The missing component in Finance Minister Jim Flaherty's budgetary team

With fanfare (or as much as the finance ministry allows), Jim Flaherty recently announced his advisory team for the upcoming budget. It's a blue-ribbon group with some of the most powerful names in Canadian business, including Paul Desmarais Jr. from Power Corp., James D. Irving from the Irving family's forestry division and West Coast entrepreneur Jimmy Pattison. Among other panelists, former B.C. finance minister Carole Taylor has experience in government and University of Calgary professor Jack Minitz has been a tax advisor to Ottawa. All are successful people.

However, Flaherty did not chose a single representative from among 88 Canadians who sent an open letter to Prime Minister Stephen Harper on Oct. 7 under the auspices of the Progressive Economics Forum. The letter warned Harper the deepening financial crisis and growing threat of global recession were exposing weaknesses in Canada's economy and urged him to take immediate action.  The markets were not best left to their own devices, it said, advising the PM to adopt a wide program of stimulus spending that included money for infrastructure projects across the country. It was fine to support the financial industry with liquidity, it said, but the government should also explore ways to expand the availability of money to households and businesses.

It was a powerful letter, made more searing today by subsequent events proving the signatories were right.  They sent it to the PM and his finance minister at a time when the latter were arguing Canadian economic fundamentals were strong. There wasn't even a hint of a deficit on the Conservative campaign trail. Signatories included progressive economists who have long supported measures to boost the real economy of jobs and services, labour representatives, sociologists, political scientists and health care specialists from across Canada.

So why are none of the signatories sitting on the team advising Flaherty on the budget? Choosing three or four wouldn't have been difficult; they tried to initiate a conversation with the government.

It's not just that they turned out to be better forecasters of Canadian economic conditions than the Conservative government - although one would think that's an important argument for inclusion. Rather, one would think the government would welcome their wisdom and experience. Back in October, they looked at things differently than the mainstream, and progessive thinking is exactly what Flaherty's upcoming budget  requires, and desperately.  At a time when working people in Canada (and North America) are losing their jobs in massive numbers (while increasingly being blamed for the crisis), it's disheartening the Harper/Flaherty team did not invite a single labour economist or union official from the ranks of the letter-writers. In times of jarring social pain, how can there not be a social worker or health care expert on the team? And when the progressive economists nailed it, how can they be excluded?

Instead, the Conservative government ignored a readily available cadre of experts who would have ensured a wider range of voices were being heard from Canadians. 

Finance Minister cleared of conflict-of-interest - but $122,000?!

Federal Ethics Commissioner Mary Dawson cleared Finance Minister Jim Flaherty this week of conflict-of-interest over the awarding of a contract without tender. The complaint, lodged by Outremont NDP MP Thomas Mulcair was over a contract with a former campaign employee to write the 2007 budget speech.

OK. So far so good. But $122,000 to write a budget speech?

The writer didn't come up with the budget. No wonder all these communications companies make so much money. What are they thinking in Ottawa? That taxpayer dollars grow on trees?

(Photo: Geoff Howe/The Canadian Press)

Danny Williams goes to bat for Newfoundland: A NAFTA challenge?

GREG LOCKE FOR THE TORONTO STAR, 2008

The Newfoundland bad boy is at it again and, again, there's an uproar from outside his province. His government passed legislation revoking AbitibiBowater's  timber and water rights in the province after the paper giant announced it would close its Grand Falls-Windsor newsprint mill. Williams said he took the action because the company broke its side of a contract, albeit one signed by an ancestral entity in 1905. Company officials warn of legal action and pundits suggest the premier's action contravenes the North American Free Trade Agreement (Canada, the U.S., Mexico). There was a delicious moment yesterday on CTV Newsnet when Nfld. union official George McDonald (Local 63 of the CEP) was asked if he's worried about all the talk of legal action coming from outside Newfoundland. "A lot of people," said McDonald, "are talking about things they don't understand."

Exactly. This thing still has to work itself out but, from what I've heard so far, it could be difficult to take legal action under NAFTA. Any action would be taken against Ottawa, not Newfoundland, but consider the options available under the agreement. Most critics talk about NAFTA's Chapter  11, which covers both expropriation and national treatment. National treatment says all companies from the three signatory countries must be treated the same. For example, it says a country/province/other entity can't force "an investor of another party, by reason of its nationality, to sell or otherwise dispose of an investment in the territory of the party." 

AbitibiBowater is a Canadian company, based in Montreal. It's hard to see how the national treatment clause could apply but, in any case, it would be tricky to argue it's being treated any differently than Williams would treat any company under similar circumstances.

The other appropriate article says:

Article 1110: Expropriation and Compensation

1. No Party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment ("expropriation"), except:

2. for a public purpose;

3. on a nondiscriminatory basis;

4. in accordance with due process of law and Article 1105(1) ; and

5. on payment of compensation in accordance with paragraphs 2 through 6.

Perhaps AB lawyers would go to battle under this banner. However, Newfoundland argues the timber and water rights were included in a contract binding on AbitibiBowater — or rather the original signatory to the charter/lease in 1905 — to provide jobs in the mills it would build. AB broke the contract and the province is revoking its rights to resources. Williams has said his government would determine compensation for physical assets, like the mill itself.

It's too easy to call Williams Danny Chavez. But it doesn't make sense that a company can break its side of a contract and continue to benefit from the resources included for a specific purpose spelled out in that contract. Isn't the public good served by the restoration of resources no longer being used for purposes of the contract?

It's not clear who would win in court. Still, most discouraging has been the parade of opinions outside Newfoundland so quickly assuming Williams is wrong and worrying about fallout for Newfoundland and the country. What if other big corporations got mad? Oh me, oh my.

It reminds me of covering a Parliament Hill hearing a long time ago when, in the midst of a west coast fishing dispute between Canada and the U.S., Conservative minister John Crosbie argued the logic of the American side. I can't remember if he was trade or fisheries minister at the time, but it was bizarre. He described the U.S. position so well and explained the reasoning, as if he had already determined American negotiators were right and Canada would lose. He was so good representing the U.S. side — but that wasn't his job. I remember wondering as I took notes: Who was standing up for Canada?

The answer over the past two decades of free trade could well be, nobody, at least no politicians. Now there's uneasiness over what President-Elect Barack Obama wants to do with NAFTA. So what? Maybe Canada should look at, say, the energy section giving the U.S. proportional rights to Canadian oil and gas even in times of shortage, and ask themselves if this is really such a good deal for the country. 

We are such timid souls. Maybe Canada needs more politicians like Danny Williams.

The Decent Mr. Brison

RENE JOHNSTON/TORONTO STAR

Scott Brison in Montreal on Dec. 1.

In this season of giving and holiday spirit, I would be remiss if I didn't write about a man of exceptional character who is also a politician. (A wacky world, I know. ) There are kind people in politics, but there are also self-important and imperious folk who have no time for the little lives of others. That person is not Nova Scotia MP Scott Brison, the subject of my blog today. He is, instead, a decent chap.

It's not a tale I particularly relish telling because I turn out to be the jackass. But how else can I tell you about Mr. Brison's good deed?

A couple of weeks ago, I transposed two names in a story about the ongoing Liberal saga and had a paraphrased a quote attributed to Mr. Brison that he did not, unfortunately, utter.  I didn't realize it and, that morning, had turned my cell off for an interview, forgetting to turn it for for another hour or two. When I listened to my messages, Scott Brison had called twice, the second time sounding a little more urgent, but nothing extraordinary. I called him back.

He broached the subject with a long introduction about how much he likes my work, how he's never had a problem with me, how journalists make errors all the time and he doesn't bother to complain but that he's, ah, getting a lot of reaction about this particular paragraph (which commented on Michael Ignatieff). There was a problem, he said, because, ah, he didn't quite remember saying it. In fact, he was sure he hadn't. And he was just wondering if the next day, the Toronto Star might have little line tucked away somewhere saying he hadn't.

Well, by that point — duh! — I realized I'd mixed him up with fellow Liberal Gerard Kennedy, and felt wretched. I told him not to worry, we would do an online correction as soon as the public editor had reviewed it and run a correction in the newspaper the next day. That's our policy. The thing is, he was so nice about it.  Obviously, he might have become agitated had I reacted differently, but he acted on the assumption civilized people settle problems with courtesy. Believe me, I've seen politicians — and others with authority — behave rudely, and worse. It is such a treat to deal with somebody like Scott Brison. I want readers to know, especially, since this is how he is. I've seen many examples of consideration, courage and kindness in his character. He's funny too. The best thing is he had no idea I would ever write about the incident.

Happy Holidays to you, Scott B.

Maybe I'll go the other way next time and spill when I see examples of jerk-dom — or as much as I can without having fleets of lawyers at my door.

An Answer for the North American auto industry

RON BULL

Workers leave a GM plant in Oshawa in April, 2008.

It's time for out-of-the-box thinking to save the auto industry. It's an integrated system so answers must involve the entire workforce from Canada and the United States and (eventually) Mexico.  When the congressional bailout for bridge financing for the Big 3 failed last week, Capitol Hill fingers pointed at the UAW for refusing to make any concessions. However, President George W. Bush later suggested the Administration will come up with close to $15 billion for the auto makers because the industry is simply too big to fail. Canada will likely follow with roughly $4 billion to save plants on this side of the border.

Considering the long-term expenses of these manufacturing auto giants, it's a giant money pit, especially with the tough contracts negotiated by the United Auto Workers over the years. Media reports last week examined the huge advantage Asian auto makers have over their North American counterparts. It's not so much in paying lower wages and the related expenses of paid holidays, weekend pay and overtime, but rather the legacy costs of health care and pensions paid to retirees. Plus, Asian car makers pay less in health care, training and other benefits for employees. The difference in hourly wages between unionized plants in the U.S. and Canada and a non-unionized Japanese plant in the U.S. is about $5. But when you start looking at what the North American auto makers have to pay out to long-gone workers in pension and health-care benefits, you see how much these companies really suffer. That's where unionized companies start paying $8 to $13 more an hour on pensions and more on health care, bringing total hourly charges to around $70 an hour for unionized U.S. and Canadian plants, compared to under $50 for the Japanese.

It's been suggested government could pick up pension costs. But throwing money at the problem is short-term thinking. Plus, other companies would be lined up around the block before the deal had been made. Rather, Canada should come up with replacement industry that could solve problems for the Big 3 on both sides of the border and give Canadian entrepreneurs a strong, independent alternative for jobs and R&D.  Canada could offer cutting-edge technology in a chain of assisted suicide centres that offer a humane way out for Big 3 pensioners who are suffering as their quality of life deteriorates. It would, simultaneously, whittle down pension lists. So far, the Netherlands has taken the lead in exploring assisted suicide, but there is no reason Canada could not become the world leader in an industry that offers hope to pensioners and, down the road, an option to include Big 3 employees and family members who face a lifetime of pain — both physical and mental — along with their medical procedures. It could be the humane choice.

There could be accompanying centres at Canadian universities and colleges studying the human rights law of euthanasia, again offering world-leader potential for Canada. As well, the option of spa and hospital accommodation — holiday package tours for the family — is enormous. If the program begins on a broad scale,  everyone on the Big 3 pension lists would be considered eligible. Hopefully, it would operate on a voluntary basis, however the larger needs of society would, at some point, overcome any vestige of public concern. The government would have to pass forward-thinking legislation to cover off legal necessities.

Or, it could be a more modest proposal at the beginning, with only a few lottery winners from the ranks of Big 3 pensioners getting slots at a new euthanasia centre. As publicity grew, need is sure to outstrip capacity, which would lead to more growth in Canada's new national enterprise.

Canada must not stay bogged down in life support for outdated industry. The future lies in a new science and health-based technology that offers concrete answers to a problem that otherwise won't be solved.