Coalition alive and well

Sunday, November 30, 2008 11:30 AM
For Immediate Release
November 30, 2008



Canadians deserve real leadership during economic crisis, Goodale

OTTAWA - The Conservative government's continued panic-mode governing further undermines Canadians' confidence in its ability to manage our economy in a time of crisis, said Liberal House Leader Ralph Goodale.



"Canadians are facing a serious economic crisis, and the Conservatives are governing on the fly," said Mr. Goodale. "Yesterday they reversed their position on political financing, and today they're announcing they'll move up the budget date.



"How can Canadians trust this government to get our economy back on track when it's all over the map?"



Mr. Goodale said that the Conservatives' behaviour clearly shows that this government is completely out of touch with Canadians - focusing more on advancing their conservative agenda with ideological cuts and attacks on the rights of Canadians than coming up with a plan to help our economy.



"Now, more than ever, Canadians need Parliament to put their interests first and provide them with a plan to help protect their jobs, their homes and prevent their hard-earned savings from disappearing," said Mr. Goodale.



"While Stephen Harper wants to keep Canadians and the world in the dark, the Liberals are putting partisan politics aside and working with the other parties to create a plan to put our economy and Canadians first," he said.



- 30 -

All the King's horses and all the King's men....

Stephen Harper starring as Humpty Dumpty. Looks good on him, especially after he fraudulently raided OUR nest eggs to the tune of $35 billion.

Hard-right Tory ideology has put the PM in a bind

Nov 29, 2008
Toronto Star
Thomas Walkom

Think of it as hubris. Stephen Harper's governing Conservatives are so used to seeing the opposition parties back down that they think they can get away with anything.

It seems that this time the Conservatives are wrong.

The catalyst for this remarkable state of affairs, in which the opposition parties say they are planning to unite to bring down Harper's government and replace it with one of their own, is Finance Minister Jim Flaherty's economic update – a bizarre document that bears no relation to either reality or any of the current prime minister's recent statements.

In that update, Flaherty downplays Harper's fears of a lengthy economic depression, ignores his stricture not to cut back at a time when governments should be doing more and singles out seemingly random targets in an effort to solve problems that don't exist.

Flaherty says he would cut back public service pay at a time when no one is suggesting that it is out of control. He wants to suspend the right to strike for federal employees even as the country enters a slump in which such strikes are highly unlikely. And he would put a crimp in pay equity – a program that requires Ottawa to pay women equal wages for work of equal value – although there is no evidence that the current system is either iniquitous or expensive.

Here, as Toronto lawyer Mary Cornish explains, the key is his apparent decision to end the right to appeal pay equity cases to the quasi-judicial Canadian Human Rights Commission.

The only thing that links these targets is their place in the Conservative party pantheon of villains.

If there's anything a red-meat Conservative hates more than a civil servant, it's a unionized civil servant. Indeed, the only thing worse is an uppity, female, unionized civil servant who complains to a human rights commission (which red-meat Conservatives also hate) that she's not paid enough.

In short, Flaherty's update is a standard piece of hard-right Conservative ideology, released at a time when Harper is promising to be less ideological, and just days after the Prime Minister explained why he thought his party's usual cut-and-squeeze nostrums wouldn't solve the crisis.

It is this contradiction, as much as anything, that signals the Conservatives are neither serious nor united about tackling the economy. Putting off substantive action until February, as Flaherty has suggested, is arguably reasonable. Using recession as an opportunity to ride Conservative hobby horses is not.

So how did the famously clever Harper get himself in this bind? To answer that question, recall The Sopranos. In that television show, mob leader Tony Soprano occasionally felt compelled to whack innocent bystanders – particularly after he'd demonstrated some element of human understanding – just to remind his own supporters that he was ruthless enough to be their boss.

Keep this image in mind. Keep in mind also that when Tony Soprano became too outrageous, his equally venal opponents felt compelled to stop him.

With Flaherty's update, Harper has entered outrageous territory. The opposition parties smell blood. They also know that, thanks to the peculiarities of the parliamentary system, this is their last chance to replace Harper's minority government without triggering another election.

Harper is nothing if not a hypocrite

Harper's letter to the Governor General of September 9, 2004

As leaders of the opposition parties, we are well aware that, given the Liberal minority government, you could be asked by the Prime Minister to dissolve the 38th Parliament at any time should the House of Commons fail to support some part of the government’s program. We respectfully point out that the opposition parties, who together constitute a majority in the House, have been in close consultation. We believe that, should a request for dissolution arise this should give you cause, as constitutional practice has determined, to consult the opposition leaders and consider all of your options before exercising your constitutional authority. Your attention to this matter is appreciated.

-From a letter to then-Governor General Adrienne Clarkson signed by all three opposition leaders: Gilles Duceppe, Jack Layton and Stephen Harper
(September 9, 2004)

I thought the Globe endorsed Stephen Harper for dictator?

Economist with a tin heart, politician with a tin ear

JEFFREY SIMPSON

Globe and Mail
November 28, 2008 at 9:23 PM EST

Prime Minister Stephen Harper called an election to secure a majority, and failed to get one.

This week, he created a completely unnecessary crisis that now threatens his government's very survival. And they call Mr. Harper a great strategist and superior tactician?

Thursday's economic statement was an economic lame duck and a political boner. It revealed, among other things, the kind of Conservative Party that all but its core supporters suspected would eventually be outed: a group of ideologues, led by a Prime Minister who discarded his campaign sweater to reveal an economist with a tin heart and a politician who looks everywhere for political advantage.

Instead of trying to grow Conservative support, he appealed only to his party's core. Instead of acting in a statesmanlike fashion at a time of crisis, he opted to play politics, proposing to cancel public subsidies for parties, a move that would disproportionately benefit his.
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Instead of reaching out, as leader of a minority government and as president-elect Barack Obama is doing by talking to moderate Republicans, he smacked his opponents in the chops. Instead of heeding the advice of economists everywhere that the economy needs stimulus, he got his Minister of Finance to present a budget that offered cutbacks and tiny surpluses that absolutely no one believes will be realized.

There is a plausible case for caution, to wait a bit until economic issues clarify themselves and until the new American administration settles definitively on its approach. The government therefore, quite credibly, could have gone to Parliament, said it could not offer precise numbers because of unprecedented volatility, said there would be a deficit but a modest one limited in time, promised a budget in January, got a few infrastructure programs speeded up, and asked for suggestions. After all, this was a government that had admitted the economy would be in a "technical recession."

That would have been prudent, statesmanlike and economically credible. There would have been no political crisis; the country would have accepted that the government had heard its concerns and worries; and a serious plan could have been developed.

Instead, the government unsheathed its ideological swords, attacked political opponents, public-sector unions, disregarded overwhelming economic advice in the country (including from deficit hawks, premiers, and conservative-minded economists) and dared the opposition parties to turn the other cheek - a move, to the government's apparent surprise, the other parties were not prepared to do.

The economic statement was wrongly conceived on every front.

It misdiagnosed what the economy needs, and offered a completely bogus explanation.

Said the government: We have already injected $31-billion of stimulus in the economy through tax cuts since 2006. As if tax cuts in 2006 were designed for stimulus in 2009. No one believes that.

That would be like President George W. Bush saying his tax cuts of years ago were designed to help the current recession. Conservatives cut taxes mostly when the economy was robust (and therefore at the wrong time and in the wrong way, but that's another matter). The point now is that the stimulus hasn't been enough.

The government also gratuitously set off a political firestorm that will damage the Conservative Party.

Taxpayer subsidies for political parties exist everywhere around the world, even in the United States, where Mr. Obama refused them because he was raising so much private money. The subsidies exist, there as here, as a quid pro quo for eliminating corporate and union contributions. As such, they help parties finance themselves, do their work, and therefore contribute to democracy.

But since the Conservatives have mastered soliciting contributions from individuals better than their opponents, they now propose to eliminate the public subsidy that amounts to a tiny sum relative to total government spending. Nothing the Conservatives have done has been so malevolently partisan as this.

Finally, the government created a potential constitutional situation in which it could be defeated and replaced, quite properly under constitutional convention, by a Liberal-NDP coalition.

Late yesterday, Mr. Harper refused to modify his economic statement, put off confidence votes for a week to buy himself some time, and in effect dared the Governor-General, should it come to this, not to exercise her proper constitutional authority to ask another party to try to form a government without bringing on an election.

He argued that if his government were to be defeated, there would have to be an election, which is not consistent with constitutional convention. He was really threatening a possible constitutional crisis that, again, would be of his own making and that he would hope to turn to his partisan advantage.

The miscalculations have been stunning. Mr. Harper's strategy has accomplished already the near-impossible: to bring the Liberals and NDP together.

He had so many other, less partisan options at a time of economic crisis and grave national concern. That he acted in this fashion, at this time, was enormously revealing. And very sad.

Harper logic

It’s the Opposition's right to form a government.

But it's not Stephane Dion's right to be Prime Minister?

Huh?

Good bye Steve. You won't be missed.

Liberals propose non-confidence motion, governing coalition

The Liberal Opposition plans to introduce a motion in the House of Commons on Monday declaring non-confidence in the minority Conservative government and proposing a governing coalition.

The motion comes as emissaries from the Liberals, New Democrats and Bloc Quebecois hold talks about forming a new government should Prime Minister Stephen Harper's minority fall.

But Harper could still avert the immediate defeat of his weeks-old government through procedural tactics.
The Liberal motion, which has the approval of the NDP and Bloc Quebecois, reads:

"In light of the government's failure to recognize the seriousness of Canada's economic situation and its failure in particular to present any credible plan to stimulate the Canadian economy and to help workers and businesses in hard-pressed sectors such as manufacturing, the automotive industry and forestry, this House has lost confidence in this government and is of the opinion that a viable alternative government can be formed within the present House of Commons."

A source says the opposition parties have agreed that Liberal Leader Stephane Dion would lead the government for the next few months.

How Mark Carney contributed to Canada's looming deficit

What gives? NDP Deputy Leader Thomas Mulcair never did receive an answer to this question. Why not Mark? Deloittes gave us the straight goods, why can't Mark Carney?

Mr. Thomas Mulcair— Questioning Mark Carney as Governor Elect of the Bank of Canada -(2007/12/5)

“I want to begin by asking you a question about income trusts. In your previous position, as an expert, you played an active role in the economy, and that had a significant influence. As you know, our political party was not favourably disposed towards income trusts. However, we never lied to people the way the government did.

This is what I would like to know. In your view, in light of what has occurred with income trusts, have the basic premises that were behind your recommendation proven to be accurate? I am going to cite the specific example of Abu Dhabi National Energy Company, which has purchased certain income trusts, including PrimeWest Energy Trust.

In your opinion, are these new companies, which are now managed offshore, contributing to the Canadian economy in terms of tax revenues? That was one of the basic premises underlying the decision you presided over.”

Hey BCE Directors: What's the big deal?

Really, do any of you BCE Directors actually know the terms of your big deal?


These Directors of BCE continue to “impress”:

How a tiny clause spelled the end of the biggest deal
Globe and Mail
November 27, 2008

“There was a lot of finger pointing by the BCE board last night. The directors wanted to know where this [insolvency test] clause had come from,” the source said. The awkward answer, the board learned, was that BCE had authored the killer clause."

I am so reminded of this earlier episode of Board amnesia:

Bondholders say BCE finessed takeover deal to avoid bond redemption
The Canadian Press
January 28, 2008

"The court was reminded that three BCE directors - Tom O'Neill, Jim Pattison and Donna Kaufman, the head of the strategic oversight committee - testified they were unaware or couldn't remember seeing all the details of the bids or how they would affect all stakeholders."

Yo, Harper: Time for some "incremental cost" analysis.

Hey, here’s brilliant idea to rescue our economy. Let’s save $30 million in order to render a $300 million exercise completely worthless and one sided.

Without the $30 million of political party funding, these $300 million elections become a total waste of time? Harper wants to save $30 million to render a $300 million exercise basically worthless. That’s like buying a Ferrari and not being willing to pay for its license plate. All dressed up and no where to go. The fate of Canadian democracy under Stephen Harper, the evil genius:


Kelly McParland: Stephen Harper, evil genius
November 27, 2008,
by Kelly McParland
National Post

Stephen Harper's decision to end public financing for political parties is a daring gambit that could pay off in several ways, but could also land him on the ash heap, out of office just months after winning his way back in. It is cynical, clever, calculating and diabolical. It's also dirty pool, and its success depends a great deal on his reading of the attitude of the electorate.

If it goes through, it would thoroughly hobble the opposition. You can tell that just by the speed and shrillness of their protests. The Liberals, as John Ivison reports, are deep in dept, barely able to keep up the payments on the loan they took out to fight the last election, and dependent on the $1.95-per-vote subsidy to do so. More than that, they have just launched a leadership contest which requires the participants to raise money from donors who have already given several times in recent years: to Paul Martin for the 2006 campaign, to candidates in the last leadership contest, and again for the most recent election. Many have to be tapped out, and are being approached at a time when even the wealthiest are counting their quarters in anticipation of dire times ahead. Removing the subsidy might allow the party to go back to the corporate donors that supported it through so many mandates, but that would take time, the apparatus is presumably rusty, the Liberals are an opposition party rather than a government (and thus unable to return any favours) and, again, corporate accounts aren't exactly flush right now.

The NDP, oddly enough, might survive relatively unscathed, having matched the Tories in developing a n effective grassroots fundraising apparatus, but the Greens and the Bloc would be deep in the doo-doo.

You can almost see the satisfied smirk creeping across the PM's thin lips at that prospect. Elizabeth May gave him no end of annoyance in the last election, sitting directly beside him at the debates while delivering insults. A party that's never elected a single member dictating to the Tory leader where he went wrong. Let's see how insulting she is when she can barely afford train fare to Ottawa. And the Bloc -- that might be the sweetest blow of all. The Bloc depends on public financing for almost 80% of its income. Here's a party that has spent 20 years in Ottawa lecturing Canadians on how unworthy they are to host a province as incomparable as Quebec, and which survives only thanks to the income from taxes paid by those same unfathomably tolerant Canadians. Without that lifeline the Bloc would face immense problems mounting an effective campaign, and without an effective Bloc campaign Quebec would once again be open to the blandishments of the federalists, the best-equipped of which to blandish are the Conservatives. Only a late surge by the Bloc kept Harper from a majority last time out; siphon off their bank accounts and who knows what glories could be achieved.

The trick will be in getting the Tory measure through the House. And that's where the calculating mind of S. Harper really comes to the fore. If the government makes approval a matter of confidence the opposition will have to bring it down to block the measure. That would put extreme financial pressure on all parties, but the Liberals in particular are in no shape to contest another war. Securing another $20 million loan could be nigh-on impossible: banks won't lend even for worthy enterprises these days; a threadbare political party down on its luck and already deep in hock is hardly an attractive risk. There's also the small matter of the party being without a leader. The two most effective campaigners are locked in a dual for the top job, leaving Stephane Dion, an interim leader unloved by Canadians, and just weeks from having led the party to a new low at the polls, to try and mount a campaign.

And on what issue? The opposition's outrage that the Tories have turned off their welfare tap? Harper can point out that his own party will take the biggest hit, losing upwards of $10 million in funding. He can also note the NDP's ability to raise money from donors, and ask why Liberals can't do the same. But more critical is the question of how much voters are likely to care. Party funding is hardly a galvanizing concern. There have been two general elections and a leadership vote in three years, and it's going to take a good excuse to send Canadians back for a third kick at the can. Many of them will be spending the holidays wondering how much longer they'll be employed, and how to pay the bills should the axe fall. Are they likely to take kindly to the sight of Stephane Dion, reborn, on their TV tubes complaining that Stephen Harper is refusing to use their money to pay for his party's bills?

So if the measure goes through, Harper hobbles the Liberals, damages Elizabeth May and forces the Bloc to find some other sugar daddy to finance its separatist fantasies. Comes the next election and the Tories are all but certain to be head and shoulders over every other party in their ability to wage a campaign.

If the government is defeated, he's back on the campaign trail against a broke, leaderless and dispirited Liberal party, able to blame them for forcing yet another needless election and to appeal for the extra few seats that will prevent it happening again.

He really is a devil, this Harper. Crafty. Very crafty.

National Post

Newspapers as pansies. Journalists as post facto protagonists.

I find it quite revealing that now that the BCE deal has essentially died, those “brave” souls in the rough and tumble newspaper world are now, for the first time, saying that it’s a good thing that the BCE deal not proceed. Not proceed? Where have these journalistic pansies been for the last 18 months? The only two journalists that I know of who have consistently questioned the merits of this deal are Diane Francis and Barry Critchley of the Financial Post.

The rest of Canada’s media have been a group of pansies who never questioned what was being wrought on Canadians by this deal and the nefarious arrangements under which it was being cobbled together (dividend suspension, suppression of bondholders, straw man Morgan McCague).

Here is some of post facto wisdom the “brave” souls who have now emerged. Where have they been for 18 months? They are only now reporting on the things I have been writing about repeatedly since the deal was approved in September 2007, all of which were contained on my letter to Industry Minister Jim Prentice of February 2008. If the deals’ failure is now being hailed by these journalists, why weren’t they questioning Prentice’s approval back in June 2008, or is that when the pansies were in full bloom?

Doomed BCE deal never did make much sense
David Olive
Toronto Star
November 27, 2008

Hope for escape from high leverage
Globe and Mail
Editorial
November 27, 2008

Can you hear it? A collective sigh of relief
Derek DeCloet
Globe and Mail
November 27, 2008

Thomas Mulcair on "transparent frauds".

Tom, What about the transparent fraud known as tax leakage that your party was a part of?


Fiscal update may cripple opposition, trigger showdown

By KATHLEEN HARRIS, Sun Media


NDP MP Thomas Mulcair accused the Conservatives of exploiting an economic crisis to hammer his political opponents, and warned the "stunt" could lead to a constitutional crisis or the defeat of the government just weeks after a federal election.

"If Stephen Harper¹s idea of a stimulus package is to start mucking around with the rules of party financing, he's going to hit a brick wall," he said.

"If he tries to play with this under the guise of doing something to reduce expenses, it¹s a transparent fraud."

Looking forward to hearing Jack Layton squeal like a pig over the prospect of losing $30 million

Meanwhile Layton caused us to lose $35 billion





Flaherty to slash public funding for federal parties

Updated Wed. Nov. 26 2008 10:18 PM ET

CTV.ca News Staff

Finance Minister Jim Flaherty will slash almost $30 million a year in public funding for federal parties, in a move that would save taxpayers' money but deal a major financial blow to opposition parties, CTV News has learned.

Flaherty will present the measures in his fiscal update at 4 p.m. tomorrow.

Jim Flaherty: Lunatic fringe

And to think, our lunatic Finance Minister was keen on a deal that would have torched $1 billion in annual tax revenue?

Flaherty keen on Bell-Teachers deal

Paul Vieira, Financial Post
Published: Wednesday, July 04 2007

OTTAWA -- The $51.7-billion pension fund-led buyout of Bell Canada Inc. spells good news for the Canadian economy so long as the prospective new owners follow through and invest billions in R&D and upgraded infrastructure, says Finance Minister Jim Flaherty.

"The key in industries such as telecommunications is that the entity has the ability to invest in innovation, and research and development. And that requires substantial amounts of capital. And from what I hear, that is

likely to happen to Bell Canada. And that is good for Canada," Mr. Flaherty said in an interview on Tuesday.

In the interview, the finance minister indicated he was comfortable with the role private equity and pension funds are playing in the economy. As a result, he does not believe Ottawa needs to review either the tax-exempt status of pension funds - which vied to take over Bell Canada - or rules that would apply to leveraged buyouts.

It is estimated Ottawa stands to lose over $1-billion in annual tax revenue should Bell Canada be privatized. Mr. Flaherty played down those worries, noting the federal government stands to reap a one-time windfall through capital gains taxes.

The Finance Minister's comments come days after Bell Canada's board of directors announced it struck a deal to sell the company to a group led by Ontario Teachers Pension Plan Board for $42.75 a share, or $34.8-billion.

With inclusion of debt and preferred shares, the total value of the transaction stands at $51.7-billion.

Canadian investors will own 59% of Bell Canada, formerly known as BCE, with Teachers holding the bulk at 52%. U.S.-based funds Providence Equity Partners and Madison Dearborn Partners will hold 32% and 9%, respectively.

On paper, the transaction could pose some problems for Ottawa due to the possible loss of tax revenue. The Bell Canada transaction will largely be financed with debt, and that greatly reduces the amount of tax paid to Ottawa. Also, wiping out the Bell Canada shares - the most widely held in the country -means Ottawa is no longer able to tax the dividends that accompany the stock.

But Mr. Flaherty said Ottawa stands to gain in other ways. "If the present transaction goes forward, there will be a substantial amount of capital gains tax paid by shareholders of BCE," he said.

(Under the current scheme, half of the profit generated from an asset sale, such as Bell Canada shares, is subject to a capital gains tax - on average, 21%.)

More important, though, he said that the new owners would likely be able to invest in upgraded technology - such as fibre optic wiring to households or the wireless network - that, in turn, will help increase Canadian productivity. Improved wiring to Canadian homes would allow Bell Canada to deliver faster Internet service to its customers, and allow it to keep pace with their cable company rivals. Bell Canada is said to be years behind its U.S. peers in this type of investment.

Meanwhile, Mr. Flaherty said he envisaged no role for Ottawa in terms of limiting how much debt can be used to finance the transaction. Tax experts have recommended such a move to preserve a federal tax base given the growing role of private equity and leveraged buyouts.

"At the end of the day these are business decisions to be made by business people - that is, assessing risk, because leveraging is the creation of risk. And we are not going to substitute our opinion for their opinion in terms of the amount of risk they are prepared to take in these transactions."

For the time being, he has also ruled out reviewing the tax-exempt status of pension funds. These funds, such as Teachers, can defer taxes owed. As a result, dividends derived from equity holdings flow through without facing a tax hit.

"The purpose of the pension funds, ultimately, is to ensure they can honour their pension obligations. And there is taxation, of course, when pensions are paid out," the Minister said.

Financial Post
pvieira@nationalpost.com

What part of this failed BCE outcome is a surprise?

Note the date:

Goldman Sachs: (BCE’s financial advisor) in letter to BCE’s Board June 29, 2007:

“We express no opinion as to the impact of the transaction on the solvency or viability of BCE or the ability of BCE to pay its obligations when they become due.”

Not what taxpayers had in mind.....measures to entrench the stench.

Tories expected to slash party funding
Nov 26, 2008 08:32 PM
Julian Beltrame
THE CANADIAN PRESS

OTTAWA–Symbolic cuts to politicians' perks, temporary relief for pension plans and a political grenade – ending the $30 million public subsidy to parties – are expected highlights of Thursday's federal economic statement.

Finance Minister Jim Flaherty will ask the five political parties to give up the $1.95-per-vote subsidy they get to pay for staff and expenses.

Opposition parties are likely to see the measure as a declaration of war only weeks after the election because of the Conservatives' commanding strength in fundraising.

The president of the Treasury Board rejected that suggestion.

"It would hurt us the most," said Vic Toews, although he refused to confirm the measure publicly.

Such a measure would cost the cash-strapped Liberals $7.7 million, the NDP $4.9 million, while the Bloc Quebecois would take a $2.6-million hit and the fledgling Green Party would be out $1.8 million.

Stephen Harper's Conservatives, who won the most votes, stand to lose $10 million.

But proportional to revenues raised last year, the taxpayer subsidy represents 37 per cent of the totals raised by the Tories.

That's far less than the 63 per cent chop for Liberal coffers, 86 per cent for the Bloc and 57 per cent for the NDP. The Greens stand to lose 65 per cent of total revenues.

The government might also use the fiscal update as an opportunity to avoid substantial salary increases for federally appointed judges.

Sunday is the deadline for the government to respond to recommendations that would give the judges pay increases much higher than the government proposed.

A steady stream of leaks have come from the government aimed at portraying the Conservatives as willing to share the pain.

Little has been said about how much pain Canadians may endure in the coming months.

The Tories were talking tough Wednesday.

"I urge the member to wait until tomorrow, and we will see who wants to lead by example," House Leader Jay Hill said in response to a question.

Harper's director of communication Kory Teneycke also appeared to be throwing down the gauntlet to the opposition.

"I'll see whether other political parties are willing to walk the walk with us when it comes to constraining spending or is this just about constraining other people's spending and not their own?" he said.

Thursday's update, the Harper government's first come-clean with Canadians since repeatedly dismissing the possibility of recession and deficits, will officially concede the likelihood of both.

But the multi-billion dollar stimulus package being prepared to prevent the economy from falling into an even deeper hole will have to wait until the budget early next year.

Instead, Flaherty is expected to announce several measures to rein in spending by MPs and top mandarins, such as restrictions on travel and expenses.

As well, the update will cut or trim the $6,500 salary increase for MPs scheduled to go into effect April 1, which could save up to $2 million.

A bigger saving could be realized from cancelling Christmas bonuses for management-class civil servants and executives of Crown corporations that can add 10 per cent to their pay packets.

For Canadians, the government is expected to offer temporary relief from mandated withdrawals from registered retirement income funds (called RRIFs), a measure estimated to be worth about $135 million.

"Tomorrow's statement, as I said to the House before, is not a mini-budget. It is an economic update," Flaherty said.

Industry Minister Tony Clement also was non-committal in reaction to news that Magna International will close two Toronto-area plants and lay off 850 workers, although he said the government was seized with the issue.

The Conference Board predicted that 15,000 auto sector jobs will be lost next year.

The measures – particularly the controls on MP and bureaucrat expenditures – were dismissed by opposition parties as symbolic gestures that pale compared to the bold responses to the crisis from other nations.

"They're into the gimmicky stuff and they're not acting quickly enough on the substantive issues that are effecting people," said Vancouver Liberal MP Ujjal Dosanjh.

NDP Jack Layton said his party will co-operate with the belt-tightening, but added Canadians want more.

"We know that for every billion spent (on infrastructure) you create 11,000 jobs and that's what other countries are doing," he pointed out.

Since the economic slowdown accelerated into a full-fledged global recession earlier this fall, the U.S. has already begun spending or committed to spend US$1.5 trillion, Britain $418 billion, Germany $213 billion, Japan an estimated $275 billion in response, and China close to $600 billion – almost all in fiscal stimulus.

Canada has announced no new stimulus, although it injected more than $100 billion into domestic money markets to ensure banks have sufficient capitalization to continue lending to homeowners and businesses.

Clement said the tepid response shows the government is acting prudently and not panicking.

New level of deceit: Harper signs communiqué he doesn't even believe in

Timeline for ending economic crisis 'premature': Harper

David Akin , Canwest News Service
Published: Sunday, November 23, 2008

LIMA, Peru - Prime Minister Stephen Harper signed on to a final declaration by Pacific Rim leaders stating that the economic and financial crisis would be over in 18 months but then told reporters he thought it premature to make such a prediction.

The relatively rosy declaration by the Asia Pacific Economic Cooperation forum was made Sunday morning, just as Harper's Finance minister was telling a Canadian television audience that Canada could be in a recession now.

"We may well be in a technical recession," Finance Minister Jim Flaherty said Sunday on CTV's Question Period.

It was the first time that Flaherty has conceded that Canada's economy is in recession - defined by most economists as two consecutive quarters in which gross domestic product shrinks.

Speaking to reporters here after the conclusion of the APEC summit, Harper said he agreed with Flaherty's assessment.

"The most recent private sector forecasts suggest the strong possibility of a technical recession at the end of this year and beginning of next," Harper said. "I am surprised at this. I am further surprised, more importantly by deflationary pressure that we're seeing around the world," Harper said.

"This is a worrying development. This is one of the reasons it may be necessary to take unprecedented fiscal stimulus."

Harper declined to discuss specific measures his government may be considering.

The GDP numbers for the fourth quarter of 2008 will not be released until March 2 and the numbers for the first quarter of 2009 won't be out until June 1. So neither the government nor Canadians will be able to say definitively until June 1 if Canada is in a recession right now.

Given the slowdown in the United States, Canada's largest trading partner, Canada's recent economic performance seems to have defied the experts. For example, as car sales plummeted in the U.S. last month, car sales in Canada actually rose by one per cent. The U.S. economy has shed more than one million jobs in the last 12 months while Canada's economy, at the end of October, had created a staggering 223,000 new jobs in the same period.

Flaherty is to present his annual fall economic update on Thursday. That update is expected to contain the government's latest forecasts for economic growth and how slowing growth is affecting the federal treasury.

Here at the Asia Pacific Economic Cooperation forum, the leaders of 20 Pacific Rim countries wrapped up two days of meetings by declaring, "We are convinced that we can overcome this crisis in a period of eighteen months."

Harper told reporters that line was inserted in the group's finale communique at the request of the meetings' host, Peruvian President Alan Garcia.

"I think it would be premature to speculate on that kind of timeline," Harper said.

APEC leaders also declared that they would refrain from bringing in any new trade barriers for at least 12 months.

On Friday, as if to underline his commitment to the principle of open trade, Harper and Colombian President Alvaro Uribe signed a free trade deal between the two countries that, once it is in place some time after 2010, could open up new market for Canadian beef, pork, and other products.

"Technical" recession? Is that the same as "not inhaling"?

Sun Nov. 23 2008 12:47:27 PM
Canada could face `technical' recession: Flaherty

The Canadian Press
Federal Finance Minister Jim Flaherty speaks at an economists conference, in downtown Toronto on Wednesday November 12, 2008.(THE CANADIAN PRESS/Chris Young)

Federal Finance Minister Jim Flaherty speaks at an economists conference, in downtown Toronto on Wednesday November 12, 2008.(THE CANADIAN PRESS/Chris Young)

OTTAWA -- Finance Minister Jim Flaherty says the Canadian economy could be on the verge of slipping into a "technical recession."

Speaking on CTV's Question Period, Flaherty said it's possible economic output could fall slightly below the line that separates slowdown from outright contraction in the final quarter of this year and the first quarter of next year.

Economists define recession as two consecutive quarters of negative growth, a scenario that Canada has narrowly avoided so far, despite deteriorating conditions in the United States and other western countries.

The possibility that Canada could slip into recession has been raised by a number of private-sector analysts, but Flaherty has generally avoided using the politically loaded R-word.

The finance minister is due to deliver a formal economic update to Parliament later this week.

From idealogically abhorent to "essential" in five short weeks?

Budget deficit 'essential' if economic stimulus needed: Harper
November 22, 2008
CBC News

Prime Minister Stephen Harper takes his seat at the Asia-Pacific Economic Cooperation summit in Lima, Peru, on Saturday. (Andrew Vaughan/Canadian Press)

Budgetary deficits may be an inevitable reality for countries intending to use financial stimulus packages to revive their economies, Prime Minister Stephen Harper said Saturday.

During a speech at the Asia-Pacific Economic Cooperation forum in Peru, Harper suggested the Canadian government will introduce a stimulus package to boost the economy while trying to avoid setting the stage for a long-term government deficit.

Signalling a shift in his usual anti-deficit stance, he acknowledged that countries that choose to implement fiscal stimulus packages will likely find it necessary to run budgetary deficits.

"We did agree at the G20 [summit in Washington] last week that additional fiscal stimulus should be used to sustain global demand if monetary policy continues to prove to be inadequate," Harper said in Lima.

"These are, of course, the classic circumstances under which budgetary deficits are essential."

It was an about-face for the prime minister, who in the lead-up to last month's election dismissed the possibility of a deficit, saying they were addictive and out of the question for Canada.

Harper said Saturday that whatever short-term new spending his government pursues, it "will ensure that Canada does not return to long-term structural budgetary deficits."
Trade barriers opposed
His comments came as the 21 leaders at the APEC summit pledged to invoke a 12-month moratorium on new trade barriers in an attempt to stabilize the global economy

"We reiterate our firm belief that free market principles, and open trade and investment regimes, will continue to drive global growth, employment and poverty reduction," the statement says.

"There is a risk that slower world growth could lead to calls for protectionist measures which would only exacerbate the current economic situation."

The statement comes on the heels of a broad plan adopted by leaders at last weekend's G20 summit in Washington, and goes one step further by pledging not to impose additional economic trade barriers in the next 12 months.

Leaders also pledged to reach agreement next month on the outline of a World Trade Organization pact that collapsed in July after seven years of negotiations. Concern over the global financial crisis injected new urgency into the so-called Doha round of trade talks.

Harper also used his speech to send a message that a freer trading system is the best way to restore global economic prosperity, saying the world is entering an economic period that is "potentially as dangerous" as anything the world has seen since 1929.

The Great Depression of the 1930s was not caused by a stock market collapse but by government policies and protectionist trade barriers that followed the crash, Harper said.

He criticized policymakers of that time for allowing the banking sector to contract and deflation to take hold, then trying to manage the problem by balancing government budgets instead of providing financial stimulus.
Unprecedented prosperity
"Notwithstanding our current difficulties, the prosperity generated around the world in the last part of 20th century, and the beginning of the 21st century, has been unprecedented in history," Harper said.

"Removing protectionist barriers and easing trade restrictions was a big factor in ushering in this extraordinary era. …We cannot allow ourselves to turn back."

Countries around the world should be "vigilant" against the rise of protectionism as they grapple with their slowing economies, he said.

Canada is committed to "pursuing mutually beneficial economic relations with like-minded nations" around the world, Harper said, pointing to a free-trade agreement signed this year with Peru, as well as a similar, tentative agreement with Colombia, announced Friday night.

"When it comes to Canada's support of free and open economies and markets, our view is based on the success of our North American partnerships," he said.

"We took a close and trusting relationship with the United States and we transformed it into the most successful commercial partnership in the history of the world."

Harper and outgoing U.S. President George W. Bush held a bilateral session earlier Saturday, where they discussed the economic slump, the Detroit-Windsor bridge and Canada's concerns about new U.S. rules requiring meat and fresh produce to be labelled by country of origin, the Prime Minister's Office said.

The Canadian livestock industry has complained it is being hurt by U.S. labelling rules.

Harper and Bush also reflected on the work they've done together, with the prime minister saying there were many things the two had agreed on and a few they hadn't, but that Bush was always willing to listen.

For his part, Bush called Harper a good friend and a strong leader.
With files from the Canadian and Associated Press

Unimpressed with Flaherty

LETTER TO THE EDITOR
Toronto Star
Unimpressed with Flaherty


Nov 22, 2008

Re: Flaherty reassures seniors


Finance Minister Jim Flaherty is apparently concerned that seniors have been getting bad advice from financial institutions about their retirement funds. This is the same man who wiped out $35 billion in the retirement savings of seniors and then refused to release the supporting documentation that showed an alleged "tax leakage."

The only bad advice that seniors got was to trust Stephen Harper when he assured them that income trusts would never be taxed at source. Flaherty is quoted as saying, "I believe it is important to ensure that they do not face undue obstacles in managing their assets in these challenging times." This is from the man who brought in "experts" who ridiculed seniors for investing in income trusts.

Now seniors sit and watch Flaherty and the Conservatives bend over backwards to assist financial institutions that made serious errors in investing in asset-backed commercial paper. Flaherty was given several alternatives that could have spared seniors, but he disregarded all of them in his attack.

William Mayne, Markdale, Ont.

“The only thing we have to fear Is Harper himself”

Today we learn from Lima Peru that Stephen Harper is promising "unprecedented action" to calm the state of fear. Please somebody, put this guy on a leash. What is he up to now? Stephen Harper is the main source of Canadians' fear and Canada's economic undoing. This is the guy who increased spending by 14% per annum while reducing the GST by 2%? This is the guy who promised us in the last election that Canada's fundamentals were strong and encouraged Canadians to invest in the stock market. Those who followed Steve's advice will have lost 21% of their investment. This is the guy who encouraged Canadians to invest in income trusts in the 2006 election and promised to protect seniors nest eggs. That sucker punch advice cost these Canadians $35 billion of their life savings.

No, the only thing Canadians have to fear is Stephen Harper himself. My advice: Put a sock in it Steve, we don't need any more of your "unprecedented actions".


Harper promises 'unprecedented' action to calm 'state of fear'
David Akin ,
Canwest News Service
November 21, 2008

LIMA, Peru - Prime Minister Stephen Harper, speaking here on the eve of the APEC leaders' summit, said markets "remain in a state of fear" and vowed to take "unprecedented fiscal actions if they are necessary" to stimulate economic growth and ease tightened credit conditions.

Harper was to have a one-on-one meeting with U.S. President George Bush on Saturday morning before giving a speech to CEOs and leaders from the 20 countries that make up the Asia Pacific Economic Cooperation (APEC) forum. He will also be meeting with the leaders of New Zealand and Peru on Saturday.

Following the G20 leaders summit last weekend in Washington, stock markets in Canada and around the world suffered one of their worst weeks ever.

"The markets remain in a state of fear," Harper said at a news conference here after he and Colombian President Alvaro Uribe signed a free trade deal between the two countries. "Those fears aren't always rational, but they're very real."

Analysts attributed some of the losses to tightened credit conditions, even though the world's governments have pumped billions of dollars into the world's banks.

"There remains considerable fear in stock markets and other markets around the world," Harper said."These markets are from time to time not rational."

Though the benchmark TSX Composite Index regained some ground on Friday, it was down more than nine per cent for the week following the G20 summit.

"This government's made clear, all major governments in the world - and I think we'll see the same thing this week - they're determined to take whatever financial, monetary or fiscal actions that are necessary to sustain growth in the global economy."

Harper said lowering trade barriers through agreements such as the one he signed Friday with Colombia will be an important component of protecting and encouraging economic growth.

"We will take, as well, in Canada, unprecedented fiscal actions if they are necessary. We will do whatever is necessary to sustain the position of the Canadian economy," Harper said.


© Canwest News Service 2008

Teachers' bid for BCE inspires confidence?

With 21 days until the ostensible closing date of December 11th, and the shares of BCE commanding a whopping $34.33 at today’s closing, this implies a whole lot of risk about this transaction ever closing as advertised at $42.75.

The current price implies a compound annualized rate of return of 4,526%

What do you suppose the market is telling us? That pigs fly?

Hapless Harper by the numbers: Sell on weakness

November 21, 2008

Stephen Harper's Index

Cumulative amount the Conservative government is projected to be in deficit over the next four fiscal years (low scenario) according to the Parliamentary Budget Office: $50.6 billion

Amount that Stephen Harper repeatedly claimed the Conservative government would be in deficit during the last election: $0

---

Amount of value an investor would have lost if they had purchased a TSX index fund right after Stephen Harper claimed there were "good buying opportunities" in the market: 21%

---

Number of mentions of the word "uncertainty" in the Speech from the Throne: 4

Number of mentions of the word "instability": 2

Number of mentions of the word "challenges": 8

Number of mentions of the word "deficits": 2

Number of mentions of the words "good management": Zero

Number of mentions of the words "budget plan": Zero

Number of mentions of the words "contingency fund": Zero

Number of mentions of the words "it would be misguided to commit to a balanced budget": 1


---


Number of resolutions passed at the recent Conservative policy convention that would remove the Canadian Human Rights Commission's authority to address hate messaging: 1


Number of caucus-sponsored resolutions passed that would remove "gender equality" from the Conservative policy platform: 1


Number of resolutions passed that would address the current economic crisis: Zero

Lies my Prime Minister told me

That he wouldn’t raid seniors’ nest eggs by taxing income trusts
That income trusts cause tax leakage
That he wouldn’t call an election until October 2009
That he didn’t bribe Chuck Cadman
That the economy is sound
That he would never run a deficit

What other lies await us, Prime Minister Dearest?

Canada's Least Trustworthy "Economist"

Perhaps by saying that he is an "Economist", Harper really means to say that he is economical with the truth?

How Harper could (and should) have ducked a deficit

Ralph Goodale,
National Post
November 21, 2008


Not long ago, as Canadians were about to vote in the federal election, Prime Minister Stephen Harper was emphatic about his Conservative government not running a budgetary deficit.

Now, barely a month later, he wants us to believe that he's being driven toward unavoidable red ink by sudden international circumstances beyond his control.

It's all the fault of a collapsing U. S. housing market, bank failures, a global credit crunch and continuing turmoil in financial markets world-wide. That's the Conservative spin.

So now, the Canadian government has no choice but to sell off capital assets, or cancel programs and services, or run a federal deficit -- or a combination of all three -- if it's going to safeguard Canadian pensions, salvage jobs in the manufacturing, automotive and forestry sectors and kick-start economic growth.

But wait a minute. This Conservative story just doesn't add up.

Yes, the economic crisis that began in the United States is very real, and it will indeed inflict significant damage in Canada and around the world. But the fact that this country is not in a better position today to weather that storm is entirely Mr. Harper's domestic responsibility.

The best economic forecasters in the private sector and within government have been warning successive finance ministers since at least 2003 about the huge downside risks posed by the precarious American situation. Previous Liberal governments took those warnings seriously. Stephen Harper did not.

From his Liberal predecessors, he inherited the most robust fiscal position in all the G8 group of world-leading economies, including an annual surplus of more than $12-billion and projected financial flexibility of close to $100-billion over the coming five years.

The fact that Canada is not in a position to weather the economic crisis is entirely his fault

But as soon as he came into office, and long before any U. S. crisis materialized, Mr. Harper began frittering all of that away.

He increased federal government spending to an unprecedented level. He eroded the federal tax base, without bolstering productivity or improving disposable incomes. And he eliminated the extra prudence and the contingency reserve that used to be built into federal budget-making as "fiscal shock absorbers" to protect against sudden nasty surprises.

You always hope those surprises will never actually happen, but inevitably they do. Until Mr. Harper arrived on the scene, Canada had the wherewithal to defend itself.

We withstood the consequences of major international currency crises in Mexico and Asia, the SARS pandemic, mad cow disease and the fallout from 9/11, while still cutting taxes, paying down debt, investing in health care, education, innovation and infrastructure and staying solidly in the black at the same time.

But no more. Mr. Harper has squandered Canada's fiscal capacity.

So the first external crisis to come along on his watch results in a deficit. And that's entirely his responsibility.

-Ralph Goodale is the Liberal MP for Wascana constituency in Saskatchewan and House Leader for the Official Opposition. He was Canada's finance minister from 2003 to 2006.

Now’s the time for Liberals to insist on Snake Oil Steve's proof of tax leakage

“He has told cabinet and caucus to stay on the high road,” a senior Tory told The Globe and Mail Wednesday. “However, we are not to be punching bags. We are advised to respond in a firm, fair, factual way.”

Respond in a factual way? In that case, the Liberals need to ask Harper for his proof of tax leakage.......and not accept “no” as an answer this time round. The G20 Communiqué of last week called for greater transparency. Let’s have it folks. Enough with Harper’s snake oil salesman lies and deceit. Canadians have lost $35 billion of their savings, for either a valid reason or a false reason. Which is it Steve? We can handle the truth, can you? Prove the case or drop the tax.


Facing a crisis, Harper instructs MPs to be less confrontational

BRIAN LAGHI AND STEVEN CHASE
Globe and Mail
November 19, 2008

OTTAWA — After three years of leading one of the most combative federal governments in recent memory, Stephen Harper is telling his MPs that it's time they take the high road. MPs and officials across government were given marching orders by the Prime Minister recently and told to shelve the aggressive ways of the first term in favour of a kinder, gentler attitude. It was a message, say sources, that the PM himself delivered recently to his caucus. “He has told cabinet and caucus to stay on the high road,” a senior Tory told The Globe and Mail Wednesday. “However, we are not to be punching bags. We are advised to respond in a firm, fair, factual way.” The PM, according to one senior government member, told MPs that women in the caucus are particularly good at verbally sparring with opposition members without coming off as too combative.
Since being re-elected in October, the Tories have purposely adopted a new, less confrontational attitude toward opposition MPs in the Commons, in part, experts say, because they cannot afford to be seen fighting relatively inconsequential battles while the economy falters. That new attitude gets a significant test Thursday, as Question Period kicks off for the first time since June. Examples of the government's new approach abound since the campaign ended. On Monday, Mr. Harper called all of the premiers and territorial leaders to brief them on the Group of 20 meetings in Washington – an unusual step for the PM, who is responsible for international negotiations. He also recently cautioned Tories at their Winnipeg convention to avoid ideological approaches during the current economic difficulties, and met for three hours with the premiers and territorial leaders on the economy, a get-together that Ontario Premier Dalton McGuinty called “one of the best meetings I've had at a first ministers.”

The relationship with Ontario is a particularly significant example. On Wednesday, Industry Ministry Tony Clement and Ontario Economic Development Minister Michael Bryant left for Detroit to discuss the economic difficulties facing the Big Three American auto makers. It's a trip that almost certainly wouldn't have happened during Mr. Harper's first term, when the relationship with Ontario was strained by controversy over redistributing seats in the Commons and a plan to overhaul the Senate. It hit its lowest point when Finance Minister Jim Flaherty said Ontario was the worst place for a foreign businessperson to invest. Others have noted a more personable PM. One Tory official was taken aback recently when Mr. Harper hailed him from a stairwell and asked how he was doing. Political scientist Antonia Maioni said the Prime Minister may be taking a new tack because he has grasped that he must compromise if he wants to get things done. “Stephen Harper is realizing that he is a minority government prime minister,” said Ms. Maioni, director of the McGill Institute for the Study of Canada. “I think he realizes that he has to find new strategies to govern. He may be coming to terms with that as a political leader.” How long the new attitude will hold is anyone's guess.

The opposition would no doubt love to provoke a prime-ministerial outburst, and the Prime Minister is known to have a temper. And the new nice-guy act doesn't apply to everything. At the party's convention last week in Winnipeg, the Conservatives blocked the media from attending a series of select key debates on the party's policy direction. And the PMO continues to insist that individual reporters affix their names to a list from which officials choose those who are allowed to ask a question. There are also potential conflicts with the provinces over such matters as a single national securities regulator. Finally, some Tories wonder whether Mr. Harper is taking a more collegial attitude to mollify party members upset at him for failing to deliver a majority. “Ask the candidates who lost in the last election, or cabinet ministers who are either moved laterally or demoted, if he was particularly warm and fuzzy,” one Conservative government official said. “There's a lot to be said for a charm offensive, particularly at a time like this,” said Peter Donolo, a partner with the Strategic Counsel, a polling firm. “People will be prone to think that Question Period banter or very aggressive behaviour in the House is trivial or kind of fiddling while Rome burns.”

Mellissa Fung comments on the complete inaccuracy of the Globe and Mail’s reporting:

The Globe and Mail: The folks who dutifully delivered to Canadians, Stephen Harper’s lies about tax leakage from income trusts, are now apparently covering up salient details about Harper’s prisoner exchange for Mellissa Fung.

My interest in the Mellissa Fung story, given we were only told about it after the fact, resides in the fact that it reveals, proof positive, that the Canadian media can be orchestrated by political forces, as I have always believe occurred in the media's coverage of Harper's income trust fraud.

Although Canadians were deprived knowledge of Mellissa' kidnapping that occurred two days before the federal election, news of Mellissa's kidnapping was revealed in real time in the Afghan media? I guess fully informed Canadians are Harper's true enemy. Meanwhile Harper is advancing the false notion that no prisoners were exchanged to secure Mellissa's release. She tell us otherwise. Evidently the Globe has its own reasons to misreport this Mellissa Fung story, just as it totally misreported on Harper's $35 billion income trust fraud.

Interviewer: What do you know now about the kinds of negotiations that went on? There were reports that there were prisoner exchanges, reports that JTF-2 was left on hold, Canada's commando unit, just in case they could help you.

Mellissa Fung: I didn't know about any of that.

Interviewer: Did you hear any of this?

Mellissa Fung: No, but I read a Globe and Mail article the other day that was totally wrong. I had to laugh because none of it was true except they got my name right.

Interviewer: What was it about?

Mellissa Fung: It was about trading up, that I traded hands three times and — I don't remember the details. But I had to laugh because there was nothing about it that was right except they spelled my name right.

I now understand that Afghan intelligence had sort of fingered the family of the ringleader of this gang and had arrested a whole bunch of them, and it was a prisoner exchange that they agreed to release the family if the group would release me, and that's what ended up happening.

Hypocrite Harper preaches double standards on world stage

Harper is calling for peer review of other countries' banking systems?

Peer review?

Why is Harper preaching double standards on the world stage, since he doesn’t practice these standards at home? After all, Harper’s fraudulent tax leakage analysis caused $35 billion in losses to innocent Canadian taxpayers. Where was the peer review of Harper's tax leakage analysis? There wasn't any, since all Harper offered as evidence of tax leakage was 18 pages of blacked out documents.

Harper is a fraud, a hypocrite and a liar. Now he's taken that schtick onto the world stage:


Harper calls for global scrutiny of countries' banking systems
STEVEN CHASE

Globe and Mail Update

November 14, 2008 at 2:51 PM EST

WINNIPEG — Prime Minister Stephen Harper says he wants countries such as the United States to agree to subject their financial systems to “peer review” by other countries – comments made as he heads to a key economic summit on tackling a global crisis triggered by an American banking and lending meltdown.

Just to be clear: It was Paul Martin who saved us from......

bank mergers and the reciprocal foreign ownership of Canadian banks.


Canadian PM: Speculative That Bank-Merger Ban Helped Avoid Woes


OTTAWA (Dow Jones)--Canadian Prime Minister Stephen Harper said Friday it was
"speculative" to say that domestic banks avoided the same kind of problems faced
by global counterparts because they are prohibited from merging.


"I have asked the question - if we had allowed bank mergers do we think we
would be in a substantially different situation today? Most of the experts I've
talked to do not share that view. But it is speculative," Harper said at a
televised news conference in Winnipeg.


He said it was "solid" regulation that has kept the banking system strong.


"That solid system of regulation has created a culture of prudence in our
banking system," he said.


Harper's comments were partially echoed in a speech by Julie Dickson, head of
the Office of the Superintendent of Financial Institutions, or OSFI, the
country's chief banking regulator. The speech, made at an insurance forum
Thursday, was published on the OSFI Web site Friday.


"A lot of past decisions made in Canada have served the system well (for
example, high capital targets, attention to quality of capital, and the leverage
ratio in the banking industry)," she said. Dickson also noted that Canadian
banks have "platinum quality" capital, since their Tier 1 capital is comprised
of a high percentage of common equity. Canadian bank capital ratios are also
higher than the global average, she said.


" We have seen recently how strong capital cushions in Canada have paid off to
the benefit of our institutions and overall financial system," Dickson said.


Nevertheless, she added, the situation faced by the global financial-services
industry is "indeed serious", which is why the regulator has taken some action.


Among recent actions, OSFI has requested that Canadian banks and life insurers
request its permission before making any share buy-backs. The regulator has also
provided added flexibility for the banks to issue preferred shares and have them
included as Tier 1 capital, and it has changed capital requirements for life
insurers related to segregated fund guarantees.

Now that the election is over, Canadian media starts reporting kidnappings in real time?

Canadian journalist kidnapped in Pakistan: Report
Canwest News Service
Published: Thursday, November 13, 2008

VANCOUVER - Government officials in northwest Pakistan are trying to negotiate the release of a Canadian journalist, who was kidnapped with three local guides Tuesday, a Pakistani newspaper says.

The Daily Times, an English-language newspaper in Lahore, said Khadija Abdul Qahaar, the owner and publisher of jihadunspun.com, was reported missing.

The Lahore newspaper said officials were speaking with elders of the Janikhel tribe about Qahaar's release.

The paper said she was doing freelance work in the area, but was not registered with National Union of Canadian Journalists.

Qahaar, formerly known as Beverly Giesbrecht, converted to Islam after the 9/11 attacks in the United States.

In an "urgent request" posted on the Jihad Unspun website Oct. 22 under her byline, Qahaar asked for help in getting out of Pakistan, which she described as "erupting into a full-scale war zone." She said that as foreigners, she and her team had to leave the country, but don't have funds to get out.

"As a woman, I have already had a few close calls in the tribal areas as kidnappers and thieves are running loose even in Peshawar," she wrote.

Prior to launching the website aimed at inspiring "others to Islam and to take a stand against this shameful war on 'terrorism,'" Qahaar was a self-described publishing entrepreneur and Web developer.


© Vancouver Sun 2008

Canada won't have asset "fire sale" - Harper

WINNIPEG, Manitoba, Nov 14 (Reuters) - Canada will never have a "fire sale" of government assets, but will still examine the possibility of privatizing some holdings to help avoid a budget deficit, Prime Minister Stephen Harper said Friday.

Yes but Stephen, we already did. It’s going on as we speak.....Click here

After Harper's income trust betrayal, many questions still remain

After Harper's income trust betrayal, many questions still remain

Financial Post
November 3, 2007
Brent Fullard

Stephen Harper broke his election promise to never raid seniors’ nest eggs through taxing income trusts, by doing that very thing on Halloween 2006. One year later the following questions remain:

Where is the government’s proof of alleged tax leakage? How could the proposed conversions of BCE and Telus into income trusts have had any effect on tax revenue when neither were paying taxes as corporations and were not expected to for several years? What policy advantage is there, now that BCE has been taken private through a highly debt-leveraged buyout, and which has caused a loss of the $793 million more per year BCE would have paid as an income trust?

How is the stated objective of tax fairness and levellng the playing field achieved when government-sponsored pension plans are allowed to own trusts, free of tax, in their private equity portfolios, while 70% of individual Canadians are not?

Harper wrote the following in the National Post on Oct. 26, 2005: “Income trusts are popular with seniors because they provide regular payments that are used by many to cover the costs of groceries, heating bills and medicine”. If so, then why did he so abruptly and without notice or consultation reverse his promise, leaving investors with losses of $35 billion and their incomes reduced by 31.5% and in some cases 50%? How is this socially just or fair?

Meanwhile why are Jack Layton and the NDP supporting this policy when they profess to be against wholesale foreign takeovers of Canadian businesses and supposedly in favour of protecting seniors’ retirement savings? Where is Jack Layton’s and the NDP’s proof of tax leakage?

Taken as a whole, this is a travesty of democracy – starting with the breaking of a promise, the false premise for breaking the promise, the complete absence of consultation and the litany of adverse policy repercussions as the aftermath of a policy borne out of zero accountability and a complete lack of government transparency. Narrow special interests have successfully manipulated Canada’s New Government for their selfish ends.

Transparency and accountability are the cornerstones of a democracy. The real danger to Canadians is that the Conservative government is flagrantly undermining our democratic institution known as Parliament, if major tax laws are bring enacted and passed on the basis of their foundations being assumed to be true, when in fact no proof whatsoever has been provided by the government.

This is an extremely dangerous precedent to have established, since it gives extraordinary powers to the government to pass important legislation by invoking supposedly fact-based arguments that are devoid of fact-based evidence.

Stephen Harper, together with the Jack Layton and the members of their respective parties, are acting in concert to abrogate Canadian’s democratic institution known as Parliament. As such we are calling for a public inquiry to fully examine the matter of alleged tax leakage, particularly in light of the government’s announced reduction in corporate tax rates by a staggering 32%, from 22% to 15%, in 2012. If the original policy intent on income trusts was to “level the playing field” with corporations, then this changed tax regime for corporations announced by the government this week demands a reexamination of the extent to which these most recent measures will have tilted the playing field in favour of corporations and to the detriment of income trusts.

Brent Fullard
President & CEO
Canadian Association of Income Trust Investors

Don Martin, known for his petty vendetta journalism, is sued for libel:

Today we learn that Arthur Kent is suing Don Martin for libel. Don Martin is the same Calgary Herald journalist who refused to release Harper’s 200 page manual on how to obstruct parliament when asked by me. For my persistence I was awarded with a petty vendetta article from Don Martin entitled “Will someone save me from Brent Fullard?” in which he attempted to discredit me during the last election, in the same way he did with Arthur Kent. Is this the best and greatest use of Don Martin’s time? Maybe he could use his prodigious (?) journalistic talents to reveal Harper’s tax leakage argument to be the blatant lie that is. No doubt a few people in Calgary would appreciate that, since their once vibrant industry was destroyed for no good reason. But I guess that would actually involve doing some research? In that case, forget it. Politically motivated petty journalism prevails:


Arthur Kent sues CanWest for libel
Claims newspapers attacked him during political campaign

By Etan Vlessing
Hollywood Reporter.com

Nov 13, 2008, 02:42 PM ET
TORONTO -- Canadian journalist Arthur Kent, known as the "Scud Stud" for his live NBC reports during the 1991 Gulf War, on Thursday filed a libel lawsuit in the New York State Supreme Court against CanWest Global Communications Corp.

Kent said the lawsuit results from a profile of him [by Don Martin] in the Calgary Herald and the National Post, both CanWest Global newspapers, that ran during a recent provincial election in Alberta. Kent ran unsuccessfully to represent a local Calgary riding.

"CanWest launched a grossly inaccurate and biased attack on my character and reputation. The article misrepresents both our team's election campaign and my career in journalism, particularly my work for the New York-based broadcast news industry," Kent alleges in his suit.

The Canadian journalist added that the CanWest Global newspapers refused to publish a rebuttal to the newspaper column that he submitted. Kent earlier filed a defamation action against the media company in Calgary.

In September, Kent settled a lawsuit against Universal Studios over the movie "Charlie Wilson's War" in which portions of his voice and video recordings were used in the war drama without his permission.

Arthur Kent's brother, longtime Canadian newscaster Peter Kent, was recently elected to the House of Parliament in Ottawa to represent a north Toronto constituency.

Ignatieff launches his campaign by positioning Harper as a liar

Michael Ignatieff announced his campaign for leadership of the Liberal Party today with some prepared comments. The second sentence of which is that Stephen Harper is a liar, citing Harper’s betrayal on income trusts as his first example and calling Harper's government intellectually bankrupt..

As a Liberal delegate, I will be supporting Michael Ignatieff’s leadership bid for this and a whole host of other reasons.

And for this, we bailed out the banks?

Jim Flaherty swapped $75 billion of taxpayers’ money for a questionable pool of mortgages , in order to free up credit and allow taxpayers the privilege of losing $800 million a year in taxes from the LBO of BCE?

TD bangs drum for BCE buyout

Andrew Willis, November 12, 2008 at 7:37 PM EST

Give Toronto-Dominion Bank boss Ed Clark full marks for consistency.
The unflappable Mr. Clark stood four-square behind his bank's commitment to the BCE buyout on Wednesday. Where many bankers would resort to weasel words in talking their way around a potentially thorny situation, Mr. Clark was straight forward in supporting a client.

The Ontario Teachers Pension Plan purchase of BCE is expected to close by Dec. 11, and there has been speculation the four banks funding the deal will look for an exit ever since the credit crunch began in the summer of 2007. But TD Bank has been steadfast in its public support the deal, and speaking Wednesday at the Reuters Global Finance Summit in New York, Mr. Clark said: "I'm confident that we'll be there with our money."

Mr. Clark did say it was unlikely the debt would be syndicated before the buyout closed, adding it is difficult to syndicate loans in these markets, according to Reuters.

Citigroup, Deutsche Bank and Royal Bank of Scotland are also lending on the BCE purchase. The Teachers and its backers have agreed to buy BCE for $42.75 a share, and the stock closed Wednesday at $37.30 on the TSX.

More lies from the Prime Misleader

Mellissa Fung: There was a prisoner exchange. [Opposed to news embargo].

Norman Spector, today at 3:50 PM EST
Globe and Mail

First of all, it was great to see Mellissa looking and sounding so healthy in her interview with the CBC's Anna-Maria Tremonti. And one had to admire her frankness in saying that, as a journalist, she would have wanted to report the kidnapping, but that she accepted the decision of the experts to maintain an embargo.

The interview also served to clear up the circumstances of her liberation (I'm paraphrasing): Afghan intelligence fingered the family [of kidnappers] and they arrested a whole bunch of them, and I now understand that there was an exchange of prisoners.

I guess you can say that Prime Minister Harper told Canadians the truth, but only technically, and only if you parse his statements very liberally. And it's now clear why the CBC's John Cruickshank - faced with a choice of playing the same word games or contradicting the Prime Minister - refused to comment on the negotiations that led to her release, other than to say that no money changed hands.

Evidently, Americans have a right to know, that eludes Canadians under Harper

Why did Stephen Harper prevent Canadians from learning about the kidnapping of Mellissa Fung (pictured above) when it actually occured on October 12, 2008? This is not the practice of other nations, as evidenced by this report below.

Can this news embargo willingly engaged in by Canada's press be explained by the fact that we had an election in progress and Harper wanted to bury this news for his own political fortunes? Keep in mind, Harper had stopped taking any questions from the press on October 12, 2008 on any topic? That's Harper's twisted idea of a democracy.

New York Times Reporter Kidnapped Near Kabul


November 11, 2008 6:18 a.m. EST

AHN Staff

Kabul, Afghanistan (AHN) - A journalist from the New York Times together with two Afghan colleagues were abducted by unidentified armed men on Monday in Logar province, some 37.2 miles south of the capital Kabul.

Jan Mohammad Khalid, spokesman for the provincial administration said that the New York Times journalist he identified only as David, was forcibly taken by armed men together with his local interpreter Tahir and driver at around 5:00 pm Monday while on their way to Charkh district.

The trio did not coordinate, with the police, their trip to Charkh, he said.

According to Khalid, the New York Times journalist wanted to conduct an interview with local Taliban fighters but failed to inform authorities of their plan.

Logar province police chief Mustafa Mohsino warned that all foreigners, as well as journalists, should coordinate with the police before traveling to Logar province.

No group has yet claimed responsibility for the kidnapping.

The abduction of the New York Times journalist came after Canadian TV journalist Melissa Fung, a reporter for the Canadian Broadcasting Corporation were freed Saturday by her abductors in Wardak province.

Fung was abducted by suspected Taliban members on October 12, after her second visit into the country.

She was freed after the local tribal council negotiated with her kidnappers for her quick release.

Canada's Premiers practice Voodoo economics that destroyed Canadians RRSPs

Canada's provincial premiers, who are today calling for action on pensions are the very same group who supported the income trust tax that was based on a tax leakage ruse that ignored the taxes paid by RRSPs. So their solution was to tax them a second time at 31.5% for good measure? How is that consistent with financial theory or their new found desire to protect RRSPs, when that action caused Canadians to lose $35 billion.

These Premiers are merely puppets for somebody. Who? Harper? Paul Desmarais Jr.? Dominic D’Allessandro? Jim Leech? Who? Certainly not Canadians at large. We don’t need their crocodile tears of sympathy. A few facts would be in order before they are to be taken seriously in these challenging economic times. No more shooting from the hip policies of pension destruction, shrouded in the total mystery of 18 pages of blacked out voodoo economics

Premiers urge quick action on pensions, infrastructure

3 hours ago

OTTAWA — The premiers are urging Ottawa to act quickly on protecting the viability of pension plans, speed up infrastructure spending and rescue Ontario's teetering auto industry.

The issues appear uppermost on the premiers' agenda as they gathered for a three-hour working lunch with Prime Minister Stephen Harper.

"If we don't get it right on how we treat pension plans, we could affect their jobs," said Manitoba Premier Gary Doer on the issue of pension sustainability.

"If we don't get it right on pension plan flexibility, we could have the market just whack a lot of people close to age 71 and they may take a huge hit. These are very, very important issues."

Canadians who turn 71 this year must convert their RRSPs into retirement income funds - known as RIFs - even though the value of their plans have tumbled. As well, private pension plans have been hard hit by the collapse of equity markets and are looking for a relaxation of the rules on funding shortfalls.

Nova Scotia's Rodney MacDonald, Doer and British Columbia Premier Gordon Campbell urged Ottawa to increase the mandatory age for conversion to allow retirees more flexibility and give them time for the value of the RRSP savings to recover.

"The fact of the matter is we should give them the opportunity to have the value of their life savings recover," Campbell said. "Frankly, if we don't let Canadians take care of themselves, at the end of the day it falls back to government to take care of them."

Meanwhile, Ontario Premier Dalton McGuinty said he is looking for co-operation from Ottawa on a rescue package for the teetering auto sector.

"I think there's understanding what's at stake here - 400,000 jobs, 12 Ontario communities, $28 billion in wealth generation, five per cent of our (gross domestic product), it's a pretty significant sector," he said.

Most of the first ministers appear to agree that with the economy slumping, a first step for governments is to inject stimulus by speeding up spending on infrastructure projects already approved in principle.

Quebec Premier Jean Charest said there is no excuse for further delays in about $4 billion in spending that has already been approved.

And the premier said Harper "would send a very powerful signal" by committing to the construction of a high-speed train line along the Quebec City-Windsor, Ont. corridor.

The premiers and Prime Minister Stephen Harper are meeting for the first time since the financial crisis intensified during the fall federal election and sent global economies stumbling toward recession.

The prime minister has been playing down expectations for the meeting, but Finance Minister Jim Flaherty suggested Sunday the government may be willing to aid auto plants that have viable prospects.

The minister also said Ottawa is open to a new fiscal stimulus package to try to stave off a recession.

The federal government has been under increasing pressure since the conclusion of the election campaign in mid-October to act more aggressively in dealing with the global financial crisis and sharply deteriorating economy.

It has responded by agreeing to buy up $25 billion in bank-held mortgages in an effort to inject liquidity in the system.

But the auto sector and a broad coalition of industries have separately asked Ottawa for a similar response, saying they need loan guarantees to secure sufficient credit to ride out the storm.

As well, Harper is expected to push for progress towards establishment of a national securities regulator.

The federal government recently announcement it will cap the growth of annual equalization payments to have-not provinces.

Ontario, with its manufacturing sector taking a beating, will join the ranks of the have-nots for the first time next year.

The duplicitous Gordon Campbell claims he wants to protect RRSPs?

What a hollow claim from BC Premier Gordon Campbell at today’s First Minister’s Meeting that he wants to protect Canadians’ RRSP investments. If that were truly the case, then why did he support the double taxation of trusts in RRSPs, with no proof of alleged tax leakage? Why did he not tax Pension Funds in the same way if he was so concerned about alleged tax leakage, as opposed to padding his provincial governments nest egg for public service workers?

Gordon Campbell’s blind support of Flaherty back in January 20007 played a pivotal role in Canadians losing $35 billion and an essential income investment for retirement. He destroyed the RRSP savings of millions of Canadians, and now he wants to play Captain RRSP? Empty political opportinism in the extreme, that bears no relationship with his past conduct.


Here’s Kady O’Malley’s (of Macleans) live blogging from the First Minisiter’s meeting, where we get a first hand account of Gordon Campbell’s politically opportunistic concerns over Canadians RRSPs


Gordon Campbell, everyone - who looks shockingly chipper, even moreso than Brad Wall — isn’t he jetlagged? I guess not, because he is waxing enthusiastic, if vague, about the importance of the auto sector, and stressing the need to reassure “older people” that they won’t have to cash out their RRSPs, or sell their stocks. “If we don’t take care of Canadians today, it falls to governments to care for them later,” he notes. He also wants to remove trade abd labour mobility barriers, duplication, all the usual stuff. “Time is something we can use quickly,” he insists — he doesn’t want to meet again in a year, he wants action now.

Okay, RRSPs and RRIFs are his priorities,

Tories promise to make Parliament dysfunctional once again.

Tories want opposition to drop 'in and out' and Cadman probes in House
House 'committee obstruction manual' from the last Parliament will be refined, improved and will be back in play.

By Bea Vongdouangchanh

The Hill Times, November 10th, 2008

The infamous House "committee obstruction manual" from the last Parliament will be refined, improved and will be back in play, says new Chief Government Whip Gordon O'Connor who also hopes for a less raucous and more productive 40th Parliament when it returns on Nov. 18.

"What it is in reality is it's like the Cole's Notes of what committee chairs should think about, or how to operate in committees," said Mr. O'Connor (Carleton-Mississippi Mills, Ont.) in an interview with The Hill Times. "I think there's a need for that certainly for people who will be chairs from our side, but what I'm going to do is I'm going to go through the book—if you want to call it that, but it's just a bunch of sheets of paper—and I think I'll try to refine it and improve it so that it's focused on how to be an effective chair."

Mr. O'Connor told The Hill Times last week that House committees have not yet been set up and despite media reports last week indicating that the Conservatives would attempt to get a majority on some of them, membership still has to be sorted out and negotiated.

"I don't see how that's possible. A committee is 12. To get a majority, you need seven, so I don't see how that would happen. We have to negotiate this with the other parties and we'll see what the end results are," he said.

Liberal Whip Rodger Cuzner (Cape Breton-Canso, N.S.), whom Liberal Leader Stéphane Dion (Saint-Laurent-Cartierville, Que.) appointed last week, said his party's critics have not yet been assigned and therefore committee memberships have not been allocated. He said it would not make sense for the Conservatives to have a majority on committees because they do not have a majority government.

"I think the purpose of committees, especially the ones that we hold the chairmanship, is to reflect the make up of Parliament and the Conservatives don't hold a majority within the Parliament of Canada. So that's something that will be discussed and negotiated. Just because it's the will of the government, doesn't make it so," he said.

Mr. O'Connor said he also hopes House committees will move on from some of the contentious issues that paralysed some committees in the last session, for example the "in and out" scandal and the Cadman Tape Affair.

"I don't control committees and I don't control the other parties," he said. "We've had an election. The people of Canada have spoken and they've elected us as government with a substantial minority. One hundred and forty three seats is a very, very good result. I would expect that some of these issues of the last Parliament, my hope is anyway, will go into the background now and we'll get on with the future."

Mr. O'Connor, who was first elected in 2004 and is a former Defence and Revenue minister, was appointed as the Chief Government Whip on Oct. 30.

Along with newly-appointed Government House Leader Jay Hill (Prince George-Peace River, B.C.), he will be responsible for guiding government legislation through the House, something that can be difficult in a minority Parliament.

"I've had two ministries and I've experienced what it's like to be responsible for a ministry and now I'm going to be at the heart of Parliament. I really consider it an honour to be elected to Parliament. It's so special. Only 308 people get elected here and to be the chief government whip means that I'm going to be involved in the life of Parliament and I look forward to it," he said, noting that there will be some challenges.

"The whip, from my point of view, is to try to get government legislation through as smoothly as possible through Parliament," he said. "You do that by making sure you maximize your own votes in your caucus so that when there's a vote people turn out to vote. The other side of it is negotiation. You should negotiate at any time but especially in a minority Parliament, you have to negotiate with the other whips and the other parties to get support for legislation because we only have 143 votes if everyone is there that day and no one's sick. That's not enough to get through Parliament if everybody else votes. So we'll have to negotiate."

Mr. Cuzner, who was first elected in 2000, has served as the Parliamentary secretary to former prime minister Jean Chrétien. He said although he still needs to "get a sense" for the whip's job, he's "very excited" about it. "I'm very pleased that our leader has placed his confidence in me. I'm not going into this with any grand expectations other than trying to keep caucus focused on being the best opposition that we can be," he said last Wednesday.

For the most part, Mr. Cuzner said, he has a good working relationship with his fellow party whips. "I've worked with [NDP whip] Yvon Godin on committee stuff before and I think we've got a good relationship. I think O'Connor's a man of his word. We'll develop these relationships over a period of time," he said. "There won't be any backstabbing with [Bloc Québécois whip] Michel Guimond. If he's got something to say, you're getting it right in the chest. I've worked with Michel on Procedure and House Affairs [committee] before and he's a very capable Parliamentarian. I'll see how that goes. I'm very fortunate in that I have a very excellent staff. It's an experienced staff in the whip's office. The staff hold the trust and the confidence of caucus. That's a great strength in having that."

While economic issues will take precedence in the House, Mr. Hill said last week that one of his goals is to have a more civil and productive Parliament. Mr. Hill is seen as more conciliatory than previous House Leader Peter Van Loan (York-Simcoe, Ont.), who is now the Public Safety Minister. Some see Mr. Hill's appointment as a sign that the Conservatives are moving toward a less combative and confrontational session, but Mr. Hill said he doesn't necessarily see it that way.

"I think the Prime Minister believed fundamentally that at this particular time, of all the resources he had to draw upon, that I was his best choice," he said. "I'm just very pleased that he made that choice. I hope I can, as I have in the past, meet his expectations as well as the expectations of the opposition and indeed the country, to have a civil and productive Parliament. That's my goal and I hope we're able to all work together to achieve that."

Mr. O'Connor said the Conservatives were in the process of looking at the bills in the 39th Parliament that died on the Order Paper in order to determine which ones would be reintroduced. "We're going to review that legislation to see what from our point of view should go forward, and what should go forward unamended, and what should go forward with changes because of things that we've learned either in the campaign, or things that opposition parties brought up that may be of value to us," he said. "We've got to look at all that legislation and decide what legislation will go back into the system and put forward. That will keep us busy."

According to the Conservative platform, some of the reintroduced bills include: two Senate reform bills to decrease Senators' terms and have them be appointed after consultation with the Canadian public, a new formula to increase seats in the House after ever decennial census and limiting loans to political candidates to financial institutions. The platform also states that the Conservatives will move to change the Senate's ethics rules to be the same as the House of Commons' ethics rules. Prime Minister Stephen Harper (Calgary Southwest, Alta.) appointed Charleswood-St. James-Assiniboia, Man., MP Steven Fletcher as Minister of State for Democratic Reform.

University of Ottawa law professor Errol Mendes told The Hill Times that Mr. Fletcher's appointment was a "curious" one, considering the reform bills touch on federal-provincial relations between Ontario and Quebec. The bill to consult Canadians on their preferences for the Senate will involve a showdown with Quebec as it has previously said it would challenge the bill's constitutionality.

Meanwhile, Ontario will not back down on its opposition to the bill to change for the formula for the redistribution of seats in the House which would move British Columbia and Alberta toward better representation by population and move Ontario away from it.

"I was wondering if just singling out the democratic reform portfolio was a way of trying to get all his [Prime Minister Harper] regional people in. It's a much larger Cabinet than before, which is curious in a time of fiscal constraint," Prof. Mendes said. "That being said, I think for whatever reason, I think Harper has a bee in his bonnet about the Senate in particular and I think if he wants to use any of his scarce confidence votes, he may try and focus in on Senate reform. ... It's curious that he's chosen Fletcher from Manitoba."

Prof. Mendes said given Mr. Fletcher's background, he expected him to get a full Cabinet appointment to the health portfolio. "The one thing you have to give to Steven Fletcher is that he surmounted an incredible challenge in terms of being the first quadriplegic MP to come to Parliament," he said. "I would've thought that given his interest in the health sector, and his own challenges, it may have been more appropriate to put him in health, as a full minister, given that he was already an understudy."

In the last Parliament, Mr. Fletcher did not speak on any democratic reform issues, but focused on health-related ones. Prof. Mendes said those three bills will be the major issues that Mr. Fletcher will face this Parliament as the minister in charge. "I'm worried that he's been given a portfolio with all of these political landmines in it for somebody who doesn't have, at least from his prior performance, the political skills, put it that way, and frankly, the advocacy skills to either promote the government's agenda or defend it on sustained intellectual basis. I certainly don't think Peter Van Loan did a good job either, he resorted to name-calling all the time. You need someone like James Moore, someone who has demonstrated his ability to get along with other parties, even if he has to defend the indefensible and to do it in a way which can sound plausible," he said. "I certainly [wonder] if Harper intends to bring back these highly highly contentious bills whether Fletcher will be up for defending it in a way that can be convincing, not only to his party, but to Canadians."

Other issues that could re-emerge in this Parliament, according to the Conservatives' 2008 election platform include copyright reforms, an updated Fisheries Act, and some anti-crime measures. The Conservatives say they will also deal with some issues that became political before the last Parliament ended, such as unwanted text messaging fees, "protecting pregnant women against violence," which is an updated version of former Conservative MP Ken Epp's private member's bill to protect pregnant women from violent assaults or murder, "made in Canada" labelling, the listeriosis outbreak and arts and culture. Mr. Harper said he would not reintroduce Bill C-10, which would have allowed the Heritage Minister to decide which films received tax credits based on public policy.

bvongdou@hilltimes.com

The Hill Times

A Private Member's Bill

A number of recent polls showed that an overwhelming number of Canadians were offended by the attack ads taken out by the Conservative Party. Those polled indicated that our democratic process doesn’t benefit from such attack ads.. Attacks ads that were only made possible because their are no limits on advertising expenditure by political parties during the “pre-writ” period. If we have spending limits during an election, then why not have spending limits prior to elections, given election timing is at the whim of the party in office, as recently demonstrated by Stephen Harper, his fixed election promise notwithstanding?

Therefore to better perfect our democracy, a private members bill should be introduced immediately in the new session of Parliament that would prohibit any advertising be political parties during the period between elections. Political parties get no end to their “free advertising” by the press over the time between elections. As such, there should be no need for paid advertising. I for one, don’t want our political process to be determined by the party with the deepest pockets. If that were the case, then why do we have spending limits DURING elections, only to have them rendered less effective, by having no spending limits BETWEEN elections?

The political moon and stars are presently aligned in such a way that such a private members bill could pass. Who amongst the Liberals, the NDP and the Bloc would object? Jack Layton? Gilles Duceppe? Who knows, maybe Stephane Dion could introduce the private member’s bill himself? It could be his lasting legacy for decorum in Canadian political life.

“Flaherty focuses on availability of credit”?

Today’s Globe headline states that “ Flaherty focuses on availability of credit."

This is a noble cause, however I truly wonder for whose benefit Flaherty is seeking this availability of credit? Is this credit being sought, for example, in order that parents can borrow to fund their childrens’’ education or that the automotive sector can survive, or is it being pursued for frivolous reasons of the past, such as allowing Teacher’s to lever BCE up with $32 billion of totally unnecessary debt (on top of BCE's $12 billion of existing debt)?

In this economic environment where debt is the last thing that any prudent individual should want more of, the government should step in to prevent the LBO of BCE. This deal should never have been permitted in the best of times for a litany pf reasons. Now more than ever it should be stopped, since it is sucking up $32 billion of Canadian credit capacity in order to achieve what ends:

(1) more layoffs, beyond the 2500 mandated by BCE’s new LBO purchasers and only made necessary by the LBO itself?

(2) the privilege of having Ottawa lose $800 million a year in taxes, since the interest payable on this $44 billion mountain of debt is deductible from corporate earnings and not subject to withholding tax (courtesy of Flaherty)?

(3) hobbling Canada’s largest telco with $44 billion of debt to service, thereby causing it have cut back significantly on capital expenditures, and devote those monies to otherwise needless debt servicing instead?

(4) saddling consumers with the burden of higher service costs and taking price pressure out of the industry to make the overall costs to consumers higher?

(5) introducing needless credit risk into the Canadian economy and placing Canada’s largest telco in a precarious credit default situation?

If Flaherty is truly interested in improving the availability of credit, where many businesses may be shuttered because of the lack of credit availability, he needs to husband the availability of credit and make credit available for those who truly need it. Canadian taxpayers should have no role whatsoever in making credit more available, if all those measures result in are more leveraged buyouts, like the LBO of BCE, which in the end only cause more tax losses ($800 million a year in the case of BCE), and do nothing to make Canadian enterprise more vibrant.

Bottom line: The LBO of BCE is about to suck up $32 billion of available credit, to support a frivolous transaction for a company that has no real need for the money. This credit is better used to grow other businesses and to prevent other businesses from failing. Thi credit extended to BCE will only serve to make BCE more likely to fail, rather than less likely to fail. There needs to a needs ranking of available credit introduced by Falherty, before any tax payers money is put at risk. On that basis, the $32 billion of credit to complete the LBO of BCE would be at the bottom of the list. TD Bank needs to take a pass, or forego any form of credit extension involving Ottawa. Meanwhile the global financial system meltdown would be relived significantly if the other foreign lenders to BCE were asked to direct their lending to other more worthwhile undertakings in Canada as opposed to the LBO of BCE. At least these banks could lend on the basis of loans that are worth par, rather than some 85 cents on the dollar, as in the case of the LBO of BCE, and their equity reserves wouldn’t be taking a major hit from the get go, in the order of $4-5 billion.

Where is the financial prudence in any of this? Credit availability is a zero sum game. What other, more important, undertakings are bieng denied in Canada’s economy in order to perpetuate the LBO of BCE, something that should never have been approved by Jim Prentice, as Industry Minister, in the first place?

Harper kidnaps Canadians' right to know

Harper's logic: Somehow Canadians' not knowing about Mellissa Fung's kidnapping protected her, but it was okay for Afghans to know?

Would Harper's decision not to disclose this kidnapping event have anything to do with the fact that Canada was two days from voting? Why did Afghans know something concerning a kidnapped Canadian reporter and the Canadian media conspired with Harper to not disclose it to Canadians. Does the Canadian media prefer that we are not fully informed when casting our vote?

Afghan Islamic Press Online http://www.afghanislamicpress.com/site/home/detail.asp?iData=15318

Canadian journalist abducted in Kabul

KABUL (AIP): Unknown gunmen kidnapped a Canadian female journalist in Kabul yesterday (Oct. 13), sources said Monday. Informed sources told Afghan Islamic Press that the Canadian journalist was capture in Char Rahi Qanbar area, western part of Kabul City after she visited a refugee camp. Security officials are tight lipped over the incident and avoid giving any details to media. The 27-year old female Canadian journalist was working for a Canadian magazine and had also visited the cam several times in the past. There was no word by security officials and armed groups in this regard. Ends Posted @ 06:20 GMT

Proof of Canadian media's willingness to suppress news at Harper's behest

.....just like the media have suppressed the news that Harper's tax leakage argument is an utter lie.

What a La Presse columnist writes about the Afghanistan abduction

Michèle Ouimet : Negotiate with the enemy?

All the big media in English Canada, without exception, knew about the kidnapping from the beginning. All, chose to remain silent.
Would they have shown the same solidarity with a humanitarian worker of some obscure NGO? Several news organizations published the name of the Canadian journalist kidnapped in Somalia on August 23. Why? Because she was a freelance journalist and did not have the CBC machine to protect her? She is still being held hostage and no one is upset.
Mellissa Fung was kidnapped on October 12, that is to say two days before the Canadian election. During the election campaign, Stephen Harper was able to avoid the Afghanistan issue.
And if news of Ms. Fung’s kidnapping of had fallen like a bomb in the home stretch of the campaign? How would voters have reacted upon learning that the government negotiates with the Taliban or with criminals?
Would this story have influenced their vote? Perhaps. But that was for Canadians, not the media—who, with CBC in the lead, embargoed the story--to decide.
The journalists are the first to raise the public’s right to know, but they become super-sensitive when one of their own is threatened.
Canada is at war, its soldiers are dying. A war that costs billions of dollars. However, with the silence and complicity of the media the Harper government negotiated with the enemy to save a life. With no public discussion.

Editor's note about the author: *Michèle Ouimet, La Presse, Montreal,
2008 National Newspaper Award winner in the category of Investigations for stories on Canada's mission in Afghanistan and what has happened to aid sent there.

CBC’s double standard

Why did the CBC impose a news embargo on the kidnapping of CBC reporter Mellissa Fung’s kidnapping on October 12, 2008 (during the middle of the Canadian election) and not this kidnapping event (below) that occurred in Afghanistan during the period of that very news embargo?

Perhaps political fallout during an election was the real reason, and not concerns about the kidnappee being proffered by the CBC and Stephen Harper?


French aid worker abducted in Kabul
Last Updated: Monday, November 3, 2008
CBC News

An Afghan bystander was killed on Monday when he tried to intervene as gunmen abducted a French aid worker on a residential street in Kabul.

One aid worker managed to escape after three assailants in a red Toyota blocked the road in front of the small van containing two French citizens, said neighbourhood police Cmdr. Mohammad Daud Amin.

A local resident who attempted to prevent the abduction was killed in the attack, Amin told the Associated Press.

Mohammad Shafi, who witnessed the attack, said the man who intervened lived in a house across from where the kidnapping occurred.

"He grabbed the machine gun of one of the kidnappers, who opened fire, burning his hand. After that the kidnapper shot him three times in the chest," Shafi said.

Some authorities have also reported the man who died was an employee of the country's intelligence agency.

Etienne Gille, president of French aid group AFRANE, said the man who escaped is a member of his staff.

"The car was blocked by another car that was driving the wrong way" from which "an armed man emerged," Gille said.

Gille declined to provide the abducted aid worker's organization but said he was in 30s, a French national and had been in the country for about a week. He added he believed it was the man's first time in Afghanistan.

The man's family has been informed, Gille said.

The French Foreign Ministry confirmed Monday a French aid worker had been kidnapped and that a crisis centre had been set up and was in contact with Afghan authorities.

Taliban spokesman Zabiullah Mujahid said Taliban militants were not involved in the kidnapping.

Abduction of foreigners on the rise


Kidnappings by criminal groups in Afghanistan have spiked over the last year because lucrative ransoms are paid to free hostages.

Wealthy Afghans are typically targeted in the kidnappings, which are rarely reported in the media.

But there has been a rise in abductions and targeted shootings of foreigners in the Kabul area over recent weeks.

It has been less than 10 days since a Briton and South African were shot dead and just two weeks since British woman aid worker was also killed in the city.

The Taliban does kidnap Westerners and Afghans, but those abductions typically take place in rural provinces.

Gille said his group will be considering how to best respond to the kidnapping, which he said is the first apparently deliberate security incident.

"We are obliged to think about the situation of the current volunteers," he said. "We will maintain some kind of presence in Afghanistan but obviously we are forced to think about the current parameters of our presence."
With files from the Associated Press and Reuters

CTV's double standard

On airing the Dion interview out takes:

"We decided that it was important that CTV News not hide anything during an election campaign," said Robert Hurst, president of CTV News (October 16, 2008)

On the kidnapping of CBC reporter Mellissa Fung (from Canadian Press article):

“Other Canadian reporters in Afghanistan learned of the Oct. 12 kidnapping shortly after it happened. Hours later, journalists travelling on the prime minister's election campaign also heard about it.

But both the CBC and the Prime Minister's Office asked Canadian news organizations to hold off reporting the story, saying any publicity would jeopardize chances of a safe and speedy resolution of the kidnapping.

The CBC contacted international news organizations, including The Associated Press and Reuters, and asked them to not report on it.”

News of CBC reporter's kidnapping two days before election, withheld from Canadians

Canadian journalist safe after secret Afghan kidnapping ordeal

Globe and Mail Update

November 8, 2008 at 3:47 PM EST

A CBC journalist has arrived safely into the custody of Canadian forces in Kabul after enduring weeks of captivity in a secret kidnapping ordeal.

Mellissa Fung, a correspondent for CBC television, was captured in the early afternoon of Oct. 12 as she returned from a camp on the outskirts of the capital where she had been interviewing Afghans who fled their homes to escape the war.

The CBC requested a news blackout for her safety during weeks of negotiations with her captors. She was believed to be held among the snowy mountains west of Kabul, the latest in a growing number foreign civilians kidnapped in Afghanistan.

“I'm happy to say that I received notice earlier today that Melissa Fung has been freed. This is wonderful news for her family for her colleagues and for all Canadians,” Prime Minister Stephen Harper said at a news conference in Ottawa this afternoon.
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The Globe and Mail

Mr. Harper said he spoke to Ms. Fung earlier Saturday, and that she wanted to convey to her colleagues in the media “that she's OK.”

“She sounded in remarkably good spirits under the circumstances.

Mr. Harper provided almost no information about who had abducted Ms. Fung or why, or about how she was freed. He said revealing such information could betray sensitive security information that could cause harm in other such cases.

But he stated categorically that no ransom, or money of any kind, was paid by the government, the CBC, or any third party.

Such cases are frequently kept secret in Afghanistan, as releasing a hostage can become more difficult if the case is publicized. A Dutch journalist was set free by her Taliban captors on Friday after a similar blackout.

It not clear who held Ms. Fung captive before her release. Several armed groups run kidnapping rings in central Afghanistan, and more than one of them can get involved in any given kidnapping. These groups include the Taliban; allied insurgents such as the Haqqani network and Gulbuddin Hekmatyar's Hezb-i-Islami group; and criminal gangs driven by profit rather than ideology.

Foreigners captured in Afghanistan have been ransomed for $1- to $3-million, making them an important prize any of the factions.

"Mellissa will undergo a full medical evaluation but early indications are that she is well," the CBC said in a statement. “When she is ready, Ms. Fung will be re-united with her family, for which arrangements are under way. Her family has been informed daily of developments since her abduction and have been participants in this process from the beginning.”

Ms. Fung, who holds a Master's degree from Columbia University, is an experienced reporter who has previously visited Afghanistan. After weeks covering the violent province of Kandahar, she was looking forward to flying north for a short stint in the relative security of Kabul where reporters usually take fewer precautions. Foreigners avoid walking the streets of more dangerous cities such as Kandahar, but some aid workers and journalists in the well-guarded capital still roam its safer neighbourhoods without guards or disguises.

The day she disappeared, Oct. 12, she had been interviewing people on the outskirts of Kabul where hundreds of displaced people are camped in ramshackle slum near Qargha Lake. Many of them are fleeing the violence in the southern province of Helmand, and their growing presence near the city has made the camp a popular attraction for journalists.

Ms. Fung's decision to visit the camp without armed protection was not unusual; several other reporters had made the same trip in the previous months, and location was considered "low threat" in an Aug. 20 security assessment by Afghan security forces.

The relatively peaceful parts of Afghanistan have been shrinking rapidly in the face of a rising insurgency, however, and many foreigners in Kabul have been re-thinking their security procedures as the threats grow.

Security consultant Sami Kovanen counted 218 kidnappings in Afghanistan so far this year, as of Nov. 2. In the central region around Kabul, Mr. Kovanen noted 38 kidnappings in the first ten months of 2008, up from 18 kidnappings during the same period in the previous year. Those statistics likely reflect a small fraction of the real total, however, because many kidnappings are never reported.

Most kidnap victims are Afghans, and abductions have become so routine that they're now the second-biggest source of income for the insurgency, according to the U.S. magazine Newsweek. Informal markets exist in Afghanistan where captives are bought and sold depending on their anticipated ransom value, and kidnappers must carefully guard their prisoners to avoid having them stolen by competitors.

Among the five international aid workers reported kidnapped so far this year, two were killed in captivity. The most recent of these abductions happened Monday in a residential neighbourhood of Kabul, when a French aid worker for the educational charity Arfane was taken by gunmen. An Afghan security official was shot dead as he attempted to stop the kidnapping.

U.S. Special Forces conducted a raid in Wardak province last month, setting free a kidnapped American citizen who worked for the Army Corps of Engineers. In both the recent Dutch and U.S. cases, no news about their disappearance was published until their release.

Flaherty's Fiscal Fumbles

By: Mike Watkins http://mikewatkins.ca/2008/11/06/flahertys-fiscal-fumbles/


FFF - Flaherty's Fiscal Fumbles - destined to become a regular feature. Today's instalment: Flaherty's moves have only enabled more corporate tax avoidance.


Recently a $13 billion dollar deal concluded, allowing Teck to buy the remaining shares of Fording Canadian Coal Trust. Despite all the talk of the on-going credit crunch, the overly generous moves by the Bank of Canada and Flaherty's Ministry of Finance have made it possible for banks to work with Teck to obtain the necessary financing and conclude the deal.

No new jobs will be created through this transaction. There is no net benefit to Canada.

Yet Canadian taxpayers are footing a big chunk of the bill, by providing a taxpayer-backed credit backstop, and through being shafted as Teck avoids paying a $4 billion dollar tax bill as a result of this transaction.

While this exercise in tax avoidance plays out under our very noses, lets think back to the last time tax avoidance was a subject in vogue in Conservative politics in Canada.

On October 31st, 2006 Jim Flaherty, then and now the Conservative Minister of Finance, announced that Income Trusts would in the future be subjected to new taxation. The move was particularly controversial as the Conservatives had campaigned only months earlier in part on a promise to leave the income trust sector alone.

The aftermath, dubbed the Halloween Massacre, saw the income trust market plummeting on the news, erasing billions in market value in the weeks to follow. Small and large investors alike, including many of Canada's pension plans, were significantly impacted by the on-going turmoil. Now more than two years later, many still feel betrayed.

Stephen Harper and Jim Flaherty's volte-face on trusts was defended as a sign their government was serious about fairness in taxation. Flaherty said trust conversion was "a growing trend to corporate tax avoidance". From a CBC News article:

By some estimates, the federal and provincial governments stand to lose as much as $1 billion annually in tax revenue to trusts. There are now more than 250 income trusts in Canada.

Trust conversions are increasing in popularity because trusts do not pay corporate tax. Instead, they pay out most of their income in distributions to unitholders, who then pay tax on those distributions.

Flaherty said that situation could not be allowed to continue. "This trend has caused me growing concern," he said. "It's not right and it's not fair."

Bringing both pieces of the puzzle together:

* In October 2006 Conservative Finance Minister Jim Flaherty closed what he called a "loophole" that companies could exploit to avoid paying their fair share of taxes, a loss to taxpayers controversially estimated at the time at $1 billion a year.
* In fall 2008 that same finance minister, backed by Stephen Harper appointed Mark Carney, governor of the Bank of Canada, enabled Teck Cominco to avoid paying $4 billion in corporate taxes.

Flaherty's Fiscal Fumble has cost Canadian taxpayers at least $4 billion in avoided corporate taxes plus we are even footing part of the bill which makes this deal possible in the first place.

The deal smells so bad that even those in financial circles are fuming about it.

Pick your Ponzi scheme: Manulife's earnings down 50%, Yellow Pages up 19.6%

Yellow Pages Income Fund Reports Third Quarter Financial Results

Strong EBITDA margin performance in both platforms
Targeted initiatives to position 2009

Montreal (Québec), November 6, 2008 – Yellow Pages Income Fund (TSX: YLO.UN) reported third quarter results today highlighted by gains in EBITDA margin performance in both Directories and Vertical Media. The company continues to strengthen its leading position through investments to expand its product portfolio and improve its market coverage.

For the third quarter ending September 30, 2008, consolidated net earnings increased 19.6% to $146.1 million compared to $122.1 million for the same period in 2007. Income from operations during the quarter reached $204.4 million, a 24.8% increase over the $163.8 million reported last year. Cash flow from operating activities amounted to $187.5 million during the quarter.

Consolidated Adjusted Revenues1 and revenues in the third quarter of 2008 reached $426 million. Consolidated Adjusted EBITDA1 grew by 4.3% to $237.5 million. EBITDA (income from operations before depreciation and amortization) increased by 4.1% to reach $237.8 million.

“We continue to deliver best-in-class financial and operational results, which enable us to grow distributable cash, offering investors a solid current distribution,” said Marc P. Tellier, President and Chief Executive Officer of Yellow Pages Group. “Our long-term strategy has been and remains to position our various assets for sustained growth.”

Harper's idea of "consulting"?

This is the very same crowd Harper kowtowed to on income trust panic exercise....banks and life insurance companies

Harper seeks Bay St. input before Washington summit

Prime Minister in town to meet bankers to talk about financial crisis
Nov 06, 2008 04:30 AM
Comments on this story (1)
Bruce Campion-Smith
Ottawa bureau chief

OTTAWA–Prime Minister Stephen Harper is in Toronto today for discussions with senior executives from Canada's big banks and insurance companies about the financial turmoil and economic downturn.

Harper will attend a roundtable at the C.D. Howe Institute, an economic think-tank, in the morning.The Prime Minister is then scheduled to meet privately with the business executives to canvass their opinions ahead of the emergency meeting with G-20 world leaders in Washington on Nov. 14-15, where economic concerns will top the agenda.

Harper also intends to sound out the Toronto executives on their views on Ottawa's economic and fiscal update, which is planned before the end of the month, a senior government official told the Star.

Because of the extent of the economic turmoil, that update is taking on added importance and could become a mini-budget containing measures meant to dampen the effects of the slowdown and help out Canadians.

While the Prime Minister has heard from "legions of bureaucrats" on the extent of the problems and possible solutions, Harper also wanted to consult experts outside of government for their advice, the aide said.

"Talking to more people is not usually a bad thing and talking to people outside of Ottawa is not a bad thing either," he said.

Federal Finance Minister Jim Flaherty is in Peru this week for a meeting of finance ministers from the Asia-Pacific Economic Co-operation forum.

While Ottawa has taken some measures to help protect Canadian financial institutions from the credit crunch, they have so far escaped the devastating meltdown that has dragged down other banks around the world.

Harper today is hoping to hear the lessons of what's worked and take the lessons of the Canadian banking system to share at the international summit, the aide said.

"Not everyone's bank system collapsed," the official said. "Ours withstood the tremendous shocks and remained on its feet."

Manulife launches latest investment product: "Income Minus"

Manulife profit halved to $510-million
TARA PERKINS
Globe and Mail Update
November 6, 2008 at 9:13 AM EST

Manulife Financial Corp. said Thursday that it earned $510-million in the third-quarter, compared to $1.07-billion a year ago, and it has signed a credit agreement to help boost its capital levels.
The insurance giant has been struggling with exposure to volatile equity markets, and revealed last month that it expected profits to be hit by roughly $250-million in credit losses this quarter.
On Thursday it said it has signed an agreement with Canada's big six banks for a five-year term loan of $3-billion, which will be fully drawn down by Nov. 20 and will be deployed as necessary to provide additional regulatory capital to the insurer's operating subsidiaries.
Manulife and its rivals received some relief recently from the Office of the Superintendent of Financial Institutions, which regulates the country's banks and insurers. It fast-tracked new rules giving insurers more leeway in the amount of capital they must put aside for their segregated funds business. In a move that was seen to be most beneficial to Manulife, the regulator decided that insurers should not have to sock away as much money now for payments that they have promised customers many years down the road.
Manulife Financial


Manulife has been putting aside money to compensate for a potential future shortfall in the amount of money it owes its variable annuity and segregated funds clients. But most of the payments aren't due until between seven and 30 years from now, and the firm is hoping that rebounding stock markets will erase the shortfall long before then.The company had total invested assets of $165-billion as of the end of September.

Stelmach to raise issue of income trusts at First Ministers' meeting

Maybe Harper can bring his 18 pages of blacked out documents to the First Ministers’ meeting in an attempt to mislead the Premiers in the same way he misled Canadians:

“The premier said he'll ensure his government's representative at the meeting identifies the pressing issues for Alberta, including federal decisions to start taxing income trusts and cancel capital cost allowances for the oil and gas industry.” Calgary Herald November 4, 2008

Question for John Manley from a Liberal delegate

Mr. Manley:

I understand that you are considering running for leadership of the Liberal Party. If so, I have one topic to raise with you.

What is your position on income trusts? In the past you have declared your support for Stephen Harper’s income trust tax on the basis that “I don't think you can run an economy where you have different kinds of business vehicles that are taxed totally differently." (Globe and Mail, September 4, 2007)

My questions on this topic are as follows:

(1) Is this still your position?

(2) If the answer to (1) is yes, then will it be your intention as Liberal Leader to begin taxing all law firms (like McCarthy Tetrault, your current employer) at the rate of 31.5% in order that “I don't think you can run an economy where you have different kinds of business vehicles that are taxed totally differently."? If not, why not? Perhaps you believe that law firms should be exempted, as are REITs, on the basis that law firms are “passive businesses”?

(3) Do you believe it is fair that different types of retirement investors be taxed differently, such that income trusts held in RRSPs are taxed at the rate of 31.5%, whereas those same income trusts held privately by pension funds are not? For example, Teranet is being acquired by OMERs. OMERs will be exempt from the 31.5% tax, whereas Teranet’s existing owners will not be. How will the purchase of Teranet by OMERs address the issue of alleged tax leakage from income trusts? Do you consider this to be a fair and efficacious outcome, as the proposed purchase of Teranet by OMERs is not an isolated example?

(4) Are you aware that the Harper government’s argument of alleged tax leakage from income trusts is a contrived argument that is manufactured by excluding the taxes paid on the 38% of income trusts that are held in RRSPs? The act of ignoring the taxes paid by income trusts held in RRSPs has become the Harper government’s central rationale for introducing a new, second tax on RRSPs at the rate of 31.5%. Does this make any sense to you?

I look forward to your response, as I will only be supporting a leadership candidate who is interested in the truth behind far reaching tax policies, such as the highly destructive income trust policy that was based on a policy lie and whose outcome has proven it to be a disaster, from all possible vantage points.

Yours truly,

Brent Fullard
505 647-2224

Calgary Herald asks: " Who did we just elect? Jack Layton?"

Deficit talk is unconservative
Calgary Herald
Published: Saturday, November 01, 2008

Who did we just elect? Jack Layton? The last people in the world we would ever have thought would flirt with deficits are the key players in the newly elected Conservative government.

Yet, there is Finance Minister Jim Flaherty -- who certainly will not be off-message with Prime Minister Stephen Harper -- declaring, "we will never . . . engineer a surplus at any price."

So much for election promises. During the recent federal campaign that returned the Conservatives to power, Flaherty and Harper specifically ruled out a deficit. Now, it is understood that when situations change, so too may responses. Yet, this was less than a month ago. What changed the situation, the government's understanding of it, or the party's need to convince Canadians that the Tories were the best people to deal with lagging economies?

Leaving that a rhetorical question, the government does have a problem on its hands. As Canadian business echoes the recession that now seems likely to engulf larger economies than ours, revenues will fall and demands on government coffers will grow: Employment Insurance, for instance.

Meanwhile, the government finds itself locked into payments, such as interest on the national debt, which in the short run at least, leave little room for manoeuvre. As much as two-thirds of planned expenditures are committed in this way, leaving only a third of Ottawa's budget with any room for discretion.

In such circumstances, conventional economic theory endorses temporary deficits as a means to cope. Many voices are suggesting that Ottawa will not only find itself with no choice but to run a deficit: Predictably, some -- those who love government programs -- say it should feel no caution in doing so, either.

The problem is deficits seldom stay temporary. They are, in fact, more addictive than crack and Canada had a grim run of them stretching from days before Trudeau, to the Chretien era. In that time, more than $540 billion was borrowed, of which $457 billion remains outstanding.

It is for this reason that Flaherty should reconsider his words, as he and the prime minister prepare to meet with the provincial premiers next month.

Not unnaturally, they fear Ottawa may arbitrarily slash equalization, or the transfers the provinces rely upon to top up their health and welfare budgets: That certainly was how Paul Martin balanced the federal budget in the mid-'90s. (And not, as he implies in his current sour-grapes public pronouncements, by some unusually clever Liberal economics -- unless one finds genius in consistent over-taxation to produce a surplus.)

Yet, that might turn out to be Harper's best practice, once the federal low-hanging fruit are plucked. As the two Harper budgets both registered sharp spending increases, there may well be some of the latter.

However, there is no persuasive argument for exonerating provincial governments -- many of whom have displayed a remarkably casual attitude to deficits in the past -- from doing their share to cope with these challenging times. On this, Harper and Flaherty should keep their options wide open.

Most of all, they should start governing and sounding like conservatives.


© The Calgary Herald 2008

BNN’s Amanda Lang asks the operative question

See also:Question for Amanda: What’s not to like about a retroactive double tax that’s applied discriminatorily using false pretenses?

On yesterday’s BNN show Squeeze Play, host Amanda Lang asked the operative question, which to paraphrase, was “if income trusts were shut down because of a tax advantage, then why are the pension funds allowed to keep their tax advantage?”

A perfect example is the present bid by OMERs to acquire Teranet Income Fund. Teranet income fund is taxable at the rate of 31.5% in the hands of its current public owners. OMERs will not have to pay this tax.

This is called a tax arbitrage. Government induced tax arbitrage. Such an arrangement is anything but “tax fairness” or “leveling the playing field”. So what exactly is Flaherty’s explanation for this gross disparity? Some Canadians are more important than others?

How will the ownership of Teranet by OMERs as an income trust, resolve any of the alleged problems with income trusts? It defies logic. It defies reason. What is Flaherty’s defense?

See Amanda’s comments at about the 8:10 mark at:

http://watch.bnn.ca/#clip108153

Bravo Amanda! Inquiring minds need to know.

Harper has zero credibility on this issue

Harper and Flaherty (Jack Layton too) have zero credibility if they attempt to champion the cause of pensioners and protecting their savings. After all, Harper’s rationale for nuking $35 billion in Canadians' retirement savings was a total and complete lie.

Maybe the solution for the pension funds in dealing with their unfunded liabilities is to follow Harper’s lead on income trusts, and simply issue statements to their pensioners that are all blacked out, as Harper did when “proving” his thesis that income trusts cause tax leakage. Who would know? The press would say nothing whatsoever. People like DeCloet of the Globe are big fans of blacked out documents when it comes to accountability on matters financial. Jim Stanford of the CAW too.

Meanwhile I thought we weren’t supposed to become a nation of coupon clippers? Better a nation of clip joint politicians and syncophant reporters.




Mr. Flaherty, it's time to fix pensions


DEREK DeCLOET
Globe and Mail

November 1, 2008



Mike Zafirovski must rue the day he took the headhunters' call. In the three years since he took over - has it really been that long? - almost nothing has gone right at Nortel Networks. When he arrived, the accounting was broken. The business is still broken. And now, courtesy of the Great Meltdown, you can add pensions to the litany of financial wounds.


The crisis on Wall Street could hardly have come at a worse time for Nortel. Why? Because Sept. 30 is the date, every year, on which the company measures the health of its pension schemes. When this year's tallies are done, it's going to be ugly.


The bad news is that at the start of this year, Nortel's plans were already short by $1.2-billion (U.S.). The worse news is that 53 per cent of the assets were in stocks, which have been annihilated. So the pension hole has become a cavern - one that will have to be filled with cash that the distressed company would rather use for other things. Like surviving, for instance.


Is Canada's private pension system in crisis? If it wasn't before, it is now. Good. There's nothing like an unfolding catastrophe that hits the Boomer generation to get the politicians to wake up. They helped create this mess; now they can do something to solve it.


This week, Finance Minister Jim Flaherty promised some relief. Most likely, the feds will give companies more time to make up their pension shortfalls - 10 years instead of five, for example. That's fine, but it's a Band-Aid, a short-term answer. If they want pension plans to be strong enough to withstand a financial panic, they'd better start by asking: How did we get here in the first place?


Let's briefly consider Nortel, BCE and Bombardier, three old, large Canadian companies with monster defined-benefit plans. Today, each one surely faces a multibillion-dollar pension shortfall. But each one also had a deficit going into this year's meltdown. Remember, the S&P/TSX composite went up for five successive years between 2003 and 2007; the Dow Jones industrials rose in four of those five years. For most of that period, the bond markets were also healthy - low inflation, few defaults on corporate bonds.


So why were all three companies' pensions in the red at the end of this great bull market? In part because it makes sense for businesses in Canada to run chronically underfunded pension plans. Or, to put it another way, the federal and provincial governments practically punish companies that try to build a pension cushion during the boom years.


Mr. Flaherty's department is a big part of the problem. Supposed you owned a car parts factory that offered a defined-benefit pension for its workers (that's the kind of plan that promises a set payout when the employee retires). The actuaries calculate the plan's liabilities at $200-million. Once the pension fund gets to $220-million - a surplus of 10 per cent - you aren't allowed to put another dime into it. The federal Income Tax Act forbids it.


The rationale is that it prevents businesses using their pension plans to shelter their income. But the end result is stupid. When profits are high, companies stop contributing to their pensions, lest they breach the 10-per-cent rule; when the economy goes sour - like right now - and big deficits return, they're forced to come up with more cash when they can least afford it.


The C.D. Howe Institute, among others, has suggested raising the cap on surpluses to 25 per cent. But that won't accomplish much unless other changes are made to federal and provincial pension laws. Let's go back to our fictional car parts factory, with the $200-million pension liability and $220-million in assets. Who owns the surplus? The employees (in most instances). All right, suppose the stock market plunges and the assets shrink to $180-million. Who owns responsibility for the deficit? The company does.


One side gets all the risk, the other gets the benefits. Claude Lamoureux, the recently retired CEO of the Ontario Teachers' Pension Plan, calls this "the No. 1 issue" affecting the future of the private pension system. It's also why companies are ditching their defined-benefit schemes as quickly as they can, or at least preventing new employees from joining them. Too much risk, too expensive. Nortel, trying to stem the bleeding, kicked U.S. and Canadian employees out of its defined-benefit plan in January, replacing it with a cheaper fixed-contribution one. Roughly one-fifth of private sector workers enjoy defined-benefit plans; four-fifths of public sector workers do.


If the trend continues, before long the only people who will have guaranteed pensions from their employers will be civil servants, teachers and others who work for government. (That's not my opinion; the Canadian Institute of Actuaries said so last year.)


Pensions as an exclusive perk for bureaucrats: Is this really what Mr. Flaherty wants? How about the provincial finance ministers? If not, they should get to work on fixing it.