Wednesday, 12 December 2012

Saskatchewan's Natural Resources and the NDP


Stephen Harper loves Chinese capitalism
This past week Stephen Harper’s government announced that they had approved the takeover of Nexen Corporation by CNOOC Ltd., a Chinese state-owned oil corporation, as well as the takeover of Progress Energy Resources Corporation by Petronas, Malaysia’s state-owned oil corporation. The details of these foreign takeovers had been well known for a long time. Brad Wall’s government had approved of the takeovers. One would have expected the Saskatchewan NDP to have worked out a position, but there has only been silence. Do any of the four candidates for the leadership of the NDP have a position on foreign ownership and control of our natural resource industries? 

The takeovers approved
Stephen Harper, while approving these two takeovers, announced that in the future state-owned corporations would be limited to minority ownership in corporations operating in the Alberta tar sands. Foreign-owned corporations dominate this sector of the Canadian eonomy. The message from the media's financial analysts was that "it is business as usual outside of the oil sands."

The federal NDP under the leadership of Thomas Mulcair opposed the takeovers. But they have taken a position no different from that of the Liberal Party. The Harper government did not hold public hearings. They are ignoring public opinion on the issue. There is no guarantee that these state-owned corporations will keep their promises. The public does not know the record of the operations of these corporations in other countries.

But the federal NDP has no general natural resource policy that is different from that of the Harper government. Peter Julian, speaking for the NDP in the House of Commons, has stated that “foreign investments are crucial for re-enforcing our economy.” Is this true of the oil and gas industry? How do they finance their new investments in Canada? Why has the NDP been unable to come up with a real alternative national energy policy? The Parkland Institute in Edmonton has produced one. In the past, public opinion polls have indicated that a high percentage of Canadians would support a policy goal of Canadian ownership and control of the oil and gas industry. Is this too radical for the NDP?
   
Saskatchewan policy on natural resources
Stephen Harper told the press last Friday:  “To be blunt, Canadians have not spent years reducing ownership of sectors of the economy by our own governments only to see them bought and controlled by foreign governments instead.” This reference would seem to include the decisions by the Grant Devine, Roy Romanow and Lorne Calvert governments to privatize the Saskatchewan Oil and Gas Corporation, the natural gas sector in the province developed by Sask Power Corporation, as well as the developments by the Allan Blakeney NDP government (1971-82) to gain some ownership and control of the potash, uranium and forestry sectors.

Nexen currently owns and operates 1322 natural gas wells in Southwest Saskatchewan. These natural gas wells were part of Sask Oil when it was a Crown Corporation and are now going back under state ownership. In 1986 majority control of Sask Oil was privatized by Grant Devine’s Conservative government. The new owners changed the name to Wascana Energy. In 1988 the Devine government sold Sask Power’s natural gas holdings in Alberta to Wascana Energy for $325 million; the market price at the time indicated that the natural gas was actually worth $984 million. Wascana Energy was then bought by Occidental Petroleum Corporation of California. Nexen was spun off in order to use it to invest in Yemen, which prohibited ownership in the oil and gas industry by U.S. corporations.

Thursday, 6 December 2012

Moving to a Post-neoliberal Democracy

Is there an alternative to the neoliberal political economy model that is so dominant in all the advanced industrialized countries? There used to be an alternative – one which was committed to the expansion of democracy and the creation of a universal welfare state. This was the role of the social democratic and labour parties. In the USA this progressive element was found in the Democratic Party and in Canada in the Liberal Party.

The big change came in the 1990s, when the social democratic and liberal parties shifted to the political right. The key here was their decision to give strong support to the various free trade agreements promoted by the organizations representing big business. The treaties were designed to prevent governments from returning to the activist Keynesian policies that had been the norm from the end of World War II to 1975. We know this only too well in Canada.

With the free trade agreements came the package of neoliberal policies, often referred to as The Washington Consensus:  privatization of state assets, the deregulation of the economy and finance, the contracting out of government services, the introduction of regressive taxation systems, the cuts to social programs, and the broad attack on trade unions. Transnational corporations won the right to produce anywhere in the world, sell their products and services anywhere, repatriate their profits without any government interference, and to hide their capital in the numerous off-shore tax havens.

Latin America has been the testing ground

The struggle to create an alternative to the politics of neoliberalism in Latin America is recounted by Emir Sader in his recent  book: The New Mole: Paths of the Latin American Left. (London: Verso, 2011). Sader is Emeritus Professor of Political Science at the University of Sao Paolo and author of a well known book on Lula and the Workers Party in Brazil. As he points out, Latin America was where the neoliberal model was first applied. But it is also the region where political movements and parties are creating the first post-neoliberal political parties and governments.

Sader stresses the need for political movements and political theorists to carefully ground their analysis in concrete reality. The models that were first tried in Latin America were from outside the area, where conditions were quite different. The Communist Parties, which were very important in building the trade union movement, had a model that was based on the experience of the Soviet Union. The Maoist peasant revolution in China, supported by some elements on the left, could not be repeated in Latin America. The Trotskyst analysis did not fit a region where the large majority of the people were in the informal economy and not employed by anyone. The guerrilla strategy worked in Cuba in 1959, but in the era of large armies with virtually unlimited support from the USA, it quickly failed to be a viable alternative.

The key is understanding the fundamental characteristics of the Latin American region. It was a colonized less developed area. After independence, the local bourgeois class was based in resource extraction and large scale agribusiness production, both for export to the offshore industrial centres. Politically, these interests were based in the Liberal parties with close ties to the U.S. government and transnational corporations.

The dominant political reality for the Latin American left has for a long time been the hegemony of the United States, seen most directly in its support for ugly dictatorships. Today the unipolar world of the US domination is based on its unchallenged military power, the economic and political power of finance capital and its support system, and the control of the international mass media with its portrayal of the “North American Way of Life,”middle class affluence.

Creating a new alternative
In the 1990s there was an attempt to revive the social democratic parties in Latin America.. Sader argues that they made a comeback “as the standard-bearer of globalization,” especially in their support for free trade agreements. However, the social democrats have not had a significant political impact because they lack the class base found in the advanced industrialized countries.

The World Social Forum had its start in Latin America as defenders and promoters of local resistance movements. But this attempt at change was doomed to fail. As Sader argues, “as long as the social movements limited themselves to the social sphere, they remained on the defensive, unable to create the instruments needed to fight for political hegemony.” Only new structures of power could possibly create “the other possible world.”

The shift against the dominant neoliberal agenda began in 1998 with the election of Hugo Chavez as President in Venezuela. Most important was the defeat of the Free Trade Area of the Americas, pushed by the U.S. government and big business. Instead, Chavez and other progressive governments undertook the development of an important alternative: Latin American economic co-operation. This began with Mercosur and moved to the Alianza Bolivariana para los Pueblos de Nuestra America (ALBA), the Bank of the South, the continental gas pipeline, and the Union of South American Nations. Venezuela’s oil, shared on a socialist basis, has been important to this development.

Thursday, 29 November 2012

Inequality, Democracy and Trade Unions

Over the past year or so the public finally discovered that inequality of income and wealth in Canada and the United States has been steadily increasing. The short-lived Occupy Movement had one lasting impact: they had little trouble convincing the general population that the top 1% of our societies included the people who actually make the major decisions on political and economic matters.

Given the fact that the mainstream media has been in the back pocket of the 1% for a great many years, and our political leaders have all embraced the neoliberal agenda, it is interesting to discover that a majority of citizens still feel that rising inequality is an affront to democracy and steps should be taken to correct the problem. Public opinion polls even indicate that the majority is willing to accept an increase in taxes.

For those who want to seriously look at this issue, I highly recommend reading and studying Gregg Olson’s Power and Inequality: A Comparative Introduction. Olson is a professor of sociology at the University of Manitoba and has written extensively on the welfare state.

From egalitarian democracy to hierarchy and inequality

For around 90% of our existence, human beings lived in small groups, where the prevailing culture stressed collective, egalitarian values. These democratic societies were based on the concept of intrinsic equality – the right to existence with material and cultural support simply because we are human beings and residents of a community.

This changed with the development of agriculture and sedentary living. The creation of an economic surplus permitted the development of structured inequality based on castes, slavery,  class systems, gender, race/ethnicity, age and ability. Privilege was usually inherited.

As the Chinese philosopher Mencius wrote: “Those who are ruled produce the food. Those who rule are fed.” Western political philosophers like Plato and Aristotle, so revered in North America, did their best to produce political theories to justify inequality and hierarchy and denigrate democracy.

The rise of capitalism and liberalism
With the development of industrial capitalism, beginning in the 18th century, we have the solidification of society based on hierarchical divisions of social class. In all capitalist societies we have the capitalist class at the top (among the 1%), the owners of the large productive assets. As sociologist Max Weber stressed, they are supported by a strata of the “propertyless upper class,” top managers and administrators who are very well paid. The third class is the petit bourgeoisie, small scale property owners and those professionals capable of making a living with their own skills. At the bottom is the majority who are the working class, those who do not own the means of production but are required to sell their manual and mental labour to survive.

Capitalism brought with it the political philosophy of liberalism and individualism. This new world system is based on competition among individuals and among private businesses. Classic liberalism, viewed in a Herbert Spencer/social Darwinian manner, is the survival of the fittest with the winner taking all.

While we identify liberalism with basic political rights and liberties against state oppression, the most basic right is deemed to be the right to own private property. Thus, the early liberals forming constitutions and establishing liberal democratic representative governments limited political rights to men who own property. While more recent liberal ideology has argued for “equality of opportunity,” the followers of Adam Smith have been strongly opposed to any taxation system that redistributes income and wealth from rich to poor, and this includes inheritance taxes. The reality, of course, is that human beings are who they are largely because of the accident of birth. Should a person be condemned to a short life with hardship because of a basic condition over which they had absolutely no control?

Thus the democratic movement against liberalism has historically insisted that all human beings have an equal value and communities must provide basic supports necessary for a life of well being. As Olsen points out, the equality of outcome requires “a greater sense of community, solidarity, co-operation, and self-fulfillment beyond that of only individual gratification.”

Saturday, 17 November 2012

Which Road for the Saskatchewan NDP?

Act Up in Saskatchewan 
Friday, 16 November 2012

The campaign for the new leader of the Saskatchewan NDP takes off this Saturday in Regina with the first public debate among the four candidates. There are thirteen debates scheduled between November 17 and February 16, 2013. This will allow NDP members and others to see the differences between the candidates. The leadership convention is scheduled for the weekend of March 9, 2013 in Saskatoon.

As everyone knows, the provincial NDP is in dire straits at this time. Their support among voters has dropped from 275,000 in 1991 to only 127,000 in 2011. Their membership has dropped from 46,000 in 1991 to around 8,000 today. The turnout at elections has dropped from 75% of eligible voters in 1991 to only 50% in 2011. The provincial Liberal Party has all but disappeared, which means that the NDP will likely have to win close to 51% of the vote to once again form the government. They now face Brad Wall and the Saskatchewan Party whose government has had an approval rating of 70% in recent public opinion polls.

The leadership candidates
The four leadership candidates are all young white men. Trent Wotherspoon, the MLA from Regina-Rosemont, appears to have the most support at this time. However, he was a strong supporter of bringing Dwaine Lingenfelter back to lead the party in 2009, and this proved to be an absolute disaster.

Cam Broten, the MLA from Saskatoon Massey Place, supported Deb Higgins for leader in 2009. Higgins had been a cabinet minister in Lorne Calvert’s NDP government but finished last in the leadership race. Because of their status as Members of the Legislative Assembly, these two candidates are the best known among party members. But because they are closely identified with the present NDP caucus, they are seen to be less likely to lead the party in a new direction.

The third candidate is Ryan Meili, a doctor and social justice activist from Saskatoon. He contested the leadership against Dwaine Lingenfelter in 2009 and finished second with 45% of the vote. He appears to have the support of many of the traditional “left” within the provincial party.

The youngest candidate is Erin Weir, an economist who has taken leave from his job with the United Steelworkers Union and the Canadian Labour Congress in Ottawa. He also spent 2010-11 with the International Trade Union Confederation in Europe. He has some public recognition from his appearances in the television media representing the political left.

Monday, 29 October 2012

A New Football Stadium for Regina?


To: The Mayor and City Council   
October 29, 2012

RE: Memorandum of Understanding on the proposed new stadium

Dear members of the City Council:

The Memorandum of Understanding on the financing of the proposed new football stadium adopted on July 19, 2012 was not final and needs to be re-assessed by the new City Council. There are a number of important reasons to revisit the issue of whether to build a new stadium or renovate the existing Mosaic Stadium. These are as follows:

(1) Some have stated that the recent municipal election settled the issue in favour of building a new stadium. However, the citizens of Regina were not given a clear choice on the issue. The three leading and serious candidates for Mayor all supported the building of a new stadium; there was no choice for the alternative. The same problem carried over to voting in the wards. Even in ward 3, where I live, there was no candidate who openly stated that they opposed the proposal for building a new stadium. There was no referendum. The election did not resolve the issue.

(2) The previous City Council did not make a serious effort to look at the option of renovating the existing stadium. The public was kept in the dark about this option. It was often stated that a renovation would cost $150 million. This was the figure supposedly put forth by a consultant’s report done for the Saskatchewan Roughriders. But both the football club and the City Council have refused to make this report public. We have no idea how the consultant came to this conclusion.

On February 8, 2008 members of the City Council, meeting as the executive committee, received a report done by Santec Architecture on the state of Mosaic Stadium. This report was not released to the public. But it has been obtained by the Canadian Taxpayers Federation, which posted it on their web site. After a careful examination of the stadium, the technical consultants concluded that it was in pretty good shape, and with the expenditure of $3.4 million, it could be made to last at least another ten years. The report detailed the renovations that were recommended.

The Saskatchewan Roughriders are currently carrying out significant renovations to Mosaic Stadium, which is to cost them $14 million. Among other things, this will expand the seating capacity to 50,000. There is no reason why these renovations cannot be maintained with some additions, which could include new seats, more washrooms and more refreshment sites.

(3) The previous City Council asked Praxis Analytics to survey public opinion as to what they think is the single most important public issue facing Regina as a community. Their survey found that 30.4% felt that the question of the availability of affordable housing was the most important issue. Only 3.2% indicated that they thought the issue of the stadium was the most important issue. The City Council did not release the results of this public opinion survey until after the Mayor and City Council had signed the Memorandum of Understanding.

These reasons may explain why there was such a low turnout in voting in the recent municipal election, only 33% of eligible voters.

Sunday, 14 October 2012

The Regina Municipal Election: A flood of candidates is one sign that residents are fed up

Act Up in Saskatchewan

The Regina municipal election will take place on October 24. In contrast to the election three years ago, there has been a remarkable increase in the number of candidates running for seats on City Council. Furthermore, there are nine candidates running for the position of Mayor. We may see a much higher turnout of voters this time and perhaps a different city administration.

Regina used to be a solid NDP town. But in the last municipal election the turnout of voters fell to 25%, which always benefits those with higher incomes. As a result, the political right re-elected Mayor Pat  Fiacco, a known Stephen Harper and Brad Wall supporter. Judging by their voting record on key issues, it quickly became apparent that the political right also swept City Council. However, a revolt against the incumbents began in 2011 when the Mayor and his business friends produced a plan to build a new football stadium.

The fallout from Regina’s boom economy
Over the past five years Regina has experienced a major boom, a reflection of the fact that people  have flooded into the province to work at the major expansions being undertaken by the existing potash mines and the new Bakken oil play. This has resulted in a serious housing shortage. The market price of existing single family dwellings has doubled over this time period. New houses are being build in new subdivisions, but almost all of them are in the range of $500,000, which is unaffordable for the majority of families and individuals.

Furthermore, rental alternatives are virtually non-existent, with the city having the lowest vacancy rate (0.6%) in the country. With virtually no direction from city planners, builders have constructed very few apartments over the past 20 years. Many existing apartments have been converted to condominiums. As a result, rental rates have skyrocketed, and it is now virtually impossible to find a one-bedroom apartment for less that $850 per month.

On top of this, the number of social housing units available has been declining for a number of years, as both the provincial and city housing authorities have been selling them off. There is now a desperate need for social and affordable housing. But this crisis situation has not led the Mayor and his passive supporters on City Council to take any serious action.
The media has named the stadium design "The Toilet Bowl."

We Need a New Football Stadium!
On the other hand, the Saskatchewan Roughriders want a new football stadium. Mayor Pat Fiacco needs a legacy project as he is not seeking re-election. The builders and developers want more land on which to build houses. Realtors want more houses to sell.

On April 19, 2011 Mayor Fiacco surprised everyone, including planners at City Hall, by announcing his own project, the Regina Revitalization Initiative. This was to include a replacement for Mosaic Stadium, expected to have a retractable roof. It would be built on the CP Rail lands on Dewdney Avenue, with links to the downtown area. Mosaic Stadium would be torn down, and the private sector would begin to build market housing on the Mosaic land sometime within the next fifteen years.

Friday, 12 October 2012

Ailing NDP Must Return to Its Historic Roots

Leader-Post

The Saskatchewan New Democratic Party is facing the most crucial decision in its history when it chooses its next leader. They have gone from being the “natural governing party” to a weak opposition party. Without a serious change of direction, it is doubtful if they will ever form the government again.

The vote in support of the NDP has fallen from 275,000 in 1991 to 127,000 in 2011. They are now down to only nine seats in the legislature. With the collapse of the Liberal Party in the 2011 election, their share of the votes cast fell to 32% while that of the Saskatchewan Party rose to 64%.  NDP membership has fallen from 46,000 at the time of the 1991 election to around 8,000 in 2011. The party is no longer even dominant in Regina.

The disillusionment of the population with the NDP is reflected in the turnout in the elections. In the 1991 provincial election, where the NDP received a majority of the votes, 83% of those who were enumerated went to the polls. This fell to 66% in 2011. But many people are no longer enumerated. Of those eligible to vote in 2011 (citizens 18 and older), only 49% voted.

This is not an unusual development. Similar trends can be found in all the advanced industrialized countries. Many former supporters of the social democrats are refusing to vote or shifting to new parties of the left, the Greens, and neo-fascist parties of the right.

The most important reason for this is the shift to the neoliberal right by the social democratic parties. Almost all of them have abandoned their historic social justice agenda for the free market and free trade policies advocated by big business.

Under the leadership of Roy Romanow and Lorne Calvert (1991-2007), the Saskatchewan NDP led the political change of direction in Canada. The new policies included cutting taxes on corporations and those in the higher income brackets, lowering the royalties and taxes paid by the corporations extracting our resources, privatizing state owned enterprise, deregulating the economy, and cutting and eliminating social programs.

The NDP surrendered the vote in rural Saskatchewan when they supported rail line abandonment and the closing of grain elevators, closed 51 hospitals under the “wellness model,” cut grants to municipalities and school boards, abolished the Gross Revenue Insurance Plan, and shifted their support from the co-operative movement to corporate agribusiness.

Secondly, they adopted an authoritarian, liberal party system. The leader set the policy agenda, and everyone else was to toe the line. Open public debates on important issues were no longer tolerated. The platform for elections was set by the leader and professional spin doctors. There was a strong move away from the democratic process.

The NDP was ready for a serious renewal following their defeat in the 2007 election and the resignation of Lorne Calvert as leader. Instead, the party’s caucus and a few key trade unions brought back Dwaine Lingenfelter from Nexen Corporation and mobilized to get him elected leader. Everyone knew that he represented the old neoliberal order. The results were a disaster for the party.

If the NDP is to seriously try to win enough votes to form the government it must make a clean break with the Romanow-Calvert years. We already have one party representing big business, the Saskatchewan Party. The NDP must once again become a broad democratic party pushed from the bottom up. It must return to a policy agenda that represents the interests of the large majority, the “Saskatchewan Way,” which was the co-operative social democratic agenda.

John W. Warnock is a Regina political economist and political activist and author of Saskatchewan: The Roots of Discontent and Protest.

Tuesday, 4 September 2012

What Happened to Social Democracy?

Anyone who has followed the current economic and financial crisis in Europe knows that social democratic governments and parties have consistently lined up on the side of the banks and the rich in the ongoing political conflict. The policies they have implemented while in government have been nearly identical to those advanced by the traditional right wing parties and governments. In several counties, the social democrats have formed political alliances to govern with the right wing parties. What is going on here?

It is hard to get answers from social democrats who hold office. The leaders of the larger trade unions make excuses or remain silent. Those who have traditionally voted for these parties, or taken out memberships, are mystified. But you can find some answers in a new book edited by Bryan Evans and Ingo Schmidt: Social Democracy After the Cold War, recently published by Athabasca University Press.

The Third Way  - revised
I can remember when Sweden was referred to as the “Third Way” – the alternative to the Anglo-American version of unfettered and rapacious capitalism and the totalitarian version of state socialism that was the Soviet Union. Sweden was a deeply democratic country with the great majority of workers in trade unions, a solid base of democratic social organizations, where the Social Democratic Workers Party formed the government between 1932 and 1976. With a progressive system of taxation, they had created a society with a comprehensive, universal welfare state that had all but eliminated poverty.

Now the Third Way is identified with the neoliberal package of policies implemented by the same social democratic parties. This includes greatly reduced taxes on corporations and the rich, major cuts to universal social programs, privatization of state-owned enterprises, deregulation of the economy and the backing of the “free trade” treaties as advocated by the largest corporations and financial institutions. US President Bill Clinton and British Prime Minister Tony Blair led the way in deregulating the financial sector and refusing to regulate the new derivatives markets, directly leading to the financial collapse and the Great Recession which began in 2008.


Social democratic parties as we know them emerged after 1919 with a split in the broad working class  movement. Parties which backed the new Soviet Union formed the Third International Workingmen’s Association. They wanted to replace the capitalist system with a government of the working class, implementing a socialist alternative. The remaining parties stayed in the revised Second International. While some of these parties hoped to create a socialist society through the electoral route, most sought simply to reform the system, to create a “capitalism with a human face.”

The high point for this reformist social democratic vision was the period between 1945 and 1975. The world economy was booming, workers were expanding the trade union movement, and governments were introducing the new welfare state. This boom period ended when Paul Volker and the central bankers raised interest rates and created the major world recession of 1980-2. The election of Margaret Thatcher’s government in 1979 and Ronald Reagan’s presidency in 1980 turned the tide, leading an all out war against the Swedish Third Way.


Sunday, 26 August 2012

Apple, Steve Jobs and Capitalism in the Era of Free Trade: A Note for Labour Day

On August 20, 2012 the business press announced that Apple Inc. had become the largest company in history based on a market capitalization of $665 billion. Its long time CEO, Steve Jobs, was widely seen as a technological genius and had become the popular personification of the modern American capitalist. But as Labour Day approaches, Apple’s success also explains why the organizations which represented large corporations and their political and academic supporters have been so determined to push through the “free trade” agenda.

Apple is a classic American success story. Founded by three friends in 1976, it went public in 1980, sold its first Mackintosh computer in 1984, and it first portable computer in 1989. It has held its own in competition with Microsoft. Today it leads the technological industry with its Mackintosh computers and its personal electronics: the iPod, iPhone, and iPad.

In the early days Apple proudly proclaimed that its products were “Made in the USA.” But this has changed with the competitive drive to maximize sales and profits. Production was shifted abroad. By 2002 it only had one production unit in the USA, the plant at Elk Grove, California. Its call centres are still based in the USA, and its head office remains in the Silicon Valley. Today it reports 43,000 employees in the USA and 20,000 overseas. But through contractors for the production, it employs another 700,000, all of them overseas, mostly in China.
Foxconn workers for Apple. Inc.

Using offshore tax havens
 Walter Isaacson’s biography of Steve Jobs has been on the best seller’s list for a long time. Strangely, it ignores the importance of utilizing the features of the “free trade” agreements to the economic and financial success of the corporation.

Apple established subsidiaries in well-known tax havens: Ireland, the Netherlands, Luxembourg and the British Virgin Islands. The headquarters for Apple’s operations in Europe, the Middle East and Africa were established in Cork, Ireland. Like other large transnational corporations, Apple has used all the tricks to maximize its profits in these countries and to get around paying taxes on its profits. In the business this has been referred to as “A double Irish with a Dutch sandwich.”

Shifting production to China 
Apple does not own production facilities abroad. Instead, it uses contractors. The most important by far is Foxconn International, a Taiwanese corporation with extensive operations in Shenzhen, China and elsewhere. Foxconn has around one million employees and produces around 40% of the world’s consumer electronics.

The reasons for the shift in production to China are clear. In 2010 the Asian Development Bank reported that the iPhone cost $178 to manufacture and sold in the United States for $500. This produced a gross profit of 64%. Overall, the profit rate for Apple has been around 40%, compared to the 10% to 20% which is the range for other high tech corporations. Recently the Chinese government raised the minimum wage for Shenzhen to the equivalent of US$238 per month, with employees working six days a week. Foxconn is now moving its factories to other areas of China and South Asia where wages are lower.

In February 2011 President Barrack Obama had dinner with Steve Jobs and other key figures in the high tech industries in Silicon Valley. Obama asked Jobs why this industry could not be brought back to the USA. “These jobs are not coming back,” he replied. Much lower wages are a major factor. But as the New York Times reported, “Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that ‘Made in the U.S.A.’ is no longer a viable option for most Apple products.”

 Of course this was what the “free trade” agreements have been all about. Trade in itself was already largely free, as tariffs had been radically reduced as had other barriers to trade. What corporate executives wanted was the freedom to invest anywhere in the world and to repatriate profits without government interference. The results were as expected: the steady decline of manufacturing in all of the advanced industrialized countries.

Thursday, 26 July 2012

Remembering Sask Oil: It Can Be Done!

This past week it was revealed that one of China’s state-owned oil corporations has made a bid to take over Nexen, one of the remaining four large oil corporations operating in this country that are deemed to be Canadian owned and controlled. Nexen is based in Calgary, but it is known that around 65% of its stock ownership is foreign. In recent years there has been a steady disappearance of major Canadian corporations as they are being swallowed up by larger transnational corporations. This is very noticeable in Saskatchewan.

Erin Weir, an economist with the Steelworkers, has reminded us that the Saskatchewan Oil and Gas Corporation (Sask Oil), once a Crown corporation, was privatized beginning with Grant Devine’s Conservative government, became Wascana Energy, and then was taken over by Occidental Oil corporation, which then became Nexen. So much of Nexen’s land holdings and oil and gas wells in Saskatchewan will now end up as Chinese assets. How did this happen? Are Canadians incapable of running their own economy? Do all of the profits from the extraction of our non-renewable resources have to flow out of the country? Does anyone care any longer?

Moving to take control of our economy
The New Democratic Party under the leadership of Allan Blakeney was elected in 1971. The platform pledged that if elected they would create a Crown corporation in the oil and gas area. In 1973 the NDP government was faced with the major increase in world oil prices created by the OPEC producers' cartel. Oil prices rose dramatically in Canada. Rather than let the private oil companies capture this windfall gain, the Blakeney government, in tandem with Peter Loughheed’s Tory government in Alberta, introduced a new excess profits tax which would capture all the increase for the general public.

Of course, the oil corporations fought back, and the federal government took their side in the dispute. They went to court against the two provinces. In 1977 the court ruled the action taken by the NDP government, which took the form of a royalty surcharge, was ultra vires. Not backing down, the Blakeney government then introduced a new income tax on oil revenues and made it retroactive. Those were certainly different times. Governments were actually willing to stand up for their constituents.

In 1973 the NDP government created Sask Oil. There was no nationalization; it bought the assets of other oil corporations. By 1981 Sask Oil had assets of $191 million, gross revenues of $60 million, and paid $26 million in royalties to the government. The Blakeney government also raised the oil royalties significantly. The share of the economic rent (excess profits) going to the general population rose form 13% in 1972 to reach a high of 65% in 1982. The oil corporations did not pack up and leave as they were still making good profits.

Grant Devine's Tory government
But the trend of expanding democracy ended in 1982 then Grant Devine’s Conservative government took office. They were committed to turning over the Crown corporations in the resource sectors to private investors. In October 1985 they began selling off Sask Oil: 100 million shares were offered for one-third of the company, at a price of $9 per share. The majority of the stock in Sask Oil was sold by the end of 1986. At the end of this process, 75% of the new owners of Sask Oil lived outside Saskatchewan, a majority in the United States.

In 1988 the Devine government sold Sask Power Corporation’s natural gas holdings in Alberta to the now privatized Sask Oil for $325 million, and all but $124 million was financed by Sask Power. These reserves represented a 15 year supply for the Saskatchewan market.  At market prices at the time, these assets were worth $984 million. Privatization always represents the theft of public goods by private investors.
Regina's Co-op refinery can't be privatized

No change with the new NDP government

Many hoped that when the NDP under Roy Romanow was elected in 1991 this trend would be reversed. But this was not to be the case. The new NDP government simply completed the privatizations that had been begun by the Devine government. This included selling off the remaining shares of Sask Oil still owned by the government. They also removed the restrictions on foreign ownership imposed by the Devine government. Following the trend set by the Conservatives, the NDP governments of Roy Romanow and then Lorne Calvert further reduced the royalties on the extraction of our oil, down to only 15% of the economic rent collected.

The experience of the NDP government under the leadership of Allan Blakeney demonstrated that the people of Saskatchewan have the ability to run their own economy. A Heritage Fund was created, and part of the royalties collected from the extraction and export of our non-renewable resources was used to finance further local ownership and control. However, it seems that these days only Third World countries have the confidence to stand up to international capital as well as their local comprador bourgeois class and their right wing political allies.

Thursday, 5 July 2012

The Fraser Institute's Global Energy Survey

 Act Up in Saskatchewan

Near the end of June 2012 the Fraser Institute released their latest survey of the oil and gas industry. They reported that 623 managers and executives from 529 oil and gas companies had ranked Manitoba and Saskatchewan near the top of 147 political jurisdictions as good places to invest. In contrast, New Brunswick and Quebec were given fairly low ratings.

A great deal of the reporting was of no surprise and the results were not that controversial. For example, the political turmoil, international wars, and civil wars naturally led corporation representatives to warn about investing in much of Africa and the Middle East. There was also the issue of government corruption, well known in many of the countries surveyed.

The level of taxes and royalties
More important for the Canadian public was the judgement that corporation officials had on the fiscal terms of investing in various jurisdictions: what is the level of royalties and taxes imposed on the oil and gas industry?  Here Manitoba and Saskatchewan ranked very high, along with Oklahoma, Texas, North Dakota, Ohio and Louisiana, as political jurisdictions with the very lowest taxes on petroleum corporations. Those with the “worst” ratings included Venezuela, Libya, Russia, Iran, Algeria, Bolivia, Iraq, Uzbekistan, Kuwait and Ecuador. These countries have state-owned National Oil Corporations (NOCs) as well as high royalties and taxes.

Countries were given poor marks for keeping old Keynesian “trade barriers.” These included government currency controls and capital controls. One of the central objectives of the various “free trade” agreements was to allow corporations to move capital around and repatriate profits without any government interference.

Political jurisdictions were also judged on their general taxation regimes: did they have progressive income taxes, high corporate taxes, and capital taxes? Here, Manitoba was given very high marks while Venezuela was given the worst ranking. Oil corporations are in love with the Manitoba NDP government.
U.S. billionaires David and Charles Koch gave $500,000 to the Fraser Institute


Are there environmental regulations?
Another key issue surveyed concerned environmental regulations and their enforcement. Were there heavy fines on corporations for causing pollution? Was there a regime of stringent enforcement? Again, Manitoba was ranked high at number 5 and Saskatchewan at number 15. In western Canada our political regimes are very pro-business. Polluters do not pay.

In 2009 Alberta was given an astonishing low rating (92) because the provincial Conservative government was considering a new royalty regime. They quickly backed away from this, and in 2012 the oil executives in turn boosted their overall ranking to 21.

New Brunswick and Quebec received the lowest rankings in Canada because of “threats by anti-development activists.” In both provinces there is strong grass roots opposition to hydraulic fracking to extract natural gas from shale oil rock, fearing that this will pollute ground water sources. New York received the lowest rating of the U.S. states for the same reason.

Saskatchewan ranks high
The Regina Leader-Post noted that Manitoba was “on top” (5th overall) and that Saskatchewan had fallen to 13th place. At one time under Roy Romanow’s NDP government the province had ranked higher in the Fraser Institute survey.

But what should be of interest to the people of Saskatchewan is that the corporate representatives gave Saskatchewan the second highest rating (69%) on the question of whether the province had a fiscal regime that encouraged investment. Of 147 political jurisdictions, only Ireland (77%) was higher, and they have virtually no oil and gas industry. Thanks to the governments of Roy Romanow and Lorne Calvert, we are known for having the lowest royalties and taxes.

In an editorial on June 21, the Leader Post proclaimed that the people of Saskatchewan had learned their lesson. No longer would we have Crown corporations run by local people developing our uranium, oil and potash. This was best done by “private investors,” which of course means large transnational corporations. As they argued, “only ideological zealots of the far left” would threaten public ownership of resources, which would cut off foreign investment.

Crown Corporation privatized by Devine and Romanow governments


A new investment climate
However, those countries which the Fraser Institute identifies as the worst places to invest also seem to have most of the undeveloped oil and gas reserves. Their newly elected governments have been raising royalties and taxes and expanding their control over their natural resources through state-owned oil and gas corporations.

But what happens if the large private transnational oil and gas corporations decide to pull out in protest? As we have seen in Venezuela, Bolivia and Ecuador, other oil corporations quickly rush to take their place. Many of these are also state-owned corporations. Most Canadians seem to be aware of the fact that the Chinese National Oil Companies, which remain state-owned, are investing everywhere they can. Even in the Alberta tar sands. Today, there are many alternatives to Exxon-Mobil and their like.

On top of this, those nasty governments in Venezuela, Bolivia and Ecuador are using their additional revenues from the oil and gas industry to support programs aimed at reducing  poverty. What could be worse!

Currently, the industry and their supporters have directed their political and economic anger at the government of Argentina. This democratic government, with strong popular support, re-nationalized their largest oil company, YPF, once a state-owned corporation that had been privatized by a previous government. That was a very bad precedent. It might even give Canadians some ideas.

Monday, 11 June 2012

Who Owns Alberta's Tar Sands?

In theory, the tar sands, as a Canadian natural resource, are owned by the people of Alberta. Their government has the right under the Constitution to give it away. That is what they are doing, of course. Information on shareholders reveals that 71% of all the profits resulting from the tar sands operations goes to foreigners.

Nikki Skuce of Forest Ethics Advocacy has used Bloomberg Professional and data from Oilsands Review to calculate the extent of foreign ownership and control of the major corporations involved in the extraction and processing of the bitumen which is processed into usable oil products. The results are below:

Foreign Owned Oilsands Corporations: percent foreign ownership

Statoil, 99.8%
Mocal Energy (JX Holdings), 99.3%
Murphy Oil, 99.2%
Royal Dutch Shell, 98.5%
Devon Energy, 98.4%
ConocoPhillips, 97.8%
Petrobank Energy Resources, 94.8%
Husky Energy, 90.9%
MEG energy, 89.1%
Imperial Oil, 88.9%

Canadian Oilsands Corporations : percent foreign ownership

Nexen, 69.9%
Canadian Natural Resources Limited, 58.8%
Suncor energy, 56.8%
Canadian Oil Sands, 56.8%
Cenovus, 54.7%

SOURCE:  Nikki Skuce. Forest Ethics Advocacy

Tuesday, 29 May 2012

Canada's Committment to Developing the Tar Sands


Over the past few weeks politicians and the mass media have been ranting about the development of the Alberta tar sands. Thomas Mulcair, the new leader of the federal New Democratic Party (NDP), and a number of left leaning economists have argued that the massive investment in the development of the oil industry in Canada has been giving Canada a dose of the Dutch Disease. The influx of foreign investment has boosted the value of the Canadian dollar and has resulted in the steady decline of the manufacturing industry all across Canada. This is what happened to The Netherlands in the 1960s when its government stressed the rapid development of their offshore petroleum industry. In 2008 the Organization of Economic Co-operation and Development (OECD) had warned Canada about this development.

There should have been a serious debate on the issue, but the politicians and the mainstream media, including the CBC, shot that down by posing the issue as a conflict between central and western Canada.

 But far more important is the question of whether or not the tar sands should be developed at all. It seems that no one in any position of authority in Canada wishes this issue to be opened up to a general, democratic debate.
Tar Sands in Alberta

The position of the NDP 
Thomas Mulcair has regularly stated that he is not opposed to the development of the tar sands. ‘It would be senseless to stop development.” You will “never hear me speaking against the development of the oilsands,” but “we should do it sustainably.” What does Mulcair (and the federal NDP) mean by sustainable development of the tar sands?

First, the federal NDP has demanded the elimination of the $1.4 billion in annual federal subsidies to the oil industry. Quite a few progressive economists, known to be supporters of the NDP, have also called for the provinces of Alberta and Saskatchewan to raise the provincial royalties on the oil industry. Edmonton’s Parkland Institute, using data provided by the Canadian Association of Petroleum Producers (CAPP), has demonstrated that the province of Alberta collects virtually no royalties from the development of the tar sands. As the dissenting economists point out, Canada has by far the lowest resource royalties in the world, no national energy plan, and no state owned oil corporation. When we are giving oil and gas away, how could the corporations resist?

Second, Mulcair and the NDP argue that it is necessary for the federal government to impose either a carbon tax or a “comprehensive cap and trade plan” to deal with greenhouse gas (GHG) emissions. Then there is the issue of local environmental pollution. The corporations profiting from the extraction of oil from the tar sands should also pay for the damage they are doing to the environment in the boreal forest and the toxic pollution of the Athabasca River basin. The principle here, supported by Canadians in a number of public opinion polls, is that the polluter must pay. Full cost pricing is necessary. The public is not happy with the present system where polluting industries pass on the environmental, social and health costs to the public at large.

Tar Sands and the Athabaska River
Greenhouse Gas Emissions and Climate Change 
By far the most important question is whether the tar sands can be developed without having a major impact on the rising levels of carbon dioxide in the atmosphere. This seems to be the issue that all of our political and business leaders wish to avoid.

The science is quite clear on this matter. The burning of fossil fuels in increasing the level of carbon dioxide in the atmosphere, which is raising the earth’s temperature and causing serious climate change. Even the Calgary Herald, the mouthpiece of the oil industry, recognizes that the scientific evidence is convincing.

Over the last 150 years the level of carbon dioxide in the earth’s atmosphere has risen from 280 parts per million (ppm) to 393 ppm. In 1959, the first year that carbon dioxide was measured at the U.S. Weather Bureau station at Mauna Loa , it stood at 316 ppm. The level is steadily increasing. Scientists warn that we are moving towards the “dangerous anthropogenic interference” level where we would experience radical change to our ecosystem. If the tar sands were fully developed, as projected by the oil industry, this alone could raise the level of carbon in the atmosphere by 120 ppm.

The fact is that the oil extracted from the tar sands is a relatively “dirty.” The GHG released through the extraction and refining process is between 3.2 and 4.5 times greater than that of conventional oil. The level of GHG released will increase as the extraction shifts from open pit mining to the in situ process, which requires the consumption of enormous quantities of energy from natural gas and coal to extract the underground bitumen A study by Environment Canada in 2008 projected that the tar sands would be responsible for 95% of the increase in Canada’s industrial GHG emissions over the next ten years.

The only way to reduce the amount of GHG released in the extraction process would be through a major system of carbon capture and storage (CCS). But this “solution” appears to be a pipe dream. Only a couple of projects are in operation, both of which use carbon dioxide to extract more oil and gas. The two test projects begun in Alberta, heavily subsidized by the federal and provincial governments, have been recently abandoned. The private corporations involved withdrew, arguing that they were too costly.
Tar Sands Tailings Ponds

The choice for Canadians 
So what does this mean? James Hansen, who is the director of NASA’s Goddard Institute for Space Studies, and one of the pioneers in research on global warming, recently set forth what we can expect. (NYTimes, May 9, 2012). If the tar sands is developed the way the industry and Canadian governments project, carbon dioxide levels in the atmosphere will rise to over 500 ppm. This level would be “higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now.” There would be the disintegration of the polar ice sheets. Sea levels would rise significantly. “Global temperatures would become intolerable.” Hansen concludes that “civilization would be at risk.”

But even over the short term – the next 20 years – Hansen argues that we would see dramatic changes in climate in North America, including “semi-permanent drought” on the plains, extreme events with heavy flooding, the loss of irrigated farmland in California, and dramatic increases in the price of food. He argues that there must be a comprehensive plan right now to significantly reduce GHG emissions. The last thing we need is to expand the fossil fuel industry.

So Canadians face a clear choice. The likely scenario is that it will be business as usual for the foreseeable future. In 2015 it is possible that the NDP could be elected the government of Canada. Mulcair and the NDP could introduce some kind of plan for a “sustainable” development of the tar sands. We can be sure that the governments of Alberta and Saskatchewan will strongly object. But the development of the tar sands would continue.

However, given the past history of NDP governments in Canada, and social democratic governments in other countries, there is no reason to believe that a serious plan would be adopted to reduce Canada’s GHG emissions. The Romanow-Calvert governments in Saskatchewan (1991-2007) were strongly opposed to the Kyoto Protocol and stood with Alberta governments on these issues. We can’t put our eggs in the NDP basket.

Friday, 4 May 2012

Stephen Harper and the NDP

Act Up in Saskatchewan
May 3, 2012

It is a year this week since the last federal election. Active members and supporters of the New Democratic Party (NDP) celebrate this event, for their party passed the Liberals to finally become Her Majesty’s Official Opposition in the House of Commons. However, others, like myself, remember that day for the fact that Stephen Harper and his Canadian Alliance/Reform Party colleagues were able to squeeze out a majority of the seats in the House of Commons. For us, it was a day of mourning.

For those who live on the prairies, it was worrisome, as we knew the Reformers better than people in the rest of Canada. For years we heard them attacking gay rights, denouncing feminists, opposing abortion and any form of gun control, opposing state-supported child care, denouncing economic support for Aboriginal communities, supporting two-tier medicare, denouncing environmentalists and insisting that climate change was bad science by communists. A great many were Christian fundamentalists, demanding public support for their own separate school systems where they wouldn’t have to teach evolution. They were strong supporters of free market capitalism and opposed collective democratic institutions like the Canadian Wheat Board. They wanted Canada to go into Iraq with the Americans.

Stephen Harper’s relationship with Jack Layton’s NDP

Jack Layton came from a well-known Quebec political family. His grandfather had been a cabinet member in Maurice Duplessis’ Union Nationale government. His father had been an active member of the Quebec Liberal Party and then served as a Member of Parliament and a cabinet member in Brian Mulroney’s Conservative government. 

After a move to Toronto, Layton became a prominent activist in municipal politics. He was elected leader of the NDP in 2003 and won a seat in the House of Commons in the 2004 federal election. His goal was to have the NDP replace the Liberals as the major party of the progressive centre-left. Under his leadership the party became more professional and made a considerable move to the political right. His long term goal was the same as that of Stephen Harper: Canada would move to a two party system similar to that in the other Anglo-American countries.

Bringing down the Liberals
Paul Martin’s minority Liberal government, elected in 2004, was deeply hurt by the Sponsorship scandal. Layton and Harper saw their chance. A non-confidence motion was introduced by Stephen Harper and seconded by Jack Layton. The Liberals were defeated, and an election was held in January 2006. In the campaign Layton and the NDP concentrated their political attack almost exclusively on the Liberals. This strategy gave Canadians their first Stephen Harper government, although it was a minority government.

Two years later opinion polls indicated increased support for Harper and his government. He convinced the Governor General to prorogue the Parliament and call an election for October 2008.  But the Conservatives again failed to win a majority of the seats. In December, in a poorly planned and feeble attempt, the three opposition parties asked the Governor General to allow them to form a coalition government. Harper went on the attack and demonstrated that he is a cunning and skilful political leader. He also had the Governor General in his back pocket.

In what was a coup by the party’s right wing, the Liberal Caucus dumped Stephane Dion and replaced him with Michael Ignatieff. No leadership convention was held. Ignatieff had spent most of his productive adult years in Great Britain and the United States and was unknown to Canadians. The majority of Canadians were opposed to the policies and politics of Stephen Harper’s minority government. But how were they to translate that into an alternative government?

With the Liberals greatly weakened, Harper was keen on a holding a new election, one which promised to give him a majority government. Again, he was aided by Jack Layton and the NDP caucus. In March 2011 Layton and the NDP insisted on voting non-confidence in Harper’s budget and brought down the government. They had a clear option, to denounce the budget but to abstain from casting their votes. But Layton saw an opportunity to move ahead of the Liberals in the House of Commons, and he chose to put the interests of his party first. Harper was elated. On May 2, 2011 with only 38% of the votes, the new Conservatives narrowly won the majority of seats in the House of Commons. Only 59% of Canadians bothered to vote. We are now all paying for that decision.

Wednesday, 11 April 2012

Do we need to buy the F-35? Does anyone speak for the Canadian public?

By now we all know that there has been a big cock up in Ottawa since the Department of National Defence decided to purchase the F-35 Lightning II fighter-bomber from the United States. The Auditor General has issued a scathing report. The Liberal and NDP opposition in the House of Commons has had a field day attacking the Harper government. But absent from all the political hype is any discussion of the central issue: where is the need for this aircraft within Canada’s broad military policy? On this question we can see that the position of all three of our major political parties is at variance with that of the general public.

Public opinion and Canadian defence policy

There is no question that the events of 9/11 had a dramatic impact on Canadians and their views on national security and defence. But an even greater impact has been the history of Canada’s participation in the U.S.-led and directed war in Afghanistan.

Canada’s mass media has consistently been a strong supporter of Canada’s role as the loyal ally of the United States in foreign policy and its military activities. Thus it is even more surprising to discover that over the past ten years Canadian public opinion polls on foreign and defence policy have found that a majority of Canadians are not comfortable with Canada’s role as an aggressive NATO military power and would much prefer to see our country to be committed once again to United Nations peacekeeping. They would rather Canada act through the UN to provide relief for famine than to drop bombs on less developed countries.

In spite of a major government and media campaign for support of the war in Afghanistan, the majority of Canadians have often disagreed. For example, the Focus Canada polls by Environics have consistently reported low support for the Afghan war, once as low as 24%.

Angus Reid polls have reported similar results over recent years: 55% to 59% opposed to the Afghan war; in 2009 82% wanted to end Canada’s combat role with only 12% in support. In July 2009 they reported that only 38% believed that the Canadian government was right to send our troops to Afghanistan in the first place. Ipsos Reid reported in September 2011 that 75% of Canadians did not believe that the war in Afghanistan was worth the cost. An Angus Reid poll from March 2011 found that 63% of Canadians opposed the military operation of Canadians in Afghanistan with only 32% in support.

A number of polls have reported that around 70% of Canadians prefer a peacekeeping role to a military role in “peacemaking.” The Ekos Research poll in 2005 found Canadians preferring peace keeping over “peace making” by a ratio of 2 to 1.
Canadians prefer UN peacekeeping

What do Canadians want as a defence policy?
In October 2010 Nanos Research asked Canadians what their priorities were for the federal government’s budget. Of the five issues listed, health care ranked first followed by education, jobs and the economy, the environment and taxes. Spending on the military ranked last.

When asked what should be the priority for Canada’s armed forces, the results were as follows:
(1) UN peacekeeping.
(2) Security operations with the U.S.
(3) European NATO commitments.
(4) Overseas combat missions.
A key question asked: “Would you support Canada having another mission like Afghanistan?” The results: 54% strongly opposed, 11% somewhat opposed, 12% strongly supported and 9% somewhat supported. The rest were unsure. None of our three major political parties reflect this majority position.

In June 2011 Ipsos Reid conducted a public opinion poll for the Department of National Defence to see what role the Canadian public would like them to play. The results were as follows:
(1) At the top of the list was disaster relief in Canadian communities.
(2) Ranked second was search and rescue.
(3) Third was patrolling Canadian air space, land and maritime areas.
(4) Next came enforcing Canada’s sovereignty in the Arctic.
(5) “Fighting the war on terrorism” came last.
A poll by Ipsos six months earlier showed that Canadians expressed strong support for the Canadian rank and file forces, but only four percent said that the military and defence should be at the top of the public’s agenda.

Wednesday, 14 March 2012

Roy Romanow: Payback Time for Warnock!

March 14, 2012

Since the middle of 1991 I have certainly been the most vigorous and persistent critic of the decision of the Saskatchewan NDP under Premier Roy Romano to strongly move the party to the right – or the liberal position – and abandon the left and democratic tradition of the previous NDP governments of Tommy Douglas, Woodrow Lloyd and Allan Blakeney. I have written many newspaper articles, magazine articles, presented papers, contributed chapters in books, and jointly published a book with two of my friends which is an overall critique. In fact, at times I thought that I was the only one in the province who thought this was a bad move. No one active within the NDP put forth any public criticism. No federal NDP leader ever came to Saskatchewan and in any way criticized the neoliberal policies being implemented by Romanow and his successor, Lorne Calvert. Now it seems that Roy has finally been able in some way to pay me back.

Saskatchewan model of medicare reform
In 1991 the new NDP government found that the spending programs of Grant Devine’s Conservative government (1982-91) had left the province with a large debt and annual budget deficits. The Saskatchewan Federation of Labour and the Saskatchewan Coalition for Social Justice argued that the NDP should follow the example of the CCF government of T.C. Douglas. They had paid down a similar debt over 20 years so that they could retain the ability to implement their progressive party platform. Instead, the Romanow government put its first priority on balancing the budget and paying down the debt.

One of the goals of the Romanow government was to reduce the cost of medicare. They chose the liberal road. They closed 52 of 132 hospitals, transforming them into “health centres.” They created 30 health districts, appointed the majority of their boards, and gave them budgets which were set by the provincial government. The districts were forced to shut facilities and contract out services in order to meet the budget cuts set by the provincial government.

With so many rural hospitals closed, people with emergency health problems were forced to travel by ambulance over significant distances to the remaining hospitals. There was the issue of ambulance service. Originally, the Douglas government had paid for ambulance service. Later there were flat user fees charged. The Romnanow government introduced fees by distances covered. It was not unusual for rural residents to have to pay over $700 to take someone to a hospital by ambulance.

The Romanow government called this “the Wellness Model.” It is no surprise that the NDP lost all of its rural ridings. There is a democratic alternative to the liberal model, based on inequality. In 1998 it was advanced by a new political party, the New Green Alliance, which later formally presented it to the Romanow Commission on Health Care.
Regina's Plains Health Centre - Closed!

Changes in Regina
The “Wellness Model” was also instituted in Regina. A private consultant recommended that one hospital be closed, and of course the NDP agreed. They closed the Plains Health Centre, the newest of the three hospitals, built by Allan Blakeney’s NDP government on the southern edge of the city to better serve rural and eastern Saskatchewan. The older two hospitals were to receive some rather expensive upgrading. The key for the Romanow government was that the number of hospital beds in Regina would be reduced from 1200 to 630. They would also move to contract out services. Robins Donuts replaced the on site food services provided by hospital employees.

The Plains hospital was highly regarded. All rooms were private, with large windows looking out at the prairies. Rural communities had contributed to its construction, and they were outraged. The two older hospitals had little room for additional parking space. The Plains was also a teaching centre linked to the University of Saskatchewan schools of medicine and nursing.

Monday, 5 March 2012

Fiacco Steps Down: Will There Be Any Change for Regina?

Act Up in Saskatchewan
March 5, 2012

On Valentine’s Day Mayor Pat Fiacco held a press conference to announce that he was stepping down and would not run in the fall municipal election. A week later he announced that he would be supporting city Councillor Michael Fougere to replace him. Fougere, who has represented Ward 4 for fifteen years, is the president of the Saskatchewan Construction Association.

Both Fiacco and Fougere stated that their primary commitment for the future of Regina was the building of a new domed stadium. This is the central focus of Fiacco’s dream for the development of the old CPR yards on Dewdney Ave. The existing stadium, known to the people  as Taylor Field, is located in the North Central inner city area. Mayor Fiacco has proclaimed that the existing stadium would be torn down and the land would be redeveloped with “affordable and market-rate housing.” This latter part of his plan would begin in 2020.
Taylor Field to be Upgraded 2012

The new domed stadium
The new stadium, with a retractable roof, would have seats for 33,000 fans. In the winter the dome would be closed and it would host major events like rock shows. While no serious studies have been completed, two years ago the estimated cost of the stadium was set at $431 million. The Mayor said then that 75% of the cost would come from the private sector. To break even on operating costs, it was estimated that the stadium would have to host around 31 major events each year to be able to turn a profit of $1 million.

Brad Wall’s provincial government announced support for the stadium. However, it has yet to commit any funds. An appeal was made to Stephen Harper for federal money. It was hoped that PPP Canada would come up with 25% of the cost or at least $100 million. However, the Harper government pointed out that PPP Canada does not provide funding for professional sports facilities. Mayor Fiacco has yet to reveal who from the private sector might invest in the project. It is not clear how much will come from Regina taxpayers.

Even among those who support the domed stadium there were early criticisms. The original estimate did not include the cost of acquiring the land from the CPR. The draft released to the public called for the site to have a hotel and another casino; many asked why this was necessary.  It was quickly pointed out that the original plan does not include any parking facilities! Many supporters want any new stadium to be built out of the city, similar to the hockey stadium in Saskatoon, the Credit Union Centre.

Brad Humphreys, a University of Alberta economist who specializes in researching sports facilities, has warned the people of Regina that many stadiums end up losing money. The Skydome in Toronto was a disaster; originally costing over $800 million, it was sold to Rogers Communications a few years ago for $25 million. His research has indicated that there is no evidence to show that building sports stadiums results in any local net increase in income or jobs. It is widely recognized that professional sports are in competition with other businesses in the entertainment industry for peoples’ discretionary spending. They are not productive enterprises.

Monday, 13 February 2012

Social Democracy and the Greek Disaster

February 13, 2012

On Sunday night, February 12, the Greek Parliament passed the new austerity measures demanded by the Troika of the International Monetary Fund, the European Commission and the European Central Bank. It is widely agreed that the draconian program will drive the Greek economy even deeper into recession. Very few believe that Greece will avoid defaulting on their debt.

The new “restraint” package includes a 22% reduction in the minimum wage, cuts to pensions and the national pharmaceutical drug program, wage cuts, the elimination of 150,000 government jobs, and the privatization of more government businesses and programs. Companies will now be able to unilaterally reduce wages and break contracts with trade unions.

Public opinion polls show an overwhelming majority of Greeks are opposed to the economic measures being imposed on them. The present government is an alliance between the social democratic party,  PASOK, and the conservative New Democracy, presided over by Lucas Papademos, an unelected prime minister and former banker. The latest poll shows 79% opposed to the bailout package, which is designed to try to protect the international banks and their investments in Greek government bonds.

The two major trade union confederations have been holding general strikes across Greece for over a year now. They are formally linked to PASOK, Greece’s version of Canada’s New Democratic Party (NDP). In the 2009 election for the Greek parliament PASOK received 44% of the vote and formed a minority government. In the most recent public opinion poll, their support among potential voters has fallen to 9%. New Democracy is holding at 31%, just slightly less than they received in 2009.
Greeks support general strike

The Greek crisis has shifted public opinion away from the neoliberal social democrats and towards the parties of the left. Support for he Communist Party (PKK), which has played an important role in the general strikes, stands at 13%. The Coalition of the Radical Left, a left green party, is at 12%. The Democratic Left, a socialist party created in 2010, stands at 18%.

When voters were asked who would be the best leader for Greece at this time, the results show the general shift to the left:

Fotis Kouvelis of the Democratic Left – 56%
Alexis Tsipras of the Coalition of the Radical left – 41%
Antonis Samaras of New Democracy - 31%.

Tuesday, 7 February 2012

Is There a Future for the Saskatchewan NDP?

February 7, 2012

From 1944 through 2007 Saskatchewan politics was dominated by the Co-operative Commonwealth Federation (CCF) and its successor the New Democratic Party (NDP). But then it was soundly defeated by the Saskatchewan Party in 2007 and routed in 2011. Today the NDP has only nine seats in the legislature. Dwain Lingenfelter, who had been called back from Nexen in Calgary to lead the party in 2009, has stepped down, and John Nilsen was chosen as the interim leader. The NDP Provincial Council will meet on March 10, 2012 to decide when to call a leadership convention. This is a very important decision.

What is the future for the NDP in Saskatchewan? It is clear that the powers that be in the party do not want to seriously ask what happened and why. They are pushing for an early leadership convention. Only two possible candidates are being mentioned, MLAs Cam Broten and Trent Wotherspoon. It is expected that either will continue the policy direction set by the governments of Roy Romanow and Lorne Calvert (1991-2007). This was the full neoliberal package including the promotion of the free market and free trade, cutting taxes and social programs, the privatization of state enterprises, deregulation, and subsidies for large capitalist enterprises. The party also took a strong stand against the Kyoto protocol and any mandatory controls on greenhouse gas emissions.

The collapse of the NDP
The Saskatchewan NDP is in big trouble. Their vote has fallen from 275,000 in 1991 to 169,000 in 2007 and 127,000 in 2011. The party membership has fallen from 46,000 in 1991 to around 8,000 today. The provincial Liberal Party has all but disappeared; in the 2011 election they got fewer votes than the Greens. As a result, the Saskatchewan Party received 64% of the popular vote and the NDP only 32%.

When Ryan Bater resigned as leader of the provincial Liberal Party, he argued that the province had now moved to a “one party system.” Without any real shift in policy, it seems very likely that the NDP will be a weak opposition party for the foreseeable future. They may never again form the government.

It should also be recognized that the public’s participation in the electoral process has dropped dramatically. In the 1991 election which swept the NDP back into office, 83% of those who were enumerated went to the polls. In 2011 this had fallen to 66%. But the number of voters on the official electoral roll has also been falling. In 2011 the turnout of eligible voters (citizens 18 and older) was actually only 49%. Why is it that the people of this province no longer feel it is of any use to even bother to vote?

For most people in Saskatchewan times are quite good. The province has had a boom in the resource extraction industries. People have moved here to find work. Overall employment is up significantly. The average wage is now above the national average. House prices have risen with the general boom, which has benefitted the majority. So it was highly unlikely that the NDP had a chance to win this past election, no matter who the leader was.

Monday, 23 January 2012

The International Community

January 23, 2012

So what or who is “The International Community?” We hear it all the time from certain political leaders. For example, Hilary Clinton, President Barrack Obama’s Secretary of State, uses the term all the time.“We will take the issue of Iran’s nuclear program [certainly not ours!] to The International Community.” Is this the United Nations? Not exactly. It is:

I. The Sheriff.

The government of the United States of America. There are five U.S. Central Commands which cover the entire world, which is the U.S. sphere of influence. They are linked to 750 public bases in 38 countries plus other secret bases. The U.S. Navy has 12 aircraft carrier strike groups which operate in all international waters and are equipped with nuclear weapons. The U.S. Air Force has 94 B-52, 21 B-2 and 67 B-1 bombers which can be loaded with a wide range of bunker bombs as well as nuclear weapons. To back this up there are 500 nuclear-armed Intercontinental Ballistic Missiles ready to go from their bases in the USA. One third of all U.S. aircraft today are unmanned drones, directed to bomb targets all around the world from bases in the USA. There are also 18 ballistic missile submarines, which are also decked out with nuclear weapons. At the bottom are around 1.4 million rank and file military personnel, backed by the private mercenary armies provided by corporations like Blackwater and DynCorp.

In support of this phalanx of military power there is by far the largest intelligence and surveillance operation the world has ever seen. This includes the Central Intelligence Agency, The National Security Agency, the National Reconnaissance Office, the National Imagery and Mapping Agency, the Defense Intelligence Agency, all working closely with Lockheed Martin Corporation. Together they do their best to monitor all telephone calls, who uses the Internet and for what purposes, read everyone’s e-mails and even monitor the books you get out of the public library. Suspects are red flagged in their data bases. This shows up on the agent’s screen when you cross an international border.

Individuals may not know they are being monitored. In the buildup of mass popular opposition to the U.S. attack on Iraq, members of the Green Party of the USA were banned from using commercial aircraft to attend and speak at peace rallies.

With this kind of raw power, it is not surprising that since the demise of the Soviet bloc, the U.S. government has been able to capture and use the United Nations. The U.S. government names the Secretary General, controls the Security Council and dominates all the official international aid agencies. But this is not enough.

II. The Deputy Sheriffs.

These are Great Britain, Canada, Australia and New Zealand. With the Sheriff, they form the Anglo American Alliance to Control the World, a power structure based on white settler colonialism. These countries worked closely together to develop the first nuclear weapons, which the US government dropped on Japan. They have an exclusive treaty for the development and production of chemical and biological weapons, which were used widely in the Vietnam war. More recently they formed the UKUSA Signals Intelligence Alliance, which operates the Echelon program and its 120 spy satellites. Because of their special cultural relationship, these governments have agreed on the right to spy on each other with no advance permission required. Now that is solidarity!

The Deputy Sheriffs all have their Special Forces which work together in the field. They were first developed after World War II to specialize in counter insurgency warfare, where national liberation movements in the colonized world were trying to end European domination. The U.S. Special Forces were fine tuned during the Vietnam War. Under the Phoenix Program they were charged with disrupting civilian support for the Vietnamese National Liberation Front. The U.S. government admits that the Army Special Forces and the Navy SEALS “neutralized” 81,740 suspects and assassinated 26,369.

Wednesday, 18 January 2012

Torture as Acceptable Government Policy: USA, NATO and Canada

by John W. Warnock
Act Up in Saskatchewan
January 16, 2012

On January 5 Afghan President Hamid Karzai declared that within one month the U.S. government and NATO must hand over control of the Parwan prison at Agram Air Force Base north of Kabul to the Afghan government. An Afghan government commission investigated and reported that the there is systematic abuse of those held in this prison.

Gul Rahman Qazi, head of the commission, told the press that only 300 of the 2700 mainly Afghans held at the prison had been charged with any offense. The remainder “were being held without charges or evidence of guilt” and should be released. The vast majority of detainees had “no access to the courts” or family members. Many of those who had been charged in court and released, or who had served enough time in the jail to cover their sentences, were still being held by NATO authorities on the grounds that they were suspected of being insurgents.

In addition, the Afghan commission charged that detainees were being subjected to practices that were widely understood to be torture. These included beatings, various techniques of sleep deprivation, being held in small cells with no light, no heat and inadequate clothes and blankets, and being stripped and given intrusive body searches. Some of those who had not been charged were held for long periods of time in solitary confinement. Most detainees are held in wire animal cages with less privacy or comfort than in Nazi concentration camps.


The U.S. and Canadian governments rejected Karzai’s demand arguing that the abuse of detainees at Afghan prisons was widespread and unacceptable. They would not transfer detainees to Afghan facilities. The Afghan Independent Human Rights Commission stated that President Karzai’s government did not have the finances or ability to operate the Parwan prison. Those held in the NATO prison would be better off to stay where they were.

In October 2011 the United Nations Assistance Mission in Afghanistan released a report which concluded that there was widespread abuse of detainees in the prisons run by Afghan authorities. President Karzai’s secret police was accused of systematically using torture. But there is no recognition by NATO governments that torture takes place in NATO facilities.

Thursday, 12 January 2012

Predator Drones on Western Canada's Southern Border

by John W. Warnock
Act Up in Saskatchewan
January 9, 2011

Last week the U.S. government announced that the ninth Predator Drone will be deployed protecting the borders of the United States against the infiltration of terrorists, criminals, drug traffickers and economic refugees. Six of these unmanned attack aircraft are based in Arizona and Texas and operate along the border with Mexico. The other three operate along the northern border, between Minneapolis and Seattle. They are stationed at the Grand Forks, ND U.S. Air Force base. When the program of U.S. government monitoring the “undefended border” began it had the full support of the Harper government.

The Predator drones operate high in the sky and cannot be seen or heard from the ground. They are active far from the bases where they are stationed and directed. They can monitor individuals well across the border into Canada. The U.S. government insists that so far they have not been armed with missiles.

President Obama’s favourite weapon
President Barrack Obama’s first act as President was to authorize the regular use of U.S. Predator drones within the borders of Pakistan. Attacks in that country rose from special cases of one or two a year to 33 in 2008, 53 in 2009, and 118 in 2010. Most recently, President Obama directly ordered the CIA to use a missile from a Predator drone to assassinate Anwar al-Awlaki, a U.S. citizen, who was in Yemen supporting radical Muslims who oppose U.S. military presence in the Middle East.

In the Iraq and Afghan wars, the U.S. government has widely used the drones to launch missile attacks on individuals and groups who opposed the U.S. war. Often these were missile attacks on the houses where the suspects were assumed to be living. The U.S. government and its NATO allies have played down the deaths of innocent civilians. However, at the local level protest demonstrations have been the norm.

Drone attacks have been widely used in the war inside the borders of Afghanistan. In one case a brother of President Hamid Karzai was killed by a U.S. drone missile attack. The Afghan government has demanded that these attacks cease, but they have not.

Friday, 6 January 2012

2012: the Year the Canadian Housing Bubble Will Burst


January 6, 2012

This is the time of year when all economists (and some political economists) are called upon to make their forecasts for the year which is beginning. From the recent data it appears that the USA will have a very modest increase in economic growth, not enough to significantly reduce the number of people who are unemployed, working part time while wanting full time work, or who have given up looking for a job and have left the work force. The European Union has an enormous pile of debt to deleverage, is already in a double dip recession, and all forecasts are for an overall negative growth rate for the year. This can only be bad news for the economies of the USA and Canada.

The housing issue
However, it does seem likely that the average price of a house in the USA will finally reach the bottom of the collapse of their housing bubble. As I write this prices have fallen back to where they were in 2000, the beginning of the formation of the bubble. We can see this in the graph of the trends in house prices tracked by the most respected sources of data, reported here by Calculated Risk.



As most people know by now, the housing market in the USA took off when the government deregulated the finance industry, drastically reduced the interest rates on mortgages, lifted the requirement for buyers to have 20% equity when buying a house, and instructed the federal chartered housing corporations (Fannie May, Freddy Mac, Federal Housing Authority, etc.) to insure all the marginal mortgages. This created what became known as the “sub-prime” mortgage market.

These very risky mortgages were then bundled together into mortgage backed securities (MSBs) which were then sold on the bond markets around the world as top rated investments. This  Ponzi scheme collapsed when many of the new homeowners could not keep up the payments. There are still over four million houses in the USA in some phase of the foreclosure process.