Friday, November 03, 2006

Daily Digest November 3, 2006

Joe Hueglin wrote:
The DAILY DIGEST: INFORMATION and OPINION from ST. JOHN’S to VICTORIA.

EDITORIALs

HALIFAX NEWS - Fishery study a wake-up call
http://www.hfxnews.ca/index.cfm?sid=9254&sc=7

HALIFAX HERALD - Right call, bad promise
http://thechronicleherald.ca/Editorial/538367.html

MONTREAL GAZETTE - Tories right this time about income trusts
http://www.canada.com/montrealgazette/news/editorial/story.html?id=2de9d765-a8e9-432c-9682-54e92c129642

MONTREAL GAZETTE - The pitfalls of knowing no history
http://www.canada.com/montrealgazette/news/editorial/story.html?id=0dfff584-5eb7-4a6d-a81d-ead9948c07df

OTTAWA CITIZEN - Canadian rebuke
http://www.canada.com/ottawacitizen/news/editorials/story.html?id=6e4b688f-82cf-4d22-bf3f-17b21105c9df

NATIONAL POST - A model native agreement
http://www.canada.com/nationalpost/news/editorialsletters/story.html?id=fa777bb7-8bb1-45ec-ae19-cc8b426a680e

TORONTO SUN - The debt we owe forever
http://www.torontosun.com/Comment/Commentary/2006/11/03/2219453.html

HAMILTON SPECTATOR - Harper closes a tax loophole
http://www.hamiltonspectator.com/NASApp/cs/ContentServer?GXHC_gx_session_id_=894c24fb05b9c715&pagename=hamilton/Layout/Article_Type1&c=Article&cid=1162507817885&call_pageid=1020420665036&col=1112188062581

LONDON FREE PRESS - Promises a problem
http://lfpress.ca/newsstand/Opinion/Editorials/2006/11/03/2219447.html

K-W RECORD - Remembering all our soldiers
http://www.therecord.com/NASApp/cs/ContentServer?pagename=record/Layout/Article_Type1&c=Article&cid=1162507820755&call_pageid=1024322168441&col=1024322320546

WINDSOR STAR - The Northwest Passage
http://www.canada.com/windsorstar/news/editorial/story.html?id=8788cf63-561e-4fe4-9678-60d968646263

WINNIPEG SUN - Tough call on income trusts
http://www.winnipegsun.com/Comment/Editorial/2006/11/03/2219455.html

SASKATOON STARPHOENIX - lost on critics (A positive on progress in Afghanistan)
http://www.canada.com/saskatoonstarphoenix/news/forum/story.html?id=a7ae8791-2cfa-48e0-af12-2873154f972f

REGINA LEADER-POST - Passport isn't optional
http://www.canada.com/reginaleaderpost/news/viewpoints/story.html?id=cde8257f-3321-4f45-aa09-be15a844bfec

CALGARY HERALD - An ugly necessity
Stampede to income trusts forced Tories to break promise
http://www.canada.com/calgaryherald/news/theeditorialpage/story.html?id=74688ce9-178b-45f8-ac10-d149812de8a7

CALGARY SUN - Trusts and trust
http://www.calgarysun.com/cgi-bin/publish.cgi?p=160631&x=articles&s=comment

LETHBRIDGE HERALD - A matter of trusts
http://www.lethbridgeherald.com/article_4818.php

VANCOUVER SUN - A lot rides on success of Lheidli T'enneh pact
http://www.canada.com/vancouversun/news/editorial/story.html?id=00e622d8-1cce-4fe6-8a1d-c8051326e480


ISSUES

CANADIAN FORCES
Forces accused of ripping off vets
http://calsun.canoe.ca/News/National/2006/11/03/2219658-sun.html


ECONOMIC AFFAIRS
'The good went down with the bad and ugly' <most informative>
http://www.canada.com/nationalpost/financialpost/story.html?id=11b77e8c-d59b-448b-8df5-5fb6995fe49a

$20B 'disaster'
http://calsun.canoe.ca/News/National/2006/11/02/2208055-sun.html

Get ready for oilpatch takeover fever: analysts
http://www.canada.com/nationalpost/financialpost/story.html?id=fefdb7bf-fe58-474f-be14-7aec49d78e07

Rating firms wrestle with trust fallout
http://www.canada.com/nationalpost/financialpost/story.html?id=5d2f4dbe-af09-4e64-b75f-82eda166351a

Tax sounds 'death knell' for new funds
Mutual funds unlikely to focus on income trusts
http://www.canada.com/nationalpost/financialpost/story.html?id=3f298c2f-3cb2-4b85-8a6a-8595433612c0

Energy trusts demand reprieve from tax
http://www.theglobeandmail.com/servlet/story/RTGAM.20061102.wtrustss1102/BNStory/Business/home

Fish stocks face collapse ‘within our lifetime'
http://www.theglobeandmail.com/servlet/story/RTGAM.20061103.wfish03/BNStory/Science/home

EI rate cut demanded
http://www.canada.com/windsorstar/news/business/story.html?id=4c059231-5594-447a-a551-864c4d58a512


HEALTH CARE RELATED
Bad health for Canada
http://www.winnipegsun.com/News/Canada/2006/11/03/2219405-sun.html

5 million Canucks have no doctor
http://www.torontosun.com/News/Canada/2006/11/03/2219838-sun.html


JUSTICE SYSTEM
Leaky provisions
Those who govern us must understand the difference between the rule of law and the rule by law
http://www.canada.com/ottawacitizen/news/opinion/story.html?id=d094af15-a853-45e2-8f5b-fc5e4110d7c7


MIGRATION
A vulnerable, exploitable labour force
Migrant workers are vital to our economic well-being and deserve amnesty
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&amp;c=Article&cid=1162507816532&call_pageid=968256290204&col=968350116795


POLITICS IN THE PROVINCES
Agreement cuts provincial powers to govern
http://www.winnipegfreepress.com/westview/story/3758460p-4345834c.html

Deal shows how we can work together
http://www.winnipegfreepress.com/westview/story/3758459p-4345765c.html


POLITICS
PM won't apologize for breaking promise
Harper stands up to storm of criticism over plan to tax income trusts
http://www.theglobeandmail.com/servlet/story/LAC.20061103.TRUSTSPOLITIC03/TPStory/TPNational/Politics/

Harper's stunning reversal on income trusts
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&amp;c=Article&cid=1162507816535&call_pageid=968256290204&col=968350116795

No trust left in Tories
Flaherty tax costs Canadians
http://www.canada.com/ottawacitizen/news/opinion/story.html?id=803a4e54-deb1-48e6-8235-af9f7f2f91eb

Tories, Liberals use e-mails to back respective positions on income trusts
http://www.recorder.ca/cp/National/061103/n110347A.html

No special oil, gas treatment, Tories say
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&amp;c=Article&cid=1162551709727&call_pageid=968332188774&col=968350116467

http://ca.news.yahoo.com/s/reuters/061103/canada/canada_economy_canada_trust_col

Flaherty: `I regret it was necessary'
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&amp;c=Article&cid=1162507817324&call_pageid=968332188774&col=968350116467

`Bait and switch' slammed
Ignatieff criticizes income trust move
Tories send wrong message, MP says
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&amp;c=Article&cid=1162507817319&call_pageid=968332188774&col=968350116467

Liberal leadership hopeful Rae rules out reopening Constitution
http://www.recorder.ca/cp/National/061103/n110389A.html

NDP trade critic fights bid to limit committee's look at softwood lumber bill
http://www.recorder.ca/cp/National/061103/n110303A.html

Ignatieff, Rae well ahead of pack in fund-raising for leadership bids
http://www.theglobeandmail.com/servlet/story/RTGAM.20061103.wxliberals03/BNStory/National/home

Quebec debate damaging Liberals
http://thechronicleherald.ca/Opinion/538372.html


PROGRAMMES
Ottawa won't appeal court decision striking down parts of secrecy law
http://www.recorder.ca/cp/National/061103/n110365A.html

Fisheries minister insists Canada on right track in protecting marine species
http://www.recorder.ca/cp/National/061103/n110369A.html

Strahl says wheat board will not change before the end of next crop year
http://www.recorder.ca/cp/National/061103/n110375A.html

Passport research plan axed
http://calsun.canoe.ca/News/National/2006/11/03/2219643-sun.html

Flaherty eyes spring GST cut
Testing idea, other tax cuts with focus groups: source
http://www.canada.com/nationalpost/news/story.html?id=7eed70a4-bbc0-4d7f-a4fb-b2aa1d04f234

Cohesive overhaul of taxes still due
http://www.canada.com/nationalpost/financialpost/story.html?id=8868137d-eff5-47d5-bfb9-fee63cb67203&rfp=dta

Women's groups slamming Harper government for cutting funds to help stop domestic violence
http://www.news1130.com/news/local/article.jsp?content=20061103_173632_3224


OPINION AND INFORMATION
Vishing latest threat
http://lfpress.ca/newsstand/Business/Columnists/Millar_John/2006/11/03/2219803.html

Bush's War of Worlds
http://www.ottawasun.com/News/Columnists/Harris_Michael/2006/11/03/2219261.html

Canadians war over troops
http://www.torontosun.com/News/Columnists/Burnett_Thane/2006/11/03/2219907.html

No child should be second-class
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&amp;c=Article&cid=1162507816660&call_pageid=968256290204&col=968350116795

Michaelle Jean, Harper on crash course
Governor General's divisive political posturing shouldn't be part of the job
http://www.canada.com/victoriatimescolonist/news/comment/story.html?id=0aad61c6-0447-4043-bec6-7bb7bc33f8af

Ex-model gives MPs a glimpse of fashion world's 'darker side'
Canadian girls being lured into global sex trade
http://www.canada.com/ottawacitizen/news/story.html?id=b7f16c98-e9c2-4dbc-8e4c-be31e536a10e

Our tolerant society must draw the line at Muslim use of full veil
http://www.canada.com/ottawacitizen/news/opinion/story.html?id=cd1c6d4b-cf6d-4f03-a990-094937871dc8


INFOS

# Une nouvelle ronde constitutionnelle est inévitable, selon Pelletier
http://mesnouvelles.branchez-vous.com/Nationales/061103/N110382U.html

# Ottawa ne fera pas appel de la décision d'un tribunal dans l'affaire Arar
http://mesnouvelles.branchez-vous.com/Nationales/061103/N110378U.html

# Michael Fortier songe sérieusement à se présenter dans Vaudreuil-Soulanges
http://mesnouvelles.branchez-vous.com/Nationales/061103/N110374U.html

# Michael Fortier est confiant que cette fois-ci, l'autoroute 30 sera terminée
http://mesnouvelles.branchez-vous.com/Nationales/061103/N110364U.html

Ottawa estime que le Canada fait bonne figure en matière de pêche
http://info.branchez-vous.com/Nationales/061103/N1103104U.html

Négociations constitutionnelles
Bob Rae n'est pas intéressé
http://www.canoe.com/infos/quebeccanada/archives/2006/11/20061103-202339.html

Harper met fin aux débats
http://www.cyberpresse.ca/article/20061103/CPACTUALITES/611030862/1025/FRONTPAGE

Les soldats qui prennent des drogues n'iront pas au combat
http://www.cyberpresse.ca/article/20061102/CPACTUALITES/61102218/5846/CPACTUALITES

«La mission la plus complexe et la plus dangereuse»
http://www.cyberpresse.ca/article/20061102/CPACTUALITES/61102010/5846/CPACTUALITES

Nation québécoise
Un débat d'actualité, pour l'avenir
http://www.radio-canada.ca/nouvelles/Politique/2006/11/03/002-nation-quebec-pelletie.shtml


Federal Byelection

Byelection war heats up
http://lfpress.ca/newsstand/CityandRegion/2006/11/03/2219778-sun.html

Thornhill real estate agent Robert Ede will run as an independent in a London byelection.
Loner parachutes into race http://lfpress.ca/cgi-bin/publish.cgi?p=160570&x=articles&s=elections

BELOW(30)(30)(30)(30)(30)30)(30)(30)(30)(30)(30)30)(30)(30)(30)(30)(30)30)(30)(30)(30)(30)(30)(30)(30)(30)30)(30)(30)(30)(30)

My contribution tonight is a collection of posts relating to the Canadian Wheat Board for those who have an interest.

Joe

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Announcement

Joe:

Through you, to my friends on the DD, in the next couple of weeks I will be formally announcing my bid for the Ontario PC nomination in the riding of Lanark-Frontenac - Lennox and Addington.

My website, www.brentcameron.ca will be operational in about a week.

Cheers,
Brent Cameron
Lanark-Frontenac - Lennox and Addington
===================================
George Weiss

Start of Income Trusts?

Hi, Joe: 11-03

When did income trusts start? Somebody must have given the permission to proceed in that fashion.

Best wishes

George Weiss

(Apparently they have been around for quite a while but only recently by growing enterprises as opposed to income based operations )
===================================
Rosalie Piccioni

Subject: Remember when...

some mention was made a few days ago on how the population could help with unwanted emissions? This website page has interesting information.
http://www.cbc.ca/gill/episodes/110306.html

===================================
Brian D. Marlatt

Subject: Income Trust Impact on Seniors and BC reaction by widely read and CKNW radio commenatator, economist Michael Levy


We’ll feel the impact of this for years
The reality of the government about-face on taxing income trusts is surprisingly not that they are suddenly wising up to the fact trusts have been (and will be) a drain on Canadian corporate tax revenues, but that the Conservatives did a complete about-face on the decision. details
Posted on Nov 03 2006

===================================
Eugene Parks
Subject: Send to a friend and ask to vote and distribute

Dear Editor

Income Trusts could have been changed without radically and abruptly breaking a promise. Simply tearing down a house without warning is not responsible government – most agree. Income trusts could have been changed into a much more constructive investment vehicle without shutting them down.

For example, a simple change could have been to only allow income distributed to Canadian individuals and Pensions Funds (primarily held by the same) to be exempt from taxation i.e. Income trusts were ideally set up to be another class of RRSP. Instead, Income trusts were abruptly and radically altered.

Steve Harper has broken a written promise on Income Trusts laws. Within 2 days, Trusts on stock markets dropped $32 billion. The average loss is $32,000 per invested person – and still counting.

Finance Minster Flaherty claims the federal government is losing revenue so Trusts must be stopped and corporate taxes reduced. However, the government is experiencing record revenues and surpluses. The broken promise significantly harms pensioners to lower corporate taxes and to address a government-revenue non-issue.

The actual issues involved were not point-resolved; rather a tax change hammer was brought in and the CPoC threw the good out with the bad.

Eugene Parks
Victoria BC

Vote for this opinion at: http://www.progressivebloggers.ca/blog/diary.php?cmd=view&id=1463

===================================
Brent Cameron

Joe:

I am sure that the American gentleman who wrote that "O Canada, Are You Out of Your Mind? story you linked ( http://www.changewave.com/freecontent/2006/11/freetobymain20061102.html )
has good credentials in terms of investing and markets, but it is completely overshadowed by the use of hyperbole and horsepucks so often used by his countrymen and women.

He takes Flaherty's move as some personal affront to Yanks. News flash, buddy - governments do what they deem is in the best interests of their citizens, not foreigners. Lord knows with BSE. softwood lumber, etc. We know that US politicians never take a moment to say "Wait, did we not think about how this will affect Canada?"

Secondly, yes, it's breaking a promise, but I have more respect for politicians of all stripes ditching bad ideas than stubbornly following them on the road to ruin. Memo to Bush on Iraq...

Also, allowing a situation where foreigners who profit from Canadian assets can shift their tax burden to individual Canadian working families is far more obscene than his sense of betrayal. Besides, with cuts to corporate taxes and R & D incentives coming later this month, he'll get over his angst.

This guy's disgust seems focused, however, on the oil patch, even going so far as to muse about investing elsewhere. He mentions Russia specifically.

Excuse me, but what a load of "tauri excretum"! The Kremlin unilaterally repossesses Yukos, and is trying to screw Royal Dutch Shell out of its multi-billion dollar investment in the Sakhalin-2 fields in favour of Gazprom, and you think that is a better investment opportunity?!

Given proven oil reserves, the US faces this situation:

1. The Middle East, with all the political and social stability that comes from Wahhabist regimes that belong to a price fixing cartel;
2. Nigeria, where at least 3 foreign oil workers get kidnapped a week;
3. Venezuela - Paging Hugo Chavez;
4. Mexico - Paging Zapatista rebels, illegal aliens and contested Presidential votes; and,
5. Russia, which we have already looked at

Add to this that China and India are buying up energy assets worldwide like Tickle Me Elmo dolls on December 24th, and the mighty US actually does not have that many good options.

Bottom line - empty threat, buddy.

It is unfortunate that this guy has chosen to be less of an economist and more of a jackass.

Cheers,
Brent Cameron
Lanark - Frontenac - Lennox and Addington

===================================
Michael Watkins
To: foe@foecanada.org
Subject: Sue Canada? Go for it, eh!

Dear foe@foecanada.org,

I'm writing to offer a note of support for your efforts to hold Canada's
government - whatever the political stripe du jour - to account for this
country's abysmal record on climate change and environmental matters in
general.

Might I suggest that you expand your lawsuit to include as plaintiffs the
provincial governments of all significant petroleum producing provinces?

While you are suing various governments, consider also suing political
parties, and my party, the Conservative Party of Canada, should be your first
target. We have so-called "truth in advertising" laws; pursue the CPC on
those grounds at the very least. Their record in print on the issue of
climate change leaves many avenues open for potential court challenges.

Political and business leaders at both federal and provincial levels have
long conspired to ensure that Canada's first battle against climate change
has so far been an abysmal defeat. The petro-dollar fueled rhetoric and
political sycophants have poisoned the public square against open and honest
debate, therefore the courts may be the only place where the issues can get a
fair hearing.

Regards
Michael Watkins
cc: Daily Digest

===================================
Rebecca Gingrich
Subject: DD CWB

Rene Moreau re--stacking deck in Agmin office--this doesn't explain anything--why is it ok for Eastern farmers to sell to Cargill but not Western farmers? I am no friend of Cargill or Tyson. It still does not explain why Eastern farmers can sell to Cargill but not Western farmers.

The West is no longer the fiefdom of the East--they have grown up and no longer should be treated as second class citizens. What makes anyone think that Cargill does not buy grain from the CWB--the farmers do not get more for their grain--to run a government monopoly is expensive so who do you think pays the bills? It isn't 'government money'--it is the money of the Western farmer.

As for Cargill--they have received 'government money' to set up in Canada--so this is really a ludicrous argument. Cargill owns hog factory farms and Tyson owns feedlots for cattle--the stipulation on these two enterprises is that the grain for these feelots and hog farms must be bought from Cargill and Tyson. Where do you think they get their grain in Canada? Ford is given 'government money' in Ontario I don't see anyone demanding that Ford sell only to a government monopoly for distribution, so why should the Western farmer be held to a different standard? Face it, our own governments have given us to the US corporations. But the fact remains, only the Western farmer is used to promote 'Canadian control'. It is lame to think that the CWB is an honest broker of the grain. Look at the AWB--they were caught with their hand in the cookie jar. CWB books are closed to scrutiny.

becky

===================================
Phyllis Wagg

The Canada Wheat Board: a view from out east in reply to Becky:

As a historian who specialized in rural history I have spent a great deal of time studying the problem of farming in Canada and elsewhere. My interest came from trying to understand why the farms in the Maritimes could not remain viable. Unlike other forms of independent business farm production is the closest to perfect competition. You have many producers competing against each other and only a small number of buyers. Since the buyers have behind them the financial power of a corporation, negotiations between an individual farmer and the corporate buyer presents an uneven playing field. The concept of the Canada Wheat Board was for farmers to pool their resources to give them maximum bargaining power.

Joe--as an Easterner you have no concept of what the CWB is. If it is so wonderful why are not Eastern farmers clamouring to join it? If it gives Western farmers and advantage in marketing you would think the Eastern farmer would want it expanded to include them.

The production of wheat and barley in eastern Canada is small compared with the west. In order for an institution such as the CWB to be viable there has to be a large amount of supply available within a certain area and good transportation. Anyone who has traveled the agricultural regions of southern Ontario knows that the primary field crops are corn, vegetables, and hay. It would be uneconomical for the wheat board to expand its operations to eastern Canada although there are other marketing boards in operation.

The concept of an individual not having control of their product is communistic. The concept that Big Government has control of your product for sale is an irritant to many Western farmers.

This is the ideological argument. An extreme form of capitalist thinking opposes any kind of collective action except under the corporate model. Individual farmers must understand that they will be trading the control of big government, over which they can potentially have some influence, for the control of big corporations over which they have none. Many of these corporations have become as powerful as national governments. A western farmer with a few hundred thousands dollars worth of capital will have to deal with buyers billons of dollars of capital behind them. This is why eastern farmers, such as the fruit growers, have chosen to create co-operatives to sell their products. As I understand it the Wheat Board operates similar to a co-op except that it is compulsory.

Remember that a corporation is a collective organization designed only to serve the interests of its investors. A government is a collective organization created to serve the interests of its citizens. What has happened in the U.S. is that most farms have become part of corporations in which the farmer is relegated to a “manager” and operations are designed only to “break even.” The profit comes from government subsidies and goes to the owners. This is the competition that western farmers will have to face once the wheat board is broken.


No one is asking the question --why should a grain grower be forced to belong to the CWB? That is the crux of the problem. If the CWB is so wonderful and gets the best price for grain, you would think everyone would be happy. As it is though, the CWB books are closed so no one knows what is really happening. Two years ago farmers were notified that they would not be getting their last payment from the CWB because there was no money left. How many producers of anything would put up with that?

No one is asking the question as to why the wheat board is not allowed to explain to farmers the situation they will face once they are left on their own to negotiate their own prices. The reason that membership is compulsory is based on the concept that a marketing board cannot function if people can move back and forth depending on which is most profitable in any one year, which is what destroyed many such boards in the east. Once the board is broken, according to the information I have seen, it will lose about one-third of its power in the marketplace as about one-third are willing to take the risk of dealing directly with buyers. This will make it a less effective body for gaining good prices. Once outside the market board, farmers will be forced to sell at whatever prices the buyers dictate which, in most years, will be lower than the market board price. This will eventually drive down the price available to all farmers to the advantage of the corporations.

In spite of the rhetoric from Liberals, NDP and BLOC, no one is getting rid of the CWB, they are just making it voluntary. No one forbade the CWB leadership from defending their place at the trough--they were refused from using CWB funds for that argument. I didn't hear any argument from anyone when the supposed 'vote' a few years ago included dead farmers, farmers that had not grown grain for years, some living in Florida, etc.

As long as you understand that you are promoting a system that will ensure that corporate investors will get a great deal more out of the trough. You won’t have to worry about any farmer getting a vote in the corporate controlled system unless they have stock in the corporation they sell to.

Depending on Big Government to know your business better than you do is a fools game, and the only winners are the government. You would think that most of us would have learned that by now!

You will be exchanging a farmer controlled marketing board for private corporations and the winners will be the corporations. The marketing boards may not know much about growing wheat and barley but what they do know is the nature of capitalist markets and how they operate. It appears that a significant number of farmers are rather naïve about that part of the system.

Why should individuals be forced to belong?

Once the one-third of individuals that prefer corporatism has left the board, the marketing board will have lost a significant portion of its power to negotiate with the large multi-national corporations on behalf of the other two-thirds.

Would the elimination of the Canadian Wheat Board result in lower prices for consumers? It is far more likely that it will merely increase corporate profits. This is why the corporations, the United States government, and the new Conservative government are so eager to get rid of the Marketing Board.

This issue might not be of importance to me except that I believe having the production of food fall totally into the hands of a few mega-multi-national corporations is a threat to all of us.

Phyllis Wagg

====================================
Michael Watkins, Vancouver--Kingsway

Lets boil the income trust debacle down to its essence - the hue and cry
should not be over the policy, but over the promise broken by Stephen Harper.

Concern over Martin's government handling of the income trust file led to
jitters among investors small and large. When Harper made his pledge, he
effectively gave the green light to Canadian investors to keep their trusts
and plow even more into these high yielding investment vehicles.

Some perspective is first needed here. With banks paying paltry interest
rates of 1, 2, 2.5% on deposits and bonds, aside from being somewhat harder
for individuals to understand much less buy, income trusts that commonly
yield annual dividends of %8 - %12 (and even more) became an overnight
success, and have been for years. Small and large investors - from
individuals to pension funds - have used this class of investment to improve
returns. Almost every Canadian will be touched in someway by what's
transpired, whether they realize it or not.

Those that directly monitor their investments will see the full impact on
their next statements. For most this will be on their end of year statements,
delivered sometime in January.

Harper's income trust imbroglio points to a bigger problem than investment
dollars lost: what we've seen is yet another example of politicians saying
one thing in order to get elected, and then doing quite another once there.

Add the fact that we are talking about a 180 degree policy reversal which
affects the real money of Canadian, and foreign, investors and suddenly
Canada as an investment destination is looking something like a banana
republic.

The facts:

1. Stephen Harper is an economist, and any economist or financial systems
policy maker has *always* known the risk that a tax regime which
significantly skews the tax burden between income trusts and standard
corporate taxes is a policy system which can lead to undesirable
consequences. In fact he pledged that if elected he would narrow the gap by
changing rules for corporations, not income trusts.[1]

2. Income trusts have been the "hot" investment class for some time. They
were "hot" when people went to the polls in January. They were "hot" in 2005
during the alleged Liberal trust policy leaks. They were "hot" years before.
The phenomenon is not new; corporations have been interested in the trust
model for years. Alberta is home to many of the nation's most popular and
largest trusts in fact.

Some corporations actually suit the trust model very well, and some do not.
An Albertan economist, having witnessed some less suitable trust conversions
in the past (Precision Drilling is a fine example, one which caused some
navel gazing in the industry, long before the 2006 election), Stephen Harper
will have always recognized this. What BCE and Telus had signaled an
intention to do was no surprise to anyone remotely interested in financial
markets or Canada's economic health.

One news report suggested that Harper felt he had to act in due to new
information coming to light, in part as he became aware that EnCana was
modelling / considering the income trust model for its future. Lets dissect
this spin: that EnCana or any Canadian corporation would at least consider
conversion into a trust is wholly predictable, like the rising of the sun
each day.

3. Income trusts thanks to some fumbling by the Liberals became a hot
election topic. Some might say the allegations over policy leaks on this
issue were a key factor in undermining public confidence in the Martin
Liberals.

4. Harper, Monte Solberg, and the Conservative Party over and over again took
the Liberals to task on income trusts, painting them as the party that would
"tax" them, while assuring investors that income trusts were a safe vehicle
if only the Conservative Party was behind the helm. A white hot trust market
listened, and according to media reports, some aimed their votes at CPC
candidates specifically because of this policy pledge.[1]

Real money is involved here. Harper made specific promises in a policy
area that, unlike many, actually caused people to change where they put their
money. Ask yourself this question: when was the last election promise that
caused you to take $100's or $1000's or much more and move it from one place
to another? Harper's pledge to leave trusts alone, to not "monkey with them"
did exactly that.

Footnotes:

[1] A quick search of my party's web site shows a number of very specific pledges
made during the course of the last election, pledges promising to leave
trusts alone. I've documented 4 such specific pledges here:

http://mikewatkins.ca/categories/politics/2006-11-03-08-15.html

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STRATOS
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Election promise looms large
Tories skewered over reversal
But NDP, Bloc will support tax move
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&amp;c=Article&cid=1162421411175&call_pageid=968332188774&col=968350116467
From the article: ""Innocent Canadians are suffering an economic bloodbath today because they believed the Prime Minister," interim Liberal leader Bill Graham told MPs. "He gave his word. Canadians acted on his word. He then broke his word."

Aaah, shadaaaap! The government in which you were a Minister was about to do the same thing. The result woul;d have been the same but it would have come sooner.

PROGRAMMES
Put wheat on farm ballot
"The minister should end, once and for all, the uncertainty that is negatively affecting farmers, customers and employees,"
http://www.canada.com/nationalpost/financialpost/story.html?id=9e11efa5-4aca-47d9-9db4-07bfab5f774e
If the CWB's out to get the federal government to put the question to a ballot, why doesn't it just tell MPs that they don't know what they're doing and should leave well-enough alone. Or that only CWB member-farmers have a stake in the decision and no one else (I mean who cares about consumers?).

Keeping or scrapping the CWB .. I don't know what to think since I don't know enough on the merits and demerits either way, apart from the well-known and obvious ones. But putting the question to a ballot amounts to farmers setting policy in the face of other stakeholders whose interests may be the opposite of the farmers'. Advice to the CWB: be careful of what you ask for ... you may getr a lot moree than you think.

=============
Few of Canada's seniors have income trusts for themselves. Most have shares in companies or in mutual funds that have shares in companies. At least some of these shares are in "major Canadian corporations" whose profits serve to provide them with retirement income. Weakening the profitability of these corporations weakens "the incomes of Canadian seniors". Right or wrong.
The thing about income trusts is that they act like bonds, rather than equity, in some ways. Since the idea behind a trust is to generate cash, spend as little as possible on administration, and either invest, save, or pay out the rest, income trusts pay out "interest" that varies over time. For example, a given trust will pay out a certain amount for each unit/share (say, $1 per unit, for example) at regular intervals (one a month in some cases, etc.), payouts that are maintained until the Board of Trustees (or whatever it's called) advises that payouts will be either raised or cut back. The price of each unit will change based on what's announced and on the rise and fall in "quality" (that is, risk factor) of investment.

So, if investors seeking, say, a 6% return on investment for a "good" quality trust (i.e. one that is a low-risk investment that will give them a 6% yearly return on investment), investors will discount future revenues by 6% yearly to calculate what a unit is worth. If trust units are trading at prices lower than their "worth" to the investor, he will be happy to buy them. At prices equal to their worth, the investor is indifferent. At higher prices, the units cost too much (i.e. their returns are too low) to interest the investor.

If investors seek to get 8% for a "lower" quality trust, they'll do the same as above but will use 8% instead of 6% in their calculations. The 8%, which will discount future revenues at a greater rate (with discount factors being (1 + discount rate) per year) means that future revenues will be worth "less" in current dollars and that the corresponding trust units are themselves worth less. Thus, a lower-quality trust investment, investors will seek a higher rate of return (the 8%) than for a good-quality investment (in this case, the 6%). For a given set of future revenues that are riskier (more subject to change) than another identical set, the investors will thus seek to pay less per unit to acquire those future revenues.

I know, I may be talking Martian here. But have a look at what I wrote yesterday for some background explanation. Mind you, that may be Advanced Martian ...

So now, how does this affect seniors more than others? In one way, since trust units generate cash, investors get cash at regular intervals without having to sell trust units, which is psychologically pleasing. Also, since trust units behave like bonds in some ways, seniors tend to have a greater proportion of trust units in their portfolios than do youngsters, who prefer equity because of its potential for greater long-term returns (i.e youngsters have more time to make up for market losses, which are more probable for equity than for bonds, so they're more open to going for the gold). When seniors are winding down their investments during retirement, they're more concerned with protecting what they've already accumulated, which means that they invest more in bonds, trusts, and "safe" investments than growth-oriented younsters do. Hence why changes in cash paid out by trusts affects seniors more than youngsters, generally speaking: senior have more invested in trusts than youngsters do.

Some articles suggest the Liberals were perhaps, maybe, going to act a year ago or so but were scared off by the attacks of the then Opposition Leader. An OP ED piece in the National Post was a part of the "Stand Up For " campaign.
Liberals not wanting to pay a political price for their decisions. Surprise, surprise. Mind you, this applies to other parties too, but to a lesser degree for Tories, who Canadians "expect" more to make unpleasant decisions. The thing to do in such as case often winds up being "win an election first, get rid of the issue early in the mandate, and hope no one remembers too much next time around". The Tories don't have that leisure, what with them forming a minority government right now, so the idea is to get rid of the issue as soon as possible (before the naming of a new Liberal leader) and moving on to other things.

It was on the Conservative Party of Canada website but is presently only available through googling as far as I can determine because when I "Click here for the current page without highlighting. " nothing comes up.

If you're of a mind read the article ion the Post. You'll find it refers to seniors, yes, but also mentions investors undefined and companies as well that were being protected
http://72.14.203.104/search?q=cache:1C4vxbchWWgJ:www.conservative.ca/EN/1113/28399+wiped+out+billions+of+dollars+in+market+capitalization+Stephen+Harper+October+26,+2005&amp;hl=en&gl=ca&ct=clnk&cd=1
From the article: "The government (the Liberals, back then) claims that income trusts enjoy an unfair tax advantage over corporate dividends. If they believe this, then the answer is not to shut down a valuable investment vehicle, but to cut the double taxation of dividends. In short, level the playing field and let the market decide between income trusts and dividend-paying companies.

As my party's finance critic, Monte Solberg, says, the success of income trusts represents a rare triumph for investors over the tax man. Let's not be so naive as to assume that the Liberals will do the right thing to protect taxpayers (the right thing to do to promote taxpayer interests is to make trusts pay taxes like corporations; the right thing to do to protect trust INVESTORS is to keep things the way they have been) . We'll need to fight hard to keep what we have, and even harder to gain ground.

It's time to stand up to Paul Martin and stop his attack on seniors and investors. (Talk about having to eat your words. Propagandists, the reckoning always comes ...)
In brief, investors are happy to get returns higher than they would be if trusts were to pay taxes like "normal" corporations (i.e. happy to get more more revenue for a given amount invested in a trust). Gee, the fellow's discovered a new law of economics. Indirectly, this means that trust investors are happy to be able to dodge taxes when they have the chance. A second new law!

Rubie sent me an article by an American investment counsellor. If he's correct and matters stand as they are to-day the answer to the title of his article
"O Canada, Are You Out of Your Mind?" http://www.changewave.com/freecontent/2006/11/freetobymain20061102.html will be "YES!"
Are you out of your mind for cutting off the chance of a lifetime for American investors? From the article: "Take a deep breath, close your eyes and remember that over 85% of ALL your exports from your lovely country go to the United States. Canada's economy is half the size of California's -- we could buy the energy trust industry over lunch. Canada, you have the great fortune of having incredible energy and mineral resources -- if we knew they were so valuable in the 18th century, we would've made you an offer you couldn't have refused then. But Minister Flaherty, you're just looking out for the best interests of Canada, right? Grow up. If you choose to kill the geese that lay the golden eggs, the most energy-deprived country in the world will roll up your industry, assume ownership, and pick up and grow the industry that you so irrationally seem to want to throw away. That is, if we beat the Chinese and Russians to it. The good news is the energy trust guys I know don't wanna work with the Chinese or Russians. They LOVE Americans and REAL capitalism."

Aaah, shaddaaap, ya dink. We all know that you and everyone else would like to draw high profits from corporate-tax-exempt investments. And that you'd be happy to cough up cash to invest in such high-profit ventures. Just don't be so crass about it, o Great American Hero-Capitalist. ("Energy trust guys LOVE Americans and REAL capitalism". - I'm sure they do. Now go ask YOUR government why it doesn't make US trusts corporate-tax-exempt. Self-serving, puffed-up dink!)

??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Sticking to promises through stacking the deck

Two years ago farmers were notified that they would not be getting their last payment from the CWB because there was no money left. How many producers of anything would put up with that?
Interesting - this must have happened back when the CWB had a shortfall which the federal government wasn't allowed to compensate for (by giving money to the CWB) without infringing on NAFTA. How did this kind of thing not make the big papers around here?

Depending on Big Government to know your business better than you do is a fools game, and the only winners are the government. You would think that most of us would have learned that by now!

At last, an explanation that holds some water for scrapping (or "voluntarizing") the CWB. The way I figure it, the CWB (or whatever ot would be called) could be kept around to enable farmers to sell fixed amounts of grain based on contracts signed between themselves and the CWB. (That is, the CWB would make it possible for farmers to sign long-term contracts for weat delivery.) Mind you, that just means that the CWB would be in the wheat futures/contracting business, like other players are. So whether or not this aspect of the CWB survives is anyone's guess.

As for the CWB's second function, segregating different strains of wheat in different silos and such, I'd imagine that that will continue to exist in some form since "pure" unmixed wheat is more valuable than blended-any-which-way wheat. Some things absolutely require that specific types of wheat be used: pasta is made from "hard" durum wheat, which gives pasta a texture that it could not have if "soft, squishy, pasty" wheat were used. The latter is used for bread, I imagine.

As for the CWB's international marketing clout (e.g. signing long-term supply contracts to places like Algeria): the about suggests that the CWB would become one player among many international ones. But one with a big card up its sleeve: segregated wheat, which many (most?) others can't offer directly.

Aha .. .so THAT'S what the Tories are probably up to. Let's see how things work out ...

Why should individuals be forced to belong?
Since the 30s, the name of the game has been price stabilization by averaging of yearly wheat prices (the CWB used prices averaged over the previous three years to come up up with a current yearly price, I understand, with a view to rounding out the rough edges as prices surged and fell). The catch with that is that when prices in the current year were higher than the CWB's averaged price, then farmers would sell all their wheat to others rather than to the CWB. If the opposite were the case, they'd sell all their wheat to the CWB and thus get the benefit of a CWB "price insurance" without paying for it when times were good. Given that logic, it was necessary to have all farmers deal with the CWB, without exception.

Now, if markets are well-enough understood and well-enough functioning, they may be used in place of a bureaucratic CWB and at a lower "price for service". In such a case, individuals could do as they please, without being forced to sell their crops to a single buyer.

becky

Becky .. tell us more!

===================================
Rosalie Piccioni
To: mailto:foe@foecanada.org
Subject: Re: Suing Canada?

I resent even the thought that you are actually moving against taxpayers of your own country; you say you are, but I wonder if indeed you are representing your country and not some foreign organization bent on destroying what this effective Government has accomplished thus far. I would ask where and how you got the name, information about, and contact with this German expert, but I am not asking - I will let the future speak for itself.

Frankly, I am disgusted that you call yourselves " Friends of the Earth," and particularly Canada, yet are ready to place another burden on the shoulders of Canadians. No, I do not believe that you are acting in the best interests of this country, or even of the planet, and one of these days your real agenda will come to light. I am a senior, but I hope I'm here to see that day!

Say it, Sister! Hahahaha. Facetiousness aside, though, I agree with Rosie here. Make your arguments, o FOE of Canada (FOE = Friends of the Earth .. you'd think that they'd have the sense to call themselves FOTE, but nooo ...), but the legitimately-elected representatives of the people make the decisions, OK?

===================================
John Halonen

Did "Canada" initiate a tax scam under Brian Mulroney
OR
Did the "US" subsidize Canada thru "Brian Mulroney" with a North American Union direction.
Huh?

===================================
Rene Moreau

When some of the largest and greediest corporations on earth want to eliminate a highly organized, Canadian united front against just such greed and uncontrolled corporatism as the food cartels, would we not have to be total fools to drop our pants, or other defences, liKe the CWB, at this time?
Hhhmmmm ... poor choice of words. The CWB is a "corporatist" entity designed to stand up to other ones in the name of farmer "greed" for higher and stabler incomes. (<== NOTE: Comment NOT meant to slag farmers.)

This is not the first time this particular ploy has been used, however. Remember when talk started about breaking up Ontario Hydro and such quite huge entities as Southern Electric and Enron's lobbyists were getting Canadians to say that Ontario Hydro was getting to big, and how uncontrolLable Hydro was and how terrible the 38 billion dollar debt was? Then remember the Enron disaster and the figures involved?
Actually, Ontario Hydro was (and is) far from being anywhere near the largest player in North America.

Think Corporate Magna Carta, now!
What, as in corporations being freed from government influence (in the sense of being subject to policy) and oversight?

===================================

End the Wheat Board Monopoly

A government task force is recommending the Canadian Wheat Board's monopoly be phased out.

All I can say is, what took them so long!

The National Citizens Coalition has been pushing for an end to the Wheat Board monopoly for more than 10 years.

What it boils down to isn't economics or wheat or trade. It's about individual freedom.

Simply put, western grain farmers should have the freedom to market their own crops to customers of their own choice.


Destroying the Canadian Wheat Board and Prairie Communities The ...

If there's a religion in the world today I hate, it isn't Islam, it isn't Christianity, even the noxious right wing version in the US - it's free trade fundamentalism.

Wheat board dead?

Detailed plan for Wheat Board changes generating debate

[Canada] Government control is theme of Strahl's .....

Harper tries to eliminate Wheat Board

Ottawa adds another monopoly foe to wheat board

Strahl announces plebiscite for barley farmers on wheat board

Vote on wheat , barley urged

Komarnicki comments about Canadian Wheat Board issue

Prairie coalition raises CWB questions

Western agriculture ministers take various wheat board messages to ...

Wheat board
chief urges consultation

Wartman Demands Wheat Board Vote

Manitoba farmers to vote on Wheat Board

Search is on for company to hold farmer plebiscite on barley ...

Barley farmers in on Wheat Board vote

No radical changes at wheat board before election, Strahl says

USofficials praise plans to conclude wheat board monopoly

Task force member appointed to wheat board

Ottawa adds another monopoly foe to wheat board

Barley battle in the first round for CWB

Pro-monopoly Wheat Board director fired

EDITORIAL - Plebiscites by the tonne

What does the Canadian Wheat Board do?

harper tries to eliminate wheat board

CWB Rally

NDP Opposition parties unite to support Wheat Board, says NDP MP ...

Conservatives and the Wheat Board « Relentlessly Progressive Economics

BS in the Wheatfields?

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