Sunday, November 05, 2006

Daily Digest November 5, 2006

Joe Hueglin wrote:


MONTREAL GAZETTE - Canadians want facts about our universities

OTTAWA SUN - Soldiers’ tough duty

TORONTO SUN - Warriors and peacekeepers

LONDON FREE PRESS - Ocean bounty is in danger

WINNIPEG SUN - Who wants another election?

CALGARY SUN - Time for Conservative candidates to show some leadership on this pressing issue
Debate good for our health

VICTORIA TIMES-COLONIST - Seeing the future brings new risks
Tests can tell us who will be stricken with illness, but that knowledge can hurt more than it helps


Land claims papers found

Online petition seeking state funeral for last veteran of First World War

Fear of U.S. retaliation prompts Ottawa-B.C. fight over weapons range: author

Pension splitting move by Tories sparks new interest in family income split

Only rich couples benefit from income splitting
Kathleen A. Lahey says Flaherty's `Tax Fairness Plan' is the antithesis of fair

It's too early to throw in the towel on trusts

Should Canada be doing more in Haiti?

Author says U.S. and Russia have pushed nuclear threat to unprecedented level

U.S. and allies face the most serious strategic challenge of the past 50 years

No hard time for 30% of killers - Jump in 'exceptions' to 2-years-in-max policy

Constitutional challenge launched as stories emerge about energy poverty

Tough talk about wife abuse
Punjabi phone-in show examines violence by men, "a serious problem" within Sikh community

Immigration applicant in limbo for 10 years

Analysis: In Ottawa, brazen lie starting to feel like truth

Top Conservative urges staff in MPs' offices to wade into byelection campaigns

Critics slam Harper's EU summit cancellation

Poll provides good news for Grit hopeful Dion

Air disaster - Who shot Rona Ambrose?

Accountability eludes Senate - They haven't a clue of fate that awaits

How the world sees America's big election

George Bush's Republicans stand to be sandbagged in this week's elections -- how did it go so wrong for the 'war president'?

Flaherty holding steady on income trust plan

EnCana spurred trust firestorm

Big oil forced trust change
Tories: Concessions possible for shaken sector

Aging society will carry steep consequences

Trust in leaders so low it can only get better

Income-trust coverage missed real story

Afghanistan drug problem not that easy to solve

There’s strength in numbers – and in diversity


Jean Charest a pris la défense de son homologue fédéral Stephen Harper

Élections complémentaires: les conservateurs invitent leurs députés à s'impliquer

Harper sera absent au sommet canado-européen

Minorités religieuses: Ottawa songe à un fonds spécial

Les négociations constitutionnelles ne sont pas dans le radar de Jean Charest


Bob Taubman

Re: Mark Garstin's Neo-Con Rant

Why do the hawks always resort to ad hominem attacks on those who oppose the war(?) in Afghanistan? I get tired of hearing the same old rant that paints opponents of the so-called war as misogynist beasts. As for the attempt to link the Afghanistan conflict with WWII, it just ain't happening. Today's Ottawa Citizen reports that support for the Afghanistan conflict has dropped 13 percent since September; from 57% to 44%. It would appear the Garstin-ites are a minority, at least for today.

That's my rant for today.

Bob Taubman
Ottawa, ON
Card-carrying PC member.

Subject: RE: Daily Digest November 3, 2006

HALIFAX HERALD - Right call, bad promise
Indeed. But, seeing things on the bright side, this is actually a sign of good things (maybe even election-positive material). Consider:

1. The announcement caught everyone by surprise. Anyone out to say (Jacko!) that Tories are beholden to business interests will have a lot of 'splaining to do. After all, the clever plans of Telus, BCE, and others have just gone up in a puff of smoke, much against "corporate interests'" desires.

2. Again, everyone was caught by surprise, that is NOTHING GOT LEAKED. Talk about Tory-tight control and discipline. And compare that to what happened last year when details of the Martin budget apparently go tleaked, which resulted in unusual trading patterns for certain stocks.

3. The timing was perfect, too. Mr. Flaherty announcement the Tories' decision just after the November end-of-month, meaning that his announcement won't affect November end-of-month corporate results. December end-of-month (and many corporate end-of-year results) WILL be affected but by December month-end, trust unit/share prices will have settled to their "natural" levels, meaning that the temporary-hysteria factor (that is, any excessive price drop caused by excessive "panic" selling) will have vapourized. Plus, since month-end results take a couple of weeks to calculate, said results won't be published until at least mid-December, that is Christmastime. All of this will make the pill easier to swallow.

So, Merry Christmas and look at the positive side. Sure, an election "commitment" will have been reversed but ultimately, the Tories had the guts to do the right thing, once they knew better. And they did it in the best way possible. Makes me proud to be a Tory, it does.

OTTAWA CITIZEN - Canadian rebuke
From the article: "Henri-Paul Normandin, the Canadian deputy UN ambassador in New York, delivered a ringing, collective rebuke to the thugs, tyrants and totalitarians who for years have made a mockery of the UN's mandate to promote peace and freedom. Mr. Normandin cited Zimbabwe, Iran and Uzbekistan. He called for the release of political prisoners in Burma; for Sudan to restrain marauding Arab warriors known as the Janjaweed; for China to respect religious freedom."

The rebuke: "According to Iran, Canadian police are guilty of using "chemical agents." Perhaps the Iranian representative was referring to pepper spray. According to Sudan, Canada supports slavery."

It's about time that Canada piped up about those bozo governments. Sure, things have to be put in context and have to be done constructively. But incentives to behaving better take two forms: the positive (carrot) and negative (stick). Either or both can be used to incite better behaviour, and often they complement each other.

Slavery ... pppfffftttt! Just a couple of years ago, there was a fuss made about Canadian NGOs "buying" slaves from traders in South Sudan and then setting them free. The slaves otherwise would have been sold to buyers (and re-sellers?) in Africa and in Arabia. The fuss erupted when the NGOs were accused of encouraging slave-raiders and traders to keep on doing there thing. Sudan, accusing Canada of promoting slavery ... pfffttt! Then again, what I've mentioned above may be PRECISELY what they're talking about, with Sudan government trying to stamp out slavery and Canadian NGOs propping up the business. Hhhhmmmm .... all of a sudden, things aren't so clear-cut

WINNIPEG SUN - Tough call on income trusts
Actually, an easy call. Facing up to the electoral consequences is the tough part.

'The good went down with the bad and ugly' <most informative>
Ha la-la, la-la. 'Twould be nice to get a more complete picture all in one place. Here goes:

(WARNING: The text that follows is long even for me. Feel free to skip and go straight to the conclusion.)

1. When a trust unit, just as when buying a stock unit, you're buying a claim to a part of the trust/corporation's cash flow. That cash flow accumulates and gets transformed into:

- free cash (that is, cash on hand or in a bank);
- near-cash equivalents (Treasury Bonds, and others things like them, which can be resold readily for cash);
- short-term assets (cash owed to the trust/corporation by its customers (that is, the trust/corporation's "accounts receivable") and payable within the next year); and
- long-term assets (assets that exist more than one year from now; includes cash owed more than a year from now (e.g. when bonds mature; when customers will be paying cash to the trust/corporation; etc.);
- dividends.

All of the above are interchangeable, except for dividends. The trust/corporation can buy a building, which would convert free cash to a long-term asset. A trust/corporation short on cash can sell some of its accounts receivable (a short-term asset) at a discount in exchange for free cash (gotta pay those salaries ... and employees want to see cash for their work, not claims to accounts receivables).

Dividends differ from the others in the sense that they can't be transformed into anything else. Transformation is only one-way: cash gets transformed into dividends, which are paid out to unit/share owners and then leave the trust/corporation.

So, summarily, a trust/corporation with positive yearly cash flow (i.e. that "makes money"), accumulates wealth in the form of assets of various natures. Each unit/share holder has a claim to that wealth, with one share entitling them to one portion of the same size as that for another share (i.e. if one million units/shares are in circulation, each one entitles its owner to one-millionth of the company's "worth". (NOTE: This isn't the same thing as entitling the owner to one vote equivalent to that of any other unit/share's at a trust/corporate annual meeting. Multiple-voting shares may entitle their owners to more votes than do single-vote unit/shares).

2. So, what's a unit/share worth? Nothing more than all the money that the trust/corporation will accumulate over time. That's it, that's all. Simple, no?

3. To calculate how much a unit/share is worth, analysts make projections based on assumptions concerning annual cash flows (e.g. earnings growth, inflation, etc.) and discount rates (a term that means the same thing as "cost of capital"). When evaluating a unit/share's worth, an analyst should always explain and justify what his assumptions are. Cost of capital is harder to explain but, in brief, it's a combination of interest rates for trust/corporate debt (that is, bonds and such) and "cost of equity" (which is a annual percentage growth rate that market-investors will demand).

Annual cash flows over a long-enough period (say, 20 years) get converted into "current" dollar values by "discounting" them at a yearly rate of (1 + DR (discount rate)) (in other words, a cash flow measured in "future dollars" twenty years gets divided by ((1 + DR) to the twentieth power), which gives its present value in current dollars. Add up all those future cash flows and add the discounted future value of a unit/share expected at the end of the projection period (20 years in this case). This will give a sum that future cash flows will contribute, over the next 20 years, to the wealth of the trust/corporation. That wealth, divided by the number of unit/shares, is the worth of each individual unit/share AT THE PRESENT TIME.

The wealth, as it accumulates, can take any of the forms listed in section 1 above, including dividends (for trusts, these are called "cash distributions").

4. So, why do trust units lose value when income trusts get slapped with corporate taxation? Quite simply, it's because the trust/corporation's cash flows will be lower than before, which means that the unit/shares will have less value. Hence the price drop.

Moral of the story: all the units of existing trusts lose value because, starting in five years, future cash flows will be lower than before because corporate tax will have been taken out of them. And from now on, the units of new trusts will be worth less than they would have been worth had trusts remained tax-exempt.

So, what will come out of this? Trust investors will still be seeking a given rate of return on their investments, with that rate of return being unchanged by trusts being taxed. Which means that trusts will have to either raise their per-unit rate of return by either: raising their future cash flows while their per-unit value remains the same; or lower the per-unit value of their units while future cash flows remain the same as before (by having the prices of their units drop); or a combination of both. In other words, to maintain the rate of return of their units, trusts will have to either improve their (trust's)profitability or lower the asking price for their units (i.e. get a lower cash return than before but pay less for it).

That being said, what are the consequences? They are:

- new trusts, as well as existing ones, will have to perform better than they would have previously to attract investment capital from unit buyers;
- unit prices for existing trust will from now on be worth less than they would have been otherwise;
- new trusts that could have been created previously and performed marginally under the past regime would be too weak to exist under the new regime, which means that fewer trusts will be created in the future than there would have been otherwise;
- existing trusts, and possibly new ones, will have to rely more on debt to finance their operations and to finance operational improvements; however, there are limits to this - up to a certain point, creditors are willing enough to lend (often up to a debt-to-equity ratio of 3-1); beyond that, they get antsy and demand higher interest rates, which makes it harder to finance operations; summarily, low-debt trusts will begin to carry more debt and high-debt trusts will be financially squeezed, which may induce them to raise equity by issuing trust units, which would lower the value of existing units;
- existing trusts may cut back on cash distributions (dividends);
- existing trusts may begin to let their assets run down (e.g. let buildings fall apart) to prop up cash distributions.

So, in brief, in the future:

- only stronger (than now) trusts will prosper as well as those in the past;
- fewer new trusts will be creaded than would have otherise;
- some existing trusts will be snapped up at lower prices than before;
- low-performance trusts will keep limping along or fizzle out;
- some trusts will increase their debt load, while will lead to trouble for some of them;
- some trusts will cut back on cash distributions, which will mean stiffing unit holders, much to the latters' displeasure;
- some trusts will dilapidate (run down) their assets, thus "liquidating" them.

Current trust owners, keep your eyes open!

Energy trusts demand reprieve from tax
Get bent!

EI rate cut demanded
Right-o. Or convert them into a salary tax, if you must. Just drop the phony "insurance" talk.

No special oil, gas treatment, Tories say;c=Article&cid=1162551709727&call_pageid=968332188774&col=968350116467
And anyone out to paint the Tories to Western $$$-interests will again have some 'splaining to do.

`Bait and switch' slammed
Ignatieff criticizes income trust move
Tories send wrong message, MP says;c=Article&cid=1162507817319&call_pageid=968332188774&col=968350116467
From the article: "Predictability of regulation is also essential. We can't have a market where major players announce their intentions one day and the government changes the rules of the game overnight."

Federal Finance Minister Jim Flaherty blindsided the markets with his announcement on Tuesday, saying new income trusts would face corporate taxes starting next year, over concerns the federal treasury is losing too much tax revenue."

Well, precisely what WAS Mr. Flaherty to do? Warn everyone ahead of time? And if he were to do that, in what way would the result be different?

In brief: Shaadaaaaap! <== Hey, I'm getting addicted to this.

Women's groups slamming Harper government for cutting funds to help stop domestic violence
Provincial jurisdiction, isn't it?
Federal Byelection
Byelection war heats up
From the article: "(Elizabeth) May promised to raise the "tone of political discourse" ..."
From soprano to shrill? (<== Sorry, I couldn't hold myself. Guess I'm feeling feisty tonight.)


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.
Hurray! DDers are looking to graduating to the big scene. Bravo, and good luck.

Brent Cameron

I am sure that the American gentleman who wrote that "O Canada, Are You Out of Your Mind? story you linked ( )
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.
I may not agree with some of J. K. Galbraith's proposals for a better society but his aphorisms surely have left their mark. He once something "Wealth often passes for intelligence", with "wealth" being the purview of rich magnates, business leaders, investment folks, and such.
Good credentials! When someone writes writes something as grossly stupid as this is, his credentials go all to hell when it comes to anything beyond his field of expertise. Let's pray that this incontinent ignoramus never gets named or elected to anything ...
("Incontinent" ... what with me venting sometimes, I'll get whacked with that one opf these days ...)

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.
Out of curiosity: do any Eastern farmers grow and sell grains covered by the CWB monopoly? Honest question, nothing else ...
As for why non-grain farmers not having to go through CWB-style monopolies. I suspect that that has to do with the perishability of their produce. Offhand, I can't think of anything other than grain seeds that can be stored for later use in their near-original form. Thus, the point for having the CWB: separate different grain strains, store them separate from one another, and centralize grain marketing to get maximum price leverage, which presumably finds its way back to the member-farmers after expenses. Whether this works well or is still worth doing is another matter.

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.
True - the federal government isn't allowed to give any money to the CWB during lean years, according to NAFTA. If it does, the Americans may stick us with penalties. This scenario popped up around 2003 (?) when Jean Chretien was PM ... he gave no money to the CWB. The idea is taht expenses are incurred in running the CWB but its getting higher prices for wheat outweighs the cost to farmers.
As for the West no longer being the East's fiefdom. That's true too. But keep in mind that the higher prices that the CWB can get away with charging for Western wheat aren't to the East's benefit (quite the contrary).

RE: Daily Digest November 4, 2006

Fair warning, folks. I've outdone myself volumewise in my comments below and those for yesterday's DD, which I finished earlier this evening. But I'd like to express my thanks to all who contribute here for given me much to think about, to synthesize, and to correct in my ideas. I'm much better off for it and, if the stars line up, I'll be bringing my now-enhanced thoughts, views, and understanding into public service, perhaps in an elected position (still years away, if at all) or in another capacity. Either way, or even if no way, thank you all very much.

And praise to Joe for making this all possible. We'll name him Tory secular-saint of the Internet someday, I'm sure.


Pollster predicts cliff-hanger;c=Article&cid=1162595435471&call_pageid=968332188774&col=968350116467
From the article: "The current front-runner, Michael Ignatieff, who leads on everything from first-ballot support to fundraising, appears the candidate most likely to stall. Dion is the leadership candidate most often picked when delegates are asked who their second choice is, and again when they are asked their third choice."

Hurray! I'll have had both a Premier (Robert Bourassa in the 80s) AND a Prime Minister (Stephane Dion) in my riding.

Trusts demand PM hear their side
A $30-billion rebuttal
A little late rebut, meseems. Does anyone seriously think that the PM can back down now? Let's consider this "rebuttal" the face-saving gesture that it is ...

Plan for 2011
Easy double-digit distributions will end in 2011. Then the only difference between trusts and corporations will be governance
Uuuuhhhh. Well, no. The purpose itself of income trusts will be to distribute income, not to accumulate for investment. Or for $6,000 shower curtains, for that matter.

Where will income trust investors turn?
Yield-seekers may opt for government issues or corporate junk bonds
How do "journalists" get away with writing this stuff? What this one's saying is that investors seeking to buy high-yield bonds (i.e. debt) will shift to government-issued debt (the definition itself of low-yield, low risk debt) or "junk" bonds (the definition itself of high-yield, high-risk debt).

Clue to journalist: debt investors seeking to balance yields versus risk can do so by self-balancing their portfolios. They can do that by investing in either: medium-yield, medium-risk debt; some low-yield, low -risk debt and some high-yield, high-risk debt; or by investing in a mix of all types inorder to get an acceptable "average yield" and "average risk".

Trusts forge alliance to defeat tax
Ottawa insists it won't back down
The horse has already run out of the barn, guys ...

The Tories did what was best for our country
Now, how often do we hear THAT said about us?

Ozone problem shows the folly of messing with nature
Hole in the ozone layer has preserved Antarctic ice;c=Article&cid=1162595434748&call_pageid=968332188774&col=968350116467
Yes, we should never have left our caves and savannahs.

Environmental reality hits home at last

Ottawa misses the boat on clean air strategy
From the article: "Lt.-Col. John Butler, leader of Butler's Rangers during the American Revolutionary War, is among 14 people chosen from 400 years of Canadian military history who are portrayed in bronzes to be unveiled Sunday by Gov. Gen. Michaelle Jean.

... While he gets a statue here, Butler gets a bad rap south of the border, where history blames him and his son, Walter, one of his officers, for two brutal massacres on the frontier."

... ""They took no prisoners when they raided, ... It was a brutal tradition of striking terror into the heart of the enemy, burning, shooting, turning prisoners over to the Indians."

Nothing new here. In classical Greece, the Spartans were reputed for the ultimata: "Run, you win. Fight, you die." Plus ca change ...

Fall out from income trust affair
No prob politically, it seems, aside from one EDA pres lost.
?I never want to downplay something like this,? Mr. Plett said. But ?the way I understand it, you've only lost money
on paper if you don't sell out.?
Actually, people holding trust units when the announcement was made DID lose out and doubly so. Since there'll be less cash to distribute among unitholders, each unitholder will get less cash per unit. If the unitholder wishes to sell his units, he'll do so at a lower price because his units, which entitle their holder to a share of a now-smaller cash distribution, will be worth less.
On the positive side (though it doesn't fully compensate for trust units getting dinged), I'd imagine that their loss in value will enable unitholders to claim a capital loss, which will reduce theiur tax burden to a certain degree. (<== How come no one ever mentions this?)

John Halonen

Regarding: North American Union - Canada, Mexico & United States

Who's ever heard of this North American Union thing? One way or another, no one wants it so who cares?
Phyllis Hubeli

Becky, Joe, I have added my two cents worth in the body of your text.

"Rebecca Gingrich
Subject: DD CWB
Sticking to promises through stacking the deck
I much prefer that the individual farmer should be allowed to decide where and how he will sell his own wheat.
I've no philosophical problem with that. But "individualism" in a given case may not be the right thing to do. Just keep one thing in mind: if farmers seek "freedom to sell / market", they'll have a hard time arguing for income-guarantees / price supports / whatever, apart from supports needed to compete against subsidies in other countries.
Appoint a commission of "Get rid of it" supporters, forbid the CWB leadership from arguing its virtues, terminate a Board member supporting it a year early - and earn the praise of Americans!
Becky I don't really think that you believe in this as it is as one-sided as those who are upset because the Conservatives want the CWB vote to be limited to those who have produced wheat during the past two years. You don't like "do nothing but use the taxpayer's money and produce nothing but drivel commissions" any more than I do. However, some farmers actually want to keep the CWB as something they can fall back on when it is difficult to sell wheat. I think that producing farmers, through their vote should have the right to vote to retain the CWB and if more farmers (which I doubt) share this view then so be it. The wheat producers will have spoken in the only way Canadians have left -- through their vote and that should be respected. I do agree with you that the CWB leadership should stay out of the debate as they have a 'vested interest' position.
Not to mention that farmers aren't the only stakeholders in this matter. What about wheat buyers and consumers? What if Canadian non-wheat-farmers want cheaper bread and pasta?
As for the CWB and its leaders having a vested interest ... on the contrary, I feel that they SHOULD be allowed to state their cases. But decision-makers will have to keep in mind that they DO have a vested interest.
And as for farmers wanting to keep the CWB around for hard times: sorry, folks. No compulsory adherence, no CWB. If hard times are a worry (and of course they are), crop insurance, long-term and multi-year sales contracts, etc., perhaps with government support, are the way to go. Either way, a price will have to be paid.
Of course, if things get out of hand, the federal government won't stand around forever with its hands in its pockets. But year-to-year income gfuarantees will be too much to ask for.
Sticking by promises and principles is primary The means are incidental.
Had Canadians had a means of ensuring that our politicians did stick to their promises and principles this country would not be in the mess we find ourselves in today. How can we ensure that politicians do stick to their promises and maintain Canadian principles?
All very nice, but what principles are to be followed? And are they always appropriate, in every case? As for promises ... Baptist-heads on silver platters are best left "unstuck by" (or even better, unpromised in the first place).
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.
Good question, Becky. One that Joe did not answer in his response to you so perhaps we can elicit a direct response by asking it again: "If it (the CWB) is so wonderful, why are not Eastern farmers clamouring to join it?" If it is so good then why does it not cover every farmer right across Canada who produces wheat? The truth, of course, is that it is not good for wheat farmers and Eastern wheat farmers would not touch it with a ten foot pole.
Mmmm .. I suspect that it has to do with there being too little grown out East to make it worthwhile to enforce the CWB monopoly. Unless Western farmers, through higher administration and operational costs, are willing reduce the benefit of having the CWB around, of course ....
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.
If the government actually could do the job better than the average farmer, Becky, I don't think that anyone would be complaining about the CWB but, as we both know, the CWB was set up, not to help Western farmers sell their grain, especially to Americans, it was set up to ensure that Eastern farmers, who can sell their wheat where and to whom they want, have an advantage over Western farmers.
Re. Communistic. Nope. Communistic would mean that farmers would be imposed quotas to meet and prices at which to sell their crop. In the CWB's case, prices are "artificialized" by making them a rolling three-year average of past prices, which smoothes out price surges and spikes. This causes its own problems in the sense that this will encourage farmers to match their present-year production to previous years' market demand (as reflected by the averaged prices). Thus, after a good three-year run, farmers will be induced to try to produce large quantities of wheat, etc., even if if projected demand is lower than expected production. In the opposite case, after a bad few years, farmers will be induced to produce OTHER crops until the three-year averaged price rises, even if demand is expected to be greater than production.

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?
It is totally unfair that Western grain farmers for all these years were forced to sell only to the CWB at the price set by the CWB which had nothing whatsoever to do with world prices of wheat. Also, it was totally unfair that Western grain farmers had to accept the CWB grading for their wheat. Wheat that was of prime quality was downgraded because one insect and a few weeds were discovered after approximately 10 minutes of searching by a CWB employee. This meant that the farmer took home less money than he would have for the actual quality of his grain. Not only that, he could not receive his payment all at once but received a portion of it when he turned it over to the wheat board. He did receive a second payment but there was no final payment as the CWB claimed they were unable to sell his wheat and it had been donated to refugees in Africa. I am not positive but I doubt that he was able to claim for this forced donation on his income tax in order to reduce his taxes either. I can just imagine, Becky, what an Eastern grain farmer would do in this circumstance.
Battling headlines: "Prime-quality wheat gets downgraded because some crap was found in it / Local farmer oppressed" versus ""Prime-quality wheat gets downgraded because some crap was found in it / CWB stands up for its customers". The real issue here is to what degree such downgrades can be avoided. Was the farmer negligent in handling his grain? Is there anything that the farmer can to eliminate contamination?
As for an individual farmer not receiving payment because HIS OWN wheat (and not someone else's) was donated to Africa. Mmmm .. this has a bit of an urban (rural?) legend smell to it. How can the CWB know that that SPECIFIC farmer's wheat had been donated? Plus, who in his right mind wouldn't just mix the donation into the CWB's overall figures and pay the farmer accordingly? Or have I misunderstood the term "his wheat"?
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.
Becky, I think that if a majority of Western farmers vote to retain the CWB then it should be retained. That being said, I am totally against the government appointing a person to direct the CWB or appoint members to sit on the Board. These positions should be voted on by the farmers themselves and filled with people who are actually working Western farmers. I agree with the Conservatives -- unless you have actually raised and sold wheat during the last two years, you have no right whatsoever to vote. I also agree that the CWB leadership should not be able to campaign using CWB funds. That money belongs to the grain farmers, not the leadership nor the government.
Campaign, no. State its case, yes.

All I ask of you is to remember the Western grain farmer in leg irons for donating a bushel of his own grain to an American 4H member relative. He lost all his farm equipment to the CWB. Remember the farmers that wanted to set up a pasta flour mill--CWB refused to allow them to use their own grain--they would have had to sell it to the CWB first and then buy it back at inflated prices, thus making the enterprise unviable. The CWB prefers to sell the grain to the Americans and then consumers buy back the finished product. Don't forget that Western Canada grows the best pasta wheat in the world!
Our Durham wheat is sold in Italy itself to produce the finest pasta in the world. It is a sad statement about Eastern monopolies not allowing Westerners to actually begin a manufacturing industry that might survive and be profitable. The finest Durham wheat is grown in Western Canada. Why is it that Western Canadians are not allowed to set up a mill to grind this wheat and a plant to produce the finest pasta products in the world. Of course the Eastern manufacturers, et al, are not overt about this, it is done through Eastern controlled banks not allowing them to borrow the money necessary to set up these facilities and, prior to this, pressure being put on the federal government to introduce legislation which would make it difficult to operate such facilities. I will never forget the time that Honda wanted to build a manufacturing plant in Richmond because it did not want to have union workers and had this plant been placed in Ontario, where the unions wanted it to be, Honda workers would have to be unionized. Unions put pressure on the government and they in turn pressured Honda to ensure that no automobile manufacturing plant was built in B.C. The land purchased was paved over to become a giant parking lot for Honda automobiles straight off the boat and the plant itself modified to be nothing more than a place where any damage to cars could be repaired or broken parts replaced before they were sent to the dealerships. You can see it when you fly into Vancouver because "HONDA" is clearly written on its roof. Had any of these things happened in the East, it would not have been tolerated but we are supposed to meekly accept it without comment or action. Then Easterners wonder why there is as much talk about separation here as there is in Quebec.
Mmmm ... the pasta flour mill having to buy at "inflated" prices. Since NAFTA makes it illegal to block one supplier from selling his wares anywhere in North America unless a specific treaty exemption applies, I presume that the CWB isn't the sole legal supplier of wheat to Canadians. (<== Please set me straight if I'm wrong). In such a case, the CWB will have to match the price at which the pasta mill could buy wheat from other suppliers. So, if some supplier in Nebraska can supply wheat at a given price to the mill, that mill will either buy it from him or it will buy it from the CWB if it proves more convenient (in price, delivery, payment terms, service, whatever). When the CWB seeks to maximize its price, it can't FORCE a price on the mill at a given time; it can only TIME it's sales (that is, withhold sales until it can get better prices) to the mill. As long as the mill can get its hands on wheat from anyone other than the CWB, the CWB can't force a price on it.
Given this, the competitive advantage of the farm and mill would be that both would combine to their mutual overall advantage, at the expense of the CWB, if prices were to change abruptly. The two most probable cases are:
1. After a few years of high wheat prices, the bottom falls out for wheat prices. However, for a while, the average price for the previous three years (and thus, the price at which the CWB will buy from the farm) will remain high while real wheat prices (and thus the price at which the CWB would sell) are low. The farm would thus sell high to the CWB and the mill would buy low from the CWB - a double bonus!
2. In the opposite case, if prices surge after a few years of low prices, the farm wouldn't sell to the CWB since it would get below-market prices for its wheat. It would sell its crop to the mill instead. The mill would buy the farm's wheat at market price (that is, the same price as it would get from the CWB), which would mean it would be in the same competitive situation as other pasta flour mills, like in case 1.
Thus, in case 1, the farm would make lots of money in both cases 1 and 2. And in case 2, it will make more money than its competitors, meaning that it will be partly protected from low prices at which the CWB would buy its crop.
In both cases, the mill will be in the same situation as its competition since it will be buying all of its wheat at market prices (unless the mill and the farm strike a deal, which would be easy to do). But, if the mill were to be a guaranteed buyer of the farm's crop when case 2 occurs, then the farm then both the farm and the mill combined would generate extra profits in the long run, at the CWB's expense. Hence why bypassing the CWB would be a no-no.
Eastern farmers are in something of the same boat regarding the quota system--remember the egg producer who lost his whole flock because he sold some eggs that had not gone through the government grading station. Quota system is almost as bad, but not quite. I think an egg producer can have 200 chickens and not belong to the EMB, but 201 and he is forced to join! Eastern farmers should figure out that they are not as free as they think they are and start rebelling against government intervention in their business.
Becky, once again this is another example of Socialism at its worst. If you want to raise 201 chickens and sell their eggs -- and you have people that wish to buy them -- why the heck can't you do so! This is the case right across Canada, it is not just limited to Eastern Canada. Canadians right across this country have to decide for themselves whether they wish to continue slowly sinking into Third World status under massive government bureaucracy and regulations telling them what they can and can't do under almost every circumstance under the Liberal Socialists or, God forbid, the NDP Socialists, or do they want a free-market system and go as far as they are capable of going without the threat of government interference? My vote would be for the latter rather than the former. It has been proven time and time again that the government can not do anything better than the people themselves can and, in most cases, can not do nearly as well.
As long as it's understood that the government shouldn't subsidize farmers to compensate for their losing their income-protection when the marketing boards get abolished. Same for the CWB.
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!
I am in total agreement with this, Becky!
The governments actually turn out to be losers since their interfering in the markets works to everyone's overall disadvantage, which leads to lower growth and lower tax revenues. However, the marketing boards and the CWB were developed to compensate for wild swings in market prices, which were leading to civil dissatisfaction and unrest. Now, however, market infrastructire has been greatly broadened and deepened so that mechanisms other than the marketing boards and the CWB can take their place (e.g. long-term supply contracts, price hedging, etc.). So the need for marketing boards and the CWB is no longer as pressing as it once was. Now, as to whether they should be kept around ....
. . . as an Easterner I'll leave argumentation pro and con to the value of the CWB to you and other Westerners. The political aspects are a different kettle of fish. Arguing the necessity of keeping an election promise holds no water. Rather than honouring promises to the softwood lumber industry the opposite direction was taken, the Commission was hand picked to get the desired result rather than a balanced view and a pro-CWB director cashiered a year before his term was up. "All's fair" is the saying. Get power and use it the pattern - but with these actions goes any claim to acting in a more virtuous manner than predecessors .
Keeping election promises, I would argue, Joe, is vitally important. These promises were given to Canadians in return for their vote. If politicians do not keep their promises to Canadians then why bother to vote for them at all? Of course, you could do as the Liberals have done so successfully for so many years and buy the votes of Canadians by bringing in programs that cost the taxpayers much more than the benefits warrant -- although they were not told that at the time. Take the long-gun registry for example.
Times have changed since the good old day (that never were). Modern voters, most having been exposed since youth to (ahem) inaccurate advertising have become more inured to its claims. Young men learn that using such-and-such brand of soap doesn't lead to instant popularity with the ladies. Young ladies learn that using such-and-such skin-cleansing cream doesn't lead to a more fulfilling love life. And so it goes for voters. I still remember how emotions would be a lot more heated than they are now when a promise would be broken. First, the promises were more explicit than they are now. So would their reversal ... or their enactment, even in the case of stupid ones.
By now, voters, having been exposed to soap, skin-cleansing, and political marketing are more given to discounting it. Hence, what used to be promises are now thought of as "general intent", which makes it much easier to drop a stupid promise-intent tahn it was otherwise. Good thing, too. I'd pull my hair out living in a world of "more subsidies / support for (fill in the blank)".