Canadian bank bailouts: The main stream media is catching up. LOL

 

CAITI  blogged about this THREE years ago, almost to the day, BACK WHEN IT MATTERED , in a piece entitled: It is patently FALSE for Harper to argue that we have not bailed out our banks

Banks got $114B from governments during recession

Support for banks 'more substantial than Canadians were led to believe': CCPA report

CBC News
Apr 30, 2012

Canada's biggest banks accepted tens of billions in government funds during the recession, according to a report released today by the Canadian Centre for Policy Alternatives.

Canada's banking system is often lauded for being one of the world's safest. But an analysis by CCPA senior economist David Macdonald concluded that Canada's major lenders were in a far worse position during the downturn than previously believed.

Macdonald examined data provided by the Canada Mortgage and Housing Corporation, the Office of the Superintendent of Financial Institutions and the big banks themselves for his report published Monday.

It says support for Canadian banks from various agencies reached $114 billion at its peak. That works out to $3,400 for every man, woman and child in Canada, and also to seven per cent of Canada's gross domestic product in 2009.

The figure is also 10 times the amount Canadian taxpayers spent on the auto industry in 2009.
"At some point during the crisis, three of Canada's banks — CIBC, BMO, and Scotiabank — were completely under water, with government support exceeding the market value of the company," Macdonald said.

"Without government supports to fall back on, Canadian banks would have been in serious trouble."
During October 2008 and June 2010, the banks combined to report $27 billion in profits on their balance sheets.

CMHC mortgage program aided banks

One of the most well-known ways in which policymakers helped the banks during the crisis is through a $69-billion CMHC program whereby the housing agency took mortgages off the balance sheets of big Canadian banks. In contrast with other support facilities, all of the funds granted by the CMHC were through selling assets (in this case mortgages) to the housing agency. They were not funds that had to be paid back.

The CMHC has provided the aggregate total of how much was given out, but has yet to release specifics on which banks sold how much to them, and when, the CCPA says.

When asked for comment in reaction to the CCPA report, the Canadian Bankers Association noted that the $69 billion that Canada's big banks sold into the CMHC program is in fact only 55 per cent of what was allocated for the program.

"Many of the mortgages were already insured and therefore, created no additional risk for the government," the CBA noted in an email to CBC News. The CMHC estimates that by the time the program is wound up, it will have generated $2.5 billion in profit as those mortgages are paid off, the bankers' group noted.

Calling the CCPA report "completely baseless," Department of Finance spokesperson Chisholm Pothier noted that the mortgage program has already generated more than $1.2 billion in net revenues for the CMHC's coffers.

But Canadian lenders also dipped into a program set up by the U.S. Federal Reserve aimed at providing cash to keep American banks afloat. CIBC and BMO took almost $3 billion each out of the fund, RBC and TD took out $8 billion and Scotiabank drew down almost $12 billion, the CCPA report found.

'These funding measures were not put in place because banks were in financial difficulty.'—Canadian Bankers' Association

That data came from the U.S. Federal Reserve, which released it publicly. But Macdonald's analysis found that Canadian banks got a comparable amount — $41 billion — from Bank of Canada facilities, an agency that has been far less transparent in sharing information.

"Despite Access to Information requests for the data, the Bank of Canada refuses to release it," the CCPA report states.

"The federal government claims it was offering the banks 'liquidity support,' but it looks an awful lot like a bailout to me," says Macdonald. "Whatever you call it, Canadian government aid for the country's biggest banks was far more indispensable than the official line would suggest.

"The support for Canadian banks was much more substantial than Canadians were led to believe," Macdonald said.

The Canadian Bankers Association disputes the notion that the funds in question were any sort of bailout, arguing they were routine transactions aimed at keeping the financial system liquid.

"These funding measures were put in place to ensure that credit was available to lend to businesses and consumers to help the economy through the recession," the CBA said. "These funding measures were not put in place because banks were in financial difficulty."

Since the start of the recession, the CBA notes 436 U.S. banks have failed. No Canadian financial institution went under, but Canada's banking sector was hit by an overall crisis of confidence in the banking sector that caused some of the banks' normal lending sources to dry up, the CBA says.
Canadian banks get about two-thirds of their funding from consumer and business deposits, but the other third comes from credit markets.

"It was these markets that were seizing up. Funding was less available," the CBA says. "Canadian banks continued to lend and increased their lending after some non-bank lenders pulled out of the Canadian market."

While some of the funding came from government sources such as the Bank of Canada, the bankers' association points out that the central bank itself says Canadian banks needed less official central bank liquidity support than their foreign counterparts.

"The credit was extended at competitive interest rates to protect taxpayers," Pothier said. "Financial institutions accepting this credit paid interest on the loans."

To show the scale of the funding, the CCPA report contrasted the total value of the support Canadian banks took against the bank's total value at the time. Under that comparison, CIBC received $21 billion in support — almost 1.5 times the value of the company at the time. BMO maxed out at $17 billion or 118 per cent, Scotiabank peaked at $25 billion or 100 per cent of its value, while TD and RBC maxed out at $26 billion and $25 billion — good enough for 69 and 63 per cent, respectively, of the total value of those companies at the time.

"It would have been cheaper to buy every single share in these companies," Macdonald said.
But the CBA disputes those numbers too, saying comparing a bank's value to the level with which it participated in a liquidity program aimed at boosting confidence in the market is "an apples to oranges comparison as the two factors are not at all related."

"The Oxford dictionary defines bailout as 'financial assistance to a failing business or economy to save it from collapse," the Canadian Bankers Association noted.

"That definitely was not the case here: not one bank in Canada was in danger of going bankrupt or required the government to buy an equity stake under taxpayer-funded bailouts."

The Jet That Ate the Pentagon

The Jet That Ate the Pentagon
The F-35 is a boondoggle. It's time to throw it in the trash bin.

BY WINSLOW WHEELER | APRIL 26, 2012

Foreign Policy Magazine

The United States is making a gigantic investment in the F-35 Joint Strike Fighter, billed by its advocates as the next -- by their count the fifth -- generation of air-to-air and air-to-ground combat aircraft. Claimed to be near invisible to radar and able to dominate any future battlefield, the F-35 will replace most of the air-combat aircraft in the inventories of the U.S. Air Force, Navy, Marine Corps, and at least nine foreign allies, and it will be in those inventories for the next 55 years. It's no secret, however, that the program -- the most expensive in American history -- is a calamity.

This month, we learned that the Pentagon has increased the price tag for the F-35 by another $289 million -- just the latest in a long string of cost increases -- and that the program is expected to account for a whopping 38 percent of Pentagon procurement for defense programs, assuming its cost will grow no more. Its many problems are acknowledged by its listing in proposals for Pentagon spending reductions by leaders from across the political spectrum, including Rep. Barney Frank (D-Mass.), Sen. Tom Coburn (R-Okla.), President Barack Obama's National Commission on Fiscal Responsibility and Reform, and budget gurus such as former Sen. Pete Domenici (R-N.M.) and Alice Rivlin, former director of the Congressional Budget Office and Office of Management and Budget.
How bad is it? A review of the F-35's cost, schedule, and performance -- three essential measures of any Pentagon program -- shows the problems are fundamental and still growing.

First, with regard to cost -- a particularly important factor in what politicians keep saying is an austere defense budget environment -- the F-35 is simply unaffordable. Although the plane was originally billed as a low-cost solution, major cost increases have plagued the program throughout the last decade. Last year, Pentagon leadership told Congress the acquisition price had increased another 16 percent, from $328.3 billion to $379.4 billion for the 2,457 aircraft to be bought. Not to worry, however -- they pledged to finally reverse the growth.

The result? This February, the price increased another 4 percent to $395.7 billion and then even further in April. Don't expect the cost overruns to end there: The test program is only 20 percent complete, the Government Accountability Office has reported, and the toughest tests are yet to come. Overall, the program's cost has grown 75 percent from its original 2001 estimate of $226.5 billion -- and that was for a larger buy of 2,866 aircraft.

Hundreds of F-35s will be built before 2019, when initial testing is complete. The additional cost to engineer modifications to fix the inevitable deficiencies that will be uncovered is unknown, but it is sure to exceed the $534 million already known from tests so far. The total program unit cost for each individual F-35, now at $161 million, is only a temporary plateau. Expect yet another increase in early 2013, when a new round of budget restrictions is sure to hit the Pentagon, and the F-35 will take more hits in the form of reducing the numbers to be bought, thereby increasing the unit cost of each plane.

A final note on expense: The F-35 will actually cost multiples of the $395.7 billion cited above. That is the current estimate only to acquire it, not the full life-cycle cost to operate it. The current appraisal for operations and support is $1.1 trillion -- making for a grand total of $1.5 trillion, or more than the annual GDP of Spain. And that estimate is wildly optimistic: It assumes the F-35 will only be 42 percent more expensive to operate than an F-16, but the F-35 is much more complex. The only other "fifth generation" aircraft, the F-22 from the same manufacturer, is in some respects less complex than the F-35, but in 2010, it cost 300 percent more to operate per hour than the F-16. To be very conservative, expect the F-35 to be twice the operating and support cost of the F-16.

Already unaffordable, the F-35's price is headed in one direction -- due north.

The F-35 isn't only expensive -- it's way behind schedule. The first plan was to have an initial batch of F-35s available for combat in 2010. Then first deployment was to be 2012. More recently, the military services have said the deployment date is "to be determined." A new target date of 2019 has been informally suggested in testimony -- almost 10 years late.

If the F-35's performance were spectacular, it might be worth the cost and wait. But it is not. Even if the aircraft lived up to its original specifications -- and it will not -- it would be a huge disappointment. The reason it is such a mediocrity also explains why it is unaffordable and, for years to come, unobtainable.

In discussing the F-35 with aviation and acquisition experts -- some responsible for highly successful aircraft such as the F-16 and the A-10, and others with decades of experience inside the Pentagon and years of direct observation of the F-35's early history -- I learned that the F-35's problems are built into its very DNA.
The design was born in the late 1980s in the Defense Advanced Research Projects Agency (DARPA), the Pentagon agency that has earned an undeserved reputation for astute innovation. It emerged as a proposal for a very short takeoff and vertical-landing aircraft (known as "STOVL") that would also be supersonic. This required an airframe design that -- simultaneously -- wanted to be short, even stumpy, and single-engine (STOVL), and also sleek, long, and with lots of excess power, usually with twin engines.
President Bill Clinton's Pentagon bogged down the already compromised design concept further by adding the requirement that it should be a multirole aircraft -- both an air-to-air fighter and a bomber. This required more difficult tradeoffs between agility and low weight, and the characteristics of an airframe optimized to carry heavy loads. Clinton-era officials also layered on "stealth," imposing additional aerodynamic shape requirements and maintenance-intensive skin coatings to reduce radar reflections. They also added two separate weapons bays, which increase permanent weight and drag, to hide onboard missiles and bombs from radars. On top of all that, they made it multiservice, requiring still more tradeoffs to accommodate more differing, but exacting, needs of the Air Force, Marine Corps, and Navy.

Finally, again during the Clinton administration, the advocates composed a highly "concurrent" acquisition strategy. That meant hundreds of copies of the F-35 would be produced, and the financial and political commitments would be made, before the test results showed just what was being bought.

This grotesquely unpromising plan has already resulted in multitudes of problems -- and 80 percent of the flight testing remains. A virtual flying piano, the F-35 lacks the F-16's agility in the air-to-air mode and the F-15E's range and payload in the bombing mode, and it can't even begin to compare to the A-10 at low-altitude close air support for troops engaged in combat. Worse yet, it won't be able to get into the air as often to perform any mission -- or just as importantly, to train pilots -- because its complexity prolongs maintenance and limits availability. The aircraft most like the F-35, the F-22, was able to get into the air on average for only 15 hours per month in 2010 when it was fully operational. (In 2011, the F-22 was grounded for almost five months and flew even less.)

This mediocrity is not overcome by the F-35's "fifth-generation" characteristics, the most prominent of which is its "stealth." Despite what many believe, "stealth" is not invisibility to radar; it is limited-detection ranges against some radar types at some angles. Put another way, certain radars, some of them quite antiquated, can see "stealthy" aircraft at quite long ranges, and even the susceptible radars can see the F-35 at certain angles. The ultimate demonstration of this shortcoming occurred in the 1999 Kosovo war, when 1960s vintage Soviet radar and missile equipment shot down a "stealthy" F-117 bomber and severely damaged a second.

The bottom line: The F-35 is not the wonder its advocates claim. It is a gigantic performance disappointment, and in some respects a step backward. The problems, integral to the design, cannot be fixed without starting from a clean sheet of paper.

It's time for Defense Secretary Leon Panetta, the U.S. military services, and Congress to face the facts: The F-35 is an unaffordable mediocrity, and the program will not be fixed by any combination of hardware tweaks or cost-control projects. There is only one thing to do with the F-35: Junk it. America's air forces deserve a much better aircraft, and the taxpayers deserve a much cheaper one. The dustbin awaits.

Dwight Duncan's downgrade

This is what happens when a Finance Minister (Dwight Duncan) follows the dictates of the few (Corporate CEOs) and  raises taxes on the masses (i.e. HST) and blows those billions in revenues on the few (corporate tax deductions) and with nothing to show for it, but this:

Moody's Downgrades Ontario Rating To Aa2

04/26/2012

TORONTO - Moody's Investors Service has downgraded Ontario's debt rating, citing the cash-strapped province's growing debt burden and risks in achieving its fiscal plan.
Ontario is facing a $15-billion deficit this year and the governing Liberals tabled a budget last month outlining their plan to re-balance the books in 2017-18.
Moody's says it's concerned about the government's ability to rein in spending and stay on track to achieve a balanced budget by 2017-18.
It says the fiscal plan rests largely on significant expenditure restraint.
But the province's expense growth targets appear to be "particularly ambitious," given the growth in expenses over the last five years.
As a result, Moody's says it's downgrading Ontario's issuer and debt rating to Aa2 with a stable outlook from Aa1 with a negative outlook, affecting $202 billion in debt securities.
Moody's put Ontario on credit watch last fall, before the austerity budget that limited government spending increases to just one per cent a year for the next five years.

Standard and Poor's did the same on Wednesday, revising its Ontario outlook from stable to negative

Flaherty: Can you say Fannie Mae, Freddie Mac?

CMHC set to be under OSFI supervision?

Garry Marr   

Postmedia News

Apr 25, 2012 

 With Canada’s dominant mortgage insurer running up against its massive coverage limit, the federal government appears set to announce Thursday how it will toughen oversight of the Crown corporation that buttresses the housing market and banking sector.

In late March, the federal budget took aim at supervision of Canada Mortgage and Housing Corp., which controls about 75% of the mortgage default insurance market. In Thursday’s budget implementation bill, Ottawa is expected say how this oversight will change.

CMHC now falls under the jurisdiction of the minister responsible for Human Resources and Skills Development Canada. But, as first reported by the Financial Post, Ottawa has been examining putting the Crown insurer under the direct supervision of the Office of the Superintendent of Financial Institutions — a powerful financial regulator with the power to enforce a broad range of actions.

The government said Wednesday it plans to introduce a law “to implement certain provisions of the budget,” according to a document known as the Notice Paper. Asked about the potential role of the Office of the Superintendent of Financial Institutions in overseeing CMHC, Jim Flaherty, the Finance Minister, told reporters “I’ll talk to you about that tomorrow. Tomorrow’s Thursday, right?”

CMHC is backstopped by Ottawa but is coming close to breaching its mandated insurance limit of $600-billion because of the red-hot housing market and so-called portfolio insurance for the banks.

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It’s this portfolio insurance — also dubbed “bulk insurance” and often referred to as “commercial activities” by the government — that the Finance Minister is most concerned about.

While speaking to reporters in February, Mr. Flaherty criticized the extent to which this commercial function of the CHMC had commandeered its lending capacity and core function.

“The issue that pushes them near their lending limit is the desire of some of the financial institutions to purchase portfolio insurance for their low ratio mortgages,” Mr. Flaherty said. “That’s not the way most people usually think of CMHC.”

Just three years ago, CMHC had $450-billion in loans it was backstopping and had to go to the government to get that increased to $600-billion.

The budget document itself provided few details about what action would take place, but suggested the government was concerned about the Crown corporation’s dealings with the banks and how it could affect the broader economy.

“The government will propose legislative amendments to strengthen oversight of CMHC and to ensure its commercial activities are managed in a manner that promotes the stability of the financial system,” the budget said.

There may also be details Thursday about a new covered bond program, which will be available to federally and provincially regulated mortgage lenders in Canada and administered by CMHC.

“A legislative framework will support financial stability by helping lenders find new sources of funding and my making the market for Canadian covered bonds more robust,” according to the budget.

The Finance Department said in a May consultation paper it was considering whether the law should encourage banks to secure covered bonds with uninsured mortgages. The federal government guarantees the full value of mortgages insured by CMHC and 90 percent of loans insured by private firms.

With files from Bloomberg News

The problem's not how they got there...it's how do you get them out?

Puttin' on the Ritz

Oda a top spender, but Ritz has biggest tab for trips and hospitality

Steve Rennie,
April 24, 2012

OTTAWA - Bev Oda may be in hot water for her champagne tastes, but by no means is she the highest-spending member of Prime Minister Stephen Harper's cabinet.

That distinction goes to Gerry Ritz. The agriculture minister has racked up the biggest travel and hospitality tab of any of his Conservative colleagues in recent years, largely because of trade missions that have taken him all over the globe.

It has cost $271,489 since March 2010 to send Ritz to such far-flung destinations as Italy, Turkey, Indonesia and Japan. He just edged out Finance Minister Jim Flaherty to claim the top spot.
In a sign that the Tories may be circling the wagons over expenses, two spokeswomen defended their minister's spending with boiler-plate responses, identical right down to the misspelling of the word "utmost."

"Our government treats taxpayers' money with the upmost (sic) respect and we require that travel on government business be done at the lowest possible cost to taxpayers," Ritz's spokeswoman, Meagan Murdoch, wrote in an email.

"Canadian agriculture exports hit record levels last year at $44 billion and the agriculture and agri-food industry provides one in eight jobs. This is due, in part, to Agriculture Minister Ritz's steadfast commitment to help farmers earn their money from the marketplace, not the mailbox."
Travel and hospitality costs for Flaherty, who also regularly travels abroad for meetings, came to $270,119.

His spokeswoman, Mary Ann Dewey-Plante echoed her colleague on spending rules:

"Our government treats taxpayers' money with the upmost (sic) respect and we require that travel on government business be done at the lowest possible cost to taxpayers."

Defence Minister Peter MacKay rounded out the Top 3 with expenses of $265,286. Like Flaherty, MacKay's job frequently takes him to international conferences as well as hot spots where Canadian troops are deployed.

"This minister has overseen Canadian Forces actions in Afghanistan, Libya and Haiti, demonstrated Canada's leadership in the world at NATO meetings and other major international conferences, and made it a priority to be in the field with the men and women who serve and sacrifice in Canada's name," MacKay's spokesman, Jay Paxton, wrote in an email.

"As a government, travel costs are down 15 per cent compared to the former Liberal government and hospitality spending is down by 33 per cent."

Another world traveller, Foreign Affairs Minister John Baird, reported $170,676 in expenses. Some of his expenses date back to his days as minister of transport and minister of the environment.

Oda, minister of International Co-operation, ranked fifth among all members of cabinet, with a travel and hospitality tab of $168,639. As the minister responsible for co-ordinating Canada's aid efforts for the world's poorest people, she often travels to international conferences and development projects in the field.

She has been under fire over a costly hotel upgrade she made during a visit to London last June. She repaid the cost difference and apologized, but the controversy shone new light on how cabinet ministers handle their own budgets at a time when the government is slashing spending and cutting public-service jobs.

Ministers are often required to travel in Canada and abroad and there are rules in place to govern spending on these trips.

For example, first-class flights are allowed for trips that take longer than nine hours. Ministers can also fly first class if they will be stepping off the plane right into meetings, if there is no business-class option or if they have a medical condition.

The federal government regularly publishes travel and hospitality expenses for ministers, political staff and some senior officials. The Canadian Press compiled a list of two years' worth of those costs for members of Harper's cabinet to put Oda's spending into context.

The priciest single trip was a 2010 visit by former foreign affairs minister Lawrence Cannon, to Kazakhstan, the United Arab Emirates, Afghanistan, Vietnam and Hong Kong. The 10-day jaunt cost $35,058 in airfare and $1,074 in accommodations.

Gordon O'Connor, minister of state and chief government whip, had the lowest travel and hospitality tab, with only $3,386 in expenses over the two-year period.

© The Canadian Press, 2012

Read it on Global News: Global Edmonton | Oda a top spender, but Ritz has biggest tab for trips and hospitality

What does the rest of Canada not understand, that women in Quebec do?

Conservative support among Quebec women plunges to 11%, scrapping long-gun registry a factor

A poll of Quebec voters this week found support for the federal Conservative Party has plunged to only 11 per cent among women voters in the province, and critics of the governing party say it is a direct result of the government’s decisions to scrap the long-gun registry and impose controversial initiatives in other justice and social issues, including the areas it chose to cut in $5.2-billion public service operations.

Prime Minister Stephen Harper’s government put into force last week to dismantle Canada’s long-gun registry. Forum Research pollster Lorne Bozinoff agreed it affected the voting intentions of women in Quebec, but said other factors have also contributed to a trend of lower support levels for the Conservatives among female voters compared to men.

Hill Times article continues here.

Andrew Coyne asks: "When governments lie, how do we respond?"

Andrew Coyne writes: The F-35 scandal — when governments lie, how do we respond?
Well Andrew, this same government has been lying since that fateful day on October 31, 2006 when they decided to renege on their 2006 campaign election promise to "never tax income trusts". Their rationale for reneging? Income trusts cause tax leakage they said. As any credible financial institution (eg, RBC Capital Markets, BMO Capital Markets, Pricewaterhouse Coopers, HLB Decision Economics) would have told you, income trusts do not cause tax leakage. In fact the opposite is true, income trusts maximize the government's take of corporate profits. Just ask someone like senior ex Finance official Len Farber.

So to your question of "how do we respond", well, your response back in October 2006 was to agree with the government and support their patent lie that income trusts cause tax leakage. You missed your opportunity five years ago to call this government what it is.....incompetent liars.

You (along with many in the press) are part of the problem, and not the solution. Reporting the truth is not a selective or subjective exercise, it is an objective exercise and absolute. Otherwise it is just propaganda.

NRA Pushed for 'Stand Your Ground' Laws

As described in the article below, the "stand your ground" law that has become infamous because of the Trayvon Martin murder in Florida is legislation that was passed because after intense lobbying by the NRA (National Rifle Association) in various states throughout the US, incuding Florida while Jeb Bush was governor.

Meanwhile here in Canada we have our own vigilante loving Prime Minister who goes out of his way (without having all the facts), to praise the latest vigilante to come to the fore to wit:PMO calls restaurateur who fought suspected thief



NRA Pushed for 'Stand Your Ground' Laws
By Michael Ono
ABC OTUS News – Sat, Mar 31, 2012


Do a quick search for "Stand Your Ground" on the National Rifle Association's website and the first video result features the story of a Florida man exonerated of murder charges in January 2012 under the State's "Stand Your Ground" law. That video's segment is titled "Hero of the Day."

The NRA lobbied for "Stand Your Ground" in the past and has yet to comment on the controversy surrounding the killing of Trayvon Martin by George Zimmerman, a case in which Florida's version of the law could play a pivotal role if it ever goes to trial.

The pro-gun group championed the passage of the original law in Florida back in 2004 and lobbied to pass similar legislation in other states, according to the Center for Public Integrity. In light of the recent controversy, the NRA has stalled its lobbying efforts in to pass the law in Alaska, according to Bloomberg News.

"Stand Your Ground" laws state that a person can use lethal force if that person feels at all threatened. Versions of the law have been passed in 25 states, but Florida's is considered to be the most aggressive.

Florida Gov. Rick Scott has convened a task force to examine the state's law, and Congressional Democrats have expressed great concern with the statute.

No mainstream Republican groups or pro-gun groups have spoken out to defend the law since the fatal shooting of the unarmed teen by a self-appointed neighborhood watch captain, although concerns have been expressed on many conservative blogs that the controversy will lead to an attack on the rights of gun owners.

A Wall Street Journal analysis today found that killings classified as self-defense doubled from 2000 to 2010, although the Journal also points out that there haven't been extensive studies done on the "Stand Your Ground" law so it is not clear whether those laws are responsible for the increase in self-defense killings.

Harper's HST skyrockets the number of tax cheats (as predicted)

Millions of tax cheats going undetected by revenue agency: Auditor-General

Postmedia News
Apr 3, 2012
By Jason Fekete

OTTAWA — The Canada Revenue Agency is unable to adequately assess and track potentially millions of tax cheats in the country because of lack of resources, and weak oversight and enforcement practices, the federal Auditor-General said Tuesday.

In his first report as Canada’s Auditor-General, Michael Ferguson highlighted several areas of improvement for the Canada Revenue Agency in how it monitors and enforces cases where individuals and corporations fail to file tax returns, and where businesses fail to register for the Goods and Services Tax (GST) or Harmonized Sales Tax (HST).

“The Agency continues to struggle to develop measures that demonstrate its effectiveness in addressing filing or registration compliance,” the Auditor-General said.

The CRA has identified the “underground economy” — commercial activity that’s unreported for tax reasons — as one of the biggest risks it faces, yet the auditor found the agency is unable to determine how effective some of its enforcement measures are in recouping unpaid income taxes. Officials wouldn’t say how much federal revenue is potentially being lost from tax cheats.

The agency has limited resources to pursue all non-filers and non-registrants — its program budget for tracking tax cheats was $39 million of the CRA’s $4.5-billion total budget in 2010-11 — so it has developed a risk-scoring model to identify which cases to pursue.

The CRA hasn’t tested its screening to determine whether the cases it chooses not to address — from among the initial 2.5 million to three million individuals initially identified as non-filers — should in fact be pursued.

“The Agency does not know if its risk-scoring process is as effective as it could be,” the auditor general’s report says.

The Auditor-General examined businesses identified as potential GST/HST non-registrants between April 2009 and March 2011 and found “the Agency cannot manage the volume” of the roughly 185,000 potential non-registrants its automated system identifies.

“The Agency has the capacity to review about half of these files,” the report says. “The Agency does not know if its selection methods to pursue potential GST/HST non-registrants are effective.”

Furthermore, the CRA’s performance measures do not provide information about the impact of the enforcement program or whether it has met its objective of ensuring high levels of taxpayer compliance.

For each of the 2009-10 and 2010-11 fiscal years examined, the non-filer/non-registrant program generated $2.8 billion in additional taxes and penalties. In those same years, individual filing compliance was about 93 per cent, much higher than that of corporations (about 85 per cent).

The Auditor-General made four recommendations to the CRA:

• Determine the effectiveness of its selection and rejection process for non-filers and non-registrants;

• Implement a robust risk-assessment system to prioritize its file selection;

• Follow through on previous commitments to develop meaningful performance measures; and

• Include its research findings in its planning and reporting to effectively manage the risk of potential tax cheats.

F35's: Harper's latest exercise in Lie. Conceal. Fabricate

Liberal Press Release
For Immediate Release
April 3, 2012

Harper Duplicity Clearly Exposed by Auditor General Report on F-35

OTTAWA– The Auditor General’s harsh assessment of the mismanaged F-35 procurement process has exposed the pattern of duplicity and stonewalling that has become the hallmark of the Harper Conservatives.

“Our caucus raised a red flag on this issue nearly two years ago,” said Liberal Leader Bob Rae. “On everything from the Conservatives’ initial decision to sole-source the multi-billion dollar purchase – the largest in Canadian history – to their blatant dishonesty on the existence of a ‘contract’, to their stubborn refusal to admit to the technical and financial problems facing the F-35 joint strike fighter program, and finally, to the contradictory stories from the Prime Minister, Minister of Defence and now Associate Minister of Defence, the Harper Conservatives have completely misled the Canadian public.”

Liberals warned of problems with the F-35 program well before the last election, and this wild spending – estimated to cost every Canadian about $1,000 – and their refusal to tell the truth and share facts with the House of Commons led directly to the government losing the confidence of the House of Commons last March. During the campaign that followed, Stephen Harper misled Canadians saying he had a contract protecting Canada from escalating costs and guaranteeing industrial benefits. We know now that no contract exists, and the report of the Auditor General confirms that the Conservative government is still unaware of the true cost of the F-35 and has ignored the risks related to this acquisition that have made many of Canada’s NATO allies scale back or rethink entirely their purchase of these planes.

“The Harper Conservatives have done nothing but stonewall and withhold vital information from Canadians,” said Liberal Defence critic John McKay. “Now they appear ready to throw bureaucrats and our armed forces under yet another bus, but Canadians won’t be fooled. Responsibility for this fiasco lies squarely on the Prime Minister’s desk. Other NATO governments shared facts, told the truth and allowed for public debate. The Harper Conservatives tried to hide the truth, attacked their political opponentsand have refused to come clean. They are still refusing to do so. Their conduct has been nothing less than disgraceful and the fault lies with one man, whose style of leadership has been exposed for all to see in this report."


-30-

Is this what Harper has in mind by fast tracking resource projects?

Last week's budget had Harper fast tracking resource projects (in his desperate attempt at creating jobs at the expense of all other considerations). Is this what Err Harper had in mind?

China must improve its construction record
Diane Francis
Financial Post
Mar 31, 2012

Chinese companies should be banned from construction work in Canada because of their questionable track record here and around the world.

It was shocking that Enbridge Inc.’s Pat Daniel said his company was willing to allow a Chinese company to buy a stake in and to bid for the construction of the proposed Northern Gateway oil sands pipeline.

Not only should Chinese companies be banned from construction or bidding but Investment Canada should ban them from buying resource companies or related assets.
China’s strategy is to buy resources around the world, then low-ball to get construction contracts by using Chinese laborers and materials. This is not only damaging to the domestic economy, and unnecessary, but in some cases laws and obligations have been flouted.

Just for the record, my husband heads Canada’s largest infrastructure and construction public company in Canada.

In 2007, Sinopec Shanghai Engineering Company brought in 132 Chinese workers to an Alberta oil sands site to assemble their storage tanks and do other work. Two workers were killed and several injured. The remaining Chinese workforce was moved out of Alberta and work stopped.

The Alberta government charged Sinopec, its subsidiary and their oil sands client with 53 safety charges. Sinopec and its branch plant have refused to appear in court. They say they have not been served papers because they are in China where they cannot be served papers to appear in court. Instead of acceding to Canadian law, they have not appeared.

In November, an Alberta Court of Appeal ruled the company must stand trial on these serious charges. In February, Sinopec said it wants the Supreme Court of Canada to overturn this ruling because it should be exempt.

The 132 Chinese workers were not paid an estimated $3.17 million by their Chinese employer even though they worked four months before the accident. Alberta employment standards spokesman Barrie Harrison said that the prime contractor, the Canadian oil sands project client, put the $3.17 million in wages and benefits in trust even though it had no obligation to do so.

In an interview last year, Harrison said: “We are still trying to determine the best, most secure method of returning these funds to the workers, who are now either back in China or working at other sites around the world. We’ve had nothing new to report on this file for quite some time.”

The Canadian embassy in Beijing has been involved in trying to right this wrong, at taxpayer expense.

This outrageous behavior by China and its companies should be reason enough to ban Chinese companies from bidding on construction work or having workforces in Canada. After all, a major corporation has no respect for the rule of law here; has damaged Chinese workers; damaged its Canadian client; cost the taxpayers of Alberta a great deal of money to try and clean up the mess and prosecute wrongdoing and has cost the taxpayers of Canada, Canada’s immigration department and Canada’s justice system as well.

This behavior is not unique to Canada.

Shoddy work and broken promises have occurred elsewhere. In Angola, in July 2010, more than 150 patients had to be evacuated from a new Chinese-built hospital in Luanda, after its walls began cracking and bricks began disintegrating. China Overseas Engineering Group Co. (COVEC) built the hospital for $8 million. Reports began to come out in the local media that many roads, schools, hospitals and other infrastructure completed by the Chinese were sub-standard or unsafe and promises to employ Angolans were not kept.

Another example was reported in 2010. The Chinese were finally able to penetrate the European Union when COVEC won a bid to build a major highway in Poland by bidding less than half the price of domestic contractors. This caused consternation across the EU because of Chinese tactics around the world. The pattern is well worn: Chinese firms low ball to beat out local competition then bring in substandard materials and workers from China.

The Poles were committed to tender bidding for the contracts, and were stuck with accepting COVEC’s basement bid but were wise to the tactics. So they stipulated that the company could not import Chinese materials, supplies or labour.

But COVEC reportedly flouted this requirement and started to bring in Chinese workers anyway, claiming that Polish workers were not cooperative and would not take pay cuts.
Then they began sourcing supplies from China, claiming Polish suppliers refused to match Chinese prices.

In June 2011, COVEC stopped work. Poland sued COVEC for $271 million in damages for breach of contract. And the country has had to spend huge amounts to complete the highway in time for the 2012 European Football Championships in Poland this summer. COVEC told China Daily it was asking for compensation.

For these reasons and more, Canada must ban any bidding or work permits to Chinese workforces. They simply are not acceptable. They are also not the only buyers for oil sands production. A pipeline can deliver oil to the west coast and then to Asian and South American markets by sea.

In that case, let's make it 2 out of 3!

This Brazeau guy reminds me of that Monty Python skit, in which the loser doesn't know when (or have the class?) to call it quits

Beaten, Brazeau wants a rematch with Trudeau

Clown journalist Don Martin finds his courage in the bottle.

Don Martin is forever making references to drinking (including in a recent interview with Jim Flaherty) and being at the local watering hole, which proves to be very revealing of his character and his prime interest. Evidently Don Martin finds his courage in a bottle, which may explain this tirade against his boss (assuming it actually happened), since none of his courage in evident in any of his reporting.

If all of this alleged incident leads to Don's dismissal, then I guess Tom Clark will have the last laugh. Tom Clark being the person who Don Martin replaced after CTV decided they wanted a lap dog to replace Mike Duffy, rather than a real journalist.

Speaking of lap dog, you need only look at the interview that Don Martin had recently with Jim Flaherty, complete with a gift neck ties for Jim Flaherty. How many serious journalists give gifts to their interviewees? That is more derserving of his dismissal than anything, but then we are talking about the Conservative Television (CTV), afterall.


CTV host allegedly tells boss to f--- himself
By David Akin ,Parliamentary Bureau Chief
Toronto Sun
March 31, 2012

CTV appeared to be considering disciplinary action for one of its high-profile Parliament Hill television hosts in the wake of an incident Thursday night at a post-budget party attended by Finance Minister Jim Flaherty and other top government and opposition politicians.

Don Martin, the host of Power Play, a political talk show on CTV News Channel, was not on-air Friday as CTV officials spent the day trying to determine what Martin may or not may have said about George Cope, chief executive officer of Bell, the conglomerate that owns CTV.

At the party, held at a restaurant a block from Parliament Hill, Martin is alleged to have engaged in a verbal altercation with Dimitri Soudas, the former director of communications for Prime Minister Stephen Harper and now the executive director for communications for the Canadian Olympic Committee. During the course of that altercation, Martin is alleged to have told Soudas that he and Cope could “Go f--- yourselves”. Neither Cope nor his son Blair, who works with Soudas at the Canadian Olympic Committee, were present at the time. But the remark was made in front of some senior government officials, cabinet ministers, and MPs, according to individuals who witnessed the altercation and agreed to provide a description on condition they not be identified.

Some of those present for the altercation believe Martin did not say anything disparaging about Cope. They also say that Martin quickly apologized to Soudas for disparaging comments he allegedly made about him.

Neither Martin nor Robert Fife, CTV’s Ottawa bureau chief and executive producer of Power Play, responded to queries.

Soudas also declined to comment.

CTV’s vice-president and director of communications Scott Henderson declined to comment on Martin’s status.

CTV is part of the 2012 Olympics Canadian broadcast media consortium.