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(Courtesy of The Montreal Gazette) How about the government learns how to manage the money they get from tax payers and not go over budget on every FUCKING PROJECT you dumb morons! No form of government works. Not even total monarchy. :stirthepot: I wonder what Paul Desmarais Sr and Guy Laliberté would say about this or I bet they would be spared from QS antics. -end rant

http://www.autoblog.com/2009/12/11/report-detroit-three-call-japans-cash-for-clunkers-program-unf/ http://www.autoblog.com/2010/01/07/report-obama-urged-to-push-japan-to-open-its-cash-for-clunkers/ Protectionism in full swing once again in Japan. Why should their cars be eligible for cash for clunkers in the US, if American cars are not there. That is not free trade. Hopefully President Obama puts an end to this nonsense.

(Courtesy of The Montreal Gazette)

(Courtesy of CBC News) How about stronger sentences? You get caught you get a huge fine. Second time you get caught your car gets ceased and auctioned off and you lose your license for life. If you ended up killing someone, you die in prison! WELL WILL THIS DAMN PROVINCE AND COUNTRY DO THIS!

(Courtesy of Logotipo REVE)

(Courtesy of Canwest News Service) some heads better be rolling because of this!

For those who enjoy's mega-production blockbusters...

CBC, VIA Rail considered for auction block: Documents BY ANDREW MAYEDA, CANWEST NEWS SERVICE JUNE 1, 2009 6:49 PM OTTAWA — The federal Department of Finance has flagged several prominent Crown corporations as "not self-sustaining," including the CBC, VIA Rail and the National Arts Centre, and has identified them as entities that could be sold as part of the government's asset review, newly released documents show. In its fiscal update last November, the government announced that it would launch a review of its Crown assets, including so-called enterprise Crown corporations, real estate and "other holdings." Finance Department documents, obtained by Canwest News Service under the Access to Information Act, reveal that the review will focus on enterprise Crown corporations, which are not financially dependent on parliamentary subsidies. Such corporations include the Royal Canadian Mint and Ridley Terminals, which is a coal-shipping terminal in Prince Rupert, B.C. But the documents also reveal that the government will consider privatizing Crown corporations that require public subsidies to stay afloat. "The reviews will also examine other holdings in which the government competes directly with private enterprises, earn income from property or performs a commercial activity," states a Finance briefing note dated Dec. 2, 2008. "It includes Crown corporations that are not self-sustaining even though they are of a commercial nature." In the briefing note, the Finance Department identifies nine Crown corporations that fall in that category, including Atomic Energy of Canada Ltd., the CBC and VIA Rail. The government announced last week that it will split AECL in two and seek private-sector investors for the Crown corporation's CANDU nuclear-reactor business. The Crown asset review comes as the government struggles to contain the country's deficit, now expected to top $50 billion this year. The Jan. 27 budget assumes that the government will be able to raise as much as $4 billion through asset sales by the end of March 2010. The budget identified four federal departments whose Crown assets are being reviewed first: Finance, Indian and Northern Affairs, Natural Resources, and Transport and Infrastructure. VIA Rail is overseen by the Transport Department, while the CBC and the National Arts Centre fall under the portfolio of the Canadian Heritage department. The Finance Department documents confirm that all government assets will eventually be reviewed. Privatizations tend to work well when Crown corporations enter a reasonably competitive market with a good chance of turning a profit, said Aidan Vining, a professor of business and government relations at Simon Fraser University. Unlike successfully privatized firms such as Canadian National Railway, it's not clear that CBC and VIA Rail could operate as profitable ventures while maintaining the public mandates they provided as Crown corporations, he noted. "They're not the classic privatization candidates, where you sell and walk away," said Vining, an expert in Crown corporation privatizations. "Unless, of course, you're prepared to fully withdraw from the public purpose (of the Crown corporation)." Certainly, the sale of a flagship Crown asset such as the CBC would be politically controversial. After the CBC announced this spring that it would lay off hundreds of employees, opposition critics accused the government of turning a cold shoulder to the public broadcaster's struggles. Under the Financial Administration Act, Parliament would have to approve the privatization of any Crown corporation. "It's hard to believe that some of these sales would go forward in a minority Parliament," said Vining. The Finance Department has also begun to examine the government's vast real-estate portfolio, which includes 31 million hectares of land, and more than 46,000 buildings totalling 103 million square metres — more than double the office space available in the Greater Toronto Area, according to the Finance documents. The government's holdings are worth at least $17 billion, Finance officials estimate. A briefing note labelled "secret" said that the Department of Indian and Northern Affairs acquired $7 million in surplus properties between 1998 and 2006 for potential use in land-claims deals. Over the same period, the properties cost $2 million to maintain. Divesting such properties could not only generate revenue for the government, but also cut "ongoing operations and maintenance costs," states the briefing note. A Finance Department spokeswoman said the asset review won't necessarily lead to sales in all cases. "Reviews will assess whether value could be created through changes to the assets' structure and ownership, and report on a wide set of options including the status quo, amendments to current mandates or governance," department spokeswoman Stephanie Rubec said in an e-mail. "In some cases, it may be concluded that selling an asset to a private sector entity may generate more economic activity and deliver greater value to taxpayers." Crown corporations identified by the government as "not self-sustaining": (Company name, commercial revenues, parliamentary subsidy, expenses) Atomic Energy of Canada Ltd., $614.2 million, $285.3 million, $1.3 billion CBC, $565.5 million, $1.1 billion, $1.7 billion Cape Breton Development Corp., $5.1 million, $60 million, $94.1 million Federal Bridge Corp. Ltd., $14.6 million, $31.0 million, $42.9 million National Arts Centre Corp., $26.0 million, $40.6 million, $65.7 million Old Port of Montreal Corp., $16.7 million, $15.1 million, $32.0 million Parc Downsview Park Inc., not available, not available, not available VIA Rail Canada Inc., $293.9 million, $266.2 million, $505.5 million Source: Department of Finance, Public Accounts of Canada Note: Financial results are for 2007-08 http://www.ottawacitizen.com/Rail+considered+auction+block+Documents/1652330/story.html

America’s triple A rating is at risk By David Walker Published: May 12 2009 20:06 | Last updated: May 12 2009 20:06 Long before the current financial crisis, nearly two years ago, a little-noticed cloud darkened the horizon for the US government. It was ignored. But now that shadow, in the form of a warning from a top credit rating agency that the nation risked losing its triple A rating if it did not start putting its finances in order, is coming back to haunt us. That warning from Moody’s focused on the exploding healthcare and Social Security costs that threaten to engulf the federal government in debt over coming decades. The facts show we’re in even worse shape now, and there are signs that confidence in America’s ability to control its finances is eroding. Prices have risen on credit default insurance on US government bonds, meaning it costs investors more to protect their investment in Treasury bonds against default than before the crisis hit. It even, briefly, cost more to buy protection on US government debt than on debt issued by McDonald’s. Another warning sign has come from across the Pacific, where the Chinese premier and the head of the People’s Bank of China have expressed concern about America’s longer-term credit worthiness and the value of the dollar. The US, despite the downturn, has the resources, expertise and resilience to restore its economy and meet its obligations. Moreover, many of the trillions of dollars recently funnelled into the financial system will hopefully rescue it and stimulate our economy. The US government has had a triple A credit rating since 1917, but it is unclear how long this will continue to be the case. In my view, either one of two developments could be enough to cause us to lose our top rating. First, while comprehensive healthcare reform is needed, it must not further harm our nation’s financial condition. Doing so would send a signal that fiscal prudence is being ignored in the drive to meet societal wants, further mortgaging the country’s future. Second, failure by the federal government to create a process that would enable tough spending, tax and budget control choices to be made after we turn the corner on the economy would send a signal that our political system is not up to the task of addressing the large, known and growing structural imbalances confronting us. For too long, the US has delayed making the tough but necessary choices needed to reverse its deteriorating financial condition. One could even argue that our government does not deserve a triple A credit rating based on our current financial condition, structural fiscal imbalances and political stalemate. The credit rating agencies have been wildly wrong before, not least with mortgage-backed securities. How can one justify bestowing a triple A rating on an entity with an accumulated negative net worth of more than $11,000bn (€8,000bn, £7,000bn) and additional off-balance sheet obligations of $45,000bn? An entity that is set to run a $1,800bn-plus deficit for the current year and trillion dollar-plus deficits for years to come? I have fought on the front lines of the war for fiscal responsibility for almost six years. We should have been more wary of tax cuts in 2001 without matching spending cuts that would have prevented the budget going deeply into deficit. That mistake was compounded in 2003, when President George W. Bush proposed expanding Medicare to include a prescription drug benefit. We must learn from past mistakes. Fiscal irresponsibility comes in two primary forms – acts of commission and of omission. Both are in danger of undermining our future. First, Washington is about to embark on another major healthcare reform debate, this time over the need for comprehensive healthcare reform. The debate is driven, in large part, by the recognition that healthcare costs are the single largest contributor to our nation’s fiscal imbalance. It also recognises that the US is the only large industrialised nation without some level of guaranteed health coverage. There is no question that this nation needs to pursue comprehensive healthcare reform that should address the important dimensions of coverage, cost, quality and personal responsibility. But while comprehensive reform is called for and some basic level of universal coverage is appropriate, it is critically important that we not shoot ourselves again. Comprehensive healthcare reform should significantly reduce the huge unfunded healthcare promises we already have (over $36,000bn for Medicare alone as of last September), as well as the large and growing structural deficits that threaten our future. One way out of these problems is for the president and Congress to create a “fiscal future commission” where everything is on the table, including budget controls, entitlement programme reforms and tax increases. This commission should venture beyond Washington’s Beltway to engage the American people, using digital technologies in an unparalleled manner. If it can achieve a predetermined super-majority vote on a package of recommendations, they should be guaranteed a vote in Congress. Recent research conducted for the Peterson Foundation shows that 90 per cent of Americans want the federal government to put its own financial house in order. It also shows that the public supports the creation of a fiscal commission by a two-to-one margin. Yet Washington still sleeps, and it is clear that we cannot count on politicians to make tough transformational changes on multiple fronts using the regular legislative process. We have to act before we face a much larger economic crisis. Let’s not wait until a credit rating downgrade. The time for Washington to wake up is now. David Walker is chief executive of the Peter G. Peterson Foundation and former comptroller general of the US

(COURTESY of The Governor of Texas) Bill

Ontario in decline: From Canada's economic engine to clunker Can Dalton McGuinty see the light and reverse the decay with his forthcoming budget? By Paul Vieira, Financial Post March 23, 2009 A month before Dalton McGuinty, the Liberal Ontario Premier, hit the election trail in the fall of 2007 to seek a second mandate, an ominous warning sign of the province's crumbling economic stature emerged that should have provided fodder for the campaign. An analysis from leading Bay Street economist Dale Orr said Ontarians' standard of living had plummeted -- from a peak of 15% above the Canadian average in the mid-1980s to just more than 5%. Accompanying the analysis was a warning of further erosion by 2010. Alas, the eye-opening report hardly generated buzz during the election campaign. Instead, most of the talk was about a Conservative proposal to provide government funding for faith-based schooling. Ontarians didn't warm to the idea and re-elected Mr. McGuinty's Liberals with another majority. Reflecting today on that report, Mr. Orr said his nightmare scenario for Ontario has unfolded as envisaged. If anything, the situation in the province may be worse. As the McGuinty government prepares to table its sixth provincial budget on Thursday, it does so knowing the province that was once the country's economic engine is now the clunker of the confederation. While former have-nots such as Saskatchewan post surpluses this fiscal year, Ontario is bleeding red ink--a cumulative two-year deficit of $18-billion. Ontario's dramatic decline comes as no accident. It was decades in the making, based on a combination of mismanaged public finances and the ascent of emerging economies at the expense of high-cost manufacturing. Upon taking office in 2003, Mr. McGuinty moved to pour tens of billions of dollars into improving government services -- health care, education and social programs targeting the downtrodden -- while neglecting the changing economic landscape. To help finance this agenda, he raised corporate taxes and slapped a health-care levy on households. These moves, analysts say, helped cement Ontario as one of the least attractive places for companies to invest. Analysts wonder whether the economic crisis is finally going to force Mr. McGuinty and Dwight Duncan, his Minister of Finance, to make tough choices on spending and undertake the kind of tax reform -- as displayed this week by New Brunswick-- that will help the province attract investment to offset heavy job losses in Ontario. Derek Burleton, senior economist at Toronto-Dominion Bank, said Thursday's budget presents a possible turning point for the province. "There is no doubt we are undergoing a period of transformation as some of the industries that have driven healthy gains in living standards are on the decline," said Mr. Burleton, who co-authored a report with TD chief economist Don Drummond last fall that called on the province to embrace a "sweeping" new economic vision. "Given the sizeable deficit the province faces, that will put increasing pressure on the government to prioritize." One of those priorities is for Mr. McGuinty to cease his preferred manner of dealing with difficulties in the industrial heartland -- funneling tens of millions of dollars to the manufacturing sector, particularly automotive, through targeted tax relief or direct subsidies. "What the province should have been doing over the years was to make the province more flexible in attracting new businesses and not diverting resources into declining sectors," said Finn Poschmann, vice-president of research at the C. D. Howe Institute, a Toronto-based think-tank that has been critical of Ontario's tax breaks for struggling sectors such as autos and forest products. "Do you want to steer resources to the sectors where the outlook is positive and growing? Or do you want to divert resources from these stars, which are more likely to generate the long-term employment and wage growth that Ontario is accustomed to?" The manufacturing sector, and its high-paying jobs, used to be the province's crown jewel. But as a component of Ontario's GDP, it has dropped from a peak of 23% in 2000 to roughly 18% on factors such as a richer Canadian dollar, higher energy costs and offshore competition. It is expected to fall further once the dust settles from this crisis. The province was largely able to mask the decline in manufacturing through a combination of a booming housing market, a surge in public sector hiring and a robust financial services sector. The financial crisis, however, has exposed those flaws. For the period starting in 2003, only Quebec and Nova Scotia have produced weaker growth than Ontario. Forecasts suggest Ontario was the only province whose economy shrank last year, and economists say it will record either the worst, or second-worst performance, among provinces this year. Scotia Capital, for instance, has Ontario's economy contracting 2.9% in 2009, and posting meagre growth of 1.4% in 2010, below the expected national average. Of the roughly 295,000 jobs lost in Canada since October, nearly half have come from the province. The result? Unemployment in Ontario, at 8.7%, is now higher than it is the United States (8.1%) and above Quebec's 7.9% jobless rate-- the first time that has happened in three decades. The news is not expected to get any better any time soon. "We believe that the unemployment rate in Canada's largest province should hit 10% by 2010, even if the automobile sector's restructuring plan works," said Sebastian Lavoie, an economist at Laurentian Bank Securities. Further, Mr. Lavoie said wage growth in the province is destined to take a hit. In the past, companies were forced to offer comparable wages and benefits based on what the Canadian Auto Workers would negotiate with the Detroit car makers. But Mr. Lavoie said that will no longer be the case, with CAW accepting salary freezes and making concessions on perks such as cost-of-living-allowance. The financial crisis has just exacerbated a growing trend, said Mary Webb, senior economist at Scotia Capital. Ontario's receipts from foreign-bound exports last year represent an 11.7% drop from a peak of $185.1-billion recorded in 2000. For the same time period, Quebec's receipts fell by just 2.9%. For the rest of Canada, excluding Ontario and Quebec, receipts have surged a whopping 72%. Compounding Ontario's problem is the emergence of big deficit, fuelled in part by shrinking tax revenue and years of escalated program spending. Under Mr. McGuinty, program spending now stands at $23-billion per year more than when he took office in October, 2003, an increase of 36%. In fiscal year, 2007-08, program spending climbed more than 10% to $87.6-billion, compared with a 5.4% increase in tax revenue. Observers note Mr. McGuinty's ascent to power in 2003 can be attributed to a desire for change among Ontarians after years of the hard-nosed, right-leaning Conservative regime that earned scorned for cutting government services. Mr. McGuinty's two terms have been dominated by a push to restore spending on public goods such as education, health care, infrastructure and social services. Analysts say Mr. McGuinty was on the right track to bolster some key building blocks, such as post-secondary education. To help pay for this, Mr. McGuinty raised the corporate tax -- to 14% from 12% --in his first budget. "The balance of [McGuinty's] approach was not quite right," said Jack Mintz, public policy professor at the University of Calgary and renowned tax expert. "The problem was trying to [reinvest in public services] while at the same time trying to maintain a vibrant industrial sector." Mr. Mintz and other analysts say Ontario's tax regime, as currently structured, is suffocating the province's ability to attract investment and rebuild the economy. Last year, Jim Flaherty, the federal Finance Minister, suggested the tax system was making Ontario the "last place" businesses wanted to invest. Mr. Flaherty took lots of heat for that remark, but he was on to something. Mr. Mintz's research indicates the province's marginal effective tax rate on capital, which encompasses all levies slapped on investment in the province, stands at 35%, six points higher than the Canadian average, 29%. Further, the Ontario rate ranks as the ninth-highest in the world, tied with Japan. Despite moves to eliminate capital tax in 2010, and other business tax reductions from the federal government, Ontario's marginal rate is expected to drop only three points to 32% by 2012 -- still higher than all provinces and exceeding the national average. "Ontario will not be successful in retaining existing businesses and attracting new ones if its taxation system is not on sound competitive footing with other provinces and countries," said the TD report by Messrs. Burleton and Drummond. There are signs that Mr. McGuinty is acknowledging the need to change. Despite previous opposition, he said in January the province would take a "long, hard look" at harmonizing its provincial sales tax with the GST. As currently structured, Ontario's sales tax derives almost half of its revenue from taxing business inputs such as productivity-enhancingequipment. Harmonizing with the GST would shift the tax burden to households, but economists argue it would boost business investment and make Ontario more attractive. In a C. D. Howe research paper he released yesterday, Mr. Poschmann said putting an end to the "archaic" sales tax and harmonizing with the GST would move Ontario from a high-tax jurisdiction to a medium-tax jurisdiction by 2012, with the marginal rate on investment falling just over 10 percentage points. A signal toward sales tax harmonization could be contained in Thursday's budget, although observers are hedging their bets given the potential voter backlash. Any further moves on taxation, whether business or personal, may have to wait given the province's monster deficit and an unwillingness to give up further revenue to fund public service initiatives. "Ontario is going to be deeply challenged," Mr. Mintz said, "because it is going to be very hard for the government to do anything when you are so fiscally restrained-- unless it wants to make the deficit even bigger now." Glen Hodgson, senior vice-president and chief economist at the Conference Board of Canada, said the needed tax reductions would not see the light of day until Ontario decides what to do about health-care spending, which is growing at an annual clip of 8% to 10% and is the single biggest expense item in the budget. "This is a catalytic moment for the province," Mr. Hodgson said. "The light bulb has gone on, but it is not burning brightly yet. A lot of people would like to return to the Old World. But I think the Old World is gone -and that's the dilemma Ontario faces." --------- MANITOBA, N.B. SET EXAMPLE: As Ontario attempts to pull itself out of its economic quagmire, it can look to the provinces of Manitoba and New Brunswick for leadership. While the recession is expected to hit every province, Manitoba comes out near the top in most forecasts as one of the country's better performers in 2009. In its outlook, the Conference Board of Canada projects slight growth in the province of 1%, powered by infrastructure projects and tax cuts. Jack Mintz, public policy professor at the University of Calgary, said Manitoba was, along with Ontario, considered a high-tax jurisdiction for business investment. But the government has moved and Manitoba's marginal effective tax rate on investment dropped from 37% in 2007 to 33.8% last year. It is now scheduled to fall to 26.7% by 2012. "It is on the high side, but it will be closer to the national average" in 2012,Mr. Mintz said. "From the point of view of people who need to make investment decisions now, they know these changes are in place over the next several years. So Manitoba looks more appealing." Manitoba also benefits from having one of the most diversified economies in Canada. Roughly 30% of its economy is agriculture, which is more resilient to economic downturns. Further, Manitoba has a diversified manufacturing base with aerospace and buses playing key roles - and, unlike autos, demand for those products continues to be fairly solid. It also has abundant, cheap hydroelectricity. In contrast, questions abound over the reliability of Ontario's power grid, especially in light of the 2003 blackout that blanketed the province and much of the U.S. northeast. Meanwhile, analysts have applauded New Brunswick for taking aggressive steps on taxation this week in an effort to make the province more attractive for both investors and workers. The main change is the replacement of the existing four-bracket personal income tax structure to a simpler two-bracket structure by 2012. The lowest rate will be 9% for workers earning less than $37,893. Beyond that threshold, a flat tax of 12% will be applied. Perhaps more stunning, however, is that New Brunswick plans to lower its general corporate tax rate from 13% to 12%, effective this year, and all the way down to 8% by 2012 - the lowest in the country. "The New Brunswick government appears to be relatively more proactive compared to other jurisdictions, taking bolder steps to improve its economic and fiscal roadmap," said Carlos Leitao, chief economist at Laurentian Bank Securities, in his analysis of the province's budget. Source: Paul Vieira, Financial Post pvieira@nationalpost.com ONE-TIME POWERHOUSE CAN'T KEEP UP WITH REST OF THE COUNTRY: Ont. Export Receipt Drop 11.7% Que. Export Receipt Drop 2.9% Receipt Rise Rest Of Canada 72% Ontario GDP Decline, 2009 2.9% RANKS OF WORKERS IN CANADA'S LARGEST PROVINCE TAKE IT ON THE CHIN: Ontario Unemployment 8.7% U.S. Unemployment 8.1% Quebec Unemployment 7.8% Ontario Unemployment, 2010 10% © Copyright © National Post

CAE on deck for $500-million defence program By David Pugliese , Canwest News ServiceFebruary 13, 2009 11:02 AM Prime Minister Stephen Harper will be in Montreal Friday where he is expected to announce a new aerospace training facility that will provide work to CAE and other high-tech firms in Canada. The contract to CAE and its partners, which could over time be worth up to $500 million, arrives at a time when the Harper government needs to be seen to provide work and create jobs for Canadians during the recession. Last year, the government selected CAE as the winner of a Defence Department program known as the Operational Training Systems Provider or OTSP. But the actual awarding of the contract was delayed, at first by the election and then by other political developments. OTSP will see the creation of aerospace training facilities to teach Canadian Forces aircrews how to fly new transport planes and helicopters, as well as aircraft to be bought in the future for search and rescue. It is unclear at this point how many new aerospace jobs will be created. Montreal-based CAE, one of the world’s largest aviation simulation firms, had been deemed by the federal government as the only qualified bidder for the program. Defence officials privately say the OTSP program, which will include new training facilities and simulators at different locations in the country, will provide the air force with a common infrastructure for teaching crews on a number of aircraft. The project would run over the next 20 years and include training on new C-130J transport aircraft and other planes that will be purchased in the future. The final value of the deal will depend on how much training for various aircraft fleets will be eventually be included. The initial deal for CAE will focus on the C-130J aircraft and is expected to be worth around $250 million. The CAE team that will work on the project includes Xwave Defence and Aerospace in Ottawa; MacDonald Dettwiler of Richmond, B.C.; NGRAIN of Vancouver; Atlantis Systems International of Brampton, Ont.; Bombardier of St-Laurent, Que., and: Simgraph of Laval, Que. The announcement is seen by the Tories as a good news story as the Harper government has faced criticism from domestic aerospace and defence firms for not spending enough money in Canada. The government has earmarked more than $8 billion for new aircraft purchased from U.S. firms but Canadian companies have complained they have seen little work from those projects. On Thursday, parliamentarians were also calling for stricter oversight on how the Defence Department spends tax dollars after yet another internal audit found a lack of management oversight on a major equipment support project. The Ottawa Citizen reported that Defence Department auditors concluded the government has no idea whether it is getting value for money from a Canadian Forces communications project worth more than $290 million because it is not enforcing the terms of the contract. Defence Minister Peter MacKay found himself answering questions in the Commons from both the NDP and Liberal parties about ongoing problems with military procurement and the growing secrecy over such troubled deals. But according to MacKay the department has strict review policies already in place. “The procurement process is accountable and is transparent,” he noted. But Liberal defence critic Denis Coderre pointed out that previous audits had raised concerns about multi-billion dollar equipment purchases. “Clearly there needs to be big changes made on how this department can be made more accountable and responsible,” added NDP defence critic Dawn Black. “They spend billions and billions of dollars and Canadians have a right to know about what is going on.”

Economy Shed 598,000 Jobs in January Article Tools Sponsored By By EDMUND L. ANDREWS Published: February 6, 2009 WASHINGTON — The United States lost almost 600,000 jobs last month and the unemployment rate rose to 7.6 percent, its highest level in more than 16 years, the Labor Department said Friday. It was the biggest monthly job loss since the economy tipped into a recession more than a year ago, and it was even worse than most forecasters had been predicting. In addition, the government revised the estimates for previous months to include another 400,000 job losses. For December, the government revised the job loss to 577,000 compared with an initial reading of 524,000. Over all, it said, the nation has lost 3.6 million jobs since it slipped into a recession in December 2007. “Businesses are panicked and fighting for survival and slashing their payrolls,” said Mark Zandi, chief economist at Moody’s Economy.com. “I think we’re trapped in a very adverse, self-reinforcing cycle. The downturn is intensifying, and likely to intensify further unless policy makers respond aggressively.” Despite the jobless number, Wall Street opened strongly with all three major exchanges up more than 1.5 percent. As in previous months, employers in January slashed their payrolls in almost every industry except health care Manufacturers eliminated 207,000 jobs, more than in any year since 1982. The construction industry eliminated 111,000 jobs. And retailers, who were wrapping up their worst holiday shopping season in years, eliminated 45,000 jobs. One modest exception to the bad news was in workers’ wages, which have thus far not reflected the dramatic plunge in employment. Hour earnings edged up to $18.46, up 5 cents, and average weekly earnings climbed $614.72, up $1.67. But over all, the new data reinforced the impression of an economy that has become increasingly trapped a vicious circle slumping consumer demand, falling business investment, rising unemployment and mounting losses in the banking system. Christina D. Romer, head of the President’s Council of Economic Advisers, said the report reinforced the need for Washington to acted quickly on a economic stimulus package. “If we fail to act,” Ms. Romer said, “we are likely to lose millions more jobs and the unemployment rate could reach double digits.” Although the United States officially slipped into a recession in December 2007, the decline was erratic and temporarily disguised by the impact of the emergency tax-rebate last spring. Since September, analysts say, economic activity suddenly plunged on almost every front. The monthly pace of job losses shot up to about 500,000 a month for the last three months of 2008, and the new report offered no hint that bottom is in sight. Last week, the number of Americans filing first-time jobless claims reached a 26-year high, with 626,000 filling out initial applications. “This is a horror show we’re watching,” said Lawrence Mishel, president of the Economic Policy Institute, a left-of-center economic research organization in Washington. “By every measure available-loss of employment and hours, rise of unemployment, shrinkage of the employment to population rate- this recession is steeper than any recession of the last forty years, including the harsh recession of the early 1980s.” Most forecasters had predicted that the economy would lose about 540,000 in January. Instead, the Labor Department estimated that 598,000 jobs disappeared. To be sure, monthly payroll numbers are subject to big revisions in the months that follow. But most other indicators of the job market had been trending worse as well. Major retailers, rocked by one of the worst holiday shopping seasons in memory, have been shutting stores and laying of armies of workers in recent weeks. On Thursday, the nation’s retailers reported that sales fell 1.6 percent in January, the fourth consecutive month of steep sales declines. And in sign that the country’s slowdown continues to reach beyond its borders, Canada, America’s largest trading partner, reported Friday that its unemployment rate jumped to 7.2 percent in January, from 6.7 percent in December. In Washington, Friday’s gloomy job report put more pressure on Congress to pass an economic stimulus bill. The House passed a bill last week that would provide more than $800 billion in spending and tax cuts. In the Senate, still bogged down by objections from Republicans, lawmakers were hoping to be able to muster enough votes to pass a measure on Friday “Today’s unemployment numbers are even worse than we thought,” said Representative Barney Frank, the Massachusetts Democrat who leads the House Financial Services Committee. “If anything can persuade Congressional Republicans to stop their hyper partisan sniping at the recovery package, these disastrous employment numbers should be it.” For comparison, the unemployment rate was 4.9 percent in January 2008. But some analysts contend that the current unemployment rate of 7.6 percent understates the labor market’s problems because the percentage of adults participating in the labor force has slumped in recent years, and those people are not listed as “unemployed.” Peter Morici, an economist at the University of Maryland, estimated that if the labor force participation rate today was as high as it was when President Bush took office, the unemployment rate would be 9.4 percent. Ian Shepherdson, chief North American economist for High Frequency Economics in Valhalla, N.Y., said the government had become the only source of energy left to break the cycle of slumping demand for goods and falling production. “The public sector needs to act,” Mr. Shepherdson wrote in a note to clients. “It needs to prevent an endless spiral of attempts to increase saving, leading to reduced spending, leading to reduced incomes, leading to further attempts to raise savings, and so on.” “We remain firmly of the view that the package now in Congress is the bare minimum required to slow the shrinkage of the economy over the next year.” Many economists expect that the economy will continue to contract until July at the very least, but at a slowing pace in the second quarter. That would make it the longest recession since the 1930s, outlasting the two record-holders, the mid-1970s and early 1980s downturns. Each of these recessions lasted 16 months. The current recession, which started in December 2007, would reach that milestone in April. The Federal Reserve continues to pump money into the financial system at a furious pace. Since September, the central bank has more than doubled its reserves, from $900 billion to more than $2 trillion, by literally creating new money. The Fed has used some of that money to help bail out financial institutions, from Citigroup and Bank of America to the American International Group. It has been pumping hundreds of billions of dollars into new lending programs, stepping in for banks and other financial institutions to buy up a widening array of corporate debt. Later this month, the Fed will begin a $200 billion program, in conjunction with the Treasury, to finance consumer debt ranging from car loans and credit card debt to student loans. But analysts say that the big problem is not a shortage of money, but a shortage of demand for products by businesses and consumers. As a result, banks are overloaded with excess reserves, made available by the Fed, which they are often simply parking at the Fed. _________________________________________________________________________ Les Américains payent le gros prix pour les banquiers de Walt Street, je n`ai pas de pitié pour eux, ils ont plongé le monde en crise, en ce sens, ils méritent grandement les conséquences...

$14B in projects ready to go: Municipalities BY MIKE DE SOUZA, CANWEST NEWS SERVICE JANUARY 14, 2009 12:21 PM OTTAWA - More than 1,000 municipal infrastructure projects worth nearly $14 billion are “shovel ready” for job creation from coast to coast, according to a new list unveiled Wednesday by the Federation of Canadian Municipalities. The list represents an inventory of projects that are awaiting funds to start and was compiled following weeks of extensive consultations by the federation and its members. The federation says many municipalities have put these projects on the backburner, but could launch them this year and create thousands of jobs if money was available from the different levels of government. “The municipal world is ready to co-operate with the provinces, territories and the Canadian government to (tackle) the economic problems of Canada,” said Sherbrooke, Que., Mayor Jean Perrault, the president of the federation, during a media conference call. “The construction phase of an infrastructure project creates most of the jobs and getting projects underway this spring is crucial to offsetting the economic slowdown.” The projects include new investments in roads and bridges, waste management, buildings, public housing, water and waste water treatment facilities as well as public transit for cities and communities that are home to more than 19 million people across the country. The federation has been urging the Harper government to fast-track transfer payments from a new infrastructure program so that municipalities can get started on the projects and begin putting people to work as part of a stimulus package for the economy. Municipal officials have complained that there is too much red tape and administrative delays in getting the money flowing into their communities, but federal Transport, Infrastructure and Communities Minister John Baird has pledged to speed up the process by reducing red tape. Perrault said the funding should be modelled after the federal gas tax transfer which provides federal money for cities based on the size of their population. He also argued in favour of reducing double environmental assessments of new projects by both the federal and provincial governments explaining that many of the projects on hold in their list would not put Canada’s environment in jeopardy. “The environment is important. There are mechanisms and rules that we must follow,” said Perrault, “but what we told Prime Minister (Stephen) Harper and John Baird to reduce the red tape and that if there were environmental studies that overlap, why not have just one and ensure that it’s propitious.” Conservation groups and the NDP have both criticized the federal government for musing about reducing federal environmental assessments in favour of a single review of some of the smaller infrastructure projects. Baird said on Tuesday that the gas tax transfer program worked well since it did not require federal environmental assessments to operate. © Copyright © Canwest News Service Voici la liste des projets : http://www.fcm.ca//CMFiles/FCM%20Shovel%20Ready%20report_list%20En1KDL-1142009-4963.pdf

Ottawa's '09 deficit may hit $14B Nov 20, 2008 11:16 AM Les Whittington OTTAWA BUREAU OTTAWA–An independent parliamentary review of the Harper government's finances concludes the federal Conservatives are likely to run budget deficits "in the near term," possibly beginning this year. The report by Kevin Page, the new Parliamentary Budget Officer, says the weaker economic outlook poses a risk to the government's attempts to achieve its "short-term and medium-term fiscal targets." Assuming no changes in Finance Minister Jim Flaherty's policies, "the downgraded economic outlook suggests the government would record modest and temporary deficits in the near term,"according to the analysis released this morning. While a budget surplus is still possible this year, the report warns the negative impact on government revenues because of the turmoil on financial markets is not yet known. "As a result, a deficit for this (2008-09) fiscal year is a distinct possibility." Page says the deterioration of the federal government's financial picture in the first nine months of 2008 is not so much the result of the weakened economy as Flaherty's policies, particularly the latest reduction in the GST tax and reduced corporate income taxes. This has caused federal revenues to decline by $353 million in the first nine months of this year. The budget office projects a budget deficit of $3.9 billion in 2009-10, although it adds that, if the economic downturn proves worse than expected, next year's federal deficit could hit $14 billion. The budget office was created in 2006 to provide independent fiscal forecasts for parliamentarians. This is Page's first budgetary study. Parliament's budget watchdog said Thursday Ottawa is in danger of running deficits starting this year, ballooning to as high as $13.8-billion next year, before returning to a surplus position starting in 2011-12. Nevertheless, the watchdog still projects a surplus for this fiscal year of at least $1.7-billion. Its "average" scenario, which is midway between worst- and best-case, projects a $3.9-billion deficit next year and a $1.4-billion shortfall in 2010-11. The outlook comes from the Office of the Parliamentary Budget Officer, a newly-created body that aims to provide non-partisan economic analysis. It used nearly a dozen private-sector forecasts to develop its outlook, and made judgments as how certain changes in growth would affect federal coffers. It made its budget deficit call based on what is expected to be weak economic growth for the country as the global economy tries to pull itself out of a financial crisis. The "external factors" that supported recent growth in Canada have "reversed course," the office's report said. "The weaker Canadian outlook ... poses a risk for the government to achieve its stated short-term and medium-term fiscal targets," the budget officer, Kevin Page, said his outlook. "Assuming no major fiscal policy changes, the downgraded economic outlook suggests the government would record modest and temporary deficits in the near term." The budget office also warned that a deficit for this fiscal year remains "a distinct possibility," due to decisions to cut the GST and corporate taxes - and not weakened economic conditions. But officially, the office projects a surplus this fiscal year as low as $1.7-billion to as much as $6-billion. "While the year-to-date fiscal results, as well as all of our projection scenarios, suggest a modest surplus in 2008-09, it will be some time before the implications for [government] revenues of the recent financial market turmoil are known." Opposition politicians immediately pounced on the report, saying misguided Conservative decisions on spending and tax cuts put the country into a deficit position. "Will the Prime Minister admit, coming from his own appointee, Kevin Page, that he is no longer anywhere to hide? The deficit is not the fault of the international community. He and his reckless Finance Minister are the sole proprietors of Canada's deficit," John McCallum, head of the Liberal Party's economic team, said during debate in the House of Commons. Stephen Harper, the Prime Minister, responded: "We need to correct the facts. There are numerous prognostications about the future. And the Minister of Finance will deliver his fiscal update in the week to come -- and that will provide the facts to all members of Parliament." The fiscal update, scheduled for some time next week, will provide the Department of Finance's outlook on the economy. But Mr. Page's report steals some of the thunder. Mr. Harper added Thursday Canada remains in a surplus position, and is one of the few countries in the industrialized world that can boast about that during this current downturn. Meanwhile, Mr. Page said there are a range of policy initiatives the government can enact to address the current economic slowdown, among them a stimulus package to boost demand. But, he added, "the key challenge for policymakers is to address short-term pressures while maintaining a longer-term vision, enacting policies that are fiscally sustainable and address the fundamental long-term challenges." Chief among those long-term challenges is boosting Canada's lacklustre productivity growth. "With population ageing reducing growth in the labour force going forward, fostering productivity growth will be absolutely essential for ensuring sustained increases in living standards," Mr. Page said. In the Speech from the Throne, delivered Wednesday, the government warned of "misguided" attempts to stay in a budget surplus position given the state of the global economy. The last time Ottawa recorded a deficit was in 1996-97, when former finance minister and prime minister Paul Martin oversaw a shortfall of $8.7-billion. pvieira@nationalpost.com

Mayor wants answers on city issues The Gazette Published: 6 hours ago Montreal Mayor Gérald Tremblay has written a letter to Jean Charest to find out where the Liberal leader stands on issues that are important to Montreal. Tremblay said he would like Charest to outline his government's plan for the city. He said improving the economy of Montreal will yield economic spinoffs in the rest of the province as well. In the letter, dated Nov. 12, Tremblay said he is anxious to hear Charest's proposals on how to "give Montreal the tools to properly assume its role as the economic motor of the province." Tremblay outlined several key areas his administration is working on that need government support: - A 20-year $8.1-billion transportation plan, which outlines major projects to renovate roads, improve public transit, and add bicycle paths. He said Charest needs to commit major public funds to help this project along. - Tremblay said the province must work to accelerate several infrastructure projects that have been stalled for many years, including the modernization of Notre Dame St. in Montreal's east end, the English and French superhospitals, and the revitalization of the harbourfront, which includes moving the Bonaventure Expressway away from the shoreline. - Tremblay also asked Charest to invest in urban renewal projects and to commit money for new social housing units. - He asked the province to help finance a new waste management plan, and to invest in the city's universities, research centres and museums. Tremblay also said Charest needs to work with Prime Minister Stephen Harper to free up Montreal's share of an $8.8 billion infrastructure program pledged in the federal government's 2007 budget. The funds have not yet been passed on to Canadian cities because of a complex application process for project approval and other delays in negotiations between the federal and provincial governments. Tremblay said it's imperative Montreal get access to that money now, to offset the effects of an economic downturn. He added Quebec also needs to change some of the rules governing cities to to give them access to new sources of revenue. Tremblay has been asking for a share of the Quebec sales tax or the ability to implement an entertainment tax on the island of Montreal. His administration has also mulled the idea of imposing tolls to drivers coming onto the island of Montreal. The city would need the permission of the Quebec government before imposing a new tax.

Ottawa boosts mortgage buyout by $50B Eoin Callan, Canwest News Service Published: Wednesday, November 12 TORONTO - After a sustained lobbying campaign by Bay Street executives that culminated in a breakfast meeting with senior government officials in Toronto Wednesday, Ottawa agreed to the most pressing demands of Canadian banks squeezed by the credit crisis. "We had asked for four things and we got all four," Don Drummond, a senior vice-president at TD Bank Financial Group, said after Ottawa unveiled co-ordinated measures to buy up to $75-billion worth of mortgages, facilitate access to capital markets, provide extra liquidity and loosen reserve requirements. Jim Flaherty, the Finance Minister, said the moves meant Canada was making good on a pledge he made during talks with his international counterparts to collectively bolster the banking system ahead of a summit on the financial crisis this weekend in Washington. The actions were a sign of the "commitment" of Ottawa to ensure the country's financial system remained strong, said Gerry McCaughey, chief executive of Canadian Imperial Bank of Commerce, which, along with TD, is thought to be among the main beneficiaries of new looser rules on minimum capital requirements. But executives who participated in the process cautioned state interventions to ease the credit crisis had proven to be more art than science, as the United States Wednesday ditched an earlier plan to buy up toxic assets at the same time Ottawa was expanding its own scheme to buy mortgage-backed securities by $50 billion. Executives said it remains to be seen if the interventions finalized at Wednesday morning's meeting would succeed in lowering the premium banks pay for medium-term financing, which is about five times higher than before the credit crisis. In a bid to ease funding pressures, executives persuaded the Conservatives to reduce to 1.1 per cent from 1.6 per cent the fee to be charged if banks invoke a special new government guarantee when they borrow money in international capital markets. Banks argued the previous higher rate had actually encouraged lenders to nudge up the premium they were charging banks at a time when other countries were offering more generous terms. The Finance Minister said he would resist new global initiatives that might put Canadian institutions at a competitive disadvantage during the weekend summit in Washington. But he said Ottawa's ability to influence the outcome was being undermined by the absence of a federal securities regulator in Canada, which is alone among major industrialized nations in not having national oversight of financial markets. "It is difficult for us to go abroad and say governments should get their house in order when there is a glaring omission at home," he said. Flaherty said a key objective of the moves announced Wednesday was addressing "concerns about the availability of credit" for business borrowers, adding that "the government stands ready to take whatever further actions are necessary to keep Canada's financial system strong among external risks." The Bank of Canada also said it would boost the availability of affordable credit in the banking system by $8 billion, using new rules that mean institutions can bid for cash using almost any form of collateral. Banks also welcomed a move late Tuesday by the Office of the Superintendent of Financial Institutions to allow them to top up their capital reserves with securities that are a hybrid of debt and equity. The regulator clarified Wednesday that a related measure on treatment of money lent by banks to other financial institutions under the government guarantee of interbank lending "would have the effect" of "increasing their regulatory capital ratios, all else being equal", but would "not count as regulatory capital." Bank analysts said the interventions were positive for Canadian banks, but warned they would be squeezed further in the coming months as the global economic slowdown hit home and losses on bad loans mount. Ian de Verteuil, an analyst at BMO Capital Markets, cited as an example how falling demand for coal could by next year jeopardize more than $10 billion in bank loans made to finance the acquisition by Teck Cominco of Fording Canadian Coal Trust. Royal Bank of Canada, Bank of Montreal and CIBC each have about $1 billion in exposures, while TD and Scotiabank each have $400 million of exposures to the deal, which the companies expect will be viable. But bank executives remained bullish Wednesday, with TD chief executive Ed Clark saying he was still on the hunt for U.S. acquisitions.

Liberals refuse to confirm report Ontario to run near $1-billion deficit Wed, 2008-10-22 13:04. By: THE CANADIAN PRESS TORONTO - The Ontario government refused to confirm Wednesday in advance of handing down its fall economic update that the province will run a deficit of almost $1 billion this year because of the world financial crisis. For the past two weeks, Premier Dalton McGuinty has signalled he is prepared to run a deficit because of declining government revenues. In the legislature, Opposition Leader Bob Runciman wanted to know how Ontario went from a balanced budget four weeks ago to what he said was an expected deficit of $1 billion. "Less than a month ago, (Finance Minister Dwight Duncan) said the budget would be balanced, even with a downturn in the U.S. economy," Runciman said. "Premier, how is it that just four short weeks ago the budget was balanced, but today there's going to be a deficit of almost $1 billion?" McGuinty told the house he didn't know where Runciman was getting his numbers. People would have to wait until the finance minister delivers the fall economic update later Wednesday to see what red ink exists, McGuinty said. "We're in a pretty good position now to withstand these powerful winds that are blowing out there," he said. But, McGuinty added, the government also has to find a way to "make advances on the poverty front, to act in a way that is fiscally responsible, to protect health care and to protect education." On Monday, McGuinty said he told Duncan not to run a deficit unless not doing so would mean cutting back on public services. He also vowed that Ontario would not close hospitals or cancel infrastructure programs after more than 200,000 people lost their jobs. On Tuesday, he warned schools, cities and hospitals that funding projections would have to be scaled back during challenging times that may last as long as two years. Government officials will say only that Duncan's statement will outline which new government programs will have to be delayed because of falling revenues. Anti-poverty activists are worried that will mean the government will fail to keep its promise to help the poorest of the poor improve their living standards.

October 13, 2008 By ANDREW ROSS SORKIN Morgan Stanley was racing to salvage a crucial investment from a big Japanese bank on Sunday in an effort to allay growing fears about its future — negotiations so critical to the financial markets that they have drawn in both the Treasury Department and the Japanese government. Morgan Stanley, one of the most storied names on Wall Street, was locked in talks on Sunday to renegotiate its planned $9 billion investment from the Mitsubishi UFJ Financial Group of Japan, according to people involved in the talks. The completion of a deal might help calm markets worldwide, which sank last week because of escalating concerns about the fate of financial institutions like Morgan Stanley. Investors might read the investment as a sign of confidence in the bank’s future. Mitsubishi was pressing for more favorable terms after Morgan Stanley lost nearly half its market value during last week’s stock market plunge. Treasury, however, is not planning to have the United States government take a direct stake in Morgan Stanley as part of a broader effort to stabilize the financial industry and the markets, these people said. Wall Street had buzzed Friday that such a move might be unavoidable. Morgan Stanley is in the midst of the gravest crisis in its 74-year history, even though analysts estimate that the bank has more than $100 billion in capital. Morgan Stanley’s shares price has plunged nearly 82 percent this year, closing at $9.68 on Friday. Last month, Mitsubishi agreed buy about 21 percent of Morgan Stanley. The investment was to be made in the form of $3 billion in common stock, at $25.35 a share, as well as $6 billion in convertible preferred stock with a 10 percent dividend and a conversion price of $31.25 a share. Under the proposed new terms being discussed on Sunday, Mitsubishi would still buy roughly 21 percent of Morgan Stanley, these people said. But all of the investment would be through preferred shares, with a 10 percent annual dividend. Many of those shares would be convertible into common stock, but the Japanese bank was trying to set a conversion price far lower than originally proposed. Morgan Stanley and Mitsubishi have been in constant contact with government officials this weekend, these people said. Mitsubishi and the Japanese government have sought assurances from the Treasury Department that if the United States were to decide to inject money into Morgan Stanley at a later time — a possibility some analysts do not rule out — that such a move would not wipe out preferred shareholders. The Treasurey has indicated that it might use some of the $700 billion bailout package to take direct stakes in banks, but it has not spelled out how it would do so. Investors suffered deep losses when the government effectively nationalized the nation’s largest mortgage finance companies, Fannie Mae and Freddie Mac. It is unclear how far those discussion have gone or whether any such assurances would be forthcoming. Henry M. Paulson Jr., the Treasury Secretary, has pushed both companies to come up with a private-market solution and has indicated that he does not believe that Morgan Stanley needs capital from the United States government. However, he privately hinted to members of both companies that the government would back Morgan Stanley if it came to that, these people said, suggesting that he does not want to repeat the troubles that resulted from allowing Lehman Brothers to go bankrupt. George Soros, the billionaire investor, wrote in a column in The Financial Times that Morgan Stanley needs to be rescued by the U.S. government. “The Treasury should offer to match Mitsubishi’s investment with preferred shares whose conversion price is higher than Mitsubishi’s purchase price,” Mr. Soros wrote. “This will save the Mitsubishi deal and buy time for successfully implementing the recapitalization and mortgage reform programs.” While the negotiations remained fluid, people close to both sides expressed confidence that a deal would be struck. The companies are hoping to announce the terms of the transaction and Mitsubishi’s commitment to complete the deal by Monday morning, before the stock market open in the United States. Over the past week, Mitsubishi and Morgan Stanley have issued statements insisting that they planned to complete the deal on the original terms. Spokespeople for Mitsubishi and Morgan Stanley declined to comment on Sunday. Morgan Stanley converted itself into a bank holding company one week after Lehman Brothers collapsed last month. That business model makes it easier for Morgan Stanley to borrow from the Federal Reserve. The firm has also lowered its gross leverage levels to under 20 times. Mitsubishi has large ambitions for expansion into the United States. It recently purchased the remaining shares of UnionBanCal, a bank in California, for a premium over its share price. Mitsubishi had owned the majority of UnionBanCal since 1996. Edmund L. Andrews and Eric Dash contributed reporting. http://www.nytimes.com/2008/10/13/business/13morgan.html?_r=1&hp&oref=slogin

New housing plan unveiled The Gazette Published: 9 hours ago A plan by the Metropolitan Montreal Community that would cost $500 million over the next five years to build, renovate and repair 10,000 low-income and social housing units in the greater Montreal area was unveiled yesterday. The agency co-ordinates urban and regional planning for 82 municipalities in and around the island of Montreal. Paul Larocque, who heads the CMM's housing commission, announced the five-year plan that would see 20,000 units built across Quebec. The greatest need, however, is on the island of Montreal, where the occupancy rate of existing social and low-cost housing units is 100 per cent. "The challenge is enormous," said Michael Prescott, Montreal city council executive committee member. "We need the co-operation of all levels of government to assure stable financing if we are to realize our objectives by 2013." Most of the funding is already secure. The Quebec government has set aside $26 million a year under the five-year Accès Logis program to build new housing units and has earmarked another $96 million a year until 2013 to renovate and repair existing housing units under another infrastructure program, Habitations à loyer modique. It appears the federal government is on board. On Sept. 4, the Harper government allocated $1.9 billion to extend programs to combat homelessness in Canada, including in Montreal, but in the middle of an election campaign, it hasn't bothered to tell anyone. "We are well on our way to meeting our needs," said James McGregor, a vice-president with the Société d'habitation du Québec, the principal government agency responsible for affordable housing in Quebec. "But we only found out about the federal government's participation through the CMHC website. It's a very curious thing." No one from the department of Human Resources and Social Development was available to comment yesterday.

Europe Works to Contain Crisis Article Tools Sponsored By NYC Times By CARTER DOUGHERTY, NELSON SCHWARTZ and FLOYD NORRIS Published: October 6, 2008 European nations scrambled further Monday to prevent a growing credit crisis from bringing down major banks and alarming savers as Sweden followed Germany, Austria and Denmark in offering new protections for bank deposits. As troubles in financial markets spread around the world, some governments are eager to act to avoid the mistakes of the 1930s when authorities sat on their hands during the Wall Street crash and its aftermath, Julian Chillingworth, chief investment officer at Rathbone Unit Trust Management in London, said. Sweden became the latest European country to offer protection for bank deposits, after the German government offered blanket guarantees Sunday to all private savings accounts. Austria and Denmark also did the same. Britain’s government on Monday scrambled to find ways to help the country’s ailing banking sector and even considered a partial nationalization of the industry. The chancellor of the Exchequer, Alistair Darling, continued to consult with advisers on Monday on ways to stabilize the banking sector, which may include a recapitalization financed by taxpayers, said a person at the Treasury who declined to be identified because the discussions were private. Stocks fell sharply on Monday in London, Paris and Frankfurt. New bailouts were arranged late Sunday for two European companies, Hypo Real Estate, a large German mortgage lender, and Fortis, a large banking and insurance company based in Belgium but active across much of the Continent. Under the agreement, BNP Paribas will acquire the Belgium and Luxembourg banking operations of Fortis for about $20 billion. The spreading worries came days after the United States Congress approved a $700 billion bailout package that officials had hoped would calm financial markets globally. The crisis in Europe appears to be the most serious one to face the Continent since a common currency, the euro, was created in 1999. Jean Pisani-Ferry, director of the Bruegel research group in Brussels, said Europe confronted “our first real financial crisis, and it’s not just any crisis. It’s a big one.” Britain is coming under increasing pressure to act. Some investors criticized the government for failing to set up an American-style rescue fund and for its piecemeal approach to deal with each problem. “The government needs to get on their front foot and get control of their own destiny,” Mr. Chillingworth said. “We could well be in a period where we see a quasi-nationalization in the banking sector, where taxpayers are taking equity stakes.” Britain partly nationalized Bradford & Bingley last week after the mortgage lender struggled to get financing and brokered a takeover of HBOS by Lloyds TSB after its shares lost most of its value. From Tuesday, the government will also increase the amount of retail deposits it guarantees to £50,000, or $88,600, from £35,000. Some analysts said guaranteeing deposits might reinstate client confidence but would fall short of bringing back the trust among banks that is desperately needed to encourage them to lend to each other. British banks remain burdened by their exposure to worthless mortgage assets, but the larger problem remains their unwillingness to lend to one another — even after an injection of £40 billion by the Bank of England. “Liquidity is drying up,” said Richard Portes, a professor of economics at the London Business School. “The authorities have to deal with this paralysis in the money markets.” The European Central Bank has aggressively lent money to banks as the crisis has grown. It had resisted lowering interest rates, but signaled on Thursday that it might cut rates soon. The extra money, aimed at ensuring that banks have adequate access to cash, has not reassured savers or investors, and European stock markets have performed even worse than the American markets. In Iceland, government officials and banking chiefs were discussing a possible rescue plan for the country’s commercial banks. In Berlin, Chancellor Angela Merkel and her finance minister, Peer Steinbrück, appeared on television Sunday to promise that all bank deposits would be protected, although it was not clear whether legislation would be needed to make that promise good. Mindful of the rising public anger at the use of public money to buttress the business of high-earning bankers, Ms. Merkel promised a day of reckoning for them as well. “We are also saying that those who engaged in irresponsible behavior will be held responsible,” she said. The events in Berlin and Brussels underscored the failure of Europe’s case-by-case approach to restoring confidence in the Continent’s increasingly jittery banking sector. A meeting of European heads of state in Paris on Saturday did little to calm worries, though officials there pledged to work together to ensure market stability. President Nicolas Sarkozy of France and his counterparts from Germany, Britain and Italy vowed to prevent a Lehman Brothers-like bankruptcy in Europe but they did not offer a sweeping American-style bailout package. The growing crisis has underlined the difficulty of taking concerted action in Europe because its economies are far more integrated than its governing structures. “We are not a political federation,” Jean-Claude Trichet, the president of the European Central Bank, said after the meeting. “We do not have a federal budget.” Last week, Ireland moved to guarantee both deposits and other liabilities at six major banks. There was grumbling in London and Berlin about the move giving those banks an unfair advantage. But Germany proposed its deposit guarantee Sunday after Britain raised its guarantee. The German officials emphasized that the guarantee applied only to private depositors, not to the banks themselves. But on Monday, Mr. Steinbrück said the government was considering an “umbrella” to protect the banking sector. Unlike in the United States, where deposits are now fully guaranteed up to a limit of $250,000 — a figure that was raised from $100,000 last week — deposits in most European countries have been only partly guaranteed, sometimes by groups of banks rather than governments. In Germany, the first 90 percent of deposits up to 20,000 euros, or about $27,000, was guaranteed. Even before the Paris meeting began it was becoming clear that two bailouts announced the week before had not succeeded and that UniCredit, a major Italian bank, might be in trouble. UniCredit announced plans on Sunday to raise as much as 6.6 billion euros. Fortis, which only a week ago received 11.2 billion euros from the governments of the Netherlands, Belgium and Luxembourg, was unable to continue its operations. On Friday, the Dutch government seized its operations in that country, and late Sunday night the Belgian government helped to arrange for BNP Paribas, the French bank, to take control of the company for 14.5 billion euros, or about $20 billion. In Berlin, the government arranged a week ago for major banks to lend 35 billion euros to Hypo Real Estate, but that fell apart when the banks concluded that far more money would be needed. Late Sunday night the government said a package of 50 billion euros had been arranged, with both the government and other banks taking part. The credit crisis began in the United States, a fact that has led European politicians to assert superiority for their countries’ financial systems, in contrast to what Silvio Berlusconi, the prime minister of Italy, called the “speculative capitalism” of the United States. On Saturday, Gordon Brown, the British prime minister, said the crisis “has come from America,” and Mr. Berlusconi bemoaned the lack of business ethics that had been exposed by the crisis. Many of the European banks’ problems have stemmed from bad loans in Europe, and Fortis got into trouble in part by borrowing money to make a major acquisition. But activities in the United States have played a role. Bankers said Sunday that the need for additional money at Hypo came from newly discovered guarantees it had issued to back American municipal bonds that it had sold to investors. The credit market worries came on top of heightening concerns about economic growth in Europe and the United States. “Unless there is a material easing of credit conditions,” said Bob Elliott of Bridgewater Associates, an American money management firm, after retail sales figures were announced, “it is unlikely that demand will turn around soon.” Henry M. Paulson Jr., the United States Treasury secretary, hoped that approval of the American bailout, which involved buying securities from banks at more than their current market value, would free up credit by making cash available for banks to lend and by reassuring participants in the credit markets. But that did not happen last week. Instead, credit grew more expensive and harder to get as investors became more skittish about buying commercial paper, essentially short-term loans to companies. Rates on such loans rose so fast that some feared the market could essentially close, leaving it to already-stressed banks to provide short-term corporate loans. Europe’s need to scramble is in part the legacy of a decision to establish the euro, which 15 countries now use, but not follow up with a parallel system of cross-border regulation and oversight of private banks. “First we had economic integration, then we had monetary integration,” said Sylvester Eijffinger, a member of the monetary expert panel advising the European Parliament. “But we never developed the parallel political and regulatory integration that would allow us to face a crisis like the one we are facing today.” In Brussels, Daniel Gros, director of the Center for European Policy Studies, agreed. “Maybe they will be shocked into thinking more strategically instead of running behind events,” he said. “The later you come, the higher the bill.” While the European Central Bank has power over interest rates and broader monetary policy, it was never granted parallel oversight of private banks, leaving that task to dozens of regulators across the Continent. This patchwork system includes national central banks in each of the euro zone’s 15 members and they still retain broad powers within their own borders, further complicating any regional approach to problem-solving. “The European banking landscape was transformed fairly recently,” Mr. Pisani-Ferry said. “When the euro was first introduced, the question of cross-border regulation didn’t really arise.” Optimists say one potential long-term benefit from the current turmoil is that it often takes a crisis to propel European integration forward. “Progress in Europe is usually the result of a crisis,” Mr. Eijffinger said. “This could be one of those rare moments in E.U. history.”

No surprise here: Harper remains fiscally off balance with Quebec JEFFREY SIMPSON September 24, 2008 at 11:00 PM EDT Right there, in bold type on page 144 of the 2007 budget, the Harper government declared: "Fiscal Balance Has Been Restored." Everywhere Prime Minister Stephen Harper goes in Quebec - the issue being of interest only in that province - he affirms that "we solved the problem of the fiscal imbalance." His Quebec ministers repeat the mantra; his candidates hammer home the message. The inference: Vote for us because we handed over all that money to Quebec (and the other provinces), just as we promised in the 2006 campaign. Case closed. Except that, as anyone with the slightest sense of Quebec could have predicted, the appetite there only grows with the eating. "The fiscal imbalance, according to us, is not yet solved," proclaims Quebec Finance Minister Monique Jérôme-Forget. Things are much better, she acknowledges. But, "is it finished?" she asks. "No." Quebec Premier Jean Charest also insists more money is needed to "solve" the problem. And, by the way, how about handing over all money and federal jurisdiction over "culture and communications," so that Quebec can achieve "cultural sovereignty"? And, while you're at it, Mr. Harper, hurry up with that promise to eliminate Ottawa's power to spend any money in areas of provincial jurisdiction. Mr. Charest has learned the ways of a Quebec premier. Always demand. Never be satisfied. Keep the heat on. Position yourself as the "defender" of Quebec's interests. Insist on more money and power from Ottawa. Mr. Harper ought to have seen this coming. No federal prime minister can ever out-national the nationalists, and none can ever satisfy any premier, at least not for long. As a result, he and Mr. Charest are no longer political allies, because it does not suit Mr. Charest to be other than a demandeur. Instead, the Action Démocratique has become the Conservatives' closest political ally in Quebec, especially in the rural and small-town ridings the Conservatives target. This is the crowd that whipped up alarm over immigration. This is the party that wants a separate constitution for Quebec, talks always of "autonomy" for Quebec, wants Quebec citizenship, demands a massive transfer of power (and money, of course) from Ottawa to Quebec, and sees Canada as a very loose association of two states. Mr. Harper has never repudiated any of these demands/statements from his erstwhile allies. Mr. Harper, as is his wont, plays with slippery language in Quebec, often using the word "autonomy." Of course, he reminds everyone that he got passed the resolution describing the Québécois as a "nation" within Canada. And he brags about having "solved" the "fiscal imbalance." These ADQ/Conservative voters are exactly those for whom artists whining about cuts to their subsidies are figures of scorn. The brouhaha about Mr. Harper's $46-million in cuts to the arts goes right over their heads, or even fires them up more to support the Conservatives. Mr. Harper says his government has increased cultural spending by 8 per cent. Where he gets that number from is unknown. He did increase the Canada Council's budget over two years by $50-million, and he put $60-million into "local arts and festivals" in the 2007 budget. But the biggest increase this year was for the Francophone Summit in Quebec City, which will happen just after the election - $38-million in 2008 and $13-million in 2007. Is that culture? The $46-million cut is a drop in the bucket of the tens of billions transferred to Quebec and the other provinces to "solve" the fiscal imbalance. The attention being paid to it represents a classic example of the urgent but minor driving out the huge and important. The whole fiscal imbalance was an invention that became a mythology in Quebec: Big, bad, fat Ottawa was rolling in dough, while the poor, beleaguered provinces had too little. A commission, established under the separatist government, produced a sum it claimed would resolve the problem. But even after the Paul Martin government transferred a larger sum than the commission had demanded, the mythology held. Still more was required to solve the "problem," claimed Quebec and those provinces that clung to Quebec's coattails. Mr. Harper, fishing for votes in Quebec and desirous of slimming the federal government anyway, obliged with a cool $40-billion in transfers. "We have solved the fiscal imbalance," he proclaimed. Nice try.

Let us decide its own cultural priorities, Charest says Quebec premier calls for reversal of arts funding cuts KEVIN DOUGHERTY, The Gazette Published: 8 hours ago (The Gazette)

Time to protect the 'green lace doily' of Montreal, environmentalists say Coalition is pressing Quebec to create a provincial park joining endangered lands MICHELLE LALONDE, The Gazette Published: 10 hours ago Environmental groups across southwestern Quebec are ratcheting up the pressure on the Quebec government to create a new kind of provincial park to stop the rapid destruction of forests, wetlands, islands and other natural spaces around Montreal. Fifty-five groups have united behind the innovative project to create the Montreal Archipelago Ecological Park, Montreal's answer to the "green belts" other Canadian cities have established to stop urban sprawl, combat climate change and preserve nearby natural green space. "We don't call it a green belt, though, it's more like a green lace doily," said David Fletcher, a spokesperson for the new coalition calling itself Partners for the Montreal Archipelago Ecological Park. The ship has sailed long ago on creating a true green belt around Montreal, since the island is surrounded by rapidly growing suburbs. But environmental groups say it would be possible for the province to legislate as protected the remaining forests, shorelines, wetlands and other natural spaces on Montreal Island and Laval's Île Jésus, as well as a number of undeveloped islands in the region. The groups want to see this "green doily" of remaining natural lands protected with the same status as a provincial park, or what the Quebec government refers to as a national park. The government has made repeated international commitments to protect at least eight per cent of its territory, ensuring that the protected areas reflect the biological diversity of the province. While the government has recently created some new conservation areas in northern Quebec, Fletcher says nothing is being done to protect southwestern Quebec, an ecologically rich domain that biodiversity experts refer to as the sugar maple bitternut hickory bioclimatic domain. Less than four per cent of this domain, which stretches from the lower Laurentians to the U.S. border, is protected from development. "The tough job that needs to be done is down here, where half the people of Quebec live, and this is is simply being ignored." Although former Liberal environment minister Thomas Mulcair had expressed enthusiasm for the park project, current minister Line Beauchamp has been at best lukewarm. In a recent letter to the project's proponents, responding to their request for support, an Environment Department official suggested the protection of these lands is a municipal and regional responsibility. "I share your concerns about the protection of biodiversity in southern Quebec, where we find a great richness of species and ecosystems, both land-based and aquatic," wrote Patrick Beauchesne, director of ecological heritage and parks in the Environment Department. But Beauchesne went on to suggest that municipalities are responsible for zoning of privately owned urban land, and did not offer support. Fletcher said his group is determined to take the debate to the National Assembly. Members of his group met last week with Mulcair, now an NDP member of Parliament, and with Parti Québécois environment critic Camil Bouchard. "The political establishment has to get behind this project," Fletcher said. "Quebec has (biodiversity) commitments that are international. ... Now it's time to move from statements of principle to action." mlalonde@ thegazette.canwest.com

August 7, 2008 VIA plans to invest $25 million to modernize Ottawa-Montreal railway infrastructure MONTREAL As part of the Government of Canada’s $692 million dollar investment to improve passenger rail service, VIA Rail Canada has announced it plans to invest more than $25 million on a multi-phase, multi-year program to modernize key parts of its rail infrastructure between Ottawa and Montréal. These improvements are part of VIA Rail’s overall capital investment plan. In this first phase, upgrades to the Ottawa-Montréal line will include the addition of a .76-km long passing track (siding) approximately 16 kilometres east of Ottawa, near Carlsbad Springs, a project which will be carried out by PNR RailWorks Inc. The siding will be constructed with remote-controlled power switches tied into the existing Centralized Traffic Control (CTC) system and Rail Traffic Control (RTC) dispatch system. The siding will also be equipped with a back track (additional track adjacent to the siding) for the storage of maintenance equipment, when required. VIA will also be installing new continuously-welded rail and performing other associated track work over some 40 track-miles between Coteau, Québec and Moose Creek, Ontario. This work, which is expected to be completed within the next few months, will be carried out by Total Track. Some trains on the Montréal-Ottawa route may experience minor delays while this work is being completed. Additionally, structural rehabilitation of the bridge over the South Nation River in Casselman, a project which has been awarded to SEMA Railway Structures, will also be completed. Improvements to VIA’s Ottawa station are also planned. VIA will be modernizing and improving the layout of the public washrooms, ticket office, baggage operations and Panorama (VIA 1) lounge. The lounge will also be enlarged to accommodate increased demand. As part of these renovations, VIA will be making both technological and environmental improvements to the station. The general contractor chosen for the project is Terlin Construction Ltd. of Ottawa. CSV Architects Inc. and Norr Ltd., also of Ottawa, will provide design and engineering support. Work on this project, worth some $500,000, will begin shortly and is expected to be completed by this fall. “These initiatives will improve comfort, speed, ride quality and reliability,” said VIA Rail president and chief executive officer Paul Côté. “They will also enhance overall safety, and increase scheduling flexibility and capacity for additional trains. Just as importantly”, he noted, “a more efficient operation will also contribute to reductions in fuel consumption and greenhouse gas emissions.” “The projects on VIA’s Montréal-Ottawa route are part of the $692 million in new funding this government announced in 2007 as part of its commitment to providing Canadians with safe, reliable and sustainable passenger rail service,” said federal Transport Minister Lawrence Cannon.