Thursday, 28 July 2016


Part I: Macro-economics, Trudeau, the Proposed Free Trade Deals and Disempowering Canadians

Disempowerment of the Majority and "Father Knows Best"
Canadians aren't totally duped on free trade, but Trudeau counts on Canadians to trust him on this. -- Trudeau can get away with this because of his success in projecting a "Father Knows Best" almost Messiah-like image, framed with his acting skills.

No wonder Lawrence Summers, former US Treasury Secretary, and former chief economist at the World Bank, has gone full circle to conclude that international agreements should be judged on whether they empower citizens.  
The Transpacific Partnership (TPP), the Canada-European Union Comprehensive Economic Trade Agreement (CETA) and NAFTA represent quite the opposite of empowerment!

At the generic level, these agreements place national corporate tax systems in a perpetual race to the bottom, leaving governments without the necessary finances to address inequality.  Rather they contribute to greater inequality.  The Trudeau administration is most comfortable with this unfairness for the majority of Canadians. 

As for the supposed benefits for the population at-large stemming from NAFTA, they have not materialized.  The economic plight of the majority have not improved in the last 30 years or more.

Turning to the specifics of the proposed new agreements, according to leaked versions of the TPP, the agreement among other things, would extend patents for pharmaceutical companies on drugs -- in some cases indefinitely -- and "block" bio-similar competitors from introducing new medicines in subsequent years.  If there was ever a great formula for raising drug costs for the middle and low income Canadians, this is it!

One has only to look to the US where similar patent rules apply.  There, high drug prices and monopolistic protections have resulted in treatment rationing, prescriptions going unfilled and severe impacts on family/individual budgets.

Investor State Dispute Settlement (ISDS) Clauses
Like NAFTA , the TPP and CETA contain clauses on Investor State Dispute Settlement (ISDS) systems, which effectively allow a foreign corporation to sue a national government in the event that the nation's environmental; First Nations; labour and economic stability initiatives; or other government actions impede the company in question from maximizing its profits -- In this way profits trumps sovereignty, specifically, profits taking precedence over the best interests of the nation regarding the common good, or as we say in Canada, "peace, order and good government."

In this context, Lone Pine Resources is suing the Government of Canada for $119M under the NAFTA ISDS clause over Quebec's ban on fracking.  Similarly, TransCanada is suing the US Government for $15B under this same NAFTA ISDS clause concerning the Obama rejection of the Keystone XL project aimed at bringing tar sands oil to US for refining, prior to being exported outside the US.

Foreign Companies Get to Have a Say on our Legislation and Regulations
Not to be outdone, CETA takes foreign rule in Canada to new heights.  As proposed, CETA would allow foreign companies to not only receive national treatment equivalent to domestic companies with respect to government procurement, but would also offer foreign companies the right to participate in public consultations on proposals for new government regulations.

While we would consider it unthinkable that a foreign citizen could influence the development of Canadian laws and regulations, CETA offers foreign corporations such rights.  In other words, a foreign company would have the privileged opportunity have a say on laws drawn up to serve the best interests of Canadians,  Canadian companies, and, more generally , Canadian economic and sustainable development initiatives.  As a case in point, this provision would re-open the doors for the export of Canadian water.

Bulldozer Communications Techniques
Notwithstanding the known concerns of progressive Canadians on these agreements, Chrystia Freeland would like Canadians to believe that 1) her signing of the TPP in New Zealand in Feb 2016 does not make the TPP a  done deal for Canada, 2) Parliament would need to ratify the deal and 3) consultations would be held with Canadians on the agreement before any such ratification.
On item 1 above, in fact, ratification of the deal is Cabinet's  task, not that of the Parliament.

As for the promised consultations, the aforementioned item 3, they would best be described as secret talks with industry representatives and university professors for which attendance is by invitation only, and there is little public advance notice. 

Questions are allowed at these hearings, but on the basis of one of these meetings, one in Montreal where the Council of Canadians managed to be present, the Council learned that none of the questions raised actually get answered.  Regarding the maximum of one day's public notice for these consultations, the rationale offered was that MPs have busy schedules!

True, the House of Commons Standing Committee on International Trade will be holding hearings in various cities in Canada.  But the press release on the purpose of these hearings reads as follows: “The Committee’s primary objective is to assess the extent to which the agreement, once implemented, would be in the best interests of Canadians.” 

Evidently, the issue for the Trudeau government is not whether the agreement should be ratified or not, but rather how to manage the message to Canadians to the effect that TPP is good for them and "Father knows best."

Part II: Micro-economics, Air Canada Middle Class Maintenance Jobs, a Case History

Absolving of Air Canada of Obligations on 2600 Middle Class Aircraft Maintenance Jobs in Canada
On the more day-to-day governing level, the mindset favouring corporate rule by the Trudeau Liberals is well-reflected in Bill C-10.

Bill C-10 is not a familiar legislative initiative for most Canadians. That's because the Liberals did everything possible to sweep this initiative under the rug.  The Bill was passed, with closure imposed, Harper style, with little time for debate in the House of Commons.  And a tie vote in the House was broken in favour of the Liberals, by the Speaker, who cast the deciding vote.

Why all this fuss to shove this Liberal legislative change under the carpet?  The answer is that this law was about the abandonment of 2500 middle class aircraft maintenance jobs to accommodate Air Canada's request to modify the legislation that applied to Air Canada dating back to its privatization in 1988.  With the changes put into law,  Air Canada would no longer be obligated to undertake its aircraft maintenance in Montreal , Mississauga and Winnipeg. 

The story behind all this is that following Air Canada's privatization, Air Canada sold off its  aircraft maintenance division to Aveos, a company primarily made up of former Air Canada employees. However, prior to the Trudeau government legislation, Air Canada had already transferred half of 5000 Canadian maintenance jobs to locations outside Canada.   The end result was that Aveos went into  bankruptcy.

All of this was followed up with the January 2016 agreement with the CEO of Air Canada,  Calin Rovinescu, to reward him for his great work in transferring jobs outside of Canada with a minimum of $3M/year in annual income.  Prior to that, in 2015, Air Canada approved an increase in his retirement  guaranteed income by 90%, to reach $800,000/year.

Maintaining the Flippant Legacy of Liberals on Middle Class Jobs
This current Liberal frivolity on middle class jobs has its roots in the 1988 Air Canada privatization itself.  Consider the fact that 60% of all international aircraft companies are state-owned

The legislation governing the privatized Air Canada was supposed to have assured that the disadvantages of privatization, with respect to the preservation of middle class jobs in Canada, would not come into play.  Justin Trudeau merely completed the task of abandoning middle class Canadian jobs and interests that the privatization legislation was supposed to prevent.

Through all this, the public had been led to believe that this was all part of a trade off to encourage Air Canada to purchase 45 Bombardier C Series aircraft that would ultimately be serviced in Montreal.  Unfortunately, all the indications are such that this was just a rumour.  In reality, it was soon discovered that once more Air Canada has a free reign to do as it feels, to transfer jobs outside of the country.

In July 2016 at the Farnborough air show in England, Air Canada signed a contract with Pratt & Whitney for the maintenance of the Pratt & Whitney engines of the C-Series.  Not so coincidentally, in June 2016 Pratt & Whitney announced an investment of $65M to do the maintenance of the C Series engines in Columbus, Georgia.
With the cat now out of the bag, Air Canada corrected the originally intended false impressions by explaining that the maintenance of the C Series in Canada would be for the structure of the aircraft only, the engines to be excluded from maintenance work in Canada.

Part III: Epilogue

Now one has to wonder how much else is being kept from public scrutiny in keeping with the principles of "Father knows best" and corporate rule, the Trudeau government trade mark. 

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