Quick show of hands. Who agrees with the CRTC that “market forces are working just fine for consumers” of internet service?

Yeah, I didn’t think so. The internet service provider market is a dog’s breakfast, mainly because the CRTC likes the competition nice and collusive. Why, you have the choice of spending $60 a month on internet from at least two corporate giants whose idea of competition is offering a bundle service with phone and cable.

This is the same CRTC that required direct government intervention to allow more competition in the the extremely expensive cell phone market to green-light Wind mobile. That didn’t last long, however, because our Canadian-content overlords decided Wind mobile was too Egyptian for its tastes.

Can’t have any scary foreign ownership in Canada. Best to simply shut up and pay our expensive cell phone bills. The CRTC is now looking at ignoring political pressure on their decision to allow so-called usage-based billing.

Which would be fine in an ideal world where some ridiculous antiquated regulator wasn’t making decisions against the best interests of Canadians. The concept of usage-based billing in a genuine free market economy would be fine. But we don’t live in a free market economy. Far from it.

As for why Canadians pay thousands of dollars more for the same service Chinese grocery vendors in Shanghai get, the CRTC doesn’t care about that either.

“The CRTC will not be expanding the scope, as requested by several parties, to include the billing practices for retail Internet services,” the commission said. “There is no evidence that market forces are not working properly in this unregulated market.”

What flatulent nonsense. No evidence that market forces are not working properly? Um, take a look at Japan for a moment (current tsunami devastation notwithstanding). (The updated 2010 report ranks Canada 22 out of 30 OECD countries for overall Internet access, based on penetration, speed and price).

Canada’s internet provider market is an oligopoly, and the CRTC seems to be the gatekeeper to that status quo.

James Surowiecki of New Yorker magazine writes that in the heart of the Great Depression, millions of American workers joined a union, remaking the economy like never before.

And though businesses saw this as “grim news”, the general public’s appetite for worker protections was whetted substantially enough to support the movement, regardless of which side of the workforce they sat on. A Gallup poll from 1937 indicates as many as 70 per cent of Americans favoured unions, writes Surowiecki.

My, but times have changed. The recent recession that saw bailouts of the automotive unionized workforce was extremely unpopular on both sides of the border. Indeed, hostility toward labour unions is at a historic high, even during a time when it would seemingly be counter to their self-interests.

As pointed out in the article, part of this is due to the perception of the unionized public sector as overpaid bureaucrats, with fully indexed pensions and benefits that are choking our budgets. People in North America have an all-time low opinion of the the kind of organizations that negotiate annual pay raises for teachers, garbage collectors and city workers.

I think this reflects the ongoing collapse of the socialist economic model, which rose to prominence in the early part of the last century, at which time it competed with other ideologies for supremacy. The lingering effects of that model are so repudiated that the insinuations of President Obama’s policies as being inherently socialist are seen as negative, even by those who self-identify with the “left”.

There is also, as Surowiecki observes, the perception that unions too greedily lapped up power and have been reluctant to relinquish it back to the people whom they purport to represent. The very workers who, in part, pay the salaries of the public sector, see their own employment undermined by the constant demands of the unionized force.

Unions have also provided an inorganic inflationary rate in the economy, demanding cost of living increases even during economic stagnation or when the tax base is unable to afford such demands. The recent negotiations across Canada with unionized teacher federations have demonstrated their inflexibility with such economic realities.

As far back as Stats Canada recorded unionization, 16 per cent of non-agricultural workers in 1921, it shows a steady growth, surpassing 20 per cent in 1942. The rate of unionization continued to expand, particularly in the public sector, reaching 30.3 by 1948, and holding steady until the 70′s. By 1975 the rate was as high as 36.8.

Union ranks rose from 2.8 million in 1977 to just over 4 million by 2003. This 43 per cent growth, however, has not kept pace with the increase to the workforce itself, meaning that unionization membership as a percentage of the workforce has declined. After rising from 32.6 per cent in 1977 to 34.2 per cent in 1987, the rate levelled off.

Membership was at 34.6 per cent in 1997. The most recent statistics (2009) shows it has dropped below 30 per cent for the first time in decades. This graph accurately depicts the fall, even through the most recent recession.

It’s also bad news for unions when you break down the demographics. In 2009 the percent of unionized workers for those aged 55-64 was 38.2. That dropped to 34 per cent for those in the 25-54 workforce, and as low as 16.4 per cent for those aged 15-24. As the younger non-unionized workers become the mainstream tax base, those levels should continue to decline. Of interest, 2009 marked the first time in history that more female workers in Canada were unionized than male workers.

How this bodes for Canada’s most well-known labour party, the NDP, remains to be seen. Though membership continues to grow, their presence as a portion in the workforce will decline, and in turn should minimize the power they hold in both the economy and Canadian politics.

[Note — this piece also appears in the National Post]

I suppose I haven’t really spent any time to sit down and write what I’ve been doing for the past couple of months, although casual and regular readers will probably know I’m in journalism school.

I finished my first term back in early December, and since then I’ve been interning at the Langley Advance and Coquitlam Now newspapers. This hasn’t given me a lot of time to really write or respond to comments.

I also visited Afghanistan in late September, early October, and I never got a chance to really share more than a few thoughts and impressions of the trip. I did want to take this opportunity to thank those who helped me with that experience. I don’t want to embarrass anybody by calling out their full name, but I’m sure you’ll recognize yours when you see it.

Dave, thanks for helping me when you heard about my opportunity. Tony, I appreciate your ongoing attention to the mission in Afghanistan and supporting my visit there. John, you’ve helped me to get through some of the self-doubt and fears about tackling this new occupation. And thanks to Mark for the assistance and the phone call before leaving to Afghanistan. I also appreciated the advice from those who had already been there.

Finally, thanks to Roy and Fred who really stepped up and made the trip possible.

Anyway, back to the headline of this blog entry, my newest National Post article is rather related to the Afghan story.

While Canadians were concerned about jobs, health care and the lagging economy, the opposition parties were busy pressing the federal government on the subject of Afghan detainee documents, according to an Ottawa Citizen analysis of question period transcripts from 2010.

The analysis shows the opposition asked more about Afghanistan, specifically about detainees, than any other subject in 2010. Although the Liberals also hounded the Tories on questions about the G8 and G20 summits and Rahim Jaffer, the NDP and Bloc Quebecois were absolutely overflowing with questions about Afghanistan.

This flies in the face of what public opinion polls say are the true concerns of Canadians, which relate mainly to the economy. Read More »

…

It’s always fun to play soothsayer, and then look back and see how utterly wrong you were. I thought I’d compile a list of predictions for the new year, in no particular order, and see what comes of it.

1. MSM Election-Watch
Rife with endless speculation, but I don’t see the opposition parties pulling the trigger in 2011, which means the Harper government goes four years. Whenever the Liberals begin softening their stance, the NDP start voting against the government, and vice versa. Even if both begin voting against the government, the Bloc Quebecois will probably vote with the Conservatives just to keep the ball in their court.

2. Ignatieff stays as Liberal leader
We can expect the same-old same-old from the federal polling scene, as Michael Ignatieff continues to struggle as Liberal leader, and his party remains between three and five points back of the Conservative Party. I do believe Ignatieff will be ousted, however, following an election loss in 2012.

3. Detainees and dithering in Afghanistan
At some point the detainees spinning wheel will overshadow the mission in Afghanistan again, and will dominate the news even as the countdown to the end of our military mission there reaches zero. When Canada is left struggling to find a post-combat training mission in the country, the opposition will point their fingers at the government, even as they distracted it with the detainee bloviating.

4. Julian Assange self-aggrandizes, media lionizes
In desperation to keep in the spotlight, Assange releases files that slightly embarrass the United States. Meanwhile, public opinion shifts away from the self-promoter as the more neutral Open Leaks launches. Assange martyrs himself again by getting arrested.

5. More global cooling, blamed on global warming
Hurricanes, floods, droughts and fires will all be blamed on global warming, even as the temperatures dip for the third year and record cold and snow sweep across Europe. Desperate alarmists blame it on the “ice cube” effect, whereby they argue the world is temporarily cooling because the polar ice caps have melted large chunks of ice into the oceans, cooling the waters.

6. More dhimmitude, even after another large terrorist attack
A dramatic terrorist attack will take place outside of North America, but will be given only peripheral attention by the western liberals, who will continue to blame the problem on foreign occupation and a few bad apples.

7. Israel ups the ante against Iranian Nukes
With intelligence reports that Iran is on the verge of a breakthrough, Israel is forced to act covertly against Iran, sparking international condemnation for the preemptive strike. Hamas and Hezbollah respond by launching terrorist attacks on Israel, and the responding force is also condemned. A Canadian flotilla to Gaza is turned aside, but not boarded, by the IDF.

8. Pakistan gets worse
It becomes clear that Pakistan is now more deadly than Afghanistan or Iraq, as insurgents launch more terrorist attacks than anywhere else in the world. The Pakistani Army is forced to take action, resulting in insurgents fleeing across the border to hide in Afghanistan. Extremists gain a stronger foothold in surrounding “stans”.

9. United States economy rebounds, but nearly bankrupt
Obama’s $150-billion monthly deficits continue, sending public debt over $14 trillion. The economy rebounds but unemployment gets higher as there’s no money left to pay people to “stimulate”. The United States is forced to contend with an overextended military in multiple conflicts that have drained the treasury. Austerity requires unpopular measures that drive Obama’s approval rating below that of George W Bush’s low water mark. Expect protectionism and more insular policies.

10. The rise of Sarah Palin
The soccer mom populist poises herself to lead the Republicans to a shot at becoming the first female President, riding a cusp of Tea Partyism and anti-Obama sentiment. Liberal heads explode the world over.

11. The European Union cracks
As the European Union invites more Euro-value-dragging partners in from the former Eastern Bloc, this time the Balkan states, a large country (like Germany) throws in the towel and leaves the Euro to save itself.

12. The BC NDP blow it
With Gordon Campbell gone, the Liberals rebound and the BC NDP are unable to find a charismatic leader to take the reigns. Infighting results in fracturing the party among the baker’s dozen dissidents and the James loyalists. The HST survives the referendum.

I’ll have a longer article on this in the National Post online tomorrow, but for now let’s compare notes:

September 2, 2010

“HST benefits will take some time”

Finance Minister Colin Hansen is playing down a study that suggests the HST will take five to ten years to benefit BC’s economy, with a negative effect on jobs and take-home-pay in the meantime.

The study by the CD Howe Institute was published in 2008, and Hansen says “flexibility” on the part of Ottawa has reduced the negative impacts of the tax, “The seven percent Provincial portion does not apply to motor fuels, it does not apply to home energy costs. The fact that we’ve been able to carve out those exemptions are important. And also, I think the fact that the Province is going to be 1.6 billion dollars better off because of the transition dollars.”

July 1, 2010

“HST, THE RIGHT MOVE AT THE RIGHT TIME”

DELTA – The Harmonized Sales Tax will improve British Columbia’s economy, build productivity and competitiveness and provide the foundation for more jobs, Finance Minister Colin Hansen announced today.

“A strong economy is necessary to create the jobs we need to provide revenue for essential public services like health and education. The vast majority of businesses can recover the HST they pay and remove the hidden taxes that get passed on to and paid by consumers. These savings will keep prices competitive, spur investment, create new jobs and boost our province’s economy” said Hansen.

The right move at the right time to create jobs coming out of a recession? Or the wrong move at the wrong time to create tax breaks for business associates?

The economic recovery that Canada has experienced for four consecutive months has changed the federal government’s deficit projections significantly, according to Cyberpresse.

The deficit for fiscal 2009-10, which ended on March 31, is expected to be $5 billion less than forecast in the March 4 budget tabled by the Conservative government. The 2010-11 predictions, meanwhile, could similarly be revised downwards to $40 billion, a change of $10 billion from the budget.

Jim Flaherty announced that the 2009-10 fiscal deficit stood at $54 billion last month, but four months of recovery, followed by an announcement of just a $300 million deficit for the month of January, means that the deficit could fall somewhere in the neighbourhood of $49 billion.

This is contrary to an article that appeared in the CBC on March 26, that indicated the September projection of the $56-billion deficit has been “little changed” by the March budget. With two months left to be accounted for in fiscal 2009-10, the deficit stands at $39.6-billion. If February and March can post deficits below $1 billion, the final figure could come in $12-billion below the budget projections.

Year-end adjustments will certainly mean that the deficits for the last two months of the fiscal year will rise, but they should come in at a lower number than $7 billion for each month. The budget called for a conservative growth rate of 2.6% in 2010, and 3.2% in 2011, which was called too optimistic by the Parliamentary Budget Officer, but so far the recovery has exceeded expectations.

Chief Economist at National Bank Financial, Stéfane Marion, told Cyberpresse that the economy is so strong right now that it will revise all previous projections.

“What is clear is that the deficit will be lower than we had anticipated this year and next year. The unexpected strength of the Canadian economy in the fourth quarter will have a positive impact on finances. And the first quarter of the year is also good. Public finances will improve more quickly than you think.” [Translation from French]

There are some obvious caveats, however, as the big banks have all begun to increase interest rates in anticipation of the Bank of Canada’s end to the record lows. Further dampening the market is the expected hit from the HST in July which is coming into effect in Ontario and British Columbia.

Photo: Reuters

There are two entirely different articles in the media today, which are essentially about the same thing. The Financial Post has a somewhat optimistic article about how Ottawa’s budget shortfall has shrunk, while the CBC is reporting quite the opposite. The CBC says that the federal deficit has grown $300-million in January. But in the Financial Post, it reports that the deficit for January is only $265-million.

The confusion is in the difference between the focus on reporting. The CBC is focusing on the fact that Ottawa added $300-million in overall debt to the fiscal deficit, while the actual budget shortfall for January is only $265-million.

Then the Financial Post compares the $265-million deficit from this year to the small $118-million surplus from a year ago. But if you flip to the CBC article, they report “Ottawa was running a $500-million surplus at this time last year.” So which is it? Were they running a $118-million surplus at this time last year, or a half billion dollar surplus?

The CBC also says that the September projection of a $56 billion deficit has been “little changed” by the March budget that announced a deficit of $53.8 billion. But the Financial Post focuses on the fact that with two months left to go in fiscal 2009-10, the deficit is $39.6-billion. If we posted a $265-million deficit for January, it stands to reason that we could finish at least $12-billion under the projected deficit by the budget. That’s an entirely different story than we’re being told by the CBC.

At the end of the the CBC article, they report that Ottawa has lost $17.7 billion in revenues compared with the previous year, with corporate tax receipts accounting for about one-third of the drop-off. But the Financial Post reports tax receipts climbed to $17.6-billion, or 12.4% in January on a year-over-year basis. This is the first such increase since the recession began its effects in October of 2008. The Financial Post reports that revenue from personal income taxes climbed 0.9%, while corporate tax receipts were up by 73%.

But where the Financial Post points to the 73% increase in corporate tax receipts, the CBC uses the less impressive figure of a $1.7-billion increase, and attributes it as a temporary gain “due to year-end settlements.”

The only parts that are exactly the same is the admission that roughly $17-billion of the deficit is attributed to the government’s 2-year, $48-billion economic stimulus plan.

For Employment Insurance, the CBC reports that EI payouts alone have increased by $5.1 billion or 41.4% in the first 10 months of the fiscal year. The Financial Post, on the other hand, finds a silver lining here. The payout of EI increased in January by 15.4%, but is the smallest increase in a while, with the three months previous ranging from 20% to 57%.

Across Canada, the number of beneficiaries on Employment Insurance notched a fourth month of decline in January, with 698,800 EI beneficiaries, down 47,700, or 6.4 per cent, from December.

There are a lot of numbers being thrown around, but how those numbers are used seems to greatly affect the way the economic situation is being presented to Canadians.

Stockwell Day’s “road map to a balanced budget” is in the National Post today, and in it he lauds the 2010 spend-the-course budget and the “3-point plan” to return to a balanced budget.

The first point of the plan is to wind down the stimulus spending of the famous Economic Action Plan that built skating rinks in community centres and bathrooms in National Parks. So that means that this year’s $53.8-billion fiscal deficit is all part of slowing down the second half of the two-year $47-billion stimulus package.

The second point is to ensure government lives within its means. To honour this plan, the government announced a wage freeze for the civil service saving as much as $6.8 billion. If you scan through the forest that died to produce the 424-page monstrosity of a budget, however, you’ll soon realize that this is a spending freeze at 2010-11 levels. As Andrew Coyne noted:

That sounds tough, until you realize they’re freezing spending at 2010-11 levels: that is, at the very height of the stimulus-enhanced, shovels-in-the-ground, money-out-the-door frenzy. In 2011, according to the budget’s breakdown of federal expenses (p. 180), “operating expenses subject to freeze” totalled $54.9-billion, fully $10-billion more than they were just two years before. That’s where they’re freezing it. The peak has become the base.

And third, Stockwell Day and the Conservatives will conduct that neverending “comprehensive review of government administrative and overhead costs” they’ve been working on for over four years now. Without much apparent success, since government spending under the Conservative Party has increased 32.7% in the five budgets delivered since May of 2006.

In the first Conservative budget, the government estimated program spending at $179.2 billion in 2005-06. This year’s 2009-10 budget estimated the figure at $237.8 billion a mere four years later. In their 2006 budget, the Conservatives began with the following promise:

The Government will restrain the rate of spending growth.
The Government will introduce a new approach to managing overall spending to ensure that government programs focus on results and value for money, and are consistent with government priorities and responsibilities.

Stockwell Day had better hurry up and finish that spending review. Meanwhile, Canadians appear to be giving tacit approval to go ahead and make public-sector cuts as a deficit-fighting tool, just as the Liberals did in the late nineties.

A new Nanos-Policy Options poll shows that 36% of respondents feel that freezing government wages is the best approach to fighting the deficit. 20.5% say government and program spending should be cut. We’d better start soon. The current Conservative road map leads us to record levels of spending and debt.

This is reminiscent of the excellent video from April 24, 2009, in which a YouTuber explained in pennies just how bankrupt the United States is. The above video also does a pretty good job, since people tend to visualize a lot better than they conceptualize. Even without the visual aid, it’s easy to demonstrate just how meaningless $807 million in savings is with this government. They’re spending $179.4 million just to plan and prepare security for this summer’s G8 and G20 summits in Toronto in which they will discuss things such as reducing the public debt.

h/t SDA