Canada’s Heartaches by the Numbers


crude oil boomingOur dollar depreciated more than 2 cents on Wednesday, and is now worth .81 of the U.S. dollar, the lowest level since 2011. The Harper government put all Canada’s eggs in one basket by banking on North American crude oil, our top export, but the commodity has plunged from a high of $85 US a barrel in October of 2014, to a low of $46.US on Tuesday.

Finance Minister Joe Oliver announced this week that he would be delaying his budget from the usual February-March date until at least April, due to “market instability.”

Unable or unwilling to admit Canada’s damaged economy, Prime Minister Stephen Harper told reporters yesterday that “These things are creating some shocks that will impact us but they’re not going to throw us off our fundamental growth path or undermine the very strong fundamentals of the Canadian economy.” He added that “The government has complete confidence in the Bank of Canada in the actions that it has taken.”

The Bank of Canada cut the rate on overnight loans between commercial banks by a quarter point to 0.75% on Wednesday, in a response to the recent drop in oil prices. The previous rate had been at 1% since September 2010.  market failure

“The drop in oil prices is unambiguously negative for the Canadian economy. Canada’s income from oil exports will be reduced, and investment and employment in the energy sector are already being cut,” BoC’s Governor Stephen Poloz explained.

Many, including NDP finance critic Nathan Cullen, think Harper is in denial. The Conservatives had hoped to sail into 2015 on a high of oil fumes and the elimination of the$2.9-billion federal deficit , but it looks like their plans may be tanked as predicted federal tax revenues could be reduced by several billions of dollars thanks to global oil price shake-ups.

No worries, though, as Harper is relying on the annual $3 billion contingency fund built into the budget for “unforeseen circumstances.”

He also said that “The oil industry isn’t remotely the entire Canadian economy.” So … what is the Canadian economy?Canadian economy

Our population of 36 million boasts a 6.6% unemployment rate, with approximately 62% employed (16-64 years of age). (The United States, with 316.1 million, is at 5.6% unemployed, and 59.2% employed, while the United Kingdom, with 64.1 million people, has an unemployment rate of 6.0%, and 73% of people are employed.)

In Canada, wealth inequality, while an issue, is not quite as visible as in America; our Canadian 1% holds 12.5 per cent of Canada’s total income. 29 per cent earn $135,000 or more. But our incomes are generally lower – 95 per cent of working Canadians earn less than $100,000 a year. Our definition of ‘wealthy’ begins at $150,000.00 per year – chump change for wealthy Americans.

One of the reasons Canadians have not felt as impacted by wealth inequality is that, beginning in the late 1970’s, women surged into the workforce in record numbers. A household with two incomes could manage quite well. With the inclusion of children into the family, however, things got shakier financially. If one of the two wage earners has to stay home with the kids, they’ve effectively halved the family income, in order to raise children and run the home. As baby boomers aged, that child care burden lifted for a large portion of the middle class.

canadian workforceEducation, and it’s inevitable costs, are a factor. In order to succeed in a technological society, we need workers with complex skills and higher education. 64.1% of adults aged 25 to 64 had post-secondary qualifications in 2011, with women aged 25 to 34 holding a larger share of university degrees. 8 in 10 Registered Apprenticeship certificates were held by men.

In 2011, Almost two-thirds of adult Canadians had post-secondary qualifications, Stemwhile 2.1 million adults had a post-secondary certificate, diploma or degree in STEM (science and technology, engineering and engineering technology or mathematics and computer sciences) but half of STEM university degrees were held by immigrants who have lived in Canada for many years, and Canadian newcomers.

waiterUnfortunately, Canada has the third-highest proportion of low-paying jobs in the world, with only the U.S. and Ireland having a higher percentage of low-paying jobs. Canada is becoming a ‘nation of part-timers’; part-time employment may still outgrow full-time employment for some years as the baby boomers reduce their working hours or retire.

But the big, well-paying manufacturing companies have left Canada to take advantage of lower labour costs abroad. What’s left for those with or without special skills are low-wage service and retail jobs, which generally lack the benefits associated with higher paying positions, and are becomingly increasingly insecure.

StatsCan released this information in January 2015:statscan

In December (2014), Canada lost 4,300 jobs as full-time employment rose by 53,500 while there was a decline of 57,700 in part time jobs… Employment gains in 2014 amounted to 186,000 (+1.0 percent), with increases in the second half of the year accounting for most of the growth. Compared with 12 months earlier, the total number of hours worked increased by 0.7 percent.”

“There were 24,000 fewer women aged 25 to 54 employed in December. Their unemployment rate was unchanged at 5.2%, as fewer of them participated in the labour market. Employment among men aged 25 to 54 increased by 23,000 in December and their unemployment rate declined 0.2 percentage points to 5.5%, their lowest rate since 2008.”

This month, however, it was announced that five large retail companies will be closing Canadian operations. Lured to Canada by massive tax breaks, cuts and incentives, they’ll be leaving more than 21,000 unemployed by March or April.

Stephen-Harper-CowboyIn Alberta’s tar sands, Suncor cut 1000 jobs last week as oil prices crashed. They also announced that they’d decrease their capital spending program by a $1-billion, and reduce operating expense s by another $200 million.

Canada’s largest growth sector in jobs has been in service and retail industries. Only Alberta has seen respectable job growth. Mr. Harper’s blithe suggestion that the current oil crisis will fail to impact the economy as a whole, sounds very much like a man whistling past the graveyardcanada bleak future

Update Jan 24/15: Last week on Global TVs The West Block, Jason Kenny (MP, Canada’s Minister of Employment and Social Development and Minister for Multiculturalism) told host Tom Clark, “We won’t be using a contingency fund. A contingency fund is there for unforeseen circumstances like natural disasters.”

But during an interview for this week’s episode of The West Block, Canada’s Finance Minister, Joe Oliver told Tom Clark, “The contingency fund is there for unexpected and unavoidable shocks to the system and, you know, the oil price decline – which was a dramatic one – would fall in that category. I’m speaking as minister of finance so I’m sort of current on the thinking here.”

Should Obama Veto the Keystone XL Pipeline?


kpIn the United States, the battle has raged for 6 years over the Keystone XL pipeline, meant to carry crude oil over 1700 miles from the Alberta tar sands to Nebraska. Canada, and especially Prime Minister Steven Harper, has held its breath as the Democrats, led by President Obama, and the Republicans, have debated the issue.

With the Republicans now holding a majority in the Senate, they’ve decided to make the decision a top priority. Obama has already threatened to veto any such action.

The Keystone would not be the only pipeline Canada has that crosses from Canada to the United States … there are already four major pipelines in existence, with lots of other smaller pipelines crisscrossing through most of the country.

So why the long deliberations? Could it be the ‘dirty oil’ being wrenched from the earth is worse than both the crude oil and tar sand oil already being conveyed?

Wet-tar-sands-537x358Environmentalists have protested Keystone since 2011. The Republicans have told us that having energy coming down from Canada instead of from other oil rich nations prevents the States being held hostage for oil. The Democrats, on the side of the environmentalists have dubbed the tar sands “Extra Lethal.”

But the demand is there. Despite the existing pipelines, oil is being distributed by other means as well – trucks, trains and barges traverse both countries. So, why not this pipeline?

Well, amongst other things, the government has already stopped the North American Free Trade Alliance (NAFTA’s) environmental oversight commission from investigating environmental damage caused by tailings ponds in Alberta’s oil sands twice, this past year alone. Public complaints that Canada is ignoring its own fishery laws have brought the trade organization’s environmental oversight commission on board in an attempt to protect the Athabasca River from industry pollution.

Dale Marshall of Environmental Defence says the Harper government is “blocking” science from getting out information about the oil industry’s harm to the watershed.

watershed“There’s compelling evidence that [industry contamination] is happening and that the federal government is denying it, and not allowing that information to be known to Canadians and the people who live in that area. “It’s disheartening. The Canadian government is more interested in protecting oil sands companies,”

So, it would seem that oil sand protestors, whether led by Canadian musician Neil Young or not, have valid points that are not being addressed, but rather, suppressed.

Recently, Mark Little of Suncor, one of Canada’s largest oil sands producers, denied that the company’s tailings ponds were leaking into the Athabasca River. The executive even referenced historic “Voyageur” accounts of naturally occurring oil seeping into the river to back up his position.

“Oh, no. Oil goes into the Athabasca River, and it has been for hundreds of years.  There is an enormous amount of oil in the sand, and the river runs across the sand.”

But renowned water scientist, Dr. David Schindler of the University of Alberta begged to differ.

“That’s totally untrue. One reason I know industry is responsible for some of [the river pollution] is there’s a 1982 well documented spill for Suncor. They watched as it made its way down the Athabasca to Athabasca Lake and caused the fisheries to be closed for two years.”

deformed fish AthabascaAfter the incident, highly deformed fish, never before seen by locals or scientists, began appearing in the watershed.

Schindler also believes that the Canadian government is likely opposed to the NAFTA‘s investigation because it is “worried about more bad press.”

So, with environmentalists and scientists opposed to the project, it’s fair to think that the United States should be worried about possible spills involved with the proposed pipeline.

From CBC News Canada, “Through an access-to-information request, CBC News obtained a data set of every pipeline safety incident reported to the federal regulator in the past 12 years. The National Energy Board oversees cross-border pipelines. The data doesn’t include smaller pipelines within provincial boundaries. The documents reveal details about more than 1,000 incidents that have happened across the country from 2000 until late 2012 and suggest the rate of overall incidents has doubled in the past decade.” (http://www.cbc.ca/news2/interactives/pipeline-incidents/)

But meanwhile, the federal government has essentially gone all in on the promise of oil. Natural Resources Canada spent $438.3 million on programs to support the oil and gas industry — it spent $41.6 million more, or nearly 10 per cent extra, than the amount it was allotted for the 2013-2014 fiscal year. As well, an additional $24 million went for an ad blitz in the U.S. Yep, bullish on oil.

environment-1-612x336But what about the $300 million for “environmentally responsible” programs Parliament approved last year? Somehow, Natural Resources Canada failed to spend $298.6-million on programs for “green” programs such as renewable energy development and technology innovation.

The government put all of Canada’s precious eggs in one basket.

And, in Alberta, “the economic promise of the oil sands and their accelerating development are coupled with a curse. The waste gases are flared into the atmosphere, while the waste fluids are pumped into immense tailing ponds. These waste streams contain significant quantities of heavy metals and persistent aromatic hydrocarbons.

As a consequence, human health and local pollution issues are starting to become evident. Democratic governments are entrusted to ensure human health. Economic growth and environmental impacts are balanced in a pragmatic and evidence based manner. But our post-democratic society permits corporations to dictate policy and our government has acquiesced. Laws are now repealed,  allowing low cost development, free from environmental safeguards and at the lowest royalty rates in the world.” (read more here: http://www.vancouverobserver.com/opinion/oil-sands-promise-and-curse)

With the recent drop in oil and gas prices, Ottawa is also expected to lose $5 billion in revenue, and the provinces even more. OPEC, in a zero sum game, is dropping the price of oil, and that drop is creating a net loss for Canada.

Research, education, public broadcasting, and the future of national health lie in the balance as energy subsidies in Canada top an incredible $34 billion each year in direct support to producers and uncollected tax on externalized costs. And still the price of oil drops, down 57 per cent since last June.

The pipeline is truly a lose/lose proposition.

boehner-ryanBUT – the Republicans will push forward on making it happen. Not because it is a good idea, or good for the United States. But because 6 years ago, on the night of Obama’s inauguration, a group of top GOP luminaries gathered to create the outline of a plan for how to deal with the incoming administration. They would fight Obama on everything. And after three hours of strategizing, Senate power brokers Jim DeMint, Jon Kyl and Tom Coburn, and conservative congressmen Eric Cantor, Kevin McCarthy and Paul Ryan vowed that none of Obama’s presidential aspirations would succeed, if they had anything to do with it.

For Americans, the road to a national health care plan was nearly derailed, and the work may still be demolished, should these politicians continue to follow their path. The pipeline, also potentially lethal to citizens, will be steam-rollered through, regardless of environmental effects. All to stop one man, President Obama. Whether you are a Democratic or a fan of Obama, it must be admitted that this relentless attack on a legally elected sitting leader is abhorrent and incredibly self-indulgent.

Six years later, America and the world still dangles from these puppeteers’ strings.

generation against oil