What's New

“Social Licence” – Who Decides?

“Social Licence” is a relatively new concept in our political and policy discourse, but one that has quickly gained stature and influence. It sounds good. It implies public support – and how can anyone object to that? On reflection, however, the concept of “social licence” deserves closer scrutiny, and some serious questions.

Major infrastructure projects have become lightning rods of division. Many people support them for economic reasons, including jobs and community prosperity; many others do not, due to environmental or aboriginal rights concerns.

Those who oppose, however, increasingly promote the concept of ‘social licence’ as something that (although undefined) must be ‘obtained’ by these projects before being ‘allowed’ to proceed.

Yet Northern Gateway, the proposed pipeline project from Alberta to the Pacific Coast received approval by the Joint Review Panel of the National Energy Board/Ministry of the Environment, after over 4 years of study and hearings, conditional on meeting 209 specific conditions. This was no “rubber stamp”. However, notwithstanding such approval, certain national politicians have said they would prevent the project from being built, citing ‘lack of social licence’. The regulatory process for TransCanada’s Energy East project, a proposed pipeline to carry oil to the East Coast, has only just begun, but – again – some politicians are already saying “No”, claiming that it does not have the ‘necessary social licence’.

There is no question that legitimate environmental concerns need to be heard – and addressed – before large infrastructure projects be able to proceed. And despite some progress, settling aboriginal land claims and establishing mutual understanding and agreement for the future is taking far too long. But disregarding due process – the internationally respected systems that we in Canada have developed over many, many years as part of our legislative, regulatory and judicial system – is neither right, nor good, nor smart.

Virtually no decision of any import pleases everyone. Some decisions needed for the benefit of the larger good may still have certain negative consequences. Our regulatory tribunals need to take into consideration environmental effects, aboriginal rights and local and community preferences, but they must – and do – balance those with what is in the larger public interest. They make recommendations based on a review of scientific and technical information placed on the record during public hearings, not on the number of letters received or on other demonstrations of public opposition or support; recommendations based on the evidence provided, within the legal framework enacted by Parliament and applied by the courts.

The concept of ‘social licence’, however, suggests a form of ‘permission’ which, although extremely vague, supersedes this current, extensive, science-based regulatory process. Yet who has the authority to award this ‘social licence’? Where do those protesting these decisions get their authority? How can they claim to know better what’s ‘right’ than those who have undertaken years of work and analysis?

In Canada, people have the right to protest peacefully, without fear of being harmed. They have the right to lobby for changes in policy. They have the right to work for a change in government to one that they believe better respects their concerns, such as environmental sustainability and aboriginal rights. But do they have the right to ignore or usurp decisions that have been arrived at through our democratically elected and developed process?

No.

We elect our politicians, and although the results never please everyone, it’s a pretty good system. And the politicians we elect pass laws – again, not to everyone’s satisfaction, but that’s the job that our system gives them. Those laws create the rules and regulations which in turn establish, over time (often over the course of multiple governments and different political parties) our regulatory bodies and processes that we rely on to analyze, review, deny or approve things like big infrastructure projects.

Those politicians who are now using the term “social licence” to question those decisions may have good intentions. They may just be angling for votes. Either way, however, they are undermining – indeed, subverting – the processes that have evolved over many years in the very system that gave them their job. To assume what, in effect, amounts to veto power over those we have asked to make these decisions, is more than just problematic – in some places it would be called dictatorial, or rule by fiat. Our system of due process may not be perfect – no democracy is, but it is better than any of the alternatives. It’s how our system works, and it should be respected.

As printed in Hi-Rise Community Newspaper, April 2015

Blog, The Economy, The Environment, What's New

The Divestment Movement: Well-intentioned but misguided.

http://www.theglobeandmail.com/globe-debate/fossil-fuels-divestment-movement-good-intention-bad-idea/article22743277/

http://www.lapresse.ca/debats/votre-opinion/201501/30/01-4840013-bien-intentionne-mais-malavise.php

Martha Hall Findlay | Jean Charest

Partnership for Resource Trade

weboilsands2

The so-called divestment movement, encouraged by the environmental group 350 (www.350.org), calls for universities, churches, other non-profits and individuals to divest their investment holdings from major fossil fuel companies. Although based on legitimate concerns over climate change, the idea is fundamentally misguided.

Most of us agree that the burning of fossil fuels contributes to climate change. Many individuals and enterprises are responding through conservation, reducing their own energy use. Many are developing technologies that improve efficiency in the use of fossil fuels and in the processes of extraction. We are achieving much better gas mileage in cars and trucks. We are reducing GHG emissions from the production and burning of a barrel of oil, a cubic foot of natural gas, and from the production of electricity. But we also know that we still have a long way to go.

The underlying question, though, is this: Does the GHG emission problem lie with the fossil fuel producers, who are fulfilling existing demand, or with those creatingthat demand? Is it the fault of the people driving cars, or the trucking companies? (Transportation produces fully a quarter of Canada’s GHG emissions.) Should we blame the manufacturers that provide jobs? Or the consumers who create demand for the things that those manufacturers make?

The problem lies with the demand – it’s not the fault of those meeting the demand.

Besides, many of those “big bad fossil fuel” companies are also the biggest investors in renewable energy such as solar and wind power generation, and in research (including university research) for technologies to improve conservation, efficiency and overall environmental sustainability. Will divestment of these companies reduce their ability to invest in these other efforts? In any case, it will do nothing to reduce the market’s reliance on, or demand for fossil fuels.

Yet, according to a report released by the Sustainable and Education Policy Network (SEPN) (www.sepn.ca) there are now 27 active Canadian post secondary divestment campaigns. Most of these are student-led, and until recently, have not resulted in any actual changes in investment policy. However, in November 2014, Concordia University became the first university in Canada to agree to partially divest $5 million of its endowment from fossil fuels in order to consider alternatives.

Now a student-led campaign at UBC (UBCC350) has encouraged the UBC Faculty Association to hold an online referendum on the issue (voting to occur between January 26 and February 6).

If, as an individual, you choose not to invest in otherwise profitable companie because of personal ‘moral’ issues, that is your call. But investment decisions for university endowments must be based on one thing: which investments will bring the best financial returns. If fossil fuel companies are a bad financial investment, that’s reason to divest. Otherwise, divestment is inappropriate.

Donors (and potential donors) may be concerned that their donations will not go as far if invested with less than optimum return.

Canadian taxpayers (including many of those fossil fuel companies) provide by far the majority of university funding. Taxpayers do not get to choose where their taxes go, but should be concerned that the money used by universities, including endowment money, goes as far as possible to benefit the university and its operations. (Endowments are not tax-funded, but indirectly supported by taxpayers by way of tax-deductibility of donations.)

As for the students so actively campaigning for divestment, many of them also call for lower tuition, better facilities, better programs, smaller classes, better research funding – all of which require money from those taxes and those endowments (and sometimes direct funding from the very companies they are targeting). They also call for jobs when they graduate – a good number of which may be in, or reliant on, the energy sector. Many of them also drive cars, and most live in heated apartments, cook food and use mobile phones and computers. That energy needs to come from somewhere. As long as we use fossil fuels, even as we move to other sources, what purpose is served by punishing the producers?

Much good is being done by groups such as 350 and SEPN, but their promotion of the so-called divestment movement is mis-placed. Most of us are concerned about climate change and want to reduce the world’s emissions of GHGs. The answer, however, is to focus on reducing the growing worldwide demand for fossil fuels, not to target those simply meeting the demand.

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Le mouvement pour le désinvestissement ─ bien intentionné mais malavisé Partenariat pour le commerce des ressources

963770-auteurs-deplorent-ciblage-entreprises-productrices

Le mouvement dit du désinvestissement, soutenu par le groupe environnemental 350, demande aux universités, aux organismes sans but lucratif ainsi qu’aux particuliers de se dessaisir de leurs participations dans les grandes entreprises pétrolières. Malgré les inquiétudes légitimes qui l’animent, liées aux changements climatiques, l’idée défendue est fondamentalement erronée.

On convient généralement que l’utilisation des combustibles fossiles contribue aux changements climatiques. Bien des gens et des entreprises réagissent par la prise de mesures de conservation et une consommation moindre d’énergie. De nombreuses avancées technologiques permettent aussi de réaliser des économies d’énergie et de rendre plus efficaces les procédés d’extraction. Les automobiles et les camions consomment moins de carburant. Nous savons cependant qu’il reste encore beaucoup à faire.

De manière plus fondamentale, il faut toutefois se demander si les responsables du problème de l’émission de gaz à effet de serre sont les producteurs d’énergie fossile, qui répondent à la demande existante, ou bien ceux qui créent cette demande. Devraiton blâmer les fabricants fournisseurs d’emplois, dans cette optique, ou les consommateurs qui demandent leurs produits? Le problème vient selon nous de la demande.

Par ailleurs, les « grandes méchantes pétrolières » comptent parmi les principaux investisseurs dans les énergies renouvelables, comme l’énergie solaire ou éolienne, et dans la recherche technologique (notamment la recherche universitaire) qui vise à accroître les économies d’énergie et à assurer un environnement durable. Le retrait des investissements dans ces entreprises seraitil un frein à ces efforts?

Selon un rapport publié par le Sustainability and Education Policy Network (SEPN) (www.sepn.ca), malgré tout, 27 campagnes de désinvestissement sont menées en ce moment même au Canada. La plupart sont organisées par des étudiants. Jusqu’à récemment, il n’en était résulté aucune modification véritable des politiques d’investissement. Toutefois en novembre 2014, à titre d’exemple, l’Université Concordia est devenue la première université canadienne à retirer des investissements dans les pétrolières, de 5 M$, de son fonds de dotation.

C’est votre affaire si, à titre individuel, vous choisissez pour des raisons « morales » de ne pas investir dans des entreprises par ailleurs rentables. Les décisions de placement des fonds de dotation universitaires doivent par contre s’appuyer sur un critère : quels investissements sontils les plus profitables? Si les pétrolières sont un mauvais placement, il est judicieux d’en retirer ses investissements. Sinon, ce n’est pas opportun.

Les contribuables canadiens (y compris les entreprises pétrolières) sont de loin la principale source de financement universitaire. Ils ne décident pas là où vont leurs impôts, mais ils se soucient de savoir si l’argent versé aux universités, y compris aux fonds de dotation, est investi de la meilleure manière possible. Quant aux étudiants militant si énergiquement en faveur du désinvestissement, bon nombre demandent également des frais de scolarité moins élevés, de meilleurs programmes et un financement accru de la recherche – or, tout cela est financé par ces impôts et fonds de dotation.

Les groupes tels que le 350 et le SEPN sont bénéfiques, mais ils font fausse route en appuyant le mouvement dit du désinvestissement. Tous, nous nous inquiétons des changements climatiques et souhaitons la réduction des émissions de GES. La solution consiste à réduire la demande en pétrole, toutefois, et non à punir ceux qui répondent tout simplement à la demande.

Martha Hall Findlay, a former Member of Parliament, is an Executive Fellow at the School of Public Policy of the University of Calgary and is Chair of the Advisory Council of The Partnership for Resource Trade (www.powerofcanada.ca).

Jean Charest, Partner at McCarthy Tétrault and former Premier of Québec, chairs the Partnership’s Steering Committee.

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Martha Hall Findlay, ancienne députée, est fellow cadre supérieur à la School of Public Policy de l’Université de Calgary et présidente du conseil consultatif du Partenariat pour le commerce des ressources (www.forceducanada.ca)

Jean Charest, associé chez McCarthy Tétrault et ancien premier ministre du Québec, préside le Comité directeur du Partenariat pour le commerce des ressources.

Blog, Government and Democracy, The Economy, What's New

Op-Ed – Ottawa Citizen – Premiers should resist the power of the vocal few

Martha’s Op-Ed in the Ottawa Citizen, based on her longer piece in the November issue of Inside Policy, the magazine of the Macdonald-Laurier Institute.

Martha Hall Findlay: Premiers should resist the power of the vocal few

Ontario Premier and Liberal Leader Kathleen Wynne, right, is shown how to use a piece of machinery by employee Christopher Rembacz, as she tours Cyclone MFG Inc., a company which manufactures parts for the aviation industry, during a campaign stop in Mississauga, Ont., on Tuesday, May 13, 2014.
Ontario Premier and Liberal Leader Kathleen Wynne, right, is shown how to use a piece of machinery by employee Christopher Rembacz, as she tours Cyclone MFG Inc., a company which manufactures parts for the aviation industry, during a campaign stop in Mississauga, Ont., on Tuesday, May 13, 2014.Chris Young / CP 

The benefits of open trade between countries are well established. The same applies to trade between our Canadian provinces and territories, yet while certain premiers are showing leadership in moving toward more open inter-provincial trade, others show signs of regressing into greater protectionism. Even as we work toward concluding free trade deals internationally, we’re still stumbling at home.

Politicians by their nature respond to what is being said in the public realm – and we as a society have allowed our public discourse to become too dominated by special interest groups – the vocal few.

While the economic theories supporting free trade versus protectionism are widely accepted, there are no special interest groups of economists loudly espousing them.

We need to change the public discourse to make doing so more politically palatable. We also need to remind our political leaders that theirs is a responsibility to the betterment of the whole.

For example: Ontario should be able, indeed, encouraged by Ontario taxpayers, to hire the company that can build the best new hospital or highway at the best price, regardless of where the company itself comes from – and put the money saved toward other useful purposes that benefit the community.

Yet Ontario requires companies to have “local knowledge” in order to win contracts for long-term infrastructure projects. Premier Kathleen Wynne, now with a majority mandate, has an opportunity to set her own path – to join other provincial leaders, particularly those in BC, Alberta and Saskatchewan, in opening up inter-provincial trade. Unfortunately, to this point, indications are that she would instead add to the restrictions.

Free traders are often painted by special interest groups as being unconcerned for the welfare of locals. Not true. Tariffs, quotas, non-tariff barriers in the form of more subtle requirements (such as “local knowledge”) in effect take resources away from the wider population to give extra to the much smaller number of owners and workers in the favoured industry.

Robin Hood must be shaking his head, as this redistribution of wealth goes the wrong way. Protectionism takes from society as a whole, including those least able to afford it, and gives to a few. No one begrudges anyone a livelihood, yet study after study has shown that the cost to taxpayers of protecting or subsidizing jobs is always a multiple – sometimes a very large multiple – of the wages of the workers thus protected or subsidized. And Ontario “protection” will only encourage other provinces to “protect” their own, preventing those same Ontario companies from expanding.

So how do we get from understanding good policy on opening up interprovincial trade to politicians deciding to do so?

Nationalistic language of “We should do this for the country as a whole” will not work, nor some vague sense of patriotic selflessness. Ontario will not open up construction opportunities to non-Ontario enterprises simply because of some feel-good idea about Canada as a whole. Ontario should do so because it is in the best economic interests of Ontarians.

The language of “protection”, of “saving jobs”, of “encouraging local” sounds good. It pulls at our heartstrings. But even though the larger population suffers from protectionist policies, the effect is more diffuse and impossible to fit into easy, heartstring-pulling sound bites. The concept of greater prosperity for the whole is harder to articulate in simple terms, but we must speak out.

Taxpayers, consumers, voters, all should be actively, loudly calling on their governments to source the best infrastructure, goods and services at the best prices, regardless of the source – particularly when public purses are increasingly under pressure.

And we should encourage the leadership of several premiers in this regard. We need them to step up even more, and to call for those still hesitating to come off the sidelines.

Martha Hall Findlay, a former Liberal member of Parliament, is an executive fellow at the School of Public Policy of the University of Calgary and Chair of the Advisory Council of The Partnership for Resource Trade (www.powerofcanada.ca). This op-ed is based on a longer piece in the November issue of Inside Policy, the magazine of the Macdonald-Laurier Institute.

Blog, Government and Democracy, The Economy, What's New

Resist the power of the vocal few

Read the November 2014 Issue of Inside Policy here.

Inside Policy November 2014 Magazine Cover While the benefits of open trade are well established, it’s easy for the vocal minority groups who benefit from protectionism to drown out the best  interests of the majority. Martha Hall Findlay calls on politicians to resist the calls of special interests and act for the benefit of the whole.

Martha Hall Findlay

 

 “It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy… If a foreign  country can supply us with a commodity cheaper than we ourselves can make it, better to buy it of them with some part of the produce of our own  industry, employed in a way in which we have some advantage.” – Adam Smith, 1776

Adam Smith’s summary of the benefit of trade between countries applies to our Canadian provinces and territories, too. And after well more than 200  years it bears repeating now, as while certain provincial premiers are showing leadership in moving toward more open inter-provincial trade, others show  signs of regressing into greater protectionism. Even as we work toward concluding free trade deals internationally, we’re still stumbling at home.

Why is this so difficult? It’s easy to point to political leadership (or the lack thereof), but political leadership is often easier said than done. Politicians by  their nature respond to what is being said in the public realm — and we as a society have allowed our public discourse to become too dominated by  special interest groups.

The reality is that it is difficult for politicians (and their advisers) not to succumb to the pressure of the vocal few. While the economic theories supporting free trade versus protectionism are widely accepted, there are no special interest groups of economists loudly espousing them – and when politicians are striving for re-election, practice doesn’t always keep up with theory.

We need to remind our political leaders that theirs is a responsibility to the betterment of the whole; at the same time, we need to work at changing the public discourse to make doing so more politically palatable.

A simple example: If a construction company in Manitoba (or France, for that matter) has specific design and construction expertise that allows it to build a new hospital more cost-effectively than the Ontario alternatives, then Ontario should be able – indeed, encouraged – to hire the company that can do the job best at the best price, regardless of where it comes from. The taxpayers of Ontario should be able to get the best new hospital for their money – and put the money they save to other useful purposes that benefit the community.

Yet Ontario requires companies to have “local knowledge” in order to win contracts for long-term infrastructure projects. The concept was introduced by Dalton McGuinty just before he stepped down. His successor, Premier Kathleen Wynne, now with a majority mandate, has an opportunity to set her own path — to join other provincial leaders, particularly those in BC, Alberta and Saskatchewan, in opening up inter-provincial trade, including access to this kind of work. Unfortunately, at time of writing, indications were that she would instead add to the restrictions.

Proponents of open trade are often painted by special interest groups as being unconcerned for the welfare of locals. This is not true. Tariffs, quotas, non-tariff barriers in the form of more subtle requirements (such as “local knowledge”) have the effect of taking resources away from the wider population in order to give extra to the much smaller number of owners and workers in the favoured industry – in Ontario’s case a small number of established construction companies and the unions with which they have close ties.

This redistribution of wealth goes the wrong way. Protectionism takes from society as a whole, including those least able to afford it, and gives to a few. And although no one begrudges anyone a livelihood, the apparent benefit to the relatively few working in these enterprises is less than it may appear. Ontario “protection” will only encourage other provinces to “protect” their own – effectively restricting those Ontario companies (and their employees) from expanding. And study after study has shown that that the cost to taxpayers of protecting or subsidizing jobs is always a multiple – sometimes a very large multiple – of the wages of the workers thus protected or subsidized.

Not only does it not make economic sense, it harms the larger community – yet politicians still succumb. Alan Blinder, Professor of Economics and Public Affairs at Princeton and author of “Hard Heads, Soft Hearts”[1] put it nicely: “Trade protection secures concentrated and highly visible gains for a small minority by imposing diffuse and almost invisible costs on a vast and unknowing majority. That makes protectionism at once economically graceless and politically fetching.”

So how do we get from good policy on opening up interprovincial trade to good political decisions that would open up inter provincial trade?

Some are using nationalistic language of “We should do this for the country as a whole,” but a vague sense of patriotic selflessness simply won’t succeed. Ontario will not (and arguably should not) open up construction opportunities to non-Ontario enterprises simply because of some feel-good idea that Canadians should be more “Canadian” and spread the wealth around. We need to be loud and clear: the Ontario government should do so because it is in the best economic interests of Ontarians.

We must move the public discourse away from the easier-to-promote language of protection for a few, to the harder-to-articulate-simply but hugely important language of greater prosperity for the whole. The language of “protection”, of “saving jobs”, of “encouraging local” all sounds good. It pulls at our heartstrings. Small groups can concentrate their messages and effectively create a wider perception of harm. On the other hand, the larger population suffers from protectionist policies, but the effect is more diffuse and impossible to fit into easy, heartstring-pulling sound bites. Individuals are often not aware of the negative consequences of protectionism –even those who do have no focused way to articulate their concern.

Taxpayers, consumers, voters – all should be actively, loudly calling on their governments to source the best infrastructure and the best services at the best prices, regardless of the source – particularly when public purses are increasingly under pressure.

We should be heartened by the leadership – not just at the provincial or territorial level, but truly national leadership — being shown by several premiers in this regard. Absent action on the part of the federal government to use its constitutional powers to move this forward, we need these provincial and territorial leaders to step up even more, and for those still hesitating, to come off the sidelines. After all, politicians are entrusted with a responsibility to do what’s best for the whole, not just a few, and we must hold them accountable for fulfilling that responsibility.

Martha Hall Findlay, a former Member of Parliament, is an Executive Fellow at the School of Public Policy of the University of Calgary and Chair of the Advisory Council of The Partnership for Resource Trade (www.powerofcanada.ca).

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[1] Alan S. Blinder, Hard Heads, Soft Hearts – Tough-Minded Economics for a Just Society (Cambridge, Massachusetts : Perseus Books, 1987)

 

 

Blog, International Trade and Investment, The Economy, What's New

End The Foot Dragging and Sign The Trade Deal with Europe

View online at the Globe and Mail here: http://www.theglobeandmail.com/globe-debate/end-the-foot-dragging-and-sign-the-trade-deal-with-europe/article20757135/

CETA – Partnership for Resource Trade

September, 2014

Thankfully, international trade is an area where, at least in more recent times, political partisanship takes a back seat. (Mostly.)

There will always be naysayers, but the overwhelming evidence points to trade being better, economically and socially, for both exporters and importers. In almost every case (acknowledging certain continuing challenges with developing countries), the tide of rising prosperity from international commerce, done responsibly, lifts all boats.

For Canada, a major trading nation which, in relative terms, depends far more on trade than many others, the more access we have to other markets the better. Although global multilateral trade negotiations have faltered, bilateral and regional arrangements that reduce tariffs and other barriers have been increasing, simply because it makes economic sense to do so. The recent agreement on the final text of the Canada-EU Comprehensive Economic and Trade Agreement (CETA) is very welcome news – for both Canada and Europe.

Canada is a resource-rich country. We produce high quality food, fish, wood products, minerals, energy — and an extraordinary variety of related products and services – that the rest of the world wants. Our various resource sectors provide high-value-added jobs in diverse areas such as agri-science, technical innovation, research and development, engineering and design. Canadians continue to create and build more efficient and more environmentally sustainable growing, extracting, processing and manufacturing methods, which in turn make our products and services more attractive to the world.

Canadians in all of these sectors – the business people, the workers, the growers, as well as the millions of Canadian consumers who will benefit from more access to better-priced European goods – all welcome CETA and look forward to its implementation.

CETA will open the massive European market to more Canadian goods and services. With 500 million people and $17 trillion GDP, the European Union is the world’s largest integrated economy area, and Canada’s second-largest trading partner. CETA also represents a new generation of treaties, and makes the most of increasing globalization. As its name suggests, it is ambitiously comprehensive in addressing far more than just goods, but services as well, and not just tariffs, but investment and government procurement. CETA means opportunities for Canadian exporters, service providers, importers and consumers, and is forecast to deliver a 20% boost in bilateral trade, the equivalent of creating almost 80,000 jobs. These new trade opportunities will encourage greater diversification of our economy and give stronger incentives to the development of our businesses, products and services.

It also moves both Canada and the countries of the European Union to enhance the human and social dimensions of our relationship, particularly in regard to the environment, research, innovation and culture.

In a world of increasingly interdependent economies, CETA positions Canada well. Strategically, the fact that the Europeans chose to proceed with Canada as a prelude to the US/EU negotiations speaks to how Canada can position itself as a bridge in the important transatlantic relationship between our two continents. And adding CETA to NAFTA – the biggest and richest consumer market in the world with Europe together with the 450 million people of the NAFTA area – puts Canada right in the middle of the biggest trade zone in the world.

The rising economic and political power of emerging and increasingly aggressive economies also creates a much bigger geopolitical challenge. And here, the stakes are very high. What is at play? Particularly with the absence of comprehensive multilateral progress, which countries, or regional blocks, will set the rules of trade? Canada, the EU and the US together comprise 45% of the world’s GDP and a third of its trade. Finalizing CETA is a major step in substantially strengthening our hand in protecting our vital economic interests.

Canada cannot wait on the sidelines, but must be a full participant, and CETA is an excellent step forward.

The CETA trade deal is overwhelmingly a good thing for Canada and Canadians, and we encourage those now tasked with finalizing the details and getting it ratified to do so as quickly as possible.

Martha Hall Findlay, an MP from 2008 to 2011, is an executive fellow at the School of Public Policy at the University of Calgary and chairs the Advisory Council of the Partnership for Resource Trade.

 Jean Charest, Partner at McCarthy Tétrault and former Premier of Québec, chairs the Partnership’s Steering Committee.

 

View online at Le Devoir here: http://www.ledevoir.com/economie/actualites-economiques/419236/l-aecg-entre-l-union-europeenne-et-le-canada-un-traite-a-conclure-et-a-adopter-au-plus-vite

 

AECG – Partenariat pour le commerce des ressources

Septembre 2014

Heureusement, le commerce international est un domaine où, ces derniers temps du moins, la majorité des activités politiques partisanes ont été reléguées au second plan.

Il y aura toujours des récalcitrants, mais une preuve abondante démontre que le commerce est meilleur, sur les plans économique et social, pour les exportateurs et les importateurs. Dans presque tous les cas (compte tenu de certains défis permanents que posent les pays en développement), la marée montante de la prospérité issue du commerce international, si celui-ci est fait de manière responsable, soulève tous les bateaux.

Plus le Canada, nation commerçante d’envergure qui, en termes relatifs, dépend davantage du commerce que bon nombre d’autres pays, a accès à des marchés variés, mieux c’est. Bien que des négociations commerciales multilatérales mondiales aient achoppé, force est de constater que les accords régionaux et bilatéraux ayant pour objet la réduction de tarifs et la suppression d’autres barrières sont à la hausse parce qu’ils sont tout simplement réalistes sur le plan économique. L’entente récente sur le libellé définitif de l’Accord économique et commercial global entre le Canada et l’Union européenne (l’« AECG ») est une excellente nouvelle, tant pour le Canada que l’Europe.

Le Canada est un pays riche en ressources. Nous produisons des aliments, du poisson, des produits du bois, des minéraux et de l’énergie de première qualité de même qu’une vaste gamme de produits et services connexes que veut le reste du monde. Nos divers secteurs des ressources fournissent des emplois de grande qualité dans divers domaines, notamment dans les secteurs agro-scientifique, de l’innovation technique, de la recherche et du développement, du génie et de la conception. Les Canadiens continuent d’inventer et d’élaborer des méthodes de culture, d’extraction, de traitement et de fabrication plus efficaces et durables sur le plan environnemental, de sorte que nos produits et services sont particulièrement attrayants sur le marché mondial.

Les Canadiens de tous ces secteurs, qu’il s’agisse de gens d’affaires, de travailleurs, de producteurs ou des millions de consommateurs canadiens qui bénéficieront d’un accès accru à des biens européens à meilleur prix, se réjouissent de l’AECG et de sa mise en œuvre prochaine.

L’AECG permettra à un nombre croissant de biens et de services canadiens de percer l’immense marché européen. L’Union européenne, dotée d’une population de 500 millions d’habitants et d’un produit intérieur brut (« PIB ») de 17 billions de dollars, est la plus grande économie intégrée du monde ainsi que le deuxième partenaire commercial en importance du Canada. Qui plus est, l’AECG fait partie d’une nouvelle génération de traités qui tirent parti de la mondialisation croissante. Comme son nom l’indique, cet accord de très grande envergure vise plus que des biens et des tarifs. En effet, il s’applique aussi à des services, des placements et des marchés publics. L’AECG est synonyme de possibilités d’affaires pour les exportateurs, les fournisseurs de services, les importateurs et les consommateurs canadiens et devrait entraîner une augmentation de 20 % du commerce bilatéral, ce qui correspond à la création de quelque 80 000 emplois. Ces nouvelles occasions d’affaires donneront lieu à une plus grande diversification de notre économie de même qu’à de meilleurs incitatifs en vue du développement de nos entreprises, produits et services.

En outre, l’accord incite le Canada et les pays membres de l’Union européenne à mettre en valeur les dimensions humaines et sociales de notre relation, particulièrement à la lumière de l’environnement, de la recherche, de l’innovation et de la culture.

Dans un monde où les économies sont de plus en plus interdépendantes, l’AECG permet au Canada de renforcer sa position. D’un point de vue stratégique, le fait que l’Union européenne ait choisi de collaborer avec le Canada avant d’entamer ses négociations avec les États-Unis montre comment notre pays peut se positionner pour faire le pont dans la relation transatlantique cruciale entre les deux continents. Le Canada se trouve au milieu de la plus importante zone commerciale du monde grâce à l’AECG et à l’ALENA, accords qui visent respectivement le marché de consommation le plus grand et le plus riche de la planète ainsi que les 450 millions d’habitants nord-américains.

Le pouvoir économique et politique grandissant d’économies émergentes de plus en plus dynamiques pose aussi un défi géopolitique d’un tout autre ordre où les enjeux sont fort élevés. Que sont ces enjeux? Plus particulièrement, en l’absence de progrès multilatéraux substantiels, quels pays, ou blocs régionaux, établiront les règles commerciales? Ensemble, le Canada, l’UE et les É.-U. représentent 45 % du PIB et le tiers du commerce à l’échelle planétaire. L’achèvement de l’AECG constitue une étape majeure nous permettant de renforcer considérablement notre position pour protéger nos intérêts économiques vitaux.

Le Canada ne peut se permettre d’attendre dans les coulisses. Il se doit de participer pleinement et l’AECG lui donne l’occasion rêvée de le faire.

L’AECG représente une occasion en or pour le Canada et les Canadiens, et nous encourageons les personnes qui sont maintenant chargées d’arrêter définitivement l’accord et de le faire ratifier d’agir ainsi dans les meilleurs délais.

Martha Hall Findlay, députée entre 2008 et 2011 et membre exécutif de l’École de politique publique de lUniversité de Calgary, préside le Conseil consultatif du Partenariat pour le commerce des ressources.

 Jean Charest, associé chez McCarthy Tétrault et ancien premier ministre du Québec, préside le Comité directeur du Partenariat pour le commerce des ressources.

 

 

Blog, Government and Democracy, What's New

D-Day, Canada, and Canada Day

(Also published in the Huffington Post)
All my life, I thought I was a proud, and grateful, Canadian.  There is, after all, so much to be proud of. We live in a wonderful country.

There is also much to be grateful for, because we didn’t get to where we are by accident. We owe a great debt to the generations of people who worked hard, who sacrificed, who suffered through hard times, who in so many ways worked to improve on the world around them. We are lucky for the generations of politicians and other decision-makers who, over the course of our history, have made, most of the time, good decisions.

Our history has been far from perfect. Our aboriginal populations as well as successive waves of newcomers from different parts of the world have at times suffered discrimination and abuse. Some still do. We have not, in Canada, been immune to the ability of humans to be awful to each other.

But most Canadians have not known, let alone shared, the incredible suffering of so many around the world under totalitarian, oppressive, sometimes murderous regimes.

So it was that in June of this year I became even more proud of being Canadian, and even more grateful – this time to a particular group of Canadians: those who, in WWII, helped liberate Europe from levels of oppression and man’s inhumanity to man that we here can’t even imagine.

My father, Hugh B. Hall, landed on D-Day, 70 years ago — June 6, 1944. He was a member of the Signal Corps, part of the Stormont, Dundas, Glengarry Highlanders (the “Glens”). He was awarded the Military Cross for, with his men, working for days without rest and under constant fire to ensure functioning communication lines in those critical days after the beach landings in Normandy. He and many other Canadians went on to help liberate Holland, and the war in Europe finally ended less than a year
later.

But the suffering of so many innocent civilians, for so long, was immense.  The losses among the liberating forces were huge.

Our Dad was a Lieutenant, and at only 22, was responsible for writing letters to the families of those of his men who were killed in action and who would never return home. Many of them were even younger than he was. It is said that they grew up fast in those awful days of fighting – but “they” were the lucky ones. So many young men were killed — denied ever being able to grow up at all.

Three of my siblings and I went to France to commemorate the 70th anniversary of the D-Day landings. We were there for our Dad, but also to honour all of the other soldiers — and the millions of civilians — who suffered through those times.

On June 6, we walked Juno Beach. We tried to imagine from the few photos and limited film footage what it must have been like, landing that day. We went inland and visited places where battles had been fought, including what became know as “Hell’s Corner” at Villons-les-Buissons, where Dad and his platoon were stuck for days on end under heavy fire.

At many of these places, now innocently quiet in the sunshine and calm breeze, we found small plaques honouring lost soldiers. Underneath were simple wreaths placed by friends and relatives of the soldiers and — to our surprise – by locals from the various villages. This was, for us, the most emotional. On seeing Canadian flags, people came out of their houses to say – even after 70 years — “Thank you.” Some told stories of how difficult the Occupation had been, and of the French Resistance. Some told stories of how happy they had been, or their relatives now passed on, to see the Allied soldiers arrive. Some told stories of harbouring soldiers. An old woman showed us a pack of cards, now 70 years old, that a soldier had given her in thanks for the milk she’d given him. She had been only a child, and she didn’t know whether ‘her’ soldier had lived or died, but she had never forgotten him.

We Canadians must never forget him either, because he was just one of many who fought to ensure that Europe could return to freedom. By extension, that young soldier, our Dad, and the many others who gave so much of themselves – many, even their lives – helped ensure that Canada could be the wonderful country that we call home.

Happy Canada Day.

What's New

Abortion and the Right to Vote Your Conscience

(Also published in the Huffington Post )

Justin Trudeau, leader of the Liberal Party of Canada (LPC), has announced that anyone who wants to be a candidate for the LPC must commit to voting in favour of pro-choice, if and when it comes to proposed measures on abortion.

This is a step too far.

For the record, I am pro-choice.  I feel very strongly that having access to safe, legal abortions is fundamental to full equality and independence for women. Although it takes two to get pregnant, the consequences of a pregnancy and birth – particularly an unwanted one – fall far, far more heavily on the woman than the man. They require major, life-changing sacrifices by the one who must bear that responsibility, and it’s almost always the woman. That is neither equality nor independence.

I also support the fact that the LPC is officially pro-choice. The LPC has made it very clear that equality and independence for women is a fundamental goal, and every person who wants to put him or herself forward as a potential candidate for the LPC knows that the LPC is officially pro-choice, even if it is not something that they personally agree with. That’s true for a variety of key policies, not just abortion.

However, having that knowledge and awareness is very different from being required to be, and to vote, pro-choice. Except in rare cases (mentioned below), requiring any MP to vote in a particular way runs contrary to some of the basic tenets of our democracy.

It is true that, from time to time, you need discipline in a political party – particularly on fundamental party policy issues. For example, if a government does not achieve support on a budget or a spending bill, it can be a matter of confidence, and the government can fall. So-called  ‘money bills’ are therefore ‘whipped’, which means that MPs are expected to vote as one. In those rare cases, if someone doesn’t vote with the Party, he or she can face demotion, other party discipline, and in extreme cases expulsion from the Party’s caucus.

But for most other issues, if the leader of a Party wants, or needs, discipline on votes, he or she should persuade members of the team, not simply impose his or her will. Persuading is usually harder than forcing with discipline, but it makes for a much more cohesive team in the long run.

Members of Parliament are asked to vote on a large variety of issues – economic, environmental, international, social and more. It is impossible to have everyone agree on every issue every time. Indeed, part of an MP’s responsibility before voting on any matter is to do the research, learn the issues, consider whether proposed legislation would fix something or (as can happen) make it worse. Canadians do not want, and do not vote for, a herd of trained seals. The voters expect a certain independence of thought.

In situations where an MP is torn between voting against her or his own views and voting against the Party’s leadership, they also have the option of staying out of the House, and simply not voting. It’s not a perfect solution, as quite a few elected politicians feel strongly that they weren’t voted into office to abstain. But it can be a compromise in touchy situations. Ultimately, it must be a truly exceptional situation for one to be willing to allow Party discipline to trump the right of MPs to vote according to their own opinions, particularly on issues of conscience.

Abortion, now brought back into the news, is a very personal and often difficult subject. There are many people for whom I have great respect, who – for reasons of religion, morality, ethics or otherwise – do not support open access to abortion. These include many members of the Liberal Party of Canada who have been, who are, and who will in the future (I hope) be excellent candidates – and MPs – for the Liberal Party. Many have contributed immensely to this country, and many more will in the years to come. There are many other economic, financial, international and social issues that MPs must deal with all the time, and an anti-abortion stance does not prevent great work and influence on so many other issues.

Finally, aside from the right or wrong of this issue : practically speaking, such a requirement of potential candidates could prevent a large number of very capable, thoughtful people from contributing to the LPC and the country. That would be a shame.

What's New

How to scrap supply management – a lesson from down under

http://www.macleans.ca/economy/economicanalysis/how-to-scrap-supply-management-a-lesson-from-down-under/

If we followed Australia’s lead, we could boost the dairy industry and have cheaper milk

Martha Hall Findlay

May 16, 2014

 In a three-part series Martha Hall Findlay, executive fellow at the University of Calgary’s School of Public Policy and a former Liberal MP, has argued that Canada’s system of supply management for dairy farmers should be dismantled. This is part 3.

Part 1: Why your milk costs so much and what to do about it

Part 2: Why the dairy industry’s defence of supply management is so flawed

The evidence overwhelmingly supports dismantling supply management for dairy, poultry and eggs—our very own cartel of fixed prices, protective tariffs and production quotas. It hurts consumers forced to pay too much for basic nutrition; food processors and the jobs they could create; the 94 per cent of Canadian farmers who are not supply managed together with manufacturers and other exporters, all looking for access to more international markets. It now even hurts dairy farmers themselves, by being denied growth opportunities.

So why has it not changed? Like the rest of the world, Canada has reduced its subsidization for all other agricultural producers, but has, despite significant international pressure, still retained its massive protections for dairy, poultry and eggs. Thanks to the high prices consumers pay for their milk, butter, cheese, and yogurt, the dairy lobby, arguably the most powerful lobby in Canada, has lots of money to spend. And they spend it—an estimated $80-$100 million a year—persuading politicians to keep the system. Frustratingly, those employed by the lobby, due to their own self-interest, lobby their own member farmers, as well, spreading fear of any change. The ‘arguments’ that the dairy lobby, the Dairy Farmers of Canada (DFC), continues to put forward have been shown to be, at best, outdated and misleading, but mostly simply untrue. Unfortunately the lobby seems more interested in perpetuating the “need” for the lobby’s existence itself than in the best options for the farmers that it is supposed to represent.

So what to do? Fighting a powerful lobby is a tough challenge, and too many politicians lack courage if they believe votes are at stake. The answer is two-fold: (i) propose a plan for reform that will benefit the majority of dairy farmers; and (ii) get those farmers to call for the necessary changes themselves.

Win-win reform is possible. There is a plan that would (i) help the more efficient, growth-oriented dairy farmers add capacity, generate more profits from exciting new export markets and make more efficient use of capital; (ii) compensate and provide transition assistance to those dairy farmers who wish to continue to operate their farms in what will be, post-reform, a more competitive environment; and (iii) facilitate, with proper compensation, the exit/retirement of those dairy farmers who choose to leave.  The good news is that this reform can be paid for, not from already-pinched government coffers, but by using the system itself—and spread out over enough time to be relatively painless.

It can be done.

The Australians did it a decade ago—and the majority of the dairy industry there are thriving, thanks in large measure to big increases in exports to those very markets that Canadian farmers could also be taking advantage of.

We Canadians already proved our ability for similar reform, with great success, when we removed protection for our wine industry as part of free trade with the US. At the time, the hue and cry was enormous (just like what we hear now about dairy)—“We can’t compete with big volumes and better climates and soils,” they said. Yet they certainly could compete, and have done so, and the growth and success of Canada’s wine industry since operating in an open market have been immense – not to mention the improvement in the quality of the wine. Yes, it involved compensation and transition assistance – as is entirely appropriate for the farmers who would be affected here. But it was done well, with great results for all concerned.

For dairy, poultry and eggs, an increasing number of academics, economists and analysts are recommending a solution similar to the Australian one:

1. Buy out the dairy quota from the farmers. This will need a formula that addresses the differences between those who ‘received’ quota for free in the 1970s, those who recently acquired quota at $30,000 a cow, and those in between. A new Conference Board of Canada report recommends using book value of quota instead of market value, which they argue is a much fairer approach and much less costly. The current market value of dairy quota is about $23 billion (poultry and eggs another $7 million), whereas book value of dairy quota is estimated to be in the range of $3.6 to $4.7 billion. The actual number, the formula to address historical differences, inter-family transfers and the like would, of course, require some negotiation with the quota-holders).

2. Provide transition assistance. In addition to the buy-out of quota, it would be appropriate to also provide two-pronged transition assistance. One form to those who chose to stay in the industry, in order to enhance their competitive and export capabilities; the other to make leaving the industry economically viable for those who choose to do so.

3. Eliminate all tariffs. This will immediately benefit consumers, who will pay closer to the lower world prices, even with the following proposed levy.

4. Add a small, temporary levy on wholesale milk to pay for the buy-out. This is what will fund the farmers’ compensation. In Australia the levy was 11 cents a litre for 8 years. In Canada, based on the 8 billion litres of milk currently produced annually in Canada, and assuming a buy-out/transition package totalling $5 million, such a levy would amount to only $0.06 a litre if spread over 10 years.

Consumers will pay less than they do now, as the levy would be significantly less than the current difference between Canadian and world prices; they will pay even less once the temporary levy is removed. The beauty of the proposal is that the compensation for the farmers will have come, not from already-strained government coffers, but from the system itself.

Although some proposals suggest a more drawn out, incremental approach, others suggest that all three components would have to happen at the same time. Our trading partners need to see change, and our farmers will need access to those lucrative export markets now, not 10 years from now—otherwise, they will be that much further behind the Australians, the New Zealanders, and now the Americans, in trying to establish a foothold in those markets.

The net result of such reform? Consumers will pay less. Farmers will be appropriately compensated and assisted in transition. The efficient, growth-oriented farmers will be able to consolidate, make more efficient use of their capital, and be able to take advantage of what are now extraordinary export opportunities. And for those farmers who choose to exit, this will provide their retirement fund—an appealing option for many, whose capacity would then be taken up by those who stay in. And finally, Canada will be able to go, immediately, to the world trade tables with open arms, instead of with one hand tied behind its back.

Most observers believe that transition is inevitable, that it’s just a question of time. It’s now up to the farmers. They need to challenge their own lobby, and seek the facts about the alternatives. And if the DFC and others involved in the dairy lobby understand this change, they will start working with their farmers and government leaders to help craft what that transition looks like. There are too many forces now combining to require change – continuing to fight the inevitable risks having something less beneficial forced upon them. The DFC, the farmers—all Canadians—have a vested interest in pursuing reform that benefits everyone.