Immigration

In a 2005 study, Statscan reported that “Canada's population is ageing fast and senior citizens would outnumber children in about a decade, according to new population projections.”

This alarming projection isn’t news to any of us as this phenomenon of population aging has already been well documented by the media. However, what we often fail to appreciate is the lack of action on the part of current and past governments to deal with this issue, the only major achievement being the CPP reform under Martin.

What I am getting to, of course, is immigration.

At the moment, we are at a crossroad. The working population is about to dramatically drop, while data shows that the level of immigration has remained relatively constant, climbing only slightly from around 200 to 230 thousand per year. The combination of these two factors makes a labour shortage ten to fifteen years from now inevitable, which will have dire consequences on our economy and quality of life.

The only solution to this imminent crisis is to substantially increase our immigration levels, but as I said, nothing is being done. Unfortunately, we only have a few years left to steer ourselves back on course before the disaster becomes inevitable. A few politicians have already raised the flag, including ex-Liberal leadership candidate Maurizio Bevilacqua who pledged to double immigration levels to half a million per year, but their voices are being muffled by louder issues such as global warming and the war in Afghanistan.

It’s also important to recognize that the solution goes farther than sending a notice to our immigration officials telling them to let in a few more hundred thousand people every year. Even now, at the height of our oil boom, many new Canadians are having difficulties finding work. And while this can be attributed to a variety of sources, the main responsibility lies with Federal government, which makes the lives of many immigrants nightmarish by refusing to recognize their credentials.

We all understand that the only way to curb the imminent labour shortage is to increase immigration levels, yet this would become extremely undesirable in the short term if Federal government’s refusal to recognize foreign credentials made it impossible for those new immigrants to find work. The government must recognize this and take prompt action, because time really is counted.

Bang For The Buck

There have recently been a number of prominent journalists and politicians who have claimed that it is impossible for Canada to meet its Kyoto targets without triggering a deep recession or buying credits from countries like Russia whose decrease in emissions are due solely to economic downturn.

What they say is partly true. Canada’s national emissions have increased so dramatically over the last ten years that it would be impossible to get them down to six percent below 1990 levels by 2012 without hurting the country’s economy. This is simply unquestionable, and anybody who claims otherwise is either a fool or some kind of economics whiz who can create money by magic.

This being the case, there is still nothing preventing us from meeting our targets without giving away billions to Putin’s friends or killing our economy. All we need to do is to finally realise that this problem of Global Warming is indeed Global, and that it therefore makes no difference in what countries the reductions are made.

Our western capitalist mentality always makes you believe that everything is achievable with hard work, dedication and passion; if you want it, you can get it. And although some people’s long hours of work don’t materialise into anything substantial out of bad luck, this is still a good mindset have.

The trouble is that people too often assume that the work, dedication and passion must not only come from oneself but also directed towards oneself. In other words: you do the work for yourself to youself. This makes sense is cases where there is only one party involved such as personal studies, businesses or careers, etc. Take for example a university student studying in preparation for a final exam, he is studying for himself (he benefits from a good grade) and to himself (the studying is directed towards his brain, which is gaining more knowledge and capacity).

On the other hand, when more and more parties start coming in and when the both the work and payoff involve more than one party, that assumption can change.

Imagine a running team involving twelve extremely skilled athletes, whose overall score is determined by its members’ average time running the 100 meters. One afternoon, the coach comes into the dressing room and announces to his players that they are underperforming and that they must work harder to get their average times down, or face demotion to a lower tier. The team members are then faced with a number of choices: they can decide to spent more time and money training, even though only a few wealthy members will be able to afford that, or they can get the same result by simply getting those same wealthy members to buy decent pairs of running shoes for the two runners on the team who can’t afford them.

If those wealthy members were to follow the traditional mindset, they would each start spending resources on themselves. This is an understandable choice, as the wealthy members would feel that their money ought to be used for their own benefit. But because their score is shared with the whole team, and therefore reliant on the performance of the worse-off members, they would benefit just as much from buying those members new shoes as from buying more training hours. This is the mistake that Canada and other wealthy countries are making with regards to climate change.

Instead of buying poorer countries new pairs of shoes by cleaning up their mess, industrialised countries are following the old mindset and opting to spend their resources on additional training for themselves –cleaning up their own backyard. This is totally irrational, because while industrialised countries are by no means totally green, they are much more so than developing countries, and are therefore much more expensive to clean.

At the moment, our government is offering tax subsidies for home owners who retrofit their homes to make them more energy efficient. In other words, the government will forfeit a few thousand dollars to let home owners put up some solar panels and additional insulation which will take 10 to 20 tons of Co2 off the atmosphere every year. This obviously doesn’t harm the environment, but wouldn’t those few thousand dollars be better spend subsidising a group of Amazonian farmers so that they can buy fertiliser and stop releasing a few thousand tons of Co2 into the atmosphere every few years by burning forest to make farmland?

Both strategies work, but when resources are scarce, it’s wise to aim for the best possible bang for the buck.

Smart Move

The recently passed private members bill tabled by Liberal MP Pablo Rodriguez’s, which forces the government to reach its Kyoto targets, could do a lot of damage to the Conservative party if properly exploited by the Liberals. If the right steps are taken, they can succeed both in painting the government as insincere on the environment, and more importantly, unwilling to respect the Canadian law.

In the bill, it is stated that the government must come to the Commons with a plan no more than 60 days after the bill’s adoption by the Senate. This leaves it with a little more than 50 days to prepare its plan, which it has already indicated it will not do.

On the day that government’s plan is due, the Liberals should make a bold move and table their environmental plan, which does meet the Kyoto targets, and have the other parties vote on it. The Conservatives would then have to choose between supporting the Kyoto accord that they spent so much time ridiculing, or ignoring the will of parliament, which adopted Rodriguez’s. At the same time, the NDP and Bloc would also be stuck between a rock and a hard place as they would have to choose between killing a plan that meets Kyoto or implementing a Liberal green strategy.

In all situations, the Liberals would stand to win, presuming of course, that their plan really is concrete and viable... at least that's what my political instinct tells me!

Tergiversations coûteuses

Hier après-midi, le secrétaire-général de l’OTAN a exprimé son désir de voir le Canada maintenir sa présence en Afghanistan jusqu’à ce que « le travail soit accompli », même si cela l’obligeait à reculer la date de retour des troupes fixé à Fevrier 2009 par la Chambre des Communes.

Cette déclaration n’est que la plus récente péripétie de la saga qu’est devenue la mission canadienne en Afghanistan. La liste d’offensives ratées, de pertes évitables et de scandales importants n’en finit plus, et le gouvernement en est le principal responsable.

Maintenant que l’OTAN exprime clairement le souhait de voir le Canada prolonger sa mission indéfiniment, il incombe au gouvernement de prendre une décision et d’en informer les Canadiens et autres pays membres. Mais au lieu d’assumer cette responsabilité, il continue à tergiverser et à laisser planer le doûte. D’un côté, Stephen Harper affirme que la mission ne sera pas prolongée sans l’accord de la Chambre, et de l’autre, le Ministre de la Défense approuve l’achat coûteux de 200 tanks Léopard II qui ne seront disponibles que dans le courant de l’année 2009. Allez savoir!

Cette attitude irresponsable risque de nous coûter cher, car elle rend improbable qu’un autre pays membre prenne la relève des Forces candiennes. En effet, plus nous approchons de février 2009, moins les partenaires de l’OTAN auront de temps pour faire approuver l’envoi de leurs militaires par leur parlement et pour préparer leurs armées. Il viendra ainsi un moment où le prolongement de la mission deviendra inévitable sans quoi la région replongera dans le chaos.

Notre participation devait initialement se terminer en 2006, puis le gouvernement conservateur à fait adopter un prolongement de la mission jusqu’en février 2009 sans débat en Chambre. Avec chaque nouvelle offensive, le coût financier et humain de la mission s’élève. L’OTAN est un partenariat, et tous ses membres se doivent d’y contribuer plus ou moins également. Le Canada a déja contribué plus que sa part à cette mission et il a le droit d’exiger que d’autres membres prennent sa relève. Si l’inaction de notre gouvernement rendait l’arrivée de cette relève impossible, nous n’aurions que nous-mêmes à blâmer en voyant revenir des cerceuils de soldats morts passé février 2009.

Bill Graham Has Resigned

I guess this is more of a news article than a blog post, but this is an important story.

Bill Graham, Liberal MP for Toronto Center has just announced his retirement from politics. Aside from marking the end of the political career of a very special Canadian and perfect gentleman, his departure, along with that of fellow MPs Lucienne Robillard and has announced she will not run in the next election, marks the end of an era for the Liberal party, as well a new beginning under Dion.

Graham served both as Minister of Defense and of Foreign Affairs, as well acting as interim Leader of the Liberal Party and Leader of the Oppostition during the period between the last election and the December convention. Aside from Irwin Cotler, who is also expected to step aside at the next election, he and Robillard are the last Liberal heavyweights left over from the Chretien years.

Though his departure will clearly represent a loss for the House of Commons, in a way, it will do some good to the Liberal party, which will resemble even less the old party which Canadians grew to hate. To add to the drama, Bob Rae will likely make his entry into the House in the next few months as he has won the nomination for Graham’s riding, which is a Liberal stronghold.

Stuck Between Two Centuries

Yesterday afternoon, our International Trade Minister David Emerson and his Indian counterpart announced a trade agreement between the two countries which will guarantee fair legal treatment for each other's investors. Whatever that may mean, this type of agreement is generally regarded as a stepping stone for an eventual free-trade deal. So who knows, in five to ten years, we might have free-trade with India (I can already hear the NDP screaming).

This agreement follows a major free-trade deal which we signed last June 7 with the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), and to add to the buzz, there are negotiations being currently undertaken towards a free-trade deal with South-Korea. So wake up people; borders are disappearing and trade is increasing. Meet... globalisation.

We’ve all heard of this fancy phenomenon called globalisation and we’ve all got a rough idea of what it means and entails: more trade, less tariffs, more outsourcing, more communication and the list goes on. But while we may all know about it and understand it and while our International Trade Ministry may be taking steps to keep up with it, our monetary policy is still years behind and our whole business sector seems to be complacently watching it hit us.

We all seem to assume that globalisation will only affect us in terms of job losses and money leaks; that it is simply about Canadian firms investing and moving operations abroad. This is all true, but globalisation also means the reverse. It also means foreign companies investing in and moving to Canada, foreign workers resettling in Canada and foreign capital coming to Canada.

Just look at the banking sector. Ten years ago, there was only the “Big Five”, which had a total monopoly over the whole Canadian banking world that allowed them to comfortably sit on their market share and gauge consumers by charging ridiculously high fees while paying no interest on their personal savings. Today, we’ve got new foreign players such as the Dutch giant ING, who are attacking the “Big Five” right in their home turf and forcing them start competing for business.

The clear winner from this new situation is the Canadian consumer, who can’t be taken for granted anymore and who is now being offered more and more options and benefits. The clear losers, of course are the big Canadian banks, who are now facing competition in what is the only market they have access to because of their small size (compared to giants from other countries). Now, you’d think that the government would have adjusted its monetary policy and let Canadian banks merge so as to make them competitive on the international stage thus allowing them to compensate losses at home with gains abroad, but our government is still living in the 20^th century and assuming that letting banks merge would ultimately hurt Canadian consumers. Of course, our big banks merging would have absolutely not effect on the consumers because of the foreign competition which would force them to keep competing for their business.

Another example would be our mining giants (or what we think are giants), which all seem to be disappearing into foreign hands. Instead to giving them the tools to be aggressive on the foreign takeover market through smart tax policy and less merger regulation, the government has been content with letting them stick to the home market until they grow big enough to become takeover prey. Remember Inco and Falconbridge? One of the reasons that they didn’t merge was become they feared our Competition Bureau would put its foot down. And more recently, we saw Flaherty’s failed budget bill on “double dipping” and “offshore tax deductions” which precipitated the bidding war for Alcan.

One could advocate that Canada should close its borders to foreign takeovers and encourage its companies to stick to the domestic market. That model was very much in style during the last century, and is still adopted by a number of countries. Today, most economists would advocate that Canada should open its borders to foreign takeovers while also giving its companies the tools to make foreign takeovers. That model is theoretically much more adapted to the reality of globalisation.

At the moment, Canada is stuck between the two and suffering from it. Our borders are open and our firms are going like hotcakes, but they aren’t being given the tools to engage in merging and buying abroad. We should really stop now, because this can only lead to troubles.

Think Twice

I’m really getting fed up by all the militaristic macho patriotic junk that I’ve getting from the papers and an alarming number of parliamentarians. They all seem to regard our strong and proud military as the proof of our country’s greatness and as an essential part of our Canadian identity.

I know that this debate has been going on for ever since confederation, so there’s no use in expanding on this topic any more. Instead, I’m simply going to treat you to a few numbers and pictures and let you draw your own conclusions.

This is a Boeing C-17 Globemaster 3 airlifter, which is sold at the friendly price of $202.3 million USD apiece. National Defence has just acquired four of those, which amounted to a little less that a billion USD once maintenance and repair were included. They use to simply rent a fleet whenever our SWAT team needed a lift, but that was simply considered inadequate for a military as great and powerful as ours.

This is one of the four infamous Victoria-class submarines that we bought used from the UK at a friendly price of £244m, which is around $600m CAD. Unfortunately, they are all in so bad shape that the cost of the repairs which will have to be undertaken to make them battle ready is estimated to be comparable to their initial price. So if we add another $600m CAD to make the subs water-tight and battle ready, we’re up to 1.2g CAD.

And just in case you weren't impressed yet, here’s an image of one of the two “Future Carriers” that are being developed for the Royal Navy at an estimated cost of £3.6 - £3.9 billion, or $8 - 9 billion CAD.

Now, for a change of scenery, here’s the tallest skyscraper in the world, Taipei 101, which is known to the world and provides the rapidly expanding city with an additional 412,500 m² of floor area. The total cost of the project came to around $1.6 billion USD, which is a little more than the total cost of our four Victoria-Class submarines and about half of the price of a single “Future Carrier”.

Here’s an MRI scanner. They cost around 3-4 million CAD. We are at a shortage of those, which is really a problem when one considers how significant and life-saving they can be.

Here’s a small child in Ethiopia getting his first vaccinations. They cost less than a dollar per child. In other words, a billion CAD less than four used British submarines.

It makes you think twice, doesn’t it.

Free Press

This link contains a video prepared by a Belgian TV station showcasing French President Nicolas Sarkozy arriving late at a press conference and visibly completely drunk. http://www.youtube.com/watch?v=Wd44XTlUQjQ

As you can see, it’s an absolutely hilarious clip! My favourite part is when he tells the journalists that they should ask the questions because he wouldn’t know what to ask them. Strangely though, not a single French TV station decided to broadcast this clip.

It really is unbelievable: a clip of their drunken president didn’t make the French’s 10 o’clock news. To add to the drama, the country is currently going through an election campaign (this current election is the legislative elections, which is not to be confused with the Presidential election that was won by Sarkozy) and Sarkozy’s party desperately wants a victory.

With the first ballot results announced, that victory seems almost assured, but this may not have been the case if the clip had been broadcasted nationally on the eve of the election, which would no doubt have happened in Canada if faced with a similar situation.

This is a reminder of the vital importance of a free press. In France, the Sarkozy virtually controls the main TV agencies, and in the case of this video, his control had a grip on the election results. In Canada, though the problem is not nearly as drastic, our government has been notorious for making the media's life difficult, and this trend has shown no sign of reversing itself. We must tell Harper that enough is enough so as to avoid ending up with dismal and controlled reporting à la Française.

TSX

The S&P Composite TSX index hasn’t stopped climbing in the last few months. It started the year just above 10 000 and is now hovering around 13 500, having just peaked a few weeks ago at 14,216. It doing so, it has significantly outperformed other major stock exchange indexes including the Dow Jones, Nasdaq, FTSE 100 and Nikkei.

These are indeed pretty sweet number for the Bay Street world, but they’ll also dangerously deceiving when it comes to measuring the overall value and healthiness of the exchange.

To get a more accurate idea of the direction towards which the TSX is heading in terms of competitiveness and size, we must look much farther that the simple S&P Composite index, which while being a useful tool, only provides us with a small part of the picture.

First and foremost, the index’s rise is almost solely due to the rise in value of Oil and Gas firms, which is itself directly correlated to the price of oil. Put it this way, if they have another major hurricane in the Gulf of Mexico which destroys a few refineries thus sending the price of oil skyrocketing, we can bet on the index gaining 250 points in an hour. This can look nice on paper, but is hardly a proof of an exchange’s strength.

Another key indicator of an exchange’s heath is its diversity, and most notably the diversity of its largest firms. Here’s an alarming statistic: in the year 2000, at the height of the high-tech boom, the ten most capitalised companies in the TSX were in telecommunications, oil and gas, mining, transportation and financials. With BCE up for grabs, we can be fairly certain that by the end of the year, the top ten will all be in either finance (banking or insurance) or Oil and Gas. Contrast that with an exchange like London where the ten most capitalised companies are currently in Oil and Gas, banking, pharmaceuticals, mining and telecommunications. This may not seem like such a big deal at the moment, but I can assure you it’s dangerous for a country’s main exchange to be reliant on two or three industries.

We should also remember the importance of flagship industries. Every exchange has them. For instance, the Paris Stock Exchange, now merged with other European partners to form Euronext, has always been the place to raise capital in the fashion and cosmetics industry. The TSX’s flagship indursty has always been mining. It’s used to attract major minors from all around the world, and had its own set of respected major Canadian miners such as Inco, Alcan, Dofasco, Falcongridge and you name them. Nowadays, with both Alcan and Stelco likely to be taken over by foreign firms, the only major Canadian mining company left seems to be BarrickGold. The TSX’s supremacy in the industry is also following suit and losing major ground to emerging markets such as Hong Kong, Sydney and most notably London.

To make matters worse, Toronto is also behind in the race to forging new alliances. Just this past year, we’ve seen New-York merge with Euronext, London team-up with Singapore, and the Nasdaq try to acquire London. Even the Montreal Exchange has gone looking south of the border for partners and settled on a 34% stake in the Boston Options Exchange. And Toronto? They’re considering their options.

So next time you read the paper and see a big green number with an arrow pointing upwards beside the S&P Composite TSX index’s symbol, don’ be fooled!

Transit

What problem does every big city in the world suffer from? Well, I guess there are lots, but I think we’d all agree that transit would usually claim the first prize.

Still, some cities, especially European ones, have dreamed up some pretty good solutions to the problem. I guess that they’re usually denser, so that must help, but it’s also a question of smarts.

Yes, smarts, the Europeans are smart about transit. They understand how to get as many people from A to B with the least possible investment. In Canada, we don’t get that. We’re always wanting to start major projects, and never getting past negotiations, even though all that is needed is a new bus line or a road improvement.

Here’s an example. All large European cities have buses. Some have subways too, but they all have buses.

But they’re different buses; actually, they’re a bit like subways on wheels. You see, the thing about them is that they have a limited number of stops. Some buses in London, for instance, have only four or five. And this, obviously, means that they go faster. This is a good thing.

In Ottawa, on the other hand, some buses literally have over fifty stops. They stop at every darn street corner. So obviously, they go slower. This is a bad thing.

So put it this way: if I have the choice between biking home from school and getting there in half an hour, or taking the bus and getting there in a forty-five minutes, what will I do? Bike.

Now, if they cut the number of stops by two thirds and the bus take 15 minutes plus a 10 minute walk, what will I do? Bus.

Get it! This was just an example, but I’m sure you get the point. You don’t need to spend hundreds of millions of dollars to get results. You need to be smart.

Hockey And Soccer

I’ve been watching soccer for almost a year; The Premiership League, Budesliga, a little Spanish Liga and a few other teams.

So obviously, I don’t find it boring. Don Cherry would be scandalised. Well, it can sometimes get a little tedious, but it’s usually very exciting. Now, you’re probably all dying to hear how I feel it compares to hockey.

The truth is that they’re both pretty fun to watch. They’ve both got their strengths and weaknesses. Hockey can provide an exhilarating and quick game, but I often get annoyed because teams often have difficulty constructing plays. Soccer, on the other hand, can go for 20 minutes without a shot, but some plays can be absolutely breathtaking.

In Canada, hockey is still the most watched and followed sport, but more people play soccer. We’ll see where that goes!

Cold War 2?

The Globe and Mail’s European correspondent Doug Saunders has just wrapped up an interview with Russian President Vladimir Putin, during which the President threatened to target Europe with nuclear missiles if the US went ahead with it’s plan to build a missile shield in Eastern-Europe.

So Putin is nostalgic of the Cold War, why am I not surprised. For god’s sakes, this man got his training from the KGB and has been engaging in ruthless bullying of weaker Eastern-European countries for the last few years. He’s the kind of man who played soldier as a kid and who still finds guns cool. He’s dangerous, that’s the bottom line. He won’t blow up Berlin, but he could easily cause some serious international havoc.

Anyhow, it’s obviously impossible to get rid of Putin. Even if the Russian people wanted to dump him, he could still buy the elections with the help of his oligarch friends. So, let’s simply keep our eyes peeled and see where this situation goes. With some luck, he’ll get bored with politics and move to a stately home in the countryside, but I’m not counting on it.

Oh, and by the way. The Conservatives are now attacking Dion for eating a hot-dog with a knife and fork…