Category Archives: Business

Aug 31 2015
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Business

Give sober review to trade laws

It would take something like beer to upend the Constitutional status quo of this country – if, of course, it ever does.

Consider the strange case of Gerard Comeau who was caught crossing the border from Quebec into New Brunswick with 14 cases of beer and three bottles of liquor in 2012. According to an antiquated Prohibition-era law, that’s a big no-no.

Mr. Comeau is now on trial for violating the New Brunswick Liquor Control Act, which states that individuals are allowed to bring one bottle of wine or liquor or 12 pints of beer into the province at any given time.

According to a CBC analysis of the historical context underlying the case, “The Canadian law regarding the shipping of alcohol was meant to thwart bootleggers, and led to a gradual devolution of federal responsibility to the provinces in matters relating to liquor. Each province established an agency that oversees the distribution, sale and consumption of wine, beer and spirits.”

The CBC piece quoted Mark Hicken, a Vancouver attorney who specializes in interpreting Canada’s quirky interprovincial trade regulations, thusly: “A lawyer down in California once said to me, ‘You can’t understand any North American liquor laws unless you trace them back to Prohibition.’ You look at any regulatory structure in North America and if it was examined in a global perspective, you’d look at it in stunned disbelief, like ‘What is going on here?’ It really does go back to the Prohibition mentality of control.”

Added Mr. Hicken: “The shipping laws were brought in to stop the inter-provincial bootlegging traffic following the repeal of Prohibition at different times and in different provinces. Today, the major reason for the continuation of those laws is money – the liquor boards want to maintain absolute control over all liquor in their jurisdiction so they can levy a liquor board mark-up on it.”

Bingo, and that, sadly, is the lay of the land for so many other brands of goods and services in Canada.

Without commenting on the merits, or demerits, of the specific case against Mr. Comeau, I will say that this nation’s arcane, out-dated and just, plain bizarre interprovincial trade rules are stunning incongruities at a time when federal officials are successfully negotiating, or renegotiating, sweeping commercial agreements with the United States, European Union and the Asia-Pacific. And I’m not the only one who thinks so.

“As we approach the 150th anniversary of Canada’s founding in 2017, we still have some unfinished business to deal with,” University of Prince Edward Island political scientist Peter McKenna has recently written. “It comes in the form of pernicious and persistent internal trade barriers between provinces.

“There is no disputing that the founding partners of Confederation had in mind unfettered trade and commerce between them. In fact, section 121 of the Canadian Constitution states: ‘All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.’”

Now, we face the very real prospect of welcoming European cheese into our local marketplace where Canadian-made craft beer and wine from outside our resident province are outlawed.

Does this make any sense to consumers or producers? The answer is as obvious as its corollary: interprovincial trade barriers benefit, most reliably, cash-strapped provincial governments.

But even when they don’t, the sheer inertia of the status quo virtually guarantees that nothing changes, despite the well-meaning noises various premiers make about finally getting things done.

Will the Comeau case make a difference?

I’d cheer that efficacious outcome.

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Aug 29 2015
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Arts, Business, Economy

The downtown party starts

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Just because Greater Moncton, after years of hand-wringing and teeth-gnashing, has finally awarded itself a modest sports and entertainment complex in the western heart of the city, doesn’t mean the controversies have concluded.

In fact, in all the most significant ways, they’ve only just begun.

Exactly what sort of a facility will (should) this be? Has the community had a proper chance to review the planning options? What will transform the venue from an expensive hockey arena into a vibrant cultural space and back again. Indeed, how will the various clients and tenants shake hands to benefit all? And what, pray tell, is the deal with parking?

It may be a certain comfort to know that almost no capital project of this type or size at a downtown location in a metropolitan area of Canada (actually, anywhere) has ever proceeded without also generating a riot of objection and opprobrium. That is the nature of this particular beast.

Many reviled Maple Leaf Gardens in the heart of Toronto’s financial district as a monstrosity when it flung open its doors in the early 20th century. Yet, here’s what the Historic Sites and Monuments Board of Canada wrote about it in 2006 upon its designation as a National Historic Site: “One of the most renowned ‘shrines’ in the history of hockey. . .the largest arena in the country when it was built, it was one of the country’s foremost venues for large-scale sporting events such as boxing matches and track meets, and non-sporting events such as concerts, rallies and political gatherings, religious services and opera. . .the Gardens holds a special place in the country’s popular culture: here Canadians welcomed a wide range of cultural icons from the Beatles to the Metropolitan Opera, from Tim Buck to Team Canada vs. the Soviets, from Winston Churchill to the Muhammad Ali-George Chuvalo fight.”

All of which suggests that the birth pangs and growing pains associated with integrating a brand, new cultural edifice into a community that maintains, at best, an ambivalent relationship with its downtown core will eventually subside. But not without effort, and not without a broad appreciation for the hard-won successes other cities have somehow managed to manufacture.

Consider, as examples, the two Londons – the original and its Canadian namesake. The former is home to the redoubtable Southbank Centre; the latter hosts the less expansive Budweiser Gardens.

Established in 1951, Southbank Centre has evolved by effectively engaging the neighbourhoods that surround it. Today, it boasts three main buildings – Royal Festival Hall, Queen Elizabeth Hall and Hayward

Budweiser Gardens, on the other hand, better resembles in both form and function, the as yet unbuilt and unnamed Moncton facility. Again, according to Wikipedia, the sports and entertainment facility opened in 2002 as the new downtown home of London’s Ontario Hockey League team, the London Knights. Significantly, though, over the years it has also become an important venue for other worthy distractions: “Budweiser Gardens was launched as a concert venue with Cher’s ‘Living Proof: The Farewell Tour’ in 2002. In 2007, Meat Loaf’s ‘3 Bats Live’ DVD from the ‘Seize The Night’ tour was recorded here. Cirque du Soleil chose Budweiser Gardens to stage its first-ever arena show, a rebuilt production of Saltimbanco.

Sting performed during his Symphonicities Tour on July 21, 2010, along with the Royal Philharmonic Orchestra. In 2010, Budweiser Gardens was awarded as the Canadian Venue of the Year at the Canadian Music and Broadcast Industry Awards.”

For Moncton, the controversies will surely continue. Eventually, though, we, like other cities, will get our downtown centre right.

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Aug 29 2015
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Business, Democracy, Economy, Government, Politics

This bromance might backfire

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He’s young, fit, energetic and, more importantly, telegenic. He has a smile that could set 1,000 campaign managers’ hearts a flutter. And that hair – don’t get me started on that hair.

If I didn’t know better, I’d swear that the Grit Premier of New Brunswick, the unstoppable, unflappable Brian Gallant (who considers the environs of Greater Moncton his natural hunting ground for Ottawa-fed Tories) is preparing to wage electoral battle this fall.

In fact he is – just not his own.

It is, of course, customary – nay, expected – for the premier of this province to support in every rhetorical way possible the principals, priorities and plans of his federal counterparts heading, as we presently are, into a general election. After all, what good is the rapport Mr. Gallant evidently enjoys with Liberal Party of Canada Leader Justin Trudeau, if he can’t splash it onto the front pages of local newspapers?

Still, the premier’s buddy routine comes perilously close to crossing the line he, himself, drew a month ago when he insisted he would not campaign (officially, at any rate) for Mr. Trudeau, but would, instead, meet with any federal leader who wanted to discuss issues critical to the province’s future, including the so-called “fiscal imbalance”.

Only last week, however, a far less circumspect-sounding Mr. Gallant delivered a politically charged tirade that could have been ripped from Mr. Trudeau’s own choir book.

“We have a Canadian economy that’s going in the wrong direction,” he thundered. “The current federal government has a bad plan for the Canadian economy, and we’ve seen that not only New Brunswick, but in many provinces across the country and, in fact, I would argue, in all of them. Some of them have had slight growth, but it’s been minimal.”

What’s more, Mr. Gallant continued, “We are in (a) recession and the current federal government refuses to change its strategy and plan. I would imagine it was because there was a 78-day federal election campaign coming.”

If nothing else, the outburst underscores the dangers of a political bromance between Messrs. Gallant and Trudeau that’s grown just a tad too fond for its own good.

Imagine, for a moment, the tone and temper of a conversation about fiscal imbalance today if the federal leader sitting across the table from Mr. Gallant happened to be Prime Minister Stephen Harper who, rumour has it, does plan to pop in to New Brunswick sometime before Election Day.

Naturally, none of this would be problematic if Mr. Trudeau’s fortunes at the ballot box were secure. They’re not.

Ottawa pollsters reckon the campaign is a virtual dead heat, with the NDP’s Thomas Mulcair slightly ahead of Mr. Harper in popularity. The young Liberal leader’s outlook is decidedly downcast and has been for weeks. Where once he enjoyed a 42 per cent approval rating, he now endures one in the range of 24 per cent.

Even here in the Maritimes, where the federal Liberals could once count on a majority of support, the NDP have gained ground. The two parties are virtually tied for public approval in New Brunswick.

Beyond any of this, though, the window dressings and pomp of campaigns only emphasize the real challenges Mr. Gallant doesn’t appear to be tackling in New Brunswick, the ones that are far closer to home and heart than a red tide in Ottawa: rising unemployment, deepening public debt and no convincing plan to stimulate economic revival and diversification.

The premier would do best to apply his inestimable energy to the issues that outlast even this, the longest of election campaigns

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Aug 06 2015
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Business, Humour

Return of the grifters

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I now pine for the good, old days of the Internet when a transparently idiotic con artist would invent his persona in the form of a disenfranchised Nigerian prince, looking for a place to park his money in a safe country.

Just give him your bank account number and, hey presto; you, too, could be a winner. “We would be willing to pay upwards of 100 million Euros just to protect the balance of our estate from rebels and authorities,” I remember one entreaty promising some years ago. “Won’t you help us?”

Well, no, actually, whoever you are, located at Dupont and Dufferin Streets in Toronto’s Upper Annex. (Yeah, that’s right; scammers aren’t the only ones in possession of common location technology. Ping that, bro!).

But in the past few weeks, Internet and phone grifters seem to have gotten my various numbers and their deluge has been like a hurricane. It’s not that they’ve grown frontal lobes (they’re still incredibly stupid); it’s that they’re more persistent than ever before and. . .well, downright rude.

To wit: I’ve received three automated phone messages in the past week threatening me with “a lawsuits” if I don’t contact “the CRAs” and settle my substantial, “outstanding billings” to the “Governments of Canadas”. The only thing is: I don’t owe a dime to the “Governments of Canadas”.

Hey man, don’t you know you can attract more flies with honey than with vinegar? I mean, seriously dude, reconcile your tenses. You do know to whom your talking. . .right?

Then, there’s this priceless bit of tripe, which appeared in my inbox just the other day: “Hello & Good day. . .I hope my email meets you well and expect it to come to you as a surprise as you do not know me personally. I am a private investor in Tokyo, Japan with a strong investment desire in search of viable business opportunities for a massive investment project which will also (sic) of immense benefit to you financially and otherwise.”

I can only swoon at the thought of “otherwise”. Free trips to the Sushi garden at the Tokyo airport, perchance?

My recent favourite, however, is from an address that I won’t bother to list. From these sun-starved folks located in a basement apartment (no doubt) in rural Idaho, I may find “peyment advice” in a “Secured PDF file assesible by only” little, old me.

Naturally, I’ll be following up right away.

According to a Washington Times report last month, “A 68-year-old Vermont widow who nearly gave $60,000 to a scammer is warning other potential victims to ditch them. Louise Brown turned to the Internet to find someone to talk to after the death of her husband. When the man she had been bonding with began begging her for money, she gave him $60,000 before her bank flagged her account and warned her of the con. AARP (American Association of Retired People) officials say Vermont has seen an explosion in the number of Internet scams. Greg Marchildon, the director of AARP in the state, says criminals build trust with their victims and try to get them into a heightened state of feeling. The Vermont attorney general’s office is pushing for legislation requiring online dating websites to notify users when they’ve communicated with known scammers.”

Methinks we in this dispirited, economically challenged neck of the woods might turn the tables.

Come one, come all to the Great New Brunswick real estate sell-off. Every house goes for $500,000 – a bargain at twice the price.

Sure, and we’ll mail you the keys once the cheque clears.

Jul 16 2015
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Business, Economy, Politics

The perfect picture-panic province

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What a marvelous time to be the youngest premier in Canada, representing the oldest population in the nation. Could anything in Brian Gallant’s professional experience be less desirable than the thankless job he now faithfully executes?

The 32-year-old’s to-do list would give Hercules a panic attack.

First, there’s the little problem of a $12-billion long-term public debt, and a $500-million annual deficit that just won’t go away no matter what tweaks he executes to civil-service spending.

Second, there’s a litany of campaign promises that inveigh against any reasonable tool to manage the province’s fiscal crisis.

There will be no new revenue streams in the foreseeable future – not from onshore natural gas development, not from a putative pipeline from Alberta into Saint John, not from the high-tech or natural resources sectors, not from manufacturing, not even from community economic entrepreneurship. Nada. Zip. End of story. Period.

Third, the cost of health care in New Brunswick is rising alarmingly, given the tax base that remains to help pay for emergency rooms, walk-in clinics, family physicians, fully equipped hospitals.

This province “boasts” the highest per-capita spending on “interventional” medicine (as opposed to the preventative type) in the country. We are, as a populace, fatter, drunker, and more likely to cough our lungs out than any other region of Canada.

Fourth, we continue to endure the steady outmigration of our “best and brightest” to other parts of the nation, the continent and the world. And, even when other parts of the nation (Alberta), the continent (the Midwestern shale patch) and the world (the European Union) fail to retain promise, our ex-pats routinely choose places other than home in which to roost (Brazil, Venezuela).

And then, of course, there are the awful employment numbers, reported far and wide around this tiny province.

According to a piece by John Chilibeck in the Saint John Telegraph-Journal, published last Saturday, “New Brunswick’s bleak jobless situation became even gloomier in June, with the unemployment rate shooting up into double digits again, to 10.8 per cent. . .Statistics Canada’s monthly labour force survey (reported that) employment in the province fell for the second consecutive month, down 3,500 in June.”

All of which must leave the impression, even in the minds of the most circumspect among us, that we are circling the drain. And that gives us the equipoise to blame the current office holders for their mismanagement, misalignment and even malfeasance.

Still, how much blame for what ails us can we properly assign to a new government, less than a year into its mandate, or even its one-term predecessor (party politics, notwithstanding)?

A friend of mine cornered me at a local grocery check-out recently and demanded to know why I haven’t been holding this young premier’s feet to the fire. “He’s obviously way over his head,” he declared as we surveyed the price of beef from Alberta. “So, what’s up with you? Have you gone soft, or something?”

To which I replied: “I was the first out of the gate telling the government to raise the HST by one percentage point. I was one of the first to tell this government to monetize shale gas, responsibly.”

My friend replied: “Well, I’m not for raising the HST, and as for shale gas, I’m for it as long it doesn’t affect me in any way possible.”

In other words, everything is better than the status quo, except for the status quo.

What a marvelous time, indeed, to be the youngest premier in Canada, representing the most calcified attitudes in the nation: The perfect picture-panic province.

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Jul 07 2015
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Business, Municipal Affairs, Politics

Imagine Moncton’s future

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If a small city can host a big world-beating sporting event, divine what Moncton can do with a hole in the ground, where once stood a shopping complex.

We walk past that vast 11-acre wasteland in snow and in heat, casting our eyes dolefully to its future. We wonder what will become of that empty space. Will it succumb to a series of poorly planned private condominiums, a sequence of public scrublands, a tract of parking spaces?

Or will it rise again as proof of life, a canvas for beginnings and the finer things in our municipal imagination?

Sometimes, it takes a tourist to tell us what we already know about ourselves. Sometimes, it takes Louise Taylor of the U.K.-based Guardian to plump our pillows and kiss our cheek and call us “charming” on the morning after we helped host the FIFA world women’s football extravaganza.

“Vancouver was more beautiful, Montreal more chic, Ottawa more interesting and Edmonton – well Edmonton had more tall buildings – but Moncton in New Brunswick was the most charming venue of Canada 2015,” the British journalist recently opined. “Virtually everyone, everywhere, was friendly but in Moncton people are super friendly. If drivers see you hesitating on the pavement (sorry, sidewalk) and think you might want to cross the road, they stop for you. It also had by far the best newspaper of any read at breakfast in the five cities I visited – so hats off to the Times & Transcript.”

Hats off, indeed.

Still, some day soon, I imagine crossing the road, from that cinder-block of an edifice that employs me from a distance, to greet a great entertainment complex – replete with sports arenas, mobile stages for local, national and international theatre companies, and hot and cold cafes providing, to smiling patrons, everything from real espresso to local Panini.

I envision spending my time in Moncton’s rejuvenated downtown meeting friends, drinking coffee, debating the issues of the day, the week and the year, and then, when the time is right, pulling away with a happy roar.

“See you next time,” I might say. “I have tickets.”

“So, to what?” my friends might ask.

“To bloody everything,” I would respond.

Bring on the hockey, the Phantom of the Opera, the Atlantic Ballet Theatre, and the Winnipeg Philharmonic Choir.

I would, in this universe, own passes to see Sid Crosby downtown, followed by Bruce Springsteen around the corner, and the last vestiges of the Grateful Dead, eating somebody else’s lunch on Robinson Court.

Picture, again, what Moncton can do with a hole in the ground. (Back-filling other people’s mistakes is, after all, one of the things this community does best; think CN, think Sears, think Hudson’s Bay, think Target).

Now think what’s in store.

Elected officials voted wisely earlier this week. According to a report from Kayla Byrne in the Moncton Times & Transcript, “After nearly three hours of debate, Moncton council agreed to apply to the Municipal Capital Borrowing Board for $95.4 million.”

What, exactly, constitutes the “Municipal Capital Borrowing Board” is a subject of conjecture; but that this council, with exceptions, feels confident about the future of that vast, empty acreage – which begs daily for redevelopment – is the kind of good news that should make residents and visitors, alike, imagine.

Imagine the next, great resurgence of entrepreneurial verve in the downtown core. Imagine the buzz and business. Imagine the play and the playfulness.

Now, imagine you being there, as the Guardian’s Louise Taylor was, just the other day.

What does this tourist know about us that we have already forgotten?

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Jun 26 2015
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Business, Politics

Facing the angry voter

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At this rate, the Hollywood-handsome premier of New Brunswick will need a political facelift before he again addresses his increasingly grumpy public on camera.

Canada’s paparazzo of pollsters – which evidently doesn’t take summer holidays, even as the objects of its scrutiny gently wend their way through the barbecue circuit – reports that Brian Gallant now enjoys a mere 27 per cent approval rating, down from 40 per cent only three months ago.

According to a news release from the Angus Reid Institute, posted to its website, the once-telegenic politician “ends his first session in government bruised by the implementation of his campaign promises and blemished in the eyes of his electorate. An. . .analysis of quarterly online survey results from more than six thousand Canadian adults shows Gallant, first sworn in last October, has seen his approval rating from respondents in his province plummet 13 points in the last three months.”

Only Manitoba’s Greg Selinger is more politically odious among Canadian premiers: Twenty-three per cent of his fellow citizens in that province give him a qualified thumbs-up.

As for Mr. Gallant, Angus Reid vice-president Shachi Kurl seemed almost gob-smacked, telling the Saint John Telegraph-Journal, “At some point the honeymoon always ends, but this is a dramatic drop. To dive 13 points is not something we tend to see over one quarter.”

In fact, though, if you are a resident of New Brunswick you might understand the Liberal premier’s precipitous fall from grace over such a short period. As is typical in this province, the reasons have both everything and nothing to do with the man, himself.

Had former Progressive Conservative Premier David Alward survived the most recent election, the odds are strong that he would be facing a fate similar to Mr. Gallant’s. His polling numbers stuck in the cellar, his political life would be dominated by a series of excessively long and tedious defences of his decisions.

That’s because, for some time now, voters have been nursing sore grudges not so much against the men and women who occupy elected office, but with the standard operating procedures of the political process, itself, which they fundamentally believe has perverted and corrupted every good intention. In this circumstance, no public figure has managed to hold the popular imagination for long.

Neither does party affiliation seem to matter. The public shuffles them them like so many deck chairs on a sinking cruise ship – a habit which goes a long way towards explaining why the policy differences between (if not major announcements of) the Bernard Lord Tories and the Shawn Graham Grits were vanishingly small and why you need an expert on constitutional law to explain the few ways in which the major party leaders today significantly part company.

Beyond this, though, the public has come to expect, with some justification, that most, if not all, political promises are either banal or unrealistic, or both.

Year after year, we witness fiscal posturing from MLAs from the left, the right and the swollen middle. We are told we must get our “financial house in order”, lest the robber-barons of the Wall Street’s bond markets make off with our chickens and the pots that contain them. And, yet, what actually changes? Where is the descriptive vision of a future that never seems to come, as one day dawns pretty much as every other.

Indeed, Mr. Gallant may well need more than a political facelift when he returns from a summer of pressing the flesh.

Whatever that is, one thing’s guaranteed: It won’t be popular.

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Jun 18 2015
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Business, Economy, Energy, Oil and Gas, Politics

Green around the gills

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He bet the nation’s country farm on the Alberta oil sands. But, my, how Stephen Harper’s expectations have tarred and feathered the petro-industry’s chickens who have lately come home to roost.

The Canadian Association of Petroleum Producers (CAPP) now says that Canada’s western crude production faces a decade-long slide into something just this side of irrelevance – a condition no one saw coming down the pipeline of public relations even a year ago, when fossil fuel prices in this country first began to sink below levels thought possible, let alone reasonable.

Still, CAPP is fairly sure of itself this time:

“The Canadian crude oil industry is facing risks on multiple fronts in a market transformed by increased global crude oil supplies resulting in lower oil prices. Lower oil prices have challenged project economics and reduced capital spending intentions. These constraints have dampened the outlook for future production growth. Against this changed backdrop, highlights of this year’s outlook are”, well. . .not good. The organization expects the following calumnies:

“Total oil production continues to grow but at a slower pace than previously anticipated; total Canadian production grows from 3.7 million b/d in 2014 up to 5.3 million b/d in 2030, which is 1.1 million b/d lower than last year’s forecast; market diversity and access is still required to the U.S. Gulf Coast, the U.S. Midwest and Eastern Canada in North America.”

Meanwhile, “the timely development of infrastructure to obtain market access is a continuing concern. The in-service dates for many of the pipeline projects have already been delayed and could be even further delayed due to extended regulatory processes.”

All of which makes an Energy East Pipeline from the west, through Ontario and Quebec and, finally, into Saint John, a sudden long shot. And yet, here on the East Coast we’re still talking about it as if it were a sure thing, a done deal, from Ottawa (which cares less than nothing for Maritime fortunes) and Alberta (whose new NDP government is far more interested in further curtailing greenhouse gas emissions from the inconvenient truth of its underperforming bitumen deposits than it is in extending inter-provincial trade).

Indeed, it seems clear that the Conservative Government of Canada must now craft, in record time, a reason, other than resource extraction, to tie the country together and behind it – just as another federal election looms on the horizon. This may explain Mr. Harper’s unexpected, rhetorical withdrawal at the recent G7 Summit in Germany last week.

As Matthew Fisher of The National Post reported, “Although his children will not likely be around to see it. . . (Prime Minister) Harper committed fossil-fuel rich Canada to ending all production and use of carbon-based energy by the end of the 21st century. This cautious softening of the prime minister’s usual staunch defence of Canada’s energy sector was matched by the other G7 leaders in the closing declaration they issued at the end of their two-day summit. . .(Mr.) Harper seemed to have caught a break on Monday when a discussion on climate change that would have put Canada on the hot seat was cut to half an hour so that leaders could devote more time to global security.”

Obviously, those particular chickens have not yet come home to roost; but while we wait, it might behove our prime minister to acknowledge, finally, that climate-change politics is not merely the source of his own nausea.

It is also for a civilization that’s growing sick of all the fine-feathered friends of the earth it must endure.

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Jun 12 2015
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Business

Poor little rich boys

 

Your typical, overpaid CEO in Canada contemplating his options

Your typical, overpaid CEO in Canada contemplating his options

They are absurdly wealthy. They are getting even more absurdly wealthy. And, because too many of them are no good at what they do, we hate them for their free rides through life.

I speak, of course, of the lordly tenth of the one per cent: The beautiful people; the ones whose marriages, when they fall apart, don’t drive them into bankruptcy; the ones whose private islands remain virginal even as their returns on their investments in oil and gas ensure that organ-replacement technology keeps them alive and kicking much longer than Methuselah could have possibly imagined, (though, to be fair, he was a supplicant of an imperfect Almighty; had he worked for Donald Trump, he night well be alive today).

Still, kids, meet the new gods, coming as cardboard cut-outs to a mini-mart they probably own near you. Even their financial backers are beginning to despise the look of them.

According to a recent piece by Janet McFarland in the Globe and Mail’s Report on Business section, “In bygone years, it might have slid by with little protest. But not in Canada’s new say-on-pay era. Barrick Gold Corp. reported in March that it raised chairman John Thornton’s pay last year by 36 per cent to $12.6-million (U.S.) and exempted him from the defined performance targets it uses for other executives’ pay, all while Barrick lost $3 billion and saw its share price shed one-third of its value in 2014.

And the denouement, thanks to Ms. McFarland’s assiduous reporting, is thusly known: “It was an incendiary combination and shareholders responded with an overwhelming ‘no’ in the company’s say-on-pay vote on executive compensation, which garnered just 27-per-cent support at Barrick’s annual meeting in May.”

Ouch, John! Tell us, how does that make you feel? Can you get by on a mere $5 million a year for effectively running the company you oversee into the fine and splendid ground the diamonds on the soles of your shoes have ruined forever? Dear John, do tell.

Of course, the obscene disconnection between company performance and executive pay is not new. Back in 2010, following the Great Nervous Breakdown That Made Mere Peasants Shudder To Think About Retirement, Harvard Magazine’s Jay Lorsch and Rakesh Khurana had this to say on the subject:

“Concerns about the compensations of chief executive officers and other top executives of American public companies have reached fever pitch since the financial crisis and the economic meltdown of 2009. Some observers blame the recent recession in part on the flawed compensation arrangements for the top management of major financial institutions. For almost 20 years, a growing chorus of voices have been criticizing the way top managers are paid. The criticisms focus particularly on CEOs, not only because they are the highest paid, but also because their compensation sets the pattern for executives beneath them. Like previous criticisms, the current complaints focus on two issues: executives are paid too much, and current incentive-pay schemes are flawed because the connection between executive pay and company performance is mixed at best – and at worst has led to a series of dysfunctional behaviors.”

No kidding, Sherlocks. Still, please refrain from deploying phrases like “dysfunctional behaviours”. It hurts my eyes.

Beyond that, it’s wrong.

These boys who wrecked the world own all the toys. They simply got out of the sandbox when the getting was good. That’s not “dysfunctional”, per se; selfish, yes; evil, indisputably.

No, the new normal in this world of work and fair pay may be absurd, but it is completely explicable and lamentably predictable.

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Jun 10 2015
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Business, Economy, Oil and Gas, Politics

Reversing our job losses

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In electoral politics, the easiest promises to make are always the hardest to keep. As the New Brunswick government recesses for the short, hot summer, it leaves with the uneasy certainty of that adage festering in the pit of its stomach.

No campaign vow is more facile – or more common – than the one that guarantees robust employment, despite evidence that strongly militates against its success. Still, every candidate for public office, regardless of his or her party affiliation, trots out the tired old trope, “job creation is our no. 1 job,” or words to that effect, as if his or her magic wand is loaded with something more substantial than good intentions.

Why elected representatives routinely beg to assume direct responsibility for an economic process that is quite eminently and obviously resides outside their wheelhouse is a question only the gods of political ambition can properly answer. The results, however, are as predictable as rain in the springtime.

As Statistics Canada reported last week, New Brunswick somehow lost 5,300 full-time jobs in May, just as nation, overall, picked up 59,000 positions.

“Certainly after a disastrous first quarter, the outlook suddenly seems a lot brighter,” a Financial Post article observed. “For that, we can thank an unexpected surge in hiring in May­ ­– the biggest gain in seven months, in fact, and more than six times larger than anyone had expected. And the majority of those new jobs were created in a previously unlikely location – Ontario, which had seen its prominence diminish in recent years as the manufacturing-focused economy turned to energy-heavy provinces for growth.”

All of which suggests that economists at the TD Bank were onto something earlier this month when they noted in letter to institutional clients, “The notion of ‘short’ or sell Canada became a growing theme in international circles, as falling oil prices added to concerns about an overheated housing market and high household indebtedness,” Derek Burleton and Leslie Preston wrote. “A few months later, however, it seems the bears have not been proven right. Data so far in 2015 show that investor flows into Canada have remained resilient and sentiment on the Canadian dollar has picked up.”

But as the country, on the whole, grows buoyant, the same cannot be said for New Brunswick, where the total number of employed in the unmerry month of May fell by 2,800 and 4,600 fewer people were combing the classifieds or pounding the pavement for even a glimmer of a job.

That performance was “bested” (if that is the correct word) only by Alberta, which lost 6,400 jobs. Newfoundland and Labrador shed 4,300 positions; Quebec lost 2,100; and Saskatchewan simply treaded water.

Never, however, underestimate a government leader’s sunny determination to put the best light on even the darkest circumstances.

Faced with the inevitable questions about his jobs record, New Brunswick Premier Brian Gallant insisted, “We’ve said from Day 1 that there will be ups and downs,” he told the Saint John Telegraph-Journal. “I think that’s (the province’s static job creation record in recent years) pretty positive when you look at what is happening nationally. Alberta, which is one of our economic drivers in the country, lost thousands over the last month. We have many companies and businesses here in New Brunswick that provide to the supply chain in Alberta, so obviously they are going to have some impact.”

Of course, if this provincial government insists on falling into the commonplace trap of issuing promises regarding job creation, it would do well to consider all the factors that are actually within its power to influence.

Shale gas, anyone?

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