Category Archives: Economy

Aug 24 2013
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Economy, Energy, Environment

How to tame a vanishing wilderness

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One item that seems conspicuously absent from Prime Minister Stephen Harper’s wilderness kit, as he tromps across the Canada’s vast Arctic expanse this month, is a well-thumbed copy of Farley Mowat’s 1956 children’s classic, Two Against the North, also known in some publishing quarters as Lost in the Barrens.

The story tells the tale of a white boy, Jaime, and his Cree companion, Awasin, who overcome enormous odds to survive a season stranded on the brutal tundra. (Think Australian outback, except colder). During their sojourn, their cultural differences dissolve and heir friendship deepens. So does their respect for nature.

What’s not often mentioned in the literature reviews is that the book is also a pretty good survival guide for anyone who suddenly finds himself, say, needing to pitch a tent or light a pot of seal oil.

As the Globe and Mail reported last week, “An Inuit elder and Ranger dressed in traditional animal skins taught (Mr. Harper) how to build an inuksuk, the famous northern stone figure. They later erected a traditional animal skin shelter. Mr. Harper set up the pole inside the structure under direction from his wife, Laureen Harper. The Prime Minister was also instructed how to light a traditional carved bowl lamp – which uses seal oil – but was unable to set it afire. Mr. Harper remarked wryly: ‘I guess I’d die in the wilderness.’”

Sure, but what a way to go. Canadians’ – especially southern Canadians – love affair with their great boreal region grows more ardent in late summer, when the mug and grime of the urban landscape tests all but the most stoic, the Northern Lights crackle and dance in the imagination and the call of the wild is a primal scream.

“There is nothing worth living for but to have one’s name inscribed on the Arctic chart,” the 19th century English Poet Alfred Lord Tennyson once remarked. Mr. Harper might well agree. Every summer, the glaciers continue their relentless retreat and the polar ice recedes into memory. Every summer, the prime minister is there to bear witness to both loss and opportunity, as if to say the north isn’t what it used to be and likely never will be again. But is that, he is wont to query, necessarily a bad thing?

“We recognize that the Arctic is growing more accessible to international shipping,” he said in Churchill, Manitoba, two years ago. “The various circumpolar countries are pressing claims that may conflict with our own. The global demand for northern resources is growing. . .The first and highest priority of our northern strategy is the protection of our Arctic sovereignty. And as I have said many times before, the first principle of sovereignty is to use it or lose it.”

Of course, the federal government’s commitment to the region depends on an essentially dialectical arrangement with the truth: Global warming is mostly hype, but that doesn’t mean we can’t exploit it. In this, the environment takes a back seat to geopolitics and whispering ski-doos.

“The Canadian military has been secretly test-driving a $620,000 stealth snowmobile in its quest to quietly whisk troops on clandestine operations in the Arctic,” reports The Canadian Press. “The Department of National Defence even has a nickname for its cutting-edge, covert tool: ‘Loki,’ after the ‘mythological Norse shape-shifting god.’”

The Arctic, today, is not only a proving ground for the armed forces; it is the site of previously undreamt economic development. Or, as Mr. Harper’s northern strategy declares, “From the development of world-class diamond mines and massive oil and gas reserves, to a thriving tourism industry that attracts visitors from around the globe, the enormous economic potential of the North is on the cusp of being unlocked.The Government is taking action to encourage future exploration and development by improving Northern regulatory systems and investing in critical infrastructure to attract investors and developers to the North.”

So much for the pitching of tents and the igniting of lamps. So much for the sentimentalities of the south. Soon, the brightest of the northern lights will belong to the derricks and diggers of industry.

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Aug 13 2013
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Demographics, Economy, Society

All the data that’s not fit to print

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Can the irony be any more succulent?

Mere days before Statistics Canada took the extraordinary decision to sit on the final batch of data stemming from its 2011 voluntary survey because, it said, the numbers don’t accurately reflect current conditions, the 1921 Census of Canada went public, showing what life was like, in authentic detail, for citizens nearly a century ago.

That’s great for fans of family trees and downright awful for anyone else who seeks to obtain a faithful picture of our present times – though some might yet extrapolate from the form and fit of great-grandma’s bloomers the spending habits of the modern, smartphone-addicted tween demographic.

Still, StatsCan insists the problem with the 2011 data had little, or nothing, to do with the controversial shift to an optional household survey, from a mandatory nose count of the population, three years ago.

Indeed, Marc Hamel, a census manager, told The Globe and Mail  this week, “We were in the final stages and some of the results seemed odd, a bit. When we went back to the data-processing steps, we discovered that one of the steps was not applied correctly. . .It is unfortunate that it was in the late stages. But it’s lucky we found it before it was released.”

The actual statement on the numbers-crunching agency’s website is a marvel of circumspection: “The release of the third and final set of data from the 2011 National Household Survey is postponed to September 11, 2013. The release focuses on income, earnings, housing and shelter costs. Statistics Canada found issues in data processing that need to be addressed prior to release. All the data previously released from the National Household Survey are not affected.”

I guess we’ll just have to take its word on that. It’s not as if the agency has any real context for assessing the verisimilitude of the results from the voluntary questionnaire. Apart from the fact that the household survey boasts a much lower response rate than the census (according to the Globe piece, it’s 68.6 per cent versus 93.5 per cent), the new system is still in its infancy.

But why is any of this necessary?

For decades, Canada led the developed world in the quality, comprehensiveness and accuracy of its census data. The numbers served a useful, and often crucial, purpose when legislators sought to craft and implement social and economic policies. The findings materially contributed to health, education and infrastructure programming.

In a 2010 letter to Tony Clement, who was the Minister responsible for Statistics Canada, the Canadian Sociological Association (CSA) argued that “Long‐form data are used by businesses, provinces and municipalities, economists, urban and community researchers, policy analysts, sociologists, and other scholars in the humanities and social sciences (including geographers and historians).

“Religious and ethnic groups are also users. They all rely on the mandatory long form census for solidly representative and accurate data – especially when data are disaggregated to community or minority‐group levels. Whatever the unit of analysis, an accurate statistical portrait of the population – one that allows for cross‐tabulation – is required.This cannot be provided by the voluntary NHS because bias – due to the under‐representation of specific groups – is likely. Aboriginal people, recent immigrants, low‐income families, and perhaps even busy professionals may fail to respond.”

A subsequent CSA blog post rather archly observed, “If the minister responsible for Statistics Canada is to be believed, the long-form census was eliminated so that upright citizens would no longer be threatened with jail time for failure to complete and return a census form that asked intrusive personal questions. A more convincing reason is that we have a government that not only says ‘Don’t bother me with the facts!’ but also wants to ensure that no one else has access to the facts.”

Without facts, of course, we are left with assumptions, suppositions and, in the words of American commentator George F. Will, “factoids” plucked “from the ether.” As he wrote in a piece that appeared recently in The National Post, “implausible and utterly unsubstantiated claims flourish when there is indifference to information.”

How odd that such sentiments should belong to one of the continent’s more notable conservatives.

You might even say, it’s ironic.

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Aug 02 2013
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Economy, Energy, Oil and Gas

New Brunswick’s pipeline to opportunity

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Now, for something completely different in New Brunswick: unvarnished good news. What began, for many, as a pipe dream becomes, for all, a bonafide pipe line into Saint John. And, unquestionably, not a moment too soon.

For much of the past 15 years, the urgent conversation in this decidedly unpromising corner of Canada has had everything to do with loss. How much public debt can we bear before our international creditors come knocking at the door? How many young people must we send west for jobs before, as public policy pundit Donald Savoie once famously wrote, New Brunswick becomes an old folks home?

Trans Canada Corp.’s announcement last week that it will move forward with a multi-billion-dollar pipeline from Alberta east to refineries in Quebec and Saint John – tentatively scheduled for completion by 2018 – changes the channel. (Quebec insists it wants to study the proposal, but the odds are in favour of its support).

In a report issued last Tuesday, Scotiabank energy analyst Patricia Mohr framed the opportunity clearly: “The line would allow access to less expensive and more secure domestic crude oil, allowing displacement of imports into the Suncor Energy and Ultramar (Valero) refineries in Montréal and in Lévis (near Québec City) as well as the large Irving Oil refinery in Saint John. These refineries have in the past been mostly supplied by expensive light oil imports.”

Moreover, “Greater access to stable supplies of domestic oil would improve the financial viability of current refineries and could eventually encourage development of a larger domestic refining industry in Québec and Atlantic Canada. History shows that pipeline developments – linking crude oil supplies to markets – often precede refinery expansion.

And, thirdly, “The line could provide vitally needed new export outlets for Western Canadian oil – to Europe and, most interestingly, to India – accompanied by expanded port and marine service-sector activity near Québec City and Saint John.”

All of which led her to conclude: “The economics of the ‘Energy East Pipeline Project’ are compelling. . .Refiners in India have shown considerable interest in importing Alberta blended bitumen. Estimated tanker charges from Québec City and Saint John to the west coast of India average a mere US$4.20 per barrel in a Suezmax vessel. A marine terminal at Saint John would be ice-free year round and could accommodate VLCCs of 350,000 DWT, cutting tanker costs to India to only US$3 per barrel. . .developing low-cost transportation infrastructure to access overseas export markets is critical.”

Against this backdrop, of course, languishes Keystone. As the Globe and Mail astutely observed in its coverage last week, “Politically, the project has attracted far less opposition so far than either Keystone XL, which has become a prime target for American climate-change activists and a political bone of contention between U.S. President Barack Obama and congressional Republicans, or the Gateway project, which has been opposed in its current form by Premier Christy Clark.” Meanwhile, it added, “Canaport (has) applied to transform its offshore facility to a gas storage and export terminal, giving it a new lease on life.”

For New Brunswick, the economic stimulus will be enormous: immediately translatable into thousands of skilled, highly paid jobs. Longer term, the energy sector, itself, will undergo a profound transformation as clusters of small and medium-sized enterprises emerge to support the refining anchor in the Port City.

But the broader significance of the pipeline has as much to do with national, as it does with regional, identity.

Premier David Alward was not wrong last year when he likened the project – when it was still just a concept – to a country-building exercise. For too long, the solitudes of West and East have driven the dialogue about what it means to be a Canadian. The have-less and have-more provinces have bickered over their respective slices of the energy pie.

The pipeline is, in effect, a handshake, across thousands of kilometers of geography, that unites once-competing interests. It says we’re in this together.

It also says to Alberta: You know all those Maritime sons and daughters we’ve been sending your way in recent years. . .Well, we’re gong to need you to send some of them back.

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Jul 29 2013
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Culture, Economy, Politics

The myth of the middle class

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In Frank Capra’s “Mr. Smith Goes to Washington” – the 1939 classic film about graft, greed and coercion in American politics – Jimmy Stewart – playing the protagonist, possessed of both naivete and moxie, in equal measures – lambastes his senatorial colleagues for their cynicism and corruption.

“Just get up off the ground, that’s all I ask,” he chimes. “Get up there with that lady that’s up on top of this Capitol dome, that lady that stands for liberty. Take a look at this country through her eyes if you really want to see something. And you won’t just see scenery; you’ll see the whole parade of what Man’s carved out for himself, after centuries of fighting. Fighting for something better than just jungle law, fighting so’s he can stand on his own two feet, free and decent, like he was created, no matter what his race, color, or creed. That’s what you’d see.”

Then, just before he collapses in exhaustion, he declares, “You all think I’m licked. Well I’m not licked. And I’m gonna stay right here and fight for this lost cause. . .Somebody will listen to me.”

There was something decidedly familiar about America’s real “Mr. Smith” who went down from Washington to deliver a speech at Knox College in Galesburg, Illinois, the other day. Familiar, and cinematic.

“With an endless parade of distractions, political posturing and phony scandals, Washington has taken its eye off the ball,” U.S. President Barack Obama cried. “And I am here to say this needs to stop. Short-term thinking and stale debates are not what this moment requires. Our focus must be on the basic economic issues that the matter most to you – the people we represent.”

He pounded his pulpit like a preacher. “I will not allow gridlock, inaction, or willful indifference to get in our way,” he said. “Whatever executive authority I have to help the middle class, I’ll use it. Where I can’t act on my own, I’ll pick up the phone and call CEOs, and philanthropists, and college presidents – anybody who can help – and enlist them in our efforts. Because the choices that we, the people, make now will determine whether or not every American will have a fighting chance in the 21st century.”

Fade to black. Roll credits.

Mr. Obama is on his last legs, and he knows it. Almost nothing he has tried during his nearly six years in office has worked. His country is even more divided than it was when he first marched into the White House in January 2009 (Oprah’s happy tears, notwithstanding). So, when all else fails, cue up the teleprompter. It’s time for rhetoric.

Speechifying is what Mr. Obama does best. And his dwindling cohort of ardent admirers still appreciate his soaring orations. But when he talks about reviving the middle class in America, one wonders whether he has missed the lessons of history, whether he understands the principle of cause and effect.

Washington’s “gridlock, inaction, or willful indifference” of which he speaks is not chiefly responsible for the wreckage skilled wage-earners and professionals now face; it is the result of years, even decades, of systematically dismantling the institutions, regulations and protections the middle class needs in order to survive, let alone thrive. The crew that now “represents” the people – the neo-cons, lunatic libertarians, science deniers, sneering accommodators – can’t help themselves. That’s how they were raised in the me-first, avaricious era of the late 20th century.

For this sea-change in attitude, government, itself, has been largely liable. Through Reagan, Clinton and Bush administrations, lawmakers did everything they could to break unions, discourage small businesses, encourage corporate consolidation, and succor the most predatory instincts of free-market capitalism.

Some got rich. More got poor. Today, almost no one believes in the durability of so-called middle-class values. Why would they when the once-sturdy bargain between an employer and his employee can, and does, perish in an offshore agreement with a cheap, foreign supplier of human capital?

At the end of Capra’s ode to the working man, Mr. Smith triumphs, having taught his confreres a little something about decency and dignity. He even gets the girl.

But, of course, that was only a movie.

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Jul 16 2013
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Economy, Society

Facing down service with a scowl

A petrified bloom. . .

The annals of lousy customer service grow longer with each day that passes in this, and every other, country that manufactures careless, disinterested workers in ballooning proportions. Rudeness, it seems, is the preferred posture.

A friend, who shall remain nameless, recounts his recent experience with an airline ticket agent who, when asked a simple question, barked: “Why, exactly, is that my problem? Get back in line!” The friend was so incensed, he wrote a letter to the head of the company. He called it “therapy,” but he’s not holding his breath till redress arrives.

My strategy for dealing with such instances – increasing, as they are – of surliness is more direct. “Don’t give me any of your lip, counter help,” I’m apt to blurt, before taking my business elsewhere. But I grew up on the mean streets of major cities, where we all talked that way.

My real problem is not crumbling decorum as much as it is creeping ignorance among those I pay to do a job I’m not qualified to undertake myself. In these situations, courtesy, though desirable, is less important than competence, which is a perishable commodity in these not especially best of times.

A couple of years ago, Toronto Star business writer Ellen Roseman posted a column on the subject to the CBC’s website. “Dave Carroll, a Halifax musician, wrote a song about the damage to his guitar on a United Airlines flight to Chicago,” she reported. “After posting it on YouTube, he became a symbol of a worldwide protest against poor customer service.”

She continued: “‘United Breaks Guitars’ is now a trilogy of videos. . .While Carroll did get a compensation offer from the airline, he turned it down. His goal is to make big corporations reconsider how they treat ordinary people.”

Indeed, she observed, “Airlines are notorious for bureaucratic handling of customer claims, but they’re not alone. Telecommunications firms – such as Bell, Rogers and Telus – often make you spend time on the phone waiting to speak to a human being. Communication is not their strong suit. . .Banks used to let you speak to branch staff, but now you’re connected to a call centre. One bank, TD Canada Trust, uses call centres in India. And Sears Canada has replaced a call centre in Saskatchewan with one in the Philippines.”

Others merely scratch their heads. “Why (doesn’t a company’s) associates understand that their job is dependent on whether or not I spend my money with the business who writes their check?” wondered an administrative officer and public relations manager at an American home improvement franchise in a post some time ago to eLocal.com. “In the past, I would have blamed this on the teenager behind the counter who was forced to be there by their parents. This isn’t the case anymore. These people are grown men and women, mothers and fathers, husbands and wives, grandparents even.”

In our case, my wife and I have endured a litany of screw-ups by allegedly skilled tradespeople who have worked on our rambling, old home in the west end of Moncton.  There’s the “new” driveway that was graded, helpfully, to conduct water against the foundation, rather than away from it. There are the custom-built kitchen drawers that stick whenever the humidity rises above 60 per cent because they don’t fit the box for which they were designed.

Still, despite all of this, some, small light does shine.

Last week, we took delivery of a brand, new natural gas furnace and air conditioner. The fuel company and the energy distributor worked together like beautifully choreographed ballet dancers – efficiently, knowledgeably and courteously. They answered our questions promptly and convincingly. They didn’t try to oversell us or pull  the wool over our once-jaded eyes.

We emerged from the experience with a renewed appreciation for the dignity of work and for those who remain committed to their own self-respect. All of which proves, if nothing else, that if customer service is an endangered species, it’s not dead yet.

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Jul 11 2013
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Business, Economy

Is a corp’s big difference always better?

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In the category of “tell us something we didn’t know,” fit for summer reading beside the bonfire, a major international market research firm’s report confirms that most people think private industry is better equipped than politicians to save the planet.

To which the only appropriate response is: “Of course it is, as it has all the money; but will it?”

The latest word from Ipsos Global@dvisor – a monthly, online survey of “consumer citizens in 24 countries” – concludes that 63 per cent of its target sample “believe that corporations can make a bigger difference in the world than politicians, who only got a 37 per cent preferential rating.”

The company’s news release continues jauntily:

“Surely both corporations and government get a bad rap for one thing or another any day you turn on the news or look at social media posts. Could the great disparity in confidence have to do with the partisanship that seems to keep some governments from moving forward with any speed?

“Is it that the Warren Buffets and Bill Gates of the world have shown the great potential big business has to cure disease, feed the hungry and invent game-changing technology? Is it that corporations have better PR machine(s) than government(s)? That’s research for another day. Meanwhile, we hope both groups give us ample reason to keep our confidence growing.”

We hope, indeed. But, given recent track records, our faith does not spring eternal on the subject of corporate social responsibility.

Not so very long ago, we may recall, the world’s richest governments effectively united to prevent the international financial system from collapsing under the weight of its own malfeasance. They did so by throwing countless billions of taxpayers’ dollars at big banks in every western nation, save Canada.

In the years since this orchestrated salvation, it’s been business as usual for high finance. And corporate America has never been better positioned to commodify the fruits of its greed.

“Corporate profit margins just hit an all-time high,” Henry Blodget, a former analyst on Wall Street who runs the Business Insider website, wrote a year ago. “Companies are making more per dollar of sales than they ever have before. (And some people are still saying that companies are suffering from ‘too much regulation’ and ‘too many taxes.’ Maybe little companies are, but big ones certainly aren’t).”

Meanwhile, he noted, “Fewer Americans are working than at any time in the past three decades. One reason corporations are so profitable is that they don’t employ as many Americans as they used to. . .Wages as a percent of the economy are at an all-time low. This is both cause and effect. One reason companies are so profitable is that they’re paying employees less than they ever have as a share of GDP. And that, in turn, is one reason the economy is so weak: Those ‘wages’ are other companies’ revenue.”

In March, marketwatch.com reported, “The company bottom line is faring a lot better these days than the average American’s weekly paycheck. In 2012, corporate profits as a share of the economy hit the highest level since World War Two, but the overall compensation of workers fell to a 57-year low. . .Last year, the profit of corporations rose to 12.4 per cent of gross domestic product. . .By contrast, compensation slipped to 54.6 per cent of GDP in 2012 from 55 per cent in both 2012 and 2011, according to the Commerce Department.”

Canadian companies were not quite as fortunate. In May, Stats Can reported that the nation’s corporations posted a mere $74 billion in operating profits during the first three months of the years. That was down by a 1.2 per cent, following a 1.4 increase in the final quarter of 2012.

Of course, the corporate world is in no way obliged to part with its loot just because the resources it consumes are, by and large, the common property of all.

But must we continue to delude ourselves that the “bigger difference” it can make in the world is necessarily for the better?

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Jul 10 2013
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Economy, Workplace

You get what you pay for

Nickel-and-diming the next generation

Nickel-and-diming the next generation

Before I became a newspaperman, magazine writer, broadcaster and author, I was a copy boy for Canadian Press. It was my first, real summer job, and I hated every sweltering, miserable, fetid moment of it.

From the heartbreaking hours (6 p.m. to 2 a.m., Thursdays, Fridays and Saturdays), to the foul-tempered, Pall Mall-puffing deskers, it was a guaranteed, weekly nightmare that poisoned, for me, all the other days in that school break of 1976.

My duties were simple for a baboon: I made coffee runs; filed the nightly clippings; ordered the weather map from the airport; and, most importantly, ensured that the office’s stash of porn magazines was organized and reliably available.

The only good thing about the whole, rotten gig was that I got paid. It was a pittance, of course. But there was never any doubt about the principle of workplace compensation.

Today, scores of young people across North America, performing far more complex and worthy tasks for corporations earning record profits, can no longer take that principle for granted. They call themselves “unpaid interns.” I call them slaves.

“Hold on,” you might say. “Slaves have no choice. These kids are free to come and go as they like.” The distinction, I would argue, is a poor excuse for treating the next generation of skilled workers as if they were scullery maids in the downstairs kitchen of an English manse, circa 1902.

Not very long ago, this sort of thing was illegal. But around the time of the Yuppie uprising, in the early 1980s, Wall Street and Bay Street fat cats realized that federal governments in the United States and Canada were no longer interested in workplace conditions to the degree they once were. Suddenly, it was open season on the young and largely powerless. From there, the doctrine of greed spread to virtually every sector of the continental economy.

Today, by some estimates, as many as 300,000 unpaid interns in this country are working without a net. South of the border, the number may be as high as half-a-million. We may never know the real tally because neither nation’s numbers-crunching agency keeps tabs on the practice.

Incredibly, corporations justify their usury by claiming that they’re providing a public service. They say they are making it possible for individuals, who would not otherwise have an opportunity to cut their teeth in the work world, to deepen their resumes. But, unless you happen to be a trust-fund baby, the only “deepening” you will be doing is to the well of student debt the private sector seems perfectly content to see you excavate.

Or, as federal Liberal MP Scott Brison wryly told the CBC recently, “Be born into a family rich enough to subsidize you to enable you to take an unpaid internship with a great organization and with great experience.”

Lurking beneath the quip is his more serious concern. According to the CBC piece, “He’s calling on the federal government to measure the scope of the unpaid workforce, identify acceptable unpaid work placements and legislate changes to protect an increasingly ‘vulnerable generation’.”

Naturally, that’s not going to happen within the current mandate in Ottawa. But I grant kudos to Mr. Brison for trying, even though the effort does not go nearly far enough.

The issue here is not only monetary; it’s moral. The more entrenched the unpaid internship becomes in the labour force, the less likely anyone will fight to have it expurgated from the web of social norms. It’s very existence justifies its perpetuation – just as did, at one time, the unequal status of women, child labour and slavery, itself.

Plenty of organizations (such as the one that owns the newspaper for which I write) still pay their interns. They understand that, in doing so, they are reinforcing the imperiled notion of the square deal between employer and employee. More than this, they simply reckon that it is the right thing to do.

There were many moments during the summer of 1976 when I seriously considered not showing up for work. Had I been an unpaid intern, I’m certain I would have played permanent hooky, and I would not have become the angry, opinionated (and, yes, award-winning) journalist you see before you.

Maybe, that would have been a good thing. But I prefer to think that it would have been a loss – if only to my growing sense of self-discipline and respect for the sometimes, unavoidably fetid world of work.

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Jul 09 2013
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Economy, Politics

Re-inventing the N.B. economy

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No statistic serves ruling political priorities more faithfully than the monthly jobs number. When it’s up, governments rush to congratulate themselves for their acuity. When it’s down, they go out of their way to remind voters that deepening unemployment can’t possibly reflect a wayward policy agenda.

So it was, mere days ago, when Statistics Canada confirmed that in June New Brunswick posted the worst jobless rate in years – the worst, in fact, in Canada. According to a CBC report, “At 11.2 per cent, New Brunswick had the highest unemployment rate in the country for the first time while Newfoundland and Labrador saw its unemployment rate dip to just below 11 per cent to 10.9, a significant decrease of 1.9 percentage points from a year ago, the biggest year-on-year decline in the country. . .Manitoba and British Columbia saw the biggest employment increases in June, gaining 7,300 and 8,900 jobs, respectively.”

Meanwhile, “Ontario’s unemployment rate inched up slightly in June, rising 0.2 percentage points to 7.5 per cent. Employment was up 1.6 per cent in the province compared with a year ago. An increase in part-time work in the province was offset by a decline in full-time work, which was also true for the country as a whole.”

The news left New Brunswick Liberal Leader Brian Gallant salivating. Quoted in the Saint John Telegraph-Journal, he said, “We’ve lost 7,000 jobs since the government came to power and as we’re waiting for them to come up with a plan we see that New Brunswickers have to leave our province. We’re the only province in the country that saw its population decrease last year.”

To which Energy and Mines Minister Craig Leonard appeared to retort, in a statement, “We are building new jobs and new industries through our recently announced $20 million investment over five years to support research and innovation in New Brunswick as part of our $80-million innovation strategy.”

He then blathered on, in predictable fashion, about the job-killing predilections of his Grit rivals, whose support of a moratorium on shale gas development, he insinuated, threatens to upend longterm economic development in the province.

Leaving aside, for the moment, the wisdom of hitching New Brunswick’s fortunes to the deeply controversial prospect of onshore petroleum production, this government wastes its time defending its record in the face of the June unemployment metric. It might argue just as convincingly that the jobless rate in that month was good news, for it could have been much worse.

For some time, New Brunswick’s economy has been undergoing profound, even structural, changes, most of which have had little to do with the partisan identities of those who have ruled the roost in Fredericton. Governments of both Progressive Conservative and Liberal persuasions have been broadly feckless in their management of economic opportunities.

There have been the “prosperity plans” and the “growth agendas,” the “blueprints for change” and the “roadmaps for sustainability.” There have been the “big gets” and the “major announcements.” Sprinkled throughout the years have been new slogans, old slogans and, occasionally, no slogans to reflect New Brunswick’s salient dilemma:  A fundamental lack of direction.

People, here, are aging. Young people are leaving. Aging people are leaving. The problem is not, essentially, that they can’t find rewarding work; it is, increasingly, that such work is temporary, fleeting, rootless.

Economic development is not about plans, priorities and programs. It’s not even about tax breaks. It’s about building capacity from the ground up. It’s about nurturing a culture of innovation, enterprise, self-reliance and self-determination. It’s about incubating entrepreneurship.

“What makes Silicon Valley so successful?” asks the website Internationalboost.com. “It’s the story of a number of pioneers who were able to produce an environment that stimulated the emergence of entrepreneurial talent and, most importantly, attracted more of this same talent into the area. . .Silicon Valley is not only the place where companies such as Hewlett-Packard and Apple can literally be founded in a garage – it is the foundation for these companies to continue to re-invent and innovate, becoming world-dominant players in ever-evolving markets and technologies.”

If New Brunswick’s political establishment finally grasp what ought to be self-evident about the province’s prospects, then the monthly job numbers will look after themselves.

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Jul 04 2013
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Economy, Society

We’re forever blowing (and bursting) bubbles

What goes up, must come down

What goes up, must come down

The increasingly trustworthy Wikipedia defines a bubble as “a globule of one substance in another, usually gas in a liquid.” Thanks to something called the “Marangoni effect – the mass transfer along an interface between two fluids due to surface tension gradient – bubbles may remain intact when they reach the surface of the immersive substance.”

Ultimately, however, the laws of the universe will not be denied. All bubbles burst. It’s just a matter of when.

One need not hold an advanced degree in fluid dynamics to recognize that we infuse society with bubbles every day. We create them from the fabric of our fads, which soon become crazes and, finally, business as usual. That’s why when they pop – as, inevitably, they must – we are left owning little to fill our empty pockets.

In this fine, early summertime, bubbles dance about our ears.

An interesting commentary from Keith Helmuth, a member of the Woodstock Sustainable Energy Group (published by the Telegraph-Journal the other day), describes the coming “carbon bubble,” which now worries economists and environmentalists, alike.

“If the nations of the world act to constrain carbon emissions, as they are pledged to do,” he writes, “the asset base of the hydrocarbon industry will suddenly contract by an enormous amount, leaving oil and gas companies with ‘stranded assets.’ Unfortunately, the industry debt load of $1.5 trillion will remain on the books.”

Why is that “unfortunate?” As Gwynne Dyer explains in one of his recent columns, “If you liked the sub-prime mortgage fiasco in 2008, you’ll positively love this one. . .It’s a grim choice: either financial meltdown if we act decisively to halt climate change, or physical meltdown if we don’t.”

Pop!

Meanwhile, the venerable Economist outlines the dimension of a more familiar bubble. “Housing markets are notoriously prone to boom and bust,” it declares in a report published two months ago. “To judge whether prices are at sustainable levels we use two yardsticks. One is the ratio of prices to disposable income per person, a measure of affordability. The other is the price-to-rent ratio.

“On this basis, Canada’s market is especially vulnerable. A large bubble now looks set to burst. Home sales in March were 15 per cent down on a year earlier. Buyers are in short supply. A recent poll showed that only 15 per cent of Canadians are likely to buy a home in the next two years, down from 27 per cent last year – the steepest decline in the 20-year history of the survey. After a big boom, the housing bust will be a wrenching affair.”

That’s indisputably good news if you’re in the market to buy, not sell. But to buy, you’ll need a good, steady job. And to get one of those, you’ll need a graduate degree in something other than applied basket weaving. Or, do you? An item by Jordan Weissmann, entitled “The Grad-School Bubble is Set to Burst,” in the July issue of The Atlantic begs to differ.

“The economic benefits of a graduate degree are dwindling,” the magazine contends. “While unemployment is still low among graduate- and professional-degree holders, underemployment seems to be rising in some fields. Nine months after graduation, for instance, barely more than half of 2012 law-school grads had found full-time, long-term jobs that required their typically six-figure J.D. And even graduates who do find decent jobs face stagnating wages and skyrocketing student loan debt.”

All of which leads him to conclude that “the grad-school bubble is one that may actually pop.”

As Jeff Jeff Kosnett is a senior editor at Kiplinger’s Personal Finance writes in his blog, “The original bubble, the blowup of the South Sea Company, lured Englishmen in 1720 to bet their spare pounds in a failed scheme to get rich trading with South America. South Sea shares soared some 800 per cent in months and collapsed even more quickly. The affair led to hostilities between Britain and Spain as well as an economic meltdown.”

Of course, the world has come a long way since then. Today’s bubbles are far more sophisticated, if no less fragile.

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Jul 02 2013
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Business, Economy, Environment, Government

A cold-water wake-up call from Mother Nature

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As the flood waters in Calgary begin to abate, the question turns – as it so often does in such cases – to the issue of culpability. Who’s to blame?

Was Mother Nature having an especially bad day when she dumped more than 100 millimeters of rain in less than a day on the western city? Or was there more to the deluge than met the eye? Did we humans exacerbate the hydrological cycle through global warming and then promptly ignore the predictable consequences?

In his commentary, which appeared in major newspapers across the country last week, nationally award-winning energy writer and Calgarian Andrew Nikiforuk answers definitively. “If nothing else the city’s often arrogant elites have been reminded that the province’s Chinese-style economic growth is vulnerable to extreme events,” he notes. “A crowded and overdeveloped province of four million is nowhere near as resilient as a province of one million. . .Albertans have also learned that climate change delivers two extremes: more water when you don’t need it, and not enough water when you do. The geographically challenged have also become learned, once again, that water travels downhill and even inundates flood plains. So climate change is not a mirage. Nor is it weird science or tomorrow’s news. It is now part of the flow of daily life.”

In fact, according to a Global News report (also covered by other print and broadcast outlets), “Strategies to prevent another devastating Albertan deluge sat on the provincial government’s desk for more than half-a-dozen years. George Groeneveld headed a flood mitigation committee after record-breaking rainfall and river levels soaked the Calgary region in 2005. They were tasked with figuring out how to lessen the risk of a recurrence and spent a year coming up with 18 recommendations.”

The suggestions included ensuring the Alberta Environment “coordinate the completion of flood risk maps for the identified urban flood risk areas in the province; develop a map maintenance program to ensure that the flood risk maps are updated when appropriate; identify priority rural flood risk areas that require flood risk mapping and develop a program to prepare the maps.”

In an interview with Global News, Mr. Groeneveld said “Of course I’ve always been disappointed. . .People have very short memories with floods: Go through one good year and they start to relax again.”

The signature feature of climate change is the increasing occurrence of extreme weather events. On the East Coast, that means the number and severity of hurricanes is rising. On the Great Plains and prairies, the number of super cells producing supremely destructive tornadoes is on the upswing. It means more and longer droughts; more and deadlier wildfires; and it means more water falling from on high. Much more.

According to an item in the Calgary Herald, John Pomeroy, a Canada research chair in Water Resources and Climate Change, says the floods in the Alberta foothills has “changed changed the Rockies. . .forever. . .He says the overflowing waters have changed everything from how the landscape will handle future flooding to the animals that live in it. Pomeroy says Alberta towns and cities will need much better flood defences in the future to handle high rainfall events. He says the Bow River has swallowed so much silt from eroding banks that its status as a blue-ribbon trout stream is in doubt. Pomeroy says many of the developments that have been affected by the flooding should never have been built in the first place.”

Given the crucial role Alberta now plays in the Canadian economy, these so-called “natural disasters” are no longer local calamities; they are clear and present threats to national security.

And while it may be one thing to turn a blind eye to the science of global warming, it is quite another to reject the evidence one’s own eye gathers as the sky proceeds to fall on one’s head.

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