Monthly Archives: January 2015

Jan 16 2015
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Culture, Economy, Media

For a prominent prognosticator, no easy answers in the year ahead

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Reading The Economist’s redoubtable annual turn as Nostradamus, we will be forgiven if we emerge shocked, appalled and fundamentally confused.

After all, this is what the western world’s leading print pundit of fair-market capitalism does best: perplex.

“The World in 2015” imparts much the same wisdom as the various “Worlds” the magazine has published since big-picture, 30,000-foot views became both the sage and financially responsible way to board-up the bottom lines of publications heading into the otherwise preoccupied end-of-year times, just around the Christian holidays.

In the early 1980s, at the Globe and Mail’s Report on Business, these annual numbers were considered essential reading for cub reporters – just as important, for example, as the Canadian Securities Institute’s textbooks for aspiring investment, dealers, brokers and floor traders.

And as metro and national beat scribblers might have tucked into Charles Dickens, while the snow fell gently on the gritty curbs of downtown Toronto, we trenchers at the ROB studiously perused the writings of Walter Bagehot, The Economist’s preeminent editor (between 1860 and 1877) for clarity about the how the world’s financial systems worked then, and perhaps now, to sadly little avail.

Complexity is, of course, the essential nature of modernity. And accepting intricacy – nay, embracing it – in the affairs of men and women of good conscience is, arguably, what The Economist does best (hence, the name of the publication). In this regard, the 2015 outlook edition does not disappoint.

In his piece, the magazine’s editor-in-chief, John Micklethwait, writes, “Of all the predictions to be made in 2015, none seems safer than the idea that across the great democracies people will feel deeply let down by those who lead them. In Britain, Spain and Canada, elections will give voters a chance to unleash some of those frustrations.”

Are you listening Messrs. Harper, Mulcair and Trudeau? How about you, Barack Obama, one-time savior of the disavowed?

“The levels of unpopularity and disengagement in the West have now risen to staggering levels,” Micklethwait continues. “Since 2004 a clear majority of Americans have told Gallup that they are dissatisfied with the way they are governed, with the numbers of those fed-up several times climbing above 80 per cent (higher than during Watergate. Britain’s Conservative Party, one of the West’s most successful political machines had three million members in the 1950s; it will fight the (general) election in May with fewer than 200,000.”

So, then, we may reasonably assume, democracy is on the run.

But, wait, here’s what The Economist’s foreign editor, Edward Carr, writes in the same issue:

“Look on the bright side. . .Armed with more realistic expectations, optimists can point to three reasons for hoping for something better in 2015. The first is that democracies take time to respond to new threats and dangers, but when they do they tend to be committed to their new policies. . .The second reason to temper pessimism is adaptation. . .In 2015, China and Japan will begin to put aside their differences. Not because either is willing to give ground on their in their long-running territorial dispute over some rocky outcrops in the East China Sea, but because both need the economic boost from sustained trade and investment between them. . .The third reason concerns America. . .(Some have said) that (Barack Obama) is weak and distracted, and others (have said) that the United States is falling into decline. The charges distort Mr. Obama’s thinking and vastly overstate America’s loss of power.”

In fact, it’s hard to argue with a five-year recovery that has returned five million jobs to the biggest economy on the planet, reduced unemployment to below 5.6 per cent, and goosed annual GDP growth (in that country) to between three and 3.5 per cent over the next 15 months.

Perplexing, indeed.

Are we going to hell in a hand basket; or are we at the cusp of a new age of fair-market capitalism, powered by democracy movements that fully appreciate the role that healthy public institutions play in realizing their peaceful, common goals?

Let us dust off our crystal balls, for all the good they will do us.

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Jan 14 2015
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Business, Media

For a prominent prognosticator, no easy answers in the year ahead

DSC_0058

Reading The Economist’s redoubtable annual turn as Nostradamus, we will be forgiven if we emerge shocked, appalled and fundamentally confused.

After all, this is what the western world’s leading print pundit of fair-market capitalism does best: perplex.

“The World in 2015” imparts much the same wisdom as the various “Worlds” the magazine has published since big-picture, 30,000-foot views became both the sage and financially responsible way to board-up the bottom lines of publications heading into the otherwise preoccupied end-of-year times, just around the Christian holidays.

In the early 1980s, at the Globe and Mail’s Report on Business, these annual numbers were considered essential reading for cub reporters – just as important, for example, as the Canadian Securities Institute’s textbooks for aspiring investment, dealers, brokers and floor traders.

And as metro and national beat scribblers might have tucked into Charles Dickens, while the snow fell gently on the gritty curbs of downtown Toronto, we trenchers at the ROB studiously perused the writings of Walter Bagehot, The Economist’s preeminent editor (between 1860 and 1877) for clarity about the how the world’s financial systems worked then, and perhaps now, to sadly little avail.

Complexity is, of course, the essential nature of modernity. And accepting intricacy – nay, embracing it – in the affairs of men and women of good conscience is, arguably, what The Economist does best (hence, the name of the publication). In this regard, the 2015 outlook edition does not disappoint.

In his piece, the magazine’s editor-in-chief, John Micklethwait, writes, “Of all the predictions to be made in 2015, none seems safer than the idea that across the great democracies people will feel deeply let down by those who lead them. In Britain, Spain and Canada, elections will give voters a chance to unleash some of those frustrations.”

Are you listening Messrs. Harper, Mulcair and Trudeau? How about you, Barack Obama, one-time savior of the disavowed?

“The levels of unpopularity and disengagement in the West have now risen to staggering levels,” Micklethwait continues. “Since 2004 a clear majority of Americans have told Gallup that they are dissatisfied with the way they are governed, with the numbers of those fed-up several times climbing above 80 per cent (higher than during Watergate. Britain’s Conservative Party, one of the West’s most successful political machines had three million members in the 1950s; it will fight the (general) election in May with fewer than 200,000.”

So, then, we may reasonably assume, democracy is on the run.

But, wait, here’s what The Economist’s foreign editor, Edward Carr, writes in the same issue:

“Look on the bright side. . .Armed with more realistic expectations, optimists can point to three reasons for hoping for something better in 2015. The first is that democracies take time to respond to new threats and dangers, but when they do they tend to be committed to their new policies. . .The second reason to temper pessimism is adaptation. . .In 2015, China and Japan will begin to put aside their differences. Not because either is willing to give ground on their in their long-running territorial dispute over some rocky outcrops in the East China Sea, but because both need the economic boost from sustained trade and investment between them. . .The third reason concerns America. . .(Some have said) that (Barack Obama) is weak and distracted, and others (have said) that the United States is falling into decline. The charges distort Mr. Obama’s thinking and vastly overstate America’s loss of power.”

In fact, it’s hard to argue with a five-year recovery that has returned five million jobs to the biggest economy on the planet, reduced unemployment to below 5.6 per cent, and goosed annual GDP growth (in that country) to between three and 3.5 per cent over the next 15 months.

Perplexing, indeed.

Are we going to hell in a hand basket; or are we at the cusp of a new age of fair-market capitalism, powered by democracy movements that fully appreciate the role that healthy public institutions play in realizing their peaceful, common goals?

Let us dust off our crystal balls, for all the good they will do us.

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Jan 13 2015
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Culture, Democracy, Media

Testing the meaning of tolerance

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Irony is, after all, its stock in trade.

How surprising is it, then, to learn that, just before the fatal attacks on 12 of its staffers last week, the French satirical organ, Charlie Hebdo, was well on its way to organ failure – the victim of falling sales and dwindling readership?

Now, it will live forever, not so much as a worthy compendium of political commentary and provocative humour, but as a symbol of French resistance to tyranny. (Not exactly what the gang of murderous thugs, brandishing kalashnikovs and invocations to the prophet Muhammad, was hoping to achieve).

Then, of course, around the world there were organized marches in memoriam for the dead and in solidarity for the principles of free speech. In the City of Lights, alone, gathered a throng of 1.5 million comprising people from all walks of life – some deserving to attend; some, in the opinion of many, not so much.

According to a piece in the Guardian online, “Press freedom campaigners condemned the presence of world leaders attending the unity rally in Paris on Sunday who have poor records on human rights and the free press in their home countries. Reporters without Borders singled out leaders from Egypt, Turkey, Russia, Algeria and the United Arab Emirates (UAE), as being responsible for particularly harsh environments for journalists. These countries rank respectively 159th, 154th, 148th, 121st and 118th out of 180 countries in terms of press freedom in a league table compiled by the group.

“‘We should show solidarity with Charlie Hebdo without forgetting the world’s other Charlies,’ said Christophe Deloire, secretary general of the campaign group. ‘It would be intolerable [if] representatives from countries that reduce their journalists to silence profit from this emotional outpouring to. . .improve their international image. . .We should not allow the predators of the press to spit on the graves of Charlie Hebdo.’”

Naturally, this said nothing about the quality of the publication’s satire, itself – a topic that has, understandably, garnered little attention ever since Paris conferred honorary citizenship on the magazine, the national government announced a bail-out fund of one million euros so it can, in the words of French Culture Minister Fleur Pellerin, “continue next week and the week after that and the week after that.”

Indeed, reported Reuters, “Albert Uderzo, the 87-year-old who created the famed French comic character Asterix, announced he would come out of retirement to help illustrate the irreverent weekly, which plans to print a million copies of its next edition next Wednesday.”

All of which may have irked Atlantic magazine writer Scott Sayare into penning a rare online screed. “Charlie’s hope, according to its editors, is to show believers the folly of their faith,” he writes. “This can hardly be called an undertaking of tolerance, that other virtue of liberal democracy.”

In fact, he jabs, “the impulse to consecrate Charlie Hebdo in a moment of horror and anger – an impulse felt far beyond France – is eminently comprehensible. But one may mourn the dead and condemn their senseless slaughter, and hail their courage in carrying out a mission in which they deeply believed, without celebrating the magazine for virtues it did not espouse.”

Frankly, he notes, “until the killings, Charlie Hebdo was not much celebrated or even particularly valued – publicly, at any rate – by the French, though the many slander cases brought against it came with a certain amount of publicity; as of 2012, its weekly print run was about 60,000 copies, about a tenth of what the country’s most popular news weeklies sell. . .Charlie Hebdo is not a racist publication. . . The magazine is, however, intolerant of religion and believers of all sorts, and smug in those anticlerical convictions. Dialogue with its opponents was never of much interest, and it has repeatedly chosen to target some of France’s most vulnerable inhabitants for provocation. . .It is a publication that champions its speech rights with all the crude prurience and vitriol and rhetorical excess the law permits.”

And yet, one could argue persuasively, that it is precisely such coarseness – once, not very long ago, dismissed and derided by the French establishment – that has galvanized, through tragedy, a nation and much of the western world.

How brutally ironic, indeed.

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Jan 12 2015
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Economy, Government

New Brunswick’s future: an axe, a prayer and good wireless

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Asking the hoi polloi what the political elites must do to keep the status quo from dissolving before the eyes of the common man and woman is standard strategy for first-term governments in the early stages of what they dread will be a crushing disappointment to everyone, including themselves.

Still, New Brunswick Premier Brian Gallant (four months old in electoral years) does it with such earnest panache, you can almost believe the words that issue from his  near-perfect mouth.

Almost.

“We need all New Brunswickers to participate with their ideas, suggestions and concerns so we can have a dialogue about how we are going to get our finances in order in this province,” he told a press conference in Fredericton last week.

“In the next few months, we will have a very open dialogue that will be fruitful. . .I am asking all New Brunswickers to give us their two cents, to give us their ideas, suggestions and concerns so we can come up with the best policies to help us get our finances in shape. . .Everything is on the table.”

Oh really, Mr. Gallant?

How do you feel about the HST?

A two-percentage-point hike in the consumption tax of this province would reap roughly $65 million a year for New Brunswick’s public coffers. Over your four-year mandate, that would amount to $260 million – plenty of good scratch to justify a moratorium (a word with which I am sure you are familiar) on hikes to personal, business, corporate and property taxes.

And yet, messing with the HST has proven to be political suicide across this great, self-aware, enlightened country of ours, ever since Paul Martin proved it could be done at great expense to his own and his party’s career. Sure, he managed to balance the national accounts in the mid-1990s – a feat for which Canadians never forgave him – but not before “reform-minded” barracudas from the west successfully labelled him a card-carrying “tax-and-spender”. The mud stuck and, of course, the rest is history.

So, then, if not the HST, how about highway tolls?

As you, yourself, have said, New Brunswick is fairly brimming with roads and thoroughfares – from the southeast to the southwest, from the north to the netherlands of moose country, where anyone who owns an ATV or snowmobile happily careens to his or her little parcel of pastoral heaven at whim.

Meanwhile, Mainers, Quebecers, Prince Edward Islanders, and Nova Scotians merrily trundle along our corridors, paid with local tax dollars, to points beyond our borders with nary a concern for such esoterica as infrastructure, stopping only to take in a view, gobble a piece of homemade blueberry pie, belch, and be on their way.

But just try to raise the possibility of tolling these folks.

It looks good on paper, sure. Still, remember what happened the last time this option carried serious weight in government.

“Finance Minister Blaine Higgs is acknowledging that putting tolls on provincial highways is an idea he is examining as the New Brunswick government tries to dig itself out of an $820-million deficit,” the CBC reported back in 2011.

“Higgs was urged to consider the imposition of highway tolls at a pre-budget meeting in Fredericton. . .The finance minister said many people have indicated during the pre-budget consultations and surveys that they are willing to pay highway tolls as a way to whittle down the province’s substantial deficit. And he conceded the policy is ‘something that is of interest.’”

What happened to Higgs? What happened to his boss, David Alward?

Enough said.

Perhaps, then, the solution to New Brunswick’s fiscal problem lies squarely on the cutting edge of the agenda.

Eliminate hospital services; curtail educational programs; fire the province’s civil servants; give everyone who remains an axe, a cord of wood, a holy bible, and a prayer, and send them off into the fine woodlands they so evidently cherish, there to build new, pioneer lives for themselves, all over again.

And when the hoi polloi, crushingly disappointed by Mr. Gallant’s earnestly failed efforts to keep their status quo plumply intact, come mewling, perhaps the besieged premier might finally say:

“Yeah. . .log cabins don’t come equipped with Netflix. Read your damn social contract, for a change.”

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Jan 12 2015
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Democracy, Law, Society

Tragic lessons from the desks of Charlie Hebdo

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If the barbarians who slaughtered 12 people at France’s satirical magazine, Charlie Hebdo, last week thought they were killing free speech at the point of their automatic rifles, they were sorely, absurdly mistaken.

Nothing ignites the fire of democracy in the belly of open – too often, casually complacent – societies than the massacre of innocents.

And, make no mistake, despite their habitual, even offensive, run at the world’s religions, the editors, writers and political cartoonists who died at the hands of a cadre of Islamic fundamentalists were, by any reasonable comparison with their assailants, utterly guiltless.

The wits and wags of Charlie Hebdo used their minds and pens to poke holes in the dangerous dogmas and priggish pomposities of their targets of derision. They didn’t grab guns and blow away their ideological nemeses like so many deer caught in the headlights of fanatical blood-lust.

As the still-civilized world mourns the obscene events in Paris, it also stands firm and united in its determination to, again, enshrine the principles of a free press as a requisite condition of an unfettered and enlightened society.

Canadian editorial cartoonists – marking the passing of four of their French peers – have come forward, joining their voices with hundreds of others around the world.

As CTV reported on Thursday, “In Halifax, Michael De Adder and Bruce MacKinnon both drew poignant pieces for the murdered. De Adder’s cartoon showed a hand writing out the words, ‘freedom of speech,’ with extremists trying to stop the hand from completing the words. . .MacKinnon’s showed a tattered French flag flying at half-mast, with a pencil serving as a flagpole.”

Said Bruce: “As negative and traumatic as this is, it has the opposite effect because it proves our relevance. It shows that what we do has an effect and does matter.”

Added Mike: “I’m actually more jazzed to continue what I’m doing.”

Their colleague, Edmonton Journal cartoonist Malcolm Mayes, praised his fallen, overseas comrades for their courage in the face of numerous threats over the past several years from would-be – now confirmed – Islamic terrorists.

To CTV, he said, “They weren’t cowed, they weren’t afraid. They stood their ground and that’s what people have to do in the face of threats like this. . .I’m not going to change the way I draw or change my opinion because someone threatens me.”

Opined Terry Mosher (a.k.a. Aislin), who made his professional bones afflicting the comfortable and comforting the afflicted on the editorial pages of the Montreal Gazette: “Satire is poking fun and questioning hopefully all of our institutions and our attitudes. Nothing is ever 100 per cent right. So the whole purpose of satire is to test your system and see if we can poke fun at these things and question them – obviously, I believe in that very strongly.”

Sadly, too many young, radicalized thugs around the world simply do not share similar values. Even more lamentable is that some of them possess the means and the opportunity to wreak havoc – on the societies that have accepted them without much compunction – at will.

We can, of course, react with force – hunting down likely perpetrators George W. Bush-style, throwing them into internment camps, subjecting them to state-sanctioned torture, and conveniently forgetting where we left the keys to their locked cages.

We can, naturally, launch drones to blow up their enclaves and, in the process, a few thousand innocent bystanders and call that “collateral damage”.

Or we could take to the generally safe streets we call home – as millions have over the past few days since the Charlie Hebdo tragedy – and declare that freedom is a universally accessible commodity; that speech is the mechanism of democracy; that live ammo is the last resort of a peaceful, productive civilization just as it is the first of an authoritarian, paranoid one.

We could take a breath and remember to get back to the hard, sometimes perillous, work of promulgating the worthy, essential notion that the free expression of ideas defines us as thinking humans, not killers or murderers or vile barbarians.

Those who died at the offices of Charlie Hebdo understood this. They weren’t martyrs. But they were heroes of democracy, and our memories of them will live longer than those we now revile of the savages who ended their lives.

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Jan 09 2015
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Democracy, Politics

Are we becoming a nation of political quitters?

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It is entirely possible, if stunningly depressing, that mainstream politicians in Canada are finally listening to those they purport to represent: the disenfranchised us.

For years, the disenfranchised us have spoken from all points on the political spectrum about the fundamental corruption of ideas sacrificed at the altar of partisanship; about the seedy incompetence that infects all levels of elective office; about the unseemly horse-trading of democratic principles between ancient interests that masquerades as fair, just and equal representation.

For years, the disenfranchised us have voted with our voices and our feet: Loudly decrying the steady perversion of a system that no longer appears to be built for us and steadfastly withholding our mandates at the ballot boxes by refusing to participate in a process we consider rooked and ruined.

Now, many who have thrown their hats into the political arena in recent years are scooping up their dusty, battered head-toppers and loping home in rueful agreement with the great unwashed they all-too-often ignored.

Some quietly.

Some, not so much.

“Looking back, I, like so many people, got into politics thinking I knew a lot,” Graham Steele, Nova Scotia’s former NDP finance minister in the defeated Darrell Dexter government, told the Globe and Mail’s Jane Taber last fall.

“What I knew a fair bit about was public policy – and what it takes you a long time to learn is how public policy gets twisted and distorted and eventually you get taken over by the desire to win, to be re-elected.”

Taber’s interview coincided with the release of Steele’s memoir, What I Learned about Politics, and her excerpts from that work were as equally revealing as was her intrepid report of the man’s late-season remorse and regret:

“There was hardly any point to who sat in my chair or who was on which side of the House. None of us was dealing with the real issues. There was no fundamental difference between us. . .Like the sex drive among primates, the drive to be re-elected drives everything a politician does. . .Spend as little time as possible at the legislature. There are no voters there, so any time spent is wasted.”

What’s more, he writes, “Keep it simple. Policy debates are for losers. Focus on what is most likely to sink in with a distracted electorate: slogans, scandals, personalities, pictures, image. Find whatever works, then repeat it relentlessly. . .Fight hard to take credit, fight harder to avoid blame.”

Finally, “Deny that these are the Rules of the Game.”

The irony, of course, is that none of these tactics actually calibrate to enhance voter confidence in the political process or in public institutions. And, so, they amount to an elaborate shell game elected representatives kid themselves into believing is winnable. The electorate knows better, but without a valid alternative, it, too, plays along; the losing streak broadens and becomes structural.

After all, if everyone’s a sucker, isn’t everyone a winner?

Today, the political horizon is brimming not with losers or winners or even suckers; but with quitters.

A recent report from the Conference Board of Canada observes that “Canada scores a ‘C’ and ranks 14th out of 17 peer countries (in terms of voter turnout). Only 53.8 per cent of adult Canadians voted in the 2011 federal election – the second-lowest (showing) in history. The decline in voter turnout in Canada may be due to lower participation of young people.”

No kidding, Sherlock.

Meanwhile, the Board perseveres: “A. . .study for Elections Canada noted the decline in voter turnout in recent elections is mainly due to lower participation of young people, and that ‘it is part of a demographic trend that shows every sign of continuing well into the future.’ In 2011, only 38.8 per cent of the population aged 18 to 24 voted.”

Under these circumstances, should there be any great wonder that the negative feedback loop between electoral confidence and elected representation continues to spiral downwards?

There goes Newfoundland and Labrador Premier Kathy Dunderdale. Farewell Wildrose Danielle Smith in Alberta. Who takes over from Prince Edward Island Premier Robert Ghiz? No one in his caucus; that’s for certain.

We, the disenfranchised us, finally salute you – for you have finally become us.

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Jan 08 2015
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Economy, Education

The A-B-Cs of solving poverty in our time

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New Brunswick’s Common Front for Social Justice is consistently well-meaning, invariably courageous and occasionally relevant.

So, why, then, in its recently released, roundly critical review of the David Alward and Brian Gallant governments (though, the latter’s has held the reins of office for all of four months), does the anti-poverty organization skirt any meaningful discussion of publicly subsidized, coordinated and integrated early childhood education as a crucial salve for the issues that concern it most?

The group states it wants minimum wage laws, employment insurance structures and pay-equity frameworks improved, enhanced and expanded. Fair enough.

It also demands that social assistance benefits rise; housing costs for the poor drop; the stock of public accommodations available to the economically disenfranchised enlarge; and that the controversial New Brunswick drug plan be reviewed for broad fairness and equitability. Again, well said.

As for “professional artists”, the Front states in its year-end report card, “The Alward government increased the budget for arts, culture and heritage. The Gallant government said it will put more money in its 2015 budget. The Alward government adopted a new cultural policy, put in place the Premier’s Task Force on the Status of the Artist and adopted a Linguistic and Cultural Development Policy for the French Schools.”

In fact, recognizing official support for professional artists is about the only cap this organization is willing to doff to either the former Tory or current Grit governments of New Brunswick. As to the rest, circumstances are, indeed, desperate:

“There is certainly a real deep financial cost to poverty,” the Front’s report writers acknowledge. “More importantly, there is a human cost that even if it is sometime(s) difficult to measure in dollars and cents is not less real.”

There is, for example, “the worry of parents who are not able to properly feed themselves and their children and have to rely on food banks in order not to go to bed hungry.” There is “the anguish of living in inadequate housing. . .the desperation of knowing that you are sick because you are poor. . .the hopelessness of teenagers knowing they have a lot less (sic) chance(s) of having a better life than their neighbour(s). . .the look of others because you are poor.”

Still, if any of this is true – and most of it is – why is there no concomitant mention, in this finely intentioned diatribe, of the exorbitant day-care costs most working Canadians face as they struggle to avoid poverty even as they slide inexorably into it?

A report, published late last year by the Canadian Centre for Policy Alternatives, makes a compelling point. To wit:

“While Canada spends less on early childhood education and care than most OECD countries, Canadian parents are among the most likely to be employed. As Canadian parents are working parents, child care fees can play a major role in decision-making and labour force participation, particularly for women.

“Torontonians pay the most for infant child care at $1,676 a month. Parents in St. Johns pay the second most at $1,394 a month. The lowest feesare found in the Quebec cities of Gatineau, Laval, Montreal, Longueuil and Quebec City, where infant care costs $152 a month thanks to Quebec’s $7-a-day child care policy (increased to $7.30-a-day in October 2014). The second-lowest infant fees are found in Winnipeg ($651 a month) where a provincial fee cap is also in place.

“There are roughly twice as many toddler spaces (1.5–3 years) as infant spaces and fees are lower. Toronto has the highest toddler fees at $1,324 a month. Vancouver, Burnaby, London, Brampton and Mississauga all have median toddler fees over $1,000 a month.”

And that doesn’t even scratch the surface of the systemic inequity that two-income families with children endure every day. Those who do not qualify for subsidized spots in the sketchy day-care system across this country can pay anywhere from $3,000 to $4,000 per kid, per month.

The circumstance is not only bizarrely unfair; it’s a recipe for economic perfidy; a calculus for ruining national prospects in an increasingly competitive, technologically treacherous world.

Give all kids an early start on the state’s dime and they will return that investment a thousand times over – in critical thinking, empathy, intellectual courage and great, learned humour.

Watch the evils of poverty dissolve before them.

That’s a common front we should all get behind.

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Jan 07 2015
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Economy, Oil and Gas

The economic pendulum swings again

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The grand expanse that is Canada guarantees that one of the iconic realities of our national character remains our ability and willingness, when necessary, to pull up stakes and head for wherever the pastures grow greenest.

Rarely, of course, has that been Atlantic Canada.

Most often – at least since Confederation made honest European invaders of some of us – the Elysian fields of our economy have been located in Ontario, the country’s traditional manufacturing hub. That’s where, as the late, great Stompin’ Tom Connors once famously wrote, “the Maritimers all go.” 

Or, they did.

Over the past decade, or so, the big employment draws have been the tar sands of Alberta and the surrounding support industries of the oil and gas sector in Saskatchewan and British Columbia. That’s where, lately, my friends and former neighbours sojourn – driving trucks, working back-office jobs and otherwise punching gilded time clocks.

Or, again, they did.

Now, the shift – as inevitable as the ebb and flow of an ocean tide – begins again, and one of Canada’s leading financial institutions, the Royal Bank, is sounding almost chipper.

“There has been considerable discussion about the negative impact of falling oil

prices on the Canadian economy,” Bank economists Paul Ferley, Nathan Janzen and Gerard Walsh write in a recent monograph. “This has been reinforced by anecdotal reports about oil-producing companies cutting back on investment spending particularly within the oil sands. However, as we have emphasized in earlier commentaries, there are offsetting positive outcomes from lower oil prices.”

The first, and most obvious one, they note, is the concurrent boost to the U.S. economy, on which Canada depends for much of its export business (some $300-billion a year). “A stronger U.S. economy implies a growing market for Canadian exports. This is the case despite the recent expansion of oil production in that economy reflecting greater utilization of shale oil reserves. Though the U.S. oil and gas sector is likely to see reduced investment activity, its share of overall capital spending is relatively small.”

Secondly, falling oil prices depresses the value of the Canadian dollar relative to its American counterpart. Again, that’s good for domestic manufacturers and exporters, whose wares suddenly cost less to American buyers.

“The third key offset,” the economists report, “is that Canadian consumers will also be looking at lower gasoline prices that will provide an attendant boost to consumer spending domestically. It is of note that while business investment is a sizable 13 per cent of nominal GDP (including investment in intellectual property products), consumer spending is a massive 54.3 per cent. Thus, a small rise in consumer spending can go a long way to offsetting a marked drop in investment.”

All of which has Ontario Premier Kathleen Wynne fairly salivating. And why not?

For years, that once-mighty, supremely confident, magisterially self-important province, has suffered the indignities that $100-per-barrel oil has wrought on its manufacturing-export economy, including an ignominious slump into have-not status in the federal equalization formula. Now that the price of benchmark West Texas Intermediate oil has settled below $53 a barrel, Ms. Wynne is doing her level best to appear generous.

“Ontario’s economy can be a buffer,” she told the Globe and Mail last week. “We have a diverse economy and it can be a buffer in a time like this, against some of that volatility. I don’t wish for low oil prices and a low dollar for Alberta. But at the same time, we want our manufacturing sector to rebound. So if that (low oil price) helps, then that’s a good thing.”

In reality, though, as long as Canada’s value to the world is predominantly measured by the oil and gas it extracts and the pipelines its builds – which has been the common hymn, soulfully trilled by the western caucus of the reigning Conservative Government in Ottawa – volatility, and all that this implies, is likely to be the national economy’s organizing principle for years, even decades, to come.

Shall we now expect a new wave of pink-slip-bearing, prodigal Maritimers returning to their roots down home, where the pastures are, if not exactly green, a little less brown than they seemed not so long ago?

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Jan 06 2015
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Climate, Economy, Energy, Oil and Gas

Juicing up the conversation about oil

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It may be a necessary evil with a preternatural tendency to warm the atmosphere, but it sure tanks at cocktail parties. Face it, after more than 100 years of reshaping the world in its own oily image, fossil fuel is, fundamentally, a crashing bore.

Almost no conversation about the stuff begins with, “Hey, here’s something I bet you didn’t know about oil and gas. . .” or “A funny thing happened on my way to the refinery the other day. . .”

Even those snippets about petroleum with the greatest potential to inspire mild surprise are rarely discussed in polite company, most likely because we know that, these days, such discussions lead to nowhere good and nothing ennobling.

Of course, that doesn’t stop the spin-meisters of Big Oil from doing their level best to remind consumers of the western world that without them, and the resource they plunder as a matter of quotidian purpose, we’d all come well and truly undone.

“Life without oil? Impossible!,” declares a web page from the corporate site of Wintershall, a subsidiary of the many-tentacled mega-squid from Germany, BASF. “Within our daily lives oil is used almost everywhere: Every year, 18 million tonnes of crude oil are processed into synthetic materials in Germany. Oil within our materials: 40 percent of all textiles contain oil; for functional clothing this may be as much as 100 percent. Oil within our leisure activities: 40 billion liters of oil a year are used to make CDs and DVDs. Oil helps us relax: A single sofa contains 60 liters of oil. Modern life is inconceivable without crude oil. . . the most important natural resource of industrialized nations. The world consumes almost 14 billion liters of oil each day. This affects us all.”

Yada yada. So does oxygen, but you don’t hear me go on about the stuff.

Besides, just because we use oil in, and for, everything, except maybe coffee creamer (and the jury’s still out on that), doesn’t mean we should or even must. I seem to recall a rather successful series of pre-oil civilizations – beginning with ancient Sumerian and ending with early Victorian – that did rather well for themselves without benefit of plastic water bottles and nylon thread.

Still, there might yet be a way to make fossil fuel more interesting and, therefore, less repugnant to the chattering classes.

How many products, for example, that contribute to a cleaner, greener world actually involve oil at some level?

Now that’s a question worthy of any late-night salon.

A link to a page of the Pembina Institute’s website (helpfully provided by a reader last week) begins the quest.

“Only a few tidal energy sites are in operation around the world,” the clean-energy think tank reports. “Larger sites include the White Sea in Russia and the Rance River in France (the largest site in the world). Smaller tidal power plant have been built in Canada, such as the site at Annapolis Royal in Nova Scotia, and several in Norway. Together they have a total capacity of less than 250 MW. However, the potential for tidal energy is immense; potential global tidal power exceeds 450 terawatts, most of it in Asia and North America.”

Meanwhile, according to the Canadian Wind Energy Association’s web site, “wind energy is more cost-competitive than new sources of energy supplied by coal with carbon capture and storage, small hydro or nuclear power. The fuel that turns wind turbine blades is free and the price of electricity it produces is set for the entire life of the wind farm. Long-term cost certainty of wind farms have a stabilizing effect on electricity rates, providing important protection for consumers. Unlike other energy supply alternatives, the cost of building wind energy continues to decline, with dramatic drops over the past three years. Wind projects have very short construction periods and can be deployed quickly with many benefits delivered to local communities.”

What does any of this have to do with fossil fuel?

It is as Wintershall claims: Oil’s in just about everything, including the plastic components that comprise tidal generating arrays and wind turbines.

Now, if we could deploy our marvelous primate minds to the front lines of innovation for a change, and determine how best to limit fossil fuel’s uses solely to meritorious ends, we might actually start a conversation worth having.

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Jan 05 2015
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Business, Climate, Energy, Idiocracy

My big picture on world views

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In recent months, readers of this column have sometimes complained that my opinions about politics, the economy and life as we live it in this alternately blessed and benighted corner of the unpredictable planet are inconsistent, unreconcilable and, therefore, incoherent.

What, they have invariably demanded, is my world view?

I’d give them one, if I had one.

Frankly, the one unshakeable opinion to which I cleave is that world views, such as they are, are for dictators and salesmen.

One wants you to knuckle under; the other wants to rob you blind. In either case, you’re left with few choices, other than those your political or corporatist overlords prescribe.

Still, the complaints ring with such predictable complacency that they might as well be a popular gospel.

“Why do you hate the wonderful earth we cherish so much?” one scribe asked me in early August. “How can you support the shale gas industry in New Brunswick when, as an intelligent man, you must know how much harm it causes?”

Precisely three days later, another reader accused me of runaway tree-hugging: “It boggles my mind that you, as an intelligent man, slam the only industry that has any chance of rejuvenating the New Brunswick economy.”

Again, with the “intelligent man” stuff!

Yes, I have an IQ above room temperature, but I like to think that this fortunate happenstance engenders a predilection for at least a modicum of critical thinking.

For those of you out there who are similarly equipped, here’s a question: Is it not possible to walk and chew gum at the same time?

The shale gas industry in New Brunswick has operated without incident for more than 10 years. No spills, no poisoning of water tables, no soil decimation, no air pollution have ever been recorded, reported or, even, imagined.

These facts, alone, should prove that the industry, here, understands (at least, intuitively) its “social licence”. And if it doesn’t, provincial rules and regulations governing the locations of, and practices involved in, hydraulic fracturing (which are still on the books, despite the recent moratorium) evidently enjoins it to smarten up.

That said, other jurisdictions around the world have not demonstrated New Brunswick’s perspicacity on this socially volatile energy issue. North Dakota and parts of Appalachia have all but abandoned their side of the social-licence bargain, preferring, instead, to let the industry have its rapacious way with privately-held lots, paid for willingly with up-front buy-downs and long-term royalty agreements.

The result is exactly what New Brunswick opponents of shale-gas development fear: pollution, social dislocation and (let’s face it) death by fossil fuel.

But simply transplanting other provinces’ and states’ experiences and decisions here is a meaningless exercise in organized paranoia. It supplants the agency of our own minds with that of those who are determined to dictate or sell their own agendas, either quasi-corporatist or pseudo-environmentalist.

The middle of the road, negotiating the traffic to the left and right of us, is where we must live now if we have any hope of charting a sustainable, prosperous future.

Those who demand that the world’s petrol-economy can and must end today are either hypocritical or deranged.

At the same time, those who insist that fossil fuels still promise an eternity of risk-free, environmentally benign energy are either sadly delusional or deliberately prevaricating.

The bucket slung around the world’s neck is full of oil. Currently, there’s so much sloshing around in capital markets, literally no one knows how to prevent its pricing from decimating resource-producing economies (including Canada’s).

Still, let’s say that we – all of us in this province, at least – engage in a thought experiment. Let us suppose that oil and gas were not primary commodities, but rather seed capital for sustainable energy research, manufacturing and deployment.

Let us imagine that the engines and factories that burn fossil fuel are actually generating new ways to radically curtail its casual use.

Let us hope that the judicious, reasonable use of “black gold” produces a sea-change in attitudes about the way we treat the planet we share.

Finally, let us propose that partisan bickering about “world views” falls silently, gently, coherently to the good earth we vow to protect from (who else?) ourselves.

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