Wednesday, June 20, 2007

Tories Blame Premiers for Equalization Crisis

So really it wasn't the Gnu Conservative government that failed the Atlantic Provinces it was the other premiers. They insisted that Jim Flaherty come up with an equalization formula that broke their promise not to claw back resource revenues.

From Hansard Thursday June 14

Hon. Jim Flaherty (Minister of Finance, CPC)
:
Mr. Speaker, as all members know, the premiers had many meetings with the Council of the Federation and they were unable to come to an agreement with respect to the equalization.

The premiers, including all the premiers of the receiving provinces, have been asking for more than two decades for fiscal equity in terms of equalization in Canada and for a 10 province, principle based formula. That is what we have been able to arrive at.

Indeed, the premiers have been asking for a principle based, predictable, long term formula for equalization in Canada. We had an experts panel look at that. Yes, it is necessary that the national government act on this because the premiers could not agree.


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Nuclear NIMBY

Unlike many opponents to nuclear power use in the Alberta tar sands, I am not anti-CANDU.

I support the use of CANDU as the safest low volume residue reactors in the world. That their need for continuing capitalization for maintenance is what has been problematic in the case of the industry in Ontario. Had the world adopted CANDU disasters like Three Mile Island or Chernobyl would never have occurred, because the technologies are different.


That being said, as a power engineer I oppose the use of Nuclear power in the Tarsands, as inefficient and not cost effective, because it will be used for steam injection of bitumen rather than for production of electricity. This will take up larger volumes of water, and further pollute the existing Athabasca river with heated effluent.

Nuclear power might be all the rage for some interested parties in Alberta's oil patch, but others question the need for such controversial power generation in an industry that requires more steam than electricity.
And let's understand that is what is being proposed for the tarsands, not just an electrical plant but one for steam and electrical production needed for bitumen production.

He was one of a small delegation of community leaders from Peace River, interested in visiting New Brunswick’s nuclear power plant. Whitecourt and Peace River are in the running to host Western Canada’s first nuclear plant, putting it about an hour’s drive from the B.C. border. It’s proposed for northwestern Alberta due to the presence of bitumen trapped in rock west of the main oilsands deposits.

Nuclear power may soon run deep electric heaters to extract that rockbound oil, reduce emissions for conventional oilsands extraction and perhaps light northeastern B.C. homes. It would spur the proposed pipeline to deliver the black gold to the west coast at Kitimat and on to Asia, and further cement the merger of Alberta and B.C. into Canada’s western super-province.


The prize Royal Dutch is chasing is bitumen trapped in hard-rock limestone, rather than the conventional oil sands around Fort McMurray where bitumen is mixed with dirt and sandstone.

The Anglo-Dutch energy giant is the likeliest customer for a nuclear power plant proposed by Energy Alberta Corp., a private company working with Atomic Energy of Canada Ltd.Unlocking the multibillion-barrel bonanza encased in limestone requires an astounding amount of electricity.

The resource has been known for decades but efforts to recover it have failed.

Royal Dutch is working on electric heaters below ground to loosen up the gooey bitumen to draw it to the surface through wells.

The firm is trying to commercialize what it calls a "novel thermal recovery process" invented by Shell's technology arm.


But because companies in the oilsands are now becoming conservationists due to the provinces carbon tax, they are finding alternatives to nuclear power in other fuels they generate as waste.

oil companies are already moving rapidly towards cheaper, more efficient technologies than those used for the past 20 years, one representative said.

''Nuclear may be an option in five to 10 years from now, but in the meantime, people are already moving off of natural gas and moving on to other things,'' Greg Stringham, with the Canadian Association of Petroleum Producers said.

In the meantime, gasification of asphaltines, the dregs of the bitumen barrel, is one process being piloted in the oil sands as an alternative fuel, and underground fires fueled by oily air is another revolutionary technology being piloted to reduce costs in the oil sands, Stringham said.


So the guy who once was the leader of the Young Conservatives in Alberta now has to find a different market for his nuclear power plant. While still hoping to sell it to the oil companies as a possible mode for steam injection processes.

Energy Alberta, with partner Crown corporation Atomic Energy of Canada Ltd., originally targetted the energy-hungry oil sands in its sales pitch, but has moved on to focus on Alberta in general. ''The purpose of this plant is to produce electricity only,'' spokesman Guy Huntingford said. ''Obviously hydrogen and steam are byproducts of it, but that's not why it's being built; it's being built purely for electricity, so we can place the plant anywhere.''

Nuclear power production of electricity is cleaner than coal, even when considering the environmental impact of both its energy source; uranium mining and fresh water, and its waste problems. It is also less environmentally damaging in comparison to the impact of hydro plants.

In fact nuclear power was one alternative source that M.K. Hubert recommended when offering alternatives to oil consumption in his Peak Oil theory.

The Green NGO's and their campaigners target nuclear power because they equate it with two false premises; fear of radiation, and fear of nuclear war.

They equate peaceful nuclear power with the military industrial complex, and they play on peoples fear of radiation.

There are all kinds of other problems with nuclear energy, including safety (even if technology has improved there is no such thing as a 100% accident proof anything, and a nuclear accident is the stuff of nightmares), dangerous waste (there is no way to get rid of nuclear waste at this time and the plant to be built would store all waste on site), environmental concerns (water would be drawn from the Peace River and that could mean pollution or an effect on local ecosystems), security (governments say nuclear power and nuclear waste are potential terrorist targets), and scarcity (uranium is a limited, non-renewable resource).

Facing reality
Editorial - Monday, June 18, 2007 @ 08:00

Not in my backyard. The call is going out loud and clear. In fact, it has been reverberating in both political and community circles ever since it was realized nuclear energy generates waste that must be stored somewhere.

As recorded in Saturday's Nugget, Nipissing-Timiskaming MP Anthony Rota has grave doubts about the whole concept of burying nuclear waste.

Rota is both a cancer victim and survivor. He cannot be thanked or commended too much for having the courage to admit his experience with cancer, and always being at the forefront in every effort to fight this dreaded disease.

Nuclear waste is radioactive. Radiation causes cancer. Rota speaks for millions of Canadians who are afraid of the stuff and do not want it in their backyards
Radioactive waste is the trouble with nuclear power says the right wing Green NGO Energy Probe which opposes nuclear power because they are shills for King Coal.

Dealing with the waste produced by nuclear reactors is one area that constantly dogs the nuclear power industry. Norman Rubin, director of nuclear research for the anti-nuclear organization Energy Probe, believes the waste is the primary problem with the technology.


The real problem is that with Canada's state funded CANDU, uranium industry and its provincial funded utilities,etc. the control lies with a closed group of state sanctioned corporations like Atomic Energy Canada, which have no public transparency, with no public representation on the board; union, consumer, engineering associations, MP's, etc.


The licensing of more reactors would also be a great boon, at potentially greater public expense, to Atomic Energy of Canada Ltd, which has received subsidies of $17.5 billion over 50 years, according to the Campaign for Nuclear Phaseout.

Widespread distrust of existing agencies led Canadians to call for a new independent, non-partisan oversight body to keep tabs on how both government and industry handle nuclear waste.

This message means that top elected officials in Ottawa and the provinces must "revisit the mandates of existing oversight bodies in the nuclear field," concludes the report. Bodies like the federal regulator, the Canadian Nuclear Safety Commission, will need to have a "very public face."


Where our concern has to be is the privatization of nuclear power, it is when plants like that at Three Mile Island or worse; Hanford, are built by Westinghouse and contractors in a P3 with the State that slip shod construction and maintenance leads to critical problems.

The same kind of cronyism that saw the MIC in the U.S. build nuclear power plants was the kind of cronyism that occurred when the Soviet State built its MIC nuclear power plant in the Ukraine. After all Ukrainians were expendable just like the nice folks around Hanford, or those who live in the Nevada desert.

CANDU was a state sponsored engineered and maintained nuclear power process plant different from the Westinghouse and other designs. It was during the Harris and Martin governments rush to privatize and cut back public sector funding that resulted in the Bruce plant in Ontario running into problems.
Bruce is now operated by a more public corporation which includes the Power Workers Union.

But in the Post-Kyoto era all that has changed. Those who once talked about selling off government assets now embrace them and are promoting them not only in Alberta but internationally.

Stephen Harper would seem an unlikely pitchman for nuclear power. When the Prime Minister launches into his familiar spiel about Canada as an emerging "energy superpower," we all think we know what he's talking about -- he's an Alberta MP, after all, and his father worked for Imperial Oil. Yet in a key speech last summer in London, his most gleeful boast was not about record oil profits, but about soaring uranium prices. "There aren't many hotter commodities, so to speak, in the resource markets these days," Harper joked to the Canada-U.K. Chamber of Commerce crowd. Then, noting that Britain is among those countries poised to begin buying new reactors for the first time in decades, he added: "We'll hope you remember that Canada is not just a source of uranium; we also manufacture state-of-the-art CANDU reactor technology, and we're world leaders in safe management of fuel waste."


And in response to the key criticism of waste storage these leaders in the 'safe management of fuels", a state sanctioned private conglomerate of nuclear power companies, have blown the dust off another old proposal from the seventies; using the Canadian Shield to store radioactive waste. Not much of a different plan than that used by the US. And one opposed by the Canadian public.
Canada's Natural Resources Minister Gary Lunn announced Friday the Harper government's endorsement of nuclear power and its approval of going ahead with storing high-level radioactive waste underground.

The Conservatives' announcement allows existing reactor sites to continue accumulating waste indefinitely, and it initiates a search for an "informed community" willing to host a "deep repository" for burial of wastes. It will also explore moving wastes to a central location for temporary, shallow underground storage and recycling of nuclear fuel.

As Susan Riley writes in today's Ottawa Citizen, "Apart from the experimental nature of the proposed solution, many hurdles remain — notably, finding a community desperate enough to become a nuclear dumping ground. It has been long supposed that some remote northern town would be the lucky winner, given the technological preference for disposing of the waste deep in the Canadian shield. But recent research suggests the sedimentary rock underlying much of southern Ontario would also be suitable. That said, the prospect of a bidding war between Oakville and Rosedale appears unlikely."

Lunn said the planned depository would cost billions of dollars but said the cost would be borne by the nuclear industry.

It would take 60 years to find a location, build the facility and then transport in the used fuel.

The Atomic Energy Control Board (AECB) regulates this waste, which is currently stored safely and economically in water-filled pools or in dry concrete canisters at the nuclear reactor sites. While there is no technical urgency to proceed toward disposal right away, the issue needs to be addressed partly because the volume of the waste is growing, and partly because the Government has recognized a public concern that a disposal option needs to be identified. In 1978, AECL began a comprehensive program to develop the concept of deep geological disposal of nuclear fuel waste in igneous rock of the Canadian Shield. AECL, assisted by Ontario Hydro, subsequently developed the detailed proposal that is the subject of a public environmental review process by the Canadian Environmental Assessment Agency. Public hearings began on March 11, 1996, and are expected to continue until the end of the year.

Subsequently, in 1978, the Governments of Canada and Ontario established the Nuclear Fuel Waste Management Program “to assure the safe and permanent disposal of nuclear fuel waste”. In this program, the responsibility for research and development on disposal in a deep underground repository in intrusive igneous rock was allocated to Atomic Energy of Canada Limited (AECL).

As it stands, the AECL concept for deep geological disposal has not been demonstrated to have broad public support. The concept in its current form does not have the required level of acceptability to be adopted as Canada’s approach for managing nuclear fuel wastes.

Ignoring a 1998 recommendation by a federal environmental panel (the Seaborn Panel) to create an impartial radioactive waste agency, the Chretien government in 2002 gave control of the Nuclear Waste Management Organization to the nuclear industry - namely Ontario Power Generation, Hydro Quebec and New Brunswick Power. Also in 2002 the federal Nuclear Fuel Waste Act gave NWMO a three-year mandate to choose between (a) "deep geological disposal in the Canadian Shield"; (b) "storage at nuclear sites"; and (c) "centralized storage, either above or below ground". NWMO must make its final recommendation to the federal government by November 15, 2005.

The Nuclear Fuel Waste Act results from the response of the Canadian federal government (December 1998) to the recommendations of the report of the Environmental Review panel (March 1998) on AECL's nuclear fuel waste management proposal. The report concluded that the plan for Deep Geological Disposal is technically sound, and that nuclear waste would be safely isolated from the biosphere, but that it remains a socially unacceptable plan in Canada. The report makes several recommendations, including the creation of an independent agency to oversee the range of activities leading to implementation. The scope will include complete public participation in the process. (See also the author's March 1998 editorial on this subject, and a detailed critique by industry observer J.A.L. "Archie" Robertson, published in the Bulletin of Canadian Nuclear Society, vol. 2 and 3, 1998)

Over a study and consultation period of three years the NWMO was mandated to choose among three storage concepts and propose a site:

  • Deep underground in the Canadian Shield
  • Above-ground at reactor sites
  • Or at a centralized disposal area

The final report of the NWMO was released in November 2005, recommending a strategy of "Adaptive Phased Management". The strategy is based upon a centralized repository concept, but with a phase approach that includes public consultation and "decision points" along the way, as well as several concepts associated with centralized storage (vs. disposal), and the ability to modify the long-term strategy in accordance with evolving technology or societal wishes. The approach of Adaptive Phased Management was formally accepted by the federal government on June 14, 2007.

The NWMO is financed from a trust fund set up by the nuclear electricity generators and AECL. These companies were required to make an initial payment of $550 million into the fund: Ontario Power Generation (OPG), contributed $500 million, Hydro-Quebec and New Brunswick Power each paid $20 million, and AECL contribute $10 million. The participants are also required to make annual contributions ranging between $2 million and $100 million (one-fifth of their respective initial contributions).

Another important component of the disposal plan is the transportation of nuclear fuel to the disposal site. In Canada this aspect is the responsibility of the Ontario utility, Ontario Power Generation Inc.. Special transport casks have been designed that are able to withstand severe accidents. The battery of tests applied to these casks include being dropped 9 metres onto a hardened surface, exposure to an 800 degrees Celsius fire for 30 minutes, and immersion in water for 8 hours. The development of such specialized containers has proceeded in parallel with efforts in other countries. Sandia Labs in the U.S., in particular, has published some remarkable photographs of severe crash tests performed on one such design.




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Tuesday, June 19, 2007

Why Not?

‘You can’t convict Lord Black for being rich’ Why not. He got his ill gotten wealth like all other wealthy folks from theft or inheritance, which is just theft from long ago. And his hero is that other Chicagoan famous for being wealthy through crime; Al Capone

Also See:


Conrad Black

Criminal Capitalism

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A Deal Is A Deal

Defying the Harpocrites expectations of pulling a fast one over the Atlantic Accord expecting it to all pass by due to the infamous culture of defeat, today their anti-equalization budget faces opposition in the Senate from none other than the Conservative voice of Atlantic Canada; John Crosby. And he is not in favour of the Harpocrites budget. Nope not by a long shot.

Former East Coast Tory godfather John Crosbie sent two me­mos to Prime Minister Stephen Har­per in a vain attempt to convince him to honour the 2005 offshore accords be­tween Ottawa and Nova Scotia and Newfoundland and Labrador.

The memos provide a strong argu­ment in support of those, like Nova Scotia Tory MP Bill Casey, who argue that Mr. Harper and Finance Minister Jim Flaherty have violated the ac­cords with the March budget.

Certainly, few people know more about the issue than Mr. Crosbie, who was instrumental in negotiating the 1980s deals under which the Conserva­tives under Brian Mulroney ceded con­trol of offshore petroleum to Nova Sco­tia and Newfoundland.

“The authors of the Atlantic council report concluded that this government's budget ‘violates the letter and the spirit of the accords,’" said Deputy Leader Michael Ignatieff. “Even former Conservative Minister of Finance John Crosby said ‘they're changing the equalization formula so that it will cancel out the principles of the accord.’

Meanwhile the rage spreads as more Atlantic provinces realize the Tories have created a two tier form of equalization.

While the new equalization formula will provide New Brunswick with a $68-million increase in revenue for the first two years, the province will receive, from 2009 through 2020, a stunning $1.1-billion less than it would have under the existing framework. While Mr. Harper talks about fixing equalization, not only has he broken his promise to honour the Atlantic Accord in Nova Scotia and Newfoundland, but he also has created two classes of equalization.

Acadia University’s Paul Hobson and Memorial’s Wade Locke have done better than running to court. In a study released last week, they ran the numbers on the two equalization options presented in the budget – the old "fixed framework" that uses a five-province standard and the new "O’Brien formula" that upgrades to a 10-province standard, excludes some resource revenues and introduces a cap to claw back equalization if resource revenues push a have-not province above Ontario’s theoretical taxing capacity.

The bottom line: The new system is a financial bust for all four Atlantic provinces over the next 13 years, whether or not they have resource accords with Ottawa.

Jim Bickerton of St. Francis Xavier University in Antigonish believes the political battle surrounding the federal budget underscores a lack of understanding between the federal Conservative government and Atlantic Canada.

Bickerton says any attempt by Ottawa to portray the new equalization deal contained in the recent federal budget as a "fair and generous offer" for Nova Scotia and Newfoundland misses the point about why they were given offshore agreements in the first place.

"The symbolism of this went much deeper than simply just a broken agreement," he says.

Agreements signed in 2005 with Paul Martin’s Liberal government protected the two provinces’ offshore oil and gas revenues from federal equalization clawbacks. After a long and at times dramatic fight dubbed the "Campaign for Fairness," the deals were heralded as key economic development tools.

The current equalization offer forces the provinces to choose between a new formula or their offshore deals, a choice both fear could cost them millions of dollars over the long term.

"The broken trust was that the federal government had more or less admitted that this was the region’s one great opportunity to reverse its historic subordinate position within the federation and that it was willing to support them in doing that," says Bickerton.

Locke's work on equalization and the Atlantic Accord have been followed closely in political circles.

This spring, when he determined that Newfoundland and Labrador would actually benefit from the new equalization formula, federal Conservatives championed his work.

However, Locke dramatically revised his analysis when he obtained full details from the federal Finance Department on how the new equalization formula will work.

He found that Newfoundland and Labrador will not only lose money as compared to the status quo, but the province would have received about $11 billion more over the next 13 years had Prime Minister Stephen Harper maintained a 2006 pledge on equalization.

As an Albertan I empathize with the Maritimes. We were there once, in the thirties, despite our coal reserves, it was not enough to keep us afloat as the feds took the resource monies and gave us back a smidgen called equalization.

It was when we struck oil, and had the oil barons take over the State that we declared our constitutional autonomy through provincial control of our natural resources.

Alberta today pays into the equalization payments to other provinces. Not just Ontario. Which irks me no end when the Conservatives talk about capping equalization at the Ontario level. What about the Alberta level, well they don't want to mention Alberta since that might wake up the sleeping giant which hates Ottawa.

Yep you see the broken promise to Atlantic Canada goes along with a letter sent to Saskatchewan and Alberta promising to respect provincial resource rights and not include them in the equalization formula. Signed by the Grande Fromage his-self.

So once the Atlantic Accord was signed it set the conditions for Nova Scotia and Newfoundland to benefit from their offshore resources just like Alberta and Saskatchewan can from their inland resources.

Those resources being oil and gas. Which seem to be unique when it comes to the federal government. Unlike say mining, or hydro-electric power, two resources Ontario and Quebec have but are never considered part of the equalization formula, past or present.

The federal state controls offshore oil and gas reserves in a paternalistic fashion for the good of the provinces where they are. They still control the offshore resources 'in trust' for Nunavut, until such time as that 'territory' actually becomes a province.

Having to give up such a lucrative source of funds, is hard to do. And the Liberals were forced into expanding the Atlantic Accord originally signed by the Mulroney Conservatives. In doing so they gave the Atlantic provinces their just due.

The Harpocrite Conservative opposition demanded the Martin government honour 'their commitment' made during the 2004 election. A promise Harper went on to reiterate in the 2006 election.

But he broke that promise, by tying the provincial rights to resource revenues to equalization payments, a bit of sugar for two years and then claw backs. Albertans would never stand for this kind of treatment, regardless of the party in power in Ottawa.

And the Atlantic premiers as well as Lorne Calvert are correct in admonishing Albertans that Harpers betrayal bodes ill for us as well. Unfortunately it has fallen on deaf ears since the Calgary School Conservatives dominate both the Federal party and Stelmach's regime in Alberta.

It's a matter of fairness. The Maritimes could well become self sufficient with their oil revenues. And then and only then should equalization payments end, as they have with the former have not province of Alberta.


Equalization & The Atlantic Accord - 'A Deal is A Deal' Petition

Nova Scotia Premier Rodney MacDonald is encouraging all Nova Scotians and all Canadians to send a strong and united message to Ottawa by signing a petition on Nova Scotia's website.

www.gov.ns.ca/accord


The only problem with the petition is there is no space to put your city or province. So I used the space for phone number (optional).




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Democracy Israeli Style

Not satisfied with the government elected by the Palestinian people, well simply refuse to fund it and allow for internecine conflicts until your side wins or declares itself a winner.

Which is just what Israel has done, in recognizing the Fatah/Abbas Government in the West Bank. Thus signaling the U.S., Canada and Europe that it is the government they want funded.

In fact it was the only government they ever wanted, and the Palestinians and democracy can be ignored.

Bush and Olmert seek to prop up Abbas

Analysis: Gaza sanctions may increase tension

Gazans Adjust to Power Shift as New Rulers Revel in Their Victory

Analysis: Limits of Democracy Talk

“Israel, Hamaza, and the Fatah Bank: A Three State Solution?




See:

Israel


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Paris Discovers Jesus In Jail


Jail in Amerika is the greatest source of Christian conversion for celebrities and other criminals.

More so than churches, TV Evangelism or even traveling revivalist sideshows.

And now we have another celebrity who goes to jail and discovers god. Paris Hilton goes to jail in LA where she discovers Jesus. As if that is a surprise. There are thousands of them in jail in LA county.

Better yet before her conversion there was a miracle of biblical proportions in the LA jail.


Because Paris Hilton was let out of jail, when this team of Auxiliary women from the Gideons International went in to the jail, they were able to hand out exactly the number of bibles they had gathered and because Paris was not in jail at that time, the floor that she would've been on — if she had been there — was left open for the women to do their bible distribution.

So because Paris was not in jail (for reasons apparently only God knew at the time) all the women inmates on Paris's floor received a copy of a Gideon bible.



Latinos who suffer, like Amerika's blacks, a race war against them by the Law and Order right, get why jail is no place for conversion.

Angel Perez says it's important his children know that jail is a dreadful and dangerous place, not one he wants them to see - not even on a visit.

The rate of imprisonment for Latinos is "about 50 percent higher than it should be," said Marc Mauer, executive director of the Sentencing Project, a Washington think tank on criminal justice policy.

"Nationally, 20 percent of the U.S. prison population is Latino. In society, however, Latinos represent 13 percent of the population," Mauer said.


The rate of imprisonment of celebrities in LA county in a year is far less than an average weekend round up of Latino and African Americans.

And the majority of them are Christians. As you can tell from their tattoos.

http://i3.photobucket.com/albums/y91/zoombie318/jesus.jpg

See:

Pain In The Butt

Anna Nicole Smith and Barbara Amiel

Ben Stein's Truth

Britney Needs a Liberal


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Monday, June 18, 2007

Lord Black No Robin Hood

Black accused of stealing, 'plain and simple'


From the little people; shareholders. Those whom Lady Black dismisses with the aplomb of Marie Antoinette.


The prosecution painted Conrad Black and his co-accused as fraudsters who systematically committed theft from Hollinger International shareholders.

The accused took a "slice of their company's profits" and "created a phony paper trail to make their actions appear legitimate

"We are here because five men systematically stole over US$60 million from the shareholders of Hollinger International."

"Conrad Black was paying himself not to compete with himself. It's ridiculous."


Also See:


Conrad Black

Criminal Capitalism

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God Is Pro Abortion

Since all acts of Nature are acts of God it is clear that God is pro abortion.

A lightning strike that hit seven people over the weekend in Alberta killed a 26-year-old man and his unborn baby.
because every abortion snuffs out the life of a human being, the most vulnerable human being among us, the unborn child






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Socialism Now!

This little online poll in the Globe and Mail has the Blogging Tories here and here all verklempt. And no wonder. It shows that a good idea is one whose time is yet to come. And as usual I will provide the following caveat; socialism is NOT state-capitalism.

Is socialism still a viable political alternative for the major industrial nations?

Yes

7451 votes (61%) 7451 votes

No

4789 votes (39%) 4789 votes

Total votes: 12240

Socialism, in short, would not come about because a handful of daydreamers had wished for it, or because pious moralists had urged it, but because the unavoidable breakdown of the capitalist system would force the turn to socialism upon those societies that, prior to this breakdown, had been organized along capitalist lines.

Thus, Kautsky says: "Socialism, that is, general welfare within modern civilization, becomes possible only through the great development of productive forces that capitalism brings, through the enormous riches that it creates and that are concentrated in the hands of the capitalist class. A state that has squandered these riches through a senseless policy, perhaps an unsuccessful war, offers from the outset no favorable point of departure for the quickest diffusion of welfare in all classes."


See: Radical Capitalists Not So Radical


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How The MacDonald Commission Changed Canada

With the Conservative governments announcement of further bi-lateral free trade agreements, we should return to the roots of this policy. One that was developed by the Liberals over twenty years ago. Credit where credit is due, the Liberals set the agenda for the development of Free Trade which the Conservatives under Mulroney and Harper have merely inherited. Proving once again the axiom, Liberal, Tory same old story.

Tracing the roots of Canada’s contemporary involvement in North American free trade back to the Royal Commission on the Economic Union and Development Prospects for Canada in 1985 – also known as the Macdonald Commission – Gregory J. Inwood offers a critical examination of the commission and how its findings affected Canada’s political and economic landscape, including its present-day reverberations.


In this case the recommendations that led to the reinvention of the Liberal government as a Neo-Liberal government began with the Commission they set up under Donald MacDonald.

Macdonald represented the Toronto-Rosedale riding for 16 years as a federal member of parliament. He served nine years as cabinet minister in portfolios such as national defence, finance and energy, mines and resources. He was high commissioner for Canada to the United Kingdom from 1988 to 1991, and from 1982 to 1985, he chaired the Royal Commission on the Economic Development Prospects for Canada (known as the Macdonald Commission).


What the Liberals didn't do was follow the MacDonald Commission recommendations on UI/EI.

Moreover, instead of following the Commission’s recommendation for increasing federal contributions to UI during recessionary periods, the government eliminated all contributions to the program by 1990. And there is no evidence that the government has seriously considered proposals made by the Commission and others for experience-rating the program’s financing.

The intensity rule and benefit clawback of 1996 were sold as “worker-side experience rating” (see Nakamura and Diewert (2000)), but they proved as politically unpalatable as employer-side experience rating of premiums. Indeed, since the mid-1990s and continuing today, the feds’ most notable attitude toward EI is that the program is a handy, covert source of net funds for other governmental purposes.


Nor did they follow the Commissions recommendations for a Guaranteed Annual Income.

The Universal Income Security Program (UISP) was the Commission’s other major recommendation for reforming income security. In essence, the UISP was a guaranteed income scheme that would have replaced other programs such as the Guaranteed Income Supplement, Family Allowances, the refundable child tax credit, child and marital tax exemptions, federal social housing programs, federal transfers to the provinces for Social Assistance (SA), and the income support functions of UI. UISP payments were to be made on an income-tested basis, with a tax-back rate of 20 percent applied to all income in addition to the normal personal income tax rates. The Report stated, “The UISP seems to Commissioners to be the essential building block for social security programs in the twenty-first century.


Instead they applied a neo-liberal approach of tax credits, which increased the taxable income of those who received government supplements. So in effect the working poor, paid for a benefit they received from the government. The Federal government let the provinces off the hook by paying their share, and allowing them to cut Social Assistance on the promise that the savings would go back into broad based public programs for the working poor.

The reality was a claw back of provincial benefits, real cash in your pocket, for a credit chit from the Feds, your tax dollars at work. The ensuing benefit not being taxed, meant that the working poor moved up the income tax scale. Not unlike the current Conservative Child benefit; their so called universal child care program.

Second, beginning in 1998 the National Child Benefit (NCB) System subsumed the CTB and replaced its earnings-related benefit with a substantial cash supplement for lower income households with children. Under agreements with the federal government, most provincial governments reduced their SA benefit rates for children by amounts equivalent to the NCB supplement. Again, this scheme pursued a Commission goal of reducing the disincentives for welfare beneficiaries to seek or return to work. These changes also reduced the break-even
income levels for welfare beneficiaries, though the provinces have not reduced phase-out rates for their own benefits. The “reinvestment” of provincial savings from reduced SA cash benefits into in-kind benefits for the working poor and welfare beneficiaries promoted the lowering of the welfare wall, but the benefit phase-outs further aggravated disincentives for the working poor.

Despite the visible positives from the NCB initiative, the scheme also mirrored the
hidden deficiencies of the Commission’s UISP scheme. That is, the NCB supplement phase-out sharply raised the effective marginal tax rates faced by many working poor and near-poor families. The NCB scheme did reduce the “welfare wall” but simultaneously erected a higher “success wall” keeping the working poor and near-poor from advancing to higher earnings.

What made the MacDonald Commission unique was the near unanimty of the political economists who agreed that Free Trade was the panacea for Canada's stagnating economy. An economy that was no worse off nor better off than any other at the time of global recession. However dissident voices were not to be found amongst the Academics of the day who promoted Free Trade saying There Is No Alternative. And so the Liberals led the push for Free Trade despite John Turners tearful denials in his debate with Mulroney and Broadbent.

Policy makers who want a policy initiative in place may well foster the research to support the initiative. This fostering could come in various forms: commissioning background studies from sources known to favor the initiatives; designing the terms of reference in ways that will yield favorable results; “advertising” favorable results while “burying” unfavorable results; or, reviewing the research with suggestions tilted towards influencing the results or having them presented favorably.

In Canada, the signature recommendation of the Macdonald Royal Commission of 1985, was for a bilateral free trade agreement between Canada and the U.S. That recommendation led to the Canada-U.S. Free Trade Agreement (FTA), negotiated between 1985 and 1987 and implemented January 1, 1989. The research of the Commission was extensive, involving 280 studies done mainly by 300 different academics in 70 volumes.

The importance of academic research to the Commission is also illustrated by the fact that 84 percent of the 1,014 references in the final report are to research studies (67 percent from the academic literature and 17 percent from the background research studies of the Commission which tended to synthesize the academic research). Only 10 percent of the references were to briefs formally presented to the Commission and 6 percent from references to transcripts of the public hearings (calculations from data in Inwood, 2005:181).

The fact that the academic research generally favored free trade while the briefs and public hearings generally involved advocacy positions opposed to free trade, suggests that the research also had a greater impact (Inwood, 1998:18).

The research on trade had a number of important characteristics that likely facilitated its
impact on public policy. It was high quality research done by top researchers in the country and coordinated by a prolific and respected trade economist. The computable general equilibrium models were particularly influential, especially because they captured the indirect productivity enhancing effects of the restructuring that would occur because of the economies of scale for producing for a large market. The research of the Commission generally involved a synthesis of the cumulative stock of existing research, the vast majority of which favored free trade. The near consensus perspective favoring free trade is illustrated by the fact that “only one academic could be found to make the anti-free trade case out of the approximately three hundred hired by the Commission” (Inwood, 1998:35).

This homogeneity of perspectives within economics and the rigor with which they are advanced made economics prominent as a source of policy advice to the Commission (Simeon, 1987). Brooks and Gagnon (1988:109) conclude that this is a more general phenomenon: “There can be little doubt that economists remain pre-eminent among social scientists in their integration with the policy process.”

The research also had champions who made the case for free trade to the Commissioners and to the politicians, and who defended it in the heated public debates that ensued. Trade unions strongly opposed the FTA and organized public forums against it. In countering this, Macdonald (2005:11) acknowledges the important role played by an Industrial Relations academic, John Crispo, for “his robust platform technique which ultimately frightened away the union leaders from contested meetings where initially it was they who had brandished the verbal brass knuckles.”

There were certainly attacks on the research and on the academic case for free trade. However, the attacks tended to be polemic and based on more nationalistic denunciations of free market economics in general. They tended not to provide alternatives based on different methodologies, and the work was generally simply presented at conferences or published in forums of contemporary opinion as opposed to peer-reviewed academic journals (Inwood, 1998:5).


The term neo-liberal was coined in this period to note the shift that mainstream political economists were making in calling for Free Trade, reductions in social benefits, reinventing government, contracting out services and privatization. All these went hand in hand, and while promoted by neo-cons elsewhere in Canada they truly were policies of the New Liberals; neo-liberalism.

Begun by Trudeau and MacDonald they were then carried through in the nineties by Chretien and Martin. The current Conservatives are the beneficiaries of the Liberal restructuring of the state.



While free trade was the signature recommendation of the Macdonald Commission, numerous other recommendations were made backed by labor and social policy research. As Riddell (2005) indicates, many of these
recommendations were implemented into policy, including unemployment insurance reforms; active adjustment assistance policies; income supplements to the working poor; national testing of student achievement; and deemphasizing minimum wages.

In his overall assessment, Bradford (1999/2000:158, 159) concludes: “The Macdonald Commission report remains the essential component reference point for the host of era-defining policy innovations, ranging from continental free trade to restrictions on unemployment insurance and retrenchment of the federal role in social assistance, legislated between 1985 and 1997 by successive Conservative and Liberal governments.”

Freer trade was also regarded as a potentially effective way for the federal government to pressure provincial governments to adopt market-oriented reforms given the substantial control they have over policy initiatives in Canada’s system. This was especially the case since there was a backlash against the nationalist and government interventionist policies that prevailed during the 1960s and 1970s, including wage-price controls, energy price fixing, foreign investment restrictions, government procurement policies, and a state trading corporation to
assist smaller Canadian firms to sell to centrally planned economies (Chant, 2005:14). Such policies were often regarded as contributing to the worst recession Canada experienced since the Great Depression of the 1930s.

Interestingly, while he was previously in political office, Macdonald himself presided over many of these interventionist strategies including a national oil policy, a state-owned petroleum company, government investment in oil developments that were avoided by the private sector, price controls on uranium exports, and the wage-price control program. He attributes his conversion to free trade and less government intervention to: “My experience in the private sector after my departure from government made it clear that state-controlled programs
had failed to achieve the rates of growth to which we all aspire” (Macdonald, 2005:9).

This rejection of nationalist-interventionist policies also occurred for Prime Minister Trudeau who had earlier instituted many of the policies in the 1970s. By 1982, he indicated: “Personally, I remain convinced that the primary engine of economic development must be a dynamic private sector and that the marketplace is in most circumstances the best allocator of scarce resources”

The Liberal reinvention of government in this period meant the whole scale contracting out of government services, in particular computer based IT as well as P3 programs and the sell off and lease back of government buildings. Which has resulted in the the various scandals and boondoggles from the Gun Registry to the RCMP pension fund scandal.

That the Conservatives could get former Liberal Industry Minister David Emerson to cross the floor days after his election to occupy his old cabinet seat shows how interchangeable the two parties are when in power. After all Emerson is simply following through on Liberal policy even as a Conservative.




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