Parliamentary Budget Officer says deficit disappears only with "significant discretionary actions"

Parliamentary Budget Officer Kevin Page says tax hikes or deep spending cuts are the only way the federal government's finances can return to a surplus position.

Page is the latest economic expert to suggest Finance Minister Jim Flaherty's plan to eliminate the deficit is unrealistic.

“Based on our analysis, even the analysis we did a few months ago, it will be very difficult to see a surplus within the next five years without significant discretionary actions,” Page said in an interview with Canwest News Service and Global National.

Flaherty, on the other hand, believes the natural growth of tax revenues when the economy returns to normal growth will be enough to clear the deficit.

“As we come out (of recession) and the revenues get better, as they will, as the economy starts to grow, we will be able to work our way out of deficit, into surplus,” Flaherty told reporters before leaving for Italy to attend meetings this weekend of G8 finance ministers.

But Page said the Canadian economy is experiencing “massive structural changes” and, even when the recession ends, growth rates likely will be slower than Flaherty has predicted. Page cites the changes in the auto and forestry sectors as examples.

“It may be that our potential growth rate is lowering, and we need to look at that,” Page said. [Read the rest:]

No money to paint Peggy's Cove's lighthouse? Cuzner has an idea..

From Members Statements today in the House of Commons:

Mr. Rodger Cuzner (Cape Breton—Canso, Lib.) (left): Mr. Speaker, I have a quiz for the House today. Where is the most famous and iconic lighthouse in all of Canada?

Some hon. members: Peggy's Cove!

Mr. Rodger Cuzner: Peggy's Cove. I did not hear anything from that side of the House, not because Conservatives do not know but because they are embarrassed they cannot find $25,000 to paint that international landmark.

Being a good Nova Scotian, I will offer them a few ideas. I will offer them a few suggestions. How about this? Fire the republican spin doctors they hired for one month's work. That is $25,000 right there.

Fire the psychic “style” consultant the Prime Minister has. The way they missed on the budget projections, they are not listening to her anyway.

Shrink the size of cabinet. If they shrink the size of cabinet, they could paint the Peggy's Cove lighthouse 156 times.

Slash the $1 billion that they have been using for consultants. They could paint 40,000 tourist landmarks with that one move alone.

The lighthouse is on over there but nobody is home. It is time to come out of the fog and paint the lighthouse in Peggy's Cove.

Later, during the daily Question Period which follows Members Statements, Conservative MPs James Bezan and Nova Scotia Gerald Keddy had this exchange of lob-balls on the subject:

Mr. James Bezan (Selkirk—Interlake, CPC): Mr. Speaker, the lighthouse at Peggy's Cove and the entrance to St. Margaret's Bay is recognized by all Canadians and citizens of many countries around the world.Can the Parliamentary Secretary to the Minister of International Trade assure the House that this national icon will indeed receive the upkeep it needs?  

Mr. Gerald Keddy (Parliamentary Secretary to the Minister of International Trade, CPC): Mr. Speaker, the lighthouse at Peggy's Cove is in my riding of South Shore—St. Margaret's, and it is a tourist destination for nearly one million people a year.It should be noted that it is also near the monument to Swiss Air 111, which was erected in memory of the 229 men, women and children who perished in 1998 on Swiss Air 111.It should be noted that I spoke directly to the Minister of Fisheries and Oceans about this last fall. She has given clear orders for the lighthouse to be painted. It was not painted last fall. It will be painted this year.

The Liberal endgame on the election staredown

I usually don't like to use this blog for speculation and political punditry — my desk is next to two of the Hill's top pundits and I like to leave that to them — but one of the fascinating political battles on the Hill in the last several weeks has been Liberals versus NDP and, if there is a confidence motion to be voted on next week, it' may be more of a staredown between two opposition party rivals than a staredown between the government and the opposition.

The Liberals have long chafed at the fact that, under former leader Stephane Dion as well as under current leader Michael Ignatieff, they have voted with the minority Conservative government on matters of confidence. Under Dion, I got the sense voting with the governnment was partly the responsible thing to do but it was also a matter of realpolitik — the Dion Liberals never were ready to fight an election and got pummeled when Harper, frustrated he couldn't goad Dion into a fight, pulled the plug himself, despite his own fixed election date law.

Ignatieff has also stood up, as Leader of the Official Opposition, to vote to sustain the government on confidence matters but he has more success, in my view, in successfully convincing his colleagues and, perhaps, the country that there was a good, responsible reason for doing so, i.e. we're in the midst of a nasty recession and some stimulus spending has to happen.

Whatever the reason, the NDP has used each occasion of Liberal support for the government — and, as Jack Layton notes below, there have been 71 — to deride that party for being nothing but driftless government wannabees. In the last parliament and in the last general election, the NDP painted itself as Canada's Effective Opposition, in contrast to the Liberal Official Opposition.

From an electoral standpoint, the NDP vs Liberal battle on this front seems to have paid some dividends for the NDP. The NDP won several Liberal-held ridings in northern Ontario, kept a seat in Quebec, won for the first time in Newfoundland and Labrador and holds the only seat in Alberta that is not held by a Conservative.

The Liberals know that, in the next electoral battle, they need to take back some of those seats to win the government and one of the ways I sense they hope to do that is to turn the tables on the NDP and get Layton to support the government by either voting with it on a confidence matter or failing to show up for the vote.

If the Liberals end up forcing an election next week, many Liberal MPs and staffers I've spoken to, are saying so be it. If they can force the NDP to blink and get the NDP to prevent a general election this summer, even better.

Layton, seems to be aware of that Liberal endgame and, yesterday after Question Period, he was asked about the prospects of a summer election:

The Hon. Jack Layton: Well I don't think Canadians are all that keen on a fourth election in five years, but I'll tell you, it's clear that the government's direction is the wrong direction. Looking at the statistics that are available — the unemployment rate being so high[and] the government's claiming that money's going out the door. It clearly isn't, if you talk to the mayors, which I've done. And I think we'll just have to see what the Liberals do. We have not brought a confidence motion forward. We brought a motion forward on pensions. It'll be voted on next week. But if the Liberals are counting on the NDP in some way, I think they should just look at our record over the last 71 confidence motions and they'll get an idea of where we're coming from.

Let the staredown begin.

Senator Brazeau and his drive-by smear

Yesterday in the Senate, Senators held a Committee of the Whole session with aboriginal leaders, including retiring AFN Chief Phil Fontaine, participating in the debate from the Senate floor, as part of ceremonies marking the National Day of Reconciliation. Apparently Senator Patrick Brazeau, who, prior to his appointment to the Senate by Stephen Harper, was chief of the Congress of Aboroginal People's which was often was at odds with the Assembly of First Nations, is not ready for reconciliation with Fontaine for yesterday, Brazeau, in the Senate, accused Fontaine of using his position to benefit family and friends. Here is the exchange:

Senator Brazeau: My second question deals with the Truth and Reconciliation Commission. Obviously, we had some good news announced yesterday with respect to the commission having different individuals named so they can start the important work that needs to be done. However, if we go back a little, we had a credible and capable individual step down, former Chief Justice LaForme, who was applauded by the Aboriginal community. He indicated that one of the reasons he stepped down was political interference by the Assembly of First Nations.

Having said that, everyone knows that your former chief of staff was also the executive director who was fired by Justice LaForme. Some have suggested as well that perhaps the interference was by yourself in trying to have family and/or friends hired on to this commission. I ask you this question with all due respect. Can you comment on that, please?

Senator Carstairs: Colleagues, I have known Phil Fontaine in several incarnations, both as the Grand Chief of the Assembly of Manitoba Chiefs

Senator Brazeau: No answer?

Senator Carstairs: — and also as the Grand Chief of the Assembly of First Nations. I want my colleagues here in the Senate to know that his legacy will be that it was never about Phil. It was always about his people, and particularly the children and his desire to have Aboriginal children have appropriate housing, education, health care and children's services.

Meegwech, Phil.

I want to ask a question about children's services. The Wendy Report was clear. The amount of money given to Aboriginal people, whether Metis, or off-reserve or on-reserve persons, is far below the amount of money that is afforded to any other people when their children need to be in care. At the same time, there are greater numbers of children in care than in the general community. I would like to hear from Chief Daniels, Chief Fontaine and Mr. Chartier about what we need to do to ensure that your children receive the services they require.

Mr. Fontaine: I am not aware of the rules and procedures of this place and whether one has immunity from making certain accusations about individuals. What I have heard from Senator Brazeau is defamatory, and I need to protect myself.

Some Hon. Senators: Hear, hear!

Senator Moore: Absolutely!

Mr. Fontaine: One would make such arguments when one does not understand the settlement agreement or has never read it. The fact is that there are six parties to the Indian Residential School Settlement Agreement. The Assembly of First Nations is one of those parties, in fact the only party that has a clear and explicit role in terms of an ongoing responsibility for the implementation of the settlement agreement.

For example, on the recent appointment of the chair of the Truth and Reconciliation Commission, and two other commissioners, the Honourable Minister Strahl consulted with me because that is one of the provisions in the settlement act.

I consider myself one of the architects of the Indian Residential School Settlement Agreement. When we were fighting for this issue, we were a lonely voice. I never heard Senator Brazeau raise his voice once — not a single time — to talk about the great importance that the fair and just resolution of this matter meant, not just for the survivors but the for entire country. It was only after we had completed the difficult and complicated negotiations that people started complaining. Until then, we met with silence.

I am quite disappointed that Senator Brazeau would make those kinds of allegations. They are completely uncalled for but very consistent with Senator Brazeau.

I want you to understand that that is the settlement agreement, and I would urge you to read the provisions of it. Then, you will understand why the Assembly of First Nations had a strong interest in ensuring that the provisions of the settlement agreement are honoured and that everything proceeds in the best interests of not only the survivors but of the country. This is about Canada.

Do we have any regrets about the past? Of course. Will we be stuck in the past? No. We are moving forward with the government on the implementation of the settlement agreement. This very important undertaking will be before us for five years. It represents not only a tremendous opportunity for the country but also a tremendous challenge to get it done right.

The Chair: Witnesses and honourable senators, I am sorry to interrupt but the committee has been sitting for two hours. In conformity with the Order of the Senate of June 9, I am obliged to interrupt proceedings so that the committee can report to the Senate.

Honourable senators will join me in thanking most sincerely the witnesses for being with us today.

Hon. Senators: Hear, hear!

Backup MAPLE reactors produced isotopes – plenty of 'em

A brand-new backup nuclear reactor at Chalk River, Ont. produced enough medical isotopes during some test runs to supply the needs of every Canadian hospital and clinic, a parliamentary committee was told Thursday, putting a dent in one argument the Conservatives have been using to defend their decision last spring to mothball that backup plan.

The revelation that the MAPLE reactors at Atomic Energy of Canada Ltd.'s Chalk River Laboratory did indeed produce the isotope Moly-99, the key ingredient used in pharmaceutical radioisotopes, came on the same day doctors in Quebec said as many as 12,000 patients there have had their cancer and cardiac tests put off because of a shortage of those isotopes…

[Read the rest of the story]

MDS Nordion on cancelling MAPLEs: Wrong for Canada

Steve West, the president of MDS Nordion, which wholesales the medical isotopes harvested at AECL's Chalk River Lab, is testifying right now at the Commons Standing Committee on Natural Resources (#RNNR for Twitterers). Here's an excerpt from his statement:

The reason for the current supply shortage is Atomic Energy of Canada Ltd.'s decision to cancel the MAPLE project. The MAPLE reactors are complete and await final commissioning. The MAPLEs have created medical isotopes. The MAPLEs can be and should be brought into full service. We recognize that this requires external expertise and we are urging the Government to reconsider its decision to stop the MAPLE project.

The MAPLE project is Canada's opportunity for medical leadership and scientific innovation. The cancellation of the MAPLE project is a detrimental loss to Canada.

The Government of Canada agreed with AECL's decision to abandon the MAPLEs. It was not a reasonable public policy for Canada or the world. It was the wrong decision. It was wrong for global long-term supply of medical isotopes. It was wrong for the patients who rely on this vital product for the treatment of cancer and heart disease. It was wrong for the future of scientific innovation in Canada. It was a mistake in public policy.

MDS announces financial results and tells a prime minister he's wrong

MDS Inc. of Mississauga, Ont. announced its financial results this morning. MDS is the parent company of MDS Nordion, the Kanata, Ont.-based company which buys all of the medical isotopes produced by Atomic Energy of Canada Ltd.'s at the Crown corporation's Chalk River Laboratory.

For the three months ending April 30, MDS Nordion had an operating profit of US$23 million and net revenue of $65 million. That was down from the same quarter last year of $24 million and $80 million. MDS also had this to say in its press release this morning:

After the end of the quarter, in May 2009, Atomic Energy of Canada Limited (AECL) announced that its National Research Universal (NRU) reactor would be out of service for at least three months. Based on historical EBITDA trends related to NRU-supplied isotopes, MDS expects the financial impact of this shutdown to reduce MDS Nordion's adjusted EBITDA by approximately $4 million for every month the NRU is out of service. MDS is assessing plans to reduce costs over the extended shutdown period. MDS Nordion continues to deliver positive EBITDA from sterilization technologies and radiopharmaceutical product and service lines.

MDS continues to work to secure a long-term reliable supply of medical isotopes. In 1996, MDS Nordion contracted with AECL to complete and commission the MAPLE reactors, which were intended to replace the NRU. In May 2008, this project was unilaterally discontinued by AECL and the Government of Canada. MDS invested over $350 million in the MAPLE project, and believes that the completion of the MAPLE reactors is the best solution to provide global medical isotope supply. More recently, MDS Nordion urged the AECL and Canadian Government to consult with international experts and obtain their assistance to activating the MAPLE project to address the current medical-isotope supply shortage. In addition, MDS Nordion is examining longer-term supply alternatives and announced in the second quarter its collaboration with TRIUMF, Canada's national laboratory for particle and nuclear physics, to study the feasibility of producing a viable and reliable supply of photo fission-based Molybdenum-99.

This will have some relevance today. Last night, we reported: Prime Minister Stephen Harper says Canada plans to leave the production of medical isotopes to other countries — despite the fact that for a time last year, this country was producing nearly all such isotopes in the world.
“Eventually, we anticipate Canada will be out of the business,” Harper said Wednesday. [Read the rest of the story]
AECL — again, it's a Crown corporation so taxpayers stand behind its obligations — signed a deal with MDS Nordion guaranteeing a 40-year supply of medical isotopes. The MAPLEs were to produce that 40-year supply. MDS is suing AECL and Canada for $1.6 billion for cancelling the MAPLEs. What now will AECL and Canada owe MDS Nordion now that the prime minister has rather abruptly announced that Canada is out of the business altogether and will not — MAPLEs or no — honour its word to MDS Nordion to provide it with medical isotopes for the next 40 years?
MDS Nordion executives, as it happens, had already been scheduled to testify today at the House of Commons Standing Committee on Natural Resources (hashtag #RNNR for you Twitterers) where executives are expected to make the case for the MAPLEs. Both Liberal and NDP MPs are pushing the government to at least have international experts review AECL's decision to kill the MAPLEs.
Why is all this important? The medical isotopes at Chalk River help 2 million Canadian cancer and heart disease patients every year.

The transcript: Lisa Raitt apologizes

At about 12:45 this afternoon, in a press conference room in Parliament Hill's centre block, embattled Natural Resources Minister Lisa Raitt had this to say:

Thank you everyone. Today I want to personally communicate my deep regret for wording I used in a private discussion earlier this year which was inadvertently recorded. As somebody who has had in their personal life been deeply affected by cancer, my intent was certainly not to show any disrespect for cancer victims, survivors or their families. However, it's clear that these remarks have been interpreted in that way. So I want to offer a clear apology to anyone who's been offended by what I've said.

I want people to know that when I was 11 years old, I watched my father pass away from colon cancer over a period of 18 months. My mother and I and my brother took care of him until his final days. Twenty years later, I was in the room with my brother as he died from lung cancer. As you can see, it's a very personal issue for me and it's one that I really don't take lightly.

With respect to the medical isotopes issue however, I will continue to work with Minister Aglukkaq and the international community to address the isotope shortage in Canada and around the world. Thank you.  

Raitt took no questions.

PM stands by Raitt despite tape's revelations that she could solve

In the tape at one point, Natural Resources Ministers Raitt and former aide Jasmine MacDonnell speak about their unsuccessful efforts to get Aglukkaq to contribute to a news release they wanted to issue about the medical isotope supply.

On the tape, Raitt says Aglukkaq and her staff seem “terrified” of the issue.

“Good,” Raitt continues. “Because when we win on this, we get all the credit. I'm ready to roll the dice on this. This is an easy one. You know what solves this problem? Money. And if it's just about money, we'll figure it out. It's not a moral issue.

“It's really clear,” said Raitt. “Oh. Leona. I'm so disappointed.”

Shortly after that exchange, MacDonnell says to Raitt the isotope issue is hard to control, “because it's confusing to a lot of people.”

“But it's sexy,” Raitt responds. “Radioactive leaks. Cancer.”

“Nuclear contamination,” MacDonnell says.

“But it's only about money,” Raitt concludes . . .

…Dimitri Soudas, Prime Minister Stephen Harper's press secretary, seemed to suggest Monday that Harper had no plans on taking any disciplinary action.

“While embarrassing, this in no way affects the minister's ability to do her job,” Soudas said in an e-mailed statement. “Ministers Raitt and Aglukkaq have the confidence of the PM.”

[Read the rest of the story]

A thoughtful introduction to the use, value, and significance of Twitter

I first became a fan of Steven Johnson's writing on the technology of culture and culture of technology 10 years ago when I read his Interface Culture: How New Technology Transform The Way We Create & Communicate . Back then — how quaint this now sounds — all the discussion was about the Desktop, about files, folders, icons, and the metaphors we used to organize our digital space. The iPod was still a glimmer in Steve Jobs' eye and the iPhone was an even longer way off.

Johnson is still interested in personal, popular technology and its effect on the way we communicate.

He has the cover story in this week's Time in which he looks at Twitter. It is rather grandly titled “How Twitter Will Change the Way We Live”.

You may not care about Twitter or see much use in it but I'd still strongly recommend Johnson's piece for what it has to say about the value and significance of Twitter.

As for me, I was, as I've mentioned here before, initially sceptical about Twitter but, upon finding the appropriate interface for it by using a standalone application, I'm now a big fan of Twitter and I tend to agree with much of Johnson says in this piece. [See Political Twits and #ottawaspends ]

Some bits in the essay that stood out for me:

… [hashtag conversations are]  built entirely out of 140-character messages, but the sum total of those tweets added up to something truly substantive, like a suspension bridge made of pebbles.

…Social networks are notoriously vulnerable to the fickle tastes of teens and 20-somethings (remember Friendster?), so it's entirely possible that three or four years from now, we'll have moved on to some Twitter successor. But the key elements of the Twitter platform — the follower structure, link-sharing, real-time searching — will persevere regardless of Twitter's fortunes, just as Web conventions like links, posts and feeds have endured over the past decade. In fact, every major channel of information will be Twitterfied in one way or another in the coming years . . .