Another Take on the Bailout

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I saw versions of Mr. Steeves letter regarding Harper's billion dollar bailout (enticement) in both the Telegraph Journal (Jan. 16) and the Times & Transcript (Jan. 17). I asked for his permission to post it on the blog and he sent me the original version which appears below with links.

To the editor:

Given the way Stephen Harper's billion dollar 'bail-out' for the forestry industry plays, I think I would prefer Gilles Duceppe as Prime Minister of Canada. At least, with Duceppe, everyone would know that he represents his own province's interests first. And Canada's second.

And I'm almost as angry with Shawn Graham and a variety of opposition federal Members of Parliament who are now pondering over whether to accept a bad deal (with a few bucks upfront) or to face really tough times (without the few bucks).

The Harper billion should be rejected. For a variety of reasons. Most of all, because it's as bad a deal for Canada and New Brunswick as anything that Brian Mulroney and Karlheinz Scheiber may (or may not) have dreamed up.

Unless I misunderstand the concept, the billion is supposed to alleviate the social and economic problems faced by 'one-industry' towns (especially forestry towns) faced with mill and plant closures. As such, I would think that resource communities in forestry-dependent provinces such as New Brunswick, Quebec, northern Ontario and British Columbia would be targeted for special attention. Instead, the deal rates the provinces on a 'by population basis. The Harper billion will be divided among the provinces by a 'per capita' formula.

Which means, among other things, that Alberta will get about three times as much money as New Brunswick. And almost as much as British Columbia.

Asked about this, Harper correctly pointed out that Alberta does have a forestry industry that is hurting. He failed to point out that Alberta's forestry centres such as Grande Prairie are not 'one-industry' burgs: they also have thriving economies reliant on both agriculture and oil and gas.

The Prime Minister also accurately noted that Alberta deserves money because it is becoming the front-line in the battle to stop the very real threat of the mountain lodgepine beetle. He failed to also note that, when (and if) Ottawa decides to kick in money for the battle
against the beetle, few Canadians would object if that money is spent where it belongs. In Alberta!

Which brings me to my main point. If this billion is supposed to help Canadians in need, it should be directed at the people who need it. The people of Dalhousie and Miramichi. Or Dryden and Fort Frances, Ontario. Or LaTuque, Quebec, and Port Alberni, British Columbia.

In other words, this federal money should be targeted at a specific problem It should not be handed over, with basically no strings attached, to provincial governments that 'can' (I am not saying will) spend it any bloody way they want.

Of course, my concerns are based on the premise that Harper is trying to help people in need. If that's his plan, it won't work.

If, in fact, his program is designed to encourage regional rivalries in a fractious nation while at the same time weakening federalism, I think he's bang-on.

I have my own theories. I've read his Montreal speech (http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20051213/elxn_harper_speech_text_051214/20051214/)
and his Alberta ''firewall' letter (www.cbc.ca/canadavotes/leadersparties/leaders/pdf/firewall.pdf ).

As I said, I think I would prefer Gilles Duceppe as Prime Minister. I wouldn't agree with him. But I don't think he would pretend that he had suddenly stopped being a separatist.

John Steeves
Sussex

Harper's Mini-Marshall Plan

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Happy New (Democratic) Year everybody! I trust that the holidays went well from you.

WARNING - Beware of eager Prime Minister's bearing gifts!

Yesterday, in a prelude to today's First Ministers' supper, Mr. Harper came to New Brunswick to announce a $1 billion package to help communities adjust to recent job losses. It makes sense to have the announcement in New Brunswick - Shawn Graham is busy trying to appease Harper in order to gain future favours, Graham is the chair of the First Ministers' group, and New Brunswick has been hit hard with significant losses in the forestry industry. Why Harper chose to make the announcement at a busy mill near Fredericton in Minister Greg Thompson's (CPC) riding when he could have gone to an impacted area in another part of the province, I don't know. I guess he had his reasons.

A billion dollars is a lot of money, but I have issues.

First, one would (and indeed, should) expect that our Prime Minister was well aware of the problem before it reached this level. With trusted advisors and his much-touted Economics degree behind him, couldn't he have seen the problem developing: what with the poorly handled softwood lumber deal, the monumental financial failure of US subprime mortgages, crisis in the asset-backed commercial paper throughout North America, a failure of US foreign policy, rising US government debt due to poor foreign and domestic policy, to mention a few? The rise in the Canadian dollar speaks not so much to the strength of the Canadian economy, but to economic decline in the US. Indeed, now key economists in the US are talking of recession. Given the importance of our exports to the US market and our government's almost-worship of all things American, the combination of a high dollar and a US recession will most certainly hurt our manufacturing and resource-export industries. In fact, we are now seeing an overall loss in jobs in both Canada and in New Brunswick (CBC Report). Why then, did Harper wait this long to formulate this "plan"?

Second, if this is really an issue about the Canadian economy, if Harper is really standing up for the regular people in Canada (recall the Tim Horton's versus Starbucks commentary), then he must realize that this is an economic issue and that the economy lasts longer than any one political party. Why then did he tie this adjustment spending to Opposition support of his spring budget? Why did he choose to wait to make this announcement the day before his supper with the First Ministers? I don't think it is reasonable to play politics with people's livelihoods!

Third, we should know that this is $1 billion for the whole economy including a fixed transfer of $10 million to each province and an additional transfer based on population - and this is spread over 3 years. New Brunswick may get $30 million over 3 years. I've read that the salary loss at the AbitibiBowater mill alone is $24 million annually. The salary losses in the auto industry in Ontario alone are probably more than $1 billion annually. More peculiar perhaps, is that booming Alberta will likely get more money than New Brunswick. (Then again, Mr. Harper is from Alberta, he has a lot of friends in the oil industry in Alberta, and he did sign the "Alberta First" letter in 2001 - which makes him Canada's first separatist Prime Minister by the way!)

I'm also concerned on a different level. New Brunswick has seen this sort of aimless bailout before. The temporary success has normally come from a significant transfer of resources to a large forestry company who set-up shop for as long as it can arrange for government help. It sounds a lot like McKenna's call-centre job creation strategy.

I had a discussion with a news producer today, and we both asked the same question, "If this money is for "retraining," then what exactly are we retraining people for?" Indeed, what is Harper's concept of the new-and-better Canadian economy, and more germane to us, what is Graham's idea? Saying we'll be "self-sufficient" and that we'll see strong growth in the north does not mean it will magically happen.

We need direction. Should we look at retraining and relocation as a method of dealing with the projected labour shortage in southern NB? If we really want to develop the north, why don't we consider sending some of the natural gas from Sussex northwards? Should the north look into tourism and eco-tourism? Can we use some of this funding to invest in literacy programs that saw funding cuts because of Harper's earlier decisions? Can the Natural Resource Minister sit down with the New Brunswick Federation of Woodlot Owners and workers from the forestry industry to see what plans might develop? Can we use this funding to provide tax breaks for individuals willing to invest in new community-based business initiatives?

We don't know, and Graham doesn't seem to want to tell us. Instead, we are told that some of the money Harper will give us (if only the Opposition supports him) may even be used to improve broadband internet access. Great news, except that at $40/month for service, it likely wouldn't be high on my list of necessary services if I had no job!

We want leaders, but we are infested with politicians. AHHHHHHH!

Other news:

Keep the members of STU Faculty and CUPE workers at NBCC in your thoughts as they walk the picket lines.

On an issue we raised a while ago, it seems that there will be a probe into the unfortunate death of Ashley Smith, a Moncton native whose death is linked to her time in an Ontario prison (CBC Report). We have to realize that prison is not necessarily the appropriate method of caring for people who suffer from mental illness.