If the Facts Don't Fit Your Narrative...

Just ignore the facts.  The Globe and Mail ran a story yesterday on its front page about how the West and in particular Saskatchewan is drawing more and more immigrants away from Ontario.  The story is one of many in a media narrative that mighty Ontario is in decline.  The impetus for this particular piece was, at least in theory, release of third quarter immigration stats from StatsCan.  What amazed me about the story was how few actual numbers accompanied the dribble about Saskatoon being a boom town, so I decided to get the numbers.  First, the national picture:

International Net Migration (2011):

Q1: 49,372
Q2: 79,020
Q3: 78,457

It is useful to note at this point that these numbers are down significantly from recent years.  We haven't been below 80k in the second or third quarter since 2007.  Now for the "dreary" picture out of Ontario (which accounts for just under 39% of Canada's population):

International Net Migration (2011):

Q1: 22,229 (45%)
Q2: 31,792 (40%)
Q3: 33,733 (43%)

As you can see, Ontario actually increased in both real terms AND in terms of national share the number of international immigrants coming in from Q2 to Q3, but I'm sure you would've realized that by reading the article.  Apparently, the other prudent "new" stat is that Ontarians are leaving for greener pastures.   This would have been true... if it weren't for those pesky statisticians

Interprovincial Net Migration (Ontario, 2011):

Q1: -690
Q2: -1880
Q3: 543

The third quarter of 2011 actually saw Ontario have a positive interprovincial migration number for the first time in years.  While Saskatchewan did have a big month in terms of migration, the loser in this situation was actually Quebec which saw its immigration decline from 19,657 in Q2 to 11,893 in Q3.  None of this of course fits the "centre of power is moving from Toronto to Calgary" narrative so it can be safely ignored. 

Stop Gouging Canadian Consumers

Stephen Harper is doing his best John Kerry impression, flip-flopping on his position on Canada's "supply management" program for dairy and poultry products.  Supply Management is one of those fancy terms governments use to avoid saying "gouge the consumer."  Stephen Harper claims to support the free market.  He even supports the free market for agriculture (when it comes to dismantling the Canadian Wheat Board), so why does he maintain a practice which costs Canadians thousands of dollars a year in food costs?  Canada's practice on dairy and poultry is to restrict the importation of dairy and poultry products through the use of a Tariff Rate Quota (TRQ).  A TRQ, for the uninitiated, is an update to the now outlawed quota system.  A quota system restricts the amount of goods that importers may bring into the country, full stop.  A Tariff Rate Quota system restricts the amount of goods that importers can bring into the country at a reasonable tariff rate.  After the quota is exhausted, the duty rate for poultry and dairy products is over 250%.  This TRQ system allows the government to artificially maintain a high price for eggs, milk, chicken, butter and cheese in the Canadian marketplace.

Under this system, a tiny number of dairy and poultry farmers (often large factory farms) benefit while Canadians pay prices well above the market rate for basic groceries.  It is the kind of classic distortion of the free market that should make red-blooded conservatives like Mr. Harper furious.  However, Canadian politicians are too scared to stand up to the farmers.  Yes,"Farms Feed Cities" but never forget that Cities Pay Farmers, Clothe Farmers, Build Farm Equipment for Farmers... well, you get the point.  There are large numbers of Canadian farmers, perhaps even some dairy and poultry farmers, that can prosper in a free market.  The government needs to stand up for Canadian consumers and put an end to this absurd relic.  It is bad for Canadian consumers, impedes the potential signing of a hugely beneficial free trade deal in the Pacific and contributes to the stagnation of developing economies who find their products barred entry from developed world markets by such prejudicial practices. 

Submitted Without Commentary

Number of people per seat under Harper's new plan (per StatsCan Q2 2011 Estimates):

PEI: 36,464
Newfoundland and Labrador: 72,940
New Brunswick: 75,546
Saskatchewan: 75,563
Nova Scotia: 85,949
Manitoba: 89,327
Québec: 103,631
Alberta: 111,157
British Columbia: 111,544
Ontario: 112, 778

Occupy Main Street

The protests that have broken out south of the border and are apparently moving north are misguided in their rage. What people remember about the financial meltdown of 2008 was the crashing of the market, the credit crisis and the bank bailouts. They seem to forget that while the banks were certainly a major player in the financial disaster, they were nowhere near alone. I remember shortly after the meltdown CNN was ran some overly dramatic top ten villains of the financial crisis. On the list Ali Velshi presented back then was the American People. They should not be forgotten. The current financial mess is not a result of the rich becoming too rich. It's a result of the average American trying to act like the rich.

The financial crisis of 2008 was upon any amount of sober reflection about the unrealistic expectation of the American dream. For the last twenty years, Americans convinced themselves and their politicians that everyone should have the house in the suburbs with the white picket fence the 2.5 kids and the 1.5 pets. Maybe not my dream, but for a lot of Americans it was the dream, and one that they felt entitled to realize it. Government responded to demand by encouraging home ownership and loosening mortgage rules. Banks responded by loosening lending rules and finding creative instruments to try to water down the worst of the debt. Asset backed credit paper is not a bad idea if you properly assess the risk of the product. The crisis was because no one saw the true value of the product and the underlying mortgages (or at least very few saw it). A society deluded itself that you could own your dream home on minimum wage. The banks were among the deluded. Singling out the banks for outrage doesn't make any sense. You certainly can't blame them because Congress decided to bail them out. Blame Congress. What did you think the banks were going to turn Congress down? The entire society is to blame for the financial mess, no amount of scapegoating will change that.

Being angry with the rich is not productive. Then again, protests rarely are productive. Bluntly, collective consensus driven mobs don't have a great history of affecting change. Particularly, when they have no idea what they want. Yes, there is a growing gap between the very rich and the rest of the country. What should Americans or Canadians do about that? The accumulation of wealth in the hands of a small minority may be discomforting but in a capitalist democratic society, there isn't much that can be done. I don't think there are a lot of people in downtown New York who want to seize the assets of the rich in spite of the "occupy" tone. After all, they didn't loot the Upper East Side, they just walked by angrily. If the protestors want to raise taxes a couple points on the wealthiest Americans, then they should get out of New York, go down to Washington or better yet their local congressional campaign office and start lobbying for change. Urban camping will not close the income gap or restart the economy (okay, maybe a slight boost to the urban camping industry). If the protestors feel disenfranchised and disconnected from their country, they should exercise their franchise and connect. Sitting outside in the cold won't get them anywhere.

Ontario's Back to the Future Election

It was a strange night on Thursday as Ontario re-elected Dalton McGuinty's Liberals to another term at Queen's Park. Much has been made that the majority is over and that the Premier should be chastened by the result. Yes, McGuinty lost votes from his obliteration of the inept John Tory in 2007. It would have been virtually impossible for a Liberal leader to do better than he did 2007. If the Grits had won 3 more seats and were sitting with a relatively stable majority, this would be viewed as a win of historic proportion. Even without the majority it is still an historic win. Historic, yes, because the last Liberal leader to do it was the great Oliver Mowatt but mostly because it represents a real defining moment not for the Liberal Goverment but for the Progressive Conservative opposition.

Tim Hudak had an awful night on Thursday. He had the extraordinary good fortune of having the extremely low benchmark of John Tory to exceed. Otherwise, Tim Hudak would have probably had to resign last night. He isn't under tremendous pressure today because PC's are content to have a leader who was at very least able to unite his party's base behind him. The base came out in droves. The Tories were able to win huge victories in rural Ontario on the strength of Hudak's anti-Green energy act platform. Absolute majorities (over 70% for John Yakabuski) in rural ridings helped prop up the PC's share of the popular vote. What it masked was a disastrous night for Tim Hudak's Tories in the GTA. The Tories failed to win a single seat in Mississauga or Brampton. They didn't come close in Toronto. This isn't a coincidence. Tim Hudak ran a campaign targeted in Rural Ontario and won in Rural Ontario. He failed to speak to urban voters and lost decisively in the GTA. As the Premier said, Hudak seemed to want to take the province back to some point in the golden past. This wins votes on the farm, not in the city.

Why is this such a disaster? Well, the 2011 census is now complete. Since the provincial legislature south of the French River is dictated by how Elections Canada draws the new federal maps and Stephen Harper has promised Ontario a more accurate slice of the pie in the new alignment, there will likely be a whole bunch of new ridings on the electoral map come sometime in 2013, 18 more according to one Harper plan. These ridings won't be in a farmer's field either. According to the projections I ran last year, 10 of the new ridings will be in the 905 largely in Mississauga, Brampton and Markham (three places the Tories didn't win a seat). Another couple ridings will be in Toronto itself. That leaves just six ridings outside of the GTA versus twelve within. This means that if the same election results were played out on the new map, the Liberals would probably have the majority they crave.

Direct Democracy Fails British Columbia

I've said it before, and I'll say it again, direct democracy doesn't work. With apologies to Kent Brockman, the result of the HST referendum demonstrates why direct democracy is a terrible way to determine public policy. The argument here is not necessarily about the HST itself. I happen to like the idea. I think it creates a simpler and less obtuse business environment. That's actually not the point. The point is that governments will have to do unpopular things in the course of doing what is best for the long term success of the country, province or city. The GST is an excellent example. Extremely unpopular when it was introduced and still unpopular today, the GST is a major contributing factor to Canada's relative fiscal strength today and our fiscal strength during the Chretien and Martin governments. In fact, it was Stephen Harper's cuts to the GST which first compromised our surplus position. If the people had been able to vote directly, the GST would never have been introduced, would have been recalled in 1993 and every year subsequent.

We elect governments because a) 34 million people can't come to agreements in any sort of town hall way and b) because we don't have the time to govern. Canadians are too busy working and taking care of their families to consider the long term fiscal and economic implications of doing something like scrapping the HST. We pay our politicians and civil servants to study these things and come to a decision. Yes, periodically we choose which path we want the government to be on, but we can't as a people make the little calls along the way. British Columbians may be celebrating the death of the HST but they should take a long hard look at their cousins in California before they go too far down this path. People, if asked directly will almost always vote for lower taxes and better services. This is a path that leads only to fiscal ruin. We elect governments to make the tough choices necessary to get to a better future. If they fail in that task, vote them out and elect somebody who will undo the damage. There was no reason the NDP couldn't have run on this platform, won and then repealed the HST. However, they would have done that knowing that they would be held responsible for the ensuing budget deficits and fiscal problems that. No one will hold the people of BC responsible for their blunder. Democracy without any responsibility for bad action leads only to chaos.

Death of a Leader

The Member of Parliament for Toronto-Danforth is dead. Jack Layton's life was cut short far too quickly. My heartfelt condolences to his family and friends. Jack Layton was for better or worse a dominant force in Toronto politics for the last thirty years. Jack Layton served the people of Toronto-Danforth since 1982 as either city councilor or as member of parliament and he died doing so. Any person with that kind of devotion to public service should be applauded. Let us celebrate the life of a man committed to serving the people of Canada.

A Deficit of Progress

That the United States should find itself in this position is not exactly unexpected. The US Congress has been loathe these last 10 years to pay for the foreign adventures, tax cuts and new entitlements that they have proven all too willing to fund. The thing is the chickens have not yet come home to roost. Instead, the Republican party and perhaps more specifically the TEA party wing of the Republican party seems bound and determined to bring the roost to the unsuspecting chickens. The roost in this strange avian metaphor is the limit on the US national debt and the chickens are the unfortunate people to whom the US owes money. Yesterday, in the latest bureaucratic twist in this absurd tale of self-inflicted economic destruction, Republican members of Congress refused to back a bill put forth by Speaker Boehner designed to little else than make the people voting for it look good to their constituents come 2012. Basically, this was Boehner's attempt to ensure that he would have something to placate his base with when it came time for the actual compromise still to be determined. In the crazy world that is current US politics even stunt bills can die on arrival.

There is an increasing likelihood that the US will fail to raise its debt ceiling. The shortening timeline and lack of any sort of progress make it more and more likely that nothing will get done. The real question is how will the markets react to a failure to raise the debt ceiling and therefore a de facto default on US debt. Let's be clear bond holders will get paid, at least in the short term. The US Treasury will turn off the lights at the White House before they fail to pay off their bonds. However, the market will view a failure to raise the debt ceiling as a default and will look to move its money away from the contaminated American market. The question will be which market comes under attack first? There are four options for the market to vent its spleen:

1. Ditch US Stocks: This option is the one that will immediately translate to the American people and perhaps even their elected officials in Washington. A 500 to 1000 point drop in the Dow Jones Industrial Average may be enough to shock the Congress into action. This actually might be the best case scenario as faith in stocks is easily restored and there are mechanisms to easily halt trade.
2. Sell US Bonds in the Secondary Market: This is also a fairly painless option. The price of US bonds in the secondary market has very little impact on the US treasury directly. If people are paying 90 or 85 cents on the dollar for 30 year US bonds issued 10 years ago, the market can handle that. The problem is that directly impacts the next option:
3. Refuse to buy new US bonds: Okay, technically with the debt ceiling capped the US can't issue new debt. However, they do perennially turn over old debt (I believe the next major batch is scheduled to be in the middle of August). If the debt ceiling is not raised, the market will undoubtedly demand a premium well above the historically low interest rates available today. A run on US bonds in the secondary market would probably trigger massive interest rate hikes to try to stem the tide and make the new bonds marketable.
4. A Run on the US Dollar: Investors may decide that the easiest way to get away from the risk inherent in the US market is to sell greenbacks and fast. A run on the green back would cause massive inflation and also force the Fed to raise interest rates to try to beat back the barbarians at the gates. A run on the US dollar is the worst case scenario as it would cripple the US market with inflation and cause untold disaster in the rest of the world.
   

The reason I ask which option the market will choose is because it may prove very difficult to do all four at once. Put simply, if you want to sell US stocks and bonds and at the same time sell US currency you need something to get back. While money will flow into all sorts of currencies and markets - Canadian Dollars, Japanese Yen, even Euros - there's no real precedent for the market trying to dump its reserve currency. This is particularly true because a large number of the major sellers are in the United States. The worst impact of this political inaction may not be felt immediately simply because the markets may struggle to punish the US fast enough.

The Canadian Economy's Strange Success

On Friday, Statscan reported that the Canadian economy added another 22,000 jobs in May and that the unemployment rate fell to 7.4%. The economy grew in the first quarter at a healthy annualized clip of 3.9% and according again to statscan it did so in all the right way. Huge investments made in plants, machinery and equipment points to a growth in manufacturing and other goods producing industries. Service industries like retail trade actually shrank. Growth due to personal spending (an indicator of a possible debt bubble if too large) was negligible in spite of all the stories about Canadians carrying too much debt. This is all remarkably good news. In fact, it's so remarkable, no one seems to believe it. Unemployment in Canada being at 7.4% is actually, historically, pretty darn normal. This is not great recession catastrophic unemployment. In really good times Canadian unemployment is between six and seven percent. GDP growth between 3 and 4% is also pretty darn good. It isn't BRIC double digit expansion or anything but it's enough to keep people working.

Why then, you might ask, has the Bank of Canada not moved interest rates closer to a normal level? There doesn't seem to be the need for big stimulus. Nor it would seem is there cause for governments to delay tackling their recession exacerbated massive deficits. The Canadian economy could actually probably withstand a little austerity right now. I think the short answer may be that Canadian officials both political and bureaucratic can't believe the good times can last. They can't believe it, because they see the carnage that continues to be the US economy. American unemployment, usually a couple of points below Canada in good times, sits a couple points above. The jobs report for May showed only about 50k created (that would translate to about 5-6k in Canada pro-rated to the population) which is not enough to keep up with the growing labour market. The housing market, which continues to boom north of the 49th, is on life support down south. What we are witnessing is complete disconnect between the economic fortunes of Canada and United States. All this and the loonie is worth more than the greenback. Ottawa and Bay St. can't believe it.

Marine Le Pen Fiddles as Europe Burns

Dominique Strauss-Kahn was arrested over the weekend and accused of very serious crimes. Like all people in free countries he is innocent until proven guilty in a court of law and bluntly this isn't a law blog. This is a politics blog and innocent or guilty M. Strauss-Kahn is dead in the water politically. This presents a new political landscape for French politics and current French President Nicolas Sarkozy. While Strauss-Kahn would have been hard-pressed to oppose the bailouts of weaker EU partners like Greece and Portugal, his next strongest opponent is vehemently opposed. Marine Le Pen, who succeeded her father Jean-Marie Le Pen as leader of Front National now finds herself well placed to repeat her father's shock second place finish in the 2002 presidential race when he edged out the Socialists to claim a spot in the run off.

While the robotic Mme Royal is gone, the options for socialist leadership go down hill dramatically after Strauss-Kahn. The frontrunner no is the runner-up to Mme. Royal last time out Martine Aubry who holds the dubious distinction of losing, albeit barely, to Segolene Royal. The socialists in France have been in the political wilderness for a decade and Mme. Aubry does not appear to be the woman to lead them back. This leads the door open to the kinder, gentler racist xenophobe: Marine Le Pen. This is still Front National we're talking about but Marine Le Pen doesn't have quite the same evil look that her father did. She might make people forget for a couple minutes that the party she represents still supports deporting unemployed immigrants even if she doesn't believe in deporting all immigrants anymore. The point of all this is that if Sarko believes that his principal opposition in 2012 is from Mme. Le Pen he might start cooling even further to any more money for Euro-delinquents. Yet another reason why the Front National is a bad thing. In case you needed one.

Democracy Delayed is Democracy Denied

The executive of the Liberal Party of Canada has learned nothing from the crushing electoral defeat endured by the party on May 2nd. They haven't learned that the leader of a political party should be chosen by the membership of the party without any interference from the executive. The executive in 2008 appointed Michael Ignatieff leader of the party so they could prevent those stupid and pesky party members from choosing someone else again like they did in 2006. Now, they seek again to delay the election of the next leadership so that the membership doesn't make another mistake. A reminder: repeating the 2006 mistake would more than double the size of the Liberal caucus. The executive should let the leadership run its prescribed constitutional course there is no reason for delay.

Let me be very clear on this matter. I do not support Bob Rae. I will not support Bob Rae. I think Bob Rae is most likely to lead the party into a disastrous merger with the NDP or into political oblivion. That doesn't mean we should try to flip the chess board when it looks like he might be winning. Liberals need to have an open discussion this summer about who they want to lead their party. At the end of that discussion, we can only hope that Bob Rae isn't the answer. It is up to people who don't support Bob Rae to make that case. To make the case that their are better alternatives, whomever they may be.

The next Liberal leader has a lot of work to do. The party is in shambles. The grassroots are torches and sown with salt. There is a huge enthusiasm gap. These problems will not take weeks or months to fix. They will take years. Luckily, we have years. About 4 and a half years to figure out how to rebuild this great Canadian institution. Let's get a leader prepared to get down to work, not getting ready to collect old age security and let's get her or him elected as soon as possible. While the NDP and Tories fight each other in the commons and on the airwaves we can begin the task of rebuilding the big red machine. One cog at a time.

Note on Failed Projection Model

My projection for the election was wrong. Like off by 100+ seats wrong if you add up all the differences in seat counts. I'll start by saying that. But I don't actually dismiss my model. Here's why:

First, I'm mostly wrong in Quebec where I had the Bloc holding on and the NDP surge far less overwhelming. This is somewhat predictable, in fact, I basically said I thought I was wrong there when I put out my first projection for the province. My model is based on previous results so when the new result or poll is completely divorced from the previous reality it's not likely that the change will show up in large scale. It is inherently conservative, in the small c meaning of the word and most nights in Canadian politics that's not a bad thing. This year, it was a millstone.

The other reason for underestimating the size of the NDP surge is the lateness of the surge and how that screws up my polling aggregate. My aggregate is designed to give the most weight to recent polls but it doesn't exclude old ones. I actually played around with my aggregate on the weekend to try get something that would look close to what was going to happen. The closest I got adding weight to new polls and weakening old ones without completely fudging the numbers was CPC 37, NDP 28.5, LPC 22, BQ 6.5, GPC 5. Low for the Tories and Dippers, high for everybody else. Probably this weekend I'm going to use the real election results as a dummy poll in my model and see what would happen. That will be a better test of my model as a tool for extrapolating poll results which is what it is designed to do. If I get closer, especially outside of Quebec which might be a write-off, I think I'll have a little more faith in my methodology. It's all kind of moot as seat projection on a riding-by-riding basis like I have becomes a lot more difficult once the House gets reconfigured to match the new census as it should be the next time Canadians vote in 2015. I'm not sure how I can incorporate it into the model. Suggestions always welcome.

I Knew It Was A Bad Night When...

They announced the Liberals had lost Labrador. We've never lost Labrador. EVER. We've held Labrador since 1948. Mr. Ignatieff, the Mondale School of Failed Leadership called, they have an opening for you.

Final Projection

Here's what's going to happen... I guess you can vote if you want:

	CPC	LPC	NDP	BQ	IND
National	150	50	62	45	1
NL	1	4	2	0	0
PE	0	4	0	0	0
NS	2	3	6	0	0
NB	6	3	1	0	0
QC	8	9	12	45	1
ON	59	26	21	0	0
MB	9	1	4	0	0
SK	12	1	1	0	0
AB	27	0	1	0	0
BC	22	1	13	0	0
North	1	1	1	0	0

Are Voters Actually Paying Attention?

Elections Canada is reporting high turnout in the advanced poll. Undoubtedly, this is largely due to the fact that the advanced poll fell over the Easter long weekend when people had time to get out and vote. I took advantage myself on Saturday, casting my ballot for Andrew Lang in Toronto-Danforth. If I have some time in the next couple of days, I may do some analysis on where the increased turnout was. I've just glanced at the data a few quick observations:

• Helena Guergis may have more life in her than people think. Almost, 15,000 of the around 100,000 electors in Simcoe-Grey turned out to vote. Only about 60k have voted in the last three elections. That makes 15% turnout in the advanced impressive.
• The long weekend certainly helped turn out the vote in the NCR. With all three advanced polls falling on federal holidays/weekends, turnout surged. Over 10k in Ottawa South, Ottawa Centre, Ottawa Orléans, and Gatineau . Almost 17k votes cast in Ottawa-West Nepean.
• Advanced polls are not for everyone. Toronto has some shockingly low numbers. Less than 3k in York South Weston and York West. Even hotly contested Eglinton--Lawrence had just 7500 votes cast. One must remember that ridings within a province start relatively equal in total population, not in total number of voters. This means that while there are 114000 + people in York South Weston only around 67000 were eligible to vote as of the last election. Ridings like Simcoe-Grey with older populations and fewer new Canadians will usually have larger numbers of voters (97k out of 125k).
  

The Return of.... Seat Projections!

Very exciting news boys and girls. I have resurrected my seat projections! If the election were called today, All Politics is Local projects: yet another Tory minority! The numbers for your interest:

	CPC	LPC	NDP	BQ	IND
National	147	83	35	42	1
NL	0	6	1	0	0
PE	0	4	0	0	0
NS	4	5	2	0	0
NB	6	3	1	0	0
QC	13	18	2	42	1
ON	52	39	15	0	0
MB	9	1	4	0	0
SK	13	1	0	0	0
AB	28	0	0	0	0
BC	22	5	9	0	0
North	1	1	1	0	0

I haven't run one of these in a while and frankly I think the data may be a spitting out a screwy result. The NDP surge in Quebec worries me, in terms of my accuracy. My model is better suited to slight shifts, not giant surges. Right now, my model is saying the NDP surge will come at the expense of the Bloc and might actually help the other two federalist parties. Could happen. The vote splits in Quebec will be fascinating come election night.

Goodluck, Goodluck

In my ongoing quest not to have any readers, I'll continue my look at elections around the world that actually really matter, but no one in Canada seems to care about. Today, news that incumbent Nigerian President, Goodluck Jonathan has won re-election. This has caused rioting in the rebellious north. Nigeria has been in quasi-civil war for a while now. The Muslim population in the north which is actually the majority has ongoing conflicts with the oil controlling south which is predominantly Christian. Goodluck Jonathan is a southern Christian, which along with allegations of fraud explains the rioting. It's hard to classify the ongoing conflict in Nigeria, like the conflict in Sudan as purely religious or purely about oil or about something else entirely. What is true, is that it is ongoing and resolution does not appear to be close at hand.

However, geopolitically and economically we would do well to pay attention to Nigeria. First and foremost Nigeria is big. 155 million people call Nigeria home and Nigeria is very much at the centre of West African politics and African politics generally. Nigeria is also oil rich and as a member of OPEC provide oil to a large part of the Western world with oil (particularly the US). This oil wealth makes a stable Nigeria essential right now with the ongoing conflict in Libya already giving oil markets fits. The threat to the oil supply is real, as northern rebels often sabotage pipelines and take other steps to undermine the oil trade to make their political points. Goodluck Jonathan came to power after a very strange period of time when the last President was rumored to be dead and no one quite knew where he was. He now has his own mandate and hopefully will be able to bring order and peace to the 155 million people he now must govern.

EU Bailouts Finnished?

While Canadians will go to the polls on May 2nd, Finns went to the polls yesterday and elected a new government. Well, actually they re-elected the existing government... well sort of. The leading party, the centre-right National Coalition Party won the most seats and will form government. How they form that government got a lot more complicated after their former allies the Centre Party lost 16 seats and no longer has the seats to prop up the government. The only real winner on the night were the True Finns who went from being marginal to the third largest party in what can be best described as a pizza parliament. The True Finns are yet another example of the xenophobic neo-nationalist parties gaining in popularity across Europe. Most problematic for the world outside of Finland is that the True Finns hate the EU and positively loathe the bailouts given to EU bankrupts Greece and Ireland. The True Finns want no part of further bailouts and with Portugal and Spain on the rocks, this is worrying because the Euro zone needs unanimity to approve the bailouts. It's a long way from Helsinki to Lisbon. That distance didn't get any shorter this weekend.

Can You Appease a Sleeping Giant?

This weekend in Montreal the Parti Quebecois is holding a convention. They gave their leader Pauline Marois a 93% confidence vote. If any time in opposition can be considered good times, these are good times for the PQ. The Quebec Liberal Party and Premier Jean Charest are about as popular as the Boston Bruins. The widely held consensus among the pundits and prognosticators is that barring a major reversal of fortune, Pauline Marois will be elected as the new premier of Quebec in the next election. That election will likely take place sometime in the next 24 months. Yes, boys and girls the separatists will be back in power in Quebec by sometime in 2013. This means for the first time in a decade, the threat of separation will be wielded by a government in power.

Why mention this in the middle of a federal election? I mention this because our current federal leaders seem to have given up the good fight of selling the idea of Canada to Quebeckers. Mr. Harper who brought forward the sordid Quebec nation resolution five years ago has never believed in a strong federation and seems content to give away the store to try to avoid the issue. Mr. Layton wants to limit the use of English in federal offices in Quebec. For his appeasing and the personal popularity of presumed leader-in-waiting Thomas Mulcair, the NDP is in record territory in Quebec. Finally, and most distressing for me, the Liberal Party, the traditional defenders of this country as a country, as more than a collection of provinces is led by a man who seems almost sublimely unaware of the problem. Let us not forget that it was Mr. Ignatieff and his musings in 2006 that led to the nation resolution that M. Duceppe beat the other leaders over the head with during the debates this week. How will any of these leaders stand up and defend a united Canada if and when Mme. Marois takes Quebeckers back into a referendum after they've already conceded so much sovereignty already?

Jack Layton's Plan to Help Money Mart

The NDP have the spectacular good fortune of never having to worry about actually implementing any of the policies they announce. Good thing too. Jack Layton's latest policy brain fart is a cap on credit card interest rates at something like 5 percentage points over prime. Sounds like a pretty good plan? Tired of getting hosed by greedy credit card companies/banks? Well, let's think what would actually happen if Layton's plan was to be put in place. As it is, Canadians put way too much on credit racking up monstrous credit card bills they are unable to pay off. One of the few disincentives for doing this is the absurd, and yes frankly near usurious, rate of interest applicable on outstanding credit card bills. If you remove that disincentive, chances are good that people will rack up more debt, maybe not in interest payments, but in larger purchases.

Banks will see this prospect and bluntly they won't like it. One of the reasons credit card interest rates are so high is that the risk of default is high. The high rate of return makes the cost/benefit analysis make sense for the owner of the debt be that a bank or a third party who purchased the debt. Eliminate the high rate of return and banks may prove a lot less likely to issue credit cards to people with marginal credit ratings... like people who don't pay off their credit cards every month. By forcing down interest rates, Layton may make credit cards a tool of the rich. Good you say? Credit cards are evil? Problem is as unfortunate as it may be, many Canadians rely on credit cards to make payments on essential items in between pay cheques. If the banks stopped giving these people credit cards, they would not stop having those cash shortages. Instead, working class Canadians who want access to easy credit would be forced to even more predatory places like payday loan offices. The only people who will actually benefit from this as far as I can tell are the good folks at Money Mart.

Dead on the Order Paper

A list of bills that die when the writ is dropped follows. A remarkable number of these bills are becoming like Kenny on South Park, dead repeatedly:

• C4 - Tougher sentencing on violent young offenders
• C8 - Canada- Jordan Free Trade Agreement - I think this is dead for the third time
• C10 - Senate Term Limits - Remember when Harper believed in Senate Reform?
• C12 - Electoral reform to rejig provincial weights to reflect population - also a Kenny - now running out of time before the census comes out
  
• C15 - Liability in the case of a nuclear accident - okay downright eerie
• C16 - House Arrest Not Tough On Crime, Tories Tough on Crime... got that?
• C17 - More Tough on Crime
• C18 - Increase voter participation - maybe we should have gotten this passed this BEFORE having an election
• C19 - Also election related. Candidates will be able to get loans to pay for their campaigns because this bill is dead on the order paper as well.
• C21 - This bill is actually called Standing Up for Victims of White Collar Crime... when the Senate stands up, it dies
• C22 - ISPs and Child Porn
• C23 - see C16, in this case forgiveness (in the form of pardons) is no longer in keeping with conservative Christian values
• C25 - Land use in Nunavut
• C26 - Don't tell the council of Canadians this one died... fresh water protection
  
• C27 - Wheat Board Reform - potential sleeper issue?
• C32 - OMG they killed Copyright reform, those bastards!
• C46 - Canada - Panama Free Trade Agreement - the Harper government must hold the record for most free trade deals killed on the order paper... at least they got the Colombia deal done this time
  
• C49 - Smugglers, you know Iggy's buddies
• C57 - Interprovincial trade
  

The list goes on. See in spite of appearances, politicians actually do make important decisions. Most of the above bills are far from perfect. It matters who gets to introduce legislation. It matters who passes bills.

A Most Necessary Election

There are people in this country who believe that the election about to be called is unnecessary. That this election is about political posturing and not about the best interest of the Canadian people. They are wrong. The Harper government has proven repeatedly that it does not deserve the confidence of Canadians. Canadians should have the opportunity to express their lack of confidence. This government was elected because of a scandal that involved around $250 million being spent over the course of a number of years in ways that were seen to be more beneficial to the Liberal Party of Canada then the people of Canada. The Harper government has spent over $100 million in advertising in the last 15 months on ads that serve the Conservative Party of Canada and not the people of Canada. At this pace, by the time the "fixed" election date rolled around in the fall of 2012, the Tories would have spent more money on their self-serving ads than was spent in the entire sponsorship program. If their ethical dilemmas stopped there, perhaps something could have been worked out.

However, there is much more. A Conservative cabinet minister lies to the house, is caught in her lie and Stephen Harper allows her to stay on. He allows her to run under his party's banner in Durham. The Tories waste millions of taxpayers dollars trying to argue on a technicality that they didn't commit electoral fraud to win election in 2006. The people of Canada have spent $50 million trying to force the Tories to admit they effectively laundered money to avoid spending restrictions. Every day it seems, more scandals. A former aide to the Prime Minister uses his influence to get a sweetheart contract for his fiancee. This government has lied to Canadians, it has cheated Canadians and now we find out that they are willing to put the safety of the water supply in our most endangered communities at risk, if their friends can take a cut. Stephen Harper promised Canadians he would shore up the ethical shortcomings of Ottawa. He has failed to do so and Canadians should be able to take him to task.

Stephen Harper came to Ottawa promising to be prudent manager of the public purse. When he took office, the chief complaint about the budget was that the government was purposefully underestimating the size of the surplus. By the fall 2008, before Lehman Brothers collapsed and put the global economy into a tailspin, Canada was already running a deficit thanks to misguided tax cuts and wasteful spending. Given a carte blanche to try to spend their way out of a recession, the Tories have invested Canadians hard earned tax dollars and the hard earned tax dollars of their grandchildren on ephemeral projects instead of lasting infrastructure which will benefit Canadians for generation. A fake lake that didn't last more than a weekend. Fighter jets that will be obsolete upon delivery. A gazebo in the riding of Tony Clement that likely won't see out the decade. Lastly, the made sure that all this ephemeral spending was well known, printing out giant novelty cheques at taxpayers expense and slapping the Conservative Party logo on them. The Flaherty Conservatives have dug Canada a deep fiscal hole, it is time to take away Deficit Jim's shovel.

In 2006, Harper implored Canadians to stand up for Canada. Why, then, has this government failed to do so on the international stage. The Canadian people and their parliament told Stephen Harper that the troops had to be home by the summer of 2011. The Canadian military and their families implored the government to allow their war weary soldiers to rest from nine years of combat. The Harper government had an opportunity to stand up for Canada and say no to international pressure. The Harper government caved to American pressure. The Harper government in the face of a mounting deficit had the opportunity to get out of a costly military procurement project that will burden generations with its ever growing costs. They could have stood up for Canada. Instead they caved to American pressure.

This government received a mandate from the Canadian people based on promises that they made. They have broken those promises. They have failed the Canadian people. It is time for the Canadian people to decide if they still should have the right to govern this country. We all have a say in this. I say no.

Ford's Pipe Dream and Toronto's Transit Needs

Or I guess I should say tunnel dream. For those of you who are uninitiated in the Toronto's transit woes. Here's the deal. The old mayor of Toronto, NDPer David Miller, wanted to build a whole bunch of above ground light rail train lines all around the cities periphery along with one buried LRT line along Eglinton. The new mayor, gravy train hater, Rob Ford, wants to abandon the above rail LRT lines and finish the infrastructure project of the last right wing mayor, Mel Lastman: namely, the Sheppard Subway. See, Ford actually has a point. The current Sheppard line is a joke. It runs a total of five stops and connects with just one other line. Logic would seem to dictate that is should at least connect to the University/Spadina line stop at Downsview if not the Scarborough RT. The problem is subways are bleepin' expensive.

This is why we really, really can't afford tax cuts like the GST cuts made by Harper. Canada's big cities have a colossal infrastructure deficit. Toronto doesn't need just the Sheppard line. It need two or three new lines. There's a chicken and egg argument to be had about subways and population/demand. Opponents of subways on Sheppard say that the population doesn't warrant the expense. That may be true... right now. Anyone who has lived in this city can tell you though that Sheppard, particularly the section along the subway route, has been a major locus of new Condo/Apartment construction in the last decade. People want to live on the subway. This city is expensive to begin with, parking is a nightmare and expensive in and of itself and the traffic, well, you can't get much worse. Many people if given the choice of commuting by subway or by car will choose subway. That doesn't apply necessarily to buses and streetcars that involve waiting outside in sub-zero temperatures for erratic service. There is a certain element of "if you build they will come" with subways.

In some cases, this city already has the population to warrant a subway. I'm going to make a case for one that doesn't get talked about. Have you looked at the Toronto skyline lately? Do you see all those towers west of the CN Tower? That is called population density: new population to be specific. Exactly the kind of thing that would justify a lake shore based subway line. Anyone who has tried to get on the King or Queen streetcar at rush hour knows the problems that exist trying to get east/west in Toronto. It's only going to get more crowded with the opening of the west don lands and more and more condos along king and queen. Think about the areas and attractions (this would be a great line for tourist) a lake shore line could cover with only a fraction of the stops on Bloor.

1. Start with a stop in the east with the lovely but inaccessible Beach. Parking is a nightmare out on Queen East for both visitors and residents, a subway with below grade stations would preserve the neighbourhood feel while granting access to the rest of the city.
   
2. Up and coming Leslieville could also get a stop east of the river.
   
3. Cross the river and head down to King and Parliament for a stop in burgeoning Corktown
4. Followed by a stop for George Brown College and the St. Lawrence Market at either Sherbourne or Jarvis.
   
5. Links with the Yonge-University-Spadina line at Yonge and
   
6. University would integrate the system and provide further access to attractions like the Rogers Centre and CN Tower downtown.
   
7. From there, you could either go down to Harbourfont Centre or head along King and to trendy King West and the new TIFF Lightbox.
   
8. King and Bathurst would pick up the rest of King West
9. King and Dufferin for the burgeoning Liberty Village and easy access to the Exhibition and Ricoh Colliseum, and BMO Field.
10. From here, follow the lake and the towers. One or two more stops out west would draw people off the Gardiner, and ease congestion downtown.

Building subways in Toronto's core is a rough political sell these days but if we're going to spend money on a subway, this is where the people are and are going to continue to be.

Bev Oda's Saramago Moment

The late Jose Saramago, the Portuguese Nobel winning author, wrote a book called The History of the Siege of Lisbon. The book centers around the decision of a proofreader to edit the book and history by inserting a tiny little "not" at a crucial turning point of the siege. The book evolves into a punctuation deprived story about it never being too late for love. It is really quite excellent. Go read it. Anyway, there's a political point to the book report. When I heard about the absurd Bev Oda, CIDA thing I immediately thought of Saramago's book. Saramago makes the point quite eloquently that it is the little things, the "not's" of the world, that make all the difference. It is the little things that make Stephen Harper a poor Prime Minister.

Harper has avoided the major political blunders. He's made some bad decisions for the country (hello, GST cuts) but he has avoided the big political decisions that make people get angry and stay angry. The Harper government has been defined by the insertion of a bunch of little negatives into Canadian life. Extending the mission in Afghanistan? Not really a major change in policy (10 years or 12 years, it's a long time). The Quebec nation resolution? It's just a resolution. Waiting for the Americans on climate change? Well, it would have been tough to go it alone. It's been a subtle shift, not the soldiers... in our streets... with guns that Paul Martin warned us about. This has proven a challenge for the Liberals in opposition. We can only hope that getting caught red-handed on something like this will help to turn people on to the slow drip of disaster Harper has been unleashing on this country.

Is Bill C-12 About To Die of Old Age?

While the house is still on vacation, it is not, for once, prorogued. That means there are still bills waiting for them when they get back. One of those bills is Bill C-12 which the Tories are calling the Democratic Representation Act. This is the one that would give increased representation in the house to large provinces like Ontario, Alberta and BC which have seen large population increases. Interestingly, the language of the bill if not amended could make the bill completely ineffective for 10 years if not passed soon.

The readjustment of the seats in the House of Commons happens after each decennial census (the ones ending in 1). That's not new. However, the Democratic Representation Act is only to take effect following the first decennial census completed AFTER its passage. In other words, if parliament doesn't pass the bill soon, it would only be effective after 2021 census. Of course, the Tories could amend the bill to fix this problem, but don't bet on it. More likely, they'll use the excuse to shelve the bill and come back with an even less effective plan that appease Québec more.

Strange Weekend News

Quick run down of things catching my eye this weekend:

• Revolution in an Arab North African country... this could be really good or well, awful
• On a lighter note, archaeologists appear to have found Noah's stash. No I don't think this is actually a biblical cave but it is eerily close to Mount Ararat.
• John Stewart's pick for the RNC Chair has won election. Frankly, this may be a poisoned chalice. The RNC hasn't been able to fundraise effectively for about five years. The GOP's inability to get cash may be the most under-reported political news story out there.
• I didn't know it was possible to not be able to sell real estate in Vancouver.
• Is it me or is Rob Ford starting to like the taste of gravy, or at least the sound of trains?
• With the French Socialist party a fading force and Sarkozy increasingly unpopular, this is scary.
• Andrew Coyne wants the government to track your every movement. Apparently, Big Brother is way better than a little bit of traffic.
• When you cry wolf too often, you tend to lose some sheep. I'm increasing convinced that the World Health Organization may be a detriment to humanity.
  

Walks Like A Duck, Talks Like A Duck, Statistically: Chicken

I turned on The Agenda on TVO last night and saw U of T prof David Hulchanski talking about his much publicized report on what he perceives as a growing income disparity in Toronto. It reminded me personally of why I never pursued post-graduate work and also how much I disagree with his report. Dr. Hulchanski received a mandate from a poverty-activist type place to do a report on income disparity in Toronto. Shockingly, the report says there is a problem and its getting worse! AHHHH! Sound the alarms! Lou Dobbs was right! The middle class is dying... sorry... I forgot to disable the panic button.

The problem with Dr. Hulchanski's report is that the numbers are rigged in his favour. Every elementary school child is taught the difference between a median and a mean. That child could tell the Dr. Hulchanski that a bunch of very big numbers in a group can really throw off a mean. That's essentially what has happened in Toronto. It's not really that there are a whole host of poorer Torontonians, in fact if you ran the numbers a different way you might even say people are generally a lot more comfortable than they were forty years ago. No, the biggest difference is how much money is being at the made at the top. According to the report, the top 20% earned about 55k per capita in the 1970's and 104k per capita in the 2000's. That growth in the earnings of the top percentages of Canadians is not exactly news to anyone. It completely distorts the numbers on the rest of the report. For his 70's baseline, the top group, those earning more than 40% above mean wages, was about 13% of the total pie. For his sky is falling modern numbers, the same group represents 36% of the total pie. The number of people represented in this group has gone from 7% to 13%. In other words, this group has about a 50% larger disproportionate effect on the mean today vs the baseline.

If you look at the report, the middle class has primarily eroded into the group 20 to 40% below the mean. That group in 1970 when, remember, there was likely only one person working in the household, was $22,300 per person. The so called middle class number was $29,800. Now, when there are likely two people working in a household, the number is $28,000. The question is as a household, would you rather have 30k a year in 1970 or 55k a year in 2005? While the 30k forty years ago is probably preferable, it isn't as much as a slam dunk as the authors of the report would like you to think.

Taking percentages off a mean can do really strange things. For the final graphs, the ones plastered all over the newspapers, they took three groups: people within 20% of the mean, people 20% or more above the mean and people 20% or more below the mean. So what does that actually equate to in dollar-terms? Your average middle class household straddle the narrow band between $32,500 and $48,840. Anyone making more than 49k is sent into the upper class and anyone making less than $32,500 is all of a sudden a pauper. Remember: this is per capita. So, if you are a successful professional making $150,000/annum and you support a spouse and three children alone on that income: your household is in the dreaded "third city" because per capita your household only makes 30k. By the same count a single TTC driver making 50K is in the first city. When your statistics are yielding that kind of crazy result, it's time to consider changing your methodology. Maybe household income would have been a better measuring stick? Maybe a median would have proved more accurate? I am generally pretty down on modern academia and this report only emphasizes the problem. Any system where this kind of statistical manipulation can not only pass as legitimate but be promoted and celebrated is fundamentally broken.

10 Events to Watch in 2011

Not sure what 2011 holds in store for political geeks? Here's a quick rundown:

10. Prairie Punch-ups: Manitoba and Saskatchewan will both go to the polls this fall. Premier Brad Wall will face the voters in November trying to win re-election for the Saskatchewan Party. Wall's popularity and power seem to be at all time highs making an NDP win here highly unlikely. Over in Manitoba, Greg Selinger, who may be the least known premier in the country, will try to win his first election after taking over for now Ambassador Gary Doer. The NDP may have a tougher test on their hands this time around as early polling shows the PC's under Hugh McFadyen ahead. There is a long list of first ministers who have taken over while their party was in power and have subsequently lost their first election. Selinger's name might get added to the list in October.

9. The King is Dead, Long Live the Queen?: Danny Williams made a national name for himself as premier, his successor has big shoes to fill. They won't have a long time to work out the blisters as Newfoundland and Labrador head to the polls on October 11th. With Kathy Dunderdale seeking the PC leadership, there is a possibility of having an election where the leaders of all three major parties are led by a woman. If it happens, Chantal Hebert will probably complain that Newfies rejected two female leaders.

8. Rand Paul Turns Into a Pumpkin at Midnight: The Tea Party will have its biggest test early this year as Tea Party sweethearts like Ricky Rubio and Rand Paul will have the opportunity to literally stop the US government from taking on more debt. The Congress actually has to pass a law in order to raise the debt ceiling. A filibuster from Paul or Rubio could theoretically derail the US government and much of the world's economy. Governing can do some strange things to principles and this vote will put it to the test.

7. Endless Federal Election Speculation: You can make an excellent case that now is as good a time as any to hold a federal election. You can also make an excellent case that there's absolutely no point in holding a federal election right now. Which one of these arguments holds currency with Jack Layton and Michael Ignatieff this year will determine whether or not we have an election. With four provincial and two territorial elections scheduled for the fall, expect the spring budget debates to be the focal point of the speculation.

6. Can a Sudanese House Divided, Stand? Southern Sudan will hold a referendum in 2011 to decide whether or not to become independent of Khartoum. The answer is widely expected to be yes. The bigger question is would such a result be accepted peacefully by the government in Khartoum. If the answer to that question is no, the dormant civil war may erupt anew. Why should you care? Well, the price of gas will likely rise if the people in the south vote yes.

5. AKP, 1,2,3?: June 12, 2011 is the date that Turkey will elect a new government. More realistically, they will re-elect the current AKP government led by Prime Minister Erdogan to a third consecutive term. Turkey's new natural governing party looks to be finally free of any constitutional opposition to it governing. The AKP or Justice and Development Party is on the one hand in favour of a more public place for Islam in Turkish society and on the other hand a major proponent of accession into the EU. Expect the future of both those burning issues to be discussed at length in the run-up to this vote.

4. 1 and 2 and 3 Canadians: Yes, 2011 is a census year. That means the first ever voluntary long form census. Oh the statisticians are going to be angry. Perhaps, more consequentially the clock is officially ticking on the Tories plan to get the House of Commons to look more like Canada. Elections Canada is going to start redrawing electoral boundaries once they have the 2011 census numbers. The process of getting the data and then turning it into electoral districts usually takes a couple of years. Presumably the Tories have until the census data is tabulated to get the house in order.

3. The Politically Windy City: Why is a mayor's race in Chicago so interesting? Well, first of all nobody named Daley is running. Second of all, former White House chief of staff Rahm Emanuel is running in his old boss' adopted hometown. Finally, competitive elections in Chicago always bring out the worst in politics. This should be a bloodbath.

2. Dalton's Swansong: The obituaries are already being written for the Liberal government of Dalton McGuinty. However, the voters don't get a chance to officially kill the government until October. Tim Hudak certainly has to be the favourite at this early point but campaigns do usually matter. Just ask John Tory. Hudak is playing his cards close to the vest at this point. It will be interesting if he is ever forced to show just how right wing a hand he really has. Expect a lot of Mike Harris references from the Grits.

1. Sarah Palin's Iowa: Yes, technically the Iowa Caucuses are in 2012 but most of the campaigning will take place this year. Sarah Palin will likely be involved which will ramp up the media coverage to an unprecedented level. To my mind, Iowa is a must-win for the former Alaska governor as she may end up an afterthought in New Hampshire. There are other potential candidates beyond Palin, lots of them. How many of them can find any oxygen with media darling Palin in the race, is anyone's guess. Haley Barbour, Mitt Romney, Mike Huckabee, Tim Pawlenty, Rick Santorum, Newt Gingrich, Bobby Jindal, John Kyl and even Ricky Rubio are on the long list of presidential hopefuls. CNN may need to build a bigger stage for the early debates.