Where was Harper's "social responsibility beyond the marketplace" when it came to his shafting of trust investors?

Better yet, where is Harper's proof of tax leakage upon which he based his canard of an argument to defraud income trusts investors out of $35 billion of their life savings?


GM, Chrysler Face To-Do List of Cutting Debt, Jobs

By Jeff Green and Alex Ortolani

Dec. 20 (Bloomberg) -- General Motors Corp. and Chrysler LLC, steadied by a $13.4 billion federal lifeline, face a March 31 deadline to slash debt, rework labor contracts and plan for thousands of job cuts or face government-ordered bankruptcy.

The loans announced yesterday by President George W. Bush will provide the government with warrants allowing it to profit from a successful rescue, and seniority over much of the automakers’ debt should the effort fail.

The Canadian units of both automakers will get C$4 billion ($3.3 billion) in government loans from Canada and the province of Ontario and may get more, Prime Minister Stephen Harper said today.

“I cannot rule it out,” the Prime Minister told reporters at a briefing today in Toronto when asked whether he may offer the automakers additional aid. “We have a social responsibility that goes beyond the marketplace.”

What gives? Mark Carney promised that no tax payer money would be used to bailout ABCP

Bank of Canada didn't consider ABCP bailout-Carney
Mon Feb 18, 2008

VANCOUVER, British Columbia , Feb 18 (Reuters) - The Bank of Canada never considered using public money to bail out the country's C$35 billion ($35 billion) non-bank asset-backed commercial paper market, a corner of the money market that seized up last August, Governor Mark Carney said on Monday.

"It was absolutely clear from moment one that there was not going to be any public money put behind any of this because these are decisions of financial market participants," Carney said.

"They took them, they are sophisticated ... That is not the place to put taxpayers' dollars or the balance sheet of the Bank of Canada," he said in response to a question from a business audience in the West Coast city of Vancouver.

In some of the most detailed comments yet from a Canadian central bank official on the Bank's role in the ABCP fracas, Carney said it acted as a "light-touch" facilitator for talks between various market participants.

"We became involved in this situation in a very light-touch way because there was a huge coordination problem in August when the problems emerged between the various players -- the banks, the derivatives counterparties, the investors.

"There was a real risk of a fire-sale with very, very low recoveries to the investors," Carney said after delivering his first speech since becoming Bank of Canada Governor on Feb. 1.

Canada's ABCP market, for paper issued by groups other than the country's big banks, ground to a halt six months ago when investors suddenly stopped buying the investments on concerns they were invested in U.S. subprime mortgages.

Banks refused to provide emergency funding, taking the market to the brink of collapse until a group of the biggest investors quickly stepped in to try to halt any defaults and hammer out a restructuring plan. The repair effort is still ongoing and market participants have largely heeded a trade and margin call standstill agreement.

"Our approach was to try to squeeze out some of the mistrust so that there could be ... a proper negotiation to try to make a bad situation less bad," Carney said.

Flaherty announces Billionaires Boys Club to advise (mislead?) him

Flaherty establishing economic advisory council to give government advice

The Council members are:

* Carole Taylor (chair).....BC politician and Finance Minister who sent letter in support of Flaherty's income trust tax and provided no supporting rationale or quantitative justification

* Geoff Beattie.......Heads up multi billionaire Thomson Family holding company.....controls CTVGlobeMedia who constantly misreport on income trust policy and promulgate Flaherty's patently false lies about tax leakage

* Paul Desmarais, Jr......son of billionaire, successfully lobbied (even though he is not registered as a lobbyist) Harper to kill income trusts to enhance his sales of competing investment products for personal gain

* George Gosbee......head of Calgary’s Tristone Capital who would love to sell more Calgary companies like Prime West Energy to foreigners like Abu Dhabi Energy

* Isabelle Hudon......39 year old CEO, Board of Trade of Metropolitan Montreal. She has been on other panels set up by Flaherty

* James D. Irving......second generation billionaire

* Mike Lazaridis......RIM co-founder and self made billionaire. Likes back dating stock options for personal gain, for which he subsequently received Canada's largest ever securities violation fine

* Jack Mintz......tax accountant and former civil servant who has a penchant for fudging the numbers and constructing false argument for income trust tax leakage

* James A. Pattison.....self made billionaire......one of four members of BCE”s Strategic Oversight committee that failed to disclose Catalyst recap proposal....in the end, the only deal that was viable. Oh well, not his loss....just the widows and orphans.

* Ajit Someshwar...... C.E.O. of CSI Consulting .....no idea who this person is

* Annette Verschuren.......CEO of Home Depot Canada....she takes her orders from the US Head Office of Home Depot

The ABC's of Flaherty's insane ABCP bailout

A: Flaherty wants to turn Ottawa into a soup kitchen for the wealthy.
B: Compensation for professional incompetents.
C: Immunity for the brokers'and banks'pathetic sales practices

Fact: Only $400 million of the $32 billion of ABCP is owned by retail investors, all of whom represented themselves as accredited and sophisticated investors in order to qualify themselves to purchase ABCP. The remaining $31.6 billion is owned by some of the most (presumably) sophisticated investors in Canada, who were looking to boost their investment returns. They took on known risks. Now they want Canadians taxpayers to bail them out of their own professional incompetence.

As for the 1400 retail investors. If they feel that the banks and brokers who sold this paper to them did so without properly disclosing the risks, then these investors have legal recourse against the banks and brokers. This is how they can achieve recourse. meanwhile Flaherty's bailout deal is designed with the sole intent of achieving legal immunity for these banks and brokers. Who do think Purdy Crawford is actually working for? Certainly not Canadian taxpayers. of that you can be sure.

Bottom line: This is absurd. That's why Flaherty is going for it. He has been successfully lobbied by Bay Street. Bat Street want taxpayers to clean up their mess. Flaherty is more than happy to oblige Bay Street......with your tax dollars!

Relevant Quotes:

"It is extremely important that financial market participants bear the consequences of their decisions." Bank of Canada Governor Mark Carney (in reference to any government involvement in ABCP bailout)

“The ultimate result of shielding man from the effects of folly is to people the world with fools” Herbert Spencer ( English philosopher; prominent classical liberal political theorist)


Provinces asked to chip in for ABCP rescue

John Greenwood and Paul Vieira,
Canwest News Service;
December 18, 2008

Finance Minister Jim Flaherty has formally asked Alberta, Ontario and Quebec to contribute toward a government-backed $9.5-billion standby facility that would clinch a deal in the 16-month restructuring of wonky commercial paper.

The request was made in Saskatoon, where Flaherty met yesterday with his provincial finance counterparts to discuss the coming federal budget and what should be done to deal with the global financial crisis.

The $32-billion restructuring of asset-backed commercial paper now hinges on Ottawa's ability to provide a $9.5-billion standby facility. Otherwise, the restructuring could unravel.

Meanwhile, Bank of Canada governor Mark Carney suggested the Canadian economy is strong enough to withstand the restructuring's collapse. However, Carney said that was not an outcome he was advocating.

Sources say Flaherty asked Alberta, Ontario and Quebec to contribute to the facility, given those jurisdictions have provincially-owned entities -- such as the Caisse de depot et placement du Quebec, Ontario Financing Authority and ATB Financial -- that hold ABCP.

At the conclusion of the federal-provincial meeting, Flaherty declined to say whether any progress was made on ABCP. "I can't tell you very much," Flaherty said. "I can tell you that there have been some discussions with some of the ministers here on that subject. It is being reviewed by several of the (provincial) ministers."

Flaherty added: "We all have our responsibilities to our taxpayers, to be cautious in our reviews and that is what is happening right now."

First mapped out in the fall of 2007, the rescue plan started off as a private-sector undertaking. Under the scheme, insolvent 30- to 90-day debt would be converted into new notes maturing in about eight years. The asset-backed paper hasn't traded since August 2007, when investors began to shun the debt because of concerns about ties to high-risk mortgage loans in the United States.

But in the face of unprecedented market turbulence, a committee spearheading the plan -- led by Bay Street lawyer Purdy Crawford -- came forward last week with a last-minute request to the government to supply $9.5 billion of additional funding for a backstop facility.

Until recently, Flaherty has insisted that taxpayers' money will not be used to fix what he regards as a private-sector problem. However, in the face of increasing distress in financial markets over the past few weeks, he has softened his position.

Meanwhile in Toronto,Carney was asked after delivering a speech whether the Canadian market could survive the restructuring's collapse.

"Yes," he said. While that "would not be a welcome development," he said Canada has "resilient markets" and could survive if the court-protected bankruptcy process unravels.

Later, Carney said the central bank has had discussions with the federal government about available options.

"But it is entirely the decision of the government's, so I am not going to comment further," he said.

Shrinking the GDP is more Flaherty's style, as Flaherty is a known destroyer of Canadians' wealth

GDP set to shrink, Flaherty says

Finance Minister's new forecast shows all hope of even a small 2010 surplus is gone; provincial counterparts cautiously hopeful after meeting in Saskatoon reaches consensus

KEVIN CARMICHAEL

With reports from Shawn McCarthy in Ottawa and Bertrand Marotte in Montreal

December 18, 2008

SASKATOON -- Finance Minister Jim Flaherty, who has been criticized in recent weeks for failing to acknowledge the depth of Canada's economic malaise, is now publishing the grim reality for all to see.

In an unusual move, Mr. Flaherty yesterday revised the government's official forecast for economic growth just three weeks after the Finance Department's traditional autumn update for Parliament.

Canada's inflation-adjusted gross domestic product will shrink 0.4 per cent in 2009, according to the Finance Department's average of 16 private-sector forecasters, which would be the first contraction on an annual basis since the early 1990s.

At the end of November, Mr. Flaherty was counting growth of 0.3 per cent next year. While meagre, the prospect of at least a little expansion left Mr. Flaherty confident enough to say a small surplus was possible in the fiscal year that ends March 31, 2010.

That hope is now gone.

"There will be a deficit," Mr. Flaherty told reporters after a meeting with his provincial and territorial counterparts. "2009 is going to be a difficult year for Canada."

Mr. Flaherty was under pressure from political opponents, especially his critics in the opposition Liberal Party, to provide a clearer picture of Canada's economic prospects amid a global recession and international credit crisis that has forced banks to record financial losses of about $1-trillion (U.S.) over the past year.

The assumptions in the federal government's fall update typically stand until Finance officials complete the budget several months later. With the global economy stuck in a downward spiral, Mr. Flaherty said he had no choice but to restate the assumptions he will be using as the basis for an economic stimulus budget set for release on Jan. 27.

Mr. Flaherty said the revision was the result of the rapid deterioration of the global economy, which institutions such as the International Monetary Fund and the World Bank say is in recession; the collapse of the U.S. housing market; and the "largest, most rapid" plunge in commodity prices in history.

The dire outlook appeared to inspire a new air of co-operation between Mr. Flaherty and the provincial ministers, who tend to bicker as often as they agree.

"It was a constructive meeting," said Quebec Finance Minister Monique Jérôme-Forget. "Everybody wanted to co-operate."

Ministers were universal in their support for new infrastructure spending, and pledged to work together to speed up the approval of projects that have potential to get billions of dollars into Canada's sputtering economy.

They also said they would look at ways to make it easier for companies to get credit, a pledge that was accompanied by accusations that the country's banks are hoarding cash and maintaining higher than necessary borrowing rates.

"There was a feeling they could be doing more to get credit to business," said Manitoba Finance Minister Gregory Selinger.

Still, the unanimity didn't yield concrete proposals and Mr. Flaherty refused to say how big his stimulus package will be.

To be effective as economic stimulus, the money governments spend on infrastructure must spend within 18 months, said Mario Iacobacci, director of the Conference Board of Canada's Centre for Transportation Infrastructure.

That gives an advantage to projects that already have been studied.

Officials should focus on these types of projects because there isn't time to analyze new proposals. Even if the cost-benefit analysis is complete, government officials still are obliged to review the proposals to ensure the spending is as effective as possible.

"You are going to be asking the policy people in the government to work a lot of overtime," Mr. Iacobacci said in an interview from Ottawa.

For some provinces, infrastructure isn't the only focus.

In Saskatoon yesterday, Alberta Finance Minister Iris Evans called on Ottawa to reverse its decision to phase out a tax break for oil sands extraction, and to extend the writeoff to upgraders.

Companies have postponed or cancelled as many as seven proposals to build upgraders - which process raw bitumen into synthetic crude oil - and have slashed capital budgets needed to expand oil sands production.

Ms. Evans said Alberta wants to see a resolution to the current disagreement between the province and the federal government on regulation of greenhouse gas emissions, and some tax breaks for the industry. On the eve of the finance ministers' meeting, Alberta Premier Ed Stelmach sent an open letter to Prime Minister Stephen Harper, urging the federal government to help improve the investment climate in the slumping oil industry.

The Quebec government said it is providing $1-billion in loans and loan guarantees to help companies get through the current credit crunch and economic slowdown.

Deborah Allan, spokeswoman for Teachers, was not immediately available for comment.

BCE files suit against Teachers
Simon Avery
Globe and Mail

BCE Inc. filed suit against the Ontario Teachers' Pension Plan and its partners on Wednesday, seeking a $1.2-billion break-up fee after their leveraged buyout of the telecom giant collapsed last week.

The suit, filed in the Superior Court of Quebec, also names Providence Equity Partners and Madison Dearborn Capital Partners, which together with Teachers had offered $35-billion for BCE.

The deal collapsed after auditor KPMG said the leveraged buyout would leave BCE technically insolvent, with liabilities greater than the value of its assets.

Deborah Allan, spokeswoman for Teachers, was not immediately available for comment.

More to come

© 2008 The Globe and Mail

Reality check: Why do you think they called it Asset Backed Commercial Paper, and not de facto T-Bills?

This afternoon, we have Boyd Erman of the Globe arguing in support of the government bail out of the ABCP cheque kiting scheme, in the name of the “little guy”, when in fact less than 1% of the ABCP paper was sold to "little guy" retail investors. Nice try Globe and Mail. The very paper that abandoned the “little guy” income trust investor, who was scammed by the Harper government with Flaherty’s fraudulent argument of “tax leakage”, widely promulgated by the good folks at the Globe and Mail.

Boyd Erman’s logic is no better than the ABCP scheme itself. If, as he argues, that “some very, very smart people who have been through the structure say there's a very low risk of that [$10 billion government backstop being called upon]”, then why is the backstop required? If we as taxpayers are asked to assign no risk to this backstop being drawn upon, they why are others asking for it in the first place? Obviously those parties who benefit are assigning considerable value to it. Meanwhile why is the government becoming a party to a transaction that serves to absolve the banks and brokers from selling practices that would otherwise be subject to legal action?

Meanwhile Boyd Erman is bemoaning the fact that these investors stand to lose some of their investment value. Is Boyd Erman not aware that this is occurring all around us? These ABCP investors, absent a bailout, will receive 100% of what they are entitled to, namely a lot of long dated bonds that were the assets that backed this commercial paper game of musical chairs. If these assets are no longer worth the 100 cents worth of commercial paper that was issue against them, so be it. Why are we now introducing some government “top up” that was never part of what was “bargained for” in the first place, to quote the Supreme Court of Canada in the case of the BCE bondholder dispute?

Meanwhile, the Caisse and the other pension funds have large portfolios of long dated bonds. What’s the problem with more of the same, which will be the result once this ABC Paper scam is wound up and the Caisse receives, in kind, the very assets that backed their Asset Backed Commercial Paper? After all, why do you think they called it Asset Backed Commercial Paper, and not de facto T-Bills, which these people are now desperately lobbying for?

Meanwhile what “success fees” are being paid to folks like Purdy Crawford, Steve Halperin et al, if this insane government bailout of ABCP takes place? Absent the government, these “success fees” would be zero, which is exactly what they should be if the government pursues this idiotic deal to its ultimate insane conclusion.




The ABCP Calculus: Why Ottawa should step in
Boyd Erman, today at 1:31 PM EST
Globe and Mail

Covering the asset-backed commercial paper mess for 16 months, I've tried to stay neutral on what I think is the best course of action. Like any human (and journalists are human) I do have my opinions, but I've kept them under wraps as best I could, leaving it to the players in the drama to tell the story.

But with a deal finally in sight, assuming the governments in Ottawa, Quebec City and Edmonton get together this week to provide some backstop credit, I will say this: on a cost-benefit basis, the governments should go ahead and do it. I say this as a taxpayer, whose money is potentially on the line. It's the smart call.

Let's put ideology aside and just look at the numbers. What will it cost the governments to do it? At the most, $9.5-billion, assuming they are actually called to put up the capital in a future emergency and it's a total loss. But some very, very smart people who have been through the structure (and who are not investors in ABCP who are conflicted by their desire to get the deal done) say there's a very low risk of that.

What are the costs of not doing it? Well, almost instantly, $25-billion or more of wealth will disappear from the pockets of Canadians as the paper vaporizes. Those losses will come from individual investors, and from big pension funds like the Caisse de depot et placement du Quebec, who, one must remember, are just agglomerations of little investors. They may have been badly served by the folks who run their investments, but those small investors shouldn't be punished for that.

And at a time when the federal government is looking at trying to find $15-billion to $30-billion to spend to prime the economic pump, $25-billion of lost wealth from ABCP alone could wipe out any boost to the economy from Ottawa's next budget. And the cost wouldn't stop there. Investors who lost money will pay less tax. Caisse contributors will likely have to pay more off their paychecks to make up the losses. Alberta taxpayers will bear the hit to Alberta Treasury Branch.

All of that means less money in government coffers, and less in Canadians' bank accounts. Some estimate the total cost would be more like $50-billion when you factor in lost tax revenue and all the other ancillary effects. Is that number realistic? It sure sounds reasonable.

So, yes, maybe on a philosophical level you can argue that the government should let 'em hang. Caveat emptor and all that. But an economic crisis is not the time to be doctrinaire. It's a time for pragmatism. The numbers say do the deal, Messrs. Flaherty, Stelmach and Charest. Do the deal.

Flaherty on the verge of bailing out Bay Street's latest cheque kiting scheme?

Sure why not? A $10 billion bailout of ABCP, only represents $625 for every Canadian taxpayer. What kind of precedent does this establish for government to bail out failed Bay Street structured investments? What's next...a bailout of failed Bre-X investors?


OTTAWA

ABCP rescue talks continue: Flaherty
KEVIN CARMICHAEL
Globe and Mail


OTTAWA - Finance Minister Jim Flaherty said he is speaking to some of his provincial counterparts on a possible government backstop for the $32-billion asset-backed commercial paper market and that he might have a decision on whether to extend a lifeline later Wednesday.

"We have had discussions on the subject," Mr. Flaherty told reporters before joining his provincial and territorial counterparts for a meeting in Saskatoon. "That's all I can say at this point. I might have more for you later in the day."

The investors and banks trying to salvage the restructuring of the ABCP are asking governments for guarantees of as much as $10-billion to keep their plan from falling apart amid the fallout from the credit crisis.

Mr. Flaherty declined to discuss specifics. He said he is talking to "certain" governments about a rescue and that any public support would be less than $10-billion.

"Nothing that large," he said.

I am pleased to report that Michael Bryant listened to me

Michael Bryant is my MPP. I contacted his office last week by phone and by email to make the point that any bailout of Chrysler needs to be treated differently than GM or Ford, by virtue of the fact that Chrysler is owned by private equity (Cerberus)

Chrysler rescue has strings

Dec 17, 2008 04:30 AM
Toronto Star

Rescue cash for Chrysler will have strict terms to prevent the privately-owned automaker from taking advantage of Canadian taxpayers, warns Ontario's economic development minister.

"Chrysler will have to be treated differently," Michael Bryant said yesterday.

He promised the Detroit Three automakers will get the life-saving financial "CPR" they need to prevent the eventual loss of over 500,000 jobs in Ontario predicted in a new study if General Motors, Ford and Chrysler were to go bust.

But there will be strings attached, particularly with Chrysler, which has major assembly operations in Brampton and Windsor.

The company's American parent is controlled by Cerberus Capital Management LP, a New York-based firm that manages $27 billion (U.S.) in assets and has been under fire in Washington for not putting more of its own money into the faltering automaker, which is seeking $1.6 billion (Cdn.) in Canada.

Details are "yet to be determined" but could include special warrants placing restrictions on any profits taken by Chrysler at the expense of taxpayers, Bryant added.

"We are working on the assumption that ... the government is just not going to be providing (money) and kissing goodbye."

But a leading auto industry analyst said it will be "extremely difficult" to put any conditions including job guarantees on financial aid for the reeling auto companies.

"They need to shed jobs, not create them," said Dennis DesRosiers, noting none of the automakers are investing so guarantees for future spending are difficult.

"There could be long-term promises regarding intellectual capital like research and development and some broad guarantees regarding greening," he said, referring to more green friendly vehicles. "But it's impossible to get into specifics."

Cerberus, a giant private equity firm, bought most of Chrysler from Daimler in 2007 but has been trying to unload it for months as losses mount.

Discussions involving Cerberus selling Chrysler to GM in exchange for GMAC Financial Services fizzled recently. Cerberus already owns 51 per cent of GMAC.

Chrysler has indicated it could run out of money to operate plants within weeks. The Detroit Three are seeking $6.8 billion (Cdn.) from the federal and Ontario governments.

The Bush administration yesterday said it was still evaluating options and suggested any deal would require major concessions by all sides. Complicating its task, lawmakers in both parties – having failed in their efforts to push a $14 billion rescue through Congress – were pressing for an array of terms and conditions they said should be part of any alternative plan.

"We are not going to be rushed into it," said presidential press secretary Dana Perino.

While the federal and provincial governments worked on conditions for aid, Prime Minister Stephen Harper met privately with Frank Stronach, chair and founder of auto parts giant Magna International Inc., in Ottawa.

One government official said the meeting was part of pre-federal budget talks. A source close to Stronach would not say if they talked about the auto aid package.

Bryant said the aid package is not just for the auto companies but more to preserve the jobs and livelihoods of tens of thousands "in the public interest" and protecting the economy from a deep recession.

His comments came at the release of a new report disclosing that Ontario would lose 517,000 jobs by 2014 if the Detroit Three go under.

The study by the Ontario Manufacturing Council, an arm's length provincial government panel, warned 582,000 jobs would be lost nationally within five years under that scenario as the impact of lost auto, supplier and dealership jobs rippled throughout the country.

Even if domestic output were cut in half, the province would lose up to 141,000 jobs and the country as a whole 157,400.

Ontario Finance Minister Dwight Duncan acknowledged the bailout – which now hinges on the prospect of U.S. government aid that remains in limbo – will put the province deeper into the red than its forecast $500 million budget shortfall this year.

Federal Industry Minister Tony Clement last week pegged Canadian emergency aid at 20 per cent of the U.S. level, which given the $14 billion congressional assistance package means $3.4 billion from Ottawa and Ontario.

No decisions have been made on how that amount might be split between the two governments.

Ontario NDP Leader Howard Hampton said the governments must get job and product guarantees for Canadian plants before handing out any money – particularly to Chrysler.

"Because the owner of Chrysler really doesn't have a commitment to making cars, they're only committed to making money quickly and getting out the door," he said.

With files from Associated Press

"Harper's been ricocheting around like a rubber ball from, ‘Don't worry, be happy' to, ‘The sky is falling.'”

PM's pessimistic talk makes bad situation worse, critics say

BRIAN LAGHI and STEVEN CHASE
Globe and Mail
December 16, 2008

OTTAWA — Prime Minister Stephen Harper was accused yesterday of exacerbating the economic downturn by spreading pessimism when he should be taking a leadership role by disbursing hope.

Mr. Harper, who said in a television interview on Monday that he has never seen such uncertainty about the future, came under fire for giving in to fear at a time when Canadians need their Prime Minister to offer a more positive outlook – both to relieve anxiety and to keep consumers spending.

“I think human behaviour drives recessions and recoveries, and confidence in the future drives human behaviour,” said Liberal MP John McCallum, a former chief economist for the Royal Bank of Canada.

“Especially during difficult times, leaders have to inject confidence and hope into their citizens and Stephen Harper has done precisely the opposite with these comments.”
Related Articles

Mr. Harper told CTV on Monday that he had “never seen such uncertainty” about the future and that he was personally “very worried” about the Canadian economy. He wouldn't rule out a depression, saying it “could be” possible, although he quickly added he believed the world had learned enough from the 1930s to avoid another one.

Peter Donolo of the Strategic Counsel polling firm said Mr. Harper may have erred in trying to demonstrate to Canadians that he feels their fear.

“Part of political leadership, national leadership, is giving people a sense of confidence and a sense of hope,” Mr. Donolo said. “My guess is he's trying to compensate for what was widely perceived to be a lack of empathy about people and their economic anxiety.”

He said Mr. Harper's message has been inconsistent.

“He's been ricocheting around like a rubber ball from, ‘Don't worry, be happy' to, ‘The sky is falling.'”

However, economists said such comments from Mr. Harper might have scared Canadians six months ago but they predicted consumers are mostly inured to dire talk after months of awful economic developments.

“Under normal conditions that could possibly send a chill into consumer and business confidence, but I would say under present circumstances it would probably land only a glancing blow because people have been so battered with bad news in recent months that there's very little one can say any more to spook consumers,” said Douglas Porter, deputy chief economist at BMO Nesbitt Burns.

Robert Fairholm, director of Canadian forecasting at the Centre for Spatial Economics, said he thinks Mr. Harper is reflecting prevailing views.

“Consumer confidence has already dropped to deep recession levels – so will his comments push them further down? I suspect not,” he said. “People are already extremely worried.… I don't know if anybody is really hanging on the Prime Minister's words.”

Oct. 7: "I think there are probably some great buying opportunities emerging in the stock market as a consequence of all this panic."

Asked whether he would unequivocally rule out a deficit under his government: "Yes. ... Yesterday I think I was asked one question about whether we would run a deficit and I said, 'No.' That's my answer."

Oct. 11: "The fact of the matter is independent analysts, including the International Monetary Fund, say that Canada is not going to go into recession with the current world environment and its current set of domestic policies. We're the one country that's going to continue to show some growth."

Nov. 23: "The most recent private-sector forecasts suggest the strong possibility of a technical recession the end of this year, the beginning of next.

"I am surprised at this. I am also further surprised, more importantly, by deflationary pressure that we're seeing around the world. This is a worrying development, one of the reasons why it may well be necessary to take unprecedented fiscal stimulus."

Dec. 15: "The truth is, I've never seen such uncertainty in terms of looking forward to the future. .... I'm very worried about the Canadian economy."

Asked whether the situation could turn out to be a depression: "It could be, but I think we've learned enough about depression; we've learned enough from the 1930s to avoid some of the mistakes that caused a recession in 1929 to become a depression in the 1930s."

Canadians having nothing to fear, but fear monger Harper himself

He's got the title – give him the job

Globe and Mail
Editorial
December 16, 2008

Upon exiting a meeting with Finance Minister Jim Flaherty yesterday, Liberal MPs Scott Brison and John McCallum described the session as “very constructive and businesslike.” That would be more encouraging if it were clear that Mr. Flaherty were actually running the Finance department.

Mr. Flaherty has spent the last three weeks being embarrassed by his own government. On Nov. 27, he rose in the House of Commons to deliver an ill-conceived fiscal update that by most accounts was dictated by the Prime Minister's Office. When the update's inadequate response to the global economic crisis and its gratuitous partisanship had disastrous consequences, Mr. Flaherty was left twisting in the wind while other cabinet ministers were dispatched to back away from its more controversial positions.

The past few days have seen the continuation of a trend that began even before the fiscal update – the Finance Minister saying one thing, and the government doing another. On Friday, Mr. Flaherty publicly preached the merits of restraint, cautioning against “panicking” and dampening expectations for a stimulus package. Hours later, Industry Minister Tony Clement announced a tentative bailout of the auto industry believed to be worth approximately $3.4-billion. By the end of the weekend, Mr. Clement was hinting at similar aid for the forestry and mining sectors. And in a television interview aired yesterday, Prime Minister Stephen Harper undermined Mr. Flaherty's call for calm – intoning that he's “never seen such uncertainty in terms of looking forward to the future” and declining to rule out a full-fledged depression.

Mr. Flaherty's disempowerment says more about his boss than it does about him. With very few exceptions, Mr. Harper has placed little faith in his ministers. They function primarily as spokespeople, with most major decisions being made centrally. The consequences of micro-managing minor portfolios have been relatively small. But the country needs economic leadership that goes beyond a few staff members in the Prime Minister's Office, as the government has ably demonstrated with its alternately inadequate and, yes, panicky response to the current fiscal turmoil.

Not every Finance minister will enjoy the clout of Paul Martin or even Don Mazankowski, and Mr. Flaherty has not yet been given a chance to prove that he merits it. But now more than ever, Canada needs a strong hand at Finance. He or she must have command of the department, the respect of cabinet, and the ability to speak to the public with authority on the government's fiscal policy. Mr. Flaherty does not seem to meet any of those criteria, because he apparently lacks the most important qualification of all: the confidence of the Prime Minister.

My fiscal stimulus plan includes taxing employee stock options gains as employment income and not capital gains

Part of any prudent and balanced fiscal stimulus plan involves not just increasing expenditures but also introducing new sources of tax revenue where possible. The taxation of employee stock option as capital gains, rather than as the employment income they actually represent, is without any economic justification and merely represents a form of unjustifiable tax relief for the wealthiest Canadians. Capital gains are taxed at HALF the rate of income, to reflect the fact that investors have capital at risk and to encourage more risk taking/investing by investors in our economy. Neither of these conditions of taking risk or making investments in our economy hold true in the case of gains from employee stock options. There is no risk taking. So why are employee stock option gains accorded advantageous tax treatment at half the rate of tax of the income from employment that they actually represent? This is a hand out to those least in need of a hand out.

Meanwhile many of the monumental abuses we have witnessed on Wall Street and the financial system at large, have been caused by compensation systems that provide undue incentives for outcomes that are often contrary to the public good. So why are these compensation systems that see executives in Canada with, for example $50 million windfall profits from stock options, paying the same rate of marginal taxation as some worker earning $15,000, as both will be paying a marginal tax rate of approximately 23%?

Makes no sense whatsoever. In this fashion, the tax system has being skewed to favour the wealthiest and is being used to encourage and incent practices in the business community that have become of questionable social value. This irrational tax carve out needs to be eliminated in the name of true tax fairness.

Which role model did Flaherty have in mind for his much vaunted single regulator?

Madoff case fuels attacks on SEC
Tue Dec 16, 2008 11:44am EST

By John Poirier - Analysis
WASHINGTON (Reuters) - The $50 billion fraud allegedly committed by broker Bernard Madoff is a major embarrassment for the U.S. Securities and Exchange Commission and adds to questions already being asked about the regulator's competence.

The SEC's inability to uncover the scandal until Madoff's sons went to authorities last week comes at a particularly bad time for the SEC and its Chairman, Christopher Cox. They have already been accused by some lawmakers and market experts of being asleep at the wheel while the credit crisis exploded on Wall Street.

The agency's future existence as a separate agency is already under threat as Washington looks at overhauling the regulation of the financial services industry.

"This will be profoundly embarrassing for the SEC," said Columbia University law school professor John Coffee, who has been critical of the agency for failing to properly regulate the failed investments banks. "Congress will predictably give them little mercy."

Madoff, a former Nasdaq Stock Market chairman, was arrested and charged last week with running a massive "Ponzi" scheme using his investment advisory firm.

A rapidly growing number of banks, investment funds, charities and wealthy individuals disclosed on Monday that they had invested in companies controlled by Madoff.

There had already been a number of red flags about the way Madoff operated his investment business going back many years, including an article in the financial newspaper Barron's in 2001 that questioned how Madoff made stunning double-digit returns year after year.

The Wall Street Journal also reported on Friday that Harry Markopolos, who years ago worked for a rival firm, researched Madoff's stock-options strategy and was convinced the results likely were not real. Markopolos pursued his accusations over the past nine years, dealing with both the New York and Boston offices of the SEC, according to documents he sent to the SEC, the newspaper said.

"I'm sure people will look closely at them (the SEC)," said Carl Loewenson, a partner in the New York law office of Morrison & Foerster, who warned against blaming the SEC too quickly.

He said the SEC may not completely be at fault for not catching Madoff's activities sooner, even if some publications questioned his investment returns.

If Madoff was able to fool sophisticated hedge funds, institutions and individuals, he probably would have been able work around regulators too.

"Those people had every incentive to do the utmost due diligence and a lot of them did and a lot of them didn't discover the fraud," he said. "The victims here are not Moms and Pops."

An SEC spokesman declined to comment on the criticism or give any details of inquiries into Madoff's activities.

House Financial Services Committee Chairman Barney Frank is likely to examine how the SEC handled the matter, which also involves a criminal investigation.
Frank's spokesman, Steven Adamske, said he would not comment on the matter until the criminal investigation was resolved, but said the committee will not ignore the matter either.
"In due time, however, we will look at what happened with the SEC and work with them to see if there was a failing of policy here," Adamske said. "If so, there will be an appropriate course of action. But it is not something we will ignore."
Frank, a Massachusetts Democrat, is a key lawmaker who could help determine how regulation of the financial services industry will be overhauled, given the failings by banking and securities regulators to reign in a bottomless appetite for risk.
He and Christopher Dodd, chairman of the Senate Banking Committee are likely to head the reform efforts in Congress.
Dodd is concerned about the people caught up in the scheme who may have been misled and also how such a massive fraud could have gone undetected, his spokeswoman, Kate Szostak, said.
"Senator Dodd is seeking more information from the SEC about this case and is determined to ensure that securities brokers and investment advisers are effectively regulated and supervised in order to protect investors and consumers," she added.
In September, the SEC's inspector general faulted the agency's oversight of big investment bank Bear Stearns for failing to adequately supervise it and limit its risks.
Even after becoming aware of numerous potential red flags prior to Bear Stearns' sale to JPMorgan Chase & Co in March, the SEC failed to limit the firm's risks, including mortgage securities, the inspector general said.
Earlier this year, the Treasury Department issued a set of recommendations to streamline regulation of the financial services industry and entities that flew under the radar of U.S. authorities such as mortgage brokers and lenders, as well as credit default swaps.
The Treasury also recommended combining the SEC with the Commodity Futures Trading Commission and merging bank regulatory agencies the Office of Thrift Supervision and Office of the Comptroller of the Currency.
Some experts do not entirely blame the SEC and instead say Congress should have given the agency more power to regulate some institutions such as hedge funds.
"Congress needs to decide what it's going to do with these gray area items like hedge funds and swaps," said John Allan James, an adjunct professor of governance and regulatory issues at Pace University's Lubin School of Business in New York.
Madoff's attorney, Ira Sorkin, declined to comment on the case, other than to say a hearing was scheduled for Friday in the SEC case against his client in a federal court in New York.

Time for Liberals to play catch up with Gord Tait, or have they abandoned income trust investors?

A wee tax change would be stimulating

DEREK DeCLOET

Globe and Mail Update

December 16, 2008 at 6:00 AM EST

A recession can alter lives and dreams. It can also take a man's best-laid plans and destroy them with the speed of an industrial shredder. Take Jim Flaherty, fiscal hawk. “I'm not going to be the finance minister that puts our country back into deficit,” he vowed in February. Come Jan. 27, he'll be the Finance Minister who puts the country back into deficit.

Mr. Flaherty so hated the idea of subsidizing the auto companies that he got into a mud-slinging contest with the Premier of Ontario about it. “What Dalton McGuinty is doing is the short-term, ad hoc, subsidy thinking … the kind of old-fashioned thinking that's proven to be a failure of short term, Band-Aid fixes for specific companies.” Last Friday, the Conservative government promised an ad hoc, old-fashioned, Band-Aid solution for the auto industry.

And there's plenty more where that came from. This, a wise economist told me recently, is the problem with deficits: Once you've tossed aside your fealty to balanced budgets, it becomes open season on the treasury. Everybody wants a piece, and it becomes harder to say no. After all, if a $5-billion deficit is good, isn't $10-billion better? And if $10-billion, why not $15-billion? And if the auto makers get money, why not lumber companies or miners? Industry Minister Tony Clement is now hinting that those groups may get aid, too, in Mr. Flaherty's upcoming budget.

Few would argue with Mr. Clement's description of the resource sector as “under distress.” One of the largest mining companies, Teck Cominco, is strapped for cash and has begun shutting down mines. Teck has about 7,000 Canadian employees, nearly as many as Chrysler. If jobs are your yardstick, then bailing out Teck is every bit as important. (Though Mr. Flaherty warned us that “politicians aren't very good at picking business winners and losers.”)

Who wins with all of this industrial aid? Those who work in the favoured industries, sure. But – no politician wants to admit this – that's a slim percentage of the working population. Auto manufacturing employs about 110,000 in Canada. Resource companies employ another 350,000. Put together, that's about 4 per cent of private sector jobs in the country. Both provide a lot of spinoffs (in trucking, financial services, and so on), but still, they're far less important than, say, the construction business.
]
No, if Grim Jim is going to become Generous Jim, there are better – and fairer – ways to do it. Most Canadians will never set foot on the floor of a truck assembly plant. But all hope to retire some day. And what group could be more “under distress,” to use Mr. Clement's phrase, than investors?

The market value of all stocks on the Toronto Stock Exchange had plunged by about $800-billion this year, through November. Corporate bond values have dropped. What's now obvious is that even people who are close to retirement have plenty of exposure to both.

A Statistics Canada survey published in February found that most Canadians hold some mix of mutual funds, stocks, bonds and income trusts in their RRSPs. The surprise was this is true even of those 65 to 69 years old. Just four in 10 had stuffed all their money in GICs and short-term government bonds, where they'd have been sheltered from a market crash. Why? Presumably because the rates were too low. They needed growth, or more income, or both.

Where will they get it? Let's return for a moment to Mr. Flaherty's decision in 2006 to tax income trusts. He did it to stop large, taxable companies like Telus and EnCana from becoming trusts and to cure the tax inequity between trusts and corporations. But in the process, he made worse the double taxation of retirement savings.

An investor who gets a dividend paid to his RRSP has to pay full income tax on it when he withdraws it, not the lower rate of tax usually applied to dividends. This means the taxman gets up to 63 cents on the dollar, calculates BMO Nesbitt Burns analyst Gordon Tait – because it's taxed once in the hands of the company, and again at a higher rate in the investor's. (The same will be true of income trusts by 2011.)

That has always been absurd. But at a time when the bear market has burrowed a gaping hole into retirement accounts and pension funds, it's unconscionable. The solution is simple, Mr. Tait says. When investors take dividends (or trust distributions) out of their retirement accounts, tax them as dividends – not as income.

Yes, it would cost the treasury hundreds of millions, if not billions. But retirees could use the money they might save – there's stimulus for the economy right away – and all investors would benefit. It would lift the markets, ease the pressure on pensions, and cut the cost of capital for dividend-paying companies, like banks, which need it. Most important, Mr. Tait says, “it would be righting a wrong.” He has sent his proposal to the Finance Department. Mr. Flaherty, big spender that he is, should listen.

This is an absurd use of taxpayer dollars

Why would the Liberals use my taxpayer dollars for an institutional investor bailout that buys immunity for the Big Bank's misdeeds?


"It is extremely important that financial market participants bear the consequences of their decisions." Mark Carney (in reference to any government involvement in ABCP bailout)

“The ultimate result of shielding man from the effects of folly is to people the world with fools” Herbert Spencer ( English philosopher; prominent classical liberal political theorist)


Ottawa should weigh in to ABCP rescue, McCallum says

John Greenwood and Jim Middlemiss,
Financial Post
December 15, 2008


The federal government should put its weight behind a proposal to restructure $32-billion of seized up asset-backed commercial paper, including kicking in an additional $9.5-billion in financial guarantees that came as a last-minute request from a committee overseeing the process, said the Liberals' top economic strategist and former finance critic.

"In the national interest this could well be the right thing to do," said John McCallum. Speaking in a telephone interview, the former economist at the Royal Bank of Canada said that the consequences of not helping the restructuring would be so negative for Canadian investors and businesses that Ottawa may have little choice but to come up with the money.

With the proposed restructuring under major stress from the turmoil in financial markets, a committee headed by Toronto lawyer Purdy Crawford has been forced to go to Ottawa in a last ditch bid to find additional loan guarantees to ensure the deal can survive.

Sources said the two sides have been in discussions for about a week but the Tory government of Stephen Harper is so far showing little appetite for getting involved.

"The minister has consistently said a market-led restructuring is a preferred course of action for investors and capital markets in Canada, one that does not depend on taxpayer dollars," Chisholm Pothier, a spokesman for Finance Minister Jim Flaherty, said in an e-mail.

But in a sign that the government is softening its stance, Mr. Pothier added that, "any actions taken by the government would reflect its ongoing commitment to protecting financial stability and ensuring the health of Canada's capital markets."

Because ownership of the stranded ABCP is concentrated in just three provinces, some including Quebec have been asked to contribute to the backstop facility, according to reports.

But a spokesperson for Quebec Finance Minister Monique Jérôme-Forget said the province has not been asked to get on board.

"There have been no discussions, said Catherine Poulin.

Nor should there be any discussions, according to Mr. McCallum. He argues that the problems that led to the collapse of the ABCP market back in August 2007 were largely the fault of Canada's banking regulator, the Office of the Superintendent of Financial Institutions, which comes under the responsibility of Ottawa. Because ultimate responsibility for the market meltdown lies with the federal government, it should be the one to provide the $9.5-billion in additional financing, Mr. McCallum said.

Meanwhile, the Dec. 11, 2008 letter from a lawyer representing retail holders of frozen ABCP to Mr. Flaherty has come under fire from a couple of fronts.

Henry Juroviesky called for a seat at the table in any talks between the federal government and the Crawford committee.

The letter states that any federal financial aid should be contingent on the retail investors getting paid out in full, either from the security dealers who sold them the paper or from the fresh funds. If they don't, but the feds still back-stop the deal, he calls for the elimination of the controversial legal releases prohibiting ABCP lawsuits.

That little grenade in the negotiations, brought a tough response from Mr. Crawford.

"It would not be productive or appropriate to respond to each of the inaccurate statements in your letter or to its unreasonable requests," he wrote, going on to criticize Mr. Juroviesky's position, noting "we have spent months litigating with your support. As we have said, there is no plan without the releases." He closed his letter with a warning to "think carefully about what is in the best interests of your clients."

McCallum and Brison to Flaherty “Come clean with the numbers”

John McCallum and Scott Brison met with Jim Flaherty today to discuss their respective views on economic stimulus.

The upshot of that meeting is that McCallum and Brison are calling on Flaherty to “Come clean with the numbers”.

This is what income trusts investors have been calling for since November 1, 2006, as we have lost $35 billion in our retirement savings.

This standard of disclosure can not be selectively applied by the Liberals, simply in circumstances of political leverage to them.

We demand that Flaherty disclose the analysis and methodology that (presumably) support his argument that income trusts cause tax leakage, as many others have called upon the Government to do.

Why are we cow towing to a minority party that’s on the run? Come clean with the numbers. Prove the case or drop the tax.

Jim Flaherty's blacked out documents, make him the Bernie Madoff of Canada

How do you suppose Bernard Madoff made off with $50 billion of his clients’ money? The same way that Flaherty made off with $35 billion of Canadian investors’ money. Falsified accounts. Insufficient disclosure. Lax oversight. Bad auditors. In the case of income trust investors that bad auditor was Canada’s Auditor General who refused to investigate Flaherty’s bogus tax leakage hoax. None of this is funny folks. It is high level corruption. Where is Canada’s press? Why is the government being allowed to hide the truth....at great cost to seniors and all tax payers?

Madoff millions vanish into thin air

By Robert Plummer
Business reporter, BBC News

Wall Street denizen and alleged mega-fraudster Bernard Madoff began his financial career at the age of 22 with just $5,000.

Taking the money raised from summer holiday jobs working as a lifeguard and garden sprinkler installer in the New York borough of Queens, he set up the investment firm that bore his name in 1960.

Now, after nearly half a century of trading, his reputation is in ruins, as he faces allegations that his entire business was nothing more than a $50bn (£33bn) scheme to dupe investors.

With his alleged victims asking why US regulators failed to query what was going on, it seems that the way in which Mr Madoff operated was key to the success of his venture.

While those who knew him describe him as "affable" and "high-profile, but not in a loud way", he went to great lengths to cultivate an aura of exclusivity.

Many of his richest clients were recruited in private chats at upmarket country clubs in New York and Florida, giving them a sense of belonging to a privileged circle of those in the know.

Then he used those big names to attract other investors, until his influence extended to international banks, hedge funds and even charitable foundations.

'Money heaven'

No-one seems to know yet what exactly has happened to all that money. Mr Madoff is quoted in the US Attorney's criminal complaint against him as saying that he has "absolutely nothing".

Whether he is supposed to have squandered it, stashed it or simply lost it on the markets has yet to emerge.

In the words of hedge fund boss Douglas Kass, of Seabreeze Partners Management: "It appears that at least $15bn of wealth, much of which was concentrated in southern Florida and New York City, has gone to money heaven."

Mr Madoff's dealings were certainly pretty opaque. As well as his original company, Bernard L Madoff Investment Securities, he ran an entirely separate investment advisory business, which is the firm implicated in the alleged fraud.

He never outlined his trading methods or how he generated the healthy returns on his investors' money.

Somehow, in bad times as well as good, he was able to pay out 10% or more every year. "It's a proprietary strategy. I can't go into it in great detail," he once said.

Prosecutors now think they know all too well what Mr Madoff's "proprietary strategy" was: using money from new investors to pay off old ones, in a form of illegal investment known as a Ponzi scheme, after one of its earliest exponents.

Regulatory gap

So why did this dubious state of affairs not come to the attention of the regulators sooner?

Well, the answer probably lies in a combination of Mr Madoff's personal prestige and some carefully exploited gaps in the system.

As a former chairman of the Nasdaq stock exchange with a string of other directorships and a generous donor to charitable causes, he was a man who inspired confidence.

As for the regulators, the US Securities and Exchange Commission (SEC) regularly inspected Bernard L Madoff Investment Securities, but not the separate investment advisory business.

That firm ran a hedge fund which was not registered with the SEC until September 2006 - and, according to reports, never inspected thereafter.

Even so, details have now emerged of earlier SEC inquiries into Mr Madoff's dealings. The SEC said last week that his securities operation was investigated in 2005 and found to have violated rules requiring brokers to get the best possible price for orders.

A second SEC inquiry, in 2007, apparently uncovered no irregularities.

Jail sentence

Mr Madoff is said to have told FBI agents that there was "no innocent explanation" for the collapse of his investment scheme.

Many wealthy people appear to have been wiped out by the alleged fraud, while financial institutions around the world are counting the cost.

Saddest of all, some charities are being forced to close because of their losses.

Mr Madoff himself has been released on $10m bail. But if the charges against him are proven, he could face a jail sentence of up to 20 years and a fine of up to $5m.

ABCP bailout? There are a thousand-fold more income trust investors

....and our $35 billion loss was caused solely by the government.

ABCP investors demand their money back now

Clients shouldn't have to wait on stalled talks, lawyers tell Flaherty

December 13, 2008
David Paddon
The Canadian Press

Lawyers for 2,542 retail investors with delinquent asset-backed commercial paper investments are calling on Finance Minister Jim Flaherty to make sure their clients are repaid immediately.

The lawyers argue that unsophisticated retail investors shouldn't have been sold the risky commercial paper in the first place.

They want investment dealers and banks who distributed the notes to repay their retail clients all their money, plus interest, without delay.

Efforts to salvage $32 billion in Canadian asset-backed commercial paper, or ABCP, have been stalled for months.

Most of the ABCP is held by pension plans and corporations but retail investors' support has been a crucial part of a court-approved restructuring that has been stalled by the global credit crisis.

The lawyers representing retail investors with ABCP paper were responding to news that Ottawa is being asked to provide about $9.5 billion in guarantees to ensure the process doesn't break down.

Flaherty's office has confirmed that officials from his department met this week with representatives of a committee, headed by Purdy Crawford, that represents institutional investors.

Henry Juroviesky, representing mostly retail clients of Canaccord Capital and Credential Securities, wrote that their lawyers should have equal access discussions with finance officials.

He also called on Flaherty to make sure the retail investors don't have to wait for the restructuring effort to be completed.

Juroviesky took aim at one of the biggest sore points in the original agreement worked out in Ontario Superior Court under the federal Companies Creditors Arrangement Act – that ABCP holders give up their right to sue the businesses that sold them the paper.

"Any new plan of compromise implemented under federal government assistance cannot include any immunity to and/or release or surrender of legal claims and causes of action originating from the sale of ABCP to retail owners, except in the context of a full cash settlement for this group," Juroviesky wrote.

Under the original proposal, spearheaded by Crawford, holders of ABCP would exchange their short-term notes – which have matured and would have been repaid under normal circumstances – for longer-term notes that mature years from now.

That plan met the needs of pension managers, such as the Caisse de depot et placement du Quebec, with billions of dollars in assets and long-term investment horizons.

But it didn't satisfy individuals who had put much of their retirement savings into ABCP. They had significant voting power under the court-supervised compromise plan and many supported the deal reluctantly, after being assured they'd quickly be repaid under side deals offered by their investment dealers.

Flaherty asks for time to consult on stimulus....why?....to avoid another panic attack on Canadians?

Flaherty asks for time to consult on stimulus? Flaherty never consulted with Canadians for a nanosecond on his income trust tax, except with those narrow self interests who had something to gain from income trusts’ demise, people like Gwyn Morgan, Dominic D’Alessandro, Paul Desmarais Jr and Michael Sabia, as reported in the Globe on November 2, 2006:

“High-profile directors and CEOs, meanwhile, had approached Mr. Flaherty personally to express their concerns: Many felt they were being pressed into trusts because of their duty to maximize shareholder value, despite their misgivings about the structure. Paul Desmarais Jr., the well-connected chairman of Power Corp. of Canada, even railed against trusts in a conversation with Prime Minister Stephen Harper during a trip to Mexico, and told him he should act quickly to stop the raft of conversions, according to sources.
Amid this escalating tension, Mr. Sabia's phone call became a flashpoint, prompting the federal government to accelerate its crackdown on the sector”


Flaherty asks for time to consult on stimulus
KEVIN CARMICHAEL
Globe and Mail
December 12, 2008 at 8:52 PM EST

OTTAWA — Finance Minister Jim Flaherty is asking for a little breathing room to come up with an economic stimulus package. Canada's economy retains enough life to allow for some “thoughtful consideration” of how to proceed, said Mr. Flaherty, rejecting critics who say he is taking too long to develop an economic stimulus plan. As governments in Europe and Japan pledged upwards of $370-billion (U.S.) to fight a global recession, Mr. Flaherty told a business audience in Saint John Friday that “panicking” risked making the weakest economic growth in almost two decades even worse. “We are living in extraordinary times,” Mr. Flaherty said. “We also know that panicking and making the wrong choices would be devastating for the Canadian economy and that responding to this type of global economic turbulence requires steadiness and stability and consultation.”

Well Jim that's exactly what you did back on October 31, 2006 with you destructive income trust tax....YOU PANICKED and made the wrong choice that was devastating for the Canadian economy unleashing a rash of takeovers of devalued trusts and causing Canadians to lose $35 billion of their life savings and an essential means to provide income during retirement.

From “Golden Age” to “Financial Armageddon” in 18 short months?

Flaherty was duped by Wall Street once again.


It wasn’t 18 months ago that Henry Kravis of KKR was in Nova Scotia at a conference on private equity pronouncing that "We're in, right now, the golden age," "The private equity world is in its golden era right now," "The stars are aligned."

KKR as you know was one of the bidders to take BCE private by way of an LBO. Now comes word from the Financial Times of London that “Fear of financial “Armageddon” is starving private equity of fresh funds”

Good, as it couldn’t happen to a nicer bunch of blood sucking, tax draining, risk inducing pirrhanas. Meanwhile we have a virtual moron of a Finance Minister who actions and income trust tax policy played right into the hands of these private equity players....at the expense of all taxpaying Canadians. And he’s in charge of our economic turnaround?



Collapse of BCE plan fuels private equity industry concern
Financial Times
By Martin Arnold in London and Henny Sender and Francesco Guerrera in New York
December 11 2008

Fear of financial “Armageddon” is starving private equity of fresh funds, one investor warned on Thursday, after the collapse of the $41bn takeover of Canada’s BCE telecoms group marked a low for the industry.

The BCE deal would have been the world’s largest leveraged buy-out when it was announced in June 2007. Its collapse underlines how severely conditions have turned against private equity in the past 18 months.

The credit crunch has prompted banks to stop providing loans for buy-outs – the lifeblood of private equity – while market turmoil has made many investors incapable or unwilling to supply the cash needed for the equity portion of buy-outs.

“As long as we are considering an Armageddon type of scenario, our hands are going to be tied for new funding in private equity,” Mark Boyle, head of private equity at the $140bn investment arm of Northwestern Mutual Life Insurance, told a conference on Thursday in London. “This environment has investment professionals so rattled they are thinking the unthinkable.”

The groups that rode the “mega buy-out” boom, such as Blackstone, Kohlberg Kravis Roberts, TPG Capital and Bain Capital are already unable to raise much debt. If they are starved of fresh investor money for new deals, their future looks even less certain.

“It is too early to talk about a buyers’ strike, but if the markets continue down, that could happen,” said the person responsible for financing buy-outs at one of the banks involved in the BCE deal.

William Gilmore, investment director of private equity at Scottish Widows, said: “I suspect there will be a shake-out in the industry and some GPs (private equity general partners) will not be able to raise new funds.”

The unwinding of the BCE deal underscores how far the economics for other players involved in the buy-out world have changed. Senior bank debt in many big buy-out deals is trading at 50 per cent discounts.

Investors are selling their interests in some private equity funds for below 50 cents in the dollar.

“October of this year was the 1929 Crash equivalent for debt markets,” said Stephen Pitts, head of leveraged finance at Deutsche Bank. “Banks, when they lend, need to see rising asset values. So we must end this deflationary spiral first.”

The failure of the BCE deal, which came after accountants at KPMG decided it would render the telecoms group insolvent, turned out to be good news for the investors in the deal, which included the private equity firms Providence Equity Partners and Madison Dearborn Partners.

None of the investors in those two firms refused to meet their iron-clad commitment to write cheques for the deal, according to people familiar with the matter.

However, many of the investors were unhappy with the prospect of having to come up with the cash at a time when they face big losses across their portfolios.

The collapse of the BCE deal is good news for the banks that had agreed to finance it. The consortium of lenders, led by Citigroup and including Deutsche Bank, Royal Bank of Scotland and Canada’s Toronto Dominion would have faced writedowns of some C$10bn (US$8.2bn) on the C$34bn financing package, said people close to the situation.

Asset Backed Caveat Emptor: Sorry, not with my tax dollars!

Why should my tax dollars be used to bail out unscrupulous brokers and elaborate cheque kiting schemes?

Taxpayers' cash no solution to ABCP crisis
Noteholders Angered

John Greenwood, with Files From Paul Vieira
Financial Post,
December 12, 2008


A proposal that the federal government provide a bailout for a restructuring of $32-billion of frozen asset-backed commercial paper has sparked anger among some holders of the frozen notes, who say that taxpayers' money should not be used to fix the problem.

"We were let down by the institutions who sold us this stuff and we were let down by the institutions who made this stuff; I don't see why they should be bailed out," said Brian Isler, a Toronto-based lawyer with $229,000 of his savings tied up in the frozen notes.

Members of the so-called Pan-Canadian Committee overseeing the massive restructuring met with Finance Department officials this week to plead for financial assistance to prevent the plan from falling apart, sources said.

The government is being asked to provide several billion dollars to cover potential margin calls on leveraged credit default swaps underlying the frozen ABCP. Failure to meet such a margin call would result in a collapse of the restructuring, which has been in limbo for nearly 16 months.

"There should be no bailout," said a senior executive at a company with more than $60-million of frozen notes. He said that instead, a clause in the restructuring taking away noteholders' ability to sue investment dealers who sold the stalled ABCP should be removed.

"They should just give us back our legal rights and we will deal with this," said the executive.

Even though the Finance Minister, Jim Flaherty, has said he would prefer a market-led solution, a spokesman for the Minister said that the federal government "takes a keen interest in maintaining financial stability and the health of our capital markets."

The spokesman added: "The role all along has been to support discussions among the parties and encourage progress."

While Mr. Flaherty may prefer to stick to his position, he can't ignore the storm in financial markets that has become so severe in recent months that, according to some insiders, the plan that was mapped out at the end of last year might not survive.

The ABCP market fell apart in August, 2007, after investors stopped buying the notes over fears that they might be linked to subprime mortgages. Under the restructuring, spearheaded by the Caisse de depot et placement du Quebec, the frozen ABCP would be converted to longer term notes.

All along one of the main stumbling blocks has been the leveraged credit default swaps that make up the largest chunk of assets underlying the ABCP. As part of the restructuring, the banks and institutions backing it agreed to put up $14-billion to cover potential margin calls on the CDSs. That was considered more than sufficient backing in the spring when the details were hammered out, but since then credit conditions have worsened so much there is concern that it won't be enough.

The spotlight is mostly on a group of foreign banks on the other side of the CDS deals. They're the ones who will make the collateral calls, and right now they are in no position to make concessions. In recent months, several have been bought or accepted government bailouts.

"Those banks would want to protect the new money that has been put into them, and to do that they would want to collect on all money that is owed to them," said Diane Urquhart, an industry expert working for some of the noteholders. "To the extent these banks have offered margin facilities; they would be examining the credit integrity of that margin facility. This is the new dynamic."

Do you suppose Harper will employ the services of Illinois Governor Rod Blagojevich? Ebay?

Harper to fill Senate vacancies

STEVEN CHASE

Globe and Mail Update

December 11, 2008 at 11:22 AM EST

OTTAWA — Prime Minister Stephen Harper will fill all 18 vacancies in the Senate with Conservative appointees before year's end, sources say.

The decision appears to be at odds with the Tory Leader's promise to only appoint elected senators to the unelected chamber.

But the Conservative move is motivated in part by the worry that the alliance between the Liberals, NDP and Bloc Québécois alliance could topple Mr. Harper's minority in early 2009 and stack the Senate with their own choices, a government official said.

Failed BCE deal allows Flaherty the chance to recoup $2.6 billion in foregone tax revenue

We have a Finance Minister who can’t even read income statements or cash flow statements. Were Flaherty able to do so, he would never have attempted to justify his income trust tax back on November 1, 2006 by saying (in the Globe):

“You have to either leave it alone or fix it,” Mr. Flaherty shrugged Wednesday. “We were going to see the two largest telecommunications companies in the country not pay corporate taxes. That's a clear and present danger to fairness in the Canadian tax system. I thought we had to act.”

Not pay taxes? Wake up Finance Minister Jim Flaherty. You were being gamed by the folks who were running BCE at the time. Neither BCE nor Telus were paying taxes at the time. Can’t you even read an income statement? Do you not read these companies forward looking statements at the time before making such ridiculous statements to the Globe. BCE for example was reporting at the time that:

"Bell expects it will have no significant federal cash taxes through 2010, due to organizational simplification enabling accelerated use of Bell's R&D tax credits."

If in doubt, you could have simply made a phone call to CRA and ask them how much tax BCE was remitting to the government. They would have told you that BCE wasn’t paying a plug nickel in taxes and hadn’t for over 10 years.

Then you could have asked that boy wonder from Goldman Sachs. Mark Carney, to do an analysis of how much tax Ottawa would have collected from BCE and its owners if it had been allowed to become an income trust. Even you could have understood this very simple math: (from http://www.caiti.info/resources_it_mythbusters.php#myth3 )

BCE Ownership:

15% foreign
35% Canadian tax deferred
50% Canadian taxable

Tax Rates:

38% blended tax on income as per Department of Finance Consultation Study dated Sept 28, 2005
19% blended tax on dividends

Distributions on 900 mm shares outstanding

Trust distribution rate: $2.55 per unit
Corporate dividend rate: $1.46 per share

Federal Taxes (including deferred taxes paid on retirement accounts):

BCE as an Income Trust: $793 million per year federal tax
BCE as a Corporation: $240 million per year federal tax

Foregone Federal taxes: $553 million per year

Foregone Taxes over BCE's 4 year corporate tax holiday: $2.2 billion

Foregone Capital Gain on Conversion to Trust: $428 million (based on $5.00/share gain)

Total Foregone BCE Taxes: $2.6 billion

Did Harper say he wanted an "elected" Senate or a "selected" Senate?

"You sir had a choice"

Harper to fill 18 Senate seats with Tory loyalists

Robert Fife, Ottawa Bureau Chief

OTTAWA -- Prime Minister Stephen Harper plans to fill 18 vacancies in the unelected Senate with Conservative loyalists before Christmas, CTV News has learned.

Sources said Harper is concerned the Senate committee system isn't working properly because there are only 20 Conservative senators sitting in the Liberal-dominated Red Chamber.

But according to insiders, what really drove Harper to move quickly and fill the vacant Senate seats is the possibility of losing political power in January at the hands of the Liberal-NDP coalition.

The centre-left alliance, which is supported by the separatist Bloc Quebecois, is threatening to boot the Tories out of power by voting against their budget bill in late January.

"It would be irresponsible to have this unelected coalition government stack the Senate with their supporters," said one Conservative insider.

Harper had campaigned on replacing the unelected body with elected Senators. Before the fall election, the Tories had proposed legislation to allow for their appointment in provinces that held Senate elections, and limit their terms to just eight years.

Currently, senators in the 105-seat chamber serve until the age of 75.

In a speech to his caucus almost exactly two years ago, Harper said: "Imagine that after a century and a half, democracy will finally come to the Senate of Canada."

Still, it appears Harper hasn't completely backed away from his previous policy. An insider said Harper would ask anyone he appoints to agree to step down and run in a Senate election if new legislation is ever implemented.

Stephen Harper: Grand Master.....of Checkers. Tiddlywinks?

Harper runs a wrecking crew, not a government

By: Frances Russell
Winnipeg Free Press
December 10, 2008

The fear, loathing and demagoguery unleashed on Parliament Hill last week could create a dangerous constitutional precedent and cripple a necessary evolution in Canadian parliamentary democracy.

The nationwide hysteria whipped up by that fear, loathing and demagoguery may be dampened by the prorogation of Parliament until the end of January.

But at what price? An Ipsos Reid poll found that it left 75 per cent of Canadians "truly scared" for the future of their country. And a political scientist warns it gives future prime ministers the right to escape defeat on non-confidence motions simply by shutting down Parliament and locking its doors.

"Parliamentary democracy as it has been practised in Canada has been compromised," University of Toronto political scientist Nelson Wiseman says. "The precedent established means that under no conditions will the Governor General ever deny a prorogation to sitting prime ministers, no matter what the circumstances."

The Governor General grants prorogations by precedent. But every situation is fact-specific, he says.

This time there was a fact that had never existed before but it did not bear on her decision.

"We've never been in a situation where you've had a request for a prorogation and the Governor General was informed there was an alternative government that did have support of a majority of the members. In that context, I thought that it was reasonable for her to dismiss her first minister."

Wiseman has further fears. "You've basically debased the legislative branch and its checks on the executive branch. The whole idea of responsible government is that the executive is responsible to Parliament. (The prorogation) has given the executive more arbitrary control over Parliament. The government already controls the business of Parliament. Now the government controls the very existence of a session of Parliament."

Canada is divided linguistically and regionally, with multiple political parties and a parliamentary, not a presidential system. Coalition governments are becoming the only option to avoid political instability and multiple elections. Recent history proves the point. Since 2004, Canada has had three minority governments and three elections and may now be facing a fourth election and government in the new year.

But the hysteria whipped up by the fear, loathing and demagoguery of the past week has made it all but impossible for parties to attempt working arrangements, let alone coalitions, in the foreseeable future.

While coalition governments have been rare in Canada, experience around the world -- including in other Commonwealth countries -- proves they are hardly dangerous. The British tradition of two parties hasn't existed here since the early years of the last century.

For almost 100 years, Canada has had at least three parties. Now it has five. Not only are parliamentary majorities increasingly unlikely, but a minority party trying to operate as if it has a majority is indefensible.

What's to fear from a coalition, from involving more parties and perspectives in government? The greater the participation, the greater the expansion of democracy. More Canadians might even be encouraged to vote.

Engaging the sovereigntist Bloc Québécois in supporting a federal coalition could bolster Canadian unity by re-engaging Quebec sovereigntists in Canada. "Separatist" is as inflammatory a label in Quebec as it is in English Canada, because many Québécois migrate back and forth across secessionist, nationalist and federalist lines.

Canadians do not elect a government, let alone a prime minister. They elect 308 MPs, who then choose the government and the prime minister. The government and the prime minister govern only so long as they retain the confidence of a majority of those 308 MPs. A party with a plurality of seats must negotiate and compromise with the opposition parties, not poke them in the eye with a sharp stick.

The Oct. 14 election gave the Tories 143 seats, 22 fewer than the 165 seats held by the combined opposition.

The Conservatives' deliberate demonization of the coalition as "socialists" and "separatists" as "treasonous" is the equivalent of yelling fire in a crowded theatre. It is shameful. It is also dishonest.

The public record shows that Harper as opposition leader in 2004 did exactly what the Liberals and NDP did last week with exactly the same objective.

He undertook serious negotiations with the parties he now chooses to deride as "traitors" so that he could take office should the Liberal minority government fall.

Dust off his 2000 Alberta "firewall" letter. Harper runs a wrecking crew, not a government. Parliament's well is poisoned and separatist fires in Quebec and Alberta are stoked. Harper is prepared to use anything -- lies, vicious attack ads and even mob rule (Transport Minister John Baird boasting about "going over the heads of the Governor General and Parliament to the people" -- to get his way).

Peace, order and good government are out. Rage, ideology and raw power are in.

Frances Russell is a Winnipeg-based freelance journalist and author.

Absolutely NFG: ABCP panel seeks Ottawa help

To put it mildly, this would be an absurdity and nothing worthy of taxpayers' dollars:

ABCP panel seeks Ottawa help
BOYD ERMAN and JACQUIE MCNISH AND TARA PERKINS
Globe and Mail Update

December 10, 2008 at 2:27 PM EST

The committee overseeing the $32-billion asset-backed commercial paper restructuring is meeting with the Finance Department Wednesday to plead for government assistance amid signs that the proposal to fix the frozen notes is in jeopardy.

A resolution to the 16-month old problem now appears unlikely before 2009 because some players in the restructuring are dragging their feet, and participants are growing increasingly concerned that the endless delays may lead to failure without government support.

The restructuring committee, led by lawyer Purdy Crawford, is meeting Wednesday with federal officials in Toronto, sources said. The hope is that the federal government, and potentially provincial governments that also have a stake in the success of the restructuring, will somehow provide backstops that will get the process moving again.

Sources said the issue continues to be the fact that many institutions that are crucial players in the restructuring have put the plan low on their to-do lists as they grapple with other issues thrown up by the financial crisis.

Although the plan was approved by dozens of banks, pension funds and other players months ago, sources close to the discussions said support for the rescue operation has declined following takeovers or government bailouts of many of the institutions involved.

“Clearly the issue is less significant to a lot of our stakeholders and less of a priority to stakeholders because of everything that has happened,” said one person familiar with the talks.

Until now, the federal government has taken mostly an observer role, intervening only to prod institutions to participate in the restructuring.

Finance Minister Jim Flaherty said in August that he was concerned about delays in the restructuring of the $32-billion market, but added that he thought Canada had shown the way to the rest of the world with respect to how it dealt with the situation, noting the plan did not require public funds to resolve the issue. Sources said the Wednesday meeting was not with Mr. Flaherty directly, but with some of his officials.

Finance Department officials have recently signalled that Ottawa is willing to consider a request from the committee for federal government support, said people familiar with the talks.

“The Finance Department is much more engaged,” said one person familiar with the discussions.

One solution would be for governments to put up extra collateral as part of the deal, which would take some of the risk off the shoulders of more reluctant participants and encourage them to finally sign on. While Ottawa would take the lead, some sources suggested that Alberta and Quebec, which both have major provincially-owned financial institutions caught up in the ABCP mess, could also make contributions.
------ End of Forwarded Message

Noted Scholar, Michael Ignatieff to challenge U of T drop out, to become Prime Minister of Canada

From Wikipedia:

Harper then enrolled at the University of Toronto but after two months he dropped out, then moved to Edmonton, Alberta, where he found work at Imperial Oil, in the mail room.[7]

From Wikipedia:

Michael Grant Ignatieff, MP ( born May 12, 1947) is a Canadian public intellectual, historian, and politician.

He has held academic positions at Cambridge, Oxford, Harvard and the University of Toronto. An award-winning author, he has also worked as a journalist and documentary film-maker.

Ignatieff was based in the United Kingdom from 1978 to 2000. During this time he was on the staff at both the University of Cambridge and the University of Oxford, and worked as a film-maker and political commentator for the BBC.

He lived in the United States from 2000 to 2005; there, he was director of Harvard's Carr Center for Human Rights Policy.

He returned to Canada in 2005 and took a position as a visiting professor and senior fellow of the Munk Centre for International Studies at the University of Toronto.

97% of respondents say Chrysler’s Cerberus should not receive bail out money

Cerberus owns Chrylser. Cerberus, from Greek and Roman mythology, is a multi-headed dog which guards the gates of Hades

There is an online poll at LouDobbs.tv.cnn.com which asks “Do you believe private equity firms should receive taxpayer funded bailouts”

Here are the results:

Yes 3% 76
No 97% 2425
Total Votes: 2501

Meanwhile:

Chrysler turns up the heat on Canada
Car maker warns production from two Ontario plants could be transferred to U.S. as it presses governments for emergency funding

December 9, 2008
Globe and Mail

OTTAWA, WASHINGTON, TORONTO -- Chrysler Canada Inc. has warned Ottawa and Queen's Park that it could close its two assembly plants in Canada, eliminating more than 8,000 direct jobs, and shift the work to the United States if the two governments fail to provide $1.6-billion in emergency financial help.

Puhlease! This from the deceitful masters of prorogation and blacked out documents.

Ignatieff selection undemocratic, Tories say
Dec 10, 2008 09:52 AM

Ottawa Bureau

As the prime minister urged Liberals to cooperate with him, his party's national campaign organizer sent a fundraising letter to supporters slamming incoming Liberal leader Michael Ignatieff, saying he was "parachuted" into the leader's job in "yet another stunning and unprecedented demonstration of Liberal contempt for our democratic rights."

A copy of the letter was forwarded to national media outlets. Doug Finley writes:

"Not only was the Liberal/NDP/Bloc Coalition not elected to govern this country, but the person who would become Canada's Prime Minister wasn't even the leader of a federal party during the last election and may not even be elected by the Liberal (or any) party's membership."

"The Liberals have decided to parachute Michael Ignatieff into the position of Prime Minister, and one thing is clear: Canadians didn't elect this coalition to form a government, and they most certainly didn't elect Michael Ignatieff as Prime Minister.

"We need to drive that wedge home and convince Canadians of all political stripes that this Coalition does nothing but weaken our nation."

The letter calls for an "emergency donation" to help crack the coalition.

Yesterday, Prime Minister Stephen Harper reached out the Liberals, saying he hopes to meet with the party's new leader to talk about the economy.

"It's in the interests of the government to find a consensus, certainly among the federalist parties," he said in an interview with CBC News.

My vote for Michael Ignatieff

Mr. Doug Ferguson
President
Liberal Party of Canada

Re: Consultation with former candidates

Doug:

I agree with the actions taken by the Liberal Party Executive in dealing with the political circumstances of the day and addressing the immediate need to resolve our party’s leadership in advance of a confidence vote presently scheduled for January 27, 2009. I recommend that Michael Ignatieff be appointed as the party’s interim leader, as I have great confidence in his ability to lead our party and hopefully serve as Canada’s next Prime Minister. I also support the Liberal Party entering into a coalition government with the NDP on the terms negotiated by Stephane Dion.

Brent Fullard
Whitby-Oshawa
647 505-2224

BCE's selective disclosure

BCE's selective disclosure

Barry Critchley,
Financial Post
Wednesday, December 10, 2008


In the lead up to tomorrow's deadline for the privatization of BCE -- the proposed $50-billion-plus transaction led by Ontario Teachers' Pension Plan Board -- the company's investor/ media relations team has been very busy. Some wish they had been as diligent in the middle of last year.

Consider the events of last Friday, when BCE issued a statement "in response to certain rumours reported in the media regarding a possible minority investment in the company by some or all of the investor group led by Teachers' Private Capital."

BCE added that while it is BCE's policy "not to comment on rumours or speculation, in the interest of its shareholders, BCE is today confirming that no such offer has been made to the company." The company, whose shareholders were set to receive$42.75 a share tomorrow, added it "continues to work with KPMG and the purchaser to seek to satisfy all closing conditions under the June 29, 2007, definitive agreement, as amended."

Well done. The company updated the market, but let's look a bit deeper.

BCE informed the market about a possible transaction that hadn't been presented to the company.

BCE's position of Dec. 5, 2008, stands in contrast to its mid-2007 position when it chose not to acknowledge that it had received a real offer.

On June 22, 2007, Catalyst Asset Management made an offer to restructure BCE using stapled securities. Known as the Canadian solution, Catalyst said it would preserve Bell Canada as a broadly held standalone Canadian-owned and controlled public company, while BCE's existing shareholders would receive all the company's future growth potential. "The Canadian Solution will put all of Bell Canada's shareholders, both large and small, on a more equal economic footing. Most importantly, the Canadian Solution would permit all existing Bell Canada shareholders to achieve a full valuation for their shares by recapitalizing the resulting company in a value-maximizing manner," the release added.

And the solution would "be done in a manner and on terms that are not oppressive to existing Bell Canada preferred shareholders and bondholders."

Certainly Catalyst liked what was being offered. Indeed the firm even had some conversations with members of BCE's strategic oversight committee, plus their advisors.

But BCE failed to disclose that interest in any of the material it mailed to shareholders. Instead, the circular devoted pages to the offer from Ontario Teachers, from the discussions it had with Telus and from earlier discussions with a CPPIB-led consortium and a Cerebus-led group.

The irony: Last year BCE chose not to make any reference to an offer it had received, an offer that was taken a few steps forward. In 2008, BCE has gone public about an offer it hasn't received.

As one wag wondered yesterday: is this a double standard of disclosure?

Calls to BCE seeking a comment were not returned.

Sorry, but didn't taxpayers just bail out the banks to the tune of $75 billion?

Banks fail to match rate cut – again

TARA PERKINS

From Wednesday's Globe and Mail

December 9, 2008 at 8:32 PM EST

Canada's banks, squeezed by tight credit conditions, only passed two-thirds of the central bank's rate cut on to consumers, posing a challenge for Ottawa as the economy withers.

Each of the six largest banks decided Tuesday to lower their prime rate by 50 basis points, to 3.5 per cent, after the Bank of Canada cut its key rate by three-quarters of a percentage point.

The move continues a game of cat and mouse that began in October, when the central bank cut its rate by half a percentage point and the banks only reduced prime by a quarter point.

Harper's anti-Quebec rant boosted support for PQ "separatists"

Quebec pollster says Harper's comments gave PQ an election boost

December 9, 2008 - 2:25 pm

By: Tobi Cohen, THE CANADIAN PRESS

MONTREAL - Prime Minister Stephen Harper's comments about Quebec separatists gave the Parti Quebecois a major boost and helped the sovereigntist party close in on the Liberals in the provincial election, a leading pollster said Tuesday.

In a reversal of the historic election-day trend, the PQ performed far better than expected and closed so much of the gap between itself and the Liberals that it nearly deprived Charest of a majority.

The PQ's share of the popular vote was just seven percentage points less than the Liberals - this after polls just days ago placed it 14 points behind - and it held Charest's troops to a three-seat majority.

Jean-Marc Leger, president of Leger Marketing, said a poll suggested 14 per cent of Quebecers changed their vote on the last day, with half making that flip-flop while at the ballot box.

Leger said the largest contributor to the discrepancy between pre-election polling and the final outcome Monday was Harper's anti-Quebec rant in the home stretch of the campaign.

Ignatieff's views on Harper September 18, 2008

Michael Ignatieff's opening statements - Liberal infrastructure announcement

18 September 2008

Good morning. Bonjour.

We're here to talk about the Liberal plan to invest in infrastructure and rebuild the ties that bind our country together.

We're here to talk about leadership in tough economic times.

Nous sommes ici pour parler du leadership quand le climat économique s'annonce orageux.

We cannot allow Stephen Harper to define what strong leadership is in this country.

Look at his record.

Harper is the man who broke his promise to millions of Canadian investors when he wiped out income trusts.

This isn't leadership – it's vandalism.

Harper is the man who has spent this country to the edge of deficit.

This isn’t leadership – it's irresponsibility.

Harper c'est l'homme qui nous a mené au bord du deficit.

C'est du leadership. C'est l'irresponsable.

Harper runs a government which told the world not to invest in Ontario.

This isn't leadership - it's an assault on Canadian workers.

Harper is the man who watched the auto sector struggling and shrugged his shoulders.

This isn't leadership - this is callousness.

Harper is the man who says everything is fine with the Canadian economy.

This isn't leadership – it's denial.

This is a man who thinks he can run Canada single-handed.

This isn't leadership – it is arrogant self-delusion.

Harper est un homme qui veut vous faire croire qu'il peut diriger le gouvernement du Canada tout seul.

C'est pas du leadership.

C'est la folie de grandeur.

This is a man whose Finance Minister was asked to invest in Canada's roads and bridges, and said: "we don't do potholes".

This isn't leadership – it is incompetence.

At a time when Canadians are getting sick of listeriosis, and food safety is in question, we have a cabinet minister making cheap jokes. That's not leadership.

That's mean-spirited incompetence.

We know that Stephen Harper loves power.

But a real leader would fire Gerry Ritz.

The problem is he doesn't like government.

In tough economic times, Canadians want their government to make sure mortgage markets are safe, our pensions and savings are secure, and our jobs won't disappear.

In tough economic times, Canadians don't need one-man rule. They need a team.

They need experienced men and women ready to practice the economics of partnership, not the politics of divide-and-rule; men and women who want to work with the provinces, not against them, to rebuild our infrastructure and get our economy going again. Le chef de cette équipe est un homme de courage et conviction.

The leader of this team is a man with guts, a man who knows who he is and what he wants, a man with a decade of experience in cabinet, a man who is ready to lead this country.

Le chef du parti liberal du Canada, the leader of the Liberal Party of Canada – Stephane Dion.

Be careful of what you lobby for: Michael Sabia's dog's breakfast

Is BCE noise a prelude to lawsuits?

Andrew Willis, today at 5:43 PM EST

There's a sense that the latest developments around BCE are aimed at the lawsuits that will inevitably follow a failed deal, rather than trying to resurrect a buyout that no longer suits the times.

The latest rumours around BCE have one blue chip firm - PricewaterhouseCoopers - contradicting the work of rival KPMG that effectively scuttled the deal. Some sort of accounting cage match may be required.

All this noise reflects, in part, positions on who should wear the blame if the expected comes to pass, and the $35-billion takeover of BCE is officially killed on Dec. 11.

It's not just reputations that are at stake.

For starters, it's possible (but unlikely) that break fees will need to be paid by one side to another. Those penalties are material, even for the $108-billion Ontario Teachers Pension Plan.

BCE promised to pay its potential buyers - led by Teachers - an $800-million break fee if the company killed a buyout first agreed to back in June, 2007. Going the other way, the Teachers fund and its allies owe BCE $1.2-billion if they renege.

Right now, it doesn't look as if either side owes the other a break fee. The deal is falling apart because in KMPG's opinion, BCE would not pass a solvency test loaded down with $32-billion of buyout debt, and a favourable opinion from KMPG was a condition for closing the deal.

BCE's lawyers at Sullivan Cromwell inserted that solvency test into the takeover agreement as a way to placate BCE's existing bondholders. BCE and Teachers agreed KMPG would do the honours. No one side is to blame if the accountants decide the balance sheet doesn't pass muster.

But that won't stop various parties from resorting to lawyers at 10 paces if the deal fails.

BCE is making noise about suing Teachers, it's single largest shareholder, to extract that break fee. If PricewaterhouseCoopers has rendered a favourable solvency opinion, as reported by Bloomberg, then BCE common shareholders might try to sue KMPG.

While they are at it, common shareholders might use a favourable opinion from PricewaterhouseCoopers to launch a lawsuit against Teachers, for failing to close the deal, or against the four banks that didn't end up lending on the transaction.

Citigroup, Deutsche Bank, Royal Bank of Scotland and Toronto-Dominion Bank are on the hook for the BCE buyout loans, and will be thrilled to wiggle out of that commitment on Dec. 11, as the mark-to-market losses on the leveraged debt would be huge.

Just think, if only had Harper been successful in his Cadman bribe attempt

....then the constitutionality of a coalition could have been tested in modern times.

Don’t you just love how Stephen Harper is doing so much to test the outer reaches of our democracy? Just think, had Harper been successful with his attempt at bribing Chuck Cadman in May of 2005, we would we have had a recent opportunity to witness the GG exercise her obligation to explore whether an alternative government could have been formed from the duly elected 38th Parliament, as contemplated by Harper’s “socialist separatist” pact of September 2004 (below). I for one, am truly crestfallen:


September 9, 2004

Her Excellency the Right Honourable Adrienne Clarkson, C.C., C.M.M., C.O.M., C.D.
Governor-General
Rideau Hall
1 Sussex Drive
Ottawa, Ontario K1A 0A1


Excellency,

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.

Sincerely,



Hon. Stephen Harper, P.C., M.P.
Leader of the Opposition
Leader of the Conservative Party of Canada

Gilles Duceppe, M.P.
Leader of the Bloc Quebecois

Jack Layton, M.P.
Leader of the New Democratic Party

Why didn’t Harper simply prorogue the Canadian Wheat Board?

December 8, 2008

Farmers choose single desk in CWB elections: Easter

OTTAWA - The single-desk selling authority of the Canadian Wheat Board (CWB) received a major vote of confidence with results of the director elections announced yesterday, said Liberal Agriculture Critic Wayne Easter.

"In spite of the unethical and illegitimate efforts of Prime Minister Stephen Harper and the Conservative Party of Canada to undermine the integrity of the CWB and influence the vote, western Canadian farmers overwhelmingly voted in favour of the single desk," said Mr. Easter. "This result is a repudiation of the intimidation tactics and unethical interventions by his government."

On Sunday, the results of the CWB Board of Directors election were released showing four of the five directors elected being strong Wheat Board supporters.

"Over the last few weeks, all Canadians have been exposed to the illegitimate and ideologically driven agenda of this Prime Minister - something western farmers have been exposed to for more than two years. Mr. Harper has shown he will say and do anything, including circumventing the principles democracy, to impose his own ideology," said Mr. Easter.

"The fate of the CWB should and must be decided by western Canadian grain farmers, not by politicians in Ottawa. Western Canadian grain farmers have stood up to Mr. Harper's tactics and sent a clear message that they and not the Prime Minister will decide the CWB's future," he said.

-30-

Stephen Harper: Psycho Despot

From Saturday’s Globe:

During the past week, while the nation wondered if the government would fall, junior Conservative staffers were ordered to be outside 24 Sussex Dr. by 6:15 in the morning. Their job was to stand there in the dark with the temperature well below zero and wait for the PM to appear. Their instructions were to applaud, wave and sing O Canada loudly as the motorcade pulled out of the gates and drove Stephen Harper to work.

Mr. Harper, by all accounts, actually believed that the young people were there of their own accord and represented a groundswell of love and support for his actions. Staffers in the Prime Minister's Office know that he is easier to handle when being applauded and not questioned. This way, nobody has to suffer at the hands of the inconsolable bear.

Dion statement

Date: December 8, 2008
For Release: Immediate
Statement by the Honourable Stéphane Dion

After the election on October 14 I announced I would stay on as Leader of the Liberal Party until my party could select my successor. One of my goals was to ensure an effective opposition to Stephen Harper’s government.

I believe that decision was the right one and I am proud of having forced Stephen Harper to back away from his attempt to force upon Canadians his most ideological and harmful plans in these tough economic times.

The alliance between the Liberal Party and the NDP to replace the Harper government, with the support of the Bloc Québécois, is a solid basis to give Canada a government that reflects both the aspirations of the majority of Canadians and the support of the majority of Members of Parliament. Such a government would be more stable than a minority Conservative government incapable of cooperating with opposition parties.

As the Governor General has granted a prorogation, it is a logical time for us Liberals to assess how we can best prepare our party to carry this fight forward.

There is a sense in the party, and certainly in the caucus, that given these new circumstances the new leader needs to be in place before the House resumes. I agree. I recommend this course to my party and caucus. As always, I want to do what is best for my country and my party, especially when Canadians’ jobs and pensions are at risk.

So I have decided to step aside as Leader of the Liberal Party effective as soon as my successor is duly chosen.

I will offer my unconditional and enthusiastic support to my successor in the same way I have always supported the leaders of our great party. I will work under the next leader’s direction with all my energy in order to give Canada a better government.

I wish to close by making it absolutely clear that my earlier departure does not change the facts of the situation that the Prime Minister has created in the last two weeks.

The Prime Minister and his government refused to lay out a plan to stimulate the economy. The Prime Minister has lost the confidence of the House of Commons. The Prime Minister shut down Parliament to save his job while thousands of Canadians are losing theirs. The Prime Minister has poisoned the well of trust and respect that is necessary for a minority government to work in Parliament - especially in a time of crisis.

Mr. Harper took an economic crisis and added a parliamentary crisis that he then tried to transform into a national unity crisis: this is no way for a Prime Minister of Canada to act.

It is my hope that the decision I have announced today will enhance the capacity of Parliament to function effectively for the sake of Canadians in this economic crisis.

Stéphane Dion, PC, MP

Tory staffers: I don't share your pain, after all you work for a tyrant

How many tears do you suppose were shed by Tory staffers when $35 billion in Canadians' life savings were nuked by Harper?

Hundreds of Cabinet and PMO staffers to lose jobs if PM defeated
PMO and Cabinet staffers on edge, some in tears, as history unfolds.

By Abbas Rana
The Hill Times, December 8th, 2008

More than 400 political Cabinet and PMO staffers will lose their jobs next month if the Liberals, New Democrats, and Bloc Québécois defeat the Conservative government on the budget and form a historic Liberal-NDP coalition government propped up by the Bloc.

This defeat will also cost the government millions of dollars in severance and separation packages. Currently, there are about 400 staffers working for 37 Cabinet ministers and ministers of state, and another about 80 staffers working in the Prime Minister's Office.

Cabinet and PMO staffers, or exempt ministerial staffers, serve on the Hill at the pleasure of Cabinet ministers and the Prime Minister and if the governing party loses government, the political staffers lose their jobs automatically.

According to Treasury Board guidelines, the Prime Minister and Cabinet ministers decide how much separation pay a staffer will get but the ceiling is a maximum of six months' salary. The severance pay is determined at the rate of two weeks' pay for each year of service as an exempt staffer.

But there's another problem. Prior to Prime Minister Stephen Harper (Calgary Southwest, Alta.) Conservatives coming to power in 2006, Hill staffers were allowed to work as lobbyists and also received preferential treatment in getting jobs in the federal bureaucracy. But with the Federal Accountability Act (FAA) that came into effect early last year, exempt staffers are prohibited from working as registered lobbyists for five years and staffers don't get preferential treatment anymore. Staffers however can work for lobbying companies in positions other than being lobbyists.

Meanwhile, the Harper Tories were scheduled to face the confidence vote on Monday, Dec. 8, a date set by Mr. Harper himself but facing the prospect of a certain defeat, the Prime Minister successfully obtained the prorogation of Parliament for about two months. The Parliament now is scheduled to return on Jan. 26.

In interviews last week, current and former staffers told Hill Climbers that exempt staffers were having mixed feelings about the prospect of losing their jobs.

"I talked to several: When it looked like the vote would go ahead on Monday [Dec. 1], some of them were in tears. Once the reprieve was in [on Friday, Nov. 30] and we were able to delay the vote for a week, there was a bit more optimism. Then on Monday, they were angry and upset, I think they're back to being optimistic now [after prorogation]. They see a way out of this which I don't think they saw on Monday," said one Conservative source.

Others, however, were more blunt in their disappointment with the party leadership.

"It's hard to believe we got into this situation right after the election. Everybody is on the brink, I don't know how we're going to get out of this. The breaking point in this [situation] was taking away the subsidies [for political parties] and it was petty and totally uncalled for," said a Conservative.

Tim Powers, vice-president with Summa Strategies, in an interview last week said that before staffers accept a job offer on the Hill, they're aware of the inherent job uncertainty.

"People who accept political jobs recognize that they are not permanent. They recognize that job security is not a fixture of political life. But it doesn't mean they don't worry that is human nature," said Mr. Powers who himself worked as an exempt ministerial staffer in the Brian Mulroney era.

Mr. Powers denied that staffers are upset with Mr. Harper.

"People are rallying around the PM. Focusing their worry on working to help the PM govern."

He was also optimistic that Conservatives will win the budget vote.

"I think the budget will pass so it [job losses] won't be an issue."

And in another odd turn of events, just before the political crisis on the Hill started two weeks ago, the Prime Minister's Office was struggling to completely staff the ministerial offices and held a "job fair," or an informal networking reception for prospective and potential Cabinet staffers on the Hill.

Some Conservative sources said that the key reason for a lack of interest to work on the Hill is the five year ban that does not allow staffers to lobby the government after they leave their jobs.

"It's not that no one wanted to work for them. If it was possible, I would go back and work for them, but I'm not going to sacrifice five years afterwards. That's such an albatross around their neck that there's lots of talented people who would go in. Everyone says the same thing, I'm not going to curtail my abilities not be employed for five years afterwards. That's the overriding reason. It's shocking that they can't fill the ministerial positions. There's people looking for work, there're former ministerial staffers who aren't been hired, I don't know what went on there. I find that bizarre," said one former Conservative Hill staffer who now works in the lobbying business.

Others in anonymous emails to Hill Climbers identified different reasons.

"Simply put, the PMO treats their staff and ministerial staff poorly. Staff were moved around after the shuffle at the whim of PMO with little, if any consideration given to where they wanted to work, their skills set or their background. They think that PMO is all knowing.... However, they don't know anything about staff management. Would you give up a job in the private sector to work under those conditions? I doubt it."

Usually, the Prime Minister's Office vets only the top staffers in the ministers' offices, but this time almost all the staffers are subject to approval by the PMO.

arana@hilltimes.com

The Hill Times

Is everyone out to screw we seniors? Caveat emptor.

Below is a great piece in Bloomberg News about AARP in the US entitled “Is everyone out to screw we seniors? Caveat emptor.” and the commercial links between the US’s largest seniors group. AARP, and the US insurance industry.

Meanwhile in Canada, and based on the success of AARP in the US, CARP was created as a “look-alike” seniors group by Lillian Morgenthau and her husband. Look alike indeed. CARP is nothing more than a commercial entity wrapped in a faux seniors advocacy blanket. These kinds of commercially based advocacy groups, such as CARP should be banned, as they are rife with conflicts of interest and are fundamentally misleading to the public and especially seniors. CARP proved that in the case of income trusts.

CARP’s position on income trusts was completely compromised by the fact that its two of its largest advertisers are Manulife and Investment Planning Council (owned by Power Corporation). Manulife and Power Corporation were the two organizations who were most active in lobbying Flaherty and Harper to kill income trusts, as they had enormous commercial advantages to be gained by killing the competition known as income trusts. CARP is so grossly conflicted on the income trust issue that its views and advice on income trusts was actually written by the (not so) good folks at Investment Planning Council (IPC). CARP is so in bed with IPC that they are actaully involved in co-branding, through the absurd concept known as “CARP certified IPC representatives”. Such nomenclature is simply designed to mislead seniors. What qualifies CARP to certify anything or anybody in the selling of financial products to seniors? Such co-branding should be impermissible under securities laws, as it represents an inherent conflict of interest and an abuse of public trust.....which is why it’s so successful and forms a key part of Power Corp’s marketing “strategy” for seniors.

Once again, Obama is light years ahead of Canada’s politicians, since Obama has called “for Insurance Companies to Stop Defrauding and Deceiving Seniors.” Meanwhile in Canada, the life insurance companies seem to have the free reign of Ottawa, with two life insurance CEOs appointed by Harper to Canada’s 10 member NACC (North American Competitive Council). Meanwhile, in Ottawa’s haste to kill income trusts at the LifeCo’s behest so that the LifeCos could sell more variable annuity product, we now have Manulife on day to day life support attempting to shore up its balance sheet, because it failed to properly hedged against the liabilities it had committed itself to. And to think, Flaherty tried to call the income trust tax good public policy? The cascading negatives continue to work their way through our ham handed economy to the detriment of all, especially seniors who need protection from groups like CARP:

Is everyone out to screw we seniors? Caveat emptor.

By Gary Cohn and Darrell Preston


Dec. 4 (Bloomberg) -- Arthur Laupus joined AARP because he thought the nonprofit senior-citizen-advocacy group would make his retirement years easier. He signed up for an auto insurance policy endorsed by AARP, believing the advertising that said he would save money.

He didn't. When Laupus, 71, compared his car insurance rate with a dozen other companies, he found he was paying twice the average. Why? One reason, he learned, was because AARP was taking a cut out of his premium before sending the money to Hartford Financial Services Group, the provider of the coverage.

Laupus stumbled onto something that many members of the world's largest seniors' organization don't know: The group, formerly called American Association of Retired Persons, collects hundreds of millions of dollars annually from insurers who pay for AARP's endorsement of their policies.

The insurance companies build the cost of these so-called royalties and fees, which amounted to $497.6 million in 2007, into the premiums they charge AARP members, according to AARP's consolidated financial statement for that year.

AARP uses the royalties and fees to fund about half the expenses that pay for activities such as publishing brochures about health care and consumer fraud -- as well as for paying down the $200 million bond debt that funded the association's marble and brass-studded Washington headquarters.

In addition, AARP holds clients' insurance premiums for as long as a month and invests the money, which added $40.4 million to its revenue in 2007.

'Fatting the Coffers'

"At the end of the day, it's all about fattening the coffers of the organization," says Thomas Orecchio, who was chairman of the Arlington Heights, Illinois-based National Association of Personal Financial Advisors until September. AARP, he says, is sponsoring insurance for its members at inflated prices.

"It's the dirty little secret," he says.

During the past decade, royalties and fees have made up an increasing percentage of AARP's income, rising to 43 percent of its $1.17 billion in revenue in 2007 from 11 percent in 1999, according to AARP data.

Laupus, a former teacher in Baltimore, and millions of others joined AARP in the belief it would provide discounts, services and publications. The organization ranks behind only Consumer Reports and the American Red Cross as the most trusted large group that influences U.S. politics and business, a 2007 Harris Poll found.

AARP has helped millions with tax returns, estate planning and health care advice.

'Turbulent Economy'

With stock markets around the world plunging, savings plans in turmoil and medical costs soaring, older Americans need an organization such as AARP in their corner.

"The turbulent economy puts more people in the difficult situation of being under- or uninsured," says Iowa Republican Senator Charles Grassley. "That's why we need to make sure individuals aren't taken advantage of with misleading marketing, especially by a name brand advocate who carries a high level of trust."

Grassley sent letters to AARP Chief Executive Officer William Novelli and state insurance commissioners Nov. 3 inquiring into whether the AARP misrepresented what is covered by some health insurance policies it sold. Four days later, Novelli announced AARP would review its marketing and suspend sales of those policies.

AARP's mission to help seniors has been compromised by its reliance on royalties and fees, says Marilyn Moon, who was director of AARP's Public Policy Institute from 1986 through 1989.

'Conflict of Interest'

"There's an inherent conflict of interest," she says. "A lot of people there are trying to do good, but they're ending up becoming very dependent on sources of income."

Moon is now vice president and director of the health program at American Institutes for Research in Washington.

Novelli, who co-founded a public relations company in 1972, became CEO of AARP in 2001. Since then, the organization has increasingly focused on marketing as a means to increase revenue, Moon says.

AARP officials say the organization always gives priority to the needs of seniors.

"There is no conflict of interest between the marketing of products and services to our members and our policy work," spokesman Adam Sohn says. "Policy always comes first."

AARP declined requests to make Novelli available for comment.

'Benefit From Our Brand'

John Wider, executive vice president of AARP Services Inc., a for-profit subsidiary, says AARP uses royalty revenue to fund its member services. In addition, he says, insurers selling products through AARP find royalty payments are worthwhile because AARP's endorsement lowers insurance company marketing costs and increases sales.

"There is an efficiency they gain in being able to benefit from our brand," he says.

Novelli, 67, has broadened AARP's reach and increased its clout in Washington. The association recently joined with industry and labor groups in a campaign known as Divided We Fail. That effort is seeking ways to ensure health care for all Americans.

Novelli has expanded AARP's marketing to include 17 types of insurance. The association collects royalties on each of those products. Its membership rose to 40 million from 35 million, and its total revenue grew to $1.17 billion in 2007 from $520 million when Novelli took charge.

Medicare Lobbying

Nowhere were AARP's conflicting roles more evident than in its lobbying in support of a 2003 bill proposed by President George W. Bush to expand Medicare, the federal health insurance program for people older than 65.

The bill, which for the first time added a prescription drug plan to Medicare, passed by a vote of 220-215 in the House of Representatives and 54-44 in the Senate. Thousands of AARP members complained that the legislation was a bad deal for seniors because it provided incomplete coverage and raised costs for seniors with low income.

After the Medicare bill was signed into law by Bush in December 2003, AARP was able to expand its contract with Minnetonka, Minnesota-based UnitedHealth Group Inc., which underwrites AARP's Medicare supplemental insurance plan.

AARP increased its annual revenue from royalties by $197 million to $497.6 million from 2003 to 2007.

Not the Least Expensive

AARP advertises that its Medicare supplemental insurance can save people thousands of dollars. While every type of supplemental policy sold by all companies must offer the same exact coverage under federal rules, AARP doesn't sell the least expensive.

The AARP/UnitedHealth basic policy costs $582 a year more than a lower-cost competitor in New York and $428 more in Los Angeles, according to data on Medicare's Web page. AARP spokesman Sohn says everyone should shop carefully.

"The products and services AARP makes available are competitively priced," he says. "Price is not the only factor. Service and features need to be factored in to determine full value."

AARP's muscle on Capitol Hill is vested in the size and geographic reach of its membership, as well as its lobbying budget. The association donated no money to candidates in 2007, federal election records show.

'AARP's Clout'

"They don't even have to give any campaign contributions," says James Thurber, director of the Center for Congressional and Presidential Studies at American University in Washington. "AARP's enormous clout comes from the threat they could defeat people in Congress who don't do what they want. They are the most powerful interest group in Washington."

Rob Simmons, who served as a Republican congressman from Connecticut during 2001 through 2006, says he waited to learn AARP's position on the 2003 Medicare legislation before deciding how to vote.

"Some people tore up their AARP cards in protest," he says. "I told my constituents 10 days before the vote that I would wait to see what AARP had to say."

Simmons praises AARP's efforts to stand up for seniors. In 2005, Novelli fought President Bush's plan to overhaul Social Security by creating private accounts. AARP launched what it called its largest political advertising campaign ever, using newspapers and television to attack the proposal.

As the president toured the country holding town meetings to win support, AARP sponsored its own forums nearby to criticize the plan. It argued that like an old-fashioned pension, Social Security should remain as a fixed payment to retirees -- and the money shouldn't be gambled in investments.

AARP Won Battle

Responding to requests from the association, AARP members wrote or e-mailed Congress hundreds of thousands of times, AARP says. AARP won the battle, and Bush dropped the proposal.

"AARP in my opinion is one of the foremost defenders of the rights of senior citizens," Simmons says. "It has the staff, expertise and national stature to be an organization to be respected."

AARP has provided free tax preparation assistance to 47.7 million people with middle-range and low incomes. Other services include career counseling, driver safety training, financial education programs and home heating assistance.

To help pay for its advocacy, training and lobbying, AARP gets royalties and fees for selling insurance. In 2007, the group spent $157.2 million, about 13 percent of its revenue, on advertising. It runs daily -- sometimes hourly -- spots on television and Internet ads saying its insurance policies can save members money.

'Compare Us'

Its Web page on car insurance says, "Get on the road to better coverage and bigger savings. Compare us to your current policy and you could save hundreds in the first year alone!" A TV ad for AARP's Medicare supplemental insurance says customers can save thousands of dollars.

At the bottom of its insurance Web page, AARP says, "Insurers and providers pay a fee to AARP and its affiliates for use of the AARP trademark and other services."

AARP has been in the insurance business since its founding in 1958. Ethel Percy Andrus, a former school principal, discovered that a retired teacher couldn't afford an apartment and was living in a chicken coop.

Andrus worked with Colonial Penn Group to provide health insurance to retired teachers starting in 1947. She expanded AARP's offer to include health insurance for all retirees 11 years later.

Expanded Marketing

AARP stopped selling basic health insurance for seniors in 1965 after President Lyndon Johnson signed Medicare into law. The organization continued to offer several kinds of insurance, including a supplement to Medicare, offering additional coverage.

Novelli has been able to expand AARP's marketing, having co-founded New York-based public relations firm Porter Novelli. He and his partners sold the company for an undisclosed amount to Omnicom Group in New York, the world's largest owner of advertising agencies.

>From 1991 to 1995, he was executive vice president of CARE, an international group that fights poverty. From 1995 to 1999, he ran the Campaign for Tobacco-free Kids, which works to block cigarette advertising to children.

"There isn't any organization like AARP, and Novelli understood it," says Tess Canja, who was president of AARP's 21-member board in 2001, when Novelli got the post. "He's taken AARP a notch higher."

'Everybody's Happy'

Novelli has reached out to younger Americans. TV commercials portray active middle-aged people, a switch from the scenes shown in the pre-Novelli era of elderly Americans sitting in wheelchairs.

In a 29-second video on YouTube, young and old people celebrate birthdays by blowing out candles, throwing cake, spinning in office chairs and ripping paper off packages while the British punk band Buzzcocks' song "Everybody's Happy Nowadays" plays.

"AARP is an organization for people who have birthdays," a female voice-over says. "That's because what we do, we do for all. Join us in championing your future, and the future of every generation."

What AARP has done for Laupus hasn't made him want to celebrate. The former social studies teacher, now a lecturer on films at Towson University in Towson, Maryland, says AARP let him down.

"I was under the assumption I would get discounts for automobile insurance, health insurance, house insurance," Laupus says. Earlier this decade, he signed up for an AARP- endorsed auto policy for a 1997 Honda Accord and a 2002 Mitsubishi Lancer.

'Best Possible Rate'

In 2007, he followed AARP's Internet-based advice and went shopping for rates from other companies for the same coverage. He says that of the 13 companies he checked, AARP/Hartford -- a unit of the Hartford, Connecticut-based insurance company Hartford Financial -- charged $700 a year more than the average.

"I figured they would be negotiating for me as a large group and get the best possible rates," says Laupus, a tall, gray-haired man who lives in Elkridge, Maryland. "But, dumb me, when I first bought their insurance I really didn't check around to find out what other companies were charging."

On March 16, 2007, Laupus wrote a letter to Novelli.

"I have been a customer of AARP/Hartford auto insurance for many years and never had a claim," Laupus wrote. He told Novelli he had compared his rates with eight companies and found AARP/Hartford to have the highest premiums.

Price Shopping

Laupus says he checked four other companies and found the same. He wrote that AARP/Hartford billed him $1,444 annually for the two cars. Laupus says Geico Corp., the insurance company owned by Warren Buffett's Omaha, Nebraska-based Berkshire Hathaway Inc., offered a price that was half as much.

He then decided to lower that further by eliminating collision insurance on the Honda and raising the deductible for his Mitsubishi to $1,000 from $500. At the same time, he increased his bodily injury liability insurance to $300,000/$300,000 from $100,000/$300,000.

That brought the annual cost of insurance from Geico to $683.60.

In his letter, he explained those changes to Novelli. An AARP employee, Sharman Greber, replied two weeks later.

"I can certainly understand your concern over the cost of insurance coverage and would like to assure you that The Hartford's goal is to provide the highest quality product at as fair a price as possible," Greber told Laupus in an April 2, 2007, letter.

'Dare I Say Kickbacks?'

Greber didn't respond to requests for comment. On April 10, 2007, Laupus wrote back, questioning AARP's dealings with The Hartford.

"What I'm asking, bottom line, is this: Does AARP have some 'special relationship' with The Hartford by which it receives commissions, incentives, rebates or dare I say 'kickbacks'?" he wrote.

Greber replied on April 25, 2007, writing that AARP contracts with The Hartford and other insurance companies include royalties. She first wrote that AARP talked to The Hartford.

"The representative did compare the quotations you received from Geico and Allstate, but was unable to match Geico's premium," she wrote.

She added, "The royalty fee paid to the Association is used to finance the many programs and services of AARP. The Association produced and distributed more than 11 million booklets and brochures last year free of charge to help older persons become better informed about issues from caregiving and widowhood to housing and consumer fraud."

Laupus responded on May 2, 2007.

'Rather Selfish'

"I don't purchase auto insurance to provide booklets and brochures about caregiving and widowhood," he wrote. "This may seem rather selfish of me, but I purchase auto insurance to insure my auto."

Laupus says AARP is playing games with words. "Notice it's not kickbacks, it's royalty fees," he says. "What a great euphemism."

David Snowden, spokesman for The Hartford, says his company offers competitive rates.

"While we lack information to speculate we could match the other company's rate in 2007, there's little doubt we could have come closer if Mr. Laupus requested the same policy features," Snowden says.

Landscaped Atrium

After Laupus discovered his AARP car insurance rate was too high, he became determined to learn more about how his membership money was being spent. In September, he traveled to AARP's Washington headquarters -- two 10-story buildings that are connected by an enclosed, landscaped atrium.

He strode into the lobby, dressed in khaki pants and a blue checkered shirt, hoping to take a tour. He noted the brass doors and the marble that stretched as far as he could see.

"It says to people that we're a very wealthy organization and we can afford to spend your money," Laupus says. After showing his AARP card and telling a guard he'd been a member for more than 20 years, he was turned away.

"We don't give tours," the guard told him. Laupus asked again, and the guard called AARP's membership department, which also denied the request.

Alan Simpson, a former Republican U.S. senator from Wyoming who chaired a subcommittee in 1995 that examined AARP, says he's not surprised the association keeps its doors closed.

'It's a Temple'

"It's no wonder they don't let you see," Simpson, 77, says. "It's a temple. Opulent would be the word."

AARP spokesman Sohn says the building is closed to visitors so the staff can work.

"AARP takes the role of fighting for its 40 million members very seriously and this necessitates that our offices remain a place of business," he says.

AARP says it uses some of the money it gets from insurance royalties to fund its efforts on behalf of seniors. But not everyone agreed its 2003 lobbying for a Medicare drug prescription plan was in the best interests of members.

President Bush pressed for prescription drug coverage for Medicare. He also wanted to turn administration of Medicare over to private companies instead of the government. AARP opposed the second goal.

Novelli and AARP's lobbyists met with the Bush Administration and Congress and succeeded in removing privatization from the bill, says Christopher Hansen, who as AARP's group executive officer for state and national initiatives oversaw the association's Medicare lobbying.

'We Forced That Out'

"We forced that out of the bill," he says. "How? By refusing to support the legislation with that provision. It drew AARP into a big political fistfight. All AARP wanted was to get a drug benefit for its members."

Thousands of AARP members said they objected to the legislation altogether. One reason was that the lowest-income seniors, people who had been using Medicaid, a federal health insurance program for low-income citizens, would have to pay more for medicine under the new law.

During the debate on the bill, two doctors at Harvard Medical School in Cambridge, Massachusetts, released a study that said the proposed changes would bring revenue to AARP at the expense of seniors.

"AARP derives significant income from the sale of health insurance policies, and stands to make hundreds of millions more under the Medicare Prescription Drug bill," David Himmelstein and Steffie Woolhandler wrote on Nov. 22, 2003, as AARP was lobbying for the legislation.

AARP knew the proposal didn't ensure complete prescription coverage, Hansen says.

'It Wasn't Perfect'

"It wasn't perfect; it was flawed," he says. AARP's biggest concern was that the bill lacked adequate funding to fully cover the cost of drugs, Hansen says. Hansen, now CEO of Santa Clara, California-based AeA Inc., a trade association for technology companies, says Novelli had only good intentions.

Hansen also sympathizes with those who complained. "People who were against it had a right to be angry," he says.

AARP felt it had to push an imperfect bill because it may not have had another opportunity to add a drug plan to Medicare, former board member Canja says.

"We thought our members could motivate Congress later to fix the things we didn't like," she says. After the legislation passed, 40,000 AARP members dropped out of the organization in protest, according to AARP.

For a While

Some members who didn't quit have since concluded that their AARP-endorsed insurance costs are inflated. Richard Ostor of Indialantic, Florida, says he joined AARP seven years ago to get the lowest-cost car insurance.

He was satisfied with the insurance for a while -- until his rates started going up even though he had had no accidents or traffic tickets. In April, his AARP/Hartford premium rose to $950 a year. He shopped and switched to Geico after he found similar insurance for $640.

"AARP has great buying power, and people should be able to get the best deal," says Ostor, 62, a retired divorce lawyer and bar owner. "AARP fell asleep at the switch or has a very sweet deal with The Hartford. This is unconscionable, what AARP has allowed to happen."

Bill and Helen Cochran, an Abington, Maryland, couple who retired nine years ago, say they felt the same way when they learned they were paying more than they had to with AARP's Medicare supplemental insurance.

Met at Shoe Factory

Relying primarily on Social Security income of just less than $1,400 a month, they had sold their 1,300-square-foot (121-square-meter) condominium and moved to a subsidized apartment less than half that size.

Bill and Helen, who married 34 years ago when they both worked at the Beta Shoe Co. factory in Belcamp, Maryland, looked for other ways to trim spending. They purchased AARP Medicare supplemental insurance.

At a picnic for seniors in June 2008, the Cochrans learned they were spending $1,079 a year more than Mutual of Omaha Insurance Co. charged for the same coverage. Bill, 72, says he called AARP to see if it could match the lower price.

"They didn't want to hear that," he says. "I told them I'd found a better price, and they didn't ask me who I was going with, but they said they couldn't do anything about it."

Bill says his experience changed his view of AARP.

"I was kind of shocked," he says. "They're making money on the backs of the old people. I don't think AARP is looking out for me."

In the current economic crisis, $1,000 a year makes a big difference to a couple living on a fixed income, he says. "It just gets you to thinking about how much money they're getting kicked back, and then we're suffering by paying more for our premium," he says.

'Rates Are Competitive'

UnitedHealth spokesman Jonathan Stone says his firm's insurance is affordable. "We believe our rates are competitive," he says. "Our plans all give overall value."

AARP-endorsed life insurance policies are also more expensive than comparable coverage by competitors, says Mark Maurer of Tampa, Florida-based Low Load Insurance Services Inc., which sells policies to seniors.

A New York Life $50,000 permanent life insurance policy for a 65-year-old man available through AARP costs $286.17 a month, Maurer found. He says the same man can buy a $50,000 policy for 51 percent less from Cincinnati-based Columbus Life Insurance Co.

After a half century of serving seniors, AARP may be slipping in its mission to members as its power grows, former AARP official Moon says.

"AARP grew often for the sake of growing, and not thinking about, Is this the best way to be?" she says.

With the U.S. economy suffering the worst financial crisis since the Great Depression, AARP has to decide if charging higher insurance rates in order to bolster its revenue by $497.6 million a year is the kind of help that seniors need.

Jack Layton calls Diane Francis for her opinion

See Diane’s blog here.

In the link above Diane blogs about a phone call she received from Jack Layton who was seeking her thoughts on the economic challenges of the day. Here is my comment for Diane:

Diane:

Did you inform Jack Layton that his BLIND SUPPORT of Harper's income trust tax has caused immense damage:

(1) to Canada's tax base, from the over $108 billion of trust related takeovers causing $1.4 billion a year in lost taxes?

(2) resulted in creating a two tiered pension system in Canada where the 25% with pensions get to own income trusts free of the 31.5% tax and the other 75 do not?

(3) favoured foreign investors to Canadians investors, by allowing foreign investors to strip all the earnings of Canadians companies out of the country via interest payments and tax sheltered earnings?

(4) introduced purely unnecessary debt to be imposed on Canadian businesses like BCE for no reason other than to dodge taxes and implement games of financial engineering....causing BCE to fire 2500 workers, destroy their credit rating, rendering the whole industry less cost competitive and resulting in higher costs to the consumer?

(5) put the NDP in bed with the life insurance companies like Manulife, who lobbied the Harper government to kill income trusts so they could sell more synthetic junk food investments like variable rate annuities, whose issuance does nothing to invest in the real economy and whose issuance and lack of hedging has now brought the house of Manulife into its current precarious financial position?

(6) permitted major tax legislation to be introduced without a scintilla of evidence for its underlying policy assumption that income trusts cause tax leakage. If the government wants to hold forth quantitative arguments then it damn well better be willing to prove them, apart from issuing 18 pages of blacked out documents?

(7) resulted in Canadians losing $35 billion of their life savings?

(8) destroyed an essential investment vehicle?

(9) destroyed Canada's capital markets and the IPO market? Ruined our capital market’s reputation in the eyes of foreign investors?

(10) knee capped Canada's junior oil and gas industry and prompted a major downturn in drill rig activity?

(11) placed Canadian capital markets at a competitive disadvantage to the US, whose issuers and investors can issue/own income trust equivalents known as Master Limited Partnerships

Jack Layton needs to expose the lies coming out of the Department of Finance on which this policy was foisted onto Canadians by the likes of Mark Carney on behalf of his former clientele at Goldman Sachs. Its not too late for Jack Layton to look smart on this file and expose Stephen Harper's $35 billion fraud?

Did you ask Jack Layton to "prove the case or drop the tax"?

Thousands protest Stephen Harper in Toronto

From Wikinews,
Sunday, December 7, 2008

Around five thousand people from all walks of life jammed Nathan Phillips Square on Saturday in Toronto to demand that Canadian Parliament work for the real needs of Canadians. Liberal Leader Stephane Dion and NDP Leader Jack Layton addressed the crowd, pointing out that the 62% majority of the voters voted against Conservative Prime Minister Stephen Harper's right-wing politics. Harper campaigned on the premise of bringing in policies to stimulate the economy during the current economic downturn.

Harper shut down Parliament last week until January 26th to prevent opposition parties from defeating his government with a vote of non-confidence. The centrist Liberals and social democratic New Democratic Party formed an unprecedented coalition with the support of the Quebec based Bloc Quebecois to stop Harper from banning strikes in the public sector, stopping pay equity settlements, and removing public funding to all political parties.

Latest figures show seventy-seven thousand more workers lost their jobs in November. Signs in the crowd were visibly in both French and English, a clear rebuttal to the politics of division being sown by Prime Minister Stephen Harper who is attacking the coalition because it is supported by "separatists who want to destroy the country."

The event was Hosted by TV star Mary Walsh, who, in a nod to recent U.S. elections, led a resounding chant of "Yes We Can-ada!" The main message of the day was that people want a government representing the majority of Canadian voters to tackle the economic crisis. Performers on stage included Samba Squad and members of Broken Social Scene. The day ended with the singing of "O Canada".

What do you mean Harper doesn't like Coalitions?

Prisoner abuse at Abu Ghraib Prison, Iraq

Canadians Stand With You
Wall Street Journal
March 28, 2003

By STEPHEN HARPER and STOCKWELL DAY

Today, the world is at war. A coalition of countries under the leadership of the U.K. and the U.S. is leading a military intervention to disarm Saddam Hussein. Yet Prime Minister Jean Chretien has left Canada outside this multilateral coalition of nations.

This is a serious mistake. For the first time in history, the Canadian government has not stood beside its key British and American allies in their time of need. The Canadian Alliance -- the official opposition in parliament -- supports the American and British position because we share their concerns, their worries about the future if Iraq is left unattended to, and their fundamental vision of civilization and human values. Disarming Iraq is necessary for the long-term security of the world, and for the collective interests of our key historic allies and therefore manifestly in the national interest of Canada. Make no mistake, as our allies work to end the reign of Saddam and the brutality and aggression that are the foundations of his regime, Canada's largest opposition party, the Canadian Alliance will not be neutral. In our hearts and minds, we will be with our allies and friends. And Canadians will be overwhelmingly with us.

But we will not be with the Canadian government.

Modern Canada was forged in large part by war -- not because it was easy but because it was right. In the great wars of the last century -- against authoritarianism, fascism, and communism -- Canada did not merely stand with the Americans, more often than not we led the way. We did so for freedom, for democracy, for civilization itself. These values continue to be embodied in our allies and their leaders, and scorned by the forces of evil, including Saddam Hussein and the perpetrators of the attacks of Sept. 11, 2001. That is why we will stand -- and I believe most Canadians will stand with us -- for these higher values which shaped our past, and which we will need in an uncertain future.

Messrs. Harper and Day are the leader and shadow foreign minister, respectively, of the Canadian Alliance.

Now that Harper has us engaged in a nationwide witch hunt: The separatist within his own cabinet:

Diane Ablonczy

Diane Ablonczy (maiden name Broadway) was born in 1949 in Peoria, Illinois, United States, as the oldest of six children. A year later the family moved to Three Hills, Alberta and Ablonczy grew up in a variety of places in rural Alberta.

Ablonczy's first political involvement was in 1982, when she briefly belonged to the Western Canada Concept party, but left to join the Provincial Rights Association (PRA) a few months later.

The Western Canada Concept was a Western Canadian political party founded in 1980 to promote the separation of the provinces of Manitoba, Saskatchewan, Alberta and British Columbia and the Yukon and Northwest Territories from Canada in order to create a new nation.

In early 1987 Ablonczy joined the Reform Association of Canada, and later that year became a founding member of the Reform Party of Canada

Politicians, scholars say Governor General must dispel secrecy

On Her Majesty's Secret Service

Politicians, scholars say Governor General must dispel secrecy
MICHAEL STUPARYK
TORONTO STAR
December 6, 2008

The secret process that led to Governor General Michaëlle Jean's decision to prorogue Parliament is out of step with constitutional norms and must be opened up so Canadians can understand how and why such crucial decisions are made, politicians and legal scholars said yesterday.

Several constitutional principles came under siege during this week's events in Ottawa, which culminated in Jean's private meeting with Prime Minister Stephen Harper and the decision to shut down Parliament without explanation, one noted expert said.

"It is simply not acceptable to have a closed door at Rideau Hall at moments like this," argued Lorne Sossin, a professor and constitutional law expert at the University of Toronto's faculty of law, which held a conference yesterday to examine the merits of Jean's decision. One core value in Canada's constitutional law is that transparency goes hand in hand with democracy, but transparency was missing when Jean agreed to Harper's request without giving reasons, he said.

Simply indicating what she had decided and why – without having to elaborate or issue written reasons – would have created transparency and helped build public confidence in an increasingly divided nation, Sossin argued.

Liberal MP Bob Rae (Toronto Centre) and NDP justice critic Joe Comartin (Windsor-Tecumseh) were also on the panel. Rae told the audience at Flavelle House, the law school headquarters, that by asking Jean to suspend Parliament, Harper was acting like a law student who knew he was going to fail an exam and decided to pull the fire alarm "to shut down the law school."

Comartin recalled watching the doors of Rideau Hall for two hours on Thursday, hoping Jean would give some consideration to the Liberal-NDP coalition's position that it was ready to form a government when a vote was lost.

Nobody knows if she did, he said.

"We will probably never know that, unless we get some of her advisers ... drunk some day and they tell us," said Comartin, who argued more "due process" must be incorporated into decisions to prorogue or dissolve Parliament, which are largely guided by unwritten constitutional convention.

Opposition parties should have the right to make representations, said Comartin, who believes it would also be better to take the process out of the Governor General's hands and ask Canada's chief justice to make these decisions, following a hearing in open court.

But political scientist Peter Russell disagreed. Decisions about the integrity and operation of Parliament must reflect "the values of the people, not (Chief Justice) Beverley McLachlin, bless her heart, but the people," said Russell, a professor emeritus of political science at U of T and a Supreme Court expert.

In some parliamentary democracies, including Belgium and the Netherlands, heads of state can appoint an "inquisitor" to question elected representatives and report back when confidence in government is at issue, said Russell.

As the country moves forward, perhaps the most "troubling" development of the past week is that the constitutional tradition of accommodating minority views and "reaching across the floor" has taken a beating, Sossin said.

If Harper survives, he's burned his relationship with Quebec "for short-term gain," said U of T political scientist David Cameron, referring to Harper's painting of the Bloc Québécois as separatists, a label many of its supporters reject.

But if a Liberal-NDP coalition prevails, the West is going to be "very, very pissed off," he said.

Mary Walsh for Governor General....we need someone who's more serious!

Just got back from the Toronto rally at City Hall....it was awesome.

Huge crowd despite freezing cold.

Mary Walsh opened the event up and then Dion and Layton each spoke. All were great.

Closed with Mary Walsh.......who would make a great Governor General, don't you think?

I drove past Queens Park to get to City Hall.

The Harperites were having their mini rally at Queens Park with a modest turnout of flag wrapped fanatics and former followers of Reverend Jimmy Jones.

Meanwhile the major league game in town was the Coalition Rally at City Hall....after all we are the MAJORITY in Parliament, which is why Harper closed it. Coward.

Harper demonstrates proper coalition protocol

As Harper himself made a big splash about in Parliament this week, protocol requires that you always have the Canadian flag prominently displayed when forming a coalition with the Bloc

Harper's first 100 days.....missing in action

A new US Presidency is typiclly judged by what it has accomplished or set in motion during its first 100 days in office. By that measure, how will Harper have performed as at January 22, 2009?

Stephen, where are you? Stephen? Are you still hiding? What do you have to show for your first 100 days in office? Barack Obama has dome more in preparing for office that you have done while in office?

Harper is not a leader. Stephen Harper MIA.

Harper's ego factor: 104,000 to 1

Canada is losing jobs at the rate of 2,000 jobs a day. So naturally, Harper decides to prorogue Parliament for 52 days, the equivalent of 104,000 jobs......in the hopes of saving one job: his

Canada loses 70,600 jobs in a month, most since 1982



Canada lost almost 71,000 jobs last month — the worst single-month drop in a quarter of a century - in a clear indication the U.S. recession is beginning to wreak havoc on manufacturers and workers in Central Canada.

Almost all the job losses were in Canada's manufacturing heartland. Ontario shed 66,000 workers - 42,000 of them in factory jobs - pushing the province's unemployment rate up six-tenths of a point to 7.1 per cent.

Overall, the Canadian jobless rate edged up to 6.3 per cent from 6.2 per cent in October, but would have been worse if not for the fact that 48,000 fewer Canadians were looking for work in November.

The shocking jobs report from Statistics Canada comes a day after Prime Minister Stephen Harper stalled an attempt by the opposition parties to topple his minority government over dissatisfaction he was not doing enough to stimulate the economy.

The Liberal-NDP coalition, which will get another chance to unseat the Conservatives in late January, has called for billions of dollars in immediate spending on infrastructure and the troubled auto and forestry sectors.

"Deteriorating global job markets have arrived on Canada's doorstep such that the country is no longer bucking the general trend of lost jobs in most major economies," Scotia Capital economist Derek Holt commented after the Statistics Canada report.

The news from America was no better, with 533,000 jobs lost last month after contractions of 320,000 in October and 403,000 in September. The U.S. is down 1.9 million jobs since last December.

After years of expansion, the Canadian economy has ground to a halt, with little growth in the first three quarters of this year and decline expected in the current quarter. Falling commodity prices and slumping U.S. housing and auto sectors have dealt a blow to the forestry, mining and manufacturing sectors across Canada.

In the United States, the recession appears to be getting worse.

"The economy has been slowing since December 2007. The real question is whether the economy is in a recession or depression," commented Peter Morici, a business professor at the University of Maryland.

It was the worst one-month job loss in the U.S. since 1974. For Canada, it was the most jobs lost in one month since June 1982, although as a proportion of the market it was the ninth-worst since the recession of the early 1980s.

That recession was the worst for Canada and the United States since the Great Depression of the 1930s, with an unemployment rate soaring to 13 per cent.

The sharp U.S. slowdown constitutes further downside risks for Canada.

"With today's dismal employment report, there is no doubt that the Canadian economy is in recession and the U.S. contraction is accelerating," commented BMO Capital Markets chief economist Sherry Cooper.

"While Canada is on a stronger footing than the U.S., there is mounting evidence of deteriorating Canadian residential and non-residential construction, retail sales, business capital spending, profitability and net exports," Cooper wrote.

"Ontario and Quebec continue to be hardest hit, but the plunge in commodity prices and reduced U.S. demand has also slowed the economies in Western and Atlantic Canada."

While many economists had anticipated that Canada's relatively robust labour market would start showing symptoms of malaise, the consensus expectation was for a 20,000 contraction lasts month, and even the most pessimistic had projected no more than 50,000.

November's loss of 71,600 cut deeply into the job creation record for the year, bringing the accumulated gain to 133,000, well below's last year's 361,000 January-through-November improvement.

The battered manufacturing sector was mostly responsible for the job bleeding in Ontario with a decline of 42,000. That took the factory sector's share of employment in the province to 13 per cent - down from 18.2 per cent six years ago.

Overall, there were 38,000 fewer factory workers in Canada, as there was a slight net gain in the category in other provinces.

"This brings manufacturing declines to 388,000 since the peak in 2002," Statistics Canada said.

The other major employment drop came in public administration, with the layoff of 27,000 temporary workers helping to run the Oct. 14 federal election.

Other industries hit with employment decreases last month included transportation and warehousing, which lost 26,000 workers, education (16,000) and agriculture (10,000).

A slight majority of the net job losses came among full-time workers and among men and youth, although most categories were affected.

Employment gains occurred in the health care and social assistance categories, and in professional and technical services.

The weaker labour market has yet to be reflected in wages, however, which remained 4.6 per cent higher in November than a year earlier. That is well ahead of the current 2.6 per cent inflation rate.

Ontario's 7.1 per cent jobless rate now matches Quebec's, which has historically been higher although Statistics Canada noted that the numbers have been edging closer in recent years.

Here's what happened provincially (previous month in brackets):

-Newfoundland 13.7 per cent (13.7)

-Prince Edward Island 10.7 (11.5)

-Nova Scotia 7.8 (7.5)

-New Brunswick 8.7 (8.8)

-Quebec 7.1 (7.2)

-Ontario 7.1 (6.5)

-Manitoba 4.2 (4.3)

-Saskatchewan 3.7 (4.0)

-Alberta 3.4 (3.7)

-British Columbia 4.9 (5.1)

Statistics Canada also released seasonally adjusted three-month moving average unemployment rates for major cities but cautions the figures may fluctuate widely because they are based on small statistical samples. (Previous month in brackets.)

-St. John's, N.L. 7.6 per cent (7.6)

-Halifax 5.2 (5.3)

-Saint John, N.B. 6.1 (6.1)

-Saguenay, Que. 7.3 (7.6)

-Quebec 4.3 (4.4)

-Trois-Rivieres, Que. 6.6 (7.5)

-Sherbrooke, Que. 6.5 (6.5)

-Montreal 7.5 (7.4)

-Gatineau, Que. 4.7 (5.1)

-Ottawa 4.7 (4.8)

-Kingston, Ont. 4.7 (5.8)

-Toronto 7.0 (6.8)

-Hamilton 6.5 (5.7)

-Kitchener, Ont. 6.5 (5.3)

-London, Ont. 6.9 (6.8)

-Oshawa, Ont. 7.8 (7.2)

-St. Catharines-Niagara, Ont. 8.2 (7.7)

-Sudbury, Ont. 5.7 (5.8)

-Thunder Bay, Ont. 5.7 (5.4)

-Windsor, Ont. 10.1 (10.1)

-Winnipeg 4.6 (4.6)

-Regina 3.6 (4.0)

-Saskatoon 4.1 (4.1)

-Calgary 3.7 (3.8)

-Edmonton 3.6 (3.4)

-Abbotsford, B.C. 5.2 (4.8)

-Vancouver 4.4 (4.3)

-Victoria 3.3 (3.2)

My fiscal stimulus package includes eliminating the Governor General....to be replaced by a judicial process.

At a time of austerity and in the interests of eliminating wasteful and unproductive government spending, the Office of the Governor General should be eliminated. At $41 million a year the GG”s annual budget is more than the $27 million in election cycle subsidies that Harper was so keen to eliminate.

As Harper himself argued, government needs to lead by example. So rather than eliminate $27 million of election cycle funding, the effect of which would diminish our democracy, let’s instead eliminate $41 million in annual funding for an institution that only detracts from our democracy. To cite the metrics employed by Jim Flaherty, we aren’t getting “good value for money”. In fact, I would argue that we are getting no value for a lot of wasted money.

The constitutional tasks of the Governor General can be performed by the courts, the incremental cost of which would be negligible, and the rulings less whimsical.

Lest we forget, Harper was the panderer who bought off the Bloc in the 2007 Budget

Budget 2007 was the budget that contained the income trust tax that defrauded Canadians of $35 billion of their retirements savings, based on the government’s policy lie that income trusts cause tax leakage. Even though the Finance Committee of the elected Members of Parliament called upon the Harper government to disclose its proof of tax leakage and separate the trust tax legislation from the Budget itself, Harper refused. Harper needed the support of the Bloc in order to pass the highly contentious and destructive 2007 Budget. As such, Harper pandered to the Bloc and the Bloc extracted an additional $2 billion in transfer payments, that came at the expense of all other Canadians.

It is typical of Harper to accuse his opponents of the very things that he himself is most guilty of, to wit:

Wkipedia: Budget 2007

Quebec Premier Jean Charest had applauded the budget, as his province would receive over $2 billion dollars in additional equalization payment. However, Nova Scotia Premier Rodney MacDonald and Newfoundland and Labrador Premier Danny Williams argued that Harper broke a written promise to shield revenues from oil and natural gas revenues that the two provinces are receiving;

Couldn't disagree more, Your Excellency

I was copied on this missive:

Couldn't disagree more, Your Excellency
mailto:Info@GG.CA>

You have placed the whim of the PM ahead of the will of the Parliament. Our Parliament I might add. This, after you granted Harper his wish to renege on his fixed election date legislation. Well done. You have now succeeded in making Canada's democracy dysfunctional, instead of just Parliament proper. Have you ever pondered what the source of this contagion called dysfunction might be? One hint: He visited you this morning for Coffee and Prorogies. Your decision has rendered you obsolete in the minds of myself, and no doubt millions of your “subjects”.......at least those who employ their minds on occasions such as this.

Pro-Rogue or Pro-Democracy?

The Governor General has spoken: The Rogue has it.

Does this mean the GG's spendthrift Eurotour is back on?

Does this mean that Michaëlle Jean can go back to her regularly scheduled five star European tour that was a spendthrift attempt to restore some of the damage caused by Harper’s invidious attack against the arts in the last election……..you know, the other bespoke election granted to Harper by the self same Michaëlle Jean and in violation of Harper’s fixed election date legislation.

Governor General Guy Giorno approves boss's request to suspend Parliament:

Democracy has now become dysfunctional along with Parliament itself. This is progress?


GG approves PM's request to suspend Parliament:

Updated Thu. Dec. 4 2008 11:35 AM ET


CTV.ca News Staff

Gov. Gen Michaelle Jean has approved Prime Minister Stephen Harper's request to suspend Parliament, agreeing to put the government on hold until the end of January, CTV News has learned.
CTV's Ottawa Bureau Chief Robert Fife reported the development from outside Rideau Hall.
Harper met with Jean on Thursday morning for more than two hours and asked her to support his plan to prorogue Parliament in order to avoid a confidence motion scheduled for Monday that would have likely toppled his government.
The Liberals and NDP have agreed to form a coalition, with the support of the Bloc Quebecois, and have signaled their intention to bring down the government over the fiscal update that was introduced last week and would have come before Commons for a vote on Monday.
They had hoped Jean would deny the prorogation request and let the confidence motion go ahead. If it did, and the government fell, Jean would have to decide whether to send Canadians to the polls for another election, or grant the coalition the chance to win the confidence of the House of Commons and possibly take over government.
Jean returned home early from a central European tour on Wednesday to deal with the political crisis that has gripped the nation.
The decision Thursday followed a rare nationally televised address by Harper on Wednesday night.
In the five-minute pre-taped broadcast Harper said the opposition plans to oust his government and seize power would cripple the country's economy.
"The opposition is attempting to impose this deal without your say, without your consent and without your vote," he said.
Harper also signaled he would be willing to work with the opposition parties in order to deliver an economic plan that will help Canada navigate perilous economic times.
"Canada's government is acting to deal with the crisis right now," he said, adding that the opposition parties should "bring forward specific proposals.
"In fact, we have already changed some of our own proposals to meet their concerns."
Later on Wednesday, Liberal Leader Stephane Dion took to the airwaves after a major delay that saw national networks filling time as they waited for the tape to arrive.
He said the Conservatives have done little to help Canadians cope with the global economic crisis.
"Stephen Harper still refuses to propose measures to stimulate the Canadian economy," said Dion. "His mini-budget last week demonstrated that his priority is partisanship and settling ideological scores.
The NDP's Jack Layton said Wednesday that while other countries have been working to stimulate their economies, the Conservatives have been wasting time with partisan politics.
"Stephen Harper simply refused to act," he said, adding the Conservatives also attacked the rights of workers and women.
The opposition began to cobble together their coalition after the Tories proposed last week to cut public funding for political parties as a part of their fall economic update.
The update also lacked a sufficient stimulus package, the opposition has said.

Deck the Hall with Con Borg Staffers. Fa la la la la, la la la la.

This is what happens when statesmanship is replaced by mindless gamesmanship:

From Macleans Magazine Reporter Kady Omalley who is staked out at Rideau Hall this morning: a tip to those organizing nonpartisan grassroots demonstrations: most of us who work on the Hill can recognize Conservative staffers - even when they’re all decked out like ordinary Canadians.

Harper is the master of faux crises: The faux crisis of separatism meets the faux crisis of tax leakage

Steven Chase:
Globe and Mail

Dear Steven:

Concerning your article of today, did you notice whether Michael Sabia, or perhaps Jack Mintz and Gwyn Morgan, were among the demonstrators at Rideau Hall this morning fanning the false flames of separatism in the same way that they collectively fanned the false flames of tax leakage upon the conversion of BCE?


Harper meets Governor-General
After televised appeal to national unity that raised the SPECTRE OF SEPARATISM, Prime Minister arrives at Rideau Hall to ask that Parliament be prorogued until January

STEVEN CHASE

Globe and Mail Update

December 4, 2008 at 9:59 AM EST

OTTAWA — Prime Minister Stephen Harper entered Rideau Hall shortly after 9:30 a.m. ET to make his case to Governor General Michaëlle Jean for temporarily shutting down Parliament.

The prime minister arrived in a motorcade after traveling literally across the street from his official residence, 24 Sussex Drive.

About 50 demonstrators greeted Mr. Harper as his black vehicle entered the gates of Rideau Hall, most of them cheering on the Prime Minister.

The vast majority appeared to be Tory staffers or Conservative Party members. They were chanting slogans such as "No secret deal!", a reference to the coalition-support agreement by the Liberals, NDP and Bloc Québécois that would oust Mr. Harper and install Liberal Leader Stéphane Dion in his place.

If Parliament is prorogued, then the GG may as well be Guy Giorno for all intents and purposes.

Photo: Guy Giorno, Stephen Harper's Chief of Staff

One governor-general to another: Don't aid in evading Parliament's will
LAWRENCE MARTIN
lmartin@globeandmail.com
Globe and Mail

December 4, 2008

The heat is on Governor-General Michaëlle Jean - and it's coming from a former governor-general.

Ed Schreyer said in an interview yesterday that granting a wish for the prorogation of Parliament at this point would constitute an evasion of the process of Parliament and should not be done.

"I'll put it this way and I will make this a plain-spoken sentence. Nothing should be done to aid and abet the evasion of submitting to the will of Parliament. I think one can stop there. It's about as basic as that."

With a new Parliament having just opened, the only circumstances to justify prorogation, Mr. Schreyer said, would be a genuine emergency. "The only emergency seems to be a desire [of the Harper government] to avoid facing Parliament. That is not an emergency."

Ms. Jean is under no obligation to listen to Mr. Schreyer, but his observations go to the heart of a problem she faces. No governor-general should be seen to be in the business of closing down Parliament for the crassly political reason of saving a government from almost certain defeat on a confidence motion.

The driving imperative of the Harper government's adjournment request is survival. Ms. Jean knows that last Friday the Prime Minister stood in the House of Commons foyer and announced that the opposition would be allowed a confidence vote on Dec. 8. She knows that his reason for wanting to renege on that vow is that he is likely to lose that vote. To grant prorogation could make her look complicit in the Prime Minister's political power play.

That's the type of thing, Mr. Schreyer said, that has to be avoided. Speaking of political neutrality, he said: "I regard that as the sine qua non of the office. ... What the Governor-General must not do is start canvassing because that too quickly comes to destroy respectful neutrality, political neutrality."

She must also consider the danger of setting an unacceptable precedent. Granting prorogation in dire circumstances for a government is tantamount to saying it should be granted at any time - that the governor-general should be a rubber stamp in the process. That means any time a minority Parliament is in trouble, facing a confidence vote, the prime minister could simply prorogue to head off the crisis.

Paul Martin could have done so in the fall of 2005 and avoided losing an election campaign that extended over Christmas. John Diefenbaker could have tried it in the early 1960s. Joe Clark could have tried it in 1979, though Mr. Schreyer said he's not sure he would have granted it.

Those leaders may have had second thoughts, realizing that the governor-general of the day might have turned them down. But with the precedent of a go-ahead for Mr. Harper, why would any future PM hesitate?

Mr. Schreyer, who served as NDP premier of Manitoba, was appointed governor-general by Pierre Trudeau in 1979. He later campaigned for the NDP in the 1999 Manitoba election. While his political bias is clear, he said he was speaking from the point of view of his experience at Rideau Hall. He said he didn't want to get into giving advice to Ms. Jean, but his strong views will certainly be interpreted as such.

In an earlier interview with the CBC, Mr. Schreyer, who favours the Liberal-NDP coalition being allowed to form a government, would not give his view on prorogation, saying he hadn't yet thought it through. But that has become the critical issue. Many are talking as though the die is cast, that the Governor-General is very likely to accept the Prime Minister's request to adjourn Parliament. The prevailing sentiment appears to be that Ms. Jean will, indeed, grant prorogation, that a timeout is needed, that cooler heads should prevail - until late January.

This could well be the solution for the Harper Conservatives. By then, with the Prime Minister outfoxing the opposition at every turn, they might be able to put this crisis to bed. The Conservatives have gained ground over the past two days with an impressive blitzkrieg of demagoguery, painting the opposition deal as a separatist coalition. Mr. Harper, whose Conservatives have had many close ties to the Bloc Québécois, went so far yesterday as to label the opposition pact "a plan to destroy Canada."

The Liberals, meantime, have been woefully inadequate in Question Period, steamrollered by the Tory onslaught. They've missed a golden opportunity to paint Mr. Harper as a coward running away from his promise of a confidence vote.

Given a few weeks time, the Conservatives will be able to flesh out an economic plan while bombarding the airwaves with their propaganda machine. The coalition will see its support fritter away. Their only chance is to strike now. They had better hope Michaëlle Jean listens to Ed Schreyer.

Diane Francis on Harper's National Lampoon form of governance

Canada's conservatives: study in stupid
Posted: December 04, 2008, 1:10 AM by Diane Francis
Canadian Politics, dysfunction, economy

What is wrong with Prime Minister Stephen Harper and his henchmen?

I know Stephen and like him even though he has always been too doctrinaire and cold-blooded for politics. But now we know just how unsuitable he is. He has concocted a crisis that is taking away attention from dealing properly with the worldwide crisis that's about to hit Canada like a hurricane in the new year. He should leave office and the sooner the better. But he won't. Instead he will meet with the Governor-General to try and convince her to dissolve parliament until the New Year.

Here’s my question:

All the blah-blah aside, the essence of this nonsense is why would Harper ever dream that the other three parties would vote in favor of his triple-suicide bill designed to kill off publicly-funded campaign allocations? Were the Tories inhaling in caucus? Or was Harper just in touch with his Grinch? Or is he an Anglo-Saxon Machiavelli?

It bears examination.

These guys must have thought they would pull off one of three things: a) They merely wanted to put a stick in the eye of the Opposition parties at a time when they thought they were helpless to do anything about it. Wrong. Not only was this wrong it was also inappropriate. Cooperation and consensus-taking would have been the preferred option for a real set of leaders whose job in coming months will be to stickhandle their way through one of the worst economic crises in history. b) Alternatively, they wanted to throw a grenade into the Liberal leadership contest and help sustain the decent, but electorally rejected, Stefan Dion at the helm. All of that Machiavellian-type stuff may have been lots of fun to brainstorm over martinis at 24 Sussex Drive, but the facts are that none of the potential outcomes were properly thought through.

Animal house does Ottawa

And the result, for Canada, is that we are a G7 country governed by a bunch of fraternity brothers who dreamed up a nasty trick against a rival house which badly backfired. Worse yet, Harper merely repeated an old, relatively recent political mistake. He did what Joe Clark did in 1979, propose legislation as a minority without sufficient support from other parties and get tossed out within weeks. At least, Clark was defeated trying to get support for a piece of legislation that involved responsible taxation and fiscal policy while Harper’s provocation was merely malicious.
If b) was the plan then it may badly backfire just as it did for the hapless Joe Clark, also from Alberta. This crisis may result in bringing back a tougher Grit leader, say Chretien as an interim boss or Frank McKenna, just as Clark’s miscalculation brought back Pierre Trudeau for many years.

Recklessness reigns

Harper and his government have been unforgiveably reckless. At a time, when consensus and leadership are needed the most, they have deteriorated into schoolyard bullies. Worst of all, they have handed on a platter an opportunity for three leaders, who have all been judged as even less adequate than Harper, to form a coalition to govern Canada. God help us.

Clearly, Tories must stage a palace revolt. Petitions being circulated should be about unseating Harper and his accomplices, not about defeating the coalition. Peter McKay comes to mind, Jim Prentice or anyone but the PM and his inner circle.

Even if they get past this crisis, because of coalition failure, they have disappointed. They are churlish people with questionable judgment whose governance may just end up being more worrisome than the proposed left-wing coalition involving the other three parties.

The facile Stephen Harper

In the last 24 hours we have witnessed a Prime Minister who thinks that flags and the late delivery of video tapes trumps impending non confidence votes in the House of Commons and non action on the economy. Canada deserves to go to hell in a hand basket if this stooge is allowed to lie and cheat his way into one more day as this country’s utterly facile Prime Minister.

What does it take for a GG to deny proroguing, beyond this set of outlandish circumstances?

Granting Harper the privilege of proroguing under these circumstances would be tantamount to the usurping of the Governor General’s role, by the Governor General herself, which is as bizarre a concept as the request itself.

Harper's Cheddar speech as disingenuous as Nixon's Checker's speech

The Education of Mr. James Travers

Yesterday Jim Travers wrote an article in the Toronto Star based on the reasoning (and title) that “Canadian democracy is the big loser”. As you can see from my comment below, I found his argument to be preposterous. I was pleased to hear Jim Travers on CBC’s POLITICS with Don Newman tonight, decry the rhetoric of those who are calling the Coalition “undemocratic”. I am pleased to see that Jim Travers has internalized the comments of his readers, such as:


Couldn't disagree more. Democracy is asserting itself

To suggest that democracy is the loser under these circumstances is preposterous.....unless you are talking about some other form of democracy different from a Parliamentary democracy. Get with the program.....this is how a Parliamentary democracy works.....sheesh. Quite trying to morph Canada into the United States "Presidential" model of democracy. Government in Canada resides in Parliament (read: in which all MPs are equal) and not the "Executive Branch" Again: Sheesh

Submitted by Brent Fullard at 10:44 AM Tuesday, December 02 2008

* Agree 26 * Disagree 4

Hypocrisy Watch: Only Stockwell Day's Alliance Party is allowed to form a coalition with separatists

Bloc part of secret coalition plot in 2000 with Canadian Alliance

A document obtained by The Globe and Mail shows that the scheme would have propelled then Alliance leader Stockwell Day to power in the coalition. A lawyer who was described then as being close to Day, says he didn't discuss the matter with the MPs

DANIEL LEBLANC
Globe and Mail Update
December 3, 2008 at 2:07 PM EST


OTTAWA - The separatist Bloc Québécois was part of secret plotting in 2000 to join a formal coalition with the two parties that now make up Stephen Harper's government, according to documents obtained by The Globe and Mail.

The scheme, designed to propel current Conservative minister Stockwell Day to power, undermines the Harper government's line this week that it would never sign a deal like the current one between the Liberal Party, the NDP and the Bloc.

Bloc officials said that well-known Calgary lawyer Gerry Chipeur sent a written offer before the votes were counted on election day on Nov. 27, 2000.

According to prominent sovereigntist lawyer Eric Bédard, who received the proposal, Mr. Chipeur identified himself as being close to Mr. Day, the leader of the Canadian Alliance at the time.

"I never had the impression that I was involved in theoretical constitutional discussions," Mr. Bédard said, adding he had never met Mr. Chipeur before.

A Bloc official said the link between Mr. Chipeur and Mr. Bédard was facilitated by Rodrigue Biron, a former Parti Québécois minister who was part of the unite-the-right movement in the late 1990s.

In addition to his discussions with Mr. Bédard, Mr. Chipeur said he also approached the chief of staff to Joe Clark, who was the leader of the Progressive Conservative Party.

The discussions were held about a two-page document entitled "Consensus Leadership for a New Century," as well as a two-page proposal for a Speech from the Throne.

In an interview, Mr. Chipeur played down the importance of the offer, saying he never discussed the matter with Mr. Day or other MPs, and was simply getting ready in the event of a minority government.

"I was preparing for what might happen," Mr. Chipeur said.

Still, the agreement included room at the bottom for the signatures of Mr. Day, Bloc Leader Gilles Duceppe and Mr. Clark, to be signed the day after the election.

At the time, the Alliance was ready to fly Mr. Day from his BC riding to Calgary to pick up Mr. Clark on the way to Ottawa, where the deal was to be presented to the Governor-General in the event of a minority Parliament.

The Alliance government promised in the event of a coalition to "respect the legitimate jurisdictions of Canada's provinces, including Quebec."

"We agree that we will support Stockwell Day as Prime Minister of Canada," said the draft agreement, which would have hinged on Bloc support.

The plan fell apart as the final result of the election in 2000 saw the Liberals win a clear majority with 172 seats. By comparison, the Alliance, Bloc and PC Party only had a total of 116 seats. The NDP won 13 seats.

However, the draft agreement raises questions about statements this week from senior Conservative ministers who are blasting a Liberal-NDP coalition with Bloc support as a "deal with the devil."

"The brutal fact here is that something has happened that has never happened before in Canadian history," Mr. Day, the current Conservative Minister of Trade, said on CTV Newsnet on Tuesday. "And that is two federal leaders have actually signed a deal with a separatist party whose goal it is to destroy the country."

Mr. Day was replaced at the helm of the Alliance in 2002 by Mr. Harper, who went on to oversee a merger of the Alliance and the PC Party.

Mr. Harper, now Leader of the Conservative Party and a minority Prime Minister, is waging an all-out fight against the proposed Liberal-NPD coalition, which includes Bloc support on confidence votes until June, 2010.

The Liberals, the NDP and the Bloc hope to defeat the Harper government on Monday, but the Conservatives will likely attempt to shut down Parliament in a bid to survive until January.

As Mr. Harper defended his government during Question Period on Tuesday, his Conservative caucus gave him repeated standing ovations and pointed to opposition benches with cries of "Shame! Shame! Shame!"

"We will have [in a coalition] a mechanism of permanent consultation empowering the Bloc Québécois on every question of importance, notably concerning the adoption of the budget. This Prime Minister, this government, this party has never and will never sign a document like that," Mr. Harper said.

While in opposition, however, Mr. Harper asked then-Governor-General Adrienne Clarkson in 2004 to turn to him if Paul Martin's newly elected Liberal government were defeated in the Commons.

"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," Mr. Harper said at the time.

The release of the 2000 draft agreement from the Canadian Alliance is likely to bolster the coalition's arguments that the Conservatives are engaged in double-speak.

Mr. Chipeur was a prominent lawyer in Alliance circles and an official member of the legal committee of the United Alternative, a key element of the unite-the-right movement. He went on to represent the Alliance in legal cases after the 2000 election.

A Bloc supporter, who was informed about the talks with him at the time, said the Alliance was willing to provide increased transfers, as well as the management of the long-gun registry, to the provinces.

The Bloc official added that the discussions with Mr. Chipeur included compromises on contentious issues, such as a promise to respect a straight majority of 50-per cent plus one in the event of a future referendum on Quebec sovereignty. The move would have gone against the Liberal Clarity Act, which calls for a stronger majority.

But Mr. Chipeur said he simply looked at the public positions of the various parties in drafting his proposal and conducting the informal talks.

Ed Broadbent just said that Harper pays people to lie.

This should come as no surprise, since we already know that Harper attempts to bribe politicians to influence their vote, so why not pay people to lie, as Ed Broadbent is alleging?

I wonder, would Mark Carney's installation by Harper as Governor of the Bank of Canada constitute such a "payment" for Carney's lies about tax leakage?

We also just witnessed Harper lie about the absence of a Canadian flag when in fact such a flag was in plain sight. Do you suppose Harper is capable of lying about tax leakage? The press was quick to pick up on Harper’s lie about the flag, but did nothing to explore his lie about tax leakage. Maybe some in the press are also being paid by Harper to lie? Payment comes in many forms....

Harper will attempt to re-enact Richard Nixon's "Checkers" speech

Who is paying for this? Do the three opposition leaders have a chance for rebuttal?

We've seen this movie before, when Richard Nixon made his plea to stay on as Vice-President under Eisenhower . Nixon made a schmarmy plea to the American people in what became known as the Checkers Speech.

Nixon's schmarmy plea worked and he subsequently went on the become US President. Like Harper, we know what a mistake that was.


Canada PM Plans Television Address At 7 PM - CBC

OTTAWA (Dow Jones)--Canadian Prime Minister Stephen Harper plans to deliver an
address on national television at 7 p.m. EST, CBC reported Wednesday.


Harper is battling to keep his minority Conservative government alive. The
opposition have struck a historic accord that could see the government defeated
in a vote of confidence as early as Dec. 8.

-Nirmala Menon, Dow Jones Newswires; 613-237-0668; nirmala.menon@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most
important business and market news, analysis and commentary: http://
www.djnewsplus.com/al?rnd=DhiqXiPFgwaKAmv0bXc80w%3D%3D. You can use this link on
the day this article is published and the following day.




(END) Dow Jones Newswires
12-03-08 1108ET
Copyright (c) 2008 Dow Jones & Company, Inc.

Copyright 2001 The Globe and Mail

Ignorance of parliamentary rules is distorting debate.....but then ignorance has always been Harper's greatest ally

Constitution and precedent are on coalition's side; Ignorance of parliamentary rules is distorting debate over legitimacy

The Toronto Star
December 3, 2008
Peter H. Russell

As Canadians live through the current political uproar in Ottawa it is important that they understand the constitutional rules of our parliamentary democracy.

The first rule is that when we hold an election we do not directly elect a prime minister. We elect a House of Commons. It is this elected chamber of Parliament that decides who governs the country.

The second rule of parliamentary government is that it is the leaders of the party or coalition of parties that have the confidence of a majority in the House of Commons who have the right to govern.

Immediately after an election the incumbent prime minister remains in office no matter how badly he or she may have done at the polls. In 1993, Kim Campbell was still prime minister of Canada even though she her party had elected only two MPs. It was obvious that a Campbell Conservative government would not have the confidence of the newly elected House of Commons so she tendered her resignation to the Governor General. The Governor General then called on Jean Chretien, whose Liberal party had won a majority of seats in the House of Commons, to form a government.

The situation is not always so clear. After the 1985 provincial election in Ontario, the incumbent premier, Frank Miller, whose Conservatives had won the most seats but were nonetheless in a minority position in the Legislative Assembly, formed a government and prepared to meet the newly elected Legislature. But when it became clear that Liberal Leader David Peterson and NDP Leader Bob Rae, whose parties between them had a majority in the Legislature, had signed an agreement whereby the NDP for two years would support a Liberal minority government so long as it pursued certain legislative priorities, Miller submitted his government's resignation to the Lieutenant Governor.

These precedents and many, many others illustrate the basic point that in parliamentary democracies we elect parliaments not prime ministers, and that the Governor General (or the presidential head of state in a republican parliamentary system) must be advised by ministers who are supported by a majority in the elected house of parliament.

Now let's apply these rules of parliamentary democracy to the situation Canada now faces. After the Oct. 14 election, Stephen Harper remained Prime Minister, formed a new government and prepared to face the House. Although his party had improved its seat total it was still in a minority position in the House. This meant that to continue in office Harper would have to win enough support from the opposition benches to secure the confidence of the House.

For a few days it appeared that Harper would reach out in a conciliatory manner and garner the parliamentary support he needs on order to have the right to govern.

But, to put it mildly, on Nov. 27 just a few days into the session, through his finance minister's economic update, he made an abrupt U-turn. Instead of seeking support from the opposition, his government presented an in-your-face, take-it-or-leave-it position.

The opposition parties - all three of them - decided not to take it. Instead, they announced that they would use their collective majority in the House to vote no confidence in the Harper government and support an alternative coalition government.

The no-confidence vote is to take place next Monday. If the government loses that vote, the rules of parliamentary democracy give Harper two options. He can tender his government's resignation to the Governor General and clear the way for Madame Jean to ask Stephane Dion to form a Liberal-NDP coalition government. Or he can ask the Governor General to dissolve the 40th Parliament so that we can elect the 41st Parliament.

The first option - resignation - would be entirely constitutional. It involves no "usurpation" of power but is an honourable way out of the present impasse.

If Harper were to take the second option, the Governor General would have to consider carefully whether to grant his request for a dissolution. Her primary concern must be to protect parliamentary democracy. A steady diet of elections - four in four years - is not healthy for parliamentary democracy.

If there is an alternative government available that has a reasonable prospect of being supported for a period of time by a majority in the House of Commons, she would have reason to decline Harper's request. Harper would then have to resign, and the Governor General would commission Dion to form a government.

If this happens, again there would be no "usurpation" of power but a proper application of the rules and principles of parliamentary democracy. It has been very disturbing to hear over the last few days, from people who should know better, wild unparliamentary theories about our system of government. Elections are not simple popularity contests in which the leader whose party garners the most votes gets all the power.

I am greatly concerned that there is so little public knowledge of the constitutional rules that govern our parliamentary system of government. These rules are not formally written down in a legal text or taught in our schools. Maybe the most important lesson to take from the situation we are now living through is to begin to codify as much as we can of this "unwritten" part of our Constitution and to ensure that it is well taught in our schools.

Peter Russell is professor emeritus of political science at the University of Toronto and author of the recently published Two Cheers for Minority Government: The Evolution of Canadian Parliamentary Democracy.

The CAW is completely out of sync with the global labour movement

Thanks to people liek Jim Stanford, the CAW is completely out of sync with the global labour movement, since the CAW favours private equity to public ownership

By blindly opposing income trusts, people like Jim Stanford of the CAW were willing accomplices in these kinds of outcomes below concerning BCE. The CAW is completely out of sync with the global labour movement. As an income trust, Ottawa would have collected $800 million more a year in taxes from BCE, 2500 people would not have been fired, Canada’s largest telco would not be junk bond basket, and the following consequences would not have occurred:

Private equity debt equation no longer adds up for Canadian Telecoms Group

- Labour news from UNI global union - for trade unions in a global services economy. -
Auditors declare a private equity deal that will load 92% of the price tag in debt onto Canadian telecoms group BCE (owner of Bell Canada) would endanger the company. UNI Global Union has been advocating against such high levels of debt leverage for the past two years. The buyout consortium including Providence Equity Partners, Madison Dearborn and Ontario teachers’ pension fund will be unlikely to close the deal with the release of KPMG’s report to the company.
“BCE’s four successive quarters of poor sales have hit profits and hampered the companies ability to pay back the debt that is due to be placed in its books.” The Guardian , 27 November 2008
The days when private equity could buy at close to 100% debt are over. The inability of banks to issue the high level of debt, due to the poor credit markets will hamper future deals. However in the case of the BCE proposed buyout, two of the biggest victims of the credit crisis are backing the deal- Royal Bank of Scotland and Citigroup. It is this sort of irresponsible investment activity by private equity and some banks that UNI believes should be regulated.
Many analysts currently claim that private equity deals that have this sort of leverage are now in danger of defaulting on interest payments. UNI Global Unions wants private equity managers to reveal their plan for unstable portfolio companies. What will happen to the workers employed in these companies? UNI will be arranging delegations to major private equity firms to put these questions directly to senior portfolio managers.

Join the “I'm a part of the 62% majority coalition”.....I did

Join here


Posted this comment upon joining:


Harper caused 2.5 million Canadians to lose $35 billion of their life savings when he broke his promise on income trusts.

Worse than breaking his promise was the fact that he lied to Canadians about his reasons for breaking that promise. he said income trusts cause tax leakage.....and only offered 18 pages of blacked out documents as his idea of "proof"

Harper's tax leakage argument is a lie. This argument is a manufactured claim, arrived at bu leaving out the taxes paid on the 38% of income trusts held in RRSPs, and yet these taxes are mandatory in nature?

Now we have seen over $108 billion of trust policy related taxpayers of Canadian companies by the likes of Hong Kong billionaires and Middles Eastern oil companies. These investors are favored over average Canadians. and these taleovers are costing Canadians taxpayers the lose of $1.2 billion in annual tax revenue.

Harper is a fraud and a liar and needs to be removed from office ASAP. He does not have the confidence of the House of Commons. Bravo the members of the Coalition!

Governor General’s attitude toward public lobbying

Many partisan Canadians, including Stephen Harper, think that they can influence the institution of the Governor General through various means of petitioning the Governor General. Insight into the Governor General’s attitude to such an arm-twisting exercise, is provided by the nomination form for the Order of Canada, which is administered by the Governor General, which reads:

“Note: Please do not initiate a letter-writing campaign to support this nomination. Doing so will not influence the outcome.”

Yesterday, Liberal MP Dan McTeague called on Harper to evacuate Canadians in Thailand. Harper refused. Here's the result.

Two Canadians killed as they try to escape Thailand: police


Tue Dec 2, 12:26 PM

BANGKOK (AFP) - Two Canadian tourists stranded by Bangkok's airport closures were killed and a Briton seriously injured in a car crash as they rushed to catch a flight out of southern Thailand, police said Tuesday.
Two Canadian men aged 63 and 48 were killed early Monday morning in southern Surat Thani province, as they headed to Phuket international airport, while a British woman was also wounded in the crash.

"The van overturned and plunged into the roadside after it tried to avoid crashing with a car in front, which suddenly slammed on the brakes," said Captain Charkrit Nima of the local police force.

He said six tourists were travelling in the van in the hope of catching a Cathay Pacific flight from Phuket, which is handling extra flights out of the kingdom because of the week-long siege of Bangkok's two airports.

A Hong Kong national was killed in a similar traffic accident on Sunday as he also tried to get to Phuket to catch a flight back home.

Up to 350,000 passengers are estimated to have missed flights out of Thailand by the week-long closure of the huge Suvarnabhumi international airport, and the shuttering since last Thursday of the smaller Don Mueang.

They were closed after protesters seized the main terminals as they upped a six-month campaign to topple the government.

Many tourists are flying out of provincial airports including Phuket and Chiang Mai. France, Spain and Australia have sent special flights to evacuate desperate citizens stuck in Thailand.

Tourists are also scrambling to leave via the small, Vietnam-era U-Tapao airport southeast of Bangkok, where queues snake round the basic terminal and thousands of passengers jostle to get their luggage through one scanner.

Check-in facilities have also been opened at a hotel and a convention centre in Bangkok to try to work through the backlog of frustrated holidaymakers.

Globe and Mail's choice of "Leader" was a six week wonder.

The whole notion of newspapers “endorsing” one candidate over another is an archaic absurdity.....for all the reasons that are amply evident in the Globe’s misguided support of Stephen Harper.....or any other candidate for that matter.

People need more facts and far fewer opinions in their newspaper. Unfortunately, facts constitute work, opinions constitute leisure.


Globe editorial board editor on why Harper should resign
The Globe's editorial board editor John Geiger
Globe and Mail Update

December 2, 2008 at 9:00 AM EST

A time of economic uncertainty — in which Canadians' jobs, homes and life savings are all in peril — is no time for political games or experiments, The Globe opines today in its lead — and only — editorial Harper, Dion put politics before national interest

"If the Liberals are truly set, however, on defeating Mr. Harper, and every indication suggests they are, then the responsibility for averting this politically illegitimate coalition shifts to the Prime Minister," The Globe's editorial board writes.

"Mr. Harper is ultimately responsible for this unhappy state of affairs. It is the byproduct of his machinations, and the product of a failure of his leadership.

"The opposition parties, especially with the Liberals busy licking their election wounds, were not out to pick a fight in the new Parliament.

"Mr. Harper gave them one anyway, turning his government's economic update into a partisan document aimed less at strengthening Canada's economic position than at undermining their ability to compete in the next election.

"In so doing, he sent the message that even if he backs down in this instance, he has no interest in making the current Parliament work.

"His conduct since then – epitomized by his blustery and provocative statement last Friday, and his party's disturbing act in eavesdropping on a private NDP conference call this past weekend – has only reinforced for the opposition the necessity of defeating him while it has the opportunity.

"If Mr. Harper wishes to act in the best interests of the country, it may be time for him to consider removing that imperative from the table.

"With a different Conservative leader in place, the coalition could lose some of its lustre – or at least its urgency – for the opposition parties.

"For Mr. Harper, who has built his government's image almost entirely around his own and controls nearly every aspect of its operations, relinquishing power would be a terribly bitter pill to swallow. He is the type who would rather fight than switch.

"That is his prerogative.

"But switching to another Conservative leader may at this point be preferable to a legacy as the man who gave Canada Prime Minister Stéphane Dion."

Stephen Harper: The Six Hundred Million Dollar Man?

Jeffery Simpson writes: “Mr. Harper has either to get to another Speech from the Throne in January that might be a better platform than the rickety one of Thursday's economic statement, or get to the people and argue, as he and his MPs did yesterday, that the opposition parties are trying to take power through parliamentary intrigue, having been defeated in the election. His fate depends, it would appear, on the Governor-General's decision to grant prorogation or an election. "

Louis Mix asks: “Is forcing another $300+ million election just to save the job of one PM a valuable use of scarce resources in a time of severe recession? After all, the Liberals have been known to govern capably for long stretches at a time, and in the new age of Canada they will benefit from the knowledge of the NDP. Besides, the surest way out of a recession is people working together. “

Brent Fullard observes: “Another election would make Harper the proverbial Six Hundred Million Dollar Man, in a time of restraint? We already spent $300 million for an election whose sole purpose was to provide Harper with political immunity from the imminent crumbling state of the economy.....and upon being elected what does Harper do to address the imminent crumbling state of the economy.........nothing? Face it Steve, you blew your ONE chance. Canadians can't afford Stephen Harper........in every conceivable respect.......the least of which is money.

Where's the corrupt Mark Carney when we need him?

Surprise Surprise. Today we learn; “BCE's lobbying won't change minds at KPMG “ But it’s THE WOLRDS LARGEST EVER LBO for gawd’s sake.......why cant KPMG simply fudge the numbers? This is a job for Mark Carney!!!! Mark will fudge anything. Just like he manufactured his bogus tax leakage argument in order to assist BCE in its goal to become a leverage buyout and pay no taxes as opposed to an income trust and pay $800 million more in taxes.



BCE's lobbying won't change minds at KPMG
ANDREW WILLIS

Here's the guts of the argument BCE Inc. chief financial officer Siim Vanaselja is making to his former partners at KPMG as he furiously lobbies for a takeover of his company: You accountants have changed the rules, and that's not right.


BCE delivered another round of shock therapy to investors last week by revealing KPMG could not deliver a favourable solvency opinion on BCE, once the company took on $32-billion of leveraged buyout debt. If BCE can't pass that solvency test, the deal is dead.


The argument coming from Mr. Vanaselja, who is making his pitch with BCE director and former PricewaterhouseCoopers head Thomas O'Neill, is that KPMG is being far too conservative in estimating what BCE would be worth in the worst of worst-case scenarios, one in which the phone company goes bust and must be liquidated. The pair are apparently looking for support for their views from rival accounting firms, and getting some joy on this front.


KPMG partner Susan Glass and her team give BCE failing marks on this front because the company's assets - valued at the same multiples as beaten-down peers such as Telus - aren't worth as much as its debt. This snapshot on values is being taken, obviously, during the ugliest market meltdown of our time.


What's hugely frustrating to many BCE shareholders - and likely causing ulcers for Mr. Vanaselja, a former KPMG tax partner - is that this valuation gap has existed since the buyout was first announced in June, 2007.


What's changed is KPMG's attitude towards liquidation values, and the importance it attaches to this measure in doing its solvency test.


Now, KPMG isn't talking about its methodology. But according to sources close to the situation, the accounting firm is telling BCE that times have changed, credit markets are in a state of unprecedented upheaval, and that requires a more conservative approach.


Let's pause to consider that logic, and the numbers.


In simple terms, KPMG is saying that if the wheels came off at BCE, and the company shut down, the valuation of its Bell Mobility division would be the same skinny multiple to EBITDA that other wireless companies command right now as going concerns. No takeover or scarcity premium for Bell Mobility is baked into this valuation. That's an extreme view.


DBRS ran the number on this kind of doomsday forecast in October, and said the value of the assets didn't meet the debt. DBRS managing director Paul Holman wrote: "This base case default scenario results in a decline in enterprise value of BCE ... to roughly $34.4-billion or 33 per cent lower than the $52-billion enterprise value when the privatization was announced on June 30, 2007."


In an interview, Mr. Holman said: "In a default scenario, we show total assets would be less than total liabilities and senior lenders would be covered but the unsecured and subordinate lenders would not be covered.


"KPMG may have been using going-concern valuation multiples that were approaching ours," he said. But DBRS deemed the liquidation scenario, with no premium attached to the value of any unit, to be so far outside the realm of possibility that it gave an investment-grade rating - triple-B (low) - to a large portion of BCE's debt. The focus for the credit rating agency was BCE as a going concern, with orderly asset sales factored in as a possibility if debts needed to be serviced at a time when cash flow slumped.


Stepping back from BCE for a moment, it's worth noting that lots of Canadian firms are doing business right now with debt loads far larger than the multiples contemplated under the Ontario Teachers' Pension Plan buyout of the country's largest phone company.


So, will the BCE heavyweights be able to sway the KPMG accountants?


It seems unlikely. This is a high-profile takeover, and KPMG has now put its reputation on the line. While its tests may be conservative, the numbers are what they are: The BCE buyout doesn't pass the most stringent of solvency tests.

© 2008 The Globe and Mail

A tale of two countries

United States: Obama taps Clinton

Canada: Harper wiretaps Layton

Harper did not receive a mandate from Canadians to lead Canada in difficult economic times

Sweater Man campaigning in Vancouver


The argument is desperately being advanced by Harper’s dwindling core of supporters that he received a mandate from Canadians to lead us in today’s difficult economic times. This is a patently absurd argument for reasons of Harper’s own creation, since Stephen Harper spent the entire period of the last election operating in a bubble where he refused to acknowledge the imminent reality of Canada’s economic situation. Think back to the weeks preceding October 14th in which we were repeatedly told that Canada was not in a deficit facing situation, that “if we were going to have a correction or a recession, it would have happened by now”, and he widely advised Canadians that “now’s a good time to invest”, where after the market fell by more than 22%.

How can Harper argue that he received a mandate to govern in difficult economic times, when he spent the entire election denying that very economic scenario?

To the extent that Harper believes he did receive a mandate to govern Canada in difficult times, then I don’t think what Canadians were looking for was a government that promptly embarked on a campaign of doing nothing and arguing that past stimulus would somehow supplant the need for stimulus today?

Proroguing Parliament would be like Harper denying MPs the right to strike

One of Harper’s ideological missteps of last week's FU (Fiscal Update) was to deny civil workers the right to strike. My reading of Harper’s logic in today’s Question Period is that he will prorogue Parliament as his last desperate attempt to hang on to Parliament. Doing so will be the equivalent of denying MPs the right to strike.

Okay. So Dion isn't the only Liberal Leader to not become Prime Minister?

Leadership candidates agree to Dion as interim PM

Updated Mon. Dec. 1 2008 1:40 PM ET

CTV.ca News Staff

The three main Liberal leadership contenders met Monday with party leader Stephane Dion and agreed unanimously that he should lead a coalition with the NDP and serve as interim prime minister if the government is brought down.

Place your bets.....who will the 6 NDPer’s be in the Coalition Cabinet?

My guess is:

Jack Layton
Thomas Mulcair
Libby Davies
Joe Comartin
Linda Duncan (only NDP or Liberal MP in Alberta)
Brian Masse (represents auto town of Windsor)


But surely not:

Judy Wasylycia-Leis
Pat Martin
Olivia Chow

Canada's mediocre media

Admitting you have a problem, is the first step to recovery


In Lawrence Martin's article in today’s Globe and Mail, he says that if there had been "more journalistic inquiry", the electorate may have been "startled" by the depths of the efforts of Harper to put a 'stranglehold" on the Canadian political system.

Seems to me journalistic inquiry is not something we have to worry about with the Canadian media.......where, for example, “tax leakage” is a given, and investigative journalism is not. Another example where Harper put on a “stranglehold”. In this case the Canadian capital markets by arbitrarily limiting investor’s freedom of choice. That may have been a great outcome for those who lobbied for these measures (ie , BCE’s Michael Sabia, Gwyn Morgan and the Life company CEOs), but it corrupted our democratic system, destroyed $35 billion of Canadians’ savings and put $7.5 billion in annual tax revenue at risk.

I close with the words of Carol Goar of the Toronto Star, who is one breath says:

““Then there was the income trust fiasco. Harper's contradictory signals left investors reeling and seniors clutching shrunken nest eggs.”

And in another states:

“I didn't explore the possibility that [Flaherty] was lying [about tax leakage]. Perhaps I should have.”

Having made the first step to recovery, the second step would be to actually do something about it.