Friday Reading Roundup
Happy Friday! As part of changing up what I’m doing with Deep Dives, Friday posts will be a dedicated Reading Roundup of some of the week’s interesting pieces and commentary, as well as the occasional older piece that is worth revisiting. As always, I’m always keen to hear your feedback, so if you have any thoughts on the format, please let me know!
A Bold Vision for Canada or More of the Same?
Photo by Element5 Digital on Unsplash
Mark Carney is offering voters the other guy’s ideas, without the other guy - Robyn Urback, The Globe and Mail
Canada’s next leader needs a bold vision to reimagine the country itself — but no one is meeting the moment - Bruce Arthur, Toronto Star
Canada’s existential election has very quickly become unserious - Andrew Coyne, The Globe and Mail
Three related pieces this week on how the federal election is shaping out. Almost a week in, and we’ve seen some very similar policy positions from the leading contenders for Prime Minister, most notably competing tax cuts. As Urback writes in her piece:
The Liberals’ strategy at the outset of this campaign is a shrewd one: narrow the policy differences such that the election becomes one of competing impressions – a vote about who Canadians feel, in that mushy spot inside their tummies, would be better suited to represent Canada’s interests at home and abroad. To do so, Liberal Leader Mark Carney has adopted some of Mr. Poilievre’s best policy positions, but he offers them without the baggage, the smarm, the polarization that comes with the Conservative Leader. It’s the other guy’s ideas, without the other guy.
Yet, as I’ve argued plenty of times before, we are not in normal times, and the gravity of the moment requires some very different approaches to policy. Carney’s rhetoric seems to match that, for example, saying explicitly in a speech yesterday that “the United States is no longer a reliable partner” and that “we will need to dramatically reduce our reliance on the United States.” Yet the policy positions of tax cuts don’t seem to match up with those kinds of statements and the sacrifices that will be required.
Coyne and Arther both pick that up in their pieces. As Arther argues, “the policies feel, quite often, like ideas from the old world.” He concludes by saying, “We must reinvest in this country in a way we haven’t had to in generations, and we need leaders who truly grasp the magnitude of the moment, and who trust Canadians enough to ask them to meet that moment. We’re not there yet.”
Coyne meanwhile characterizes the proposed tax cuts as
A bipartisan bribe, in other words, driven by neither equity nor efficiency considerations, but the worst sort of politics as usual. Facing the most severe threat to our country’s sovereignty since Confederation, our political leaders have chosen to play a game of electoral Parcheesi.
Yet perhaps we are expecting too much. A snap election with a brand new Prime Minister in the midst of an existential, fast-moving crisis is perhaps not really conducive to the deep, visionary thinking needed to meet the moment.1 I still think that promising tax cuts is reckless, given that it is abundantly clear that huge spending is going to be needed, whether support for auto workers, expanding EI, or massive investment in the armed forces, along with so many other things that need more investment. However, either way, sooner or later, that deep thinking is necessary. Which brings me to…
A Royal Commission on Securing Canada’s Future
Open letter to the next prime minister: We need a royal commission on Canada’s future - Jörg Broschek, Érick Duchesne, Blayne Haggart, Patrick Leblond, Policy Options
Forty years later, we’re due for another big rethink about Canada’s future - Charles Breton, Policy Options
If an election isn’t the time for deep, visionary thinking, then perhaps we need a new royal commission. Broschek, Duchesne, Haggart, and Leblond argue in their open letter published in Policy Options that “Royal commissions are how we develop multi-pronged, nation-building initiatives of the kind that Canadians have strongly endorsed through their actions over the past several months.”
For them, a royal commission, like the Royal Commission on Dominion-Provincial Relations or the Macdonald Commission, would help “create a national policy that aligns with the realities of the 21st century, while acknowledging the failures of the past.” For the authors:
We are all in this together and every one of us deserves a say in shaping Canada’s future. What we need now is a unified, multi-partisan, all-hands-on-deck effort to craft a bold plan – and, more importantly, to take immediate action on it.
I think this argument has a lot of merit, and I’m happy to be a signatory to the open letter. Even before this crisis erupted from the US, we have clearly been in a difficult moment where a real accounting for policy failures is needed. As I argued in my piece on Canada’s policy paradox, we have been spinning our wheels in the mud on some issues for decades now. Taking that into account, as well as the partisanship and polarisation that we also see, a royal commission is potentially a powerful tool to help cut through and chart a path forward.
Pair this with Breton’s article, in which he makes a similar argument. However, Breton also tackles why royal commissions have fallen out of favour with governments, with the last being the Royal Commission on Aboriginal Peoples, which took place in the 1990s. Their expense, their political risk to go in different directions from the government itself, and the tendency to try and solve complex problems with “quick fixes or slogans, even when history suggests otherwise” have left royal commissions out of fashion. Yet, as Breton argues, the problems really are complex, and we need “leadership with the humility to acknowledge that no single person or government has all the answers.” For him, “the leadership we need isn’t one that has all the solutions. It’s one that is willing to create the conditions to find them.”
Let’s hope these arguments gain some traction.
Are We In An AI Bubble?
Bubble Trouble: An AI Bubble Threatens Silicon Valley, and All of Us - Bryan McMahon, Prospect
Is AI Worth It? - Troy Wolverton, Nob Hill Gazette
MacMahon’s piece in Prospect is worth a read, if only for some of its stunning statistics. McMahon maps out the immense scale of the bets that have been made on AI, and on LLMs in particular, and how that looks like it is setting us for trouble if/when the AI bubble pops. Some highlights include that:
VC funds have poured about $200 billion into generative AI and 33% of VC portfolios are committed to AI
Only four companies, Microsoft, Alphabet, Amazon, and Meta, combined for $246 billion of capital expenditure in 2024 to support AI build-out (once again putting Canada’s $2 billion CAD over 5 years into perspective)
OpenAI expects to lose $5 billion in 2025, and lose $11 billion in 2026.
The cost of running its models, training the next generation of models, and paying its staff means that OpenAI loses $2 for every $1 it makes, yet as Deepseek showed, its moat is paper thin.
OpenAI expects to break even when it sees $100 billion in annual revenue—a figure that Alphabet only reached in 2021, 23 years after its founding, and on the back of huge money-makers such as Google Search, Gmail, and cloud computing.
US power utilities will have to spend an additional $500 billion on top of their already planned capital expenditures to meet AI needs.
There is a lot more in there, and it is worth taking the time to read. Wolverton’s article is a good accompaniment to it. He interviews a range of different experts, from those bullish about AI’s potential as well as many who are far more skeptical about the reality of AI as it stands today, the prospects of achieving Artificial General Intelligence, and whether the trade-offs are worth it. However, the best read I’ve found that looks at AI holistically, including its trade-offs, is Madhumita Murgia’s excellent book Code Dependent: Living in the Shadow of AI. I finished it earlier in the year and might do a short write-up of some of my main takeaways soon.
I hope you liked the refreshed format of today’s piece. Please do let me know your thoughts!
1This is my wife’s argument, who, in about an hour’s worth of discussion with me on this yesterday, picked apart my original approach to writing about these tax cuts. She is the real brains behind the operation!
