Well, it appears that the gloves are off in public for the opponents of the Enbridge Northern Gateway Pipeline from Fort McMurray to Kitimat BC. This ad ran in today's Globe and Mail, as well as being widely posted online by the various signatories:
http://blogs.greenpeace.ca/?p=2573
From the the point of view of Enbridge and other players in the oil industry the majority of the signatory list can be referred to in shorthand as 'the usual suspects'. That being said there are a couple of reasons that this public statement is significant. First and foremost the lengthy list of First Nations groups is a serious threat to the very existence of the project. Laying out a pipeline from Alberta to Kitimat that doesn't cross First Nation's land would be awkward, to put it mildly.
In addition the decision to challenge the pipeline on the basis of the risks on the maritime end is smart, on several levels. The ferry Queen of the North was lost in those waters in 2006 and the case has been in the news recently as the lawsuits wend their way through the courts. In addition this threat has enabled Greenpeace and other opponents of the pipeline to get the tourist and fishing industries on board with their opposition, as the organization and business lists reveal. Finally it enables them to challenge the pipeline without reference specifically to the domestic oil industry or the pipeline itself. This last demonstrates that Greenpeace and their allies have learned that threatening jobs and economic growth directly is a counterproductive marketing strategy.
It would be in Alberta's interests to see the development of this pipeline, or some similar project. Creating alternative markets for bitumen and oil outside of our current restrictions would help insure better access to markets, and perhaps a greater degree of competition for our raw product. Currently the pipeline grid means that our options are starkly limited in terms of refinery access - whereas a link to a deep-water port opens the world's refineries to us. Whether or not a modus vivendi can be found that makes this pipeline, or another like it, feasible is something that Alberta in particular and Canada more generally need to pay serious attention to.
* My thanks to @duncankinney for linking and discussing this with me today!
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Tuesday, March 23, 2010
Saturday, December 19, 2009
Public Assets
Over the past week both the government of Canada and the government of Ontario have begun looking into the possibility of asset sales to help with their budget deficits.
In the case of AECL there are issues with giving away the growth potential of the business, but the real objection lies in the area of intellectual property. The CANDU reactor patents, while there has been a dearth of recent sales, have generated revenue in the past and there is a real prospect of significant growth in nuclear power over the next decade. The recent bankruptcy of Nortel, which the government should have prioritized supporting ahead of American auto makers, meant that a number of patents were sold off at fire sale prices. The liscencing fees that Canadian governments and companies will now have to pay to access those technologies will cost considerably more than a support package would have. To repeat the mistake with AECL would be simple incompetence.
The Ontario case provides an even more powerful case for retaining the assets. The LCBO generates approximately $1.5 billion in net revenue, and the OGLC another $600 million. In other words the structural hole in Ontario's budget would be at least $2.1 billion larger next year, and every year going forward. Both the liqour monopoly and the lottery are cash cows that support the program spending of other departments, and to sell them off in order to make one year's defecit smaller is like accepting a pay cut in order to shrink this month's credit card bill!
The deficits themselves are bad enough, though the current low interest rates will most likely put off the real pain from them for at least 6 months or so until they start to rise significantly again. These proposed asset sales will not raise enough money to cover the shortfalls even for this year, and will cost our citizens money even in the short term, much less the long term. They are, in short, political optics masquerading as policy - and a damned bad policy at that.
Canada: www.theglobeandmail.com/news/national/canada-puts-its-nuclear-pride-on-the-block/article1404807/
Given the scale of the deficits - an expected $55 billion for the federal and approaching $30 billion for Ontario - the decision to examine this option is unsurprising. It is also an extremely bad idea should it be taken past the examination phase, however.In the case of AECL there are issues with giving away the growth potential of the business, but the real objection lies in the area of intellectual property. The CANDU reactor patents, while there has been a dearth of recent sales, have generated revenue in the past and there is a real prospect of significant growth in nuclear power over the next decade. The recent bankruptcy of Nortel, which the government should have prioritized supporting ahead of American auto makers, meant that a number of patents were sold off at fire sale prices. The liscencing fees that Canadian governments and companies will now have to pay to access those technologies will cost considerably more than a support package would have. To repeat the mistake with AECL would be simple incompetence.
The Ontario case provides an even more powerful case for retaining the assets. The LCBO generates approximately $1.5 billion in net revenue, and the OGLC another $600 million. In other words the structural hole in Ontario's budget would be at least $2.1 billion larger next year, and every year going forward. Both the liqour monopoly and the lottery are cash cows that support the program spending of other departments, and to sell them off in order to make one year's defecit smaller is like accepting a pay cut in order to shrink this month's credit card bill!
The deficits themselves are bad enough, though the current low interest rates will most likely put off the real pain from them for at least 6 months or so until they start to rise significantly again. These proposed asset sales will not raise enough money to cover the shortfalls even for this year, and will cost our citizens money even in the short term, much less the long term. They are, in short, political optics masquerading as policy - and a damned bad policy at that.
Saturday, October 31, 2009
Stelmach's response to the Pembina Report
The batting around of numbers in political discourse is an ongoing source of frustration to me, since the context that gives the number relevance is often (or even usually) omitted. This is especially prominent in discussions of economics or economic policy, where to put it crudely there are a lot of numbers to choose from.
For a recent example, and some demystification, I strongly recommend this post by Aaron Braaten on his excellent blog. http://www.grandinite.com/2009/10/30/ed-meet-data-data-ed/
For a recent example, and some demystification, I strongly recommend this post by Aaron Braaten on his excellent blog. http://www.grandinite.com/2009/10/30/ed-meet-data-data-ed/
Tuesday, October 20, 2009
Stimulus and Partisanship
I had this article brought to my attention this morning: http://thechronicleherald.ca/Columnists/1147994.html
It is worth diving into the comments section as well, there is some interesting by-play there.
I share the author's serious concerns about the systemic obfuscation regarding the stimulus spending. Whether or not there are partisan abuses of the system is hard to say, given that it is almost impossible to ascertain what money is in fact spent, or committed, and what stage of planning the projects concerned are at. Based on my research there are certainly enough gaps to be concerned, but not enough information to be definitive.
Obviously it is my opinion that this information should be easily and freely available - in as much detail as possible. Sadly this government appears to oppose, as both Conservative and Liberal governments have in the past, free access to public information. What the Harper government has managed, however, is to promote stonewalling to an art form. Given the reform roots and the passionate cries for transparency and grassroots engagement that informed that movement under Mr. Manning it is particularly depressing to see the lengths to which Mr. Harper and his government are going to prevent just such transparency.
It is worth diving into the comments section as well, there is some interesting by-play there.
I share the author's serious concerns about the systemic obfuscation regarding the stimulus spending. Whether or not there are partisan abuses of the system is hard to say, given that it is almost impossible to ascertain what money is in fact spent, or committed, and what stage of planning the projects concerned are at. Based on my research there are certainly enough gaps to be concerned, but not enough information to be definitive.
Obviously it is my opinion that this information should be easily and freely available - in as much detail as possible. Sadly this government appears to oppose, as both Conservative and Liberal governments have in the past, free access to public information. What the Harper government has managed, however, is to promote stonewalling to an art form. Given the reform roots and the passionate cries for transparency and grassroots engagement that informed that movement under Mr. Manning it is particularly depressing to see the lengths to which Mr. Harper and his government are going to prevent just such transparency.
Tuesday, October 6, 2009
Profit, Regulation and Responsibility
The last few years have put several of our economy's weaknesses on prominent display. Lack of basic regulation, excessive lending/borrowing (on the assumption of permanent growth!) and a series of issues with corporate governance have all been themes that have impacted the last few years' recession. This article from Sunday's New York Times discusses a few of the themes as related to private equity firms and the case of Simmons Mattresses.
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=3&pagewanted=1 (my thanks to @abraaten for bringing the article to my attention)
It is important to move past the knee-jerk negative reaction to the operations of Equity Firms and other financial sharks - they are an important part of the economic system. That said there are glaring problems with corporate governance and basic regulatory standards revealed in this case study. Make no mistake, I am a great fan of the competitive capitalist model - without pressure from some kind of constraint there is no efficiency in any undertaking. That said there is also no such thing as a completely free market, unless piracy counts I suppose.
The question isn't the false dichotomy of regulation vs. deregulation, the issue is what the details of regulation will be. Fundamental ignorance about the complexity of the system leads to pointless discussions about straw-man issues.
We as Canadians and Americans need to elevate the conversation about our economy, and how societal concerns are expressed in its organization, whether those concerns be environmental, cultural, financial or personal.
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=3&pagewanted=1 (my thanks to @abraaten for bringing the article to my attention)
It is important to move past the knee-jerk negative reaction to the operations of Equity Firms and other financial sharks - they are an important part of the economic system. That said there are glaring problems with corporate governance and basic regulatory standards revealed in this case study. Make no mistake, I am a great fan of the competitive capitalist model - without pressure from some kind of constraint there is no efficiency in any undertaking. That said there is also no such thing as a completely free market, unless piracy counts I suppose.
The question isn't the false dichotomy of regulation vs. deregulation, the issue is what the details of regulation will be. Fundamental ignorance about the complexity of the system leads to pointless discussions about straw-man issues.
We as Canadians and Americans need to elevate the conversation about our economy, and how societal concerns are expressed in its organization, whether those concerns be environmental, cultural, financial or personal.
Subscribe to:
Comments (Atom)