Thursday, June 24, 2010

 

FLORIDA'S MASSIVE HANGOVER

The 100 miles of beaches of the Florida Panhandle constitute the greatest strand of white sand on the planet. More than one-third (35 miles) have now been closed by the insidious oil oozing-out unabated since late April from more than a mile below the once pristine surface of the Gulf of Mexico.

Slowly, and almost as surely, America's "Sunshine State" is inching towards becoming an international vacation destination with the rules of an archaic museum: "Look, but don't touch!"

Floridians are angry. Their anger portentous of disastrous consequences for States and Provinces which have never (and may never) indulge the desire to allow oil drilling rigs off their shores. Like our pristine garden gem, Prince Edward Island; or the sandy beaches of southwestern New Brunswick which are at the mercy of drilling operations deep in the offshore of Newfoundland and Nova Scotia. Or, of British-Columbia's unique rugged coastline and the mighty oil carriers that ply the waters from Alaska down towards deep water ports below the 49th parallel.

When rigs first started drilling for oil off the coast of Louisiana more than 60 years ago; in Florida they scanned their own shorelines of dotted resorts and beaches of startling beauty and concluded: "No Thanks! - We'll stick with tourism."

The rare sands of the Florida peninsula tempered by its subtropical climate are the underpinning of a totally dependant tourism economy. The mere possibility of damage to the beaches is already hurting the industry in areas not yet affected by the oily tar balls from below; like the Tampa Bay area and communities south. In the majestic Florida Keys, an ecosystem unequalled anywhere in the world, locals are resigned to..."waiting for it all to disappear." As Key Largo resident Mike McLaughlin recently told the Associated Press.

The lesson learned for Florida, as perhaps it should be with Canada's coastal provinces; is that the State gets little if any financial benefits from drilling off its shore, even though it is sharing all of the environmental risks. Risks estimated just last week at the loss of 195,000 jobs and $11-Billion this year alone (2010) if the BP Oil disaster cuts tourism just by half.

And...there are far many other things it could lose beyond tourism and fishing. Florida's housing is concentrated along the State's 8,500 miles of shoreline. Deep in the wake of the 2007/09 economic downturn, housing values have sunk by as much as one-third, and statewide the unemployment rate is 12%. The impact of the oil spill could savage the economy for decades ahead.

Floridians may be heartbroken and suffering in silence over the damage they see in neighbouring Louisiana: But, they also compare Louisiana's quest for the ephemeral riches of oil and gas exploration to a neighbour with a bonfire that has now set the entire block on fire.

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Monday, June 21, 2010

 

MAYBE IT IS US!

An international poll being published this week at the onset of the G-8 and G-20 twin summits in Toronto suggests that one of Canada's greatest failures is as a world trading partner.

It seems the key impediments are in large measure within our own borders because provinces and territories are often at protectionist logger-head over such basic issues as trade, professional and worker qualifications. Let alone the free flow of products and services from one province into one, or out of another.

For instance the Minister of Transportation, John Baird, was in Michigan last month making a very public case to take down the barriers to allow construction of a new bridge to promote trade between Windsor and Detroit. But; a bottle of Moose Head Beer brewed in New Brunswick is still being sold (if at all) west of the Quebec border as a premium "imported" lager. Just last week, Newfoundland's Premier was accusing neighbouring Quebec of..."thwarting growth across Eastern Canada" over yet another decision involving the transmission of hydro generated power into the United States market. So it goes: But, just how should we expect our international trade efforts to be recognized and succeed if in a nation of just 30 million we can't settle internal trading issues amongst our own ten provinces.

I have just returned from four or five days of business related travel into southern portions of New Brunswick, the province where I was born. Lest I digress; in these first warm days of this 2010 summer, I was struck by the verdant green colours of the "Picture Province's" vast pine and spruce forests devastated during my childhood by the rampant dreaded "Spruce Budworm" which had turned the millions of acres of forested regions into dull brown dead overgrowth.

Viewed from my Ontario perspective where I have lived for just about 30 years, I confess to having difficulty with the concept of a reality whereby none of the four Atlantic Provinces has a population greater than the single National Capital Region of Ottawa/Gatineau, the twin cities where I reside. In fact, New Brunswick's own population of 750,000 is about the same as the single industrial southern Ontario city of Hamilton. Yet as a province it's tax and rate payers are encumbered with supporting and maintaining the reality, infrastructures, costs and every other elements of a full fledged partner (in fact an original partner) of Canada's 143 year-old nationhood. In the cold light of modern economic realism, this may not make much sense.

Out west; Saskatchewan, Alberta and British Columbia have been taking a hard look at their own not dis-similar situation. Earlier this spring (in late April), they announced the "New West Partnership" agreement which will create Canada's biggest inter provincial barrier-free trade and investment market. Not only does the effort combine the strength of the economies of the three provinces but a couple of the partnership's keystone elements include a procurement agreement whereby the western provinces have combined their buying power; as well as an international co-operation agreement which launched four week's ago when Saskatchewan, Alberta and B.C. essentially took over responsibility for their own business dealings with China, the world's fastest growing economy, by opening a trade and investment office in Shanghai, China's financial capital.

By contrast, Prince Edward Island's effort this summer will be to spend a million dollars to host the syndicated "Regis and Kelly" American television morning gabfest for two or three days in Charlottetown in mid-July...Newfoundland's Premier Danny Williams blames the greed, arrogance and entitlement displayed by his neighbour (Quebec) for milking Newfoundland dry over the infamous Churchill Falls hydro agreement signed 41 years ago...and which should have long ago been either forgotten or relegated to the pile of learned experiences along with Brian Peckford's hydroponic cucumber operations; The so-called Newfoundland "pickle palace" of the 1980's.

There's hope still for our Atlantic Provinces. Perhaps a good first step would be to work with (and on) the synergies, infrastructures and projects which unite them rather than with economic realities which are no bigger than most of Quebec and Ontario's main cities.

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Wednesday, June 16, 2010

 

TOO BIG TO FAIL?

It was once a Goliath of Biblical proportions and North America's largest corporation. But; General Motors failed and needed massive government handouts from the United States and Canada to survive.

In an unrelated post ten or so days ago, I opined on the challenges and difficulties of predicting the future by gazing through a crystal ball. There is extreme volatility in the global economy. The volatility is reflected almost on a daily basis in the wild roller-coaster fluctuations of the world's major trading exchanges when investors react nervously to each rumour and new issue.

One ominous sign is over the exchange of words and public spat between the United-States and Great-Britain over the plunging stock prices of that country's industrial Goliath: The giant petroleum producer BP, which is Britain's largest corporation.

It no longer seems too far fetched to foresee that along with the "speed of light" Internet social media commentaries; the Gulf of Mexico disaster which is playing-out daily on the television screens of the world, could eventually threaten the very existence of the BP Corporation. Not only has the giant oil producer failed at each effort to contain the worst oil spill in North American history. There is no applicable precedent for the situation BP now finds itself in. Experts in Crisis Management believe the company is even failing spectacularly at managing the issues over which it still has some degree of control.

From its own gasoline retailers in the United-States and abroad and on up; BP has failed to stop people from losing faith; and much more importantly losing money in the corporation. Share values have collapsed close to 50% since the oil rig explosion on April 20 erasing as much as $80 Billion of BP's value. The Obama Administration is making it clear in an increasingly aggressive manner that it holds BP accountable for a clean-up effort which could go on for decades; and which some Wall Street analysts say could be more than $50 Billion and still counting.

Most every public and private pension fund in the United-Kingdom owns a bit (and frequently much more) of BP. Because of the current public backlash some British analysts believe the company's operating position in its largest market, the United-States..."could become untenable."

Fearing the collapse of BP, the British government could be faced with just two equally disastrous choices: a) Bail-out the company to keep it from going under; b) Allow it to collapse under the weight of the Gulf Coast mess. Because of the state of the weakened global economy, either scenario would result in a world financial and economic crisis which, like the oil spill clean-up, would reverberate for decades.

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Saturday, June 12, 2010

 

THE FOUNTAIN OF YOUTH ISN'T IN A PRESCRIPTION FOR LIPITOR

I pick on the cholesterol reducer "Lipitor" only because it's widely advertised and hugely prescribed. There are thousands of other examples. But here in Ontario; Lipitor accounts for the single largest expense of the annual $3.5 billion Drug Benefit Program for residents over the age of 65.

On July first, the Ontario government is wiping-out a professional allowance (Read: Promotional) fee totalling $750 million per year paid by the drug manufacturers to pharmacists. The government claims the drug companies have been tacking-on the $ 3/4 billion fee to the cost of the drugs the pharmacists then sell back to the province.

One example cited is the oral Diabetes medication "Metformin" sold in Ontario for $0.10 to $0.15 a pill. In several American jurisdictions it's just given-away to diabetic patients as a loss leader on the sale of more testing supplies (monitors, strips etc) for the disease.

In the United-States, an in-depth investigation published by the respected Associated Press, caught my attention recently. It concludes that..."too much medical treatment is making many Americans sicker." Over treatment won't make people healthier, it may make them sicker. The Associated Press review of hundreds of pages of studies and interviews with dozens of specialists concludes that anywhere from one-fifth to one-third of medical tests and treatments are unnecessary.

It's a concept that our technology driven North American society, and our doctors find hard to believe: Avoidable care is costly in more ways than the bill - It may cause dangerous side effects. Physicians have the good intentions of doing what's best for their patients. But seems it's rare that a patient will say: Wait! I need more information. The A.P. analysis in the United-States concludes that our burgeoning epidemic of over treatment at every stage of life often means that someone could have fared as well or better with a lesser test or therapy, or maybe even none at all.

It frequently starts during birth where for platitudes expectant mothers choose Cesarean Section surgery; and it extends to futile intensive care efforts at the end of life. In between there are far too many CT (radiation) scans, MRI's, "stents" and bypasses for blocked arteries; and anti-biotics prescribed for viruses they can't help.

Though health care system delivery is different between Canada and in the United-States; the levelling fear for all North Americans is the ageing curve of the population explosion which followed the end of the Second World War. The early "baby boomers" have now entered their seventh decade of life. While there is no "fountain of youth", patient education is going to be extremely significant if we are to remain healthy before the money runs out.

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Wednesday, June 9, 2010

 

TORIES AND GRITS GEARING-UP FOR A NON-PARTISAN ELECTION

There was a hint of mischievous irony a couple of weeks back when Members of Parliament duped a pollster into believing John Baird was their choice for Parliamentarian of the year.

My Member of Parliament; the Conservative cabinet representative for Ottawa; Transportation Minister; and Stephen Harper's "Go-To-Bulldog" hardly personifies the ideals of representative democracy and federal parliamentary institutions.

Still there's growing anecdotal evidence that Ottawa's incumbent Mayor, Larry O'Brien, is once again counting on Mr. Baird's auspices to catapult him back into the city's highest office, come Ontario's fall municipal elections.

O'Brien hasn't yet thrown his hat into the ring; but he's expected to jump-in pretty much any day now. By doing so he'll be facing a couple of well organized opponents, each with a degree of backroom support from the other mainstream political parties : Alex Cullen with the backing of the NDP; and former Ontario Municipal Affairs Minister, Liberal Jim Watson. (Worth noting that Watson was Mayor of Ottawa about a dozen years ago.)

Back to Leepin' Larry and John Baird: The Minister of Transportation has just announced the Federal Government's contribution of $600-Million for the construction of a first phase 12-kilometer Light-Rail-Train system, which includes a subway tunnel underneath Ottawa's downtown core. The cost of the tunnel alone may reach $800-million, and the entire controversial project will likely top $2.5 Billion.

For Ottawa ratepayers, it's "deja vue" all over again! Back during O'Brien's 2006 election (The "Zero Means Zero" campaign), Minister Baird held-off funding on an original LRT (sans tunnel) until O'Brien's supporters kiboshed the deal. The City paid about $50-million in penalties for reneging on its contract with the German industrial giant Siemens to build the line...got nothing in return.

Nothing gained, three years later; and with City Council towing the line on O'Brien's new plan (with tunnel), Minister Baird pulled-out of a joint Ontario/Canada announcement on funding the project last December; holding things off instead until this week when His Worship is about to jump into the 2010 campaign. Through long time political affiliation; O'Brien, the millionaire businessman; and Baird, the perpetually angry federal politician have been friends for years. Locals will recall that Baird's name made the witness list at O'Brien's "influence peddling" trial a year ago. Since declared not guilty, he's been coy about re-offering for the 2010 election...at least until now.

Things though are different now: O'Brien's popularity is low; he still wears the mantle of his repeatedly failed "Zero Means Zero" tax promises of 2006; his transitional learning curve from businessman to politician has been long and excruciatingly costly for the City of Ottawa. Despite the now committed joint Federal/Provincial funding of $1.2 Billion for the LRT, ratepayers will be on the hook for another unfunded billion dollars. About $1000 for each resident of the city; and essentially the cost of the "damned" tunnel under downtown. Front-running candidate Watson says that's simply too expensive for the city to swallow.

Despite pledges of non-partisan municipal elections; like in a microcosm of Federal politics; the Grits and Tories are set to square-off in Ottawa's fall city council election over the same issue which divided the city four years ago. "Deja vue" all over again. Think I'll take the bus!

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Saturday, June 5, 2010

 

CAUTION! CRYSTAL BALLS ARE FRAGILE

The oil washing onto the shores of the American southeast is just the most recent lightning rod for the anger and frustration which has been washing over the United States of America.

Gone is the sense of anticipation, renewal and hope symbolized by the Presidential campaign and election of Barack Obama less than two years ago. In the face of an unsustainable national debt, the President's legislative efforts have stalled; the wars in Iraq and Afghanistan persist; the economy tattered; and the optimism trashed.

As the beaches, fishery and industry surrounding the Gulf of Mexico, along with the resources of its precious waters are slowly destroyed; President Obama and his administration along with the giant oil company at the root of the problem are sharing the mounting hue and cry to make it stop!

To digress: When this is over, the only thing that will not have changed is the Continent's insatiable thirst for the energy resources which lie deep within the earth's crust. In reality America burns through the millions of gallons now spilt in the Gulf of Mexico in less than half-a-day...each and every day!

The emergence of extreme right-of-centre partisan movements symbolized most recently by the "Tea Party," may just jeopardize America's last hope of retaining the vaunted and deserved reputation as the greatest nation on earth. Even democracy itself could suffer a damaging blow.

The Washington Post describes the recent hijacking of the State of Maine's Republican Party platform by supporters of the "Tea Party" as a: "Manifesto of Insanity". By implication the support for the movement could have untold consequences on the relationship between Canada and the United-States. As it gears-up for the State's Gubernatorial Elections this November, the Maine GOP has adopted an extremist platform which calls for...(wait for it!) - "SEAL U.S. BORDERS." The platform also advocates abolishing the U.S. Federal Reserve, and the Department of Education.

Passage of the platform caused the Washington Post to ponder the question: "Do our friends Down East fear an invasion from the Canadian Maritime Provinces?" Across the United-States, angry and desperate Americans are identifying with this conservative and anti-government movement; and in the process giving it increasing legitimacy. Observers note that so far the Tea Party has been credited this spring with political victories in several states - Kentucky, Utah, Massachusetts among them.

It's difficult to gaze into the crystal balls of either mainstream American national parties: The Democrats and The Republicans. But accounting for voter anger and discontent will have to figure prominently as the parties gear-up for the mid-term elections in the fall, and further down the road to the 2012 Presidential election campaigns. Those campaigns are likely to launch in earnest by 2011, in as little as eight or nine months.

At this stage; America's drastic political shift away from the optimism of the Obama Presidential campaign and election of 2008 is not likely to bode well for the enduring relationship of our two nations.

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Wednesday, June 2, 2010

 

BEST FRIENDS...

As a regular traveller across the international border which separates Canada and the USA, I am chagrined (as many in my generation) over the so-called "thickening" of the thousands of mile of water and land frontier between our two countries.

The blame rests squarely with the sense of paranoia and fear in the United-States in the aftermath of the terrorist attacks of September 2011. Though our countries remain on the best of friendship terms, and the world's greatest trading relationship persists; what was once a relatively seamless undefended border, the world's longest, nowadays (on occasion)cloaks a style closer to that of the infamous "Check Point Charlie" in the wall separating Berlin; or the notorious DMZ which still splits to two halves of the Korean Peninsula.

Canadians though persist: Quite simply our relationship is so inter-dependant that we may have no other choice. In the last week for instance, in Nova Scotia's Capital City, Halifax, a tribute was paid to the more than 200 American prisoners of war who died while incarcerated on the east coast during the "War of 1812". Just yesterday, the former two-term Governor of Florida, Jeb Bush, was guest of honour in Moncton at the "Atlantic (Canada) Institute for Marketing Studies." Lest I digress: The son of George H. Walker Bush; and some might suggest somewhat unlike his younger brother George (Dubya) Bush; the former Governor is a recognized leader and advocate for reform in education.

Canada and Mexico share this North American continent with our much more powerful, strong and populous American neighbour. The Mexicans have their own issues with the United-States. None perhaps more recently contentious than Arizona's decision to clamp-down on a perception of illegal immigrants based almost entirely on skin colour and / or language spoken. And, as recently illustrated in Montreal our two countries commiserate, shrug, and deal with America's occasional intransigence. In the recent case; AeroMexico flight 006, grounded in Canada after being refused permission to fly over the United-States on a non-stop flight between Paris and Mexico City. For the time being (at least) everyone on the Mexican side has been quiet about the ravages of America's massive oil spill deep underneath the inland sea which is shared by Mexico and the USA.

But; on another waterway the tensions in the relationship appear to have taken-on a whole new dimension: The International Falcon Reservoir, a man made lake created in the 1950's when American engineers erected a dam on the Rio Grande River has become "Wild West" on the Mexican/USA border. The 99-Thousand acre lake has now been dotted with a picket line of large concrete beacons to mark the international border with Mexico. In a most recent twist crews of outlaws in a small armada of banged-up skiffs and high-powered boats launched from the Mexican shore have ambushed American bass anglers from the Texas side casting bait over their favourite spots. The "Pirates" claim to be Mexican Federales(Police)and they put a substantial damper on the annual Zapata, Texas "Memorial Day" bass fishing tournament last weekend...I was reminded of Ray Stevens' 1974 novelty hit song "The Streak" over the weekend (Yep, Ethel, I saw him nekked as a jaybird) when the "Washington Post" quoted Texas bass fisherman, Richard Drake: "Yep, I saw em' and I saw they were machine guns. They were that close, they were 15 yards away from me. I was scared."

Back here on the northern border, America's Homeland Security is known to fly un-manned camera equipped "drones" thousands of feet over the imaginary border which is constituted by the Great Lakes. In the summer of 2009 thousands of Canadians showed-up in a Sarnia, Ontario park to "moon" a camera equipped tethered balloon monitoring the border from the American side. We're Canadian, and we're best friends. Though we will never arm our side of the border...It sure would be nice if tensions eased-up once in a while in deference to the friendship we share.

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