Showing posts sorted by relevance for query infrastructure bank. Sort by date Show all posts
Showing posts sorted by relevance for query infrastructure bank. Sort by date Show all posts

Thursday, March 23, 2017

Just A Couple Of Questions



Given that I have no background in economics, I will leave it to more finely-tuned minds to debate the merits of yesterday's federal budget. However, there are a couple of things that, from my perspective, need to be answered, and they both relate to the Infrastructure Bank the Liberal government is touting.

Introduced in last fall's economic update, the goal of the Bank, according to Finance Minister Bill Morneau, is
to attract private sector dollars at a ratio of $4 to $5 in private funding for every $1 of federal money.
While that sounds fine on the surface, the question about the returns that will prompt private investors, including institutional ones, to invest in infrastructure projects the bank will help fund needs to be answered. And it is here that things becoming a tad murky.

In yesterday's budget, Morneau had no real details to provide about it, other than a motherhood statement:
Ottawa has said it wants to leverage every dollar it puts in its infrastructure bank into $4 of investment, the balance kicked in by private-sector investors. The government thus hopes to fund $140 billion in infrastructure projects with an upfront Ottawa investment of just $35 billion.
Sound too good to be true? Perhaps it is:
The catch here is that only infrastructure projects with revenue streams will attract private investment. To be sure, that includes a lot of infrastructure, including toll roads and bridges; alternative-energy suppliers that reap revenues from power consumers; and water and transit systems that earn back their cost of capital through mill rates and Metropasses.
One can't help but wonder, like the idea to sell off our airports, this is just another neoliberal ploy, thinly disguised, that will redirect revenue from the public to the private domain.

The Canadian Centre for Policy Alternatives has released a study that suggests we will all be paying more for this largess gifting the private sector:
This study finds that private financing of the proposed Canada Infrastructure Bank could double the cost of infrastructure projects—adding $150 billion or more in additional financing costs on the $140 billion of anticipated investments. It would amount to about $4,000 per Canadian, and about $5 billion more per year (assuming an average 30-year asset life). The higher costs would ultimately mean that less public funding would be available for public services or for additional public infrastructure investments in future years.
The full study, which you can obtain here, suggests there is a better way:
There’s no reason the federal government can’t make the Canada Infrastructure Bank a truly Public Infrastructure Bank, with a mandate to provide low-cost loans (or other “innovative financial tools”) for large public infrastructure projects. The federal government already has banks and lending institutions that provide low-cost loans, financing, credit, and loan guarantees for housing, for entrepreneurs and for exporters. So why not also provide low-cost loans and other financing for public infrastructure projects? This bank could be established as a crown corporation with initial capital contributions from the federal government (and perhaps other levels of government) and backed by a federal government guarantee. It could then leverage its assets and borrow directly on financial markets at low rates and then use this capital to invest in new infrastructure projects.

This approach would involve a slightly higher cost of financing than direct federal government borrowing, but it would be considerably below the cost of private finance.
And finally, is it simply a coincidence that one of the government's tools for borrowing at ultra-low rates is ending?
The federal government is phasing out the Canada Savings Bond, a popular savings vehicle introduced after The Second World War.

The Liberals’ 2017 budget stated the bond program peaked in the late 1980s and has been in a prolonged decline since.

“The program is no longer a cost-effective source of funds for the government, compared to (other) funding options,” the budget document reads.
Perhaps it is naive of me to suggest, but wouldn't paying a higher rate of return on savings bonds that average citizens can benefit from also be a source of much-needed cash for infrastructure?

Just wondering.

Thursday, June 1, 2017

The Infrastructure Bank: Another Taxpayer-Funded Subsidy To Big Business



There are undoubtedly those who will never accept the fact that in electing Justin Trudeau and his sunny band of men and women, they were, in fact, putting into power a group as neoliberal as the outgoing Harper regime. It is a hard truth, one that I have had to accept despite the fact that mine was one of the many votes that put the Liberals back into power.

The latest evidence of this sad truth is found in new information about the Canadian Infrastructure Bank, a scheme ostensibly designed to raise private capital to fund various projects to rebuild our steadily decaying roads, bridges, etc.
Federal investments doled out through the government’s new infrastructure financing agency may be used to ensure a financial return to private investors if a project fails to generate enough revenues, documents show.

What investors have recently been told — and what the finance minister was told late last year — is that if revenues fall short of estimates, federal investments through the bank would act as a revenue floor to help make a project commercially viable.

Experts say the wording in the documents suggests taxpayers will be asked to take on a bigger slice of the financial risk in a project to help private investors, a charge the government rejects.
The devil, as they say, is in the details:
An October briefing note to Finance Minister Bill Morneau ahead of the fall economic update where the government unveiled the financial plan for the bank, said federal funding could be structured in such a way that the bank’s “return on investment will only materialize if defined institutional investor revenue thresholds are met.”

“The infrastructure bank could enter in the capital structure to bridge the gap between reasonable returns on investment for investors and the revenue generation capacity of specific infrastructure projects,” reads the briefing note, obtained by The Canadian Press under the Access to Information Act.
In other words, if I interpret this correctly, should revenues for private investors fall below expectations, we, the taxpayers, will be propping up their profits.

Despite my aging olfactory system, I am forced to conclude that this scheme does not pass any reasonable smell test.

Tuesday, June 20, 2017

Omnibus Bills: Another Liberal Betrayal



When Justin Trudeau and his merry band of men and women were campaigning for our vote, they railed against the Harper propensity for passing omnibus bills; those documents, being so dense and long, meant that almost anything could be slipped in.

Said the erstwhile earnest Trudeau in 2015:
We will not resort to legislative tricks to avoid scrutiny.

Stephen Harper has used prorogation to avoid difficult political circumstances. We will not.

Stephen Harper has also used omnibus bills to prevent Parliament from properly reviewing and debating his proposals. We will change the House of Commons Standing Orders to bring an end to this undemocratic practice.
Sadly, the Liberals'return to power has dulled the appetite for change, with the use of the omnibus bill now enjoying the government's full fervour:
The Senate has narrowly defeated a motion to divide the Liberal government’s budget bill, following a personal appeal from Finance Minister Bill Morneau.

In a late-night 38-38 vote with one abstention, senators defeated a motion to split Bill C-44 in a way that removes the proposed Canada Infrastructure Bank Act from the main budget bill.
The motion to split the bill had come from independent Senator André Pratte, who argued that it would give the senators more time to study the proposed $35-billion infrastructure bank about which I have written previously. In typical neoliberal fashion, the Infrastructure Bank appears to be a gift to the corporate world, backstopped as it will be by the taxpayer.

Senator Pratte's desire to separate the Bank legislation from the budget bill appears to have arisen from noble motives:
Mr. Pratte promoted his motion as a vehicle for the Senate to draw a line in the sand against the use of wide-ranging omnibus bills that make it more difficult for Parliament to thoroughly study all of the bill’s component parts.
Alas, the pressure from Finance Minister Morneau appears to have been too great:
Mr. Morneau spent nearly two hours last week as a witness before the Senate national finance committee, where he urged Mr. Pratte and other senators to approve the budget bill intact before Parliament rises for the summer recess.
It would appear that even though Liberal senators are no longer part of the Liberal caucus, their affiliations and gratitude still tend toward placating their former political masters.

Tuesday, November 15, 2016

Meanwhile, Back At Home



While the Gong Show unfolding in the U.S. will likely continue to preoccupy a great many of us in the weeks, months and years to come, we would be remiss to ignore disquieting occurrences in our own country. Many of these occurrences are unfolding under the blinding glare of our prime minister's sunny smile; indeed, many of them are being orchestrated by Mr. Trudeau, under the not-so-subtle aegis of his neoliberal agenda.

One of these issues is the Infrastructure Bank Trudeau is establishing, one that seeks to meld public and private money to finance projects. The key question one must ask, of course, is what is in it for the institutional and consortia investors he is trying to attract. Kate Chucng, a Toronto Star reader, recently raised a very pertinent point.
So the federal government plans to start an “infrastructure bank.” But we already have one. It’s called the Bank of Canada, and it was set up for this very purpose.

The Bank of Canada exists to make low-interest loans to all levels of government. So why are they wanting to borrow at high interest rates from private investors? Could it be that the 1 per cent controls the government?
It is a question all of us should be asking.

In his column today, Paul Wells writes about a meeting the prime minister and nine of his ministers had on Monday in Toronto at the Shangri-La, where they were guests
of Larry Fink from New York’s humongous BlackRock investment firm, pitching Canada as an investment destination to some of the deepest pockets on the planet.

Around the table were all your favourite emissaries from global capital. The Hong Kong Monetary Authority, with $360 billion (U.S.) in assets. Norway’s Norges Bank, which may be the world’s largest sovereign wealth fund, though it’s hard to tell and the Norwegians hope to keep it that way. The Olayan Group from Saudi Arabia, with assets somewhere north of $100 billion. Singapore’s Temasek Holdings, closer to $200 billion. The Qatar Investment Authority. The Lansforsakringar, which is Swedish for “If you have to ask, you can’t afford it.”
Interestingly, for a government that promised openness and transparency,
the whole day happened behind closed doors and surrounded by heavy security.
This kind of secrecy and preferred access, so typical of the former Harper regime, should cause all of us concern:
The novelty of it all, and the long trains of zeros and commas following all these visitors around, has generated a very large amount of skepticism among the relatively few Canadians who’ve been following this project so far. How will the investors generate returns? Toll roads? Jacked-up hydro rates? What kind of bargain is it if Canadians pay for all this fancy new stuff through their daily out-of-pocket expenses, rather than through their taxes?

Nearby, at Nathan Phillips Square, the Ontario Public Service Employees Union was staging a protest of the whole business. “When people find out how much of their money private contractors are skimming off the top, they don’t want anything to do with it,” Smokey Thomas, the OPSEU president, said in a news release.
There is no philanthropy in business. Everything is done with an eye to the bottom line. This fact alone should give Canadians deep, deep cause for concern over the direction our 'new' government is taking us in.

Saturday, June 24, 2017

A Corporate Gift?



Recently, the Star's business editor, David Olive, offered some cautious optimism about the Canadian Infrastructure Bank, the scheme dreamed up by the Trudeau government,
to “leverage” its $35 billion in CIB seed money by a factor of four, creating roughly $140 billion in infrastructure spending. It will do this by enticing private-sector partners to put up most of the infrastructure funds, backstopped by Ottawa.
Seen in a charitable light, Ottawa means to stretch taxpayer dollars in a way not possible with the traditional model of purely public spending on publicly owned infrastructure.

Less charitably, the CIB looks like a device for nationalizing the risk and forfeiting the profits from CIB projects that will be largely owned by private interests.
It is the later interpretation I have written about previously, as it seems to me that all of the risks will be borne by the taxpayers who will also, conversely, receive few of the benefits.

Apparently I am not the only one dubious of the benefits of this proposal. A Star letter writer offers his concerns:
Re: Feds bet on bank as social justice tool, Olive, June 17

David Olive’s proposal that public pension funds provide financing for infrastructure is flawed.

First, there is no shortage of low-cost government funds when we own the Bank of Canada — witness the recent $200-billion bailout of big banks and corporations after the 2008 financial crisis, or the government’s sudden decision to increase defence spending by $62 billion.

Second, while pension funds may be non-profit, the public-partnership model eats up enormous accounting, legal and management charges, and pension funds expect a 7- to 9-per-cent return. Such financing is expected to double the cost of projects.

Third, while helping retirees may seem admirable, the monies are extracted through tolls and fees, largely from overstretched middle-class families when they can least afford it.

However, Olive makes a good point regarding CPP’s meagre investments in Canada. At a time when 1.3 million Canadians are unemployed, why is our national pension fund sucking money out of the domestic economy and building up competitor companies overseas?

Larry Kazdan, Vancouver
As the old saying goes, "If it sounds too good to be true, it probably is."

Saturday, May 27, 2017

On Public-Private Partnerships

Much has recently been written about the Trudeau government's plan to establish an Infrastructure Bank whose putative purpose is to leverage private sector money to help fund projects. One can legitimately ask why that is necessary, given the record -low rates at which the government can currently borrow money.

Trapinawrpool provided a Twitter link to an analysis that should give everyone pause. Perhaps its most salient point is this:
It appears that public private partnerships (P3s), and not low-cost financing, will be the focus of the bank. The likely impact will be interest rates of 7 -9% on Infrastructure Bank projects, instead of 0.8 per cent, the current federal borrowing rate.

In other words, the proposed structure will increase interest costs by a factor of 10: 8% instead of 0.8%. Those higher costs will be paid by governments, by higher user fees, or both. Municipalities are not blind to this issue, preferring public financing due to its lower costs and improved control over public infrastructure.
For a quick look at the forces of unfettered capitalism that may very well be unleashed by the cozy relationship that Mr. Trudeau seems intent on fostering and furthering with his corporate pals, the American experience with such dalliances may prove instructive, especially when the report describes the field day private interests are having with toll roads they financed:



Clearly, Canadians should be very, very worried about what lies ahead under Mr. Trudeau's plans.

Thursday, April 12, 2018

As The Mask Slips Away



My late father-in-law, a man of deep conviction and integrity, was fond of this saying: "Socialism for the rich, capitalism for the poor."

Although he did not originate the adage, he felt it firmly described the thinking of those who control the levers of power, our governments. And now that his mask is slipping away, it seems an apt description of Justin Trudeau's true sentiments and the policy decisions he is making.

As preliminary evidence, sauce as it were to the great corporate feast, consider his Canadian Infrastructure Bank scheme, about which I wrote last year. While its ostensible purpose is to raise private capital to fund various projects to rebuild our steadily decaying roads, bridges, etc., it can also serve as a neat little package of corporate welfare:
Federal investments doled out through the government’s new infrastructure financing agency may be used to ensure a financial return to private investors if a project fails to generate enough revenues, documents show.

What investors have recently been told — and what the finance minister was told late last year — is that if revenues fall short of estimates, federal investments through the bank would act as a revenue floor to help make a project commercially viable.
Experts say the wording in the documents suggests taxpayers will be asked to take on a bigger slice of the financial risk in a project to help private investors, a charge the government rejects.
All of that perhaps palls, however, now that Kinder Morgan has issued a May 31 ultimatum to the feds, threatening to suspend construction on the Trans Mountain Pipeline twinning project unless the impasse between the B.C. and federal government ends. As a remedy, a strong dose of socialism is now being considered to protect Trans Morgan's nervous shareholders:
Finance Minister Bill Morneau says the federal government will act on the Trans Mountain pipeline project in “short order,” sending the strongest signal yet that it will move to financially backstop the project to reduce the risks for its American-based backer.
[Rachel] Notley has already said her government is open to buying the Trans Mountain pipeline — meant to move Alberta oil to port near Vancouver for shipment overseas — to ensure the expansion goes ahead.

Morneau, who has been in touch with Kinder Morgan officials, said earlier in the day that Ottawa is “considering financial options” to ease those concerns. Speaking later, he wouldn’t provide specifics but said there was a need to “derisk” the project so it can proceed.
Significantly, but not surprisingly, the Finance Minister
framed the issue as an economic one, talking about the need to enhance opportunities and good jobs while saying nothing about the concerns around the environment or rights of Indigenous Peoples raised by the project.
As usual, his boss, Justin Trudeau, continues to speak out of both sides of his mouth, claiming his environmental vision is bound up with an economic one, insisting there is no contradiction between the two.


Mr. Trudeau likes to talk about what Canadians know and understand. I suspect he is speaking of those Canadians who go through life blithely and willfully unaware of the immense peril our world now faces thanks to climate change, not those of us who understand that a drastic reordering of our priorities is crucial if we are to survive what lies ahead.




Sunday, December 22, 2013

Tory Policy-Making: The Dangers Of Simplistic Thinking



Fallacies of reasoning are easy traps to fall into. Whether it is absolutist thinking, straw man arguments or any number of other errors of thought, we are all prone to them, and I am sure that I am no exception. Our best defense against such faulty thinking is to try to cultivate our critical faculties as much as we can; one of the best ways of doing so is to read widely and deeply. There is no alternative, unless wants to make a virtue of simplistic and lazy cognition.

The latter, of course, is what the Harper regime has excelled at since it was first elected. Most issues have been reduced to an either/or option; perhaps the most infamous was the facile and inflammatory statement Vic Toews made over those who opposed his failed Internet surveillance bill, namely that people “can either stand with us or with the child pornographers.”

The Tory propensity for reducing issues to their simplest forms has done a grave disservice to the people of Canada, who have essentially been told time and again that they need not think deeply and engage vigorously with issues of public policy, but rather let an autocratic majority government decide instead what is best for them. People increasingly seem more and more passive when told, for example, that now is not the time to improve the CPP, OAS must be delayed to age 67, or home mail delivery must end, all due to cost constraints.

And yet, with critical thinking, there is always room for alternative approaches to public policy. One such instance can be found in Canada Post. Although a crown corporation with an ostensible degree of independence from government influence, the recent decision to end home mail delivery and raise stamps to $1 each has all the earmarks of a government bent on the erosion and ultimate dismantling of public programs and institutions. No compromises were seriously entertained, for example moving to three-day a week delivery to cut costs. It is a classically absolutist policy decision that will ultimately see the end of Canada Post.

In his column in Saturday's Star, Thomas Walkom introduces a notion that could, in fact, make Canada Post very profitable and facilitate the retention of delivery services: a postal savings bank, an idea that has been advocated by the Canadian Union of Postal Workers.

Arguing that Canada Post has the technology and infrastructure to make such a venture both possible and highly profitable, Walkom points to New Zealand, France, Italy and Britain as successful examples of the concept:

New Zealand’s postal banking system, which was re-invigorated just eight years ago, now accounts for 70 per cent of the profit earned by that country’s post office. The comparable figure for Italy is 67 per cent.

France’s postal savings bank accounts for 36 per cent of its postal service’s pre-tax earnings. Britain is privatizing mail delivery. But it is not privatizing its system of post offices and postal savings banks. They’re too lucrative.


Indeed, as Walkom points out, former Canada Post CEO Moya Greene, who was hired away by Britain's Royal Mail, was an advocate of postal banking:

Speaking to a Senate committee three months before taking up her Royal Mail job, Greene said Canada Post was seriously considering the idea of offering full financial services.

“We . . . need to diversify the revenue stream and be in wholly different businesses than we are today,” she told the committee. “I note, for example, that many postal administrations have made a success of banking.”


Another compelling and potentially gratifying reason to offer such service resides in the conservative nature of our chartered banks which, many feel, should be shaken up a bit by competition. It is their conservative nature that is partly responsible for the fact that upwards of 15 per cent of Canadians are estimated to have no bank accounts at all, making them easy prey to the payday loan operations whose rates in Ontario can exceed 540 per cent.

So again, some reflection, analysis and good policy-making could solve two problems: the end of home delivery and the usurious interest rates that the poor without bank accounts must contend with.

But the Harper cabal is one that cares neither for nuance nor cerebration. After all, the solutions to problems are simple, reflected in just these mantras: privatization good, public ownership bad, and long live the 'free' market.





Thursday, August 12, 2021

Corporate Philanthropy: The Art Of Misdirection

 

I have just read a fascinating book by Anand Giridharadas entitled Winners Take All: The Elite Charade of Changing the World. His thesis: that big-name, wealthy and corporate philanthropists, aided and abetted by world 'thought leaders,' do much good in the world, but the solutions they promote are also benefitting them while at the same time protecting the status quo, i.e. the systems that are in fact responsible for inequality, poverty, lack of opportunity, etc. Hence, increased taxation and regulation are off the table.

Examples abound of what this means in practical terms: charter schools instead of ensuring proper funding for all schools through decent levels of taxation;  developing companies and apps like Uber or Lyft that promote precarity and are strongly anti-union, all while touting 'greater consumer choice' and worker 'flexibility' but taking no responsibility for their employees, whom they term 'independent contractors' and hence not subject to minimum wage laws, labour legislation, etc.

These movers and shakers have a simple mantra: do good by doing well. In other words, my success is the world's success, a win-win situation. 

Except that it isn't. In pursuing this very narrow filter for philanthropy, it is doing two things:  misdirecting people away from the underlying causes of the problem, as previously stated, and  undermining democracy by promoting the idea that business, not government, is the answer to the world's problems - a neoliberal's dream!

That government should get out of the way of business is, of course, nothing new, and is frequently found in the policies of the Trudeau government, from the leveraging of Infrastructure Bank funds to pouring hundreds of millions of dollars into foreign pharmaceuticals (think Sanofi and BioNtech) to set up shop in Canada.

But I digress.

One of the best illustrations of the corporate world's 'charitable' practices can be found in this excerpt from a book entitled Take the Money and Run, an indictment of the unholy relationship that exists between food banks and Walmart Canada:

For decades critics have identified Walmart Canada’s employment practices — characterized by inadequate wages with few benefits — as contributing to household food insecurity (HFI). Walmart Canada also opposes unionization drives which would result in higher wages and benefits through the collective bargaining process. In a remarkable example of image management, Walmart Canada now brands itself as an important ally in reducing HFI by entering a partnership with the major food bank association in Canada, Food Banks Canada (FBC).

Mastering the magician's art of misdirection, corporations like Walmart burnish their images and derive practical benefits such as the avoidance of costly disposal fees while the underlying causes of food insecurity go unaddressed:

Walmart Canada’s contribution to food banks, when placed against its history of anti-union activities and its effects upon their own workers and other workers’ well-being, is trivial. Its anti-union activities have a far greater impact upon HFI, and not for the good. Additionally, Walmart Canada and other similar corporations — through partnerships with CSOs such as FBC — go from villains to saviours, making dealing with the causes of HFI such as low wages and inadequate social assistance benefits more difficult. Such partnerships make it unlikely that HFI organizations such as Food Banks Canada will call for reducing HFI by raising minimum wages, promoting unionization and increasing corporate taxes on profitable corporations such as Walmart Canada to help restore the Canadian social safety net. In fact, the chair of the FBC’s board of directors of FBC is a vice-president of Walmart Canada.

The authors suggest that Food Banks Canada should make a better use of their resources:

Instead of embracing Walmart Canada as a partner, FBC and its affiliated food banks should highlight how unjust and unfair employment creates HFI and call for major reform of the employment market as a means of reducing HFI in Canada. They should also resist the role that corporate lobbying plays in maintaining low wages and poverty-inducing social assistance levels. Embracing corporations and polishing their images is not a solution to HFI in Canada.

Most of us, both as individuals and corporate entities, like to feel good about our philanthropic practices. But I leave the final word to Hamlet about the dangers of ignoring or minimizing the underlying causes of, in this case, the socio-economic diseases we seek to cure:

Lay not that flattering unction to your soul

….

It will but but skin and film the ulcerous place

Whiles rank corruption, mining all within,

Infects unseen.

that flattering unction to your soul
That not your trespass but my madness speaks.
It will but skin and film the ulcerous place,
Whiles rank corruption, mining all within,
Infects unseen.


Wednesday, February 24, 2016

Highlighting Corporate Failure



There are two lead letters in today's Star that bear reproducing. Expect no admission of a flawed ideology on the part of the neoliberals among us, however:
Re: House of Harper quickly crumbling, Feb. 22

Suddenly a lot of people from banks and corporations are in favour of the Liberals running infrastructure-investment-driven deficits from $30 billion to as high as $50 billion. In other words, they want government to do the really heavy lifting in stimulating the economy along with assuming, on behalf of the Canadian taxpayer, all of the financial as well as political risk.

This is the same group that for years has said governments really don’t create jobs, but rather are responsible for creating the right “environment and supports for investment,” by which they usually mean taxes.

Over the last decade, Canada’s corporations were given some of the deepest tax discounts in the world, and yet they have utterly failed to do anything other than mostly pocket the rewards.

We need to remember that those same corporations also failed to reinvest their tax windfalls in new Canadian jobs (ex-Bank of Canada governor Mark Carney’s “dead money”). Recent data from Statistics Canada also suggests many of the corporations were in fact investing their tax windfalls outside of the country.

Canada’s books for 2013–14 show personal taxes accounted for 48 per cent of total federal revenues, while corporate taxes accounted for a mere 13.5 per cent of that total.

So yes, Canada should indeed invest heavily in infrastructure investment in the coming years, but the question remains: Why can’t those corporations assume a larger financial input and responsibility in the country’s job and economic future?

Edward Carson, Toronto

In response to the CBC Power & Politics Ballot Box question, “How big should the deficit be?” 77 per cent responded “whatever is needed.” These voters understand that the deficit should be judged by results and not by arbitrary targets such as budget balances or debt-to-GDP limits.

The practical limit on spending for a sovereign country with a floating currency is the availability of domestic resources unused by the private sector. A reasonable measure of these resources is unemployment. When infrastructure, program spending and direct job creation measures result in jobs for all Canadians who want one, then government must either limit expenditures or increase taxes so as to prevent inflation.

But the Canadian economy is far from experiencing inflation, and there are 1.3 million Canadians who could be doing productive work. The federal government must challenge the conventional wisdom and spend whatever is needed.

There is no question it can do so, because it owns the Bank of Canada, which allows the federal government to run deficits of any size for as long as required.

Larry Kazdan, Vancouver

Thursday, October 19, 2017

The Foundering Ship Of State: A Followup



Following up on last evening's post, I am adding the comments of Gyor, who listed several more failures of the Trudeau government thus far:
You forgot Trudeau's attempt to increasingly centralize power in Parliament.

Many parliamentary posts still go unfilled 2 years in, the filling of which Chantal Herbert called the governmental equivant of tying ones shoe laces.

His questionable trip with the Aga Khan.

Minister Joly's Netflix boondoogle pissing off Quebec and the RoCs TV and Movie industry.

His MMWI is a mess, and should have included FN men, who are murdered and missing more often then FN women and who cases go unsolved more often.

Morneau's Villa in France in the name of a Corporation.

Trudeau's idea of boosting Foreign Aid was to take it from a general pool for all in need to give to only women, leaving men in need to die.

Lying about the combat role in Iraq, remember the Sniper shot that set a record.

Boosting military spending massively to appease Trump, while mismanaging the C-18 procurement.

NAFTA negiotations, period. Disaster.

The infrastructure bank he never promised, that will transfer wealth to the rich.

Oh and recently ambushing the Premiers recently with the idea for a special weed tax that they were not prepared for especially when the stated goal was to underprice criminal organizations.

Meanwhile, both the optics and the 'ethics' of Finance Minister Bill Morneau's situation continue to reverberate. Martin Patriquin offers this withering assessment:
Morneau, a multimillionaire banker married to a multimillionaire heiress, owns a villa in southern France. He also owns millions of shares in Morneau Shepell, the pension services behemoth founded by his father. Let us peruse how our finance minister has handled these particular assets.

Morneau’s French villa is owned by a holding company in which Morneau and his wife Nancy McCain are partners. Morneau neglected to mention the existence of this corporation to Conflict of Interest and Ethics Commissioner Mary Dawson until after the CBC’s Elizabeth Thompson started asking questions about it. Such corporations are particularly useful in France, where the inheritance tax is an expensive burden for the country’s wealthy landowners. Using a corporation to avoid said taxes is entirely legal — much like the loopholes Morneau wishes to close for a certain class of Canadian tax-avoiders.

Next, there is the matter of those shares. Morneau’s shares, which earn upwards of $2 million in yearly dividends, are owned by a corporation controlled by Morneau and his family. This set of circumstances, unearthed by CTV News, allows Morneau to deke the federal conflict-of-interest ethics laws. Because they are owned by a corporation, not a human being named Bill Morneau, the finance minister didn’t have to get rid of them when he took office. Again, it’s perfectly legal. It’s also a loophole to hold onto extremely valuable assets he otherwise would need to sell.
Finally, Global National gives us some insight into Morneau's conflicts of interest/hypocrisy:



In today's Star, Chantal Hebert blames much of the Liberals' misfortune on rookie ministers like Morneau. I would say that the problem with the Trudeau government runs much, much deeper. Platitudinous rhetoric, arrogance and ethical blindness do not make for government people can trust and respect.

Wednesday, July 19, 2017

Justin's Secrecy



There will always be those unable to see beyond the obvious when it comes to Justin Trudeau. His sunny smile, his platitudinous assurances that we can have our pipelines and climate change remediation simultaneously, and his opaque insistence upon the necessity of an Infrastructure Bank seem to carry the day for some, apparently happy to suspend whatever critical-thinking capacities they may possess.

Unfortunately, this blanket belief in Trudeau's sincerity means that his neoliberal agenda is being under-scrutinized by the public. One of its most egregious manifestations is the secrecy around which the government has hired consultants to study the deliverance of our airports to private interests.

H/t trapdinawrpool for his twitter alert about the following:
A secretive project to generate billions of dollars from the sale of major Canadian airports is pushing ahead with the hiring of consultant firm PricewaterhouseCoopers (PwC).

The firm is to "act as a commercial adviser assisting with additional analytical work with respect to advancing a new governance framework for one or more Canadian airports."
The shield of secrecy was peeled back only due to a freedom-of-information request from the CBC, coupled with some stellar sleuthing. The very fact that this project was withheld from public eyes is the first red flag.

But wait! There's more!
The new contract follows a report delivered last fall by Credit Suisse Canada on how Ottawa might gain billion-dollar windfalls through the sale of its interests in Canada's Big Eight airports and 18 smaller airports. The eight are in Toronto, Vancouver, Montreal, Calgary, Edmonton, Ottawa, Winnipeg and Halifax.

Credit Suisse was hired by CDEV, [Canada Development Investment Corp.] acting on behalf of Finance Canada, in a contract announced in a terse two-sentence release on Sept. 12.

The Crown corporation and Finance have since refused to release the Credit Suisse report, the contract terms or even the cost to taxpayers, despite requests by an opposition MP and by journalists.
And, again typical of the neoliberal orientation, private entities were given veto power over the release of information:
... the contracts with Credit Suisse and PwC contain clauses that give the firms vetoes over the public release of any information, including the cost of the work.
Why should any of us be bothered by any of this? There are many reasons, but Craig Richmond, the president and CEO of the Vancouver Airport Authority, recently addressed one of them when he said,
... prices for airlines and passengers would only increase as for-profit entities seek to make back their investments.

[He understands] the attraction of a one-time big profit for Ottawa, but "that's like selling the furniture in your house to cover your credit card debts."
Mr. Trudeau's government euphemistically refers to this whole process as "asset recycling." Those less enamoured of the Prime Minister and his band of sunny men and women, I suspect, would call it something else entirely.

Friday, July 21, 2017

The Creep Of Corporatism



Responding to my post on the secret study conducted by the Trudeau government on privatizing our major airports to raise much-needed cash, BM offered the following, which I am featuring as a guest post today:

Well, this is the usual way corporatism works. Change a capital investment into an eternal loan with rent due sharpish at the beginning of each month, paid for by the citizens. When paper money is abolished in the next five to ten years (already started as an experiment in India by withdrawing low-denomination notes to see what happens - disaster - but who cares, they're brown people and not in the West; full story on the countercurrents.org Indian site last fall, studiously unread by white men in the West of all political persuasions), we'll be well on the way to mere electronic representations of our paid-for labour. Every transaction under full surveillance by our masters, no under the table cheapy house-painting, no cash at the farmer's gate for decent veggies and real eggs, taxes paid in full, citizens in thrall, and so on. It'll be sold as the Bright New World, like a super-duper schmarty-phone. All will cheer at how advanced we are.

No wonder Bitcoin thrives.

But as Amazon flogs groceries online, takes over Wholefoods, ruins supermarkets, what happens to old people? I see it all the time when I run from my rural lair into Halifax, old ladies carrying full shopping bags miles. Halifax is a food desert city, bus routes are organized at right angles to where people live to get to a supermarket, that is, they are 100% utterly useless. These old folks don't have PCs or even mobile phones. They're screwed in our brave new world, slain on the fields of corporatism. I drive them if they'll accept a lift, those old gals still dressing up to look presentable, living on OAP and a supplement if they're lucky, trying to keep up appearances. Makes me weep in frustration. The destruction of civil society on the bed of profits and eff-you attitude.

Don't know if JT has the brains to understand the consequences of flogging off public property, or doing the Canadian internal equivalent of an ISDS governed free trade pact called the Infrastructure Bank, I really don't.

But Morneau does, look at that Economic Council of his, set up in February last year with all the corporate and university academic wannabe rich types "advising" him. Telling him, more like. A $1 a year each, such noble types donating their valuable time, reduced to eating sandwiches from the caff at their Ottawa meetings in order to do their bounden duty for Canada, chaired by a man from a big accounting firm. It was then that I knew we were truly effed, seduced by hair and a smile.

Nothing has occurred in the last 18 months to make me change my mind at the neoLiberal's canny backing of JT, the intellectual waif with an aw shucks um and an ah at public speaking events that makes people buckle at their knees in abject adoration. Behind his back, the people that matter are planning ways to pilfer our back pockets.

Succeeding!

And we love it!

Wednesday, January 25, 2017

Clarity From Robert Reich

Robert Reich simply and brilliantly deconstructs Trump's construction plans. Lest Canadians feel tempted toward complacency, check out Trudeau's infrastructure bank plans, which will likely have the same effect of enriching corporate investors at our collective expense.

Friday, June 16, 2017

He Can Talk The Talk

But his sandal-clad feet cannot walk the walk.


After the disastrous tenure of Paul Wells as national political affairs commentator, it was a real pleasure to see that The Toronto Star has called Tim Harper out of retirement. In his column today, Harper reminds us of some things that Justin Trudeau acolytes would prefer to ignore.

Among Trudeau's less-than-stellar achievements thus far,

Constitutional Debate, Anyone?
... this government is now facing the prospect of having a budget bill split, or stalled, in the non-elected, non-accountable Senate. It has wandered into this muck by tabling the type of omnibus budget bill it railed against in opposition when it was done by Stephen Harper’s Conservatives and by appointing independent senators who have taken that label literally.

Sen. AndrĂ© Pratte may have been quite right in pushing to have the government’s infrastructure bank yanked out of the Liberal budget bill for separate scrutiny. And Trudeau’s point man in the Senate, Peter Harder, may have been quite right in arguing that splitting the bill would mean a spending bill would originate in the Senate — powers the upper chamber does not have.
Harper suggests as with other issues, this one will escape the public's scrutiny thanks to the impending summer recess.

But when we all return from our summer holiday, there are other issues that the public will likely notice.

The Federal Deficit
On the economy, they will see that behind what looks to be a chugging locomotive is a federal deficit that goes much beyond — almost three times beyond — the $10 billion or so Trudeau promised in 2015. It conjures memories of a mocking Harper holding his thumb and forefinger almost together and laughing at Trudeau’s plan for those “tiny” deficits.
Indigenous Issues
... the Trudeau Liberals lifted expectations sky high for historic national reconciliation with First Nations.

But they have not walked their talk on spending on health and social services for Indigenous children living on reserves. They have instead ignored a series of non-compliance orders from the Canadian Human Rights Tribunal, which ruled in January 2016 that Ottawa was discriminating against the children. It is also seeking individual hearings for thousands of children taken from reserves and placed with non-Indigenous families in the so-called ’60s Scoop, despite losing a court battle over compensation.

The inquiry into murdered and missing Indigenous women has turned into a morass, way behind schedule, certain to miss its deadline, sure to seek more money and losing the support of frustrated family members. Thursday, it lost another key member, Tanya Kappo, one of the Idle No More founders, who resigned as a community relations manager, one more dropping shoe indicating the commission is floundering.
The Environment
...the Trudeau government is still operating under the Harper emission targets, and it faces challenges with Donald Trump’s decision to pull out of the Paris climate accord. So far, the Trudeau environmental package includes a carbon tax in return for a pipeline, and the future of that Trans Mountain pipeline is clouded by the chaotic politics of British Columbia.
I feel bitter about this government, given the fact that it rose to majority status thanks to the promise of doing things differently. Thus far, outside of a more pleasing manner, I see little to distinguish Justin Trudeau from the neoliberal policies of the Harper government.

Time for people to start paying attention again.

Monday, December 19, 2016

What A Pretty Face Conceals



When one thinks deeply about neoliberalism, one conjures up the face of greed, rapacity and monetary narcissism. Not at all a pretty face. But here in Canada, Thomas Walkom writes, neoliberalism is concealed by a human, some would say pretty, face, that of Justin Trudeau.
The essence of neo-liberalism is globalization. Neo-liberals strive for a world in which capital, goods and even labour move effortlessly from country to country. The aim is to let the free market do its magic and maximize wealth.
Once the centrepiece of the Conservative Party, the legacy of the reviled Stephen Harper is now being carried by our 'new' prime minister. Youth and attractiveness seem to go a long way on a number of fronts, including the temporary foreign worker program that grew to outrageous proportions under the previous regime:
... the Trudeau Liberals are smooth. Last week, they eliminated a rule that prevented temporary foreign workers from staying in Canada for more than four years.

To make the move politically palatable, the Liberal government said it would also require employers to advertise among disadvantaged groups such as indigenous people and the disabled before turning to foreigners.

But the bottom line is that the new rule allows employers to use cheap foreign labour indefinitely.
And Trudeau seems to understand something that Harper refused to: the need for 'social licence':
In Canada, that means wooing indigenous peoples and well-organized environmental groups.... And to win social licence for oil and gas pipelines, he worked on two fronts.

One was climate change. The government established its bona fides here by negotiating a path-breaking agreement with eight out of 10 provinces (plus three territories) to impose a price on carbon.

On its own, the carbon-price agreement is not enough to let Canada meet its climate targets. But in the end, it may be enough to convince enough Canadians that the pipelines from Alberta to the Pacific coast Trudeau wants should go ahead.
Simultaneously, the government has been successfully wooing indigenous leaders — with promises of more money, a more respectful relationship and an inquiry into missing and murdered aboriginal women.
And while people are oohing and aahing over this new style, globalization plans continue apace:
The free trade and investment deal between Canada and the European Union is closer to fruition. A similar deal with China is on the agenda, as is some kind of free-trade relationship with Japan.
Although Walkom doesn't mention it, my guess is that Trudeau's plans for an infrastructure bank is of the same neoliberal ilk. One may legitimately ask why, when the cost of borrowing is at record lows the Liberals will kick in $35-billion and hope to attract private sector dollars at a ratio of $4 to $5 in private funding for every $1 of federal money. Obviously, if we partner with private sector interests, their rates of return will have to be much more than, for example, a Canada Savings Bond would yield. Will that mean tolls/user fees for roads, bridges, etc.? Whose interests are thus served?

But a pretty face and a pleasing manner can conceal only so much. Perhaps the government's masked slipped a bit recently, and a truer visage emerged, as Walkom notes:
As for the hallmark of neo-liberal economies — the precarious workplace of low wages and multiple jobs — the advice from Finance Minister Bill Morneau is hardly encouraging.

In effect he has said: Get used to it.


Saturday, May 25, 2019

Piercing The Propaganda



It is indeed heartening to see so many young activists now regularly protesting the inertia that our political masters are mired in when it comes to climate change mitigation. If anyone has a right to feel outraged, it is the younger generation that will find life on our planet far less hospitable than the one their elders knew growing up.

Equally heartening however, is the growing realization of the economic consequences of the widespread costs being incurred in these still early-days of global warming:
...the Bank of Canada... has just announced that it will incorporate climate change and its effects on business and the economy into its ongoing assessments of financial stability, growth and inflation.

In its report on financial stability last week, the central bank has finally recognized that even though environmental concerns are a bit outside of its wheelhouse, the risks are too consequential to be ignored. Extreme weather hurts infrastructure and the daily functioning of the economy, but it can also affect the stability of banks, pension plans, insurance companies and other financial institutions.

More broadly, however, because the world is moving to a low-carbon economy, Canadian companies that don’t measure their exposure to carbon and figure out how to handle the shift could suffer deeply, the bank points out.
This, of course, begins to pierce the propaganda promulgated by many of the economic consequences of a rapid move to a low-carbon economy.

And speaking of the low-carbon economy, Don Pittis offers some interesting insights as he cites a report called Missing The Bigger Picture: Tracking the Energy Revolution 2019.
Not only is Canada’s clean energy sector growing faster than the rest of the country’s economy (4.8% versus 3.6% annually between 2010 and 2017), it’s also attracting tens of billions of dollars in investment every year.

And perhaps most importantly for the average Canadian, it’s a huge, and growing, employer. In 2017, clean energy accounted for 298,000 jobs in Canada—roughly equal to direct employment in the real estate sector.
The fact that the role clean energy is playing an increasingly important role in our economy is hidden from most Canadians, largely because it is
not even classified in most statistics as a sector at all.

As the executive director of Clean Energy Canada, Merran Smith says in her introduction to the report, "Put simply, it's made up of companies and jobs that help to reduce carbon pollution — whether by creating clean energy, helping move it, reducing energy consumption, or making low-carbon technologies."

... the concern of Smith and her group, and the reason for assembling today's report, is the blinkered view of many Canadians that the energy industry and the economy are somehow in conflict with green principles.
But nothing could be further from the truth:
Economic research has shown that making the world more energy efficient is exactly what successful businesses have done throughout history, because energy is a cost, and cutting costs is what thriving businesses do.

"The clean energy sector isn't just about fighting climate change — it's also about using Canadian innovation to create better and cheaper solutions for everyday life," said Smith.
And there is real economic heft to be found in that sector:
Studying the period from 2010 to 2017, not only did the sector outgrow the entire economy by more than one full percentage point, but jobs in that component of the economy increased by 2.2 per cent a year, compared to an annual increase of 1.4 per cent in jobs overall.
No doubt, the old canard about climate-change mitigation measures being inimical to economic imperatives will persist for some time. However, the louder young people scream, and the more economic data that becomes available to us, one hopes that blinkered and inaccurate mindset will weaken and ultimately disappear.

Sunday, November 27, 2022

The Smell Of Protest

Tomorrow marks the day that the Ford Government enacts Bill 23, The Gift To Developers Act. It can also rightfully be designated The Environmental Destruction Act, since it will not only fill the already overloaded bank accounts of Ford's wealthy friends, but also deplete the natural reserves we have to battle the ever-increasing pace of climate change. 

Of course, Conservatives have never been known for their long-range planning capacity.

Nor has this government for the people ever been known for listening to the people. Nonetheless, protests continue, one hopes a cogent reminder that some people have long memories. Here is a clip from one of the protests conducted yesterday:


I suspect the Ford cabal is sadly mistaken that people will return to their usual quiescence once the bill is passed. Too much is at stake environmentally; add to that cost the much higher taxes ratepayers will have to pay since the bill also greatly reduces the fees developers must pay for the infrastructure needed in their sprawling developments. Indeed, the Association of Municipalities of Ontario estimates the bill could leave communities short $5 billion and see taxpayers footing the bill, either in the form of higher property taxes or service cuts.

Like the bully he is, Doug Ford thinks he can imperiously sweep aside opposition by legislative fiat. Yet he is grossly underestimating the popular opposition Bill 23 has provoked. He is also underestimating the power municipalities have in either stopping or greatly slowing down his sprawling vision. As I recently wrote about what some on the newly elected Hamilton city council are contemplating:

Simply deny the budgeting funds needed to pay for the costly infrastructure that new, far-flung development entails. It is difficult to see how the Ford cabal could counteract such a measure, unless the premier invoked another notwithstanding clause threat to overturn local democracy.

May the passions and forces coalescing against Ford's heavy-handed rule ultimately prevail.



Tuesday, June 16, 2015

UPDATED: Going, Going ....

...soon to be gone?



There are many things we take for granted in our lives: our health, our family, our way of life. Sometimes, changes in those and other areas happen so gradually that we really don't notice until it is too late. The state of democracy, both globally and domestically, is one of those things that, over time, has become grievously imperiled, with the vast majority seeming either not to notice or, perhaps even worse, not to care.

A newspaper report from a few days ago serves as an international illustration. In India, Greenpeace and a multitude of
other NGOs and charities — environmental and other — have been under the government radar since last June, when the Intelligence Bureau leaked a report accusing several foreign-funded NGOs of stalling infrastructure projects.

The government has also restricted direct transfers of foreign donations.
The language of an intelligence report on these organizations is chilling:
The report named several activists and organizations but singled out Greenpeace as a “threat to national economic security.” The report also said the global organization was using its “exponential” growth in terms of “reach, impact, volunteers and media influence” to create obstacles in India’s energy plans.

Since then, Greenpeace India’s offices have undergone inspections, its bank accounts have been frozen and at least three staffers, including Pillai, have been refused permission to either enter or leave India.
The parallels with what is happening at home should be obvious. There is, of course, the Harper use of the CRA to intimidate organizations that are critical of government policies. There is his widely reported muzzling of scientists. And then there are the very worrisome provisions of Bill C-51 that could be used to criminalize dissent. These are just three examples of the tip of a very large iceberg.

Today's Globe and Mail tells us that a a 66-page report is being issued today that should be of great interest to all Canadians:
The report is being released under the banner of Voices-Voix and its signatories include the heads of Amnesty International Canada, Greenpeace Canada and the former head of Oxfam Canada.

The coalition of 200 organizations and 500 individuals accuses the government of taking away funding or otherwise intimidating organizations that it disagrees with.

It accuses the government of muzzling scientists and public servants and portraying First Nations and aboriginal groups as threats to national security.
The implications for democracy are deeply troubling:
...the government is silencing the public policy debate on important issues.

“We have borne witness to hundreds of cases in which individuals, organizations and institutions have been intimidated, defunded, shut down or vilified by the federal government,” the report states.

The report accuses the government of targeting dozens of charities that it deems “too political” for its taste.

It also says the government has undermined the function of Justice Department lawyers by discouraging them from giving important advice to the government.

And it points to the “muzzling” of several government watchdog agencies, citing the sacking of senior leadership at the Canadian Wheat Board and the Canadian Nuclear Safety Commission.

It also accuses the government of undermining the work of the military ombudsman, the Commission for Public Complaints against the RCMP, the federal commissioner of the environment and the correctional services investigator.

The report says the government has mounted an attack on “evidence-based” policy-making and cites Statistics Canada, which has undergone an 18 per cent staff reduction and $30-million in budget cuts since 2012.

It also takes the government to task for doing away with the long-form census.

“Canadians deserve a vibrant and dynamic democracy and they are capable of building that together,” the report concludes.
The report ends with what is ultimately the ideal of which the Harper regime is the antithesis:
“It is the job of government to support those engaged in this task, not undercut and destroy their striving for a better and more inclusive democracy.”
If this does not move Canadians, perhaps we are beyond saving.

UPDATE: You can access the full report by going to this website.

As well, environmentalist Paul Watson has not been able to return to Canada since his Canadian passport was seized in Germany in 2012 and turned over to the Canadian embassy in Frankfurt. Canada has refused to return it to him, and Watson believes the decision was driven by Canadian Prime Minister Stephen Harper's dislike of environmentalists.

And ThinkingManNeil has provided this link to Paul Watson's story on the outrage.

Friday, August 31, 2012

A Sage Observation

Paul Kahnert of Markham has an uncommonly apt observation in this morning's Star, one that I'm sure the ideologues leading us both federally and provincially will choose to ignore:

Re: Canada’s idle threat, Business Aug. 25

It’s time to reverse corporate tax cuts. David Olive’s article was proof positive that tax cuts don’t work. Weren’t tax cuts for corporations supposed to make them “competitive” and create lots of job for Canadians? We’ve been conned. The only thing tax cuts created was massive wealth for corporations and the top 1 per cent.

Corporate tax cuts have been one of the main contributors to the $526 billion of profits sitting idle in their bank accounts. Right now provincial and federal deficits are running at about $65 billion a year. All governments are crying poor and say they can’t afford to pay for public services like health care, education and infrastructure like water, sewage roads and bridges. Baloney.

We don’t have a deficit problem. We have a distribution of wealth problem. Governments need to tax that money back and get on with the job of building this country with good jobs.

And all of us need to stop voting foolishly for politicians who keep promising us tax cuts.