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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:
http://www.worldtrivianight.com/musicmarathon.html

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.”

Hatched and matched

Congratulations are in order to some political notables for a new baby and a new commitment.

The baby is the grandson of a former Prime Minister — who shares his granddad’s birthday:

eTalk has learned that Quebec Reporter Sophie Grégoire-Trudeau and her husband Justin Trudeau have welcomed a son, Xavier James Trudeau, into their family today. Sharing the same birthday as his late grandfather and former Prime Minister of Canada, Pierre Trudeau, the healthy boy was born in Montreal this afternoon and weighed 9 pounds, 2 ounces. eTalk will have all the baby news and more in tonight's show at 7 p.m. ET on CTV

Rahim JafferFrom the other side of the political spectrum comes news of pending nuptials between Helena Guergis, the Secretary of State for Foreign Affairs and International Trade and Secretary of State for Sport, and Rahim Jaffer, the Edmonton MP who is also the chairman of the National Conservative Caucus. If a date has been set for the wedding, we’ve had no news of it yet but many female observers in the press gallery today were pretty impressed with the jewellry on Guergis’ finger.

Congratulations one and all!

New names all around

As of the Throne Speech, the phrase “Canada’s New Government” has — mercifully — been tossed away by — oh, let’s use it one last time — Canada’s New Government. The Conservative government will now just be known in government press releases etc. as The Government of Canada.

Meanwhile, in the wake of yesterday’s decision by the Liberals to abstain on a Throne Speech vote that could bring down The Government of Canada, the New Democratic Party has decided to give itself a little nickname which debuted on some e-mail just sent around from their office. Drum roll please for … From the Offices of Canada’s Effective Opposition. They will be doing their darndest — all 30 of ‘em — to bring down The Government of Canada over the Throne Speech.

NDP watchers will want to tune in to CPAC or, over the Web,  to House of Commons TV to catch the inaugural speech of newly minted MP and party deputy leader Thomas Mulcair. He will be speaking in the House of Commons at 1:30 pm Ottawa time.

 

Unexpected war: Canada's generals

“… Canada's generals and admirals tend to be more concerned about their relationships with their American counterparts than they are with their own political masters in Ottawa, a preoccupation that would play out over the next few years on a variety of issues”

“One example illustrates the point. Defence Minister John McCallum tried urgently to reach a senior admiral at NDHQ and was put on hold and told to call back later, as the admiral in question was on the line with the Pentagon.”

-Janice Gross Stein and Eugene Lang, The Unexpected War: Canada in Kandahar, Toronto: Viking Canada, 2007. P. 14