Ethnic votes

The Conservatives have been chasing the "ethnic" vote in order to get their coveted majority. They've been doing this by espousing policies that resonate with the particular groups their after. This is nothing new, since it has been a long tradition amongst political parties. The difference with the Conservatives is, they're hypocrites.

For the past year or so, they have been airing attack ads against Michael Ignatieff saying that he's "not here for you." That he has lived abroad for many years; that he calls other countries "his own"; that if defeated, he will just go back to Harvard. What I find interesting is how this plays against the ethnic vote.

When you look at the ethnic vote, you'll find a number of them are 1st generation Canadians. Many of them have dual citizenships, and most significant of all...they vote in the elections of their home countries. Many countries allow their former citizens to vote in their elections. I know of at least one country that will allow the adult children of these immigrants to vote in these elections, as long as they register. Does this make them less of a Canadian citizen? I don't think so. Then why was Mr. Ignatieff being pressed about whether he had voted in foreign elections? (For the record, he said he has only voted in the UK, as a Commonwealth, i.e. Canadian, citizen). Add to all of this that many naturalized Canadians, decide to go back and live in their home countries for months or years at a time.

This is an example of the Conservatives being hypocritical. On the one hand, they criticize Mr. Ignatieff for living abroad, and on the other hand, they vigorously pursue ethnic voters who engage in the behaviour they are attacking. Why hasn't the media pressed Mr. Harper on this? Why don't they reveal this incongruity, which I would say is significant, since not only does it examine the Conservative political strategy, but criticizes their attack ad strategies.

My charge to journalists is, press Mr. Harper on this issue. He'll obviously dance around the topic, like he often does, but at least it will get voters thinking.

Conservatives promising to open an office to support religious freedoms

Another example of the Social Conservative (SoCon) agenda that the current Conservative caucus is moving towards. The Conservatives have promised to fund a centre to promote religious freedoms around the world. One example he gives is the persecution that the Coptic Christians experience in Egypt. But I wonder if they will treat all religious persecutions equally?

The historic tradition in Western democracies is a separation of church and state. Although there is some dabbling in each other's affairs (The Vatican making political statements, and governments observing religious traditions), in recent memory there has not been a real merging of the two...until now.

The Conservatives want to help Coptic Christians in Egypt, but will they defend with the same vigour Tibetans in China? Muslim sects persecuted by other Muslim sects? And what about the Morman sect in British Columbia that believes in polygamy? Will the Conservatives fight for their rights? Where is the line? What constitutes a religion? Will they recognize the Falun Gong?

This issue is politically polarizing and obviously catering to their Christian core support. This office will more likely support lifting Christian persecution only, instead of all religions (unless it garners votes from a particular religious group). And how is the publicly funded centre hope to achieve their objectives? Do they really think they will be able to influence foreign governments through this office?

No. This is first and foremost a vote grab for religious voters. Second, it's a vote grab for particular religious groups that feel persecuted (such as Coptic Christians in Egypt). And although promoting religious freedoms around the world may be a good idea, it is not something that should be part of an election promise, especially when public funds are being committed to it.

Rising gas prices now an election issue?

It appears the party leaders are fielding more questions regarding rising gas prices (with the exception of Mr. Harper of course, who only receives scripted questions). People are mad about rising costs, without any readily apparent reason other than because of oil speculators (similar to what happened prior to the recession). Canadian voters are asking politicians what they will do to fix it.

Politicians, being what they are, say they will have inquiries to get to the bottom of this to see if there is collusion, appoint an ombudsman to hear public complaints, and various other touchy-feely band-aid promises. The reality is there was a commission a few years ago to determine collusion, none was found. And none of these answers actually fix the problem.

Gas prices, like pretty much everything else, are typically driven by supply and demand. But huge investment firms and hedge funds like Goldman Sachs, J.P. Morgan and the like (not that I have investigated whether these particular firms actually engage in this) invest in crude oil futures quite vigorously, which drives up the crude oil spot price. The fact that Canada is a net oil exporter would make you think that Canadians wouldn't feel the pain at the pumps. Another factor that has been cited is that refining capacity in Canada has dropped over the years, which means Canada has to import its gas.

Now, back to the problem of high gas prices as it relates to election promises. The biggest mistake made with respect to this issue is when Petro-Canada, which was a crown corporation, was sold to private investors. This meant that the Canadian government had no proxy in the free market to ensure sufficient competition in the marketplace. Since buying Petro-Canada back would be an expensive proposition (in the tens of billions of dollars), beyond the fact that it could be political suicide for any party that puts it in its platform during an election (because of the cost), I believe the government does have an opportunity to play an active part. The government should direct the Canada Pension Plan, which already has billions of dollars in the open market, to buy a majority of shares (51% or more) of Petro-Canada.

With the CPP having a controlling interest in Petro-Canada, they can install their slate of candidates on the Board of Directors, as well as recommending their picks for senior management. In doing so, they can pursue the following strategy:

1. Ensuring Petro-Canada has a complete supply chain under their control, i.e. from well head to the pumps. That means not only drilling and having gas stations, but having a significant transportation and refining capacity.



2. Because it is a for-profit organization, having a policy of cost plus reasonable profit pricing strategy ensures shareholders (including the CPP) are taken care of.



3. Buying up more shares over time to ensure the CPP maintains its majority stake.

By following this strategy, the government now uses the CPP as its proxy to maintain controls on gas prices within a free market economy, through the use of competition. Other oil companies will be forced to match gas prices at Petro-Canada pumps, thus reducing the possibility of gouging and influence of oil speculators. No need to form commissions, which find no evidence of collusion (and wastes a few million dollars doing so), or hire ombudsmen, or otherwise increase the size and cost of government.

What can the average Canadian voter who is worried about the gas price do now? Remember this: gas prices are affected by supply and demand, use less gas, demand goes down. Demand goes down, supply increases. Supply increases, prices come down. How do you do this?

Boycotting a particular gas company and buying your gas elsewhere doesn't fix the problem, because you're shifting the same demand to fewer gas chains. This reduces competition, which makes matters worse. You need to reduce your consumption! How can you do this? Here are a few ideas:

1. Instead of buying a gas guzzling SUV, buy something that's easier on gas. Of course if you only have one vehicle, you want to buy one that suits your needs. But you don't necessarily need a huge vehicle to accommodate the occasional time you load up with materials from Home Depot. You can always rent a van or trailer. You want a vehicle that meets more than 75% of your needs. Not necessarily 100%.



2. When buying a vehicle, look for vehicles with fewer cylinders. The more cylinders, plus the higher the engine displacement, the more fuel you go through. Compare that to hybrids. Typically, hybrids are more expensive to purchase so going with a smaller engine will be less costly and have a competitive fuel economy.



3. If you decide you need two vehicles and you absolutely need an SUV or minivan, your second vehicle should be one that has the best fuel economy that you can get in the class you need. Typically it just needs to get you to work, so you don't need a large interior, therefore a sub-compact will do. Keep the SUV in the driveway when you don't need the capacity.



4. If you're fortunate enough that you don't need the regular use of a car, rent one when you actually need one. Using the services of companies such as Zipcar, where available, make this very convenient. But where Zipcar is not available, the prudent use of traditional rental car companies (they're everywhere) may do the trick.



5. Buy foods that are produced locally, as much as possible. This encourages local producers which reduces transportation requirements, thus the need for gas and diesel used in transportation systems. When it comes to fresh produce, you need to take advantage of seasonable supply of the various offerings. Try to stay away from foods shipped in from other countries, especially from overseas.

Canadians are looking to the government to fix the problem. Maybe they want to hear that the government will reduce their taxes at the pump. This is a big mistake, because it will quickly get absorbed by the gas companies and Canadians will be back to square one, and governments will have less revenue to deliver programs that Canadians want. Government has a role to play, but not the way politicians are dancing around it. The CPP is the best immediate option to deliver what Canadians want: Reasonable gas prices.

DOH! Moment: Liberals' "Career Politicians" talking point

The Liberals have come out and described Mr. Harper and Mr. Layton as "career politicians" in one of their latest attack ads. Is this wise?

The Liberals' strategy has been to shy away from promoting Mr. Ignatieff as the great leader (unlike what the Conservatives have done for Mr. Harper - even going as far as to rebranding the government and calling it the "Harper Government" - and what the NDP have done for Mr. Layton). Instead, Mr. Ignatieff has focused on his "team". I have news for you Iggy, some of your caucus members are career politicians, including your school mate, Mr. Rae.

This is not an effective attack and it should be dumped. Obviously, the Liberals are trying to fight back the NDP surge and making their ad buy effective by lumping Mr. Harper and Mr. Layton in the same attack. If you really wanted to do that, you might have focused on their idealogical platform extremes, i.e. right vs. left. The message would be that Liberals represent the moderate, middle-of-the-road political stance that will resonate with most Canadian families and business.

Will a Conservative majority make abortions illegal?

Women's health groups in Canada have come out and said that Mr. Harper and his Conservatives will open up the abortion debate and make abortions illegal if they get a majority government. Mr. Harper has come out to categorically deny this and has said that if legislation comes up for a vote, that his government will vote against a law that bans abortions. I say poppycock!

Abortion is a key plank in the religious right vote, which is the Conservative base. Even though the government may not introduce legislation, a Conservative backbencher might (the same thing that happened when a bill was introduced to strike down the long gun registry - another Conservative support plank). Mr. Harper claiming that his government would vote against it means he will have to "whip" the vote, i.e. force his caucus to vote a certain way. I've heard it said that two thirds of his caucus supports making abortions illegal. If they are forced to vote against this legislation, these MPs will have to go back to their constiuents, who will no doubt be angry with them, which would mean a reduction in support for the Conservatives. If Mr. Harper allows a free vote, he's going to have to cross his fingers that enough of his caucus and the members of the Opposition will be sufficient to defeat this legislation. That would be walking a knife's edge, depending on the number of seats the Conservatives hold.

I'm doubtful that Mr. Harper would sacrifice support for his party in order to keep abortions legal, given his own religious beliefs, as well as the support he enjoys from the religious right. It means ensuring none of his backbenchers introduce a bill. I find it hard to believe Mr. Harper will be able to control some of his more militant caucus members if the Conservatives have a majority government.

DND no longer backing Conservatives on F-35 purchase

OH NO! Looks like Mr. Harper is going to have to eat his words. He said that the life cycle cost of the F-35 program for Canada would be $16 billion over 20 years, i.e. $9 billion for acquisition and $7 billion for service contracts ($350M per year). Today, the Canadian Department of National Defence (DND) came out and said that those estimates are now low but they are waiting for details from the Pentagon to asses the impact. A former Candian Defence official indicates that he currently estimates the cost of a Canadian service contract (not including procurement) at $24B over 30 years ($800M per year) based on figures from the Pentagon, an increase of more than twice the previous amount estimated by DND.

This supports Opposition assertions that the replacement of the CF-18s should go to tender and a competition held. This will ensure that Canada gets the best bang for the buck, with a guarantee of industrial offsets (see my previous post on Apr 8, 2011). If Mr. Harper and his Conservatives get a majority in this election, you can kiss the promises he's made to be implemented when the books are balanced (you know, the ones he's promised families) a big sweet goodbye!

Leader's Debate: Mr. Ignatieff's point the most important for Canadian voters?

Did one of the leaders deliver a knock-out punch in last night's debate? I agree with others that there were no knock-out blows, but each of the opposition leaders had their rabbit punches.

Mr. Harper remained calm (but always speaking directly to the camera creeped a lot of people out), despite having a reputation of blowing up behind closed doors, although he did engage in some significant obfuscation and misdirection (saying that there were no upcoming corporate tax cuts, even though it's in the government's latest budget, is one that comes to mind). Mr. Layton seemed the most relaxed and came up with a couple of good zingers ("...criminals in the Senate" was probably the best one). Mr. Duceppe seemed to have a little difficulty debating in English, but came up with some good attacks (bringing up the 2004 coalition accord that Mr. Harper initiated and signed, as well as pointing out that he promises that his government won't open up the abortion law among others, but may use someone in his caucus to raise a private member's bill like he did with the gun registry, were the most memorable).

However, I think the most poignant moment for all Canadian voters, the one that everyone needs to consider, is the point made by Mr. Ignatieff. Although not a knockout blow, it is one that the media hasn't really held up as important for voters. Mr. Harper went on about one of his main talking points (and plea to Canadian voters) that they're "asking Canadians for a clear majority so we can get on with the nation's business..." Mr. Ignatieff retorted with, "You haven't earned a majority. Majorities are things you earn when you earn the trust of the Canadian people. And you haven't earned the trust of the Canadian people because you don't trust the Canadian people." Mr. Ignatieff also said, "You don't deserve a majority because you don't respect our democratic institutions." How telling is that? The polls consistently show that among committed voters, the Conservative numbers have remained flat, and have so for the past several years. I think that this shows that Canadian voters are not ready for a Conservative majority and certainly not one with Mr. Harper at the helm. Could the Conservatives be deliberately engaging in obfuscation and misdirection to so thoroughly turn voters off the election process that minority Conservative support turns into a Conservative majority parliament because so many people that will not vote Conservative just stay home on election day? It certainly appeared that way in the 2008 election. It was the lowest voter turnout in Canadian history, yet the Conservatives failed to form a majority government.

Are the Conservatives aiming for new lows in voter turnout so that they do have a shot at a majority? Election Day will tell the tale, unfortunately hindsight will be 20/20. Whatever your political stripe, get out and vote. Don't let this election be a Sienfeld-esque "election about nothing." Make it about who you want to lead Canada. Make it about what YOU want, not about what someone else wants, because you didn't bother voting. THAT is what democracy is about!

Should Canada buy the F-35?

An election issue that is being debated is the decision by the Conservative Government to purchase F-35 jet fighters as replacements for the CF-18's.

The Conservatives argue it's the best plane available in the time frame that Canada needs a replacement and is coming in at a good price. The Liberals are criticizing the Conservatives because they want to enter into an untendered contract (i.e. no competitive process) and that they are purposely low-balling the cost estimates (not to mention there is no requirement for industrial offsets - something that is very common in these types of contracts, regardless of which country is buying the equipment). Many sources (including the Parliamentary Budget Officer - Kevin Page) are coming out and saying that the actual costs are going to be significantly higher (see my other post about the PBO posted on March 18, 2011). Before you take sides, consider this: if you're going to undergo a major renovation on your house, are you going take a quote from one company, or are you going to ask for at least three or four quotes? Mike Holmes would say you get a few quotes before you decide and Mike is never wrong!

The process that picked the F-35 is flawed. The debate should not revolve around whether the F-35 is the best plane, since this is a simplistic argument. What is the definition of 'best'? Of course if you ask the military what they want, they'll want the 'best' and shiniest piece of hardware they can find, not unlike a child that wants an expensive toy. The reality is that there are competing forces on taxpayers' money, not to mention that the top 5% in system performance usually accounts for a significantly disproportionate amount of the unit cost. The way this process is supposed to work is that the Government makes defence policy (when is the last time the Canadian Government issued a white paper on defence?). Defence planning is developed from this policy and consequently, manpower is allocated and equipment procured. Getting back to the purchase of the F-35's, a statement of requirement should be developed based on the government's defence policy (and not written to a particular platform, which is sometimes engaged in these types of contracts). A request for proposals should be sent to potential suppliers to see what's available to meet the requirements. If there are insufficient candidates because the requirements are too stringent, then the statement of requirements can be revised to list what are must-haves and which requirements can be less stringent (with alternative benefits) to include more suppliers. After an initial vetting process, shortlisting to three contenders allows the government to wrangle some significant concessions out of the suppliers during final negotiations. In the end, maybe Canada will choose the F-35, but it will ensure it got it at a competitive price and with industrial offsets. Something that was done during the purchase of the CF-18s but is not guaranteed at this point of the new fighter aircraft purchase. Makes sense doesn't it?

So even if the Conservatives form the next government, there's still an opportunity for Canadian voters to make it known to their elected representatives that Canada needs a competition to choose it's next front line fighter aircraft. But it doesn't hurt if voters make their thoughts known to their candidates during the election, because candidates are seeking your vote and they're more likely to listen! P.S. Remember my "PMO watches the movie Wag the Dog" post (March 22, 2011)? I heard in the media recently that one of the reason's that a Canadian general is leading the NATO task force is that the CF-18's have old technology that "can't communicate" with American forces so this was an opportunity for Canada to make a significant contribution (or words to that effect). I find this hard to believe. There are NATO standards that every NATO member must meet. Communication is certainly one of them. I think this was a little tidbit sent out into the ether to support the purchase of the F-35's. I'm just sayin'...

Should Elizabeth May be in the televised leaders' debate?

Should Elizabeth May, Leader of the Green Party, be allowed to debate with the other party leaders in the televised debates next week? The simple answer is YES. My reasoning for this is simple. The broadcast consortium running the debate say that since the Green Party doesn't have a seat in Parliament, the leader isn't allowed in. It has been argued that the reason they don't have a seat is because of the "first past the post" electoral system used in Canada. If seats were allocated by the popular vote, that the Green Party would most definitely have some sitting MP's. However, I think that the argument that the number of votes they received in last election qualifies the Green Party to receive the full per vote subsidy is a good reason, and that they deserve to be heard as a legitimate voice in political discussions in Canada, since they receive significant public funding. But, to make sure we don't have too many voices, regardless of whether a party receives any per vote subsidy, in the interest of having a civilized debate, it should be limited to party leaders that earned at least 5% of the popular vote across Canada (the Green Party had 6.8%). This ensures a plurality of voices to be heard without muddling the discussion too much. I also think that the debate format used in 2008 (when Ms. May was included) was not a very good one. This needs to be revised. One suggestion I have is to dedicate a significant block of time for a debate strictly between the Prime Minister and the Leader of the Opposition. The Leader of the Opposition has an official status in the Canadian Parliamentary system and therefore should have special status in a debate so that the Opposition Leader has the opportunity to debate issues directly with the Prime Minister without the other leaders interjecting and creating a lot of noise. Typically, it's the parties of the Government or the Official Opposition that are voted into the next government and voters need to see how the leaders of each of the parties stack up. Finally, it has been suggested that decisions regarding the debates be taken away from the broadcasters and an independent body be used to manage the debates (as it is in the United States). I applaud this. Broadcasters are too close to this issue. They need to be at arms length. The independent body could negotiate terms with the broadcasters and the broadcasters would have to televise the debates as part of their licence requirements. Someone suggested that the people running the Munk debates could take this on, and unless someone has a better idea, this appears to be a sound idea. Canadian voters need a plurality viewpoints so that they can decide who to entrust their democracy to!

DOH! Moment: Conservatives announce Children's Arts Tax Credit

Mr. Harper and his Conservatives announcing a Children's Arts Tax Credit (allowing a credit of $500 per child per year to attend arts and cultural activities) as one of their campaign promises made me fall off my chair! This is the same man who a few years ago wanted to cut off arts funding because their "elite" members were overpaid, when in fact many artists barely make a living wage in Canada. How do Mr. Harper and the Conservatives reconcile funding for children to attend arts activities, getting them interested in this area, only to cut them off if they decide to make the arts their career when they reach adulthood? Oh wait, I almost forgot. It's election time and the CONservatives are promising little nuggets to anyone that will give them a vote. It's not about principle, or good public policy, it's about getting a/any vote! The policies of Mr. Harper and his Conservatives never cease to confound and amuse me.

Globe and Mail proves corporate tax cuts do not equal jobs

Here's an article from The Globe and Mail's Karen Howlett that supports the idea that corporate tax cuts do not necessarily equate to more jobs. Instead, The Globe and Mail's analysis shows that over the past several years as successive corporate tax cuts have been implemented, corporations have been hoarding their new found cash, instead of creating new jobs. There is nothing wrong with keeping corporate tax rates competitive with other industrialized countries. This puts Canada on the map when it comes to international corporations considering investment in the country. However, corporate tax rates alone will not be a factor. As I stated before, productivity needs to be a consideration. Administrative costs (such as payroll taxes, and the work required to fill out forms and reports), benefits to employees (such as health care), livability for a company's transplanted workers, etc. are just some of what corporations will also look at. This means that Canada doesn't necessarily need to strive for the lowest corporate tax rate. There has to be a balance. And if provinces want corporations to locate and grow in their jurisdictions, they have to do their part too, which is what the Province of Ontario just did by announcing the reduction of the provincial portion of the corporate tax rate. Getting back to the other factors that attract corporations, such as health care, there needs to be a balance between reducing the corporate tax rate and paying for social programs. The Liberals announced this tact in their election platform by balancing the corporate tax rate with the need to institute new spending that considers the needs of Canadians. I've been arguing that corporate tax cuts should not be instituted and instead, the money should go to social programs, but I don't know if raising the federal tax rate back to 18% (versus the current 16.5%) is necessarily a good thing, coming out of a recession. I believe that the demand for Canadian resources will create a greater growth rate than is projected, which will pay for the new social programs announced by the Liberals. However, it's difficult to predict this with any certainty. Unfortunately, foresight isn't as accurate as hindsight. The bottom line is that the Conservative message of killing the federal corporate tax rate cut, i.e. from 16.5% to 15%, is going to kill jobs is a bunch of unfounded fear mongering as the CONservatives grasp at anything and everything to hold onto their tenuous power.