CANADIAN PIPELINE PROJECTS IN LIMBO? NO WORRIES, HERE IS AN ALTERNATIVE SOLUTION!

All logically minded and technically well informed people know that the Keystone XL pipeline is:

·       Good for both US and Canada from various standpoints (economic, political, technical);

·       Not a villain, by any logical stretch of imagination, in the climate change dynamics;

·       A safer way to transport bitumen to the US refineries which have been retrofitted at hundreds of millions of dollar to process this Western Canadian Select crude.

However, the US administration is playing football with this project for more than five years – one does not even know whether any decision would at all be taken never mind the timeline.

So, the POTENTIAL alternatives folks are talking about in regard to transportation of bitumen:

-     Transport by rail cars: TransCanada is thinking about it. But this mode of transport is under cloud due to recent accidents, e.g., Lac-Megantic disaster, bsides, there are other constraints too;

-     Northern Gateway Pipeline (ENBRIDGE): This project was not exactly conceived as an alternative to Keystone XL – this project officially started in 2004 (as per the project website). At any rate, however, this project is expected to face serious challenges from the First Nations and the environmental groups resulting in inordinate delays;  

-     West to East Pipeline (TRANSCANADA): Again, this proposal too is likely to run in to rough weather and delays due to involvement of various provinces (through which the pipeline is proposed to pass through).

-     Line reversal (ENBRIDGE): This project too is facing obstructions from various groups.

Is there no other solution that can circumvent all the above issues? Well, there is provided the concerned parties - namely, the Province, Industry (TransCanada and Enbridge) - and some others who are supportive toward harnessing Canadian resources for development of Canada, its people and its economy come together.

SO WHAT’S THE PLAN?

Preamble:

We know that Saskatchewan Premier Brad Wall is very supportive of oil sands developments in a sustainable manner as is Alberta Premier Allison Redford. We also know that West Coast newspaper mogul David Black is interested in setting up a refinery in BC (but apart from money constraints the main bottleneck for this project is the pipeline transporting Alberta bitumen to BC – again, the same issues that bedevil Northern gateway Pipeline). We also know that potential buyers of bitumen in Asia are all asking one question: What is the high tide exit point from Canada? Have all issues in regard to the exit point been resolved? If not, what is the definite timeline?

OUTLINE OF THE PLAN:

Form a consortium of following parties:

Ø  Province of Alberta

Ø  Province of Saskatchewan

Ø  TransCanada

Ø  Enbridge

Ø  David Black (who would bring on board the investors he says are willing to pony up money)

Project:

Ø  Set up an Upgrader facility to process bitumen from Alberta and Saskatchewan in future (from its Bakken formation)

Location of the project:

Ø  In Saskatchewan at some optimized site closer to Alberta-Saskatchewan border such that it should facilitate transport of bitumen from Alberta via pipelines and from Saskatchewan oil sands producers in future. Why Saskatchewan? First, to share the investment; second, tight oil is going to come from this province apart from bitumen from oil sands.

Estimated cost of the project:

Ø  $10-15 Billion depending upon extent of upgrading facilities installed, length of pipelines and associated tankages.

Products from the Upgrader:

Ø  Synthetic crude oil (SCO).

Pros of this project based on the proposed consortium:

Ø  Bitumen transport pipelines’ approval will be within Alberta and Saskatchewan jurisdiction: This means much lesser hassles in terms of approvals from the various authorities;

Ø  Product would be synthetic crude oil which can then be:

-     Piped to various refineries within Canada (Central Canada or East Coast); alternatively,

-     Piped to US or to Asia through BC coast – the opposition to pipelines is for bitumen transport, it will be much less for synthetic crude oil.

Ø  Investment will get shared and hence investment on the part of each party will be within manageable limits – TransCanada and Enbridge are already prepared to invest billions (>CDN$5.0 Billion). Both the provinces could also possibly fork out 2-3 of billion dollars each, Mr. Black can bring his investors’ billions too on the table. And, may be Ottawa might chip in with some billions (much less than 8 billion dollars Mr. Black requested for from Ottawa);

Ø  The project will produce value-added products in Canada – this will silence the critics who allege that by transporting bitumen to US or Asia, Canada is throwing many jobs away down the pipeline;

Ø  The refinery can be expanded later to process more bitumen produced in Alberta and Saskatchewan;

Ø  This project would minimize potential accident hazards (of rail car) and longer pipelines carrying bitumen;

Ø  The project would avoid litigations and consequent delays that the proposed pipeline projects are facing/expected to face;

Ø  The project would assure the international investors and buyers (of SCO) about the definitiveness of the project and availability of the product, and Canada would be able to take advantage of the window of opportunity;

Ø  There would be definitiveness for the large, medium and the small oil sands producers who are wondering how they will get their product (bitumen) to some market. Because of this uncertainty many projects are on hold, consequently, work load for EPCM companies in Alberta is moving toward a cliff, soon there will be a spike in folks seeking EI in Alberta unless there is some miracle;

Ø  There would be synergy between the two pipeline companies instead of unnecessary rivalry and competition;

Ø  BC can be persuaded to chip in with some investment in future for the pipeline from the Upgrader to BC coast for shipment to Asia. If they don’t, well, TransCanada, Enbridge and Mr. Black could possibly pool together money for such a pipeline (these companies could hopefully manage and adjust their cash flows suitably) – some new investors may also come on board sensing the opportunity;

Ø  Canada would not be hostage to decision making of others.

Timeline of the project:

Ø  From concept to commissioning: Maximum 60 months, in other words, by end of 2019/beginning of 2020 if the parties agree and get going this year (2014). This pretty much comes close to the realistic timelines of the Northern Gateway and West to East Pipeline project completion dates.

Well, if Google-X team can think of out-of-box solutions, so can the folks in Canada. It’s high time the concerned parties thought out of the box and gave a serious thought to the above proposal and brought some touch of finality to projects in Alberta (and Saskatchewan).

DAVOS 2014: Canada’s Low Profile and Opportunities Missed

Every year the World Economic Forum Annual Meeting at Davos, Switzerland attracts big names from various countries – from politics, industry, media, not-for-profit organizations to international organizations. This forum provides an excellent platform for these people to put forward their views to a powerful set of attendees.

This year was no exception in terms of big-wigs turning up at Davos. US was represented, among others, by Secretary of State John Kerry who was at pains to explain that US is not withdrawing from international stage. UK was represented by PM and Deputy PM. Japan’s Prime Minister attended and caused ripples with certain remarks. There was high profile presence from other G-7 nations, namely, Germany, France and Italy.

But what about Canada - the remaining country from G-7? There were only two speakers - Elissa Golberg, Ambassador and Permanent Representative of Canada to the United Nations, Geneva and Naheed Nenshi, Mayor of Calgary. There were 6 other Canadian nationals who spoke but they spoke on behalf of other countries’ organizations, e.g., Mark Carney was representing Bank of England.

So, why this low key, low profile representation from Canada? Ms Elissa spoke about humanitarian crisis in Syria – this was okay, it was in consonance with the big aid declared by PM Harper during his visit to mid-east in January 2014. But with no senior Canadian minister present in Davos, Canada missed an opportunity to:

·       Articulate its views on international politics (including, Middle East);

·       Put forward its views on global economic issues toward global economic turnaround;

·       Make a strong pitch for Canada as a solid investment destination;

·       Have bilateral discussions and achieve headway in flushing out some agreement outlines.

It is worth mentioning here that Mexico used Davos 2014 opportunity to wrap up investment agreements of around 7 Billion Dollars. Others, like, Japan PM Abe articulated some remarks which are bound to be followed closely in the backdrop of Pacific Rim politics.

It seems the current federal folks in Ottawa like to follow the policy of lying low, especially, when the opinion polls in Canada are currently not too favorable towards the ruling Conservatives. The strategists of Conservatives probably think that the more you stay out of news, you stay out of trouble. This concept, actually, is predicated on escapism – ostrich like attitude (put your head in the sand and you think nobody is watching you).

But high profile attendance at Davos would have had little impact on domestic politics and election fortunes of 2015. In fact, if some senior minister of Canada had attended and made statesmanlike articulations, it would have been well received at home. Not only that, such articulations would have furthered Canada’s economic agenda as well as enhanced its stature as an important player at international stage.

The rule of international image building and its maintenance is simple: if you lie low, you slowly fade away from public mind; people start ignoring you and your pronouncements, if you make any, do not carry that much weight. Canada might resent being treated as something like a non-entity by its neighbor in the south but if US does treat Canada like this, part of fault lies with Canada too – this kind of low profile attendance (of Canada) at important international forums like Davos adds to shrinking of stature and ebbing of gravitas.  

Political issues at home just do not go away even if one lies low – the political adversaries just won’t allow them to go away. The domestic issues need to be confronted at home with suitable counter strategy, and not showing up at Davos at similar levels as of your peers should not certainly be part of any such strategy.

The world’s 11^th largest economy need not feel shy or apologetic toward making a strong presence in international forums – it is absolutely important and beneficial for a country like Canada to project what values, principles it stands for, the leadership qualities that it can bring to play at international stage and so on. All these contribute to the image a country projects internationally and it has many potential spin-offs – near-term and long-term.

Some opposition parties and/or section of Canadian media who are not favorably disposed toward the party in power in Ottawa may try to present attendance at such forums as wastage of tax-payers money, but then there would always be some insular minded, dim witted schmucks to nit-pick – they need to be brushed aside with the contempt they deserve.

Hopefully, Canada would make a stronger presence next time at Davos and other important international forums and won’t let go any opportunity, which have the potential to project Canada’s image, pass by. This would be in the interest of Canada and Canadians as a whole.

CANADIAN ECONOMY 2014 AND BEYOND: ISSUES, AND ACTIONS REQUIRED

The Bank of Canada (BoC) gave its latest assessment of Canadian economy in its Monetary Policy Report of 22 January 2014; some of the key points of the Report are:

·       Inflation in Canada has moved further below the 2 per cent target. This is due largely to significant excess supply in the economy and heightened competition in the retail sector. The path for inflation is now expected to be lower than previously anticipated for most of the projection period.

·       The Bank expects inflation to return to the 2 per cent target in two years or so, as the effects of retail competition dissipate and excess capacity is absorbed.

·       The United States will lead the way, helped by diminishing fiscal drag, accommodative monetary policy and stronger household balance sheets. The improving U.S. outlook is affecting global bond, equity, and currency markets.

·       In Canada, economic growth improved in the second half of 2013. However, there have been few signs of the anticipated rebalancing towards exports and business investment.

·       While we are doing more work to understand the wedge between the level of Canadian exports and that of foreign demand, this remains difficult to explain. We are therefore taking a conservative approach to our forecasts for exports, and assuming the wedge will remain.

·       That said, the U.S. recovery is becoming more broad-based, including higher investment spending by companies, and that, as well as the recent depreciation of the Canadian dollar, should help to boost exports. This, in turn, should lead to stronger business confidence and investment here in Canada.

·       Meanwhile, recent data have been consistent with the Bank’s expectation of a soft landing in the housing market and a stabilization of household indebtedness relative to income.

·       Real GDP growth is projected to pick up from 1.8 per cent in 2013 to 2.5 per cent in both 2014 and 2015. This implies that the economy will return gradually to capacity over the next two years or so.

·       Although the fundamental drivers of growth and future inflation appear to be strengthening, inflation is expected to remain well below target for some time, and therefore the downside risks to inflation have grown in importance. At the same time, risks associated with elevated household imbalances have not materially changed.

Basics of Canadian economy:

-     30% of GDP comes from exports
-     >60% from internal consumption

GDP contributors by Sector:

-     ~11% of GDP comes from manufacturing
-     ~8% comes from mining, quarrying and oil or gas extraction
-     ~79% from service sector (including public administration)
-     ~2% comes from agriculture, forestry, fishing and hunting

Some salient issues vis-a-vis Canadian economy:

Ø  As BoC mentioned, the wedge between the level of Canadian exports and that of foreign demand;

Ø  Strength of Canadian Dollar vis-à-vis US Dollar and other major currencies including Korean Won;

Ø  Reluctance on part of big capital owners (companies, individuals) to invest (the reasons need to be understood and addressed – more on this later), hence lack of multiplier effect in the economy;

Ø  Dis-inflation;

Ø  Too much dependence on US economy’s health;

Ø  Sluggishness creeping in China’s GDP growth (hence impacting consumption of goods and therefore import of goods from other countries, including Canada);

Ø  Absence of federal government/manufacturing industry/agriculture/service sector coordination and policy making (there is reasonably good coordination between mining, oil and gas and federal government though);

Ø  Extremely tardy progress on providing finality re: investment/export avenues (e.g., oil export, LNG export);

Ø  Slow turnaround in European Union’s economic health.

Salient list of actions required by Federal/Provincial Governments to infuse more vigor in Canadian economy:

-     Review export items vis-à-vis existing export outlets and promote these exports through suitable strategizing and free trade agreements, bilateral trade agreements;

-     Review export items vis-à-vis new and potential export outlets and promote these exports through suitable strategizing and free trade agreements, bilateral trade agreements (look for new regions, like, South America, Africa and untapped Asian regions) and adding new items;

-     Devise policies that encourage manufacturing/production of those products that have export potential in existing and new markets (example, bitumen, natural gas, high-tech items);

-     Have more cohesive and inclusive federal government/manufacturing industry/agriculture/service sector coordination;

-     Promote innovation in the industry in a big way through incentives;

-     Encourage big capital owners to invest – have continual dialogue and make necessary adjustment in policies (conclude reviews quickly, conclude deals with provincial agencies, first nations tribes in an expeditious manner rather than a process that takes forever to complete, or, sometime, never reaches any conclusion);

-     New investments would result in more employment and hence have multiplier effect of higher consumption;

-     Subtly encourage consumption (not necessarily in housing sector but other areas which won’t load the national debt situation)

-     BoC may consider lowering interest rate and/or engage in some sort of quantitative easing;

-     Stimulus spending should be kept as one of many options of last resort;

-     Create an optimistic environment rather than that of impending gloom and doom (one of the key requirements would be that the political parties would need to talk less in inflammatory and fear mongering tone, less recriminations and uttering nonsense)

Summary:

Other countries too are facing similar situations as Canada faces and, therefore, they too are considering many of the abovementioned strategies and actions. Therefore, the window of opportunity is short and there is lot of competition out there. If Canada wants to maintain its pre-eminent position within the G-7 nations and international comity at large, Canada would have to act quickly and decisively both at Federal and provincial levels in a coordinated manner without the political ideologies inhibiting such coordination. There are already signs of wear and tear at some aspects of social support and quality of life which Canada is famous for and proud of; if Canada does not act soon, things would get worsened and some damage may be irreparable.

WANT SOME PUBLICITY ON THE CHEAP? COME AND BASH THE CANADIAN OIL SANDS!!

If you happen to live in North America and get a sudden fetish for public attention and publicity and you do not have much money or resources to spend, what do you do? You just pack your bags, land up in Canada, meet some anti-oil sands groups and/or people and tell them that you are willing to start another anti-oil sands movement in some shape or form. Just get started with your form of protest against oil sands with some sensational verbiage (but may be factually incorrect, who cares?) and you are off to media attention and publicity!

Curiously, some celebrities whose careers are heading in to sunset and who wanted to get some publicity ‘high’, chose the oil sands bashing route to get back in public limelight. Example? Robert Redford some time ago, and now Neil Young (Young who?).

Frankly, I had never heard of this guy Young – a rock star? Really? Anyway, this fellow, for some strange reason (and may be some personal agenda which needs to be investigated and established) parachuted himself in the midst of Canadian landscape as a messiah for and on behalf of Fort Chipewyan folks and as an anti-oil sands crusader in general.

It seems his umbilical connection with Canada by virtue of having being born in that country seems to be helping him to get some traction in Canada on his oil sands related utterances and some attendance in his so-called concerts in various Canadian cities. Young is taking the opportunity of his so-called fund raising concerts to launch in to anti-oil sands tirades with all sorts of assertions that are clearly indicative of how ill-informed/mis-informed and pathetically biased he is.

Unfortunately for the Canadians (see later narrative as to why I say so) the television channels of Canada seem to be slanting the reporting about this fellow’s views with a negative bias toward oil sands. And more unfortunately, some sections of Canadian public also seem to be getting an itch to jump on the anti-oil sands bandwagon.

Why is the purported negative bias toward oil sands unfortunate for Canadians at large? Because the narrative of most of anti-oil sands rant of these people indicates that they have:

-      NEVER visited Ft McMurray;

-      Absolutely NO idea of actual foot prints of oil sands projects (i.e. land disturbance) vis-à-vis total area of Ft. Mc expanse;

-      Absolutely NO idea of historical presence of bitumen like substance for millenniums in Athabasca region and its dynamics with the environment (water and others)

-      NO factual idea (or any idea!) of official situation on various agreements, consultation with First Nations folks;

-      NO firsthand how oil sands projects are ACTUALLY taking care of environmental impacts, reclamation;

-      NO factual information about commercial venture opportunities for the First Nations folks in oil sands development process (and the economic benefits accruing to them).

The above is not taken from any leaflet of any oil company or from CAPP. The above is based on first hand understanding of the ground realities. Moreover, the perception that oil sands development would bring calamitous consequences for planet Earth is as nonsensical, blighted and mis-informed as saying that Sun goes around Earth.

The gullible Canadians are getting carried away by the scare mongering rhetoric of the so-called environmentalists. The lay person is not challenging the global warming models - that the so-called environmentalists allude to when talking of calamitous consequences of oil sands’ contribution to global warming - which have so many parameters that are fuzzy, half-baked, incomplete, un-validated.

Based on the above 'models' there is this scare mongering going on that GHG going to wreak hell soon and oil sands is a major villain in this regard. This is utter crap, balderdash, clap trap. Why? Because the GHG’s contribution to global warming in totality is no more than 5% and oil sands contribution in all this is 0.1% or even less (depends on what is the basis of calculation).

Global warming is taking place – yes, it is correct. What factors REALLY contribute to it, is not clearly understood by so-called scientists – there are so many theories, schools of thoughts, models, explanations of inter-relationship of parameters and so on. And, amongst all this, one thing is fairly clear – the overall impact of GHG is no more than 5% (and impact of oil sands ? Even less). Sounds unbelievable? Well, this is correct - the fear mongering environmentalists may not like to hear this though.

So, folks, ascertain the facts, challenge the so-called scientific material thrown at you (creating scare and negative biases), challenge the sensational verbiage (which may be zillions of miles away from facts and reality) used by people like Young and more importantly look for the hidden agenda and ulterior motive folks like Young are having. Do not get carried away by the purported grandiose sounding ‘messianic’ image sought to be conveyed by such individuals.

Remember this: Oil sands is NOT a game changing contributor toward bringing about catastrophic consequences to this planet. On the contrary, it contributes significantly towards maintenance of ‘first world’ basis/status of Canada – the whole gamut ranging from health care to education to seniors’ care to social development at large.

INDIA-UNITED STATES STAND-OFF ON INDIA DIPOLOMAT ROW: SOME UNTOLD ASPECTS

Devyani Khobragade – a name that was front and centre of a row between India and the United States recently after the India diplomat was arrested, handcuffed and strip-searched in New York in December 2013 on charges of visa fraud and underpaying her housekeeper. India had demanded an apology for the treatment meted out to Ms Khobragade; it also refused to waive her immunity so she could be prosecuted in the US.

Ms Khobragade was arrested after a complaint from her maid, Sangeeta Richard. Devyani in turn accused Ms. Richard of theft and attempted blackmail. In January 2014 Devyani was indicted by a US federal grand jury in Manhattan on two criminal charges of visa fraud and misrepresentation but was also granted immunity by US officials owing her posting to UN which brings with itself diplomatic immunity, paving the way for her to return to India.

India felt further piqued not only due to the US’s attitude in shunning subtler ways of dealing with the case filed by Khobragade's former maid but also smelt rat in the manner in which US Embassy in New Delhi spirited away Sangeeta’s family - all Indian citizens – to US which suggested a high degree of premeditation.

Media in India merely repeated the same aspects of the story over and over, and provided some outlet to the various guest speakers to voice their so-called outrage. The foreign media (including the US) just reported in a normal matter-of-fact manner. But none of them seemed to be able to bring out the ‘real’ aspects that potentially dictated the unfolding of this whole drama. So, here are the untold aspects of this whole case.

Ms Khobragade – someone who has been in controversies in the past

-      Devyani’s recruitment in the Indian Foreign Service came under the shadow when her batchmate Mahaveer V Singhvi alleged that the rules for allotment of foreign language on basis of IFS officers’ ranks was changed for her batch (1999), to ensure she got her chosen language, German. Singhvi alleged that despite being graded higher than five other candidates in the shortlist of 10, he was not allowed to pick the language of his choice. And this, he said, was solely in order to accommodate Devyani, who was two places below him. Singhvi, who was dismissed from the service, moved court and got the Supreme Court of India to order his reinstatement.

-      Recently, Ms Khobragade’s name was mentioned in the enquiry committee report of a housing scam in Mumbai, known as Adarsh Housing Society scam. A judicial commission mentioned in its report that among 25 illegal beneficiaries in the Adarsh housing society Devyani is one of them.  

Mind you, in the maid’s case (i.e. Sangeeta Richard) the US court indicted Devyani on two criminal charges of visa fraud and misrepresentation. Devyani is incidentally daughter of an Indian bureaucrat whose role too in the Adarsh scam had come under scanner. It is a mystery as to what is so special about her (or her father/family) that she has been allegedly accorded out of turn favours mentioned above. Incidentally, there are many big fish (from ruling Congress party) in the Adarsh scam judicial committee’s report which has put the ruling Congress party in very embarrassing situation and it is trying to wriggle out of it somehow.

Exploitation of domestic help providers in US

It is widely reported that diplomats of many Asian countries are known to have paid their domestic help providers less than what was stipulated in their contract or the minimum daily wage supposed to be paid in US. In other words, exploitation of foreign domestic help workers at the hand of Asian diplomats has been going on for some time in US. It is to be noted that Richard allegedly complained to the US law enforcement agencies that she was allegedly exploited and paid less.

US prosecutors say Khobragade claimed to pay Richard $4,500 per month in order to obtain a visa for her. But they say Khobragade actually paid Richard $573 per month and often forced her to work more than 100 hours a week without a single full day off. The long hours meant Richard was earning $1.42 or less per hour, the indictment says.

After about six months of working for Khobragade, Richard fled and sought help from a non-profit group that works with human trafficking victims because Khobragade refused to hand over her passport and allow her to return home, according to the indictment.

Why US acted in this case the way they did

-      Apparently, the US authorities wanted to make Devyani’s case an example to warn diplomats of other countries who allegedly have been exploiting domestic workers brought from Asian countries and maltreating them.

 

-      US also wanted to convey its growing frustration with Indian government regarding slow progress on matters of importance to them (US), namely, deals on nuclear reactor, defence deals etc. As well, India is reportedly not toeing the US line on the American Af-Pak policy calibrations as well as some other policy calibrations. So, the US thought by indicting Devyani, they will kill two (or more) birds with one stone – they would convey their frustration with India (re: not looking after US interests) as well as warn the delinquent diplomats who tend to exploit the domestic workers in US.

-      It would appear that US wanted to convey to India that it does not consider India to be a military power of any significance in its (American) emerging geo-political adjustments in Asia; the Americans know that China treats India with disdain as it reportedly intrudes inside Indian border in Ladakh at will.

Now, the question to ask would be: Did US achieve what it wanted to? Despite the public posturing of Indian government on this diplomatic spat, it would appear that most likely the US achieved what it wanted to. The current Indian government is too weak, corruption tainted, full of self-seekers to stand up to US political chess game and do anything drastic – one would have to wait to see when and how India bends backwards to accommodate American interests.

CANADIAN ECONOMY 2014 AND BEYOND: DARK CLOUDS LOOM AS POLITICIANS AND CORPORATE HONCHOS EXCEL IN INCOMPETENCE

Canada’s economy lost 45,900 jobs in December 2013 and the unemployment rate rose to 7.2% from 6.9%. The employment data released by Statistics Canada on 10 Jan 2014 was the weakest since March 2013. The report also showed hiring in 2013 was the slowest since 2009.

The worst part of the news is that all in all, 60,000 full-time jobs were lost - the monthly drop in full-time work is the largest seen since late 2011. It's the worst showing for jobs overall since March 2013 when Canada lost 54,500 jobs. As one economic analyst put it “the job losses announced on 10 Jan wiped out most of the gains over the last four months.” Further very disturbing aspect was that two major employment centres lost jobs - Ontario lost 39,000 jobs during the month and even Alberta, a source of recent strength, shed 12,000 jobs.

But what did the Canadian federal Finance Minister say about this serious setback? "We sympathize with those Canadians who lost their job last month. This is a reminder that the economic recovery remains fragile and we must stay focused on our plan to grow the economy and keep taxes low to create the environment where job creation can flourish."

What a meaningless stupid statement intended to obfuscate the crass incompetence of the leadership at various levels!! However, the grim situation that Canadian economy finds itself in currently is not due to the current federal leadership – it is the result of collective gross incompetence of the following:

a.      Politicians at federal level (of the three major parties)

b.      Provincial leaderships (British Columbia, Quebec, Ontario)

c.       Corporate leaderships (oil companies, pipeline companies, various manufacturing and commodities’ companies)

The abovementioned people failed the nation and are responsible for beginning of decline in Canadian economy and wellbeing at large (decline in overall health care and senior citizens care, falling educational standards, decline in innovation to name a few) that can become catastrophic if corrective actions are not taken quickly.

And, why are corrective actions required urgently? It is because of the reason that Canadian economy is dependent on (approx. percentages):

-           65% on domestic consumption (which is dependent on people’s purchasing power)
-           30% on exports
-           78% on service sector (which provides the solidity and basis to people’s purchasing power)
-           20% on manufacturing

The above data should intuitively nudge anyone’s common sense to comprehend that if the purchasing power of Canadians keep declining (due to loss of jobs, stagnating economy, lack of new projects, lack of new export avenues/products etc.) there would be potential for serious negative impact on Canada’s overall wellbeing and existence/subsistence as a wealthy, prosperous first world nation.

Let’s see in brief how the factors mentioned at ‘a’, ‘b’, ‘c’ mentioned above failed the nation:

Incompetence of federal politicians

-         The politicians failed to act proactively in ensuring that vital Canadian resources, like, oil and gas find alternate export outlets – the Conservatives woke up much late in the day to the realization that Canada needs alternative outlets for its oil and gas.

-        Finally when the Conservatives started to push for alternatives, the NDP, and to some extent the Liberals, kept damaging Canada’s cause (in regard to alternate avenues for oil and gas) by barking in unison with the fear mongering environmentalists (based on inconclusive aspects of global warming).

-         The self-serving politicians’ canine like in-fighting seriously damaged Canada’s prospects in getting a head start vis-à-vis its competition - the US have already stolen lead over Canada in LNG export. The foreign investors still do not know if the much touted LNG projects in Canada will at all reach the stage of fruition.

-         The federal level politicians failed to act proactively in identifying alternate markets for Canadian products. The head-in-the-sand attitude of federals folks prevented them from realizing that keeping all the eggs in one basket, namely, depending on only US as the export destination was suicidal.

-         The federal level politicians failed to kick on the back sides of the top corporate leadership to show more innovation and initiative in promoting/developing their major projects without hanging on to the coat tails of the politicians (more on this later).

Incompetence of provincial politicians

-         The provincial politicians in BC and Quebec displayed disgusting parochial and dog-in-the-manger attitude towards blocking potential oil and gas projects of Canada (e.g. Northern Gateway pipeline, Kinder Morgan Trans Mountain pipeline, West to East Pipeline, LNG pipelines, and LNG projects).

-         The obstructionist approach of the politicians of BC, Quebec and, to some extent Ontario (who later seemed to be more supportive to West to East pipeline project) caused and are still causing serious delays in decision making of some of the vital projects of national interest. These politicians seem too interested in their own power grabbing shenanigans and seem too willing to overlook what is potentially good for Canada.

Incompetence of corporate leadership

-         The pipeline companies’ leadership failed to be pro-active in engaging with local stakeholders (e.g. First Nations, provincial leadership) in the context of their major pipeline projects. They displayed pathetic propensity to hang by the coat tails of provincial politicians (Alberta) and Federal politicians in taking up the issues which these companies should have tackled themselves;

-         Some of the oil and pipeline companies displayed unfounded overconfidence that politicians would get them the necessary clearances in other countries (e.g. Senators/Congressmen would help out in US).

-         The oil and pipeline companies failed to proactively plan for alternate solutions. They are waking up 5 years late that alternate means of transport is needed to transport bitumen to US. The risk assessment and contingency exercises of these companies have been horribly third rate and complete failure.

-         The corporate leadership of manufacturing companies did little to keep the innovation edge going and/or to find new products and new markets.

-         The corporate leadership of some other commodity producing companies failed to anticipate coming changes in the world markets and were less than adequately prepared to face the challenges of change (e.g. Potash, Fertilizer, Gold, Uranium).

What to do now?

-         Learn the lessons from the above.

-        Get over the self-defeating notion of ‘we-know-the-best’ and ‘frog in the well’ mentality. Go out of Canada, see what alternative stuff is being done out there and bring back the knowledge to adapt the same to Canadian conditions.

-        Politicians of all stripes got to act unitedly in getting policies implemented which are in interest of Canada (and not invest energy in unproductive nonsensical debates stemming from self-aggrandizement fetishes).

-        Fast track projects that can create jobs in thousands, add to Canada’s GDP (all political parties must act unitedly in making them a success).

-        Further heighten the ‘commerce’ focus of the Federal ministries (implemented recently by the Conservatives).

-       Make sure the foreign investors are re-assured of the definitiveness of the proposed projects in Canada and their economic returns.

-        Crank up efforts to find alternate outlets for Canadian products, services (in Asia, Latin America and Africa)

-       Keep investor friendly environment in Canada and in Canadian provinces.

Consequences of not acting soon

-        The window of opportunity for export of Canadian resources would not remain open for ever – if the Canadian politicians, corporate honchos do not act quickly and decisively, Canadians would keep sitting on piles of their natural resources for the rest of their lives and keep sucking their thumbs.

-        The politicians must realize that dog-in-the-manger politics would not only consume the Canadians, the resultant implosion would wipe them out too.

-        Canada’s existence of being a successful, happy, good performing first world country would seriously get compromised.

-        Falling standards could trigger disaffection which could bring about potential serious fractures in the multi-cultural foundation of Canada.

Let’s hope the Canadian politicians and the people would rally round and come together to meet the current challenges.