CAUGHT LOOKING THE WRONG WAY ?

As much as I hate to admit, the President of the United States and I are of the same generation. But after a week when most mainstream American media have described the mayhem in their nation's capital, and in particular the White House, as 'Pure Madness' - I am first to admit that sometimes at least, I keep my crazy to myself.

As best I can: I sympathize with how lonely it must seem being the most powerful man in the world when everyone has concluded you're an idiot. Perhaps just like the great icon of American manufacturing, Henry Ford who became increasingly dictatorial and ever more demented in the post World War II years,  Mr. Trump has convinced himself and a handful of 'believers' that America will be great again when dinner is brought to your car window on roller-skated damsels or the 'cinemascope' movie speaker hangs from the driver side window.



Unsafe at any speed !

How else to explain the delusional notion of plunging the world into a global war on trade over the manufacture of key components of the great muscle machines of the pre-Viet Nam era:  Steel and Aluminium.

From beer cans, appliances, aircraft, auto making, and God forbid gun-making (Sigh !)  more than 6 Million Americans depend directly on jobs which use manufactured steel and aluminium. Less that 100,000 Americans work in the country's ageing steel and aluminium rolling mills, mostly along the mid-Atlantic rust-belt which can't, won't and could not keep-up with domestic demand - Trade Wars are not good for America : They're wars in which.... OH WAIT !... I was going to say everyone loses.

On second thought, perhaps the one winner over yet another looming trade dispute with our bullying deranged neighbour to the south is our Prime Minister, Justin Trudeau, and his embattled Cabinet. Even with the many gifts and promises of more in an early Federal Budget Tuesday last; nothing deterred the country's (and much of the world's) attention away from "That India Trip !" Until "The Donald" ill advised and unplanned blurting. Until the next shoe drops, perhaps Mr. Trudeau should be thankful.

BUILDING WALLS AND BRIDGES....MAYBE !

Tensions along the North American borders, the 'de facto' stalled talks involving Mexico, Canada and the United States over the North American Free Trade Accord (NAFTA), and an increasingly, somewhat hostile, and surely dysfunctional American Administration; add these to a grid-locked Congress and Government, and none augur very favourably to support the construction of new international crossings and / or the infrastructures and facilities which they require and demand.

 Meantime, all of a sudden along the International Border between Northern Maine (USA) and the Province of New Brunswick (Canada) it seems that no one noticed, until recently that is, that the 100 year old 1,500 Ft steel-span bridge over the St. John River was falling apart. (Figures, eh ? - S'tie !)

Politicians are like High School students waiting until last minute to start cramming, in this case 'scrambling' for a quick fix - The Edmundston / Madawaska International Bridge is the life-link which joins the local economy. The American owned Twin Rivers Paper Company operates mills in both countries of the community and the busy bridge links the company's Pulp and Cardboard mills in Canada to its Paper and Packaging Labels manufacturing mills in the USA.  Alas...the international bridge's deteriorating span has forced a 5 Tons weight restriction on vehicles crossing since last October, and the bridge is too old to fix. - Wait ! - There's more : Since 9/11 Canadian Federal authorities have spent multi-millions of dollars to build new and crucial border inspection facilities at the bridge and there is absolutely no appetite to relocate them - In fact that has been made crystal clear to all concerned.  The opposite is true on the American side where the border post dates to near the end of World War 2 and needs to be replaced. Trouble is the current bridge approach on the USA side is way too small to accommodate the mandate from Homeland Security.

 

The "locals" have come-up with a 'made at home' proposal to build a new bridge on the Canadian side where the existing border infrastructure exists, and north up river about 1/2 mile where there would be room to build a new USA Border post. Accordingly the new bridge would be diagonal across the river, and about twice as long as the current 100 year old span...and somehow they expect to be granted authority to proceed and build between 2020 and 2022.  Well, wait until the upper levels of governments and echelons of the bureaucracy on both sides of the 'divide' get hold of this nose stretcher ! - May I digress ?

 

 

It's 14 years since the Government of Canada proposed building a new bridge across the Detroit River to link Ontario and Michigan and (essentially)  replace the (now) 87 year old privately owned 'Ambassador Bridge' over which $2-Billion of trade (The most anywhere in the world) crosses the International Border every day.  It's 6 years since, out of sheer frustration and no doubt hoping to score political capital, the Government of Stephen Harper created the Windsor-Detroit Bridge Authority to manage the (fiction of the)  'Gordie Howe International Bridge' - So far that corporation has spent close to $ 1/2 Billion (Canadian Dollars) and there ain't no bridge ! - President Obama said OK to the bridge if Canada pays for the USA Border Post in Detroit ($250-Million) - We Canadian have also offered an Interest Free loan of $250-Million to Michigan so they can pay their share...The State Legislature said: Umm... No Thanks !

 

Wait ! There's more : American Billionaire Matty Maroun owns the Ambassador Bridge and he's been offering for at least a dozen years to build a new bridge AT HIS OWN EXPENSE - Guess what ? - Very quietly late last summer, Mr. Maroun's company outmanoeuvred the Windsor-Detroit Bridge Authority and received a permit from the Trudeau Cabinet to plan and build a new bridge next to the 'Ambassador' as long as the Ambassador Bridge is torn-down within 5 years of the new one becoming operational . There's much speculation now on both sides of the border these days that 'Gordie Howe' will not see the light of day.

 

Perhaps the elected officials of my home town should give Mr. Moroun a call - He's in the Detroit Phone Book.

 

THE BURST BUBBLING UNDER THE SURFACE

Unrealistic mortgage rates and super-inflated home prices imploded the American economy in 2008, and despite what the politicians would want us to believe, it's an economic disaster from which the United-States (now saddled with a $15-Trillion national debt) may never recover.

Now, as the Euro-Zone's economic Titanic sinks below the water-line, a cynic from 'across the pond' remarked sarcastically this week that the only thing keeping the U.S. economy afloat these days is that it's owned by China: Alas! I digress.

Handyman fixer-upper - Not cheap!

I note with a certain level of of dread and apprehension the monthly (October) report of the Canadian Real Estate Association which now pegs the average price of a Canadian home listed and subsequently sold on the MLS service at $362,899 - an increase of almost 6% since October of 2010 - Clearly we too north of the border are being lulled by unrealistically cheap credit which is bloating housing prices substantially beyond their "real" value. And as (inevitably) that wave of bad credit and worthless debt from overseas eventually crashes upon our shores; credit rates will rise, over leveraged mortgage holders will fold, housing prices will collapse - Well...just look south of the 49th parallel for the rest of the story.

The international Organization for Economic Co-Operation and Development (OECD) has already singled-out Canada as a country facing significant challenges from our steady climb in consumer debt. Experts note that with the Canadian and U.S. economies so closely linked to one another, what happens in the United-States has a significant impact in Canada.

Recently, OECD's concerns motivated Pacifica Partners, a Capital Management business based in Surrey, B.C.,  to take another look at the "Misery Index", a tool which faded from the political discourse during the economic halcyon days of the 1980' and 90's.  In the 1960's, an adviser to U.S. President Lyndon Johnson came up with the idea to measure the general economic hardships felt by the masses. The "Misery Index" is calculated by adding the unemployment rate to the inflation rate.  Pacifica Partners believes that..."with rising inflationary rates and stubbornly high unemployment rates in both Canada and the the US, this index may be more relevant than ever." - The "index" calculated currently for ordinary Canadians isn't anywhere near the "gleeful experience" we have been told by bankers and (especially) politicians that we are experiencing.

Pacifica Partners concludes that the Canadian Misery Index..."has stealthily marched higher after hitting a low in the first quarter of 2008." Fueled by unemployment, inflation and cost of living,  "misery" has risen sharply to levels above the psychological level of 10%. South of the border, Wall Street's recovery may have brought back the market for mansions in the Hamptons, on Long Island, and for luxury co-ops in New York City. The "real" reality Canadian homeowners could be about to face is pretty much that with which middle-class Americans have been dealing for almost 5 years.

In the housing market inhabited by most Americans, prices have fallen 30% or more since 2007. That is a steeper decline than during the Great Depression. Some people have had their homes on the market for over a year without a single offer. Almost a quarter of American homeowners owe more on their house than it's worth. Another quarter have less that 20% equity and about half of all U.S. homeowners could not get a mortgage if they applied for one today.

Not very pretty, but a reality far too many over-leveraged and mortgaged Canadians may be about to encounter.

....AND THIS IS NOW!

Like most of my generation, I mourn our collective loss of innocence in the decade since the attacks on New York, Washington and Shankville, Pennsyslvania.  I was born and raised along the border, and I've witness far too frequently just how much the security measures, now common place in the post 9/11 world, complicate and divide lives, friends, commercial enterprises, business relationships and even families.

Within weeks of the September 2001 events, the United-States launched a massive security build-up which is still growing pretty much unabated along our shared border where for centuries people had crossed back and forth to shop, work or visit relatives with only a nod from a friendly Customs Officer.

Windsor - Detroit's Ambassador Bridge

Canadians acknowledge and accept the need for enhanced security in the United-States and that "our" lives will never be quite the way they were. But the disruptions and changes remain a source of frequent frustrations on both sides for residents of the cities, towns, villages and communities which dot our shared 8891 kilometer / 5557 miles  border; the longest (once friendliest) on the planet. There are nightmarish stories recounted by emergency responders (fire and ambulance) on mutual-aid calls held-up by overzealous border agents. Small towns struggling with soured economic conditions: Has anyone been to Van Buren, Caribou or Madawaska, Maine recently? Towns like Ogdensburg, Messina and Watertown, New York reduced to advertising their "economic opportunities" in far off large Canadian city newspapers.

Mindful of our long standing and mutually beneficial economic trading relationships with the United-States; successive Canadian governments, provincial and state authorities, and business, manufacturing and trade organizations (often from both sides)  have sought to ease cross-border passage if not frequent tensions. Mired by paranoid patriotic fervor the Bush Administration, First - (and) - Overwhelmed by economic and political turmoil the Obama Administration, Second - have neither expressed nor entertained any genuine interest in effecting change.  Most recently plans for a new crossing over the Detroit River suffered a crippling setback in the Michigan State Senate, the American federal government re-introduced a $5.50 per person levy on Canadians entering the USA, and President Obama's multi-billion dollar pre-election jobs creation scheme hinges on  "Buy America" provisions. The much touted, ballyhooed and delayed "Perimeter Security Framework" has turned into an irritant for Canadians, and an embarrassment for the Harper government.

Whether it's a matter of how Canada gets routinely sideswiped when the U.S. is really targeting someone else (that has been suggested by some observers) or bad manners and discrimination; the cacophony from our noble friend and ally down south has grown somewhat tedious, irksome and alas, wearisome!

The message may be starting to get through: Since North Americans and the world were turned upside down by terrorism a decade ago, instead of working together as neighbours on common strategies to reduce internal problems and re-build damaged economies we hop from crisis to crisis and Band-Aid solutions. Perhaps out of frustration but always with the political correctness required of his office, Canada's Minister of Finance, Jim Flaherty, said recently that U.S. politics can sometimes be "dysfunctional." - Someone else remarked: "Once the presidential race fully takes off in January, "dysfunctional" may look like a compliment.

BORDER ACTION PLAN

In this country the Government of Prime Minister Harper has been fixated on affixing the "Action Plan" label to just about everything it's attempted since launching the $50+Billion rescue of the economy in the wake of the 2008 world financial collapse. No surprise then that in the absence of Mr.Harper's grand-vision of an integrated Canada-U.S. "Perimeter Security" deal as announced with fanfare last winter, the government will now take to calling the recently negotiated perimeter security lite - "Canada's Beyond The Border Action Plan."

Doubtless despite intense efforts from Canada's perspective; just about all that's been accomplished since the two sides began meeting in February is the establishment of a "working group" which will attempt to peel away at international layers of bureaucratic red-tape, and re-double efforts to establish better communications on matters relating to Customs levies and procedures, and most important to the United-States: Security issues.

That's a very far cry it seems from the Harper "big-vision" which up until just very recently his Government had hope to implement. And that's also why the Prime Minister's office has failed to convince authorities in Washington to make the President available for any announcement, let alone a signing ceremony of any sort. Just slightly more than a year out of the next Presidential elections in the United States the last thing the Obama Administration wants is to focus his moribund jobs creation record over improving cross-border trading relations with the neighbour north of the 49th parallel.

Fortunately perhaps for Mr. Obama's re-election efforts he's now far more likely to focus his attention on the Mexican neighbour south of the U.S. border in the wake of last week's failed alleged Iranian backed terror plot which Homeland Security claims to have been coordinated down Mexico-way.  On Tuesday last, President Obama himself announced that Iranian Forces had sought to assassinate the Saudi Ambassador to the U.S. by bombing a popular Washington restaurant with the help of Mexican desperadoes. Ay, Caramba! (As is frequently the case in such matters; details are sketchy).

Most Republican Presidential hopefuls in the United-States have seized on the matter to redouble demands that America must secure its southern border by sending more troops to the area, adding predator drone surveillance aircraft,  and building more fencing to separate the U-S border from Mexico. On Saturday Republican candidate and Minnesota Congresswoman Michele Bachmann signed a a formal pledge committing that as President she will build a double fence across the entire border with Mexico before the end of 2013.

A Raleigh, North-Carolina group called "Americans for Securing the Border"is behind the pledge initiative. It's current focus is on matters related to the problems along the border with Mexico including drug smuggling, illegal immigration, human trafficking and in light of these most recent developments, potential terrorists. But the group's Chair and co-founder, a Washington defense lobbyist named Van D. Hipp, Jr has claimed in the past that the Government of the United-States has been derelict in its duty in defending the "borders".

When the U.S. House of Representatives defeated President Bush's proposed "guest worker programme" for undocumented immigrants in December 2005, the bill the House adopted ordered the Department of Homeland Security to obtain "complete operational control" of borders within 18 months, including studying the feasibility of erecting barriers on the border with Canada.  In follow-up reviews, (most recently in May 2011) the Government Accountability Office (G.A.O.), the U.S. Congressional watchdog, noted that in its opinion just 32 of the nearly 4000 northern border miles had reached an acceptable level of security.

Canada's focus remains on trade with our southern partner which is essential to our own economic security. The focus on border relations in the United-States seems to be from an altogether different perspective. I'm not quite sure we will ever see it with the same optic and intensity.

GREED BROKE THE SYSTEM.

Our modern economic system is broken and there's mounting anecdotal evidence to suggest efforts to effect repairs are slowly tearing apart the fabric of our political system. The Arab spring has morphed into a fall of economic turmoil. Just last week Egyptian activist Mohammed Ezzeldin told protesters in New York's "Washington Square" park that he sees a connection between the spreading Occupy Wall Street movement and the spring protests against (former) Egypt President Hosni Mubarak.

"It's time for democracy, not corporatocracy, we're doomed without it" - That's the rallying cry the Canadian based magazine "Adbusters" issued to its subscribers in July in an article asking readers to protest corporate greed by staging an "Occupy Wall Street" demonstration in New York on Saturday, September 17th. They are still there, and they've been (and continue to be) joined by like-minded supporters in hundreds of cities around the developed world.

Welcome to middle-class poverty! Since that mid-September weekend in Manhattan the protest has unleashed a global outcry against the notion that the rich are getting richer and the poor are getting poorer. In the United-States (primarily) as elsewhere, there is anger and frustration over gargantuan bailouts that lined the pockets of international corporations and which have done little to help individuals and families squeezed between rising expenses, historic job losses, stagnating wages and thinning benefits. 

I wasn't around during the Great Depression but the images of  protesters in Zuccotti Park across from New York's Wall Street, at the dozens of other tent cities in town squares, or most probably later this week on Toronto's Bay Street are hauntingly similar to those of the "dirty thirties".   And, it's not just the issue of image: In the United-States inequality has reached just about the same level as at the end of the 1920's.  The 7,000 American millionaires who paid no income taxes in 2011 excepted; - Everyone has been affected. Just as with the case of the Arab Spring, it's the social media savvy young people faced with bleak economic futures, political grievances and the perils of climate change who are now effecting this demand for change.

Though some politicians have expressed sympathy with the anger towards the role the international banking and investment community has played in this endless financial crisis  paralyzing the world's economies, because there is no firm grasp on solutions; perceptions remain that governments indulge the financial elites. In the absence of tangible evidence of a dramatic shift in thinking, political institutions and economic assumptions; and in the face of (what seems to many) a "big black hole," the legion of protests grows unabated into a second month.

The onset of winter is not very far. Regardless of whether the movement has unleashed the politically creative and productive changes which are clearly needed, the "Occupy Wall Street" protests are a crystalline message that a significant number of people no longer feel they have meaningful representation from those they've elected to political office. Accordingly, they are increasingly prepared to do something about it.

OVER A RAINBOW

It has been (sometimes) painfully obvious during  the last 48 hours that players along the investment food chain - big and small, institutional and individual - have clearly been spooked by this worldwide debt debacle and credit rating(s) downgrade.

Of course it isn't just within the United States. The European banks once again are having to rescue yet two more of their own (Spain and Italy) from the near precipice of total financial failure.  Though China is not itself without financial sin, it was a darn rude awakening over last weekend for our American friends to be lectured about their mountain of debt by the Communist government of the country's largest lender. The $14+Trillion hell-hole the United States Federal Government is into is just one component of the macabre imbroglio the folks at S&P and debt holders worldwide had to mull-over and consider to arrive at the credit downgrade which has now shaken confidence in the American "greenback" to the very core.

Individually, each man, woman and child in the United-States owes about $150,000 when their share of the Federal debt is combined with State, Municipal and personal borrowing commitments. That is a $45-Trillion drain on the world's largest economy. Be that as it may, much of it (about 40%) is being borrowed from offshore lenders despite growing anecdotal evidence of America's right-wing political agenda desires, efforts, and tendencies to insulate and isolate itself from the rest of the world.

On the Canadian side of the border where the Federal Government deficit is about $50-Billion and the total national debt roughly $1-Trillion, (though still cautious) politicians are sounding somewhat more smug about the long-term effects on our economy of this debt downfall. Though probably not a lesson for our partners south of the border, there is interesting evidence that Canada's embrace of the spirit of multiculturalism has worked in surprisingly strong terms to favour the economy. It comes in the results of a survey of rich Canadians undertaken by Bank of Montreal (BMO) and the Harris polling organization. The survey which was conducted amongst people who have more than $1-Million in "investable" assets found that about one-third of those investors were "new" Canadians (not born in Canada).  Even more interesting was that pollsters found 96% of those new rich Canadians had no plans to invest outside of the country.

There are about 250,000 immigrants who arrive in Canada each year. Clearly the very vast majority are not wealthy and are simply seeking a better life for themselves and their families. But,  as a
spokesman for BMO told the Financial Post of the survey results: "These findings speak to the spirit of Canadian multiculturalism and how this country fosters an environment that helps individuals to succeed and thrive. Attracting the best and brightest demonstrates the relative prosperity and openness of Canada's economy. This bodes well for long-term wealth generation."

The net result is that although about one-third of rich Canadians weren't born here, most of them are keeping the bulk of their money in their adopted home country. That's a worthwhile lesson learned.

MIXED SIGNALS ALONG THE BORDER

There's plenty of anecdotal ammunition to suggest that the "Council of the Federation" meeting of Canadian Premiers just wrapped-up in Vancouver accomplished almost nothing in unifying the provinces: The founder of the "council" Quebec's Jean Charest didn't attend and Ontario Premier Dalton McGuinty upped and left early to deal with matters back home.

Perhaps it's because there are five Provincial Elections in the works for the fall (and potential for a possible record seven elections) that just about everyone brought an intransigent series of wants and needs to the table. Quebec and Ontario want to re-open the Canada Health Act discussions; the Atlantic Provinces agitate for greater Federal Transfers; Saskatchewan is still smarting over the sale of Potash Corp. debacle; and Alberta and British Columbia want trade deals with the Far East.

With the provinces bickering over regional matters and without any common accord to raise pressure on the Federal Government, it's pretty clear that Prime Minister Harper's parliamentary majority in the House of Commons will remain free to set both the agenda and the course of debate come the return of Members of Parliament in the latter part of September.

Though the Obama Administration is somewhat pre-occupied with a debt crisis which threatens to flatten the planet's most powerful economy. Canada's Federal Government seems undeterred by evidence of the sputtering thirty year old "Mulroney" Conservative ideological belief that what ails Canada is easily fixed by increasing trade south with the Americans. If in a post 9/11 reality this simplistic solution worked then everyone assumes the provincial governments could easily be brought "on board" and their demands for additional funding from Ottawa (for whatever cause) would be satiated.

Unfortunately border perimeter security has been the all consuming top priority of the Government of the United States since the heinous attacks on the homeland ten years ago this fall. And, the reality no Canadian Government seems willing to acknowledge under the current circumstances is that trade and security are mutually exclusive. Add the ongoing melt-down of the United-States economy in the aftermath of the great-recession of 2008 and the attendant rise of American protectionism, and the pop-up perfect economic storm risks leaving Canada's export dependant provinces and Federal coffers battered and bruised beyond reasonable recovery.

Mr. Harper has vowed to press forward negotiating with the Americans to cut "red-tape" and bureaucratic inefficiencies which frequently trump reason at the border. But in reality, with the prospect of a bitter and divisive Presidential Election campaign just over the horizon, Mr. Obama's adversaries are sure to make sure America's security boot on Canada's economic throat remains firmly in place. Already the Homeland Security Secretary Janet Napolitano is being pressed to respond to a sharply critical report of the U.S. Government Accountability Office (The GAO) which claims that the American Customs and Border Protection Agency provides an "acceptable level of security along less than one percent of the border." The study commissioned by the GAO applied the criteria used by the US towards guarding its border with Mexico, and concludes that Border Patrol agents can exercise proper control over just 51 kilometers of the 6400 kilometer border between Canada and the United States - Based on its Mexican model, the GAO implies that the U.S. "does not have the ability to detect illegal activity across most of the northern border."

The Mulroney era free-trader model may have been good for business 30 years ago. Excepting Canada's finite vast energy resources; it now seems essential for our future prosperity as a nation to look outside of the immediate neighbourhood to modernize our trading model - Whether the provinces can agree or not on what precisely it is they want.

REALITY CHECK

When Atlantic Canada's four provincial Premiers met in southeastern New Brunswick a few days ago they came-out resolved to ask the Federal Government for more transfer funds. Although Prime Minister Harper did promise in last month's Federal election campaign to maintain a steady level of transfers; I'm guessing given Ottawa's deficit budget measures that any "new" money is not soon to flow down towards the east coast.

Residents in two of the Atlantic Provinces will go to the polls in provincial elections this fall; Prince Edward Island on October 3; and Newfoundland & Labrador a week later on October 11. The get-tough posturing with Ottawa over transfer payments to the "have-not" may be good fodder for provincial politics but quite likely to fall on deft ears federally, in particular in those two jurisdictions which voted overwhelmingly against the Harper Conservatives in the May 2nd Federal encounter. And, from the perspective of the other three Atlantic provinces, though they may be envious of Newfoundland's recent offshore oil wealth, it probably doesn't help the "one-size fits all" argument favouring increased transfer funds from the Feds either.

Lest I digress: Flush from his majority win in Ottawa Mr. Harper has promised to pass his budget; scrap the long-gun registry with its 250 jobs based in Miramichi, New Brunswick; deliver on his omnibus "get-tough on crime" agenda; and kill subsidies for political parties - while at the same time chopping more than $4-Billion per year in annual spending. In addition to massive Federal job cuts, experts predict that means painful reforms to the Employment Insurance Program and (you guessed-it) Equalization payments to the provinces.

When Statistics Canada's April inflation numbers were published at week's end no one, least of all New Brunswickers, were surprised that theirs was the highest in the land: A reflection of the usual "sin tax" increases foisted on them by the Progressive-Conservative government of Premier David Alward in an effort to stave-off provincial bankruptcy. Sadly the same measures contained in the province's March provincial budget played a significant factor in a double-whammy which resulted in the loss of 2000 full-time jobs and kicked the provincial un-employment rate to more than 10 Percent.

The trend was in sharp contrast to the rest of Canada with a national unemployment rate of 7.6%; which added nearly 60,000 jobs in April. Commenting specifically on the New Brunswick situation a senior economist with the research think-tank Conference Board of Canada described Premier Alward's austerity measures as..."necessary to address the inevitable long term impact of crumbling finances."

Across North America less than 7% of the population has in savings more than the $500,000 which is estimated to get us through our "Golden-Years." In reality 63% either don't know how much they have; or admit to having less than $25,000 in savings. And; that same Conference Board of Canada predicts that specifically New Brunwick's aging population will scuttle any long term potential growth for at least the next generation. In North America, economic growth is set to ease overall as "Baby Boomers" retire. Pretty much since the end of the great sailing ship era of the 19th Century Atlantic Canada's problem has been to retain it's young workers. I was a product of that great migration west 45 years ago. It is a migration which has shown little sign of moderating over the past 5 (or more) generations.

In demographics alone, New Brunswick already has less than one young person entering its workforce for every person leaving it. And; that does NOT account for the 41.4% of provincial students surveyed a year ago who indicated that would be "likely" or "very likely" to leave their native province in order to find work. Despite noble efforts to turn around its provincial fortunes, New Brunswick's economic problems will only get worse. That's the reality of the Boom, Bust and Echo cycle of the post war euphoria of the mid-20th century which demographers have been warning about since the halcyon days of the "sixties".

For reasons theorists and economists may debate for decades; it's happening first in one of the country's smallest regions...but New Brunswick's slow agony into economic chaos should be a clarion call to every other region of the North American Continent that we are poised for, and headed down the same path. If magic somehow produces an effective remedy to the woes that ail my native province; it will be an experiment to watch, and a lesson to be learned.

PU - PU PLATTER OF NORTHERN DELIGHTS

Little wonder that Prime Minister Harper's "Perimeter Security" arrangement was D.O.A. from the "git-go." And; forget about lifting the egregious trade and business barriers between Canada and the United-States now that President Barack Obama has launched his re-election campaign for the White House in 2012.

Canada's economy may feel the need for a loving relationship with the massive commercial appetite of our southern neighbour but, at least publicly, it's a one way relationship. We're a lover scorned...alas without any of the appended fury.

In America's growing slide into isolationism, fueled largely by the philosophy of the "Tea Party Patriots" and their supporters, the country's land borders are one more irritant and potential source of all those elements: terrorists, carpetbaggers and aliens who would wish harm upon the United States.

Let it not be said that Canada is not a quintessential partner to the recovery of the American economy, including the country's biggest foreign supplier of oil and gas; and most probably eventually its biggest supplier of fresh water; but in "official" Washington, pending the outcome of the 2012 election; northern border issues, choke-points and business concerns fall on deaf ears...



From the Alberta oil sands, which President Obama described this week: "These tarsands (sic), there are some environmental questions about how destructive they are...we've got to examine all those questions." - To eliminating a $583-Million project to ease woefully insufficient infrastructure at the Blue Water crossing from Sarnia to Port Huron, Michigan - and the President's budget proposal to tax Canadians entering the United-States - The pile of anecdotal evidence seems to point to just one inevitable conclusion: CANADA! Not on the radar screen of crucial re-election issues down south.

Perhaps until the saga of the American 2012 Presidential election plays-out to its conclusion; it would be best for Canada to concentrate on its abundant Cornucopia of northern delights for those American tourists who can still afford to travel "abroad". Ottawa hotels are selling out from a Tourism Commission digital media blitz in the U.S. northeast to promote the "Canada Day" visit of the Royal newlyweds; Prince William and Katherine Middleton. And; Disney Cruise Line has announced that its 2400 passenger ship the "Disney Magic" will make a total of 9 trips (each) to Halifax and Saint John this summer. - There you go!

PARADISE FORECLOSED

Amidst a surprising litany of political scandals on Parliament Hill, some reaching practically all the way into the inner sanctum of the Office of the Prime Minister; Mr. Harper has travelled to Europe to a hastily convened meeting over Libya's civil war. A calculated effort to bolster the illusion that, just as it did in the Great Wars of the Twentieth Century, Canada can still affect the course of human history.

Marching into war, even if it's only with a token force of six ageing jet fighters, is the cost we'll be paying for the Conservatives to show (at least if you believe their barrage of TV advertising) the Prime Minister's firm grip on the tiller of power - As was the case when he (single handily) rescued the planet's battered economy a couple of years back.

To no one's surprise, to proffer an illusion on the eve of tabling next Tuesday's Federal Budget confirms it almost seems, despite rhetoric to the contrary, that the Conservatives are preparing to launch into a national election campaign by week's end. It becomes thus safe to conclude that Tuesday's budget will itself be an illusion, without hope of passage, designed to springboard Mr. Harper's ruling party into the election ahead of their competitors.(see: Abusing Power - March 16/11)

But beware! Dark economic clouds may be gathering once again as the list of crises grows; not the least of which is Libya's civil war; to nip the world's recovery at its roots, and set the stage for another meltdown.

For the first time in more than 10 years, the U.S. Federal Reserve Bank intervened in currency markets on Friday as a direct result of the twin disasters of the Japanese earthquake and tsunami, which have brought the world's third largest economy to its knees. There are fears of runaway inflation with the developing economies of China and India; geopolitical uprisings and potential oil disruptions in the Middle East and North Africa; debt crises in Europe (most recently in Portugal); and pretty much a stalled recovery in the United States.

And (Alas!) Canada is stuck with the economy of its closest neighbour and very largest trading partner. The news south of the border is somewhat gloomy:
Unemployment in the United-States remains about 9%; growth is slow; States are slashing spending to balance budgets; investment is shaky; the Federal budget proposed by President Obama is a disaster with little prospects of American politicians doing anything constructive about it. The American Dream of owning a home has evaporated...the Census Bureau says that a staggering 12.1% of all residences (18,394,000 homes) are vacant mainly as the result of Foreclosures by lenders and their subsequent repossession by the sheriff. In short, the net worth of America is about $54-Trillion, still 23% below the pre-recession peak of $65.8-Trillion.

Mr. Harper's handlers wish to convey his skillful handling of the last recession and his decisive grasp of erupting world crises as we are quite obviously perched on the edge of another Canadian Federal Election. Budget illusions and voodoo war making on a grand scale ultimately may not serve any of us very well.

THE DAY THE RUBBER HITS THE PAVEMENT

The major credit-rating agencies have been casting a watchful eye on the Province of New Brunswick, and they are unlikely to respond kindly unless the provincial budget later in the month moves significantly to stop the financial hemorrhaging.

Travis Shaw who speaks for Dominion Bond Rating told the Saint John Telegraph-Journal a few weeks back that New Brunswick's "challenging fiscal situation" has become a matter of serious concern. Unlike "Dominion", the two other top rating agencies, Standards & Poor's and Moody's Investor Services, haven't waited for the first budget from novice Premier David Alward: They've already downgraded the province's ratings outlook amid concerns for the amount of debt it's been accumulating.

New Brunswick's 700-thousand inhabitants have an accumulated provincial debt of about $9.5 - Billion on which they pay $600 - Million / year in interest alone. Little wonder the deficit for the current fiscal year is pegged at about $820 - Million. By the way, none of which includes the staggering $.4.5 - Billion debt of the provincial utility, N.B. Power.

Somewhat unlike the United-States; a country that puts its President on a pedestal on election night, only to spend the rest of his term tearing it down; Progressive-Conservative Premier Alward, elected late last September, has been enjoying a surprisingly good post election "honeymoon". A recently published eastern Canadian poll pegged him with a higher rating than during last fall's election.

The financial challenges facing New Brunswick are daunting. They run the gamut from weak revenues, a shrinking workforce, ageing population, rising health-care spending and increasing dependence and reliance on transfers from the central government in Ottawa. At a recent meeting with the Prime Minister, Mr. Alward walked away (he claims) with a commitment that the Federal Government would not reduce transfers to the province in the next fiscal year.

In cross-province public budget consultations the P.C. government indicated that everything was on the table, but there really isn't much wiggle room left short of raising taxes and selling provincial assets; Crown Corporations and properties. Of those, the New Brunswick Liquor Corporation (N.B. Liquor), with annual profits near $175 - Million, seems the most likely target. The previous government's attempt to sell another Crown, the debt laden N.B. Power, caused such a ruckus that burying the "liquor" headline is perhaps a compelling reason why Mr. Alward's government has scheduled the budget speech on the same day the Federal Minister of Finance is scheduled to deliver the national budget - March 22nd.

Selling liquor to Maritimers is a lucrative proposition; one that doesn't imply rocket-science. So, when N.B. Liquor goes up for sale, given New Brunswick's precarious fiscal situation, Mr. Alward's biggest problem may be to pass on the temptation to sell at a fire sale price. A significant concrete effort to pull the Province of New Brunswick out of its spiral into bankruptcy is potentially a first significant "bump" along the soft ride the Premier has been enjoying so far.

FEBRUARY CLEARANCE

Alas, the end of another winter's month; time to clear-out the bottom of the drawer before the onset of the cold season's final four weeks.

MICKEY'S YOUNGEST FANS: Statistics are clear. In President Obama's America less than half of the next generation is white. The prestigious Brookings Institute has analyzed the data from last spring's American census and whites are now the "minority" amongst the very young in at least eight states - Arizona, California, Florida, Hawaii, Mississippi, Nevada, New Mexico, Texas and the District of Columbia. Though some might conclude that could be a problem...Without skipping a beat, the Disney Corporation sees it as an opportunity. Late in January Mickey's representatives began pressing the corporation's newest priority: "Disney Baby" in 580 maternity hospitals across the United States. A multilingual representative visits the new mother and offers a free Disney Cuddly Bodysuit and asks the new parents to sign-up for DisneyBaby.com. Disney expects to give away more than 200,000 baby bodysuits by the end of May.

IT TAKES ONE TO KNOW ONE: A visiting scholar from the Sloan School of Management at the prestigious M.I.T. has warned Canadians that our own household debt may likely spark a "Made in Canada" recession. Post Christmas statistics have confirmed the Bank of Canada's fears that total household debt is now $1.5 Trillion, (or in simple terms) more than 3-times the National debt. It seems that politicians may have been a tad too cocksure in convincing Canadians that the 2008 recession was a mere blip on everyone else's radar. So we've borrowed ourselves to the eyeballs into debt. The result: Every family in Canada now owes more than $100,000 in personal debt.

EVERYWHERE A GRAM, GRAM: No one seemingly knows exactly why, but the international prototype of the "kilogram" appears to weigh less than it did when it was manufactured in 1889. No small mystery: In Sevres, France "THE" kilogram - the universal standard against which all others are measured - resides in controlled conditions in an underground vault than can be opened only with three different keys possessed by three different people. But, this pampered hulk of platinum and iridium somehow, someway has fallen down on the job and seems to have mysteriously shed about 50 micrograms over its near century and a quarter of existence. That signals, scientists claim, that it's time to find a new way to calculate the kilogram. They point-out that its cousin, the international prototype of the "meter" was retired from duty in 1960. Before you ask; What's a meter now? "The length of the path travelled by light in a vacuum during a time interval of 1/299,792,458 of a second."

NO FRET ABOUT THE TRAIN RUNNING LATE: Florida's new "tea party" backed Republican Governor, Rick Scott, has nixed the cornerstone of President Obama's signature high-speed bullet train proposal for the state. The President travelled to Tampa about a year ago to announce (with great fanfare) America's pitch for high-speed rail travel. Its showcase project was to be built in Florida with others to follow in Ohio and Wisconsin. Those three states elected tea party favored Republican governors in November, and each project has now been derailed. One of Governor Scott's ideas to replace the roughly 10-thousand jobs created by the bullet train plan is to open-up Florida to casino gambling. Las Vegas developers are chomping at the bit to bring casino gambling to South Beach (Miami) and Tampa Bay. Opposition from the state's parimutuel industry and (most especially) the Orlando based "family oriented" tourism attractions is expected to be intense. Perhaps one rare exception when the Mouse will roar louder than the President.

BOOMER FRET

It is maybe the reality of our ageing demographic that causes every small tremor in economic news - Employment, Interest Rates, Manufacturing output (you name it) - to terrorize the stock market. We are the "Boomers;" the nation's largest population cohort and we're fretting whether there will be anything left for life in blissful retirement.

Perhaps sadly...well we should. Though most of the world's great economic thinkers agree that Canada is in damn good financial shape; in at least one respect we're one of the world's basket cases. Canadians are drowning in debt: In 2009 our government debt amounted to 82% of the nation's entire Gross Domestic Product (GDP), compared for example to Great Britain (68%) where the national government has just imposed Draconian restraint measures. And even the United-States, the world's economic disaster poster boy, which is just one point above us; 83.2%.

Canada's Federal government debt is as bad as ever, and climbing at the rate $135-Million per day. It peaked at $563-Billion in 1998 before the Liberal Government of Jean Chretien wrestled it back with its own drastic cuts. In the past five years it has now risen back to what the Canadian Taxpayers' Federation claims will be $567-Billion on March 31 - A new record.

That's just the Federal Government debt, add in provincial debt where some economies - New Brunswick, Ontario, Quebec (to name just three) - are their own basket cases, and Canada's total government debt will be well over $ One Trillion on March 31 when the books are closed for the fiscal year.

Lest you think that it is just our elected officials who are doing a bad job at minding the nation's purse strings - They are - But the rest of us are "maxed-out!" Spending by Canadian consumers over the past two years is the most leveraged in history. Canadians hold more than their own $-One Trillion in mortgage debt alone; up about 8% since 2009, and an eye-popping 194% since 1995. It's not just the family credit cards that are maxed-out either. Last year (2010) about 2,000,000 Canadians took out equity loans from the value of their generally mortgaged homes - The average withdrawal was $46,000.

Fueled by historically low mortgage interest rates, it has been Canada's housing market which buffered the country against the economic recession which shook most other parts of the developed world. But the pent-up demand for an average Canadian home which is now priced at $331,000 is rapidly evaporating amongst the record personal, national and provincial debts we have accumulated as a nation. It may be later than our American cousins' or the homes of our ancestors in the United Kingdom and in France; but the party is probably over for us too.

Just this week the International Monetary Fund (IMF) downgraded Canada's GDP growth predictions for 2011 to 2.3%. In recessionary times, that ain't bad but it pales against the IMF's world economic predictions of 4.4% growth. At the very height of the recession one Canadian Imperial Bank economist called Canada..."a safe harbour in today's global economic storm." For the most part, witness to the turmoil abroad, Canadians were pretty smug about our country's fiscal position.

If our reasonably safe economy was fueled by an unprecedented housing boom which has now spent itself out; there may be good reason to fret that it was all along an illusionary boom built on a somewhat expensive house of cards.

MOOMBEAMS?

I am trying to detect a lesson worthwhile - Ah Hell! Anything worthy - Over this kerfuffle out on the country's left coast about what the conventional media has been describing as the "ticking HST time Bomb."

In Canada's La-La-Land, British Columbia locals lined-up, 700,000 strong, behind their former disgraced Premier, William Vander Zalm to pony-up on a petition to (a) overthrow the Government of Premier, Gordon Campbell; - (b) Force the Legislative Assembly into reversing an earlier vote - (and/or) (c) Hold a province-wide Referendum.

The issue is British-Columbia's dreaded HST, a 12% Value-added tax which went into effect on July first, the same day Ontario's HST of 13% also kicked-in. In fact, there are now just a couple of provinces without their own Harmonized Sales Tax, which combines the national Goods and Services Tax (GST) with their provincial sales tax.

The difference is that British Columbia is Canada's only province with a "direct democracy law", a concept borrowed from a handful of States south of the border whereby if sufficient names are collected on a petition; elected officials and the measures they represent can be "recalled from office." In B.C. apparently everything has been forgiven of their former Premier, Bill Vander Zalm, forced-out of office in 1991 over allegations of "conflict of interest" involving his family owned theme park: 'Fantasy Garden World.'

"Recall Measures" have been practiced foremost in California the "Land of Fantasy" where the recall of Governor, Gray Davis, in October 2003 over the cost of energy production (electricity) promoted strong-man, turned actor Arnold Schwarzenegger into the Gubernatorial Mansion on promises of strong tax-cutting measures - Governor Schwarzenegger will step-down from office on November 2nd this year; amidst California's worst economic slump since the collapse of the gold-rush of 1848...



Former Governor Jerry Brown hopes to be returned to California's highest office to replace Governor Schwarzenegger. Mr. Brown who twice sought and lost the U.S. Democratic Presidential nomination three decades ago was known as Governor "Moonbeam" back in the late 1970's after pop singer Linda Ronstadt described her relationship with Brown as "My little Moonbeam" in Rolling Stone Magazine. - I digress!

Whether in California, British-Columbia or elsewhere the issue is clearly just who will pay the bills if taxpayers continue to demand better services but refuse to provide the funds necessary to cover the costs? An issue which is all too real for the residents of my native province of New Brunswick on Canada's east coast. regardless of the B.C. recall law, or California's November election; New Brunswick ratepayers will be first at the polls this fall, on September 27. Second smallest of the country's ten provinces, the 750,000 people of New Brunswick face a staggering debt of almost $10-Billion or about $13,000 for every man, woman, child. And; while this untenable provincial debt should be the main focus of the election, the province's main political parties are using every measure to avoid talking about it.

Just like in British-Columbia, California and all of those other places which have come before it seems everyone is counting on "moonbeams," miracles and prayers, maybe a little "Pixie Dust" to avoid the inevitable payoff to the piper.

HELP! I'M A VICTIM OF THE ECONOMIC RECOVERY

People want change but they won't make the changes necessary to achieve it: A very recent obvious example has occurred over the past few days as Greeks took to the streets violently protesting the measures their country must implement to drag itself out of bankruptcy.

Greece's measures; the European Union's bail-out plan; and the protests in Athens sent the constantly jittery investment community into another tail-spin. In a matter of less than 24 hours North American markets, the DOW in New York, and the TSX in Toronto lost all of their gains so far this year.

Amid talk of even more E-U countries failing (Portugal and Ireland have been mentioned), investors sought the relative shelter of the United States dollar, driving down the value of the Euro and other international currencies, including the Canadian dollar. Our "loonie's" feathers were plucked to the tune of about 5-cents, dropping from parity with the "greenback" to 95-cents by Friday's close. The irony in this is that America's own debt of close to $14-Trillion is 37 times larger than the Greek's. Lord knows where we'll be heading when that elephant is eventually forced out of the closet!

Meantime the Prime-Minister, Stephen Harper, has been on a whirlwind tour of Europe's capitals glad-handing leaders in support of Canadian overtures for a NAFTA type trade accord with the European Union. He's also laying the groundwork for both the G-8 World Summit and the subsequent G-20 Economic Summit which he will be hosting in southern Ontario next month. Instead he's been buffeted for resisting G-20 efforts to tax the banking community. Perhaps with their minds turned towards a pending United States debt crisis; the tax, it's argued, would create an economic slush fund against any future crisis. Canada argues that it's banks avoided the plague that's afflicting everyone else because of good behaviour and good planning, and others should instead do likewise.

This week's influential London based "The Economist" says there's also been quite a bit of luck to Canada's relatively shallow recession, and it wonders if others could ever be so lucky. It points to our resource based economy: Mines, Oil, Gas and even Farming for benefiting especially from China's insatiable appetite for raw materials. As for Canadian banking institutions, in the words of The Economist..."keeping tabs on the banks is much easier when all are...based within a few hundred yards of each other and of regulators in Toronto."

Some commentators on the international scene, in particular observers of Canada - U.S. relations suggest Canadians should guard against a feeling of superiority as America and other world countries struggle through a period of growing discontent. They point to a couple of good reasons why our own economic woes may be just around the next corner: First, there is our treasured and terribly expensive universal health-care system; and second, the stressed-out demands on our public pension schemes. Sixty years ago, Canada's "Baby Boom" was the world's strongest and we're about to face the economic consequence of our ageing population. Canada's problem is that there is little sign that our politicians are prepared to deal with either.

When people feel economically frustrated and disenchanted with mainstream politics they may start looking to find a vehicle to voice their frustrations. If and when Canada's economic circumstances wobble; here also anger may get vented on city streets. In Greece this week, Canadians may have caught a glimpse of the shaddow cast by the glow of our perceived economic superiority.

TIDBITS FROM THE DESK

In the midst of these "dog daze" of the summer of 2009, and as Hurricane "Bill" huffs and puffs into a category 4 storm through the Caribbean, let's take a moment to clear-out a backlog of accumulated notes on my workspace.

Best to clean these out; after all it's a matter of short time before our Parliamentarians return to their Ottawa offices...the debate in the House of Commons sinks to new inconceivable lows...and the blind race towards an election no one wants heats up to a fever pitch.

-AIRLINES, AEROPLANES AND RECESSIONS DON'T MIX
Doubtless it's been a tough tourist season for Canada's air carriers. Visa and Passport restrictions have reduced cross-border travel. Summer load factors have slumped and aviation consultants predict "lean, dark times" for the usually slow fall period. Air Canada is mired in debt once more...the word bankruptcy has been bandied about. It won't happen...but if it did, for the second time in one decade, it could usher-in irreversible damage for our national flag carrier. WestJet had been counting on a cash infusion from SouthWest Airlines in the USA. The two airlines follow the same business model, and were to enter into a code-sharing arrangement this summer. Code-sharing involves booking flights on each other's routes. Instead, SouthWest has pocketed the money to bankroll a bid to buy bankrupt Denver based discount carrier, Frontier Airlines. And, orders for Bombardier's business jet aircraft are said to be down about 40% as client companies, like GM, Chrysler and others shed their private aircraft and adjust to the new economic realities.

-WHERE'S THE MISSING LOOT?
If the Royal Canadian Mint can find it, maybe the airlines could use it. Very little has transpired...er, well nothing really...since the Federal Government called-in the RCMP to investigate the disappearance of more than $15-million in gold from the mint. It has been almost a year since auditors at Ottawa's most heavily guarded building started to query how a thousand pounds of gold went missing from the Fort Knox like vaults on Sussex Drive. Although "who's got the loot?" (Bernie Madoff? Earl Jones? Michael Jackson?) has become a favorite parlour game in the Capital, the daily "Ottawa Citizen" reported this week that the Mounties have yet to launch their government ordered investigation..."That suggests they don't suspect the missing gold has been stolen." The Mint's bean-counters are knee-deep in the middle of three ongoing "last-ditch" efforts to account for the missing bullions. Lest of course they be knee-deep in dark doo-doo if they can't find anything.

-TIMMY, IN FOR THE DUNKIN'
Going for the gold? Invaders from the north became the darlings of the "Big Apple" over the summer months when Tim Horton's took over about a dozen former Dunkin Donuts stores in New York City. The stores are owned by franchisee Riese Corporation. Some will recall a few year's back the scandal when photos were published showing mice on the racks of one of their Manhattan Dunkin' stores. Obviously engaging in a rear guard action against "Buy American" provisions. New Yorkers have apparently fallen in love with Tim's rich calorie laden Ice Cappucinos. If we can't beat'em, maybe we can clog their arteries. Tim Horton's reported earlier this month that it now has 536 restaurants down in the USA. Same store sales in the United-States have grown as much as 5% over last year. Sales at the Canadian stores, of which there are just short of 3000, grew less than 2% during the same period. The company has said it may have to raise prices in Canada to meet its year-end goals. The American owned McDonald's restaurants, Canada's second largest chain, have been increasing pressure on the Canadian icon by offering discounted breakfast and premium coffee options. Roll-up The Rim to see who wins!

FAREWELL TO THE INDUSTRIAL REVOLUTION

These days one does not have to look very far afield for evidence of the devastating effects of the end of North America's shinning 20th Century industrial age.

It is not just about the headline making spectacular failures of the giant industries that surround the Great Lakes: The vast steel mill complexes; the auto-parts and automobile assembly sector, and the too many manufacturers of products too numerous and varied to enumerate.

The demise of the industrial age hasn't been good to the town of my birth, Edmundston, New Brunswick; like so many single industry communities far removed from the major trading outlets of the vast urban areas of North America...And: The emergence of the "age of information" surrounding the dawn of this 21st Century really doesn't seem to offer any viable foreseeable solutions.

Growing-up in Edmundston at the mid-point of the last century our bilingual community revelled in the optimism of the post World War II economic boom. It was from the vast timber resources of western New Brunswick that the plywood constructed fabled "Warbirds" credited with saving England at the "Battle of Britain" had been assembled. The "Fraser Companies": Its giant mills straddling both sides of the International Border between New Brunswick and the State of Maine dominated the skyline; and the pollution from its coal fired furnaces (also trucked across the International Border); dominated the air we all ingested.

Fraser's endless timber resources, its pulp products for the newspaper industry, and most importantly the thousands of tons of quality "catalogue paper", produced for "Sears & Roebuck" and "Spiegel's" of Chicago meant that the Canadian National Railway's "transcontinental line" through Edmundston (the city's second largest industry) was kept operational and busy twenty-four hours a day. Just across the border in the wilderness of the State of Maine, "Loring Air Force Base", developed as a part of President Dwight Eisenhower's "military industrial complex" - fueled by the Cold War with the USSR - brought thousands of military servicemen into the area. Strategically, "Loring AFB" was the closest over the North-Pole point for atomic bomb carrying aeroplanes to reach the USSR from American soil - Thus the U.S. Air Force made sure it was the largest, best equipped "Strategic Air Command" facility in the world.

Loring Air Force Base is long gone. So is the Canadian National Railway. CN's three story brick train station and yard control centre is now a cheap looking out-of- place office building. It has also been a long time since the "pulse of daily life" in northwestern New Brunswick has been governed by the steam whistles of the Fraser mills on either sides of the international frontier between Canada and the USA...or for that matter by the "bells" of the massive Roman-Catholic "Cathedral of the Immaculate Conception" on top of the hill half a block away from the house where I was born.

Late last week, Fraser Papers filed for "bankruptcy protection" with both Canadian and American regulators. Just like so many larger manufacturers, Chrysler and General-Motors included; the financiers, managers and about 3,700 employees hope that a leaner productive and profitable "Fraser's" will emerge from restructuring. The likelihood though is for just more shattered dreams for the folks of my little hometown. The memories it seems may be all that are left for the pages of history.

THE ISOTOPE FIASCO

The Government is paying the price for dragging its feet on the repairs and improvements to what once was one of our proud Canadian achievements. The Chalk River facility was among the first, after Atomic Bombs fell on Japan in 1945, to harness nuclear energy for the good of mankind.

At Chalk River in eastern Ontario, scientists developed the CANDU nuclear electricity generating system used in several jurisdictions around the world. When it works, the National Research Universal reactor at Chalk River is the world's largest single source of the Isotope required for 85% of the world's nuclear medical procedures. The trouble is the reactor is old...and these days it isn't working. The break-down has led to a worldwide shortage of the precious isotope and a looming crisis for the medical community.

Although plenty of warnings were posted about the ageing reactor when a similar crisis forced a world shortage late in the fall of 2007; it is not just the Harper Government which is to blame. For most of the last 20 years successive governments have ignored the plight of the decrepit facility which is operated by Atomic Energy of Canada Limited. Although the reactor is increasingly unreliable, efforts to replace it were abandoned in 2008 by the Conservative Government after the flawed design of two modern replacement reactors led to uncontrollable cost overruns.

Despite the unreliability; Kanata, Ontario based MDS-Nordion, in the same period, has evolved into the world's leading supplier to the nuclear medicine community from this single source of isotopes produced at Chalk River. The web is now untangling. In a brief letter to its customers late on Thursday, MDS Nordion confirmed that the reactor will be out of service for at least 3 months and the company..."anticipate(s) that the medical community and your patients will continue to experience a significant shortage of isotopes."

Back in 1976 as a young reporter working for the CBC in Hamilton, Ontario I was given a tour of the reactor operated by that city's McMaster University. I had never seen a nuclear reactor, I remember my visit to this day. McMaster was the first university in the British Commonwealth to own and operate an experimental atomic plant. Built in 1959, it is just two years younger than the seriously defective National Research Universal reactor at Chalk River. From several indicators though it has apparently received over its 50 years of existence the "tender love and care" the Chalk River plant so desperately lacks.

Not the least of which is that just today comes word that McMaster has tapped into $22-million in Federal and Ontario "infrastructure" funding to convert its reactor to the production of medical isotopes. It is apparently the only other Canadian reactor which is capable of producing "molybdenum-99" which decays into the medical isotope. The irony is that a 50 year old reactor may be in line to replace a 52 year old reactor which is on its last leg...and the government thinks that is just fine. Good grief!

POLISHING THE TARNISH

It is a gargantuan effort, not unlike re-floating the Titanic.

The explorer Simon Fraser, he who blazed Canada's expansion all the way to the Pacific Ocean, is buried in the historic Roman Catholic parish cemetery of St. Andrews on the outskirts of Cornwall, Ontario where he died a poor man in 1862.

Fraser was the last surviving partner of the famed fur trading Northwest Company which merged with its rival, the Hudson's Bay Company, in 1821. Hudson's Bay, every Canadian knows, is the oldest continually operating commercial establishment on the North American continent. It was formed on May 2, 1670.

The venerable Hudson's Bay Company and its 92 flagship "The Bay" stores have been the subject of multiple failed makeovers since the 1990's. Struggling through increasingly poor performance, ownership passed into American hands in 2006 when a minority shareholder, South Carolina billionaire, Jerry Zucker, bought the company. After Mr. Zucker's untimely death a U.S. based shopping centre holding company, NRDC Equity Partners, took over.

NRDC is the first owner in many years to have some sense of merchandising and the consumer retail business. Among others, it owns the high end U.S. retailer, Lord and Taylor, a company it acquired from Federated Department Stores. If I may digress ever so briefly: Ownership of "Federated" back in the halcyon days of the mid-1980's brought the over-leveraged financial empire of Sudbury born millionaire, Robert Campeau, to a crashing collapse.

Alas, since the beginning of the current economic downturn, some of the other retail assets of NRDC Equity Partners have been on the rocky road to oblivion. "Linens'n Things" flamed out in the fall. In February, "Fortunoff" filed for bankruptcy. In efforts to stop the bleeding, NRDC has pumped about $130-million in cash into "Lord & Taylor"and "The Bay."

A Toronto based retail analyst, John Williams, recently told MacLean's that mid-market department stores are on a death watch. Many of my generation will recall fondly the iconic retail giants of the mid-twentieth century: Creaghan's, Simpsons', T.E. Eaton...and some more now forgotten names. Williams says: "It's not a viable format...they're squeezed between value merchants - the Wal-Marts and Winners - one one end, and luxury stores and specialty boutiques on the other."

In 2005 in a $100-million deal, The Bay, acquired the Canadian Olympic Team clothing line from Roots Canada. "Roots" Olympic products, their marketing and most importantly the commitment to an all-Canadian made product line had ensured its success and recognition. And made it,
as well as the Canadian Olympians, the envy of the far larger producers from competing countries.

In the Olympic Games since, The Bay's clothing line, manufactured in China, has been plunged into controversy and criticism. In store sales haven't matched expectations. The tarnished image, just like the venerable Hudson's Bay Company, needs a bit of patriotic "dab and polish". Perhaps otherwise, next winter's Vancouver Olympics clothing line may be the iconic retailers' last effort to remain afloat amongst the icebergs of competition and dwindling sales. That surely would be a catastrophe!