Cool the rhetoric on softwood lumber says Condoleeza Rice, U. S. Secretary of State. Keep things in perspective, softwood lumber is simply a trade issue. Go back to the negotiating table.


Oh and if that doesn’t work “our word is a good as gold”.

Let’s put that in context.

We are to trust the word of a United States Government representative who was part of a conspiracy to convince the world that Saddam Hussein and the Government of Iraq was armed with nuclear weapons and biological armaments of mass destruction to justify the invasion of that country.

We are to trust the word of a United States Government representative who flaunts the value of “free trade” but refuses to honour a judgment (rendered by a NAFTA dispute-settling panel) because it goes against the United States. I don’t think so.

If Canada goes back to the negotiating table, it will acknowledge that the NAFTA dispute settling mechanism has no legitimacy and worse that its decisions are not enforceable and therefore are without value.

Furthermore, it will acknowledge the failure of NAFTA. If terms of an agreement cannot be honoured and worse are not enforceable, why be encumbered by the agreement?

The Canadian Government is warning that unless the Americans respect the Panel ruling and give back the $3.5 billion in duties they have collected, the entire North American Free Trade Agreement will be in jeopardy. Dah!

Meanwhile, the Bush administration argues that the NAFTA ruling is invalid because prior to its ruling, Canada had appealed to the World Trade Organization (WTO) and post-NAFTA ruling, the WTO ruled in favour of the United States, thus making the NAFTA ruling irrelevant.

To further muddy the issue, some have suggested that if the United States continues to ignore the NAFTA ruling, the trade agreement would no longer be in force and Canadians would be freed of their obligation to export energy to the United States at prices no less favourable than those available to Canadians. There is some hypocrisy in this position because our economy depends on the free flow of goods and services between the two countries and NAFTA with all its warts helps facilitate that flow.

There is also hypocrisy in Secretary Rice’s position because the U.S. administration is one that cares little for international treaties or agreements. This is an administration that withdrew from a treaty to establish an International Criminal Court (ICC), even though the treaty had been signed by former President Bill Clinton in 2000. The Bush people vehemently opposed the ICC because they feared U.S. soldiers and diplomats could be brought before a court that would hear cases of war crimes and crimes against humanity.

Is it any wonder the Bush people opposed it?

This is an administration that refuses to support the Kyoto Accord which aims to curb the air pollution blamed for global warming. The accord requires countries to cut emissions of carbon dioxide and other greenhouse gases by 5% by the year 2012. Some 141 countries have ratified the treaty but the world's top polluter - the US - has not signed it because the changes would be too costly to introduce and in their words, the agreement is flawed.

Sound familiar?

This is an administration consumed by the threat of international terrorism and a middle-eastern conspiracy of attack against the United States. It’s not concerned about Canada or Canadian interests. The Bush people only recognize treaties that fit their definition of U.S. ‘national interest’. They are not prepared to recognize the NAFTA ruling or resist their softwood lumber lobbies because they need the political support of these lobbies.


In fact the administration is more concerned with a federal grand jury investigating the leak of a CIA operative's identity. Yesterday, a U.S. federal grand jury indicted Vice President Cheney's chief of staff, I. Lewis "Scooter" Libby, after a two-year investigation into the leak of a CIA agent's identity.

The grand jury spared President Bush's top political strategist, Karl Rove.

U.S. federal law makes it a crime to deliberately reveal the identity of an undercover CIA agent.

Former CIA operative Valerie Plame and her husband, retired State Department diplomat Joseph Wilson, have accused Bush administration officials of deliberately leaking her identity to the media to retaliate against Wilson after he published an opinion piece in The New York Times that cast doubt on a key assertion in the Bush administration's arguments for war with Iraq - that Iraq had sought to purchase uranium for a suspected nuclear weapons program in Africa.

Wilson, who was acting ambassador to Iraq before the 1991 Persian Gulf War, said the CIA sent him to Niger, in central Africa, to investigate the uranium claim in February 2002 and that he found no evidence such a transaction occurred and it was unlikely it could have. Days after Wilson's article was published, Plame's identity was exposed in a piece by syndicated columnist Robert Novak.

Only one in 10 Americans say they believe Bush administration officials did nothing illegal or unethical in connection with the leak, according to a national poll released in the United States last Tuesday. Thirty-nine percent said some administration officials acted illegally in the Valerie Plame matter. In this week’s FOX News poll, 51 percent of Americans disapprove of Bush’s job performance...

This is the same administration, according to Secretary of State Rice, whose word is “as good as gold” when it comes to international trade and international treaties. As someone in Canada’s parliament said the other day, the “gold standard” was abandoned years ago.

Madam Rice has a great smile but she should consider putting some of that “good as gold” stuff between her teeth. That would be far more attractive than her warning that Canada should lose its rhetoric and get back to the softwood negotiating table.

What are Canadian forces doing to protect us from the United States?

Earlier this week, I watched General Rick Hillier, Canada’s Chief of Defense deliver the annual Dick, Ruth and Judy Bell Lecture to a group of students at Carleton University.

General Hillier is a Newfoundlander and a candid promoter of Canada’s military role in the modern world. He made headlines recently with his comments that Canadian troops in Afghanistan are going to “kill the scumbags” in that country.

Hillier’s speech to the Carleton students was entitled “Canada’s military in a dangerous new world”.

He addressed the issue of Canadian participation in Afghanistan.

As you might expect there was some heckling in the audience. When his lecture was completed, there was some aggressive questioning from students.

The General defended the occupation of Afghanistan and argued that Canada should have more troops in the country because “if we don’t fight the terrorists over there, they will come here”. That sounds more American than Canadian to me but he might have a point.

I was particularly struck by the distinction he made between the values represented by our military and the values conveyed by the U.S. military. As he put it, the role of Canada’s military is to help and protect people, while the role of the U.S. military is to occupy. Our military forces serve as peace-keepers, not intruders.

The most interesting question from the Carleton students, following the General’s speech was “What are the Canadian forces doing to protect us from the United States which is increasingly belligerent, ignoring international law, ignoring trade agreements and conducting illegal wars”. That got me thinking about our relationship.

The United States is Canada's most important ally and defense partner. Defense and security relations between the two countries are longstanding, well entrenched and highly successful. Defense cooperation with the U.S. maximizes the security of Canadians. Indeed, the terrorist attacks of September 11, 2001 underline the need to continue working together to effectively counter new threats to the North American continent.

Dealing with situations in failed or failing states, is the external mandate of Canadian forces. It’s not simply about waging war. It requires a complex set of skills including combat capabilities, negotiation and diplomatic skills and a willingness to help others rebuild their countries and institutions in a way that is sensitive to their needs.

The Canadian Forces have a combination of round the world peacekeeping operations (Europe, Africa, other since the 1950's), a war-fighting history (two World Wars and the Korean War) and recent experience in the Balkans. Few militaries in the world have this experience or history. The acquired skills define Canada's military advantage when dealing with defense and the security challenges around the world.

One of those challenges, as reminded by our Carleton University student is the United States. The U.S. is a nation in crisis. It’s stuck in a Middle-East war that should never have happened and it can’t get out of it in the near future.

It’s carrying the largest national deficit in its history. It’s plagued by tropical storms and the aftermath of poverty, class distinction and ruin. It has skewed public access to education to the wealthiest of its citizens and is now 7th or 8th in the world in terms of academic achievement, ranked well behind Canada. Its airline industry is in a financial shambles. Its auto industry is choking on healthcare costs and the country is panting for new energy sources.

The federal Government is under siege.

George Bush is scrambling to get out of the way of prosecutor Patrick Fitzgerald’s probe into who leaked the name of CIA officer Valeri Plane (it’s illegal to reveal the name of an undercover CIA operative in the United States). Her husband, U.S. Diplomat Joseph Wilson was the guy, who prior to the U.S. invasion of Iraq challenged George Bush’s assertion that Saddam Hussein was buying uranium from Uganda (or was it Nigeria) to build nuclear bombs.

Indictments may come from Fitzgerald’s probe and they could go all the way to the President’s senior political advisor Karl Rove and his Vice President Dick Cheney.

On Wednesday, a Texas court issued a warrant for former Republican Majority Leader Tom DeLay on conspiracy and state money laundering charges, alleging that a political committee he founded funneled corporate money into state GOP legislative races through the National Republican Party.

A few of weeks ago, Bush offended his conservative voter base by nominating his White House counsel, Harriet Miers for a lifetime appointment to the US Supreme Court, bypassing conservative judges in favour of a loyal lieutenant with no judicial record. Opposition to the appointment is fierce, particularly from his Republican supporters.

U.S. Colonel Lawrence Wilkerson, former (retired January 2005) Chief of Staff to former Secretary of State Colin Powell claims that U.S. Vice-President Dick Cheney and a handful of his non-elected colleagues hijacked U.S. Government's foreign policy during the lead-up to the Iraqi invasion. He implicates Cheney, Secretary of Defense, Donald Rumsfeld and Condoleezza Rice, former national security adviser and current Secretary of State. This is the lady Canadians hope will uphold the spirit and intent of the NAFTA agreement and resolve the softwood lumber issue.

George W. Bush has three more years in office. What happens if his presidency collapses? Why should people in the Maritimes care?

We should care because if the U.S. president is trapped in crisis, the last thing he will care about is resolving issues that are important to Canadians.

The last thing he will care about is Canada’s softwood lumber issue. The last thing he will care about is cross-border trade. The last thing he will care about is an “Open Skies” agreement between Canada and the United States.

The last thing he will care about is the impact of new passport policies on our tourism industry.

It’s early in the fall but the media are already on a feeding frenzy in preparation for a long cold winter.

This time, it’s the Dingwall affair.

I’ve been trying to figure out the media’s fascination with David Dingwall. He’s a former Federal Cabinet Minister and Minister of Public Works. That’s yesterday’s news. He’s also a Cape Bretoner, a Nova Scotian and the immediate past President of the Royal Canadian Mint. Is that reason enough to envy his $250,000 a year salary?

Margaret Wente, columnist for the Globe & Mail is convinced that his tenure as Minister of ACOA is reason to chase him. After all, she says “the Atlantic Opportunities Agency is only a pork-machine” for the Government. By implication, anyone in her world who would be Minister of that Agency would be a raving pork-barreller. What bunk. What does she know about Atlantic Canada?

So what is the real issue?

Is the media just fascinated with Dingwall’s expense claim for a $1.29 gum purchase, as Rex Murphy would have us believe?

Is it concern about his 1993 handshake with Chuck Guité (central figure in the Federal Sponsorship fiasco) who the Liberal Government inherited from Mulroney’s Conservatives? Is it the $300,000 “success fee” he may have earned as an un-registered lobbyist before he became President of the Mint?

Is it the contractual agreement he has with the Government that may have earned him a separation payment even when he resigned from his position as head of the Canadian Mint? Is it Revenue Minister McCallum’s assertion that Government is legally obliged to make the payment?

Frankly, I don’t believe it’s any of the above.

The media is after Dingwall because he was a Chrétien supporter and more importantly because he is not a Quebecer. Virtually everyone who was implicated in the Federal Sponsorship mess was a Chrétien supporter and a Quebecer. Virtually everyone who lost their job or was prosecuted as a result of the Sponsorship debacle was a Quebecer. Canadians outside of Quebec have been able to get beyond the Sponsorship program and Justice Gomery’s Inquiry (his report is coming soon) because they could rationalize the misuse of Sponsorship funds as Quebec-based and perhaps even well-intended. This rankles many in the media.

David Dingwall is the first high profile Chrétien supporter who is not French, French-speaking or resident of Quebec to be put under the questionable-behaviour microscope.

The media smells blood and have already convicted the man without benefit of trial or defense. If Dingwall can be linked to a misuse of public funds, the pattern of misuse, showcased by the Gomery Inquiry would be extended beyond Quebec. Worse, Paul Martin’s early defense of Dingwall and John McCallum’s defense of Dingwall’s contractual right to severance payment could, in theory link the current Government to the Sponsorship issue.

That leads us back to Quebec.

Months ago, Belinda Stronach strolled across the floor of the House of Commons.

Something in her move stuck with me for days and that was her rationale for moving, her concern about the Conservative Party’s partnership with the Bloc Quebecois and her worry that an early election would produce a Bloc sweep in Quebec.

We need to revisit her concern. The Liberals are still weak in Quebec. Stephen Harper and the Conservatives are a wasteland in that Province and continue to trail the Liberals in national polls.

During the Gomery Inquiry, witnesses provided daily soap-opera entertainment for huge numbers of people in Quebec. Those people are still mad at the Liberals for thinking they could buy Quebec’s allegiance to Canada with a bunch of local-event sponsorships.

They are mad because the Federal Government singled out the perpetrators of that farce as Quebecers and they are mad because the Gomery Inquiry painted a picture of Quebec-society, Quebec businessmen and Quebec politics as corrupt.

If the Dingwall affair should resurrect the Sponsorship issue and provide reason for Canadians to toss the Liberals, one has to wonder whether the tossing would create the perfect storm for Quebec-separatists. An angry Quebec combined with a minority Conservative government, led by Stephen Harper and held ransom by Gilles Duceppe’s Bloc Quebecois would be close to a perfect storm for the separatists.

Regardless of Dingwall’s contribution, chances are that the next federal election will produce another minority government. Today’s polls suggest the minority would be held by the Liberals. Another minority government would pressure both parties to change leaders and/or to find a leader from Quebec who could be supported by that Province. The Conservative choice would likely be Bernard Lord rather than Peter MacKay, given Lord’s roots in Quebec and his bilingual credentials.

On the Liberal side, it’s a little tougher to call. Frank McKenna, Canada’s Ambassador to the United States would be a terrific candidate but he doesn’t have a big fan base in Quebec. He would be strong in Ontario and acceptable in the West but he would have to find a new generation of Quebecers to support him in that Province.

If McKenna can’t find his Quebec support, I would bet the new Liberal leader will be somebody from that Province, a person with the passion to merge Quebec with Canada, a 21st century version of Pierre ElliotTrudeau.

In the absence of such a leader, the Liberals might even turn to a new generation francophone, someone fluently bilingual and sensitive to the needs of today’s Canada. This person would move easily between French and English Canada but also be at home in the multi-cultural country we have today.

Who knows, one day our new Governor General might become Prime Minister of Canada.

This week, we hear about a $2.5 billion Federal energy rebate program that will pay families with less than $35,000 a year in income $250.

Seniors with less than $30,000 a year in income will also receive $250. Low income families will also be eligible for $3500 to $5000 in conservation incentives but the majority of working Canadians will receive nothing.

Oil prices are down from $70 a barrel to near $60.

The stock \market responded to the decline by lowering its investment in the energy field. The president of Imperial Oil would like to see it fall to $30 a barrel. However, investment fund-managers remain bullish about energy stocks as analysts suggest that the least little hiccup in the market that could affect the supply of oil or refining capacity could push the price back up again.

As price speculation rages, Paul Martin is linking energy to resolution of the Canada – United States softwood lumber issue and U.S. refusal to abide by a NAFTA (North American Free Trade Agreement) decision that ruled in favour of Canada. Implicit in that link is that Canada might be tempted to void its energy agreement with the United States as it relates to NAFTA by reducing exports of oil and gas to that Country or by increasing the price of our exports to the United States.

While Mr. Martin is doing the energy-softwood link, the president of General Electric is calling for a North American energy policy that would invite government intervention. He doesn’t go so far as to advocate price controls. He wants more government investment in infrastructure – read pipelines to ensure better access to energy across the continent. Read better access to canadian energy resources. Go figure!

Meanwhile, here in Moncton the Times & Transcript is criticizing the management of NB Power for applying to the Public Utilities Board for a 14 to 16% electricity rate increase while ignoring two fundamental parts of the equation

• (i) that the Provincial Government has instructed NB Power to operate on a cost-recovery basis and,
• (ii) that rates are increasing because of the cost of oil. It seems to me that the management of NB Power is caught in the middle and not the guilty party.

The Federal rebate program would provide low income families with the $250 to offset their heating costs. They will also provide incentives up to $5,000 to increase the conservation of energy in lower income homes.

It would seem to me that it would make a lot more sense to remove the HST on heating costs and then everyone would benefit. If energy costs remain high, we’re going to be in for some major inflation in this Country as prices start to go up for everything that has an energy component in its cost structure.

Do the math! If you put 50 litres of gasoline in your car every week and prices average 30¢ a litre more than they did last year, you’ll lose about $750 this year. If it cost you $3,000 to heat your house last year, it could cost you $400 to $600 more next year.

If you spend $5,000 a year on food and the price of food goes up 10% because of rising energy and transportation costs, you could add another $500 for food. If your family spends $2,000 a year for clothing, add another $200 for energy and on it goes.

If your family income is $70,000 a year and you’re giving away $2000 or $3,000 a year in new energy costs, what are you going to give up to pay for them? Will it be your vacation or your car?

Will it be cable for your television set or hockey for the kids?

Will you have to sell your car or send the kids to work? Will you turn off the lights or just turn down the heat?

Will your boss help out by giving you a raise or will you have to go to the bank and ask for a loan?

The answer is that it has to be one of the above because the Federal and Provincial rebate programs won’t affect you if your family income is more than $35,000 a year. These programs are for the lowest income families only and they’re not big enough to make a difference for anyone except in so far as some help is better than none.

Instead of rebates for the poor, why not tax relief starting with removal of the HST from energy purchases if prices don’t settle back near last year’s prices. Everyone pays taxes on energy, not just the wealthy.

In fact, consumption taxes on essential purchases like electricity, heating fuels and gasoline to get you to work hurt the poor more than they do the wealthy. Heat and light are essential purchase in our society and in our climate. At the very least, the first $2,000 or $3,000 of your energy purchases should be free of sales tax. That would save everyone $300 to $500 a year.

Sure, those people who don’t need the money will use it to buy something else but that could be a good thing if it creates new economic activity that in turn increases employment levels in Canada.

In addition to the tax cuts, Governments should also be directing energy providers to build conservation incentives into their pricing models – the more energy one uses, the more one should pay for that energy.

We need a coherent energy policy in this Country that addresses the long-term energy needs of Canadians. I don’t think a knee-jerk reaction to a spike in energy prices represents a long-term vision.

Energy prices are on everyone’s mind these days, so I’m going to take another shot at them.

Two weeks ago we had a spike in gasoline prices that created panic at the pump. Panic morphed into retrospection but the warning was there.

In the United States, two major airlines filed for bankruptcy protection in the last few weeks, blaming the high cost of fuel for their problems.

One might argue their problems were more systemic than fuel-related but fuel costs were certainly a factor. Still, it’s interesting to note that Southwest Airlines and Jetblue Airways, a discount carrier, are still operating at a profit, even with higher energy costs.

The same can be said for WestJet in Canada.

By the time you read this column, NB Power may have announced its intention to ask the Public Utilities Board for another ten to fifteen percent rate increase for electricity to cover its rising oil costs. One might argue that a billion dollar decision to convert its Coleson Cove generating plant from oil to Orimulsion has more to do with NB Power’s need for a price increase than the cost of oil.

Alberta is flush with oil money and is preparing to distribute “prosperity” cheques to its residents. Does it make sense that one part of a country should benefit from the hardship of another?

Can the Federal Governments do anything about it?

The Feds could introduce national price controls but NAFTA (North American Free Trade Agreement) forces us to sell oil to the Americans at prices no less favourable than those we offer to Canadians. If Canadian prices should be fixed below world prices, we would end up subsidizing the Americans by selling them oil below market prices.

The Canadian Taxpayers Federation is speculating that federal and provincial governments will reap a $300 million windfall benefit from gasoline taxes. The Feds aren’t quick to admit it but they say that if there is a windfall-benefit; the dollars will go to fund improved healthcare services.

What people seem to forget is that when prices rise, demand for a commodity like oil generally drops. If oil prices rise fast enough and steep enough, we could actually see a drop in gasoline tax revenues for our federal and provincial governments.

It’s also easy to forget that when energy prices increase for residential users, they also increase for governments. School buses need gasoline. Hospitals and schools need heat and electricity. Government office buildings need energy. Asphalt to pave our highways is an oil derivative. If the Provincial Government’s operating costs should increase by just 3% as a result of a 10 or 15% increase in energy costs, the pass-along cost to New Brunswick taxpayers would be at least $30 million.

Earlier this week, this newspaper was demanding that federal and provincial governments do something about energy costs. It’s not clear if the paper wants subsidies, rebates or price controls. It’s not clear if it wants them for everyone or just the working poor. What is clear is that the Paper seems to be saying that our provincial and federal governments can and should do something about rising energy prices.

Premier Lord has already announced a $20 million relief program that will include cash rebates and fuel supplements for our neediest citizens. The Federal Government is toying with the idea of creating a new agency to monitor gasoline prices while it builds a program to help low income families deal with home heating costs.

The harsh reality is that oil is a global fuel, not a provincial or federal football. Prices will continue to rise as supplies diminish. Canadians don’t set the price. World markets and middle-eastern suppliers set the price. This winter we’ll most certainly pay more for heating oil, electricity, natural gas and even coal than we did last year. And don’t forget those gasoline pumps. It’s not just our personal energy costs that will grow. Oil price increases will eventually boost the cost of the goods and services we consume.

Reacting to price increases with cash rebates and supplements will not resolve the longer term issue of diminishing oil supplies and the probability of continuing price increases. Rebates and subsidies don’t discourage energy consumption. At best they maintain it and at worst encourage it. Short-term assistance is appropriate for those who need it but it’s not a solution for the bigger problem.

We need to find and exploit lower cost alternative energy forms and we need to reduce our demand for conventional energy forms. Higher prices will help us conserve.

The Times & Transcript seems to think that governments have the money and power to repel market forces. Without saying it, the Paper is asking governments to underwrite the ongoing cost of energy for New Brunswick’s residents. It’s clear to me that our governments do not have the money to fill a bottomless subsidy hole.

Let’s assume for a moment that there is a billion dollars floating around in government treasuries that could be used to address the energy price problem. If it’s used to subsidize the purchase price, the money will disappear in jig time.

Wouldn’t it make more sense to take that billion dollars and invest it in a fuel replacement technology or wind power for homes or the technology to harness our tides?

Wouldn’t it make sense to invest that money in the design of automobiles that could run without gasoline or home heating systems that could operate without oil or perhaps without electricity?

The choice is simple; reduce demand for high priced energy and force down prices or find affordable alternatives. If we can’t manage our resources to make them more affordable or if we don’t have the market power to force down prices, then we’ll have to get used to paying the price.