Month: October 2011

Yesterday, our papers across the country, carried my call to fight for cheap cheese. An excerpt:

…as Conservatives bust up one kind of agricultural monopoly [ending the monopsony of the Canadian Wheat Board], how about taking on the other agricultural cartels such as the dairy farmers who force Canadian consumers to pay more for food and hurt our standing on the international stage as free traders?
Sadly for consumers, the Conservatives, like the Liberals before them, don’t seem interested in dismantling the so-called supply management system that gives the country’s dairy farmers $2.4 billion a year in subsidies that one think-tank called “an implicit tax that governments have authorized farmers to impose on consumers.”

I was pleased to see my inbox fill up with lots of thoughtful reaction, including this one from Bruce Beaumont, a dairy farmer from Ontario:

As a dairy farmer for over 60 years, I'm in total agreement with your assessment of quotas (expensive, useless and totally uneccessary) but before you criticize the farmers please try and understand how we got into this mess.

At the time quotas were being debated most farmers were opposed to quotas.The government subsidized farmers during the WWII period to encourage more production, and it did increase production substantially. During the post-war period when production overshot demand and prices tanked,  goverment again introduced subsidies and guess what? Subsidies increased production just as they did during wartime.

Faced with overwhelming supply some that could not even be given away the idea of quotas was contemplated. The quota solution had the almost unanimous support of both the rural and urban press of the period. The farm majority who opposeded quotas were just ignored.

In the end qotas were unilaterally imposed on the dairy and poultry industry without ever allowing farmers ( who were considered just too dumb) to even vote on the issue.  By imposing  severe penalties on anyone who broke the rules everyone was forced into submission. Now that farmers have invested billions and billions of dollars to buy mandated quota to farm, a withdrawl of quotas without adequate compensation would vertually wipe out the industry.

Speaking with a resident of Australia a while back I mentioned how well farmers there had adjusted “Yeah,” he said “but they don't tell you how many commited suicide.”

In the period leading up to the imposition of quotas on farmers without even  allowing them to vote the goverment was spending huge amounts to subsidize farmers and subsidize the export of the excess product that susidies were helping create there was a 33% import tarrif on manufactured goods coming into Canada.

Industrial wages were three times farm wages (earnings) yet farmers were not  permitted to bid on factory jobs because of the closed shop policies that are still in place today.

Fact: Canada is alone among major industrialized powers without its own car. The U.S. has Ford, GM, and so on. Italy has Fiat. Japan has Honda and Toyota. Germany has Volkswagen. France has Citroen. Jaguar and Bentley (and plenty of others) first started in Britain. Korea has Hyundai. Even Russia has its Lada. But Canada? Nothing.

Back in 2008-09, when the Harper government was debating if it should use billions of Canadian tax dollars to prop up the Canadian divisions of the foreign-owned car companies GM and Chrysler, there was — too briefly, if you ask me — a flurry of nationalist murmurings that the Canadian government should do no such thing but instead, use those billions to develop Canada's first car. The Beaver? the Paddle? The Canoe? Oh, the branding possibilities!

But nothing ever came of that chatter. The government did what everyone expected and gave billions went to GM and Chrysler (and taxpayers made a tidy little sum on the deal). And though Canada still builds lots of Toyotas and Fords and KIAs, we still don't have our own car.

The yearning to have Canada create its own car, though, was more than just nationalism, there were some reasonable arguments about the research and manufacturing spinoffs that would accrue to Canada if we had our own car.

And so it was (and is) with India where, in 2009, leading industrialist Tata Group announced that Tata Motors would build and sell the Nano, the world's cheapest car. This would sweep through India (environmentalists were worried about millions of new car drivers putting greenhouse gases into our already overburdened atmosphere) and the rest of the developing world. India could boast of its own car, bringing new wealth and expertise to that country and, in the process, creating a car for the masses in the developing world.

But, as the American Enterprise Institute's Sadanand Dhume told me today, so far, it's not exactly working out for Tata's Nano — mostly because status-conscious Indians don't want to be driving what everyone knows is “the world's cheapest car.”

And here's the link to Dhume's excellent piece in Foreign Policy about Tata's Nano

The Liberal Party of Canada is urging Canadians to sign a petition that will tell Stephen Harper to lay off the CBC's budget; that “the Conservatives are using the CBC as a scapegoat for their budget deficits and are breaking their election promise to continue their funding.”

Fans/employees of the CBC may be excused for raising an eyebrow to see the Liberals criticizing any government eyeballing CBC budget cuts as part of a government-wide austerity plan for in 1996, as Liberal prime minister Jean Chretien and his finance minister Paul Martin were trying to dig Canada out from under its biggest debt load (measured relative to GDP), the Liberals imposed drastic cuts on the Crown corporation, chopping $414 million from a budget of what, at that time, was $1.4 billion a year. That's a haircut of close to 30 per cent.

The current Conservative government has asked all government departments, including the CBC, for a plan that would shave 5 per cent of funding and a plan that would cut 10 per cent. The CBC's federal subsidy for this current fiscal year is $1.07 billion. A 10 per cent haircut would amount to little over $100 million, a far cry from what the Liberals did the last time a government was trying to dig itself out of a defict hole.

And if you think the Conservatives are worse than the Libs because the Liberals have an “ideological” bias — ask CBC reporter Terry Milewski how enlightened the Chretien government was about his reporting on Sgt. Pepper at APEC.

Others say the Conservatives promised to maintain or increase CBC's funding during the May 2nd election. If you voted for the Tories based partly on that promise, presumably you hope they'll stick to that promise.

Here's the Liberal Red Book of 1993:

“Funding cuts to the Canadian Broadcasting Corporation … illustrate the Tories failure to appreciate the importance of cultural and industrial development … A Liberal government will be committed to stable multi-year financing for national cultural institutions such as .. the CBC.” (p. 88)

Then the Liberals went out and whacked 2,400 jobs at CBC and cut funding by over $400 million.

Here, incidentally, are four years of Liberal governments (Fiscal 1996 through fiscal 1999) that came after the big whack of cuts, an example, presumably of a Liberal government “protecting” the CBC's funding (this from the CBC's own annual report in 1999):

I'm still trying to obtain an apples-to-apples series that would show how much the CBC received from taxpayers for the years 1993 through to now. But, based on CBC's own annual reports and the Main Estimates published by Treasury Board, here's what I've got so far:

In Fiscal 1996 (a reminder that a fiscal year is denominated by the year in which the financial reporting ends. So, as the Government of Canada's financial year ends on March 31, FY 96 refers to the the last nine months of 1995 and the first three months of 1996), Parliament apportioned $1.07 billion to the CBC. That was drastically slashed in FY 97 and FY 98, stayed at that low mark in FY 99 of abotu $760 million and then began a tentative creep up again. By the time the Liberals, then led by Paul Martin, left office in the last fiscal for which they are responsible for (FY 06), the CBC's subsidy totalled just over $1 billion.

So despite: an apology in the 1997 Liberal Red Book for the CBC cuts and a promise to restore funding and several budgetary surpluses in the last years of the Liberal reign that allowed them to book as much as $3 billion in “contingency” money, the Liberals never made good on that 1997 promise to restore funding. And so, after 13 years of Liberal rule, the CBC had less money in absolute terms and a lot less if you pegged it to GDP or some other relative measure.

So how's the Conservative measure? Despite frequent sabre-rattling by Conservative MPs, the Conservatives have not taken the axe to CBC with the same gusto the Liberals did a decade earlier. CBC funding was trimmed by $32 million (3.2%) in Finance Minister Jim Flaherty's first fiscal year (FY 07).  But then — and there's where I want to double check that a comparison using Treasury Board Estimates against CBC Annual Reports yields accurate results — funding under the Tories jumped in FY 09 nearly 20 per cent to $1.19 billion. But in each fiscal year since then, there has been less and less for the CBC from the Conservatives. Cuts of 3.6% (FY10) , 4.5%(FY11), and, projected for this year, 1.52% will leave it in FY 12 (year end March 31 2012) with a subsidy of $1.07 billion — almost exactly where the CBC was in 1996!

Update: Freelance journalist Justin Ling points me to this: Friends of Canadian Broadcasting has crunched the numbers and adjusted them for inflation and published the following chart which, if you're a fan of CBC, would seem to indicate that it would be tough to trust Liberals or Conservatives to protect CBC funding …

There will be many who will wish to diminish the significance of this — not enough MPs from outside Quebec, etc. etc — but when you stand up with more than one-third of your 100+ Parlamentary caucus to run for your party's leadership, that's saying something. And that, folks, was Thomas Mulcair today.

Now, if you believed the whisper campaign that seemed to be afoot in Ottawa, Mulcair was loathed by his parliamentary colleagues. I wasn't prepared to believe this until I heard from at least few actual New Democrats. I have tried my darndest to eavesdrop on as many conversations as I could among NDP MPs and staffers in Ottawa, but so far, I cannot name a single loather. I can find many Conservatives, however, who tell me that they believe Mulcair would likely represent the biggest threat in four years to Prime Minister Harper.

Here is the list, incidentally, of the NDP MPs who have signed on to make Mulcair the first NDP prime minister:

• Robert Aubin – Trois-Rivières
• Tarik Brahmi – Saint-Jean
• Sylvain Chicoine – Châteauguay-Saint-Constant
• Anne-Marie Day – Charlesbourg-Haute-Saint-Charles
• Matthew Dubé – Chambly-Borduas
• Pierre-Luc Dusseault – Sherbrooke
• Réjean Genest – Shefford
• Sadia Groguhé – Saint-Lambert
• Dan Harris – Scarborough-South-East
• Sana Hassainia – Verchères-Les-Patriotes
• Pierre Jacob – Brome-Missisiquoi
• Matthew Kellway – Beaches-East York
• François Lapointe – Montmagny-L’Islet-Kamouraska-Rivière-du-Loup
• Alexandrine Latendresse – Louis-Saint-Laurent
• Hélène Leblanc – LaSalle-Emard
• Wayne Marston – Hamilton-East-Stoney Creek
• Marc-André Morin – Laurentides-Labelle
• Marie-Claude Morin – Saint-Hyacinthe-Bagot
• Pierre Nantel – Longueuil-Pierre-Boucher
• Jamie Nicholls – Vaudreuil-Soulanges
• José Nunez-Mélo – Laval
• Annick Papillon – Québec
• Claude Patry – Jonquière-Alma
• Manon Perreault – Montcalm
• François Pilon – Laval-les-Îles
• John Rafferty – Thunder Bay-Rainy River
• Mathieu Ravignat – Pontiac
• Jean Rousseau – Compton-Stanstead
• Djaouida Sellah – Saint-Bruno-Saint-Hubert
• Lise St-Denis – Saint-Maurice-Champlain
• PhilipToone – Gaspésie-Îles-de-la-Madeleine
• Jonathan Tremblay – Montmorency-Charlevoix-Haute-Côte-Nord