By Aaron Wherry - Wednesday, October 21, 2009 - 31 Comments
The Finance Minister talks to Canadian Business.
OK, you say you’re a fiscal conservative, but I know you’ve heard a lot of criticism from the conservative base. People are starting to say that when the country is running $55-billion deficits, that term “fiscal conservative” has lost its meaning. Does it have any meaning anymore?
It does. I think the key is to have a commitment to a balanced budget and to always be moving in that direction, to have a plan to be there, and to have the discipline to do it. And we will show that discipline. I’ve certainly exercised that kind of discipline before at the provincial level in order to balance budgets, and we’ll do it again federally. But in the past year, we’ve faced the most serious economic crisis globally since the Second World War. The meetings we had in the middle of October last year in Washington were in a time of deep crisis. We weren’t even sure that the markets were going to open on Monday morning. I think there’s a tendency for people to forget very quickly, because we’re out of the time of crisis right now, how deep and dangerous this crisis was for the world economy. And when we made the decision to run large deficits in Canada, we made the decision to save General Motors and Chrysler in Canada at large expense. These decisions were made because of the seriousness of the crisis. That, to me, is being a good conservative economic manager.
By Steve Maich - Friday, August 7, 2009 at 9:00 AM - 3 Comments
A weekly scorecard on the state of the economy in North America and beyond
Ladies and gentlemen, the recession is over. Or at least it seems to be winding down. Unless it isn’t. The past few weeks have been a little dizzying for those not accustomed to the wildly contradictory messages common in the world of economics.
What is a poor citizen supposed to think when Bank of Canada governor Mark Carney comes out one day and says the recession is all but over, and then Finance Minister Jim Flaherty (backed by a passel of big bank analysts) emerges a day later to throw cold water on the idea.
Is the recession over or what? As is so often the case in the world of economics, the answer is “yes and no.”
Carney and Flaherty were speaking honestly and accurately about two separate but related realities. Carney was referring to the technical definition of a recession, and the news there is encouraging. All signs suggest that Canada’s economy is growing again, and will likely grow more toward the end of the year. Commodity prices have rebounded, housing has stabilized and job losses are slowing. That means that the pressure will soon be on for Carney to squeeze off the easy money tap, to keep inflationary pressures at bay. Continue…
By Colin Campbell - Saturday, July 25, 2009 at 11:00 AM - 3 Comments
It’s not just cars that are getting smaller, so are car companies
If you think everyone in the auto sector is feeling grim these days, then you haven’t talked to John Vernile. The vice-president of sales at Hyundai Auto Canada says the recent turmoil has been nothing but good news. Sales for the South Korean automaker are up “in every segment,” he says—amounting to an overall surge in sales of 20 per cent during the first half of this year. “When this downturn hit, it just dialled things up for us,” he says. Thanks in part to the demand for Hyundai’s smaller cars, the company has suddenly emerged as one of the dominant players, not just in North America but globally. It’s now the fifth-largest carmaker in the world. In quality surveys, it ranks ahead of Toyota and Honda. Market share is up, sales are up, and opportunity abounds. Despite the tough economic times, “we quietly celebrate here,” says Vernile.
That kind of talk should have struggling industry heavyweights such as General Motors, which just emerged from bankruptcy protection, in panic mode. It is, after all, a revolutionary shift from 20 years ago when Hyundai was best known for the Pony, a small, cheap and just plain ugly car. Today, Hyundai has one of the hottest cars on the road with the Genesis, a sleek and expensive sedan that won the North American and Canadian car of the year awards. “Who would have ever thought we’d be selling a car over $40,000?” quips Vernile. “We can’t keep them in stock.” Continue…
By Lianne George - Thursday, June 11, 2009 at 9:30 AM - 0 Comments
Barack Obama: the musical, Kim Jong Il’s cook, and the unexpected panda pregnancy
Prince Edward, 44, the youngest son of Queen Elizabeth and Prince Philip, arrived in Canada last week to present the Duke of Edinburgh’s Award—honouring academic performance and volunteerism—to 100 youths ages 14 to 25. On Monday, the province of Manitoba honoured him by naming two of its lakes after his children, Lady Louise Windsor, 4, and James, Viscount Severn, five months. On Sunday, the prince’s wife Sophie, Countess of Wessex, attended a service at Holy Trinity Anglican Church in Edmonton as royal watchers crowded in and looked on excitedly. One parishioner, Richard Baird, told the CBC, “I’m a royalist and I think those that aren’t royalists should contemplate what they would replace it with.”
Cooking with Kim
For 20 years, Kenji Fujimoto, 56, served as head sushi chef to North Korean dictator Kim Jong Il. In his new book, I was Kim Jong Il’s Cook, Fujimoto reveals some strange facts about the Dear Leader’s culinary tendencies. Says Fujimoto, “He particularly enjoyed raw fish so fresh that he could start eating as its mouth is still gasping and the tail is still thrashing.” He also said that the dictator hosted “pleasure parties” during which he would order women to dance naked to American dance music. Fujimoto recently fled the Communist state, and is now in hiding in Japan. Continue…
By John Geddes - Monday, June 8, 2009 at 7:45 PM - 6 Comments
The bad news piles up, and the stimulus cash is slow coming
If there’s one place the federal government might want to showcase its push to spend billions to stimulate the economy, Vancouver would be it. With the 2010 Winter Olympics coming up fast, the city is about to come under intense international scrutiny. The recession has idled many British Columbia building trades workers who were, until recently, kept busy by a booming West Coast construction sector. Vancouver Mayor Gregor Robertson says he’s ready to put many of them back to work on municipal projects, but hasn’t won approval yet for a single cent of a promised gusher of federal infrastructure spending—funds the Conservatives vowed would flow fast after their budget more than four months ago. “We’d love to put those dollars to work creating jobs and investing in our infrastructure,” Robertson told Maclean’s. “None have arrived yet.”
Gripes like Robertson’s just aren’t fair, say Ottawa’s front-line economic ministers. Transport Minister John Baird, who’s responsible for the federal infrastructure plan, argues that he’s approving projects “10 times faster” than any similar program in history. And that might well be true. But the standard he’s up against isn’t past performance, it’s the benchmark set in Finance Minister Jim Flaherty’s urgently worded Jan. 27 budget. “Measures to support the economy,” the budget declared, “must begin within the next 120 days to be most effective.” Then again, that was the same budget that projected a $33.7-billion deficit, and that figure, as Flaherty admitted in a late-May bombshell, has ballooned in four short months to more than $50 billion. It seems positive measures are taking longer than hoped to materialize, while the bad news is piling up even faster than feared.
By Aaron Wherry - Tuesday, June 2, 2009 at 1:05 PM - 3 Comments
CTV’s Ken Shaw challenges the Prime Minister on the GM bailout.
By Aaron Wherry - Saturday, May 23, 2009 at 12:22 PM - 8 Comments
Mr. Gaudet was particularly critical of Mr. Harper, who started his political career as a Reform Party MP and served as the head of the right-wing National Citizens Coalition in Calgary before becoming Conservative Party leader.
“Mr. Harper may left his balls out West when it comes to taking a principle stand against bailing out this industry like he used believe in,” he said.
By Colin Campbell - Friday, May 22, 2009 at 12:08 PM - 6 Comments
Obama’s new fuel efficiency rules kick the car companies while they’re down—and don’t appeal to the public either
North American car executives put on a happy face when they stood side-by-side with U.S. President Barack Obama and environmentalists to unveil new fuel efficiency rules this week. Under the new standards, the cars they build will have to get 35.5 miles per gallon (up from 25 mpg) by 2016—a much shorter timeline than any had expected. Speaking to reporters after the announcement, the executives applauded the ambitious move, which will force them to make cars over 40 per cent more efficient. But what they didn’t say publicly, in front of their new boss, is that this will be a severely onerous task for an already very fragile industry.
Meeting the new rules will cost the auto companies billions of dollars as they speed up the necessary engineering work to design and build more fuel efficient cars and retool plants. And this comes at a time when car makers like G.M., Ford and even Toyota have no money to spare. “This is the equivalent to be being very sick in the hospital and then coming down with pneumonia,” says Rebecca Lindland, an auto analysts at IHS Global Insight. Just hours before the deal was announced, Ford informed the White House it might not survive under the new rules and threatened to pull its support, reported the Los Angeles Times. It was eventually convinced to play along.
By Rachel Mendleson - Thursday, April 30, 2009 at 8:20 AM - 3 Comments
Ford, GM allegedly sold vehicles used by the apartheid regime
A New York judge has given the green light to sue multinationals such as Ford and General Motors for their alleged role in the segregation, torture and killing of blacks in South Africa.
Class action suits have been cleared to proceed against Ford, GM and Daimler for allegedly “aiding and abetting” torture and extrajudicial killing by supplying military vehicles used in the persecution of blacks during South Africa’s apartheid regime. IBM faces similar charges for allegedly providing computers for the surveillance of rebels, and Germany-based defence giant Rheinmetall may face a suit for its alleged role in arms dealing. “One who substantially assists a violator of the law of nations is equally liable if he desires the crime to occur or if he knows it will occur and simply does not care,” wrote Judge Shira Scheindlin in her April 8 ruling.
By Aaron Wherry - Thursday, April 9, 2009 at 1:28 PM - 2 Comments
Jim Flaherty is confronted by some friendly pensioners.
“Listen, this is a very serious time!” a frustrated Flaherty said sternly. “All of these issues being raised about jobs, about pensions, about whether or not General Motors can survive and in what form, and whether Chrysler Canada Ltd. can survive and in what form, these are very major questions that are being discussed right now in a serious way.”
In other news.
By Aaron Wherry - Wednesday, April 1, 2009 at 1:23 AM - 41 Comments
The Scene. After the last of several government MPs had been sent up before Question Period to cast aspersions on Michael Ignatieff’s character, the Speaker decided to interject. Calling for order, Peter Milliken told Conservative Daryl Kramp that he might “find himself suspended” if tries again to defy a recent ruling against the use of Parliament’s time to attack a fellow MP.
Those on the Liberal and NDP benches applauded. The government side pouted and, after Question Period, once more asserted its right to freely disparage by doing just that.
“This is politics. This is not a Harvard classroom,” explained Kory Teneycke, the Prime Minister’s press secretary. “You have to be able to take it as well as give it.”
Above all else, it seems, one’s ability to “take it” is the highest measure of public leadership in Stephen Harper’s Ottawa. Take, for instance, the Question Period that followed the Speaker’s warning. Continue…
By Aaron Wherry - Monday, March 30, 2009 at 6:42 PM - 45 Comments
The Scene. In preemptive move, the government side sent up another of its backbenchers before Question Period—this one named Greg Rickford—to report on the latest outrageousness of the Liberal leader.
“Mr. Speaker, Canada’s auto industry directly employs over 150,000 Canadians and another 340,000 indirectly … half a million Canadians and their families depend on the health and viability of this industry and are looking to their leaders to ensure that Canada remains a strong part of the North American automotive industry through these economic times,” Rickford began. “That is why it is absolutely shameful that the leader of the opposition has turned up his nose to auto sector workers by saying: ‘No voter in B.C. wants to throw money into the auto sector and neither do I.’”
To Rickford’s credit, this was not entirely incorrect. Mr. Ignatieff did speak those 16 words. And one assumes it was by innocent omission that the Conservative failed to note the two preceding sentences. ”I don’t believe in bailouts,” Mr. Ignatieff reportedly said. “What I believe in is fully-refundable loan packages for industries that give you a business plan that will restore them to profitability.”
Undaunted by such details, Rickford went on. “I wonder if he would repeat the same sentiment at a town hall meeting in Ontario,” he whined. “I am sure he has more savvy than that. He has shown time and time again that he is more than willing to flip-flop on the content of his message to suit whatever audience he is speaking to, whether it be in Saanich, St. Catharines or at his home in Harvard.”
This last bit was, apparently, meant as a put-down. Continue…
By Colin Campbell - Friday, February 6, 2009 at 5:04 PM - 34 Comments
The optics may be terrible in these tough times, but flying the company plane isn’t always the evil it’s made out to be
In the corporate jet business, there are three people who are especially unpopular these days: the heads of the Detroit Three automakers. When the trio jumped on their corporate planes and flew to Washington late last year, they turned the business jet from being a nice perk for well-off executives into a symbol of corporate excess. How, people screamed, could these businessmen display such excess when the entire purpose if their trip was to beg for a public bailout? The “delicious irony,” as one congressman said, was too much.
The CEOs elected to drive to Washington on their next trip, but the damage was done. Even today, the outrage over corporate aircraft burns brightly. Last week, U.S. President Barack Obama chastised Citigroup for its plans to buy a new $50 million jet after accepting $45 billion in government bailout money. His administration is now talking about rules that could force companies that receive federal money to relinquish their private jets. This week, Bank of America Corp. said it will sell a number of its corporate aircraft.
But while there are some ethical dilemmas at play, not all corporate jet travel is bad or unjustified, say ethics and business experts. In some cases, company boards (like the one at General Motors) actually require that their CEOs fly private jets for security reasons. The optics may be terrible in these recessionary times, but flying the corporate jet isn’t always the evil it’s made out to be. “Whether there’s a problem depends on the circumstances,” says Leonard Brooks, a professor of business ethics at the University of Toronto. When jets are used for business purposes and they free up time for executives to work, or improve their state of being when they arrive somewhere to do business, the costs may well be justified, he says. In an interview last month, GM’s vice chairman Bob Lutz was unapologetic, saying that he’d still elect to fly to Washington via private jet, even if it was to ask for tax dollars. (He was not one of the executives who made the now infamous trip in November.) Imagine, he argued, a haggard executive showing up late to a congressional hearing because he’d been bumped off his Northwest Airlines flight. Continue…
By Aaron Wherry - Friday, November 14, 2008 at 5:30 PM - 9 Comments
January 16: Ottawa turns down auto aid
January 17: No bailout for Ford, Flaherty says
February 29: Canada won’t bail out auto industry: minister
April 1: Ford calls on Ottawa for funding
September 3: Tories pledge $80 million for Ford plant
September 26: McGuinty, Prentice at odds on funding
October 28: Prentice says no to auto parts bailout
November 8: Canada cautiously considers assistance to auto industry
November 10: Auto sector of particular concern, Flaherty says
November 10: Harper hints at auto bailout
November 12: Clement examining options for aid to auto sector
November 12: Flaherty, CAW spar over bailout for automakers
November 13: Don’t expect bailout: Flaherty to auto industry
November 13: Canada, U.S. talking about carmaker aid: Flaherty
November 13: Flaherty says any auto industry aid can’t be wasted
November 14: Ottawa ponders Canada-U.S. auto bailout plan
By Charlie Gillis - Thursday, October 2, 2008 at 12:00 AM - 10 Comments
The auto industry faces its biggest changes in 100 years
It must have been hard not to gloat. Chris Paine—filmmaker, eco-activist, gadfly to the lumbering beast of the U.S. auto industry—was sitting on a panel as a special guest of General Motors Corp., sharing thoughts on the future of transportation. Paine’s 2006 documentary Who Killed the Electric Car? had made him a blood enemy of GM, which is what happens when you suggest a company has conspired with government and Big Oil to scuttle its own product. Yet here was GM, flying Paine out to Detroit three weeks ago to witness the unveiling of—you guessed it—another electric car. At a symposium afterward, industry types who not long ago vilified him as a distorter of truth listened intently as he passed judgment on their efforts to reinvent themselves. “If they’re reaching out to people like me,” the filmmaker concluded, “they must be getting serious.”
In the last 12 months, such spectacles have become a norm in the auto industry, a looking-glass world where environmentalists now stand shoulder-to-shoulder with Big Three executives, and the head of General Motors openly muses about the electrification of the U.S. auto fleet. Words are cheap, of course. But these ones point to the carmakers doing something we never thought they would—decoupling themselves from oil—and recently the carmakers have backed the talk with action. Two weeks after GM unveiled the production model of the Chevy Volt, an electric car equipped with a gasoline generator to recharge its batteries, Chrysler stunned the auto world by introducing three electric-powered vehicles it developed in secret. The cars are projected for sale in 2010, which will put them on pace with both the Volt and a plug-in electric car Nissan Motor Corp. plans to test-market within two years.
And those are just the electric cars. Toyota is working on a plug-in version of the Prius that after a full charge would allow drivers to go 10 km while using scarcely a drop of gas. Ford is road-testing its Escape plug-in hybrid as we speak. Honda? Just got its hydrogen fuel-cell car approved for sale by the U.S. Environmental Protection Agency—an industry first, and a last hurdle before the car goes to market.
For people like Paine, it’s all a little dizzying. “I don’t trust car companies as a rule,” he told the liberal radio network Air America. “But they’re certainly making it look very real.” As recently as two years ago, GM maintained that its previous electric car, the EV1, was not commercially viable; now it’s staking its future on similar technology. Chrysler cranked out its three electric prototypes in one-quarter the time it normally takes to develop a new model, raising questions about whether it is truly ready to join what increasingly resembles an arms race.
Then again, fear has a way of clarifying the mind, and if one GM executive compared the Volt to “a moon shot,” it’s because Detroit is in desperate need of a success. According to some estimates, half of the cars sold in the world by 2020 will run on something other than gasoline. And fuel-saving alternatives are already the fastest-growing segment of the market, with sales of hybrids, including plug-ins, projected to climb to 2.5 million by 2015, from 500,000 in 2007. Yet the Big Three have allowed their Japanese competitors to dominate the field in recent years, with Toyota claiming more than half of the U.S. hybrid market last year.
Whether Detroit’s Hail Marys will close the gap is unclear. Consumers may rightly wonder whether they should commit to a vehicle developed in less time than it takes to age a decent bottle of wine. And what if the economy craters? What if the price of fuel goes back down? Sure, a car like the Volt costs one-sixth what it takes to drive an average car. But its projected US$40,000 price tag may drive a lot of mid-market buyers back toward fuel-efficient gas models.
With so many obstacles still ahead, drivers shouldn’t expect the Big Three to turn on a dime, says Dave Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. “This is going to be incremental,” he cautions. “These companies will start by selling 40,000 models, then 100,000 and so on.” Still, Cole isn’t one to overlook the psychological hurdle the industry has just crossed. At long last, carmakers are ready to part company with the internal combustion engine, he says, with implications for practically everyone on the planet: “We’re at the threshold of the biggest change in 100 years of the auto industry.”
By Jason Kirby - Friday, July 4, 2008 at 12:51 PM - 0 Comments
In the money:… Who wins when President Bush doles out $168 billion to stimulate
In the money: Who wins when President Bush doles out $168 billion to stimulate the American economy? Pornographers, it turns out. AIMRCo, a market research company focused on the adult online industry, says many porn websites have aroused interest from new customers since the checks first went out in mid-May. Some sites have experienced a 20-30 per cent growth in membership rates. A spokeswoman for one site said they polled new customers and found one-third were using Bush bucks to buy smut. “Getting more people to buy porn was probably the last thing Bush had on his mind when he came up with his ‘stimulus package,’ but we’ll take it.”
Trading down: Bad news for Sw33t_Tush, a.k.a. Lloyd, the 48-year-old mechanic from rural Kansas. A U.S. District judge has ordered YouTube to hand over reams of data about the viewing habits of millions of users. Viacom sued to get access to the records to prove that viewers seek out its programming (ie. the Colbert Report) far more than user generated content. While that would be interesting to know as a cultural factoid, given all the hype about social networking and viral media, the judge’s decision means Lloyd’s online proclivities will wind up in a court docket on some lawyers desk.
Number cruncher: As gasoline prices march higher, many pundits have suggested the situation will correct itself when consumers cut back on consumption. I guess we’ll soon see. Today StatsCan said sales of motor gasoline fell 3 per cent in May. Oops, since then the average price for gas in Canada has risen from $1.28 per litre to $1.39. I’m sure it’s just a lag effect.
By Jason Kirby - Friday, June 27, 2008 at 12:08 PM - 4 Comments
In the money: …Suncor CEO Rick George puts the rhetorical boots to Barack Obama
In the money: Suncor CEO Rick George puts the rhetorical boots to Barack Obama in today’s Globe. The presidential candidate has proposed restricting imports of “dirty” oil. George says go ahead. “These guys will say a lot of things, but then when they get into office, it’ll end up they’ll do something else,” Mr. George said. “The pragmatic thing is, if they don’t buy crude from Canada, where are they going to buy it?”
Trading down: Who knew General Motors, along with building trucks nobody wants, also builds time machines. The General’s shares have fallen to levels not seen in 34 years, or 53 years (depending on who’s counting). Incidentally GM’s woes have had an interesting side effect. Based on market capitalization Magna International, the Aurora, Ont-based auto parts supplier, at $7.12 billion, is now a bigger company than GM, at $6.47 billion. Of course, since GM is one of Magna’s largest customers, that doesn’t bode well.
Number cruncher: Sure, $140 a barrel oil gets all the attention, but another commodity is breaking records, and the consequences are even more dire. Because of flooding in the U.S. corn futures hit an all-time high of $7.99 a bushel. The price of corn has more than doubled in the last year. Bad news for families around the world. Follow this link for a chart showing corn prices since 2000. For no other reason than pure curiosity I plotted corn against the S&P 500. Stunning.
Ticker tape: Mark Mcqueen of Toronto investment firm Wellington Financial thinks Royal Bank and Scotiabank should team up to buy mega Wall-Street bank Citigroup, once the largest company in the world… With prices for everything from gasoline to lipstick going through the roof, bet you didn’t know inflation in Canada only “accelerated slightly” last year, but that’s the way it was according to StatsCan
By selley - Monday, June 9, 2008 at 1:58 PM - 0 Comments
Must-reads: …Rosie DiManno on female police in Afghanistan, and on American troops’
Must-reads: Rosie DiManno on female police in Afghanistan, and on American troops’ enemy-making skills; Scott Taylor on Kandahar prison; Daphne Bramham on the children of the FLDS: Lawrence Martin on Liberal incivility; Thomas Walkom on Roy Romanow; Dan Gardner on pesticides and science; Greg Weston on the lost promise of openness and accountability.
It’s official: the pundits have absolutely nothing good to say about federal politics. And away we go…
If anyone’s going to investigate the unlikely prospect that Maxime Bernier’s left-behind documents represented a security breach, Lysiane Gagnon suggests it be the foreign affairs department, and if necessary CSIS and the RCMP. Committee hearings would be “a joke,” she writes in The Globe and Mail—a “partisan circus,” just like they’ve been at the Schreibergelder hearings. If MPs are really this desperate for something to occupy their well-paid time, she suggests they discuss military equipment, Omar Khadr and the private members bills “that many fear might eventually lead to the criminalization of abortion.”
The Toronto Star‘s Chantal Hébert says Stephen Harper’s “crafting [of] a bipartisan consensus on the future of the Canadian mission in Kandahar” was a rare snapshot of successful “Conservative statesmanship”—a triumph of “finesse” over his manifest preference for “brute strength.” This recollection seems a tad airbrushed to us, but she’s quite right that the government’s been pretty much crap since then, if not before. The positive contributions of Jim Prentice and David Emerson in cabinet are routinely undone by Peter Van Loan’s “overly partisan tone,” she argues, and it’s needlessly damaging the government’s reputation.
By Colin Campbell - Tuesday, June 3, 2008 at 11:02 AM - 0 Comments
The oil crisis continues: General Motors announced today that it will close four North…
The oil crisis continues: General Motors announced today that it will close four North American assembly plants including its pickup truck factory in Oshawa. It’s also thinking of selling its Hummer division (Hummer, official brand of the conspicuous consumer). With gas prices so high, demand for trucks and SUVs, the bread and butter of U.S. automakers, is plummeting. The National Post describes the dramatic decline in sales of SUVs here. And let’s not forget the ongoing fallout in the airline industry. It now costs $68,948 dollars to gas up a Boeing 777 in Toronto. With expenses like that, the International Air Transport Association says the industry will lose $2.3 billion this year. Ouch.