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Former PQ cabinet minister Joseph Facal struggles with an important issue: Does he show solidarity with the locked-out reporters and editors from Le Journal de Montréal or does he continue writing for the paper (the largest circulation daily in Canada's second largest city)?

Facal has decided in favour of continuing to write and explains why at his blog:

Je l’ai vu dans une vie antérieure. Des reculs dans vos conditions de travail sont toujours douloureux. La culture syndicale traditionnelle en est une de gains successifs par accumulation. Les derniers gains deviennent le plancher de la ronde subséquente. Cette culture rend extrêmement difficile pour lui gérer des changements qui découlent d’une mutation radicale de l’industrie. [Lire la suite…]

I asked my good friends at the TD Bank's economics department if they could give me some key benchmarks that might let us compare the other two great recent recessions that Canada went through — most economists I've talked to say the worst years we've had prior to this one were 1981 and 1991 — against the current recession. The key takeaway here, as you may have heard, is that we are in much, much better shape to weather a recession than we were in 1981 and 1991. Here's the benchmark averages for the years prior to the worst recession year:

Inflation

• 2008: 2.37 %
• 1990: 4.78 %
• 1980: 10.13%

Unemployment rate:

• 2008: 6.1 %
• 1990: 8.2 %
• 1980: 7.6%

Exchange rate ($CDN need to purchase 1 US$)

• 2008: 1.0671
• 1990: 1.1668
• 1980 (Dec. 19): 1.1692

Crude Oil (in constant 2008 dollars)

• 2008: $100.16
• 1990: $35.61
• 1980: $96.84

CIBC Prime Rate (this data set is courtesy the Parliament of Canada. CIBC's Prime Rate could be expected to largely mirror the prime rate of every other major Canadian bank)

• 2008 (Dec. 10): 3.5%
• 1990 (Dec 21): 12.75 %
• 1980 (Dec. 19): 18.25%

And now, here are the forecasts for 2009 for each of those variables except Prime:

• Inflation: 0.50 %
• Unemployment: 7.7%
• Exchange rate: $1.2060
• Crude oil: $36.07

David E. Sanger, the chief Washington correspondent for The New York Times, has a new book out and in it, he suggests that we all should take a pill if we think CHANGE is coming so far as America's stance towards the world …

In this sense, even the title of David Sanger’s quick-paced chronicle, The Inheritance, offers a corrective: Obama will not craft anew; he will inherit. “The world he is inheriting from Bush will constrain his choices more than he has acknowledged, and certainly more than the throngs of supporters believed as they waved their signs proclaiming CHANGE,” Sanger writes, with justifiable asperity.

Will American normalcy be restored? Absolutely not. It is “illusion” to imagine that “with George W. Bush retired in Texas, America will now sheath the Big Stick.” Will there be a respite abroad? Probably not. Only a naïf “thinks the Iranians will give up their nuclear program without the lingering concern that bombers may appear over the skies” of their reactors. Can nothing budge the habits of American statecraft? Not really, given that “the crises may be too plentiful and the accompanying expectations may be too high” for Obama to steer an honestly new course. His more excitable lieutenants, with a conviction that things are the other way around, are just as likely to perpetuate Washington’s strategic bankruptcy.

Really? I'm looking forward to reading Sanger's book and so I don't want to take issue with him based on this review (even if the review is by Lawrence F. Kaplan). But if Sanger is suggesting Obama will have trouble fighting Bush's inertia when it comes to foreign policy, then how was it that Bush (II) was able to take American foreign policy in such a new direction after Clinton? Was 9/11 such an enabler for Bush? Is Obama constricted on foreign policy without a similar enabling event? Is his enabling event the fact that his ascension to the White House such a historically significant event because of his skin colour? Is Obama's enabling event the global hope/interest/pressure that accompanied his election?

Technorati Tags: United States – Foreign Policy

Things have gotten bad in Canada's economy and in a hurry.

This morning, Statistics Canada says 129,000 jobs disappeared in January, the biggest single monthly loss ever.

Employment fell by 129,000 in January (-0.8%), almost all in full time, pushing the unemployment rate up 0.6 percentage points to 7.2%. This drop in employment exceeds any monthly decline during the previous economic downturns of the 1980s and 1990s.

Forecasters didn't see this coming. They were thinking it would be something in the range of 40,000 job losses or so. (Which is still a big month).

All of the job losses came in Ontario, B.C. and Quebec.

Manufacturing lost more than 100,000 jobs in January, an all–time record.

Technorati Tags: economy

I'm back in the business pages in some papers today with:

Months before Canada's steel industry found itself at the centre of a brewing trade war with the United States, it was pressing the federal government to either put up trade barriers to protect it from what it called unfair Chinese imports or somehow exempt it from pending environmental regulations.

Canwest News Service has learned that Canada's steel companies, which collectively employ about 150,000 people, have been aggressively lobbying politicians, including Finance Minister Jim Flaherty and Environment Minister Jim Prentice, and senior government officials for months.

The industry's dilemma underlines one of the thorniest issues that policymakers in Canada and other developed nations must face: How to live up to environmental commitments in the face of an economic downturn.

…

A briefing note prepared for Mr. Flaherty last spring said the Canadian Steel Producers Association is pushing the government to put up trade barriers that would limit or restrict the amount of steel being imported into Canada from countries like China, so that “that the domestic steel industry is not put at a competitive disadvantage,” the note said.

You can read the rest here …

Merrill Lynch Canada's Economist and Strategist David Wolf updates his economic outlook for Canada today and it's not exactly a cheery view:

“we continue to see Canada experiencing a deeper recession than does the consensus, with concomitant downward pressure on inflation, interest rates and company earnings.”

All forecasts, and Wolf's is no exception, hinge on the forecaster's prediction for Canada's gross domestic product this year. The “consensus” call (not exactly an average but close enough) of private sector forecasters is that GDP this year will shrink 0.8 per cent. The Bank of Canada thinks it will be worse than that, that GDP will shrink 1.2 per cent. Wolf believes it will be much worse: A contraction for the year of 1.7 per cent.
Why? “Consumer spending … appears to be declining at an alarming pace.”
The worst part of the year is right now, Q1. Wolf cut his forecast from GDP growth of -2.9 per cent to -5.2 per cent.
“The weaker activity outlook prompts a weaker employment profile, with our estimate of the peak-to-trough jobs decline rising to roughly 400K, yielding aprojected unemployment rate of 8.6% by year-end,” Wolf writes.
And what does that mean for the key overnight interest rate in Canada? Wolf says the Bank of Canada will have no choice but lower it to “effective zero.”

We had more than 128,000 unique visits here in the month of January. Thanks to all who dropped by.

The most popular destination here was a post I made in complaint of a piece published at the online newsletter of the University of Guelph's student government, the Central Student Association. The whole Kinsella-and-Chinese–food thing rated a close second. And a note to those complaining that the MSM gives Kinsella a free pass: I am the MSM. This made the Vancouver Sun, the Ottawa Citizen, the Globe and Mail and many others. Do you guys ever read a paper anymore? (Man, you Conservatives sure do exercised about him!)

Here's the rest of January's hit list with the date of the original post in parantheses:

1. A request – and a complaint [Sat 10 Jan 2009 11:14 AM EST]
2. MP demands Kinsella's resignation [Fri 30 Jan 2009 12:25 PM EST]
3. Chinese restaurant to win new parliamentary business [Fri 30 Jan 2009 02:07 PM EST]
4. Chinese Conservatives outraged at Kinsella [Wed 28 Jan 2009 12:40 PM EST]
5. How much does the middle class make? [Mon 05 Dec 2005 07:58 PM EST]
6. The size of the inaugural crowd: A journalist's dilemma [Sun 18 Jan 2009 10:20 AM EST]
7. I'm de-Twittering: Here's why [Thu 29 Jan 2009 10:42 PM EST]
8. Mac OS X YouTube to iPod? Help! [Fri 02 Jan 2009 09:51 PM EST]
9. 24 Sussex Drive — Great for street hockey [19 Jun 2006 10:46 AM EDT]
10. Who's heard Tory attack ads on the radio? [Fri 16 Jan 2009 12:29 PM EST]
11. On the Hill [Mon 12 Jan 2009 05:38 PM EST]
12. F-35 – Test Flight [Wed 10 Jan 2007 03:07 PM EST]
13. Learning the hard way: USB Turntables and your Apple Mac OS X computer [Tue 30 Dec 2008 01:11 PM EST]
14. The toughest job in politics [Thu 08 Jan 2009 06:01 PM EST]
15. Senator Duffy (and others) join their caucus [Wed 07 Jan 2009 11:00 AM EST]
16. Will the NDP vote for the budget? [Tue 13 Jan 2009 05:23 PM EST]
17. Mercedes' SmartCar [Thu 20 Jan 2005 01:03 PM EST]
18. Bestselling cars and trucks in Canada [Thu 08 Jan 2009 12:24 PM EST]
19. Who pays for this blog? Some disclaimers [Fri 13 Aug 2004 08:09 AM EDT]
20. In his last days, Bush looks north [Mon 12 Jan 2009 06:55 PM EST

I can't believe I'm putting up what you might interpret as a pro-free-trade post. Twenty years ago, as a student journalist, I remember writing editorials ridiculing attempts by then Prime Minister Brian Mulroney to negotiate the Free Trade Agreement with the U.S. Now there are substantial — monumental, some might say — flaws with the agreement and its successor NAFTA as well as the approach U.S. administrations have taken since then to circumvent the spirit, if not the letter, of the agreement. (See Softwood Lumber) But the evidence seems to suggest that, since signing those agreements, Canada is a wealtheri country for the deal than it would have been without it. (And, it seems to me, just as sovereign. My concerns in 1985 centred on the potential loss of cultural autonomy through free trade. I concede that the effects of free trade on our cultural autonomy remain a hotly debated question but I don't think they're as bad as some predicted in 1985.)

Moreover, I tend to agree with those, like the spokesman for one of America's biggest companies, below, that one of the major mistakes policy makers made during the 1930s was raise trade barriers. And yet – though it signed an agreement at APEC in Peru saying it would not do so, the U.S. is poised to do just that, the Washington Post reports, partly in retaliation for perceived trade barriers recently erected in China and in Europe:

Nations including China and many in Europe are preparing to spend billions of dollars of taxpayer money on stimulus projects. American companies are angling for a piece of those pies, and retaliatory measures against U.S. companies, executives argue, could significantly complicate those efforts. This week, a European Commission spokesman threatened countermeasures if the Buy American provisions are approved.

“There is no company that is going to benefit more from the stimulus package than Caterpillar, but I am telling you that by embracing Buy American you are undermining our ability to export U.S. produced products overseas,” said Bill Lane, government affairs director for Caterpillar in Washington. More than half of Caterpillar's sales — including big-ticket items like construction cranes and land movers — are sold overseas.

“Any student of history will tell you that one of the most significant mistakes of the 1930s is when the U.S. embraced protectionism,” Lane said. “It had a cascading effect that ground world trade almost to a halt, and turned a one-year recession into the Great Depression.”

Lane sounds he might have been listening to Canada's prime minister address business leaders at APEC:

…let us remember what led to the Great Depression. It was not caused by a stock market crash. That was only the beginning. Policymakers pursued four sets of actions that defined that terrible decade. They allowed a rapid contraction of the banking system. They allowed widespread deflation as a consequence. They undertook to balance the books at all costs – raising taxes and contracting government economic activity at the one time when fiscal stimulus was absolutely essential. And, finally, they erected protectionist barriers in a short-sighted attempt to preserve jobs. These are mistakes the Government of Canada will not make.
Some of these things – letting badly run institutions fail, falling inflation, a balanced budget – would have been the right policies at a different time. But not building walls. Not closing doors. That is always wrong.

Technorati Tags: Canada – Foreign Policy, economy, stephen harper, United States – Foreign Policy