Business
China likely to escape scot-free in persecution of two Canadians
From the MacDonald Laurier Institute
By Charles Burton
Beijing propagandists are already using recent claims to vindicate the appalling treatment of Michael Kovrig and Michael Spavor
There is a deep sadness to reports that Michael Spavor feels he was badly wronged by his fellow former political prisoner Michael Kovrig and, by extension, political officers at Canada’s embassy in Beijing and their masters in Ottawa.
Spavor reportedly wants millions in compensation from the Canadian government for its alleged complicity in his detention in his Chinese prison ordeal. If this ends up in court, Kovrig and his superiors would have an opportunity to defend themselves against these allegations, but Beijing propagandists are already using them to vindicate the appalling treatment of Kovrig and Spavor — a gross violation of international law — by a ruthless regime that arrested them to pressure Canada into releasing Chinese Communist Party figure Meng Wanzhou from house arrest in Vancouver.
While few specifics are known about Spavor’s claims, media reports depict a connection to Kovrig’s former job at Canada’s embassy in Beijing, and later with the International Crisis Group think tank, roles in which he would allegedly meet with people in China, engage them in his fluent Mandarin, and mine the conversations for nuggets of insight into China’s political or economic affairs.
Chinese authorities, of course, don’t like such activities. One expects that Kovrig and his superiors, both in government and the ICG, would have been well aware that this type of work would irritate Beijing, thus the danger of arbitrary detention on trumped-up charges was always there whenever he visited China without the protection of a diplomatic passport. And so it was.
One particularly troubling aspect of this sort of activity is the risk it presents to people who might unknowingly be sources for these information-gathering practices. Apparently Spavor and Kovrig routinely got together for drinks and sessions of good-humoured conversation. But friendships with diplomats imply that observations shared in a bar can end up the next morning in a report to Ottawa, and on to the Five Eyes. Was this possibility lost on Spavor? Was Kovrig perhaps not as forthcoming as he could have been about the full dimensions of their chats?
And there is always the possibility that China’s Ministry of State Security has access to Canadian diplomatic communications, which led them to open a file on the two.
Spavor ran a business, Paektu Cultural Exchange, that facilitated sports, cultural, tourism and business exchanges with North Korea. These pricey tours necessitated the transfer of badly-needed foreign currency into North Korea, arguably helping to enable the repressive Pyongyang regime. Perhaps more intriguing, in the course of his work Spavor developed an unlikely rapport with the third-generation Kim family dictator, Kim Jong Un, and was photographed jet-skiing and drinking cocktails with him on a private yacht. It is very plausible that China strongly disapproved of their junior proxy Korean communist dictator cavorting with non-Chinese foreign friends, hence his arrest.
Troublingly, Canadians — who were transfixed and infuriated by the two Michaels’ incarceration — have had little news about Kovrig and Spavor’s China nightmare since their sudden release in September 2021, just hours after Canada released Meng. One wonders if Ottawa really did enough to incentivize China’s Communist authorities to send them home sooner, or if there were other factors in Canada’s murky relationship with Beijing that took priority over what was perhaps downplayed behind closed doors as just another consular matter, one of many that are de facto subordinated to trade and political interests.
We may never see any Global Affairs Canada officials or former diplomats giving public evidence in a Canadian court to defend against Spavor’s accusation. To be sure, much of what goes on between Canada and China — indeed, within our own government internally — is kept from us by the secretive walls of the Security of Information Act.
Perhaps Spavor will be given a big whack of taxpayer money in an out-of-court settlement laced with ironclad nondisclosure provisions. One thing is for sure though. The Chinese authorities who so brutally persecuted him will, as usual, get off scot-free.
Charles Burton is a senior fellow at the Macdonald-Laurier Institute, non-resident senior fellow of the European Values Center for Security Policy in Prague, and former diplomat at Canada’s embassy in Beijing.
From the Fraser Institute
By Scott Lincicome
The U.S. Supreme Court will soon decide the fate of the global tariffs President Donald J. Trump has imposed under the International Emergency Powers Act (IEEPA). A court decision invalidating the tariffs is widely expected—hovering around 75 per cent on various betting markets—and would be welcome news for American importers, the United States economy and the rule of law. Even without IEEPA, however, other U.S. laws all but ensure that much higher tariffs will remain the norm. Realizing that protection will just take a little longer and, perhaps, be a little more predictable.
As my Cato Institute colleague Clark Packard and I wrote last year, the Constitution grants Congress the power to impose tariffs, but the legislative branch during the 20th century delegated much of that authority to the president under the assumption that he would be the least likely to abuse it. Thus, U.S. trade law is today littered with provisions granting the president broad powers to impose tariffs for various reasons. No IEEPA needed.
This includes laws that Trump has already invoked. Today, for example, we have “Section 301” tariffs of up to 25 per cent on around half of all Chinese imports, due to alleged “unfair trade” practices by Beijing. We also have global “Section 232” tariffs of up to 50 per cent on imports of steel and aluminum, automotive goods, heavy-duty trucks, copper and wood products—each imposed on the grounds that these goods threaten U.S. national security. The Trump administration also has created a process whereby “derivative” products made from goods subject to Section 232 tariffs will be covered by those same tariffs. Several other Section 232 investigations—on semiconductors, pharmaceuticals, critical minerals, commercial aircraft, and more—were also initiated earlier this year, setting the stage for more U.S. tariffs in the weeks ahead.
Trump administration officials admit that they’ve been studying these and other laws as fallback options if the Supreme Court invalidates the IEEPA tariffs. Their toolkit reportedly includes completing the actions above, initiating new investigations under Section 301 (targeting specific countries) and Section 232 (targeting certain products), and imposing tariffs under other laws that have not yet been invoked. Most notably, there’s strong administration interest in Section 122 of the Trade Act of 1974, which empowers the president to address “large and serious” balance-of-payments deficits via global tariffs of up to 15 per cent for no more than 150 days (after which Congress must act to continue the tariffs). The administration might also consider Section 338 of the Tariff Act of 1930—a short and ambiguous law that authorizes the president to impose tariffs of up to 50 per cent on imports from countries that have “discriminated” against U.S. commerce—but this is riskier because the law may have been superseded by Section 301.
We should expect the administration to move quickly to use these measures to reverse engineer Trump’s global tariff regime under IEEPA. The main difference would be in how he does so. IEEPA was essentially a tariff switch in the Oval Office that could be flipped on and off instantly, creating massive uncertainty for businesses, foreign governments and the U.S. economy. The alternative authorities, by contrast, all have substantive and procedural guardrails that limit their size and scope, or, at the very least, give American and foreign companies time to prepare for forthcoming tariffs (or lobby against them).
Section 301, for example, requires an investigation of a foreign country’s trade and economic policies—cases that typically take nine months and involve public hearings and formal findings. Section 232 requires an investigation into and a report on whether imports threaten national security—actions that also typically take months. Section 122 has fewer procedures, but its limited duration and 15 per cent cap make it far less dangerous than IEEPA, under which Trump has repeatedly threatened tariffs of 100 per cent or more.
Of course, “procedural guardrails” is a relative term for an administration that has already stretched Section 232’s “national security” rationale to cover bathroom vanities. The courts also have largely rubber-stamped the administration’s previous moves under Section 232 and Section 301—a big reason why we should expect the Trump administration’s tariff “Plan B” to feature them.
Thus, a court ruling against the IEEPA tariffs would be an important victory for constitutional governance and would eliminate the most destabilizing element of Trump’s tariff regime. But until the U.S. Congress reclaims some of its constitutional authority over U.S. trade policy, high and costly tariffs will remain.
It finally happened. Canada received a federal budget earlier this month, after more than a year without one. It’s far from a budget that’s great. It’s far from what many expected and distant from what the country needs. But it still passed.
With the budget vote drama now behind us, there may be space for some general observations beyond the details of the concerning deficits and debt. What kind of budget did Canada get?
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For a government that built its political identity on social-program expansion and moralized spending, Budget 2025 arrives wearing borrowed clothing. It speaks in the language of productivity, infrastructure, and capital formation, the diction of grown-up economics, yet keeps the full spending reflex of the Trudeau era. The result feels like a cabinet trying to change its fiscal costume without changing the character inside it. Time will tell, to be fair, but it feels like more rhetoric, and we have seen this same rhetoric before lead to nothing. So, I remain skeptical of what they say and how they say it.
The government insists it has found a new path, one where public investment leads private growth. That sounds bold. However, it is more a rebranding than a reform. It is a shift in vocabulary, not in discipline.
A comparison with past eras makes this clear.
Jean Chrétien and Paul Martin did not flirt with restraint; they executed it. Their budgets were cut deeply, restored credibility, and revived Canada’s fiscal health when it was most needed. The Chrétien years were unsentimental. Political capital was spent so financial capital could return. Ottawa shrank so the country could grow. Budget 2025 tries to invoke their spirit but not their actions. Nothing in this plan resembles the structural surgery of the mid 1990s.
Stephen Harper, by contrast, treated balanced budgets as policy and principle. Even during the global financial crisis, his government used stimulus as a bridge, not a way of life. It cut taxes widely and consistently, limited public service growth, and placed the long-term burden on restraint rather than rhetoric. Budget 2025 nods toward Harper’s focus on productivity and capital assets, yet it rejects the tax relief and spending controls that made his budgets coherent.
Then there is Justin Trudeau, the high tide of redistribution, vacuous identity politics, and deficit-as-virtue posturing. Ottawa expanded into an ideological planner for everything, including housing, climate, childcare, inclusion portfolios, and every new identity category. Much of that ideological scaffolding consisted of mere words, weakening the principle of equality under the law and encouraging the government to referee culture rather than administer policy.
Budget 2025 is the first hint of retreat from that style. The identity program fireworks are dimmer, though they have not disappeared. The social policy boosterism is quieter. Perhaps fiscal gravity has begun to whisper in the prime minister’s ear.
However, one cannot confuse tone for transformation.
Spending is still vast. Deficits grew. The new fiscal anchor, balancing only the operating budget, is weaker than the one it replaced. The budget relies on the hopeful assumption that Ottawa’s capital spending will attract private investment on a scale that economists politely describe as ambitious.
The housing file illustrates the contradiction. The budget announces new funding for the construction of purpose-built rentals and a larger federal role in modular and subsidized housing builds. These are presented as productivity measures, yet they continue the Trudeau-era instinct to centralize housing policy rather than fix the levers that matter. Permitting delays, zoning rigidity, municipal approvals, and labour shortages continue to slow actual construction. Ottawa spends, but the foundations still cure at the same pace.
Defence spending tells the same story. Budget 2025 offers incremental funding and some procurement gestures, but it avoids the core problem: Canada’s procurement system is broken. Delays stretch across decades. Projects become obsolete before contracts are signed. The system cannot buy a ship, an aircraft, or an armoured vehicle without cost overruns and missed timelines. Spending more through this machinery will waste time and money. It adds motion, not capability.
Most importantly, the structural problems remain untouched: no regulatory reform for major projects, no tax competitiveness agenda, no strategy for shrinking a federal bureaucracy that has grown faster than the economy it governs. Ottawa presides over a low-productivity country but insists that a new accounting framework will solve what decades of overregulation and policy clutter have created. More bluster.
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From an Alberta vantage, the pivot is welcome but inadequate. The economy that pays for Confederation, energy, mining, agriculture, and transportation receives more rhetorical respect in Budget 2025, yet the same regulatory thicket that blocks pipelines and mines remains intact. The government praises capital formation but still undermines the key sectors that generate it.
Budget 2025 tries to walk like Chrétien and talk like Harper while spending like Trudeau. That is not a transformation; it is a costume change. The country needed a budget that prioritized growth rooted in tangible assets and real productivity. What it got instead is a rhetorical turn without the courage to cut, streamline, or reform.
Canada does not require a new budgeting vocabulary. It requires a government willing to govern in the best interest of the country.
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