Remembrance Day / Veterans Day

At the 11th hour of the 11th day of the 11th month this year, I found myself in the DC Metro system. It wasn't a very memorial occasion, but I paused for two minutes of silence anyway. I tried to appreciate the vast contribution made by boys and men who have fought in the front lines of the wars in the last century.

I was ignored by all those around me. Veterans Day has little emotional meaning for most Americans, and Remembrance Day has almost as little impact for most Canadians.

It's understandable I suppose. It might all seem quite removed. Some people don't even like to honour the contributions of soldiers, as it seems like war-mongering to them. I respectfully disagree.

So long as there are dictators and greed, so long as their is nationalistic fervor, so long as their is religious hatred, there will be people who want to make war and do evil. There need to be good people there to stop them. I thank those who have done it in the past, making our future possible.

The Canada-Obama Free Trade Agreement

Obama's campaign is being accused of soft-pedaling his policy concerns about NAFTA to a foreign government, namely Canada. A leaked memo from the Canadian consulate in Chicago appears to confirm it. It comes just days -- hours -- before the big showdown on March 4.

What a mess.

Despite Obama's strident denials, there probably is something to this story. Either he or his campaign thought it would be good idea to use some weasel words about his true intent on free trade.

The real damage from this episode is that it is driving both Democratic candidates further and further into the wrong policy position: protectionism. Obama is now publicly digging in his heals on free trade, insisting that he would renegotiate NAFTA and pull out if he wasn't satisfied. Still worse, Hillary Clinton is clutching to this controversy like a drowning swimmer, hoping that if she can prove that she is more anti-NAFTA than Obama is, it will win her Ohio.

The tragedy is that both of the candidates appear to know better. Hillary Clinton publicly supported NAFTA when it was passed, and she's smart enough to know that NAFTA has been good for the economy of all three countries involved. But now she says she was against it all along, and was just being loyal to her husband. (Clearly a guy who knows what loyalty is about.)

So the Democrats should feel ashamed of themselves, but the real buffon here is the Canadian government. By allowing that memo to get into the press, the Canadiang government has driven both Democrats into a more anti-NAFTA position, which won't be good for Canada if either of them is elected.

The fact that the Canadian embassy doesn't seem to get it is galling. They issued a statement that says: “The Canadian Embassy and our consulates general regularly contact those involved in all of the presidential campaigns and, periodically, report on these contacts to interested officials. There was no intention to convey, in any way, that Senator Obama and his campaign team were taking a different position in public from views expressed in private, including about NAFTA.”

Hey guys, I got a genius idea for you: stop trying to get private concessions out of Presidential candidates and then leaking them to the press!

Canada: Hypocrisy in Bali

Canada's "principled stand" at this week's global climate change talks in Bali is, not to put too find a point on it, a farcical display of hypocrisy.

PM Stephen Harper argues that until all major emitters -- including developing countries like China and India -- have signed up to emissions reductions targets, Canada refuses to accept any limits on its own activity.

But Yvo de Boer, the normally diplomatic UN climate chief, exposed the absurdity of this position this week. “I personally find it interesting to hear Canada just a little while ago indicating it would not meet its commitments under the Kyoto protocol and now calling on developing countries to take binding reduction targets,” he told a press conference Monday.
“So I wonder how that's going to be received,” he added.

One wonders if Harper ever thought about how galling it would sound to developing countries that, after admitting that Canada won't meet the Kyoto targets, we are insisting that they take action. Either he didn't think about, which makes him mildly incompetent, or he did, which suggests his argument is really much more about avoiding binding commitments than it is about any "principled stand." Indeed, Harper's principles look an awful lot like a cynical masquerade.

Not exactly what Canadians expect of their Prime Minister in terms of leadership on the global stage.

Canada: Dodging corruption in Alberta

Anyone who watched the fiasco of the Gomery Commission unfold in Quebec should know that Canadian politics are not immune to bribery and corruption. In its wake, federal politicans tightened electoral laws -- better late than never. Now it's time to use foresight, not hindsight.

No political system in Canada is as ripe for corruption as Alberta's. Oil companies face enormous financial incentives to bribe politicians in order to shape policy, yet Alberta's political transparency laws are from the Dark Ages. It's time to do something about it.

I am not casting personal accusations. The reason I think Alberta is ripe for corruption is based on economics and a realistic view of human nature. But the economics tell a compelling story.

Alberta is a booming province, and this is basically wonderful. But a boom economy comes with various dangers that have to be managed carefully. One of the hidden dangers is the financial incentive for what political scientists call "capture": when politicians and senior bureaucrats fall into the pockets of private interests. In Alberta, there's every reason to think that it is more cost-effective for oil companies to pay politicians to avoid unfavorable tax treatment than it is to actually pay the taxes.

Consider the money involved. Currently, oil companies pay Alberta a royalty of either 1% of gross revenues or a quarter of net profits for oil sands operations, whichever is more. By global standards, this is a low rate. Moreover, it has stayed low even as oil prices have risen in the last 5 years, and other jurisdictions from Venezuela to Norway are raising their rates. Canadian companies justify the royalty rate based on the risk they took by investing in the oil sands in the 1990s, when oil prices were low.

Yet now there is a huge financial incentive to avoid an increase in the royalty rate in the oil sands. At present, the Canadian Association of Petroleum Producers says the industry pays Alberta about $1 billion (2005), up from $0.2 billion in 2003. Still, it could go a lot higher. If total output from the oil sands is about 1 million barrels per day and oil prices average about US$60 per barrel, then increasing the royalty rate from 1% to 10% is worth at least $2 billion dollars each year to the Alberta government.

Compare that sum of money to the kind of money raised by Canadian politicans in elections and leadership campaigns. When Stephen Dion won the 2006 Liberal Party leadership, he raised $1.8 million. In other words, the annual cost of a potential increase in the oil sands royalty rate for oil companies is 1000 times bigger than the entire campaign fund for the leadership winner of the biggest party in Canada.

We know this because there are laws regulating federal party leadership contests. Alas, there are no such rules in Alberta. At the federal level, Parliament also passed a law in 2003 that banned parties from accepting campaign contributions from corporations. Some provinces, like Ontario, have a cap on corporate contributions. Again, no such law in Alberta.

Now put yourself in the shoes of an oil company executive. If you knew that an increase in the tax and royalty system in Alberta would cost your company billions of dollars over time, what would you do to avoid such a change? It just makes sense that you would want to befriend the politicans in power. And when they asked you for a contribution to their political campaign, of course you'd be willing to help out.

The trouble is that once you walk down this road, you wouldn't have to be a monster to consider ways to get around any of those pesky rules that limit political contributions. Of course, in Alberta, you wouldn't have to. Why? Because they're aren't any.

I'm not saying oil companies have actually bribed anyone. I'm saying that bribery probably isn't necessary. That's because in Alberta, undisclosed contributions to party leadership campaigns are all perfectly legal. So when Ed Stelmach ran for the Conservative leadership in 2006, no one outside of his campaign team knew who his funders were. We still don't know.

Maybe nothing shady is going on. But it just makes good sense to make sure it doesn't.