On Public Asset Sales

Selling off public assets that yield steady and lucrative revenue streams is rarely a good idea. In Ontario, Kathleen Wynne did just that with 60% of Hydro One so she could claim a balanced budget. It is a betrayal I will never forgive her for.

As I have written previously, Justin Trudeau would like to do the same thing, for similar reasons, with our major airports. It is a very bad idea, as are most of the schemes promoted by neoliberals.

Happily, the possibility of relief from such madness is shimmering on the horizon:

A Parliamentary committee is recommending against the Liberal government’s plan to sell off Canada’s airports to raise billions in capital to be used towards other public infrastructure projects.

“Limit rising passenger and operational costs by preventing the privatization of Canadian airports,” the House of Commons Standing Committee on Finance, said in its report of the Pre-budget consultations in advance of the 2018 federal budget.

The committee's report, Driving Inclusive Growth: Spurring Productivity and Competitiveness in Canada

summarized the strong opposition to airport privatization by various stakeholders, including the Air Transport Association of Canada (ATAC), which believes that the sale is near-sighted and will result in significantly higher costs for airlines and passengers.

“Recent experience in such projects, for example in Australia, has resulted in costs per passenger to increase by 50% in the decade following airport privatization,” ATAC told the committee in a briefing. “To add insult to injury, the government would impose a huge new burden on our industry and its passengers while not reinvesting one penny of the billions generated back into aviation.”

Empirical evidence like this should carry much weight, but the Trudeau government is refusing to release the privatization study by Credit Suisse Group AG that it commissioned. Therefore, whether such disquieting facts were even considered is unknown. This unwholesome secrecy is opposed by the National Airlines Council of Canada, which is calling for open and public discussion around the entire issue.

I seem to recall Justin Trudeau, upon taking office, promised an open and transparent government. What a difference two years in office have made to that promise, eh?

The Corporate Imperative At Work

Robert Reich continues to fight the good fight.

Nothing New To Report

Here is a perfect illustration of why unfettered capitalism and ethics are incompatible:

Canada’s national pension fund manager is among a group of Canadian companies that are undermining the federal government’s international anti-coal alliance by investing in new coal power plants overseas, an environmental organization says.

Friends of the Earth Canada joined with Germany’s Urgewald to release a report today looking at the top 100 private investors putting money down to expand coal-fired electricity — sometimes in places where there isn’t any coal-generated power at the moment.

The report lists six Canadian financial companies among the top 100 investors in new coal plants in the world. Together, Sun Life, Power Corporation, Caisse de depot et placement du Quebec, Royal Bank of Canada, Manulife Financial and the Canada Pension Plan Investment Board have pledged $2.9 billion towards building new coal plants overseas.

The fact that the corporate world extols maximum profit at any cost largely limits government goals on climate change mitigation to the aspirational:

While Environment Minister Catherine McKenna is claiming to be a global leader on phasing out the dirtiest of electricity sources, private investors are “undermining that commitment,” says Friends of the Earth senior policy adviser John Bennett.

Canada and the United Kingdom last month teamed up to launch the Powering Past Coal Alliance, trying to bring the rest of the world on side with a campaign pledge to phase out coal as a power source entirely by 2030 for the developed world and 2050 for everyone else.

Clearly, this post reveals nothing new, eh?

A Brief Notice

I'll be out of town and offline for the next week. See you soon.

UPDATED: An Increasingly Tattered Cloak

That would be the one Justin Trudeau wraps himself in with such rectitude whenever he attempts to convince the public of his climate-change bona fides. Increasingly, both his cloak and his rhetoric are wearing thin.

The latest example of the hollowness of his public persona comes with news that his government is doing something it shouldn't be doing, interfering in provincial rights:

The B.C. government says Ottawa is interfering in an independent review connected to the Kinder Morgan Trans Mountain pipeline expansion, just days after Alberta Premier Rachel Notley called on Ottawa to intensify its efforts to defend the project.

"It's both a highly unusual and a highly troubling intrusion on a province's right to enforce its own permits, its own regulations and the interests of its own citizens," B.C. Environment Minister George Heyman said in an interview on Wednesday. "We do not take kindly to this intervention."

Federal Natural Resources Minister Jim Carr announced in a statement on Wednesday that Canada has filed a letter to the National Energy Board supporting a process to quickly resolve conflicts with local and provincial governments that could slow down construction on the pipeline.

It would seem that the powers to whom both Trudeau and Alberta's Rachel Notley answer are unhappy:

The NEB is hearing a complaint from Kinder Morgan, which has already begun construction, that the city of Burnaby, B.C., is blocking the project by refusing to issue four permits. The city, which opposes the project, denies any unreasonable delay.

The company – now with Ottawa's support – wants a standing panel to allow any future permit disputes to be resolved quickly.

In Calgary on Wednesday, the NEB heard Mike Davies, Trans Mountain's senior director of marine development, say the company's dealings with Burnaby have been difficult for some time.

B.C. Environment Minister George Heyman doesn't care that the pipeline giant has its knickers in a twist:

"The federal government should not be intruding on provincial rights and authority," he said.

"I would expect the National Energy Board, which in this case has the powers of the federal court, to understand that we as a province have a responsibility and a right to both permit and enforce our own standards. "

It would seem that Mr. Trudeau and Ms. Notley only have ears for one entity here: Kinder Morgan.

Now why does that not surprise me?

UPDATE: NDP leader Jagmeet Singh has now entered the fray. Whether this is mere political opportunism or principle, only time will tell.

NDP Leader Jagmeet Singh slammed the Trudeau government on Wednesday for its "betrayal of the people of British Columbia" in order to support a large corporation, Texas-based multinational energy company Kinder Morgan.

Trudeau had promised during the 2015 election campaign to introduce a brand new environmental review process to assess the Kinder Morgan project. But once elected, the prime minister approved the pipeline last November based on an assessment by the National Energy Board (NEB) under controversial rules adopted by the former Harper government. Singh said that Carr's new proposal was a second "betrayal" of the west coast province.

"They’re supporting the rights of a corporation to override the decision making of an elected body, the municipality of Burnaby," Singh told reporters. "That to me is a massive concern. That is something that is very troubling and it’s the second major betrayal of the people of British Columbia."

C'mon Bill. Just Answer The Question

The beleaguered Bill Morneau continues in his refusal to answer questions about whether he sold a whack of shares in his company, Morneau Shappell, before the government introduced changes to tax rates dropping the income tax rate for middle-class Canadians while boosting it on high-income earners. Those rates were to take effect on Jan. 1, 2016, prompting financial advisers to advise high-income earners to realize capital gains in the last weeks of 2015 to avoid the coming higher tax rates.

The 680,000 shares were sold for $15 apiece. By Dec. 14, a week after the tax rate announcement, they had dropped to $13.96.

Employing a time-worn technique practised by scoundrels far and wide, Morneau is embracing moral outrage, threatening to take the Opposition to court over the impertinence of their questions:

Morneau said if the Opposition wants to make its claims outside the Commons, where MPs enjoy the legal protection afforded by parliamentary privilege, they will “absolutely be hearing how the legal system works.”

His strategy did not work:

Shortly after Question Period began, he [Pierre Poillievre] challenged the now-absent finance minister to take things outside.

“Would he commit that if I go out and repeat my question in the lobby at this moment, that the finance minister will meet me out there and answer the question?”

Poilievre then walked out, and did just that. But he was greeted by an empty lobby, as Morneau had already left to deliver a scheduled speech in Toronto.

It would seem that old Bill needs some lessons in basic poker strategy.

Lest one think this is just a nasty partisan fight between the Conservatives and the Liberals, the third party also smells some rot:

The NDP is also taking aim at Morneau over the share sale. The party's ethics critic, Nathan Cullen, has written a letter to Ethics Commissioner Mary Dawson, requesting she investigate.

"If the finance minister used his inside knowledge to sell his shares at an advantageous time to financially profit, it would be in direct violation of the rules that prevent someone from profiting directly from their work in government," Cullen wrote in a letter that was sent Monday afternoon.

"I respectfully ask that you look into this matter as urgently as possible," the letter says.

As a political neophyte, Mr. Morneau has much to learn. He might start his lessons by checking with average Canadians about how they feel when privilege once more apparently games the system and leaves the rest of us holding the proverbial bag.

UPDATED: A Sad Day In The House

It is indeed a sad day in public life when a worm like Pierre Poilievre can stand up in the House of Commons and seem to occupy the high moral ground as he renders ethical judgement on a minister of the Crown. Yet the government of Justin Trudeau has brought this odium on itself by harbouring Bill Morneau from the kind of standards all Canadians should expect from their politicians:



The Star reports that the sale of $10.5 million worth of shares in Morneau's company, Morneau Sheppell, occurred on Nov. 30, 2015,

a week before the Liberal government formally introduced changes to tax rates — dropping the income tax rate for middle-class Canadians while boosting it on high-income earners.

Those rates were to take effect on Jan. 1, 2016, prompting financial advisers to advise high-income earners to realize capital gains in the last weeks of 2015 to avoid the coming higher tax rates.

The 680,000 shares were sold for $15 apiece. By Dec. 14, a week after the tax rate announcement, they had dropped to $13.96.

Morneau held two million shares in Morneau Sheppell and sold half of those in the fall of 2015, a source has told the Star. Profits from those sales were donated to charity. The National Post has reported that the shares sold on Nov. 30 were held by Morneau.

Liberal loyalists and apologists will no doubt assert that the fact the profits from the sale were donated to charity means this is a non-issue. To argue thus, however, is to miss two key points:

The donation itself would have afforded Morneau a very handsome tax benefit.

That insider trading was committed by the Minister of Finance (that he refused to exonerate himself by answering the question suggests his guilt) renders him unfit for public office. How can Canadians believe the government has its best interests at heart if it shields such egregiously unethical behaviour?

Morneau should be compelled to answer the question. If the answer is what I think it is, he should finally do something honourable and resign.

UPDATE: Democracy Watch has a Government Ethics Campaign you may want to check out. It has already sent out over 170,000 letters about this issue.