Wednesday Night #1288

There are those among us who, despite Don MacDonald’s column in Monday’s Gazette, think that Income Trusts are still THE story.
Die-hard political junkies are fixated on the Liberal leadership race despite (or perhaps because of) the latest Ipsos Reid findings that “Sixty per cent of Canadians say the Liberals aren’t ready to govern again and 42 per cent are less likely to support the party if their new leader champions `nation’ status for Quebec.”
The Liberals who still believe they should be governing, along with some of us who simply worry about Canada’s foreign policy, are concerned by Stephen Harper’s cancellation of his appearance at the Canada-EU summit meeting
There are others with a somewhat more global view who believe that everything pales in comparison to Saddam Hussein’s conviction and the furor it has caused in Iraq
Some believe that Daniel Ortega’s imminent victory in Nicaragua should cause us to lose sleep, given his cozy relationship with Venezuela’s Hugo Chavez.
For the environmentalists among us, it’s all about Climate Change, poverty and the meeting in Nairobi of the Parties to the Convention
For our development specialists, we’ll keep an eye on the Microcredit Summit in Halifax starting next Sunday, where Nobel Peace Prize Laureate Muhammad Yunus is the featured speaker.
And all these items relate to what we view as this week’s BIG STORY, the U.S. mid-term elections. Everyone is talking about it; punditry has reached a state of feeding frenzy; the only people who seem indifferent are a large percentage of Americans of voting age (Government of the people, by the people, will be missing a lot of people Election Day) .
By Wednesday Night, we will know all – or at least, most of – the answers. Who knows, we may even be able to turn to other topics amidst analysis of impact on markets, foreign relations, oil supply, environment concerns, even the Canadian Liberal leadership.
Meantime, we offer Tom Friedman’s advice to voters for your consideration (this is sure to annoy some of you!).
Insulting Our Troops, and Our Intelligence
By THOMAS L. FRIEDMAN
George Bush, Dick Cheney and Don Rumsfeld think you’re stupid. Yes, they do.
They think they can take a mangled quip about President Bush and Iraq by John Kerry – a man who is not even running for office but who, unlike Mr. Bush and Mr. Cheney, never ran away from combat service – and get you to vote against all Democrats in this election.
Every time you hear Mr. Bush or Mr. Cheney lash out against Mr. Kerry, I hope you will say to yourself, “They must think I’m stupid.” Because they surely do.
They think that they can get you to overlook all of the Bush team’s real and deadly insults to the U.S. military over the past six years by hyping and exaggerating Mr. Kerry’s mangled gibe at the president.
Wednesday is also the eve of the Millennium Promises Conference in Montreal – headlined by Bill Clinton. On Wednesday evening, there’s a great gathering organized by Désirée McGraw and Heidi Hollinger in support of Spread the Net, the Canadian initiative co-chaired by Belinda Stronach and Rick Mercer aimed at curbing malaria in Africa through the distribution of bednets.

The Report

Nortel
There was a time when shares of Bell Telephone were an integral part of virtually every Canadian’s portfolio, the quintessential source of security for widows and orphans, so that the meteoric rise of the split-off Northern Electric and its rise through various name changes to Nortel, was a source of pride and vindication to Canadian investors, the more realistic of whom recognized the hollowness of the rising share prices and declining value, but to others whose memory of the former glory of its parent or out of loyalty to an old friend are forced to face the reality that Nortel’s reverse split of ten shares for one, augurs the virtual death knell or sale of a once proud Canadian icon.

The economy
Following a period of great optimism in the Canadian economy, the reality of weaker commodity prices, as well as the current decline in Ontario, especially in the automobile and steel industries, has led to a sober look at our failure to upgrade equipment and technology in industries where we compete on a global basis. Canada has only two companies in the Fortune global 500, far fewer than most other developed countries. Inflation appears to be under control in Canada, but not in the United States.

Are Canada’s Management schools competitive?
While some may blame the apparent slowdown of the Canadian economy on less competent management, or perhaps, point to the poor financial management of Universities, or allege less competent business schools, the fact of the matter is that our senior managers are certainly on a par and exchangeable with those in the United States with a fairly high degree of mobility between the two countries. As for our schools of management, the teaching staff is largely drawn from industry. The random organization of the professorial staff may be considered an indicator of academic freedom.

Income trusts revisited
The income trust legislation, while not totally unexpected, appears to have been written in haste. In addition to the fact that the loss of tax revenue to the government has probably been exaggerated, the new legislation will undoubtedly adversely affect investment in small Canadian energy companies. Some believe that lowering taxes on conventional companies and/or taxing the conversion of corporations to income trusts could have achieved the government’s objectives.

Immigration
Something appears to be amiss with our immigration practices. Not for the first time, Wednesday Nighters remind us that while we give preference to highly educated and trained immigrants, they find that they are not permitted to practice their skills in this country because of the difficulties encountered in becoming accredited here. All of us have met the civil engineer, doctor or nurse who arrived from another country to be barred from his or her profession. The shortage of accredited surgeons in Canada has led many patients to have their surgery done in India, apparently by qualified professionals. There’s even an industry – medical tourism – Meanwhile, our governments and more particularly, our professional accreditation entities, do not appear to be eager to either accredit them or to ease their way into upgrading their skills to our standards.
On the other end of the scale, it is said that badly needed skilled labourers are not permitted to immigrate because of imperfections in our national point system. But once here, they too encounter problems with the trade unions. While government officials are quick to down play the situation, which as described does not appear plausible, it is clear to most – at least around the Wednesday Night table – that the Canadian immigration system is less than transparent, or fair.

The Liberal leadership
The debate continues on the Liberal leadership race. One prediction is that if Michael Ignatieff doesn’t win on the first ballet, the winner will be either Bob Rae or Stéphane Dion; another that it will be between Ignatieff and Rae. Either result would undoubtedly be of comfort to the reigning Conservative Party. Part of the solution may lie with the recent organization of Apathy is Boring , an organization of young potential voters, aimed at interesting youth who are not enchanted with the present situation, to involve themselves, not only by voting but by becoming part of in the Canadian political process.

The U.S. elections
The Americans have made a bold statement of dissatisfaction with the current direction of the Bush Administration. While many of us in Canada applaud the change, the apparent inability of the U.S. to successfully fight an asymmetric war is cause of concern, considering Ortega’s victory in Venezuela [see: “The best strategy for the U.S. is to engage Nicaragua, not push it away “] and the question of political succession in Cuba. Considering all the failures of the Bush regime, it is not a given that the Democrats will be in a position to do much better. The Presidential elections two years hence should prove very interesting.

QUOTES of the EVENING
Government spending is not a lever of prosperity
It looks as if we are de-industrializing
It sounds to me like stagflation (stagnant growth and increasing inflation) … not as bad in Canada as it is in the U.S.
Companies have become global and have arranged themselves in ways to be most profitable. We haven’t managed to do that
When we talk about profitability of energy companies, rail and financial companies, in order to gauge the (real) health of Canadian economy, you have to look at the other 20% that make widgets
(The income trust legislation), a twenty-five billion dollar hammer for an eight million dollar nail
They could have cut the corporate tax, they could have put a graduated conversion tax. They put a sledgehammer to it
I’m confident that young Canadians are more entrepreneurial and have gained a lot of optimism about the future
If he (Bush) had announced that he was dumping Rumsfeld a week ago, he would have gotten a lot more votes than he did