It ain't the the Big Red Machine anymore

The Liberal Party of Canada — once the dominant political machine in the Canada – continues to stumble financially. For the third quarter of this year, the Liberals were badly outgunned when it came to fundraising relative to their chief rivals, the Conservatives. The Conservatives raised nearly four dollars for every dollar the Liberals were able to raise.

And, if that's not bad enough, there were a lot more Canadians in the three month period ending Sept. 30 willing to cut a cheque to Jack Layton's party than to Stephane Dion's party.

Elections Canada released third quarter party financial return transactions a few minutes ago. I've got lots of number-crunching to go through but here's the basic scorecard:

  • When it comes to contributions from individuals, it's probably about time to talk about the Big Blue Machine: The Conservative Party of Canada found more than 32,800 people who would write a cheque to Stephen Harper's team and the party collected a total of $3.15-million from those individuals. Their nearest rivals weren't even close on either count.
  • The Liberals raised just under $794,000 in the quarter from 7,849 people.
  • The NDP found 10,857 contributors — many more than the Liberals — though on a per capita basis, NDP supporters tended to give less than a Liberal supporter. As a result, the NDP finished the quarter by raising about $594,000.
  • The Green Party raised more than $218,000 from 3,143 individuals.
  • How well did the Bloc Quebecois do? Well, there are nearly as many MPs — 308 — as there were BQ contributors in the quarter – 310. The combined haul from that group was $31,520.

Three questions for Flaherty

Finance Minister Jim Flaherty would have preferred to read his Economic Statement in the House of Commons but was prevented from doing so because he could not receive the unanimous support of all MPs to do so. And so, the Parliamentary Press Gallery was more than pleased to make the National Press Theatre available to him yesterday afternoon in order to deliver the statement. I got three questions in the q-and-a that followed and here they are:

Akin: Your party said during the election campaign you would never tax income trusts. And you did. And you justified it by saying, well, things have changed. Similarly, why not tell Canadians, “we promised to cut the GST but things have changed'. That, we've got nothing but advice to say put it all into income tax cuts. No economist worth his salt would say the GST cut is a good idea. They say, more income tax cuts. More corporate tax cuts. Why not put it all into those two “good” tax cuts, instead of a GST cut.

Hon. Jim Flaherty: Well, you're assuming that there's such a thing as a bad tax cut. I've never met one. I'm in favour of tax cuts. We think Canadians pay too much tax. The GST is a tax paid by all Canadians. Even Canadians who don't pay income tax have to pay the GST when they buy things. We promised to reduce the GST by two points. Because of the strong economy we're able to do it earlier than we had planned. So, we're going ahead and we're going to have this permanent year after year tax reduction for all Canadians.

It's part of a larger reduction of taxes here, about $45 billion of the tax reductions are for individuals and families, about $15 billion for businesses. So about 75% of the tax reductions in the Economic Statement will benefit individuals and families in Canada.

Akin:Just to follow up on that GST question. Some economists still say that with our economy performing so well that this broad measure of tax cuts could be inflationary. When the Bank of Canada gets worried about inflation, they tend to raise interest rates. So some Canadians might say, well, it's a GST tax cut or my mortgage rate is going to go up and that's going to cost me thousands and thousands of dollars a year. Did you think about that at all?

Flaherty: Oh, we think about many things, I can assure you, when we do tax work. This is a balanced package. There are substantial business tax reductions. But after all, that's where Canadians work, at businesses. And we want to make sure that there's confidence in Canadian businesses, that Canada's a very attractive place in which to invest and that businesses doing business in Canada, Canadian businesses want to reinvest in Canada.

And that's why we went out five years to a very low corporate rate of 15% because of the business planning cycle to give them time to do that. The individual tax cuts will mean money in Canadians' pockets as soon as they file their income tax returns for 2007.

So as soon as we get into the new year and people get their T4's and so on they can go ahead and get more money than they would have had, assuming our notice of Ways and Means Motion passes in the House of Commons.

Akin: To get back to spending. Because if my math is right you kept spending program expenses much higher than GDP over the next three years. You're going to jump 4.6% next year, 4.5% the year after that … 3.7%. Conservatives are supposed to be all about cutting spending and you're outpacing GDP growth in your spending.

Flaherty: On average. On average, we will contain spending to within the rate of growth of the economy, which we estimate at about 4.1% over the cycle. It's a lot of work and we're working at it. We're going to look at every government program. But we will accomplish it. We know how to control spending.

Canada's forest sector commits to carbon neutrality

This just in from the Forest Products Association of Canada:

The Forest Products Association of Canada (FPAC) announced today that Canada’s forest products industry, a global leader in sustainable forest management, is setting a new bar for environmental responsibility and action on climate change: industry-wide carbon-neutrality by 2015 without the purchase of carbon offset credits. A partnership with WWF-Canada will inform and help guide the initiative. The announcement was made at the second annual Business of Climate Change Conference in Ottawa.

“We are pleased that FPAC is taking such a leadership position and not waiting for government regulations before taking action. My big hope is that other Canadian sectors will follow suit and rise to the challenge,” said Mike Russill, President and CEO of WWF-Canada.

“Climate change is the number one environmental threat facing the world today and becoming carbon neutral is the most significant step the forest products sector can take to reduce its overall environmental footprint,” said Avrim Lazar, President and CEO of FPAC. “Canada’s forest products industry has already made significant strides in mitigating its impact on the climate and its next step is to be carbon-neutral. The initiative we are announcing today has the potential to not only move the industry towards carbon-neutrality by 2015 but to go beyond, potentially removing more greenhouse gases from the atmosphere than we emit. And, unlike other sectors that rely significantly on the purchase of offsets, we can get there without having to do so.”



“The road will not be easy but we are confident that we can get there with the help of our partners and key stakeholders, and the guidance of other advisors,” added Lazar. “WWF has already begun some groundbreaking research into the global potential of sustainable forestry for bioenergy supply and climate change mitigation, and their Climate Savers program has established a high standard of emission reductions among leaders in many business sectors.”


Fiscal update — coming tomorrow after the markets close

Today in the House of Commons, Finance Minister Jim Flaherty announced that he will present the government’s annual economic update at 4 pm Ottawa time tomorrow. The fact that he is presenting this update after the markets closed has not gone unnoticed.

The federal budget, for example, is announced after markets close because there is information in the budget that could affect the markets and so, in the interests of making sure buyers and sellers of stocks, bonds, and other securities are all trading with the same information at their disposal, budget announcements happen when markets have shut down for the day. It was the same with the income trust announcement which — coincidence of coincidences — was made one year minus a day ago.

But the economic update is not normally a market moving event. Last year, for example, the Finance Minister used his economic update to talk about his “Advantage Canada” plan, which included the goal of bringing the ‘net debt’ of Canadian governments to zero by 2021. This was all interesting stuff but there were no new announcements about the government spending money or introducing new taxes and, as a result, Flaherty announced all this in the middle of the day at a meeting of the House of Commons Standing Committee on Finance.

So now we have this year and an “update” at 4 pm. It would seem to be a reasonable conclusion that the Finance Minister is waiting until 4 pm because he will indeed announce something about spending money or — more likely — adjusting taxes. But which taxes? Here’s the scrum with the Finance Minister after Question Period this afternoon:

Flaherty:  I hope I'll be able to deliver the fall economic statement in the House of Commons but we require unanimous consent to do that at four o'clock after the markets are closed and two of the parties have consented, I understand, but the NDP have refused to give their consent.  So if I can't do it in the House of Commons because of the NDP then I'll do it somewhere else.

Question:   Why not wait to do it at the Finance Committee? [The standing committees of the House of Commons, including the Finance Committee,  have not yet been struck for this parliamentary session so, as a result there is no Finance Committee and, hence, no meetings of the Finance Committee. It’s not yet clear when committees will be formed up but it will likely be after a break week early next month – ed..]

Question:   If you're doing it at four o'clock there must be tax measures in there.  Good news for Canadians?

Flaherty:  I'm doing it after the markets are closed.

Question:   Why?

Flaherty:  It's a fall economic statement and we generally do that after the markets are closed.

Let’s break from the scrum for a minute to challenge that last assertion. Here’s a note from the NDP researchers, who remind us that the last four fall  economic updates were all made while markets were open:

So now back to the scrum with Flaherty:

Question:   It's often done before the Finance Committee often.  Why not do it at Finance Committee when they get the committees back up and running?

Flaherty:  Well, I really want to do it in the House of Commons but we may not be able to because of the opposition of the NDP.

Question:   It sounds like a mini budget.

Flaherty:  No, it's the fall economic statement and —  It's a fall economic statement.  We're going to do it tomorrow at four o'clock.

Question:  What about a GST cut? Would you like to get that over with a little sooner like maybe after four tomorrow?

Flaherty:  Well, we certainly feel that Canadians pay too much tax.  Okay, see you tomorrow.

Some economists believe that, if he wants to, Flaherty as the means, motive, and opportunity to bring in a whole raft of tax cuts tomorrow. Don Drummond, chief economist at the TD Bank and a former top official with the Department of Finance, just published his latest analysis today of the federal government’s fiscal capacity.

Drummond believes the federal government will finish the current fiscal year on March 31, 2008 with a surplus of $14.5–billion. For the next fiscal year, Drummond says the surplus could grow to $16–billion and to $16.5–billion the year after that. And Drummond’s surplus numbers are crunched after the federal government makes an annual $3–billion payment on the national debt.

A GST cut would cost the federal treasury about $5.5–billion in lost revenue. So even if a GST cut comes in, it is the view of Drummond and many other professional economists  that there is still plenty of room — $9–billion and then some — for other kinds of tax cuts. In fact, in a phone call discussion I had with him this afternoon, Drummond believes Flaherty could cut the GST by one point, cut personal income taxes by one point and accelerate promised corporate tax cuts and likely still have money left over. And, he says, no lockup would be needed to do that and it would take the bureaucrats in Finance about three minutes to make all that happen.

And what about this lockup issue? Drummond remembers times when the update was done after the markets had closed and he remembers tax measures being announced without a formal lockup for journalists and financial analysts.

In other words — anything’s possible!

Blair Wilson: The Province investigation

The Vancouver Province devoted several full pages on Sunday and again on Monday detailing an investigation into Liberal MP’s Blair Wilson’s financial history.

Among the allegations against Wilson, The Province has learned:

  • Wilson did not report campaign expenses to Elections Canada and paid for supplies off the books, in cash, a breach of the act.
  • Wilson and his wife, Kelly, borrowed roughly $1.9 million from his in-laws to purchase six properties, and much remains unpaid despite the fact they have sold some homes.
  • Wilson and his wife were subject to Social Services Tax Act liens on three properties and owe $2.1 million in bank mortgages.
  • Wilson misled the media about the true extent of his business success, exaggerating the number of restaurants he founded and claiming to have sold an accountancy business his in-laws claim closed, among other discrepancies
  • Wilson lost hundreds of thousands of family investors' money in the stock market and yet billed them for management fees.
  • Wilson's two restaurants, Mahoneys and Wilson's Steakhouse, closed. He was taken twice to the B.C. Employment Standards Tribunal for refusing to pay employees, was sued twice for failing to pay contractors, was twice compelled by the courts to pay GST owing, and was also taken to court by a supplier over $33,839 that was owed (this amount was later paid).
  • Wilson bought extravagant gifts for a girlfriend in Poland while working for a restaurant chain called Pan Smak Pizza Inc.

When asked to comment on the allegations about campaign expense discrepancies, Wilson, the Liberals' B.C. caucus chair, former associate critic for finance and now the national revenue critic for the Official Opposition, said, “These are just unfounded allegations.”

“The only thing I can say is I had a very good fiscal agent that filed all the necessary documents. I have not heard anything with respect to these allegations from Elections Canada to date, and if and when I do hear from Elections Canada, I'll have more to comment on.”

[Read the full story]

More elections scandals

For the last several  days, the Liberals have used much of their time during Question Period to suggest that the Conservatives violated election spending laws. Something tells me we may hear about a different topic today:

Statement by the Honourable Stéphane Dion, Leader of the Official Opposition, on the Resignation of Blair Wilson

OTTAWA – I learned of the allegations of improper campaign spending against West Vancouver—Sunshine Coast MP Blair Wilson today.

They are serious allegations, which raise questions that Mr. Wilson must address without delay.

As such, I have accepted Mr. Wilson's resignation from his position as National Revenue critic, and as a member of our national caucus, effective immediately.

I am particularly concerned about allegations of Elections Act violations by Mr. Wilson's campaign.

I am pleased that Mr. Wilson has called on Elections Canada to launch a formal review of the matter. I trust Elections Canada will deal with this matter expeditiously.

In the meantime, I have instructed the Liberal Party of Canada to provide whatever assistance they can to Elections Canada as it reviews the allegations.


Attention music trivialists: Your help urgently required

Urgent call for help!!!!

Next month, I'll be one of the rookies on a an award-winning trivia team that will be participating in World Trivia Night here in Ottawa. This event raises a lot of money for a children's charity.
One of the pre-event competitions has our team frantically trying to decode a music trivia event and we need help:

If you can help, point your browser here:

At that link you can download a music file.

The music file contains tiny excerpts of 26 songs. We have to identify each song. We've been given one hint: The first letter of each song is in the same order as the alphabet.

Our team has done a decent job of solving most but we are stumped on clips K, X and Z.

If you can help — expect much virtual karma to come your way.

NATO and Afghanistan

From today's Washington Post:

NATO Conflicted Over Afghanistan

As War-Torn Country Backslides, Allies Differ on How to Stabilize It

KABUL — Four years after NATO began an expanded mission in Afghanistan, members of the 26-nation alliance are divided over anti-drug and reconstruction policies, rising civilian casualties and what some say is heavy-handed U.S. leadership, according to interviews with military officials and diplomats.

Some allies express frustration with the refusal of others to share the dangerous combat roles being assumed almost exclusively by the United States, Britain, Canada and the Netherlands.

NATO's internal conflicts are playing out against a background of increasing violence in Afghanistan, where the extremist Taliban group is resurgent, suicide attacks and roadside bombings are on the rise, and opium production is at an all-time high. [Read the rest of the story…]

Meanwhile the folks at The Torch draw our attention to an inciteful insightful piece by The Toronto Star's Mitch Potter, filing from Brussels, on NATO's frustration at getting thumped by the Taliban when it comes to winning the attention of Western media:

Addressing a Copenhagen gathering of insider delegates, including a sizeable contingent from Canada, [Secretary General Jaap de Hoop Scheffer] said NATO is “frankly in the Stone Age” when it comes to many aspects of public diplomacy.

“When there is an incident in Afghanistan, the Taliban are quick to say there have been high numbers of civilian casualties. The wires pick it up, then the TV stations, then the Web,” Scheffer said. But by the time NATO has investigated, checked the results and passed the information through its approval system, “our response comes days later – if we are lucky. By that time, we have totally lost the media battle.”

Scheffer also faulted commanders for tending to deal only with reporters from their own countries.

“The result? The population of Canada thinks Canadian soldiers are fighting alone. So do the British and the Dutch. That undermines solidarity, diminishes the multilateral nature of the operation and makes it harder to sustain,” he said.

“Canadians need to see Danish soldiers in the south, and Romanians and Poles as well as Dutch and British and Estonians and Americans.”

Scheffer's words were music to the ears of Appathurai, who has been the “lone voice” urging his colleagues to awaken to tempo of 21st-century communications. [Read the rest of the story…]

"A Pandora's Box of bigotry…"

The Montreal Gazette this morning reports on a new poll that surveys Quebecers attitudes about the Bouchard-Taylor Commission, currently making its way around the province to listen to what Quebecers have to say about the integration of minorities into the province's cultural fabric. To critics — and apparently to a majority of poll respondents — the commission's hearings have become little more than a cesspool of bigotry and xenophobia.

…six weeks after the 17-city “reasonable accommodation” road show got under way and derogatory remarks against Jews, Muslims, Sikhs and other religious minorities started flying – it seems that Quebecers think the chairmen were right to worry.

In a new poll, 62 per cent – rising to 74 per cent in central Quebec, scene of the Hérouxville controversy – said the commission should have done something from the outset to prevent racist and anti-Semitic statements from being expressed.

And 40 per cent of non-francophones polled said those views are so objectionable that the hearings should no longer be carried live on Radio-Canada.

Americans told not to sell to Canadians

The Calgary Herald has a good read on its front page this morning, reporting that some Canadian car makers have ordered U.S. dealers not to sell to Canadians. And now — get this — Bombardier is doing the same thing. U.S. dealers who sell a ski-doo to Canadians will have to pay a $3,000 'surcharge' to Bombardier.

Consumers’ Association of Canada president Bruce Cran, noted the irony of Bombardier refusing sales to Canadians.

“Do they think we are a bunch of dupes that we are putting up with this stuff?” said Cran.

“Bombardier has been subsidized by Canadian taxpayers over great many decades and now they will sell to Americans — and only Americans — for 40 per cent less? That’s the reward we get?”

It's hard not to sympathize with Cran's sentiment, though, for the record, it's not quite accurate. Bombardier Recreational Products was actually spun off a few years ago from Bombardier, the publicly traded plane and train maker, and is now privately owned by the Bombardier family. So technically the taxpayer never subsidized the ski-doo business but certainly subsidized the plane business of the same family that owns the ski-doo business. Cran doesn't care, though: He's issued a public call for an apology from BRP CEO Jose Boisjoli: “Apologize Mr Boisjoli and take whatever action is needed to put things right for your loyal Canadian customers.”