Conflict over consensus

For those holding out hope that there were still constitutional negotiations going on in Iraq, the process is over with no Sunni agreement:

Sunni Arab political leaders condemned a draft of Iraq's proposed constitution handed to them on Saturday and made last-ditch efforts to revise the document even as Shiite and Kurdish leaders insisted that it would be published without substantial changes.

The Shiite leaders said late Saturday night that they were already planning the details of the ceremony where the final document will be received by the National Assembly on Sunday afternoon...

Asked what the consequences of such a rupture might be, (a Sunni negotiator) said: "The violence will go up, the hope among the people will go down. And the extremists will be the ones who are in control of the country."

The U.S.' part in all this was to get tired of playing messenger between the Iraqi factions. This should be all the more comfort to the families of slain troops, not to mention the troops still in Iraq. Apparently Bush's vision for Iraq is worth thousands of military lives (not to mention all the Iraqi civilians killed), but it's not important enough for the U.S.' diplomatic envoys to spend any more time on actual diplomacy.

Bank of Corporate Canada

Of all the responses to the recent news of higher corporate profits, I don't recall anybody suggesting that we should try to cut down on economic activity in order to prevent them. But it's a different story when wages and tax receipts increase:

Wage growth by this measure is now running at an eight-year high of 3.4% on a year-over-year basis, up from 1.3% just four months ago -- an "unprecedented acceleration in the 15-year history of this series," Mr. Wolf said.

The rise is highly bullish for the Canadian consumer going forward, providing important offsets to higher energy prices and relief for heavily indebted consumers, Mr. Wolf said.

"But they will be treated with great concern by the Bank of Canada, whose greatest fear has arguably been that the tight labour market -- reflected in the 30-year low in the unemployment rate -- would push up wages and threaten durably higher inflation," he said. "Those fears appear to be rapidly materializing."...

Bank of Canada staff may not be the only ones sweating over the data. The higher numbers, taken directly from payroll receipts, mean the federal government will have pulled in another heavy personal tax load in June, despite protestations the surplus is not surging by the minute.

What we have here is the ultimate rebuttal to the "rising tide lifts all boats" claim that underlies most tax-cutting philosophies. Even if that were otherwise true (which is itself far from clear), the financial system is now set up to make sure that the expected cause and effect can't happen. When the rising tide actually arrives, the Bank of Canada is there to drain the reservoir just as the benefits were about to be felt society-wide.

For those riding the initial wave, it's a great system: the ultimate effect is to promote top-end gains while ensuring that most Canadians don't keep up. For everybody else, though, the main effect is to hurt the relative purchasing power of non-wealthy Canadians compared to wealthy ones.

All the more reason why most people should want and expect a calmer sea in the first place. After all, much fewer people get thrown overboard that way.

The NDP's direction

Awhile back, Koby posted a list of proposed NDP campaign planks. By request, I'll take a moment now to comment on them, then over the next couple of weeks I'll try to toss out a few ideas about the direction the party should be taking.

My main area of disagreement with Koby is a familiar one: his platform seems to me to be primarily a protest platform, while my take is that the NDP should be positioning itself as a future government. I'll examine Koby's ideas in order of how easily I see them being dismissed - while I like a couple of them, I'm far from sure that any of them should be in the party's next platform.

Koby accordingly includes two planks which in my view should be dismissed out of hand. Abolishing the Senate and the monarchy may sound great from a "fight the power!" standpoint, but they're both impossible without constitutional change, and uncertain to bring about better results in any event. Any focus on electoral reform should stay right where it is: toward PR, which is both more easily accomplished, and more likely to lead to better representation of Canadians' interests.

Next comes the euthanasia plank. While it's a worthy enough goal, it's one which should be fought for on an individual basis rather than a society-wide one. It's easy enough to say that a Sue Rodriguez is entitled to make her own decisions when she publicly made her intentions known on as many occasions as she did; it's much harder to draft a statutory provision that'll avoid the risk of unwanted deaths, or avoid accusations of wanting to put lives at the discretion of the state. The NDP's stand here should be to continue to support individual efforts under the Charter as it did with Rodriguez, but to avoid demanding change through Parliament.

Following that, there's the dental care idea. In principle, this is where the country should be going in the long term. But it would be utter lunacy to propose adding an extremely costly, less-necessary component to health care when the health care system is alreadly woefully underfunded. The first step has to be to preserve one-payer health care; maybe a couple of elections out, if the system is in better shape, then we can consider including dental care.

Next to last, there's vacation time. This is an even better long-term issue, but I don't see the NDP as the body to start pushing for it now absent substantial public demand. This is an issue that unions should take up ASAP in order to attract attention; another election cycle down the road, if people respond positively, it'll then be time for the NDP to take up the mantle.

Finally, legalizing marijuana. I'm on the fence as to whether or not this should be included in a platform: I tend toward a libertarian view on drugs myself, and particularly in the case of marijuana there's no real basis for keeping it illegal (even with the recently-reduced penalties for possession). While I'm not a fan of making policy based on polls, this would be one issue for a cost-benefit calculation: it'll resonate mostly with younger voters, and I'd be glad to include it in the platform as long as the votes attracted will be close to the number of law-and-order voters who would be completely alienated.

To sum up, Koby's ideas are by and large good ones, but that shouldn't be enough for admission into the NDP platform. For that, an idea should be not only good in the abstract, but also both realistic, and popular enough to attract positive attention. Again, I'll try to pitch in a few such ideas over the next little while.

Rewarding one's heroes

In trying to rescue others in the aftermath of 9/11, many people may have exposed themselves to harmful substances. Originally, the U.S. planned to monitor that exposure - but according to the Daily News, that monitoring has amounted to nothing:

Programs were developed to check on the health of every other group that rushed to Ground Zero during and after the Sept. 11 attacks, primarily the World Trade Center Medical Screening Program run by the Mount Sinai Medical Center. Officials involved told The News the feds barred their workers from that program because they were setting up their own.

Unfortunately, that program vanished during the bureaucratic shuffle creating the Department of Homeland Security.

After trying for months to find out what happened, Manhattan Rep. Carolyn Maloney's office was able to uncover only that a branch of the Department of Health and Human Services got $3.7 million for the work. But it started and stopped in 2003, seeing fewer than 600 people.

Yet another indication that when it comes to protecting and helping the people who actually made sacrifices in the wake of 9/11, Bushco has done nothing but ignore the problem. For shame.

(Via Suburban Guerrilla.)

As so often happens...

...Billmon nails an issue, this time the question of Pat Robertson's motivation in calling for Chavez' death:

Thanks to soaring oil prices, Chavez has managed to escape the trap that usually awaits leftist Third World leaders who won't dance to the IMF's tune or kowtow to the global superpower, but who also don't want to make the great leap forward into Stalinist repression and communal poverty. For the moment at least, he doesn't have to worry about capital flight, or economic strangulation or "structural adjustments." Not as long as he's got his hands on the spigot that keeps the go juice flowing...

With the U.S. Army bogged down in Iraq, the invasion option is probably off the table -- although with the Cheneyites you never know for sure. The Bay of Pigs gambit (this time in the form of a gang of Columbian paramilitaries) has already been tried, and failed. Last year's recall referendum failed. (Under Chavez Venezuela has become such a communist police state that his opponents were only able to collect 1.9 million signatures on their recall petitions.) Prospects for beating Chavez in Venezuela's next presidential election also look dim -- his popular approval rating is currently north of 70%.

No wonder the right wingers are getting a little hysterical about the guy. He's holding all the high cards, and they know it. Assassination is the only trick that hasn't been played. Thus do our warriors for democracy in the Middle East reveal their true colors in Latin America -- by embracing the functional equivalent of the Brezhnev Doctrine.

Give it a read. There's not much by way of answers, but the post hits all the important questions.

Sometimes worth listening to

Buried in the lower reaches of the latest softwood lumber update: one of the few people who even Bush might listen to puts in a good word against protectionism:

U.S. Federal Reserve chairman Alan Greenspan gave Canada some welcome ammunition Friday by warning that increased trade protectionism could come at an economic price.

"Developing protectionism regarding trade and our reluctance to place fiscal policy on a more sustainable path are threatening what may well be our most valued policy asset: the increased flexibility of our economy, which has fostered our extraordinary resilience to shocks," Greenspan said in a speech.

There's almost certainly a strong element of CYA in this quote. Regardless of the U.S.' trade policy, the housing bubble and foreign deficit are significant problems, and this may simply be a way to move some attention away from the Fed for a "recovery" that's managed to be wageless, jobless and unstable all at once.
In addition, it's not too difficult to anticipate Bushco arguing that the quote means that Canada should avoid retaliation while the U.S. does what it pleases.

But with the most-respected financial commentator in the U.S. taking an anti-protectionist line, there are two plausible positive results. At best, Bush could be forced to offer a more reasonable deal than the U.S. has ever done before on softwood lumber. At worst, the U.S. will do nothing differently, and the rest of the world will see that American protectionism is so deeply entrenched as to overcome even the U.S.' economic interests - which should give a lot of countries pause in deciding whether to enter into (or stay in) NAFTA-style treaties, and shift the balance of trade elsewhere. That wouldn't be a huge benefit in the short term, but enough small steps in that direction might well be the best long-term result.

A terrifying and dark future

It's official. Iraq has no agreement on its constitution, and whatever hell hasn't yet broken loose among the Sunni population is headed in that direction:

Iraq's Shiite-dominated constitution committee will submit an amended draft charter to parliament this weekend despite opposition from minority Sunni Arabs who rejected a proposed compromise, negotiators said Saturday.

But Sunni negotiators said they did not accept the revised document...

"There is a terrifying and dark future awaiting Iraq," (a Sunni negotiator) said. "It is important to present services for the Iraqis now, as well as to maintain security, and it is not important to write a piece of paper that all Iraqis disagree on."...

Sadoun Zubaydi, a Sunni member of the drafting committee, blamed the Americans for interfering in what was supposed to be an Iraqi process.

"To the last minute, this supposedly Iraqi process is being dictated by the U.S. government," he said.

The frightening part is that the negotiators were surely among the Sunnis most willing to contemplate solutions through the political process rather than through civil war. If the negotiators themselves couldn't get agreement and a Shiite solution (with U.S. influence) is being pushed down Sunni throats, that only fuels the fire of the insurgents who have stayed away from the political process all along.

Tax breaks and free riders

While Klein is whining about the prospect of another NEP, the Globe points out that he's also trying to make gains at the expense of the rest of Canada:

Mr. Klein argued that his government is being prudent with its windfall and that he favours using cuts to both corporate and personal income taxes in the future to keep attracting workers and investment to Alberta...

Recently, the Canada West Foundation, a western think-tank, warned against that strategy for fear it would disrupt the Canadian economy and set up Alberta as a "tax haven in the federation."

Mr. Klein said that concern is unfounded because other provinces could keep up to Alberta by using incentives such as subsidies and loan guarantees.

Apparently the interrelatedness of Canadian provinces is completely lost on Klein just as it is on the Ontario Chamber of Commerce. Klein makes it clear that he fully expect other provinces to have to pay more to keep up, whether by trying to reduce tax rates to similar levels or by offering subsidies and public financing. However, he believes that Alberta shouldn't bear any obligation to address the national consequences of its proposed policies. Per Klein, the federal government should not only ignore the oil and gas money now pouring into Alberta, but also do nothing if Alberta uses that money to the detriment of the rest of the country.

That makes no sense in a federal system, particularly one with an equalization system as exists in Canada. If the known effect of Alberta's policies is to cause harm to other provinces, then it should rightly be obliged to pay added equalization out of any gains acquired at the expense of the rest of the country. And even from the most ardent pro-business angle, there should be little doubt that the presence of a tax haven distorts the natural flow of business to the detriment of other jurisdictions.

To clarify, that doesn't mean we should be looking at federal controls over energy, or indeed any policy with the effect of harming Alberta's economy; that would be doing to Alberta exactly what it's threatening to do to the rest of the country. Nor does it mean that unemployment and growth can or should be forcibly evened out between regions.

But the equalization system is designed to ensure comparable levels of services across the country. That should also mean a relatively low degree of difference in the capacity of provincial governments to stimulate job growth, whether through tax cuts or public investments. The outcomes may vary, but at the very least the opportunities shouldn't be radically different.

It's bad enough that Klein plans to throw that entire system out of balance; it'll only be worse if the federal government allows him to avoid the consequences of that plan. We have bigger issues to fight with foreign free-riders; the last thing we need is a similar dispute internally.

Good news, bad news

The good news: Bush seems to have learned the meaning of the word "compromise":

President George W. Bush has urged Shiites to make concessions to Sunni Arabs on two key points - federalism and Saddam Hussein's Baath party - to win their support for Iraq's constitution, a Shiite official said Friday following a third extension of the deadline to approve the document...

Al-Adeeb said Bush personally telephoned Shiite leader Abdul-Aziz al-Hakim and asked him to make compromises on clauses that would purge former members of Saddam's Sunni-dominated Baath party from government jobs and political life and on federalism, which the Sunnis strongly oppose.

The bad news: As expected, the definition is filed under the heading of "Things other people do". And according to the article, it looks like the Shiites are paying more attention to Bush's actions than to his words.

Giving directions

I suspect most visitors are already familiar with CalgaryGrit's Greatest Prime Minister poll. I suspect I take it a lot less seriously than some of the people trying to organize voting blocs, but it's still a very interesting read. Curl up with a copy of Will Ferguson's Bastards and Boneheads and make your vote count.

As for me, I'll simply leave my vote, and start drawing up campaign material for the Greatest Canadian Who Should've Been Prime Minister poll to follow. Since, of course, blog-based polls will be at least as significant as ones that CBC may have run.

Not yet an age of majority

Apparently the Liberals have decided to respond to Trickle Down Truth (or at least David Herle's challenge) with a claim that Canada needs a majority government:

Much of the hallway chatter at a summer Liberal retreat that ended Thursday revolved around shedding the government's minority status - and why that would be good for Canada.

Though he cautioned MPs to avoid sounding "cocky," Prime Minister Paul Martin took the opportunity at a closing news conference to sing the praises of majority - Liberal - government.

"Obviously with a majority government it's much easier to fulfil an agenda," he said after the four-day meeting.

It's no great surprise to see the Liberals testing the boundaries of their current popularity - the polling numbers seem to have stabilized, and it's easy to see how the Libs would want to try to add the extra couple of points to move into majority territory.

But there's going to be an awfully fine line to walk in order to make the case. After all, the bulk of recent Lib policy (most notably Budget '05) was put together in a minority situation: in order to claim that minority government doesn't work, it seems to me that the Liberals would have to try to point to what they'd rather have done with the budget in comparison to what they did do. And that'll leave them facing serious attacks from both sides.

If the Liberals try to argue that they should have been able to pass their attempted corporate tax cut, that'll have the effect of bleeding centre-left support to the NDP. Likewise, any claim that they'd rather have veered left would give the Cons an advantage with fiscal minimalists.

Moreover, the great branding fight after the ultimately-popular budget was over which party could take the most credit for it. If the Liberals start disclaiming responsibility for parts of the budget, or at least implying that they'd prefer to have done otherwise, that gives the NDP a great chance to get on the right side of the apple-cart argument.

The other possibility would be for the Libs to try to claim that the budget roughly approximates what they'd have done anyway. But given how public the negotiations were with the NDP, as well as the Libs' stated intention of reintroducing tax cuts later, that's a claim that would be shot down in a second - and likely to the benefit of the NDP.

So what if the fall session turns into a sniping match where nothing gets done? Even that could backfire on the Liberals, particularly if the NDP continues its full-court press for cooperation. If the governing party can't get anything done despite having a relatively cooperative partner for negotiations, that'll speak to the Liberals' competence in government as well as to the desirability of a minority. The effect would be a highly conflicted mix of factors: some voters might lean toward a Con majority to try to get both the majority factor and a change, others might reward Layton for continuing to be the leader who acts most like he's willing to govern by consensus, and the Liberal outcome would be at best uncertain.

With that said, the NDP shouldn't do much to try to counterbalance the Libs' current bravado. I stand by my position that the best situation for the NDP is to take a substantial chunk of the opposition benches away from the Cons to position itself as one of the two main contenders next time out. That'll be much easier if the Liberals appear to have an easy win than if there's a genuine threat of Harper moving into 24 Sussex. And if the majority talk inspires an angry response from Harper to sink the Cons even further, then all the better for the Dippers.

Why Bush doesn't get along with the CIA

Unlike many branches of the administration, the C.I.A. still dares to demand accountability when its members mess up:

The CIA's independent watchdog has recommended disciplinary reviews for current and former officials who were involved in failed intelligence efforts before the attacks of Sept. 11, 2001, The Associated Press has learned.

CIA Director Porter Goss now must decide whether the disciplinary proceedings go forward.

Following a two-year review into what went wrong before the suicide hijackings, people familiar with the report say Helgerson harshly criticizes a number of the agency's most senior officials. Among them are former director George Tenet, former clandestine service chief Jim Pavitt and former counterterrorism centre head Cofer Black. The former officials are likely candidates for proceedings before an accountability board.

It can't be by accident that the report leaked out: this is exactly the sort of thing that Bushco specializes in burying, but now that the information is public it'll take an awful lot of sheer arrogance for Goss to avoid giving the go-ahead. I doubt the findings of any further inquiries will see the light of day during this administration, but there's at least some hope that a few of the shills who allowed the U.S. to go to war will yet face some responsibility for their negligence.

Those in need, and those less so

As if we needed more reason to doubt any businesses trying to win dollars, tax breaks or lighter regulations by crying poor, Stats Can releases releases the latest data on corporate profits:

Statistics Canada says profits at Canadian corporations continued to climb in the second quarter, rising 2.9 per cent from the first quarter to $51.9 billion.

The agency says soaring oil prices lifted oil and gas extraction and refining profits to record highs, accounting for three-quarters of the overall profit gain.

It says profits have risen in 12 of the last 14 quarters, although the growth rates have moderated in the last three quarters.

Non-financial industries saw profits increase 4.2 per cent in the second quarter.

Note that the increased oil prices haven't undercut other industries, which still managed to contribute to the gain as well. Only the financial sector struggled due to lower bank profits, but there's a ready explanation for that.

Let's be clear that it's a good thing that businesses are doing well. But at the same time, this is added evidence that the corporate sector is the last part of Canadian society in need of more resources at this point.

No such thing as free trade

Another interesting commentary on NAFTA, this time from Peter Urmetzer in the Globe's web comment:

Canadians have long been aware of the American tendency to play fast and loose with the rules, so it is difficult to understand why the government of the day decided to introduce a deal that made us even more dependent on our southern neighbour. A free-trade agreement, Canadian negotiators had hoped, would tame the elephant. But those hopes have been trampled, as the elephant continues to act - quelle surprise! - like an elephant...

As the United States continues to openly ignore various rulings handed down by NAFTA and the World Trade Organization, Canada might want to reconsider its position on free trade. Retaliation by way of placing tariffs on American imports will prove futile. It is interesting to note that the only weapon we have in our arsenal in terms of compensation are more tariffs. In other words, a trade war - the very thing we tried to avoid in the first place.

I'd again disagree with the position that retaliatory tariffs can't have an effect, as surely the trade war would also be undesirable from the American point of view. And Urmetzer goes too far in seeming to criticize any focus on global trade - there's nothing inherently better about internal trade (particularly in as vast a country as Canada) than foreign. While it's probably best not to devote too much time to negotiating agreements, that doesn't mean that trade barriers themselves are desirable either.

That said, it's refreshing to see such a strong third angle taken on the free trade debate, and Urmetzer's reminder that Canada has been perfectly successful with a relatively inward-looking focus is one worth remembering.

All in a day's work

Not surprisingly, John Bolton's gig at the U.N. is leading to nothing but conflict:

John R. Bolton, in his first public initiative as American ambassador, told envoys at the United Nations on Wednesday that time was running out on efforts to create institutional change, only days after the United States began privately pushing for major revisions to a draft of reforms that was already close to completion.

The new American approach recommends scrapping more than 400 passages in the 38-page draft prepared under the General Assembly president, Jean Ping of Gabon, that was being readied for a summit conference next month after nearly a year of intensive negotiations.

According to the article, the objections are predictable: the U.S. wants no mention of the ICC, the Kyoto Protocol, the Comprehensive Test Ban Treaty, aid targets or disarmament. All this is after the changes in the current draft already sound like something out of a Bush foreign policy address (assuming his typical wilfully blind eye to U.S. human rights abuses):

Among the changes under consideration are the substitution of the Human Rights Commission with a more powerful Human Rights Council that would no longer allow rights violators onto the panel; the creation of a Peacebuilding Commission to help countries emerging from conflict; the defining of terrorism to exclude its justification as a national resistance or liberation tool; and the empowerment of the international community to intervene in countries that fail to protect their people from genocide and ethnic cleansing.

There can be little doubt that the U.S. proposal will fail utterly in any attempt to radically change the draft version, and with good reason. The world at large has worked hard to reach agreement on the current draft and conceded to U.S. interests on at least a few of the above points, especially if the U.S. (as seems likely) will have an effective veto in defining "terrorism" and "human rights violators".

The big question is whether the new demands will completely undercut the consensus version, and result in other states deciding to add a wish list as well. If that happens, the U.N. reform that Bush and Bolton supposedly want will be impossible.

Usually even the neocons aren't quite this efficient in directly undercutting their own stated goals. But apparently Bolton makes it possible.

Day in court

It likely won't lead to any great change through litigation, but it's nonetheless significant that environmental groups have been given standing to sue the U.S. government over global warming:

A federal judge has ruled that environmental groups and four U.S. cities can sue federal development agencies on allegations that the overseas projects they financially back contribute to global warming...

(Friends of the Earth), in addition to Greenpeace and the cities of Boulder, Col., Santa Monica, Oakland and Arcata, Calif., sued Overseas Private Investment Corp. and the Export-Import Bank of the United States. Those government agencies provide loans and insure billions of dollars of U.S. investors' money for development projects overseas. Many of the projects are power plants that emit greenhouses gases that the groups allege cause global warming...

White did not rule whether those agencies must perform environmental assessments of projects they help fund, but simply said the groups have a right to sue. If White's decision stands, the issue of whether U.S. environmental rules apply to the projects backed by the agencies likely will be litigated, Shems said.

Unless there's a radical change in the works, the litigation itself won't lead to much by way of added requirements on the investment agencies. But if nothing else, it'll force the agencies to present their case (and all supporting documentation) to the court, and maybe add some more American public pressure on climate change. That's no panacea, but it's a start.

All too true

Duncan Cameron takes on NAFTA with both barrels:

To their everlasting discredit, Prime Minister Brian Mulroney, his principal advisers and his cabinet accepted a trade treaty which provided for a face-saving mechanism of bi-national panels to review domestic trade rulings, and claimed this was free trade. While Mulroney and his people claimed they had a free trade deal it was nothing of the sort. Free trade would bind the U.S. government to respect the free movement of Canadian goods into the U.S. Under NAFTA, like the FTA, the U.S. Congress is free to legislate trade restrictions, and U.S. trade tribunals are bound to respect the U.S. laws.

The NAFTA panels can review U.S. trade tribunal decisions. If the panel disagrees with the interpretation of U.S. law given by the U.S. trade tribunal, the NAFTA panel can send it back to the tribunal for review. That's it. The U.S. government can then change its laws to make them conform, not to the NAFTA panel decision, but to its original intent: i.e. to protect the U.S. producer from Canadian competition. That is what it has done in the past.

I disagree with Cameron on the question of whether the countries are too far out of balance for retaliation to work (particularly when the U.S. is actively making its economy weaker, but he's right in his analysis of how this calls all of NAFTA into question. Give it a look.

Doctor, doctor, give me the news

Great news on multiple fronts from the Canadian Institute for Health Information. The lead story is about a net inflow of doctors in 2004: many less doctors are leaving, and more are arriving than in 2000. But the more interesting point is that concerning gender balance:

Canada's physician workforce is increasingly female. CIHI's latest statistics show that the number of female physicians increased by 14 per cent in the last five years, from 16,945 in 2000 to 19,365 in 2004.

In contrast, the number of male physicians increased only slightly (0.6 per cent), from 40,841 in 2000 to 41,071 in 2004. In 2004, women accounted for almost one-third (32 per cent) of the total supply of physicians, representing a 10-per-cent increase since 2000.

But among physicians age 40 and under, females represented nearly half (47 per cent) of the total physician workforce in 2004.

Based on these numbers, while there's still a ways to go in equalizing the workforce, it looks like we can safely say that there's something resembling gender parity for recent medical graduates. The next task should then be to work on having more doctors of both genders in order to meet the needs of the health care system.

Reading between the lines

The Ontario Chamber of Commerce complains that Ontario is at risk of becoming a have-not province, and demands federal money in response. But while the Chamber hints at a reasonable solution, it wants that solution on a completely unreasonable basis:

(T)he report warns that on a per-capita basis, Ontario will fall further behind other provinces in terms of funding for hospitals, nurses, college grants, university professors and other public services.

And the economic cost to Ontario, home to roughly 40 per cent of Canadians and traditionally the country's manufacturing heartland, could in turn have a disastrous economic impact on Canada as a whole, chamber president Len Crispino argued Wednesday...

The gap between what Ontario pays to Ottawa and what it gets back to fund social programs has in recent months been a favourite topic of Premier Dalton McGuinty, who claims the gap has reached a whopping $23 billion...

Unless the equalization formula is changed, Ontario would only be able to narrow the funding gap by raising taxes - a political nightmare that has little appeal, Crispino noted.

Let's sum up the Chamber of Commerce's position:

Taxes are now too low in Ontario to support the level of social funding deemed appropriate for Canadians in general. Therefore, the rest of Canada should pay more than its proper share under equalization (or, at least, receive less than appropriate) in order to subsidize artificially low tax rates in Ontario.

Now, there are probably some reasons why costs would be lower in Ontario to begin with - surely a business group has at least heard of the concept of "economies of scale". But let's assume for the moment that Ontario's current tax structure can't provide a sufficient level of service to its population. Might it then be time to re-examine just what a "nightmare" it would be to allow Ontario to tax sufficiently to fund its own programs?

In fairness, there is something to Ontario's concern over the equalization side deals. In my view, one of the top priorities for the next majority Parliament should be to completely rework the equalization system so that no exceptions to the rules are necessary. (A return to the 10-province standard would be a good start.) But the reason for that is based on the national interest in having a workable system, not based on a desire to allow Canada's wealthiest province to undertax its corporate base.

We can only hope

The Star has more speculation that Bob Rae will run as a Liberal in the next federal election, and notes that he has a fair amount of support for a future leadership post as well:

"Bob is very popular in Quebec. He speaks French and is well thought of there," said one prominent Liberal, noting that since retiring from politics in 1996, Rae has spent years forging a sterling reputation as one of Canada's leading "statesmen."...

The case for a Rae candidacy was bolstered with the release yesterday of a Toronto Star-SES Research Associates poll.

It said former New Brunswick premier Frank McKenna, 57, now the Canadian ambassador to Washington, is the frontrunner in the undeclared leadership contest with support of 23 per cent of the 1,000 people surveyed.

Rae and former deputy prime minister John Manley, 55, were tied for second at 11 per cent apiece followed by former federal minister Martin Cauchon, 42, and Harvard University professor Michael Ignatieff, 58, at 4 per cent.

Among Ontarians polled, 20 per cent favoured Rae compared to 17 per cent who back McKenna.

It's particularly interesting to see Rae so high in the rankings when compared to a lot of longtime Liberal stalwarts (not to mention the most-hyped candidate in Ignatieff). Whither Allan Rock? Anne McLellan? Sheila Copps? They may have merely been left out of the poll, but either way the desire to recruit an outsider over each of them seems to be a slap in the face.

Meanwhile, a Rae Liberal party would probably be the NDP's dream scenario, for reasons which have oft been discussed elsewhere. There'd be a stronger Liberal push for soft-left votes, but that would be more than counterbalanced by the NDP's ability to play off the problems of the Rae Ontario government (rather than being hamstrung by them). The effect will be lessened if Rae doesn't ascend to the leadership, but the same factors should still be in play.

On not showing weakness

The talk of (fully justified) trade retaliation looks like it's at an end, as Jim Peterson throws in the towel on softwood lumber:

It could be well into 2007 before the federal government applies retaliatory tariffs in the softwood lumber dispute, Trade Minister Jim Peterson said Tuesday.

Despite heightened rhetoric earlier in the day by high-ranking cabinet officials and the Prime Minister, Mr. Peterson said Canada would wait until after it received WTO approval and performed extensive consultation with Canadians before retaliatory tariffs would be considered in the softwood lumber dispute.

“We have not made that decision. We will pursue all measures including litigation, possible retaliation, and heightened political advocacy,” Mr. Peterson said.

Now, please correct me if I'm wrong in any of the following.

But as far as I can tell, there's been plenty of time for consultation while the illegal tariffs have been in place.

As far as I can tell, the current U.S. administration has no interest in allowing political advocacy to change its mind on anything.

And as far as I can tell, the reason we need to retaliate now is because the U.S. is merrily thumbing its nose at what was supposed to be binding litigation.

We have one tactic at this point with a chance of getting something accomplished. Peterson has just made it clear that that tactic won't get used until at least a congressional election cycle from now, by which time Bush will be too busy deciding where to put the "My Pet Goat" exhibit in his presidential library to care about foreign trade issues. The fact that Peterson is supposedly looking at sectors where tariffs could be effective doesn't do much good when the picture could change radically before tariffs are ever imposed.

Peterson's backing down leaves nobody in the U.S. political system with any reason to even try to compromise on softwood lumber, let alone accept the NAFTA ruling on its face. I'm not quite sure what justification there was for his statement, but the outcome for Canada's position is disastrous.

If there's any silver lining, it's from a domestic political standpoint. The Liberals' decision to follow tough talk with complete capitulation leaves the NDP as the only party with any claim to be willing to stand up for Canada's interests. Unless Peterson shifts course again, this should turn into a powerful issue next time out.

Gas tax deal

It's official. Saskatchewan has signed an agreement on the federal gas tax rebate:

The Saskatchewan deal will see $147.7 million in federal gas taxes given to municipalities large and small across the province over five years...

The deal springs from the February federal budget, which promised a $5 billion, five-year program to share gas taxes with municipalities across Canada.

The program limits where the money can be spent. Larger cities, for instance, are required to use the cash for environmentally friendly projects, such as improved public transit, better sewage systems or research into reducing greenhouse gas emissions.

Definitely a worthy initiative, and both the provincial government and SUMA (the association of municipalities who'll actually be bound by the restrictions) are happy with the deal.

Of course, the Cons and the Canadian Taxpayers Federation had to find some way to complain. In this case, they apparently don't think municipalities can decide for themselves what type of deal is worth signing, and are accordingly up in arms over the requirement that urban municipalities use the money on environmentally-responsible projects.

But that contrarianism aside, the biggest problem with the deal is that it wasn't reached sooner.

Brilliant

The Skwib has the perfect solution to the softwood lumber dispute. Enjoy.

Timing is everything

Apparently there are a few Liberals who aren't all that eager for a winter election:

"Our hands are tied," one senior Liberal MP said as he and his colleagues headed into their three-day summer caucus retreat in Regina, where election-readiness will be a major component of discussions.

And MPs are grumbling, one Liberal said, about "how the hell do we campaign in the winter"...

Ontario Liberal MP Paul Macklin said there is confusion among constituents about Mr. Martin's deadline and what exactly it means -- an election immediately or a few months later.

"I don't think any of us relish the idea of a winter election," he said.

The article theorizes that the point of suggesting a delay now is to lengthen the time between the broken promise and the actual election. But I have a hard time thinking that this is anything but a PR gambit.

For all the complaints about how difficult it would be to campaign in winter, those problems would be borne by all parties, and might well favour incumbents who are more familiar to their areas. Moreover, those problems would be worse in the rural areas which the Conservatives would need to shore up. And most importantly, I can't see the Libs wanting to hold off until the 2005 budget (and fall mini-budget) are in the more distant past.

Strategically, a winter election might then be best for the Libs even if there wasn't a televised promise in play.

Even without actually planning to delay the election, however, the Libs can gain some political points out of the idea. Presumably a fresh "broken promise" to add to Harper's talking points will only make Harper seem all the more negative for the rest of the summer. And better yet, Martin can then claim that the idea was merely floated by backbenchers, that he listened in a spirit of democratic involvement, but that he displayed leadership by deciding that pushing ahead was the best course of action. (Not that many people will still be awake by the end of that, but the spin is easily seen.)

As for the NDP's response, this should be one time where the party stays out of trying to broker an agreement. Let the Liberals offer concessions if they're serious about trying to hold off on the election, and point out that the doubt now was apparently caused by a lack of consultation within the Liberals to begin with.

Quick! Start spinning!

According to the Washington Post, a group of experts has concluded that the leading piece of evidence supporting the claim that Iran has a nuclear weapons program doesn't prove anything with respect to Tehran:

Scientists from the United States, France, Japan, Britain and Russia met in secret during the past nine months to pore over data collected by inspectors from the International Atomic Energy Agency, according to U.S. and foreign officials. Recently, the group, whose existence had not been previously reported, definitively matched samples of the highly enriched uranium -- a key ingredient for a nuclear weapon -- with centrifuge equipment turned over by the government of Pakistan.

Iran has long contended that the uranium traces were the result of contaminated equipment bought years ago from Pakistan. But the Bush administration had pointed to the material as evidence that Iran was making bomb-grade ingredients.

Of course, this does prove that Pakistan was all the more negligent in allowing its nuclear material to be shipped elsewhere. But no worries: that won't affect Abdul Qadeer Khan's non-sentence, or Musharraf's status as a preferred U.S. puppet.

According to the article, the main reason for the presence of American inspectors was to ensure that Bushco wouldn't decide to ignore all evidence and common sense this time out. Mind you, that was before Bush had dropped as far as he has in the polls.

Now, I'm guessing that it'll take just under one news cycle for Republicans to start smearing both the IAEA, and the American experts involved in the project.

Bookworms on the hook

I'm a huge fan of a well-funded and well-run library system as one of the great equalizers of knowledge. Unfortunately, CUPE points out that there's a nationwide crisis in funding that's currently going unnoticed:

Statistics compiled by a group representing public libraries serving larger towns – places with more than 50,000 people – are telling. Between 2001 and 2002, although total funding remained stable, per capita spending on libraries declined by 13 per cent...

And in the meantime, the burden on libraries has been growing, as central libraries in particular have been forced to pick up the slack where social services have been cut.

The last 20 years have seen massive cutbacks to social services across Canada. People with mental conditions, addiction problems, the homeless and other disadvantaged groups are using public libraries more than ever, partly because it’s one place where they know they’ll be treated with dignity. Problems arise because workers are given little or no training to deal with the special needs of these people.

“We have people looking for resources at our library when they should be getting support from government and various agencies,” says Oake. “We have recent suicide survivors asking reference librarians for help. A young woman recently diagnosed as HIV-positive came into the library looking for resources, but she also needed to talk. We have people doing drugs and having sex in the washrooms. We are caring people, but our workers simply aren’t trained as counsellors. These people need proper counselling and help.”

So not only do libraries perform their vital core services, but as a freely accessible public resource, they're also the natural source for information and help when other agencies can't handle their workload. Of course in a perfect world they wouldn't have to fill the extra roles, but the reality is that they do, and will continue to do so until there's a serious revamping of how poverty issues are handled.

Something to keep in mind next time next time your local business group tries to claim that freezing a mill rate is more important than properly funding libraries.

(Via Rabble.)

Blackout

The AP hones in on the oil implications of today's power outage in Iraq - but there's a more significant side to this story:

Government officials blamed the outage on insurgent attacks that toppled key power pylons in central Iraq and darkened broad swaths of the country, including its two largest cities, Baghdad and Basra...

Analysts also noticed that an insurgent attack hundreds of kilometres away from Iraq's export terminals was ominously able to strangle Iraq's lifeblood export...

For Iraq, the outage was expensive. It cost the national treasury some $60 million in lost revenue on daily earnings that average around $85 million, Qureshi said.

Obviously, the implications for oil exports were important. But more significantly, if the insurgency is so well-coordinated as to be able to shut down power throughout parts of both Baghdad and Basra simultaneously, then there's all the less prospect of other industries being able to develop meaningfully. And there can't be much doubt that the insurgents will realize they're on to something with attacks on an insufficiently secured power system.

As if that wasn't enough of a problem, the lights appear to be out on constitutional talks as well. By all indications, the Shiite and Kurdish factions are satisfied with the current draft constitution, while the Sunni faction wants no part of it.

The best option at this point is probably to take a step back from constitutional talks, but it looks like the majority wants to push ahead...which will only alienate all the more Sunnis and feed into the insurgency. Unfortunately that may be the lone growth industry in Iraq at the moment, especially if all other industries are stuck in the dark.

Classless war on terror

Good news for your local wingnuts: the U.S. government has given them a new reason to hate the homeless:

Asking for increased vigilance in the wake of the London bombings, the government is warning that terrorists may pose as vagrants to conduct surveillance of buildings and mass transit stations to plot future attacks.

“In light of the recent bombings in London, it is crucial that police, fire and emergency medical personnel take notice of their surroundings, and be aware of ‘vagrants' who seem out of place or unfamiliar,” said the message, distributed via e-mail to some federal employees in Washington by the U.S. Attorney's office...

Homeless people easily blend into urban landscapes, the message said.

“This is particularly true of our mass transit systems, where homeless people tend to loiter unnoticed,” the e-mail said.

Now who is it that's actively fighting class warfare? (Though in fairness, it should be remembered that Bushco is at least trying to send added reinforcements to the lower classes.)

Back on point, nothing in the article indicates that the e-mail placed anybody else under suspicion, which makes no sense if the purpose was actually preventing terrorism. After all, wouldn't a disguise as a businessperson be far more effective in getting access to most areas? Wouldn't people trying to blend in tend toward more common clothing rather than an outfit which sets them apart in any way?

Of course, that would involve putting the burden of heightened security on everybody. Rather than sending a message of general mistrust, the U.S. Attorney's office has chosen to single out those already in the worst position for added scrutiny. And as a result, the U.S. attorney's office wants the homeless to be the object of active suspicion, instead of merely an ignored part of the urban landscape.

Blogging is good

For those wondering just what they're doing on a blog, here's a handy discussion of what blogging can do:

1. Blogs can promote critical and analytical thinking.
2. Blogging can be a powerful promoter of creative, intuitive, and associational thinking.
3. Blogs promote analogical thinking.
4. Blogging is a powerful medium for increasing access and exposure to quality information.
5. Blogging combines the best of solitary reflection and social interaction.

See the link for expanded discussion.

Of course, this should largely be a matter of preaching to the choir. But I'll be curious to see how many counterarguments there are against the link's points.

(Via the Suburban Guerrilla.)

All faith, no credit

Much has been made about how the U.S.' current consumer spending is driven almost entirely by debt rather than by rising wages. But Kos diarist cskendrick points out that the new U.S. bankruptcy bill will severely curb the debt spending - and will also heavily punish Americans for the spending they've already done on credit cards. The end result should be nothing but disastrous for the American economy, and the consequences don't end there.

($20-80 billion in credit card defaults) would be covered by credit card companies significantly increasing the spread to prime that they charge the surviving debtors, which would both increase the vulnerability of same to falling under the default cloud, and decrease remaining cardholders' willingness to incur additional consumer debt.

Just in time for Christmas 2005, a large fraction of American credit card users are going to be given a very bad case of sticker shock. A small portion of these will be financially ruined, another small portion soon threatened as card rates are jacked to cover losses due to default, or their own rates transcend 30% due to late or insufficient payment on their balances.

I've mentioned before that I'm not a fan of consumer overspending, but also that solutions can easily go too far in trying to prevent spending; as a disease, overspending is far less harmful than the cures I've seen so far. And the the bankruptcy bill is a particularly egregious example. Rather than better informing consumers in a context of attempting to reduce reliance on debt by pointing out alternatives, the bill imposes unforeseen consequences to past spending and helps to prevent responsible use of credit in the future.

What's unclear to me is who's supposed to benefit from this part of the bill. The rationale is supposed to be to discipline debtors, but surely the U.S. wouldn't be that eager to shoot itself in the foot just for the sake of perceived morality - or at least not without some Republican contributors making a buck off it.

It's apparently not the credit card companies who will benefit, as they have to provide for greater credit losses. Consumers will obviously be hurt, and most retailers (and in turn manufacturers) will likely see lower sales as a result.

One industry likely to benefit is the payday loan industry, who will presumably see some added business from people trying to meet the higher payment requirements. But that alone can't justify an otherwise disastrous policy. Right?

The other likely beneficiaries are those concerned about the U.S.' current foreign debt: it does follow that if Americans refuse to spend money, then imports should diminish and exports increase proportionally. (Assuming, of course, that the move won't cause even more people to buy the cheapest foreign-made goods available at the Wal-Marts of the world instead of more expensive domestic alternatives. But let's not assume that the Republicans have thought this through that deeply.)

With this gain, of course, comes a loss for the U.S.' trading partners - and here's where Canada is of course hit worse than anybody. We're making progress in diversifying the destinations for Canadian goods, but we're nonetheless more dependent on the U.S. than almost any other state - so when the U.S. shoots itself in the foot, we end up limping as well.

Unfortunately, there isn't much we can do about the bill for now, other than learn from its mistakes. The consequences are coming, and we can only hope that Canada won't be hit too hard.