Let’s take a quick walk around the world and see what is happening..
One of the few people not asked to investigate the Biden’s was Kim Jong-Un – he was too busy building and testing ballistic missiles and writing love letters to Donald Trump. But Donald Trump has now confirmed that he did ask Ukraine (and now China) to investigate the conspiracy theory that the children of prominent politicians can get jobs that they are not qualified for and get paid for it. Ivanka explained that this is how she got her job, together with her husband. There is about as much truth to the Biden “corruption” conspiracy as there is to Trump’s claims that he is the best US President since Tony Soprano.
A man in France who has been paraylzed for some time has now been able to walk using the his thought processes (via a brain implant) to control an exoskeleton. Mr. Trump may find this technology useful in controlling his mouth, though finding the brain in which to place the implant may prove a challenge.
Borish Johnson has unveiled his master plan for a deal for Brexit, which the EU has given him one week to significantly improve. If he cannot do so by October 19th, he will have to ask for an extension of the Brexit negotiations for another 247 years. He has said he would rather be found dead in a ditch than ask for an extension – a variety of volunteers are scouring Britain for an appropriate ditch, preferably near the Irish border.
Andrew Scheer, the leader of Canada’s conservative party (so he claims), claimed to have been an insurance broker, except he never was. He also claimed to have a degree from the University of Saskatchewan, except he didn’t. And he also claims to be a proud Canadian, except he is also a US citizen who is still on the active service list and can be called up in the US military reserves. Who has black face now, intelligent people ask and wonder?
It is becoming increasingly obvious that deviousness and deceptive methods were used to ensure that Jason Kenney, now Premier of Alberta, won the leadership election for the United Conservative Party of Alberta – at least according to a report from the CBC. Fines have already been levied for some involved in this debacle and the RCMP continue their investigation of possible criminal activity. Some of us are old enough to remember when conservatives were the party of law and order. No longer, it seems. Nor are they a party of truth tellers – see above observations about Andrew Scheer.
The biggest lie the Tories tell people is about trickle-down economics – the idea being that giving millions and millions to rich people helps create jobs and solves poverty. The technical term for this form of economics is “bullshit” – researchers cannot find a shred of evidence that this works. So when Premier Kenney gave away $4.5 billion to rich Alberta corporations, they paid themselves more, paid shareholders more, bought back shares and laid people off. Trump’s tax cuts led to the same thing. So as to pay for this give away, poor people and the middle class will now be punished. What is interesting is to hear them talk this “bullshit” as if it made sense. It doesn’t. Maybe this is what Scheer didn’t learn at the University of Saskatchewan.
Another bad idea these same people have is that governments should balance their budgets. This is another piece of “bullshit”. They should manage the economy, seek efficient and effective ways of supporting the needs of communities and their citizens and manage debt. Balancing the budget is what they talk about – but two conservatives (Mulroney and Harper) created the biggest chunk of debt Canada now has to deal with. Kenney will do the same in Alberta. Some fall for this, but that is usually because they misunderstand what the conservatives do is not what they talk about. Look at Trump. Look at Boris. Look at Kenney. Look at Doug Ford, who is now spending more per week in Ontario than the Liberals did.
The good news is that real television is back after the summer break when we were forced to watch Barry Manilow specials and then go for therapy. Catherine the Great, QI, Graham Norton, The Capture, The Confession, Scarborough – all good British TV. Makes a change to watch some professional acting versus the stuff Boris, the Donald, Kenney-Scheer give us – amateur theatricals with no make-up.
Let’s talk a walk around the world and see what is happening.
Showing his strong sense of history, Donald Trump suggested that the Kurds did little to help the US, Canada and Britain (supported by the RAF and the Australian Air Force) in the World War II landings in Normandy. Neither did the Afghans or Iraqi’s – it wasn’t their fight. They also didn’t help with the moon landing and they have never won the NBA or NHL finals. You can see where his strong sense of history takes him – probably to prison. He has abandoned an important coalition ally without consultation with anyone other than the President of Turkey (who also didn’t help in Normandy and is another dictatorial leader). Meanwhile, he is resisting all forms of response to the impeachment inquiry other than bluster and bullshit. Based on the theory of total executive privilege and supreme right of Kings and the historic rights of people with bad hair, Trump sees himself above the law. I have no doubt some judges will take a different view and will do so soon.
In Britain, Borish Johnson is having a heck of a time persuading people to take his ideas seriously, even though the Conservative party has a 10-point lead in UK opinion polls right now. His “new” plan for Brexit was seen by his EU counterparts as about as useful as a pair of worn underpants as a way to fix a Boeing 737 Max aircraft. Parliament is having a special sitting on October 19th after the EU summit next week to decide what to do. Don’t hold your breath. Brexit is so much of a mess that even Trump looks sensible in comparison. Part of the problem is that Jeremiah Corbyn, leader of the UK Labour Party, is a sensible as a cat on a freezing tin roof. He has no plan, no support, no idea, no sense. In fact, the paucity of leadership amongst the political elite in the UK is remarkable. No sign of a statesman or woman anywhere. Even Meghan Markle starts to look like she could be effective as a leader.
Speaking of effective leaders, Canada held a leadership debacle on TV. It wasn’t as good as the Big Bang Theory or as bad as the final season of the Game of Thrones, but it was a spectacle. But then so was Catwoman or Snakes on a Plane – two of the worst films of all time. What the media and newsprint has done is reduce politics to a popularity contest and made all a bit like Big Brother or X Factor. Andrew Scheer may be a muppet with a dodgy CV but his policies would take Canada back in time and help make America Great Again. Trudeau (a.k.a. Mr Dress-up) may be a bit of a poser, but he is helping to shape a modern Canada. As for Maxine Bernier, well, think of a love child from a Boris Johnson and Donald Trump mating with some DNA from Atilla the Hun. Voting is soon. Votes need to be cast for the future of Canada, not on whether or not you “like” some bloke in an ill-fitting shoes or another bloke whose shoes don’t match his suit (why is that?).
A friend, who is generally very smart and thoughtful, and I had an interesting chat. It was about debt and government. I hadn’t realized that most smart people misunderstand money and the responsibilities of government. Her argument was “I balance my chequebook at the end of each week, so should the government” and also “debt costs us money that we could well spend on services, like health and education”.
First, some obvious things. Government should be efficient and focused in its use of resources – it shouldn’t waste time, people’s skills, money or equipment. Second, government should demand not just efficiency but also effectiveness – it needs to be able to show outcomes and impacts. Third, governments should occasionally fail at something worth trying – it shows that they are trying to innovate and not all innovation is 100% successful.
But government should not be run like a household. Few households need a defence system, warships, soldiers, police. Second, few households carry the responsibility for an entire nation or Province’s future education, health, social needs, transport, etc. Finally, all major corporations and most Canadian families have debt – debt that they consider manageable. Air Canada has debt – around $5.3 billion. Yet this debt is seen as “manageable” – revenue enables them to pay off both interest and a % of capital. If they didn’t have debt, we’d all be flying around in converted B52 aircraft – they couldn’t afford to buy new jets. The issue is not being debt free, but how manageable that debt is.
One of the rationales for debt is that it can produce assets – we use mortgages (debt) to buy a house we will eventually own (an asset). So we look at the difference between our borrowing and the value of the house (which increases each year in most parts of Canada) to look at net debt.
Alberta’s debts, for example, are very modest. In 2019-20 they are projected to be $37 billion (up $10 billion from the previous year due to decisions already taken by Jason Kenney) giving a net debt to GDP ratio of 10.3% – one of the lowest for any government anywhere in the world and almost exactly one third of the net debt to GDP ratio of the Federal government (30.7%).
Gordon Brown, when he was Chancellor (UK), suggested that net debt to GDP should always be below 40%. Indeed, if debt is being used to invest in the future (education, public health, infrastructure) and not to fund current operations, then both Alberta and Canada have room. Debt should not be used to fund operational activities.
Indeed, some of the most vibrant economies in the world have debt to GDP ratios worse than Canada – it is the lowest in the G7. Britain has been in debt for 300+ years and is the world’s fifth largest economy.
The idea of balanced government budgets is a pure nonsense if people’s needs for appropriate government support are not being met. Modest debt, especially when interest rates are so low, makes a great deal of sense especially if the funds are used to invest in all our futures.
As we get close to the election in Canada – 21st October – it is looking possible that we will either get a small, tight Liberal majority or a Conservative minority. This means we have to vote tactically. There are only two ridings in Alberta where this really matters, and I live in one – Edmonton Centre. I happen to know the Liberal candidate well and I have no difficulty voting for him. But others – especially NDP and Green supporters – may have more challenges in doing so. If they vote conscience, they will help elect an austerity, anti-climate sense, anti LGTBQ2+, anti-women’s rights candidate who is a Conservative. I appreciate their dilemma – BUT isn’t it obvious that neo-fascists and neo-liberals are not who we want to run Canada?
The mantra I hear a lot is that the Liberals are destroying oil and gas and, de facto, are anti Alberta. This is nonsense.
Oil and gas companies are quite capable of destroying themselves.
The large oil and gas companies are strongly in favour of a range of climate change policies. They worked WITH the NDP government in Alberta to introduce the Carbon Levy and proposed the large emitter tax – a tax which Alberta was amongst the first jurisdictions in the world to introduce (it’s still there by the way at $30/barrell and was introduced by a Conservative Provincial government). They also favour “social license” strategies, which the Liberal party of Canada are pursuing.
The Liberal party bought a pipeline when the oil and gas industry was about to give up on it. People forget that the government bought it because investors and bankers were abandoning it. When they say they were abandoning it because of Liberal policies, they forget that it was the Conservative party that (a) didn’t build the pipelines when then had years to do so; and (b) messed up the environmental legislation which enabled the courts to intervene (which the Liberals have now significantly improved). The Liberals are supporting Alberta’s need for a pipeline.
The Liberals are accused of paying off Quebec through transfer payments. All they are doing is following the policies and practices introduced and fully supported by the then Conservative government of Stephen Harper and Jason Kenney. Alberta doesn’t actually PAY transfer payments, it comes from general revenues which Alnbertan’s contribute to.
The Liberals are seen to be spending too much and adding to debt. Yet net debt in Canada is going down and is the lowest in the G7. The biggest chunks of Canada’s debts were created by Conservatives Mulroney and Harper.
The oil and gas sector will decline as green technologies start to displace fossil fuels. The oil and gas sector needs to embrace the transition (as several large global players are doing) as investors shift their investors OUT of fossil energies into green tech. A large group of banks and investors have and will continue to divest fossil fuel investments. Get used to it.
I am not a liberal by nature, but the brand of conservatism embraced by Scheer and his cohorts disgusts me. His stance on women’s rights (vague but encouraging anti-women policies), lGTBQ2+, austerity and anti-fact (like killing off CBC News) is deeply disturbing. I am not a big fan of Trudeau, but we are not electing a leader we are electing a Government. Vote for Canada’s future – don’t take us back to a dark age!
I am thankful for many things in my life, not least of which is that I am still living. Given my family history, getting to 69 on halloween is quite the thing. Hoping to have another 15-20 years, but that is pushing the genetic odds.When I had my DNA test some time ago, it didn’t show any markers for genetic disease, but I do know that the Murgatroyd males are not schedule to get much past 80-85. I am 70 in 2020. But I am part neanderthal!
I am also thankful for family – my wife Lynne of 49 years, my sons James and Glyn, their wives Lena and Nadine and the three grandkids – Lily, Oliver and Sam. Family means a lot. It is so wonderful to watch them all grow and develop.
I am grateful and thankful to friends like Sarajane Aris and her husband Brian, to Brain and Kate Thomas-Peter, to Neil and Janne Henry and their family, and to so many Edmonton friends (like the members of the Little Club) and to all who spend time keeping me sane and amused. It can’t be easy. I also love spending time with Ray Bassett, Bob Fessenden, Ron Dyck and Robert Ascah at the Faculty Club once a month.
I am thankful to my colleagues for their never ending support and encouragement – Areef (business partner), Maxim (faithful client), Jean and JC (partners in the non profit company), Don Simpson and the Innovation Expedition team (especially Jan and Adrian, but also Leah, Alex, Keith, Tom, Abdullah) who have kept me going all these years.
I am thankful to all the music makers, artists, chefs and film-makers that enrich my life and give meaning and purpose to it. Music is with and beside me each day as I write, I love to cook and to eat and to explore the culinary world. I also have a special place for poets.
Most of all, I think, I am grateful to occupy a world of ideas, of challenge and of opportunity. Innovation intrigues and enables. While some ideas are uncomfortable (my friend Harry Gray always observed that “most significant learning comes from challenge or pain”), all of them help me grow as a writer and thinker.
Indeed, this week we celebrate 25 years of the Athabasca University MBA which I had something to do with along with Lindsay, Dwight, the Shelley’s, Marco, Konrad and others. An example of ideas and innovation in action. The same time we launched the MBA, Jeff Bezos launched amazon.com! Ah well…I am thankful that I could work with the team to create something that has made so much difference to the lives of so many.
Finally, I am grateful that I inherited my father’s sense of humour and my mothers sense of place. Without laughter, life would be too long. With laughter, life is likely to be too short.
Let’s take a walk around the world and see what is happening..
In Europe, Borish Johnson looks like he may broker a deal with the EU in the next 2 days which would lead him to a rare Saturday meeting of parliament who will, in all probability, vote it down since they are very clear about nothing in particular. The DUP – a kind of Irish version of the Kamikaze Pilots Alumni Association – want a veto on the deal. The Welsh remain silent. The mess continues.
In the Dis-United States of America, the pathological liar a.k.a. as President Trump is unravelling before our eyes. In a just released letter to the President of Turkey, Recep Tayyip Erdoğan,
he basically asks him not to be a bully or he will be a bigger bully him back. Most thought the letter was a hoax until the White House confirmed its authenticity. We all think the President is a joke, but the White House will not confirm this.
Meanwhile, the impeachment hearings continue. It is becoming clear that there is no government in the United States. There are oligarchy-mafia -like operations in the shadows, such as the Ukraine operation run by Rudi (“yes I’m getting divorced yet again”) Giuliani, who is under investigation by the FBI. In a set of moves based on the divine rights of kings, Trump is refusing to co-operate with the impeachment inquiry, asking his staff and members of the executive branch to disobey legitimate subpoenas. None of this will end well.
In North Korea, Kim Jong-Un has been seen riding a horse on Mount Peaktu, a sacred mountain. This is a dictator thing. Turkmenistan’s dictator Gurbanguly Berdymukhamedov recently built a massive golden statue of himself riding a horse. And we can’t forget those iconic photos of Vladimir Putin, senior advisor to President Trump, riding a brown horse shirtless. Let’s hope the Trumpkin doesn’t get any ideas.
The Canadian election trundles along. We could end up electing our first US Prime Minister – Andrew Sheer, but the odds are increasingly on a modest Liberal win or a Liberal minority government. The NDP has offered to form a Liberal-NDP coalition to ensure that the conservatives don’t form government. We also have a Trump impersonator – Maxime Bernier – running and showing that we can produce our own nut-cases who think they are stable geniuses. His web site says he “speaks his mind”, trouble is his mind is empty and therefore he has nothing to say. He says he is leader of the People’s Party – which people and where they are having the party is not known.
Finally, the Alberta government’s $30 million war room setup to combat foreign influences whose funds are intended to impact Alberta “oil and gas” (based on a pile of pants blogs from the widely discredited Vivian Krause) is not going to be transparent. It has been set up as a corporation – the Canada Energy Centre – and does not have to disclose anything about its work. I suspect its funded by the Taliban or possibly the Trump Foundation. Don’t expect value for money.
As Greta Thunberg plans her time in Edmonton on Friday, she may want to take a moment to reflect on the difference between science and speculation.
The science of climate change is a science dealing with a wicked problem. It is “wicked” because: (a) the science of understanding complex systems is, well complex; (b) trying to estimate likely impacts of any change is difficult, but it becomes more so when what you are dealing with is hundreds of complex variables which interact with each other and seeking to predict these interactions over a very long period of time; and (c) the impacts of change will be experienced differently in different parts of the world. This is tough enough, but science and politics of climate have become so intertwined that many scientists are now activists and many activists claim “science” as the foundation for their activism.
- Almost all agree that ocean levels are rising. Since 1900, sea levels have risen by around 8 inches – 20.5 cm – app. 0.17 cm a year. These rises have not been experienced equally everywhere there is sea and suggestions of oceans rising by several feet over the next 200 years are based on very dubious predictive modeling and inexact science. We can expect sea rise to continue, but there is disagreement by how much and where the impacts will be felt.
- There is a poor level of scientific understanding of the way in which solar indirect effects, multi-decadal oscillations of large scale ocean circulations, cloud formation and CO2 interact and impact both surface temperature, deep ocean temperature. As Freeman Dyson observed, current models used to build an understanding of climate “do a very poor job of describing the clouds, dust, the chemistry and biology of fields, farms and forests – they do not begin to describe the world we live in”. This is a point accepted by Trenberth (one of the principle authors of the scientific studies used by the United Nations International Panel on Climate Change), who has said “we do not have reliable regional predictions of climate”. Thus, the attempt to scientifically understand climate is an ongoing challenge and the science is not “settled”.
- There is little to no evidence that C02 is the cause of extreme weather events or that these events are increasing in both frequency and intensity, given the large naturally occurring and regional weather systems as we understand them.
- The IPCC says that it does not offer predictions. It uses computer simulations (models) to develop scenarios or projections. It says so repeatedly in Chapter 10 of the IPCC 2007 Working Group 1 report and reviews how these were developed in Chapter 8. Most readers and most who refer to these reports (and subsequent editions and updates) refer to them as “predictions” and “forecasts”. There are systematic approaches to forecasting science and most who are forecasting scientists involve explaining and documenting uncertainties and factoring these uncertainties into the analysis, especially in seeking to forecast the behaviour of causal variables. Given the degree of uncertainty about all of the variables in the models used (especially CO2, solar impacts and ocean oscillations), the models are highly unreliable as testing them against known data shows.
Scientists keep an open mind and no science is ever settled (suggesting that all scientists agree on something doesn’t mean that it is therefore true – 97% of the medical profession rejected the idea that germs are a significant cause of disease at one time and similar numbers rejected the whole idea of plate tectonics). Consensus seeking and consensus enforcement have trivialized and politicized climate science for decades.
So, Greta, take up Judith Curry’s (a climate scientists) view and “let us stop manufacturing consensus about climate change. Let us open up the scientific debate on climate change and celebrate disagreement and use it to push the knowledge frontier of climate science. The whole consensus thing has done little to reduce global CO2 emissions, which was the point of the whole exercise. It’s time for new approaches to both science and policy”.
Let’s take a walk around the world and see what is happening…
Donald Trump, now completely free of any form of adult supervision, is paying himself handsomely by deciding to host the next G7 summit at one of his own properties. While this is a distraction from the general corruption and debasement of the office he holds, he has persuaded many around him that he is a living God and as such is both immune from prosecution and divine in all that he does. Bless him. He is such as numpkin. The difficulty for the future is that the Republican party has so debased itself as to lose all credibility – its worse than an NHL team without a team or a coach that knows what they are doing (we know a lot about that here in Edmonton). They accede to nepotism, Russian interference in elections (even letting Russian oligarchs own the voting machines used in US elections), the appointment of unqualified judges to Federal courts, paying off porn stars, and asking foreign governments to help win an election for a sitting President. All shameful and bodes ill for the future of government and democracy in the US.
In Britain, parliament sat on a Saturday, which is most unusual (the first Saturday sitting in 37 years) – but then British TV is pretty poor on Saturdays. They did so to decide whether or not to accept the deal Borish Johnson negotiated with the EU earlier in the week. Oliver Letwin, well known for being a “remainer”, proposed an amendment to the deal so as to delay the 31st Oct deadline to enable the needed specific legislation to be passed by parliament ensuring that the deal. He feared that, while the Commons might agree in principle to the deal, the legislation might subsequently fail to pass the house, leading to the UK leaving without a deal on Halloween (soon to be known as Brexit Day). The Kamikaze Party (aka as DUP) backed Letwin. The Letwin amendment passed (winning by 16 votes) and the Government decided not to pursue a vote on the deal at this time. Back to square one. Borish looks much more vulnerable now that he did on Friday – he is required to ask for an extension to the deadline for a deal. Borish will now introduce the needed legislation and, if it passes, the deal will go through if not, the UK will leave withouta deal.
The good news for England is that its rugby team beat Australia in the rugby world cup 40-6 and will now meet New Zealand who thrashed Ireland 46-14 in the semi final.
In Canada we are almost at election day – 21st October (Monday). Andrew Scheer, candidate for the US and also the Canadian Conservative Party, has upped the anti with new unfounded statements about the Liberal/NDP raising sales tax (GST in Canada – VAT in other parts of the world). This is just one of many slights of hand and nonsensical statements he has made in his attempt to gain the prize of leading the country, which looks growingly unlikely. They are matched by similar nonsense statements from Justin (Mr Dressup) Trudeau. The general view is that this will be a nail biter, which is not a recommended practice. The big recommendation by those in the know is that significant quantities of quality Scotch will be needed on election night.
In Edmonton, Greta Thunberg and 4,000 others suggested in a meeting on the steps of the legislature, that it might be appropriate for Alberta – a leading oil and gas economy – to enact world leading climate change legislation and social actions. The Government of Alberta turned a deaf ear, having already repealed some of the most progressive climate change legislation (including a carbon levy) in North America introduced by the previous government. The activists want action now, the Government wants no action now since they see oil and gas as “the” economy, which it is not. In the US, for example, there are more people working in alternative energy than in oil and gas and that will likely be the case in the developed world over the next decade. Greta wants us to think back from the future while the Government of Alberta wants us to get back to the past.
21st October – Election Day
I was in a box with Schrödinger’s cat the other day reading about the Heineken principle (the only physics I remember from high school) – you can never remember how many beers you had last night – when thoughts turned to the parallels between quantum matter, nanotechnology and Brexit. I realized that the physics is easier to come to grips with than Brexit.
David Cameron, the idiot savant Prime Minister who not only inflicted this mess on Britain but made it worse by also creating the Fixed Term Parliament Act, made the referendum binding on parliament, not unprecedented but silly. That was three years ago. Since then a bunch of Heisenbergers (a.k.a. as remainers) have sought to prevent Brexit at every turn. They want an ideal deal with the EU, but cannot agree what such a deal would look like. Even the cat is bemused.
On the other side are ardent Brexiteers – the Bohrs – who want a deal (at this stage, any deal – even one involving having to drive a Lime Green Lada for the rest of their lives) so as to move on to more important matters, like the colour of Mars Bars or the size of a fish finger. The current Prime Minister – Borish Johnson – is a Brexiteer supported by his cabinet, which includes the very tall last living Victorian, Rt. Hon William Rees-Mogg, who resembles an elongated graphene string.
As far as anyone can tell, Brexit is not going to happen on my birthday (Halloween) – parliament has to agree what day it is and what time it is before the deal Borish did with the EU can pass, which looks unlikely (Big Ben is under repair). The EU, meantime, is asked to agree to an extension of the October 31st deadline. If they were smart (well, if they were smart we wouldn’t be in this mess), they would say no and force the British parliament either to agree to the deal or crash out without one. The cat is interested in getting out of the box alive and I would like this to end in my lifetime (I am about to be 69).
What we all need to realize is that was is being negotiated here is the exit agreement. Up next is the trade agreement – we haven’t seen anything yet, the negotiation for which have not yet started.
E = MC Hammer Squared, Cubed and Fine diced says the cat, but I think its describing its food preference.
Television coverage of the Canadian election is about as exciting as watching my socks go mouldy or my underpants fall apart. When I could be watching Snagglepuss (where the phrase “heaven’s to Murgatroyd” was widely shared), here is Lisa Le Flamme on CTV (with strange hair) prattling on when nothing at all is happening. Some bloke with a pointer is making up numbers and across the country smart people are wasting our time talking about what “might” happen when all we have to do is wait. What is so urgent? I would rather watch Jamie Oliver caramelize onions than this – he does that kind of thing.
Meantime, Brexitexcitement continues in Britain (not), impeachmentexcitement continues in the US, protests are taking place in Chile and several other Latin American countries and Andy Murray won his first men’s single tennis tournament since he got a new hip.
I am sipping a wonderful Italian wine called Gattinara from Piedmont. It is one of those wines where you need to put your pajayma’s on before you start drinking. It’s going to be a long night. It is likely that the Liberals will win one way or another..either with a majority or a minority. As results come in, we will switch to a decent Scotch. But I doubt I’ll make it to the end.
A Brexiteer and a Remainer walked into a bar in Brussels…
Well, not really. While Belgium has some nice beer (Duchesse De Bourgogne is my favourite), it is not a happy place for deal making, especially when the deal requires emotional opposers to agree on a compromise. It is a place of factions and fictions, intrigue and intransigence. This is the place where the next stage of Brexit – assuming the current stage ever finishes – will get done. That stage is the trade deal the UK needs with the EU to make sense of all of the drama of the last three years.
But first, there is the need to end the debacle over the withdrawal agreement. That may happen in the next nine days, but it is more likely to take longer. The UK Government has tabled legislation based on the agreement reached with the EU, but parliament are likely to amend this legislation, which will require further negotiation with the EU (who may not like the amendments). The decision of the Speaker not to permit an indicative vote makes all of this more difficult for the EU and for the UK Government.
At the heart of this debacle is a shift in the role of parliament. Parliament is now, de facto, the government and is making decisions which used to be made by government. Government, which should be held to account by parliament, is now constantly trying to second guess what parliament will do next. Only a general election can move things forward. I suspect that this will be the outcome of the tango dance this week between parliament and government. It used to be the case that the Prime Minister could advise the Queen to dissolve parliament, but not anymore. Parliament has to agree to dissolve itself – another example of parliament becoming a different kind of beast.
Even if an election was called this week (unlikely), the earliest possible date for the vote would be November 28th because of the way the law works. Boris would likely do well – currently polling at 35% of the electorate, some 10% ahead of Labour (some polls have this higher – between 13% and 15%) but then “a week is a long time in politics” as Harold Wilson was fond of saying. What could derail Boris is what Harold McMillan called “events, dear boy, events”. There have already been many events and no doubt there are more to come.
So Boris and a young lady walk into a bar in Putney…
October 23rd Alberta’s Psychological Dystopia
One feature of psychological illness is this: “if only everyone else were different, I could be the person I have always wanted to be”. When I was in practice as psychologist (many years ago), I heard this implicitly all the time. The situation these people were in was hopeless, but not serious – we could change their situation by changing how people thought about themselves and others.
Many in Alberta have this illness, except its focused on our economy and politics.
The fantasy is this: oil and gas could be “back” as the engine of the Alberta economy at the level it was when oil was over $100 a barrel and jobs were plentiful and jobs would be back at the level they once were. We have lost over 100,000 jobs (with more losses to come) and oil is trading at an average of $43.10 throughout August 2019.
What is getting in the way, the story goes, is the lack of pipeline capacity, environmental and climate change preoccupations, immigration, and transfer payments intended to ensure all Canadians share in the wealth of the nation.
Oil and Gas
The “blame” for the fact that oil and gas sector is experiencing a severe recession and that the key pipelines are not yet built is placed on the Alberta NDP government and the Federal Liberal government plus climate change activists (allegedly “funded” by foreign money). Also to blame are Quebec (recipients of significant transfer payments) and BC who oppose new pipelines and foreign funded organizations whose preoccupation is ending the use of fossil fuels. Also involved is Saudi Arabian oil, which Canada has been importing since the 1970’s – oil that is cheaper than Alberta oil.
The non “sense” here is complicated but important.
Oil prices reflect global market conditions and the fact that most oil producers are seen to produce oil that can easily get to market. Alberta’s major oil is either mined (bitumen mining) or produced through a steam assisted gravity process. While a lot of work has gone into “greening” this oil sands product (CO2 intensity is down as are the volumes of water needed to produce it), there are still a lot of environmental issues associated with its production. These are being systematically worked on, but they are still issues.
As companies like TOTAL, Shell and BP exit the oil sands sector to pursue a greener energy strategy and as investors look at the future and switch their investments to green energy and less problematic oil, then the oil sands have experienced a reduction in foreign funded direct investment. Indeed, we have gone from an oil sands sector dominated by foreign ownership to one which stronger Canadian ownership, funded by foreign backed debt.
What is important to understand here is that big players like Conoco-Phillips and others exited Alberta not because of the NDP or Liberal governments – having worked with them they take a 50 – 75 year view of the markets and return on capital – but because their strategic priorities shifted. They saw shifts in global market conditions and decided that return on capital here was less attractive than elsewhere. Welcome to the real world of investment and corporate decision making. They are not loyal to place, but to shareholders.
Also, the investment landscape changed. A significant group of investors have decided, following the Paris Climate Change Accord, not to invest in fossil fuels new sites and reduce their investment in fossil fuel old sites. Some $6 trillion in fossil fuel investment has been “switched” over the last five years with major investors de-carbonizing their portfolios. What these investors are also looking at are models which suggests that demand for fossil fuels could drop by as much as 40% by 2050 as electric cars and other technologies become more widely affordable and available. Many jurisdictions are banning the sale of fossil-fuel cars by 2030.
What oil and gas companies are doing is investing in smart technologies which dramatically improve productivity with less labour. In Texas, for example, 231,500 jobs were lost when the 2008-9 recession hit and oil prices collapsed, profits are back but only 50,000 people were hired. This is what we will see in Alberta – increased productivity and profitability with fewer people employed. The forecast is that 17,000 direct jobs will return in Alberta but production will rise by 800,000 b/day. Jobless capitalism.
Green energy – wind, solar, nuclear, hydrogen – is gaining ground. More people work in this sector than in oil and gas (conventional and unconventional) in Canada and investments in this sector globally is growing. Wind energy is now the lowest cost source of new electricity in Canada and capacity is growing quickly. Even in Alberta, wind energy will account for 750 MGW by 2030 and investments in green energy in Alberta are also substantial.
Energy companies – the large players which employ the most people – are pushing for climate change policies and environmental regulations so as to create the social license to sell which they need for international markets. Oil companies were key to Alberta’s carbon levy, now scrapped by the UCP government and were key to the Federal Governments carbon tax strategy. Economists see carbon levies as a significant ingredient in public policies aiming to reduce CO2 emissions. The Alberta emissions regulations still apply ($30 barrel), but for how long.
Part of the concern is that the Trans Mountain Pipeline, now owned by the Federal Government (because the private sector was about to walk away from building it) will never get built because the Liberals, it is said, will back away so as to curry favour with the NDP. First, the Conservative party had years to build this pipeline and didn’t. The Trudeau government approved it TWICE, but had the first decision upturned by the courts due to flawed public consultations which took place in part under the Harper Government (and under Harper Government regulations and law) and in part under Trudeau. Trudeau improved the legislation, re did the consultation and approved the pipeline a second time and it is now being built. Any challenge to this would secure a majority in the House of Commons (PC’s + Trudeau Liberals).
Another concern is that the Trudeau Government passed legislation relating to tanker activity off the BC coast (Bill C-48). The legislation stops tankers carrying more than 12,500 metric tonnes of crude or persistent oil products from stopping, loading or unloading north of Port Hardy. It does permit tanker loading in the Port of Vancouver but not at Port Rupert or Kitimat. Despite claims that this will spook foreign investors and profoundly impact oil tanker movement, the ban puts into law a voluntary agreement which has been in place since 1971. This is worth repeating. There has been NO loading, unloading or stopping of oil tankers in this area for over forty years.
(This law also prohibits the offshore exploration for oil and gas in this region – something that has been in place since 1972).
Another controversial bill introduced by Trudeau is the “pipeline killer” bill – C-69.
Actually called the Impact Assessment Act (it is now law), the legislation sought to clean up the process for environmental impact assessment of new infrastcruture projects, which include pipelines. The argument is that it will be tougher to secure approval for new projects and therefore investors will not even bother to put their money on the table. A part of the reason for this is the requirement for impact assessments to now include the likely impact on climate as well as the water table, soils and air.
This is another piece of nonsense. The Act puts back into force many of the regulations and legal requirements that were in place in 2012 which Stephen Harper repealed. The Act also requires enhanced consultation – a way of reducing the amount of litigation about the consultation process seen as a result of Harper’s changes to the law. Lawyers suggest that the changes introduced in C-69 are minor and represent a return to “normal” for this kind of legislation around the world. Many specialists also think C-69 will increase certainty rather than uncertainty – a great many investments were made in oil and gas pre the 2012 changes made by Harper when the legislation in place closely resembled C-69.
Then there is the issue of equalization payments – moneys paid from the Federal Governments general revenues to ensure all Canadians have relatively equal access to services and support and a decent standard of living. The argument of the Wexiteers is that Alberta subsidizes provinces like Quebec who then oppose the economic requests of Alberta – e.g. a pipeline. In 2019-20 Quebec will receive $13 billion in equalization payments, some $11 billion of which “comes” (sic) from Alberta. The increase in Quebec’s payments came as a direct result of Stephen Harper’s decision to change the basis on which these payments are made (Jason Kenney was a cabinet Minister who signed off in these changes, which he now seems to oppose). Kenney has promised a referendum on equalization for Alberta in 2021 – largely a piece of theatre, since the idea that seven of ten provinces would agree to remove the equalization from the constitution are zero.
This issue is complicated. There are three transfer programs – health, social transfer and equalization. The first two are per capita funds – $X/person. 75% of all transfer funds are based on population. Only the equilization payments are based on equity estimates – what would it take to ensure equity of service for all Canadians. The formula itself asks what a province’s revenue would be if all its tax rates equalled the national average. Alberta would raise $12,327 per person, more than any other province, followed by B.C. at $11,052. Quebec is far behind, at $8,123, and Prince Edward Island lags even further, at $6,648, according to Finance Canada calculations. Equalization tops up provinces below the national average, which is why a province as populous as Quebec receives payments.
Albertan’s pay a lot more into the Federal government because they earn more. Per capita GDP in Alberta is around $77,500 as compared to a national average of $58,000 – Alberta is amongst the richest places on the planet. We also spend more per person, so the Federal government collects more sales taxes ($400 per person) than anywhere else and collects more income taxes ($2,500 more). It is not because we live in Alberta – we earn more, are worth more and spend more.
Immigrants strengthen an economy by both working in it and creating enterprises. Indeed, it is the case that a great deal of Canada’s GDP growth is as a direct result of immigration. Yet there are many in Alberta who see immigrants as “job takers” (where do they think we all come from – those who are not indigenous people’s)? This is a component of some of the more extreme “Alberta nationalists” who also oppose same sex marriage, gender equality, abortion and women’s rights and transgender rights.
Alberta’s New Policy Group – The Wexiteers
It seems Alberta has a growing group of people that sees the past as so wonderful that we must return to it as quickly as possible. These individuals – those behind the Western Canada separation movement (Wexit) – are also against big government and against a variety of social policies. Their basic propositions are:
Economic Liberty: We will achieve an overall personal income tax rate of 15%-19% by:
- Abolishing all special interest spending.
- Removing non-value added government services.
- Abolishing Federal Income Tax and GST.
- Delivering essential government services only.
- End public investment in unreliable energy technology, such as wind and solar.
- Robust surface and subsurface land owner and property rights.
We will ensure that Alberta remains friendly, open, and attractive to businesses by:
- Reducing corporate taxes to 7%, while maintaining current royalty formula.
- Abolishing speculative and non-value added industrial regulations.
- Ensure that regulations imposed directly and objectively relate to employee safety; and prevention and reclamation of any air, soil, and water pollution.
- Offer further incentives for maintaining a 100% Alberta resident work-force.
- Offer further incentives for the relocation of manufacturing operations to Alberta.
- Offer further incentives for the development of shale and nuclear technology.
- Taking punitive measures against jurisdictions blocking Alberta’s economic progress.
We can see these positions as “red neck” conservatives – low tax, low spend government, limited regulation yet creating incentives to “pick winners”. Yet their social policies suggest that these minimum tax levels have to go a long way:
- Ensure mandatory and available addictions and mental health treatment for Alberta’s homeless and other at-risk populations.
- Protect Seniors through a stable and portable Alberta Pension Plan; Explore solutions to lower cost of living and support in-home care; Choice in healthcare.
- Invest in communities through subsidy of dental care, non-generic prescriptions, youth sport, conditional student loan forgiveness, and qualified higher education via resource royalty revenue.
- Alleviate courtroom backlogs and prioritize serious criminal cases through de-regulating divorce and matrimonial property disputes. Removing judicial prejudice against men in family court.
- Promote immigration in accordance with economic and social need.
- Impose severe penalties for murder, terrorism, sexual assault, and drug trafficking.
- Assist Alberta First Nations in compensation claims against the Federal Government and institutional partners for genocide and other abuses.
- Protecting Albertans from discriminatory on-line censorship.
- Ensuring that publicly funded schools teach the importance of Alberta’s energy industry, while protecting the rights of parents in matters regarding sexuality or religion.
- Outlawing groups whose primary objective or effect is racial agitation, or social chaos.
This is not a costed platform, but is an expensive one with health privatization, subsidies and new costs for government who will have much lower levels of revenue.
The policy platform also continues to rely on royalty revenues to fund the operations of government (highlighted above). This has long been seen as a problem (oil and gas have always been cyclical revenue sources) but this “platform” seeks to perpetuate this.
So this is where we are. A growing group of “alienated” Albertan’s are promoting the idea of Wexit based on no serious analysis, no serious thinking about consequences and a lot of poor understanding of some key issues. They have bought into some rhetoric about Alberta being a victim and a lot of “gut”, evidence free thinking.
What Alberta needs is less rhetoric and more analysis; less policy based evidence and more evidence based policy; less buying of bullshit and more understanding that most problems are complex and wicked and do not have simple solutions.
I am not optimistic.
At the heart of Alberta’s Wexiteers is anger. Anger and frustration.
They are angry that, even though they pay very little tax (of any kind), they feel like they pay a lot. They also see their municipal taxes rise as needed infrastructure gets built after many years of neglect and decay. They are frustrated that the Provincial and Federal government spend money on things they don’t like and do not spend money on the things they want them too – like better care for seniors, more day care for children and pharmacare.
They are angry that a key sector of the Alberta economy – oil and gas – is in recession and has been for some time. Oil prices are stuck below the costs of production for new oil sands projects and technology innovation and new ownership of oil sands is focused on massively improving productivity with less labour – a strategy that is working. It is also focused on getting Alberta’s oil to market through rail (using bitumen pucks) and pipelines, now being built but only after years of delay. They are not convinced that the Federal Government (of any kind) treats this industry seriously or, as importantly, with respect. This despite the fact that, so as to ensure that the Trans Mountain Pipeline got built, the Federal Government bought it for $4.5 billion, redid the public consultation and approved it. It is now under construction, despite ongoing court challenges. The expanded pipeline will increase oil to market by this means from 300,000 barrells a day to 890,000.
They are angry that climate change – something we know to be real – is derailing the rapid growth and exploitation of oil and gas and they blame, without any real evidence, foreign influence and left wing environmental activists for this. This despite the fact that the oil and gas industry asked for a carbon tax (well, the big players did – the small ones who run CAPP campaigned against it) and pushed both the Conservative and NDP Provincial governments over emissions regulations and charges (which are still in place at $30/barrel). This despite the fact that oil production continues to grow and that revenues are increasing – they are just not hiring as many people.
They do not like to acknowledge that Canada is, on average, experiencing warming at twice the rate of the rest of the world, and northern Canada is heating up at almost three times the global average. Nor do they acknowledge that the fastest growing cause of CO2 emissions (and other greenhouse gasses) are the Alberta oil sands.
They point to statements made by the Prime Minister about climate change and fossil fuels as evidence of his disdain for oil and gas. He has promised to phase out subsidies for the fossil fuel industry (alongside all G20 countries), work to develop a NAFTA style clean energy agreement, and has endowed the Low Carbon energy trust with $2 billion to help stimulate the growth of this sector (some of these funds have been allocated to Alberta oil sands companies). He has introduced a Federal Carbon Levy – something agreed to at the time by all Provinces but has since been opposed by some. This tax will apply to Alberta starting in January because an angry Saskatchewan person who is now Premier of Alberta repealed our own carbon levy and instead wants the funds collected to be controlled by Ottawa.
They are angry that Alberta looks to be treated differently than other Provinces, especially Quebec and BC, both of which oppose new or expanded pipelines. In a deliberate, and some may think malicious, misunderstanding of equalization Albertan’s think they pay money into a fund and don’t get any back, while their opponents (like Quebec) does. They know that the money for equalization is sitting in the Federal governments general revenues and is allocated according to a formula designed and developed by Stephen Harper and Jason Kenney. It is not Alberta’s money. Just as Alberta doesn’t pay a portion of defense costs, we don’t pay a portion of equalization – the Federal government’s budgets don’t work that way and Albertan’s know it.
Some – a small number – of Albertan’s glorify a fantasy of Western separation, ignoring the fact that large parts of Alberta are owned by the Federal Government and First Nations, that we would “inherit” a portion of the Federal debt, that we have no access to global markets (except the US) without having a trade with Canada and we are not viable as a nation state, whatever rye you drink. A new Wexit nation would begin with debts that make current debt levels of Western Canadian governments look like chicken feed.
As the Premier of Manitoba said, Provinces are married to Canada and, as in all marriages, one has to work at the relationship. Canada is not perfect, but it is worth fighting for and working for. Rather than being angry and threatening, Albertan’s should develop clear, specific proposals for all of our future within confederation. Let the anger out and replace it with sense-making and imaginative ideas.
If you want to know what Wexit would actually look like, look over the pond at Brexit. It is not exactly a picnic.
Around the world, energy economies are changing. Companies like Honda and Daimler have announced that they are no longer going to produce cars, SUVs and trucks which use gasoline or diesel as a fuel – in Honda’s case, they will stop making gas driven vehicles in 2022 – just 26 months from now. Uber and Volkswagen have teamed up to build a massive fleet of self-driving cars, all of them electric, so that the world can shift away from transport systems which add to CO2 emissions.
Countries are also on board, banning the sale of fossil fuel vehicles. Norway was the first, with sales of fossil fuel cars and trucks from 2025. India, Germany, Netherlands will do so from 2030, France and the UK (Scotland will do so in 2032) in 2040, Ireland in 2045 and the US State of California will also join the 2040 crowd. Diesel cars and trucks are being phased out faster – Athens, Madrid, Paris, Mexico City, Rome, Brussels will end sales of these vehicles by 2030 and sales, as a result, are already in rapid decline.
Banks and other investors have agreed not to invest in fossil fuels and to switch investments in fossil fuels to other sectors. A renewed commitment was made valued at $11 trillion by over 1,000 fund managers meeting in Cape Town in September. This is around 16% of the total equity market, and the campaign to be Paris-compliant is gathering momentum. But it is not just concerns about emissions that is leading investors to back off fossil fuels, it is the return on investment. A recent study from the University of Leeds shows that ROI from fossil fuels and green energy are now about equal when a medium term view of ROI is taken – in part due to the higher costs of extraction and distribution. The 23% decline in ROI for fossil fuels over a sixteen year window is at the heart of this calculation.
While demand for oil and gas remains strong and will do so for sometime, that time horizon is shortening. By 2030 – just a decade from now – the world energy system will look very different. By 2030 we expect $1.2 trillion to be invested in green energy projects – five times more than investment in fossil fuels. There will be a growing set of micro-energy producers – companies, communities – using solar, thermal and windpower to generate energy on local scale and selling energy to regional and national grids. We can also expect widespread electrification of transport systems – buses, cars, trains. While natural gas will be a key source of energy fueling the new transport systems – coal will be almost completely gone in the developed world as a source of electricity – new energy forms will also start to appear – hydrogen and fusion power will also begin to play a role in the energy mix.
So the energy game is changing. We need to play our part in shaping this future, otherwise we will all play catch-up.