Wednesday Night #1300

Written by  //  January 31, 2007  //  Reports, Wednesday Nights  //  1 Comment

31 January 2007


Last week we were treated to an exceptionally thorough briefing on the Alberta Tar Sands and we commend the write-up with additional links to any and all who wish to know more about this somewhat troubling – if not troublesome Canadian resource. Coming on the heels of the State of the Union Message in which President Bush called for better fuel economy and stepped-up production of alternative energy, nothing could have been more appropriate than Judith Patterson’s informed and passionate Tar Sands Seminar.
In last week’s discussion of oil prices, Jacques Clément cited the rising tensions in Nigeria. There are two excellent pieces on this topic to which we would draw your attention:
Blood Oil
Could a bunch of Nigerian militants in speedboats bring about a U.S. recession? Blowing up facilities and taking hostages, they are wreaking havoc on the oil production of America’s fifth-largest supplier. Deep in the Niger-delta swamps, the author meets the nightmarish result of four decades of corruption.
Curse of the Black Gold
Oil fouls everything in southern Nigeria. It spills from the pipelines, poisoning soil and water. It stains the hands of politicians and generals, who siphon off its profits. It taints the ambitions of the young, who will try anything to scoop up a share of the liquid riches-fire a gun, sabotage a pipeline, kidnap a foreigner.
Surely, all the fine minds around the Wednesday Night table should be able to come up with a way to bypass the corrupt officials and ensure that the hopeless communities of the Niger Delta benefit from the royalties paid by the oil companies.
So, what do we do for an encore? For one thing, we will welcome Danny van Gelder from his trip to the Middle East and look forward to comparing his impressions of Egypt with those of Anne Coleman.
Davos is now over for this year and amidst the various declarations of good intentions and fellowship, we were struck by the optimistic note sounded by Pascal Lamy of the WTO, announcing that the stalled Doha Round trade negotiations had been somewhat unfrozen thanks to informal talks between ministers from 30 countries. Even the staid Economist seems cheerful about the prospects for renewed negotiations.
We are not sure whether it was in this context that Jean Charest launched the idea of a free trade agreement between Canada and the EU . It’s a good idea, but we wonder if anyone remembers a similar thought advanced some years ago by, if memory serves us, Bernard Landry. Certainly it is not a Charest, nor a Harper original.
It appears more and more likely that the Premier will call an election this spring, while a federal election this year appears doubtful at the moment. We wonder if Mr. Charest – or any other politicians/political hopefuls – are bearing in mind the results of the Gallup International Voice of the People© survey, released just before the WEF, which indicate a growing lack of confidence in leaders to improve our lives, along with findings that “business leaders are widely held in better esteem than their political counterparts but significant proportions still criticize both sets of leaders, with dishonesty heavily associated with political leaders”.
As the games begin again in Ottawa on Tuesday, with the resumption of Parliament, we are dismayed by the Attack Ads put out by the Conservatives and hope that they will backfire. No wonder people don’t trust political leaders. The Conservatives would do better to prepare a response to the charges of a coalition of environmental groups that Canada needs a comprehensive plan on climate change and a commitment to the Kyoto accord, not more photo ops.
Reverting to Africa, the news that Ghana will take the Chair of the African Union is good; until the crisis in Darfur is resolved Sudan should have no claim to lead the pan-African body.
We are resigned to observing a two-year presidential campaign in the U.S. so have decided that unless something startling happens we will relegate news of candidates seeking primary votes to the very bottom of our lists of things to worry about – much more fun to watch the race in France. What we do and will continue to worry about is the worsening situation in Iraq and the Middle East. Unfortunately the “surge” announced by President Bush seems to have fostered only a surge in violence in the Middle East and a surge in opposition at home.

The Report

Theatre news
The departure of Gordon McCall from Centaur Theatre has just been announced, prompting much conjecture about his possible replacement. Although a minority in the Montreal area, the Anglophone population is theoretically sufficient to support good live theatre. While Gordon McCall was at the Centaur attempts were made to exchange plays with other cities in Canada and abroad, but the main problems to be resolved remain, namely funding, publicity, public education and engaging a public which has yet to sufficiently embrace live theatre locally.

The Americanization of Canada
Reports of the remarks made by former PM Joe Clark at McGill today launched the topic of the Americanization of Canada. Mr. Clark, who has recently taken up a post as a professor with McGill’s Centre for Developing Areas Study, voiced his dismay over the Harper government’s foreign policy citing “remarkable closeness” to U.S. foreign policy, an absence of priority for issues in the developing world, the deterioration of Canada’s relationship with China, and an erosion of the status of Canada’s professional foreign service. He also mentioned the repudiation of the Kyoto Protocol.
Many believe we are moving ever closer to American practices, from our adoption of American colloquial expressions to moving towards an elected Senate, to electing a Speaker of the House, to foreign policy or, in business, to overcompensating Chief Executive Officers in comparison to employees.
The dignity of Parliament has been compromised since the election of the Speaker by the Members rather than being named by the Prime Minister, as has been the custom in the past. The unparliamentary actions of MPs whose purpose appears to be less motivated by matters of principle than by being seen and heard by audiences at home or in the House, do no credit to the importance of their position. In the past, the appointed Speaker had a personal stake in the objective execution of his function, regardless of the political makeup of Parliament.
We could all play a more active role in democracy by [for instance] writing to the Speaker and asking him to make them [the Members] behave – it’s embarrassing to the nation
The Speaker cannot control the people who voted for him

The debate is not dissimilar to that surrounding another American practice, namely the election rather than appointment of judges. In both cases, the reputation of the office holder should be judged more by his/her objectivity than popularity. American-style political attack ads have unfortunately also made their debut in Canada , demeaning political parties, government and elected representatives while probably failing to convince the electorate (which is actually paying for the ads through tax credits) of the validity of their message.
What is particularly interesting [about the attack ads] is the response of the grassroots. On YouTube, you can see videos produced, not by the party, but by grassroots activists and this may presage a very unpleasant campaign in the next election
Despite the attack ads, Stéphane Dion is doing quite well in popularity. While, as claimed by Prime Minister Harper, the environment was largely neglected under Prime Ministers, Chrétien and Martin, Stéphane Dion as Minister of the Environment had a very positive impact on the November-December 2005 United Nations Conference on Climate Change [unlike the appearance of his successor, Rona Ambrose at the 2006 Conference in Nairobi]. Unfortunately, the Martin government underfunded Environment Canada. Although both sides criticize the environmental record of the other, realistically when, dealing with any environmental issue, one is dealing with natural resources, which fall under provincial jurisdiction since the 1930s when the Liberals gave the provinces jurisdiction (in order to get elected). More importantly, the Liberal Environment policy focused on restoration of degraded resources, which is between ten and one hundred times more expensive than to protect and preserve areas that are pristine.
Realistically, what the Liberals were doing [on environmental issues] … not efficient, low versus high return
As is not at all uncommon in politics, Mr. Harper loudly emphasized a number of policy issues, among which Income Trusts, redressing Fiscal Imbalance, and reducing hospital wait-times. While he behaves as though the hospital waiting times are solved and seems to be working towards some sort of solution on fiscal imbalance, he abruptly backtracked on the Income Trust Issue, an action that has brought together a vociferous opposition that includes pensioners and oil & gas fat cats. Some wonder at what appear to be excessive losses claimed by the former (where do these people get $500,000 to invest?), but the issue isn’t going away.

[Editor’s note: This week’s parliamentary committee hearings, kicked off by Minister Flaherty, appeared to be a rubber stamp for the government policy until Thursday afternoon when Finance Department officials gave a different explanation from one the Finance Minister had made to the committee just two days previously. This was in the face of testimony by the economics consulting firm HDR/HLB Decision Economics that the department’s tax-leakage estimates were “sharply overstated.” The company’s analysis, which used the same basic methodology as the finance department, found that 2006 federal tax leakage from trusts was about $164-million, not $500-million. Further, as a result of other legislated taxation changes for future years, the leakage in the future would be only $32-million annually. Whatever one’s opinion on who’s right, our favorite quote will remain “If we were incompetent, we wouldn’t admit it”. Stay tuned!]

Québec politics
On the political front in Québec, there appears to be a general consensus that we can expect a Spring election [WN was correct]. Increasing public recognition of André Boisclair as a lightweight appears to have revived the fortunes of both the Liberals and Action Démocratique. In some circles there is talk of parachuting Gilles Duceppe as a new leader of the Parti Québécois, which, if true would almost certainly put an end the present Liberal reign.

The new terminal at Pearson airport
Toronto has acquired a new glitzy airport terminal to be paid for, as is the case for most Canadian airports, with increased landing fees for aircraft, and airport fees and ticket prices for passengers. With no competition, no oversight and a reluctance on the part of travellers to fly to a less expensive airport an hour or so away by bus or car from their destination, there is virtually no limit to what can be charged.
In an effort to put the management of local airports in local hands, the Government of Canada set up Airport Authorities in the various cities served by airports. The members of these Airport Authorities are named by various bodies such as mayors and Chambers of Commerce, hence are responsible only to themselves, resulting in excessive airport fees and ticket prices at most destinations. Thus the Toronto -or any other – airport authority can do anything it wants with no oversight by the government except for safety and security issues, and it is almost impossible for citizens to intervene.
The fact is that airports can charge what the market will bear and the market will bear almost anything because the airlines want to be where the passengers are

CEO compensation
An analogous issue is C.E.O. compensation. While compensation is not and should not be an issue in privately owned companies, when compared with the earnings and salary protection of the lowest paid employees, compensation packages of the Chief Executive Officer of many large publicly owned companies appear obscene. All things being equal, the board members should determine the C.E.O.’s compensation package but the situation appears to be that most, if not all, board members of large corporations are C.E.O.s of others companies, putting them in a conflict of interest situation when determining C.E.O. compensation.
As it is usual for boards of directors to act on the opinion of their advisors, usually large accounting firms, there may very well be some self-interest on the part of the advisors to be generous in their estimates. As the company’s bottom line is adversely affected to some extent by the overcompensation, it would be in the interest of shareholders to intervene, but shareholders are not informed of the details of C.E.O. compensation until the end of the financial year, too late for them to object, to act or to raise the issue at annual general meetings. In the final analysis, the company is the property of its shareholders and what is lacking is timely information. The solution would appear to be that shareholders be informed of the compensation of board members and Executive Officers on signing their contracts and at the beginning of each year, a move that would enable them to intervene when determined it to be in their best interest to do so.
There is a difference between parachuting a paid employee into a CEO position and paying him/her outrageous amounts of money and someone who is the entrepreneur who founded and built the company, taking all the risks
Why not have a separation of powers, i.e., executives cannot be members of boards of other companies

What will be the cost of Kyoto?
On the eve of the release of the fourth assessment of the IPCC (Intergovernmental Panel on Climate Change), it was inevitable that the discussion turn to the effect on Canada’s economy of an eventual turn-around by the Harper government on Kyoto. We recommend the National Round Table on the Environment and the Economy “Advice on a Long-Term Strategy on Energy and Climate Change” as the basis for further discussion. The example of Walmart’s green initiatives, many of which are actually saving the company money, is also thought provoking. Generally it was agreed that the impact would not be as dire as some predict and that there are opportunities as well as costs, but the sceptics remain unconvinced. More important to others is the cost of NOT taking action.


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