Harper's Foreign Investment Review Policy Targets China

Here is our regular monthy column that we do for the LaPresse newspaper in Montreal. It was publised last week.

The Broken Equilibrium of the Canadian Economy
Satya Das et Ken Chapman

Surging oil prices and the rising Canadian dollar will profoundly alter Canada’s equilibrium. The short-term volatility in commodity and currency markets this week is a blip on the way to $100-oil. Rising oil prices drive the dollar’s strength, as does Canada’s fiscal stability and its falling national debt.

The Canadian economic balance – relatively cheap energy prices, a weak dollar, a flourishing manufacturing industry – has been under threat throughout the early years of the new century. Now, it is definitively broken. The contrast is ever clearer between the energy-fuelled boom of Alberta and British Columbia, and the manufacturing economies of Central Canada reeling with higher input costs and reduced export revenues from the United States.

The Bank of Canada faces the difficult – if not impossible – demands of reconciling these two economies under a single fiscal policy that works to the benefit of each. Politicians aren’t likely to be satisfied with the Bank’s logical response – to concentrate on its core mission of controlling inflation, thereby preserving the intrinsic value of the currency.

The realistic answer of what to do about expensive oil and the high dollar is: get used to it. While this may be no comfort to a manufacturing sector in turmoil, the only viable strategy is to adapt to this new reality, no matter how painful this may be in the short-term. Canada, with the world’s second largest oil reserves, is the only stable democracy with a secure and abundant hydrocarbon supply. Despite the high costs of energy production in Alberta – and a recent announcement of higher royalties beginning in 2009 – the “democracy premium” is seen as well worth the price to a world thirsty for more and more oil and natural gas.

This trend is unlikely to change soon, according to the International Energy Agency, despite a growing and justified public unease about climate change and the sustainability of the hydrocarbon economy. In fact, preliminary findings from research being conducted by our firm show Albertans deeply committed to protecting habitat and capturing carbon emissions as the oil sands are developed to feed the world’s energy hunger.

Yet rising oil prices are not necessarily a disaster for Quebec and our other Canadian partners. More than half of the government revenue from oil sands development goes to the federal government. In 2006, the federal share amounted to $12 billion. This goes a long way in equalization payments, and amounts to more than a third of Ottawa’s transfer payments for health and social services.



Moreover, compared with Alberta, Quebec enjoys significant economic diversity. Quebec is home to Canada’s largest money pool, the $240 billion Caisse de dépôt et placement du Québec, and the tens of thousands of families it benefits. (By contrast, Alberta’s Heritage Savings Trust Fund, set up by Peter Lougheed to house petrodollar revenue, only has about $15 billion saved because government kept on diverting the interest income for general expenses). Despite recent revelations regarding its investments and fiscal performance in La Presse, the very existence of the Caisse and its clout in international markets is an asset that is the envy of other provinces.

Aerospace, the financial services sector, biotechnology, health and of course tourism are major contributors to the Quebec economy. More than 100,000 highly skilled Quebecers work in the IT industry alone. The concentration of skilled workers is surely a result of widely available and reasonably priced higher education – Quebec tuition fees are typically less than half of what college costs in Anglophone and Allophone Canada. Indeed, one can assert that Quebec is strongly placed to compete globally in the knowledge economy, precisely because it doesn’t have the “easy” money of Alberta’s petrodollars.

The challenge for Canada is to wisely invest the economic benefits of the energy boom – remember the federal share is greater than Alberta’s – in building an even stronger knowledge economy. And to apply that knowledge to “greening” our collective future by making environmental sustainability and stewardship the essential precondition of developing our energy resources.

Will the Alliance and Wildrose Parties Bring Down Ed Stelmach?

I see Grog commenting on this Blog and I found that he resides at The Cracked Crystal Ball II Blog. I recommend you visit him and daveberta for more updates on amazing political adventures of Craig Chandler.

I wonder if the polls referenced in the Chandler Fundraiser Letter at CTV Calgary and the Calgary Herald were those much abused and laughably unscientific web based “polls” that can be invaded by self-selecting and self-interested trolls. My guess it they were.

The line that I liked most from the Fundraising Letter was "Alliance, the Wildrose Party, Independents and many from the Alberta Progressive Conservative Party who are organizing to insure that Ed Stelmach is not supported in his next leadership review."

So Alliance and Wildrose members will get together with independents and some PCs, all under the Craig Chandler as martyr banner and conspire to take Ed Stelmach out as Progressive Conservative leader?

They obvously need a common enemy in order to have something they can agree on! Sweet!

Harper Decrees "There Will Be NO Nuclear Accident"

How confident are you that Steve Harper knows what he is talking about when he says “There will be no nuclear accident” when they prematurely start up the Chalk River reactor?

I mean Steve Harper is a smart and clever guy - we all know that because that is what we are constantly being told. But now we have to ask is he mimicking Steve Martin and being a wild and crazy guy? Could it be that Harper has morphed into Homer Simpson?

I agree that the plant has to be reopened so the isotopes can be developed. We are risking lives in real time without them. Politically deciding to reopening reactor before it is declared safe by our independent regulator is the lesser of two evils. It is a calculated risk but not one where the PM can unequivocally say there will be no accident. That is beyond misleading. It is personal arrogance morphing into delusions of omnipotence methinks.

This all-party “emergency” over-ride of the Canadian Nuclear Safety Commission, our national nuclear energy watchdog, drives me to conclude that there is too much politics and not enough Peace Order and Good Government going on in Ottawa. And that didn’t just start 2 years ago when Harper “happenstanced” into power. This has apparently been going on for some time including under the old Liberal regime.

How come this old plant had not been upgraded earlier? Why did it take so long? Why was there not an alternative plan for isotope production during the Chalk River shutdown? Why is this 50 year old antiquated nuclear plant virtually the only global source of medical isotopes? How does this comedy of errors happen and who is to blame for it continuing?

My answer is that it is the pettiness of personality politics and the prominence of partisan bickering. That is the default culture of all political parties these days. While it is fodder for mainstream and new media, such gamesmanship allows the media to think they/we are absolved of a duty to inform and educate about what is really going on in government.

Frankly I think Canadians are past being weary of this stupidity and are now just disgusted with these antics. While our governors are trying to score cheap political points at each others expense they are seriously neglecting their real job of governing. There are serious issues facing this country and the globe and they are not easily resolved.

So Hey Ottawa, cut the cleverness and cant. Smarten up, focus and do your damn job!

Chickens Come Home to Roost

This is a week of facing the music and the consequences of past choices and bad behaviours for some pretty high profile folks.

On the criminal front the convicted serial killer and pig farmer William Picton will be sentenced this week. The convicted fraudster and British Lord pinning to be Canadian again will be sentenced today

On the political front the Commons Ethics Committee has heard from Karlheinz Schreiber, aka the Artful Dodger. Now we are anticipating the testimony from Brian Mulroney, a former Prime Minister, aka The Eloquent Liar.

In Alberta the “colourful” Dr Lyle Oberg is reported to be announcing his “retirement” from politics today. Dr. Oberg was adept at sitting on political powder kegs and giving off sparks. Stelmach has run out of patience with the irrepressible Dr. Oberg. It looks like he is about to politically implode instead of explode as he goes out with a whimper and not much of a bang.

In theses examples we have some proof that the systems will actually work effectively on occasion.

Alberta Separatist David Crutcher Also Not Acceptable as a PC Candidate

Dec 11 - CORRECTION: there is a comment from Mr. Chandler correcting a factual error on this post. He says Mr. Crutcher was not his campaign manager in the recent Calgary Egmont PC nomination campaign. Harley Shouldice was the campaign manager, and according to the comment, still is Mr. Chandler's campaign manager. Thank you for bring that correction to our attention.

As for Mr. Crutcher's Alliance Leadership campaign platform where he outlined his conditions for Alberta separation, the links in this post to his position on this matter speaks for itself.

It was with some amusement that I found that Mr. David Crutcher is considering running for the PC Party nomination in Calgary Egmont. This gentleman was Craig Chandler’s campaign manager for his recent “successful” nomination in Calgary Egmont. Mr. Chandler was recently rejected as a candidate by the Progressive Conservative Party Executive Committee for “not being in the best interests of the Party.”

The quid pro quo irony is that Mr. Chandler was Mr. Crutcher’s campaign manager in his failed bid to leader the Alberta Alliance Party in 2005 where he came in third of four candidates.

Mr. Crutcher was very recently elected President by one vote of the Calgary Egmont PC Association and was removed from the Presidency for supporting Chandler and not remaining neutral in the nomination process.

This trial balloon candidacy is being seen as a bit of mischievousness by some and sour grapes by others on the far right. I believe Mr. Chandler has moved on to the Alberta Alliance or the new Wildrose Party or some other manifestation of the far-right fringe element in Alberta’s political “culture.” Mr. Crutcher seems to want to keep the nomination pot boiling and so be it but lets give him a heads up first and tell him that he will not be the PC candidate under any circumstance.

Looking into some of Mr. Crutcher’s background and previous policy positions one can easily conclude his candidacy is also “not in the best interests of the party.” I think he should be told that now and well in advance of exercising any delusions he may have of running for nomination and hoping his candidacy will be accepted by the Alberta Progressive Conservative Party.

He, like Mr. Chandler, is also misaligned and likely maladaptive to the Statement of Principles of the Alberta Progressive Conservative Party. When he was running for the leadership of the Alberta Alliance Party in 2005 he touted Alberta separation from Canada as part of his campaign policy. He couched his policy position saying that Alberta should not seek separation from Canada if the Harper Cons won the next federal election. That is sure reassuring (sic).

Such a policy position in his leadership bid of another political party shows that Mr. Crutcher will not be able to adhere to at least one of the very significant Statement of Principles of the Alberta Progressive Conservative Party, namely:

“ALBERTA AS AN EQUAL PARTNER IN CONFEDERATION
We must strive to maintain sovereignty over provincial matters, believing that a strong and vibrant Alberta is a cornerstone of a strong and united Canada.”

The Progressive Conservative Party of Alberta is not a separatist party Mr. Crutcher. Mark Norris mused about this idea for a few moments in the recent leadership campaign and quickly changed his tune. He lost his leadership bid - badly!

The PC Party believes in a strong Alberta within a strong Canada and will not harbour any overt or closet separatists. Don’t waste your time and money Mr. Crutcher. It is time for you to move on too sir!