The Goldilocks recovery

Strict financial regulation and a new commodity boom have turned “boring” Canada into an economic star

THEIR economy is so intertwined with their neighbour’s that when the United States plunged into recession, Canadians assumed they would be dragged along for the ride. Newspapers took to illustrating their economic stories with pictures of Depression-era bread lines. Yet whereas the United States has still not officially declared its recession over, Canada is nine months into recovery from its mildest and shortest downturn in recent history. Unemployment has been falling since last August, and proportionately fewer jobs were lost than south of the border.

Jim Flaherty, the finance minister, attributes Canada’s strong performance to its “boring” financial system. Prodded by tight regulation, the banks were much more conservative in their lending than their American counterparts. Those that did dabble in subprime loans were able to withdraw quickly. This prudence kept a lid on house prices while those in America were soaring, but it paid off when the bust hit. The volume and value of home sales in Canada are now at record highs. In some areas the market looks downright frothy: a modest house in Ottawa listed at C$439,000 ($435,000) recently sold for $600,000. “A lot of homes are selling in one day, and often for over the asking price,” says David Cullwick, a local estate agent. Rising prices have bolstered the construction industry and sellers of furniture and building materials.

True to form, the authorities are moving to halt the party. During the recession the Bank of Canada cut its benchmark interest rate (to 0.25%), injected extra liquidity and bought up mortgage-backed securities. At its April policy meeting the bank withdrew its pledge not to raise rates. Analysts expect an increase in June. The government has ended tax credits for first-time house buyers and for renovations, which were granted in 2008 to stimulate demand.

For the other component of the country’s resilience—resurgent appetites for its exports of oil, gas, and minerals—Canadians have to thank policymakers in Beijing more than those in Ottawa. At their low point, prices for Canada’s commodity exports were still 50% higher than in previous recessions. Since then, they have rallied strongly. The impact is illustrated by the fortunes of Teck Resources, a Vancouver-based mining firm. It staggered into the recession loaded with a $9.8 billion debt taken on to buy the assets of a coal-mining company. For a while its survival was in doubt. Last month Teck not only announced that it had repaid the debt but also that it would pay a dividend.

The energy industry is coming back to life, with new investments planned for in Alberta’s oil sands. Last month Sinopec, a Chinese oil company, announced it would pay $4.65 billion for a 9% stake in Syncrude Canada, the largest operator in the sands. Such investments are controversial because of their environmental impact. But they are welcome in Alberta, where the government posted an unprecedented budget deficit last year.

“Our regional economies are so diverse that there is always something leaning against the wind,” says Philip Cross, the chief economist at the government statistics agency. But the combination of commodity revenues and investors seeking safety in Canadian assets has caused the currency to take off. After falling as low as 77 American cents during the recession, the Canadian dollar has now returned to rough parity with the greenback.

That is a tribute to the country’s success. But the central bank warns that a strong loonie, as the currency is known, will slow the recovery. It would be particularly harmful to manufacturing exporters, who were battered by the recession (car production fell by 31% in 2009). That might lead to further specialisation in natural resources. For now, concern about the loonie is muted, because most companies adapted to a stronger exchange rate during its previous run-up in 2007. Many of those that did not went bust. But if the currency continues to rise, the squeals will surely grow.

The government of Stephen Harper, the Conservative prime minister, might have expected to receive more praise for the economy’s robust performance. If it has not, that may be partly because it insisted that the recession was imported from the outside world. Much of the country’s resilience stems from policies—such as bank regulation and sound public finances—which predate Mr Harper. The Bank of Canada can share some of the credit too. But Britons might note that Mr Harper has managed to govern for four years without a parliamentary majority, and that this has not prevented Canada from sailing through the recession.


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Get out of our canoe

When a Canadian is not a Canadian

THE dozen chiefs who make up the Mohawk Council of Kahnawake expected criticism when they began presenting eviction notices this month to 25 non-natives living on their 13,000-acre (5,260-hectare) reserve just south of Montreal. They hoped Canadians would understand their desire to protect a threatened language and culture, and refrain from interfering in internal Mohawk affairs. But many saw their action as a racist and illegal denial of Canada’s constitutional Charter of Rights and Freedoms. Despite centuries of coexistence, the First Nations, as Canada’s indigenous people call themselves, and other Canadians still live in mutual incomprehension. For a start the Mohawks do not see themselves as Canadians.

The council passed a bylaw in 1984, supported by the majority of the reservation’s 8,000 residents, which stipulated that a person must have at least four Mohawk great grandparents to live or own property there. Any Mohawk who marries a non-native must leave. “Everyone knows the law: if you marry out, you stay out,” says Joe Delaronde, a spokesman for the council. “If we don’t protect who we are, we will become Canadian citizens.”

Not such a terrible fate, you might think. But the leaders of many First Nations have been fighting assimilation for centuries. The Kahnawake reserve was originally set up by the French in 1716, when the Mohawks were their allies against the British. Shortly afterwards, some French traders were asked to leave. There have been many evictions since. A more prosaic reason is that First Nations receive federal money for social services only for officially registered natives. Yet there has also been a long history of intermarriage and adoption of non-natives. “Everyone in the community has mixed ancestry,” says Matthieu Sossoyan, an anthropologist.

Canada’s minister of Indian affairs admits the evictions make him “uncomfortable” but says he can do nothing because First Nations have the right to say who lives on reserves. The chiefs say that rather than the Charter of Rights and Freedoms, their relations with non-natives are governed by the Two-Row Wampum Treaty, agreed with Dutch traders in the 17th century. (The wampum, or beaded belt, showed two parallel lines on a pale background.) This called for mutual non-interference. “We stay in our canoe and you steer yours,” says Mr Delaronde.


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Lobbyist Trial Could Embarrass Political Establishment

Dodgy Deals and Slush Funds

Schreiber was extradited to Germany from Canada in August 2009 following a long legal battle.

The trial of the former arms lobbyist Karlheinz Schreiber, who is connected to a major German political scandal of the 1990s, began Monday. Schreiber’s testimony could shed light on dodgy dealings in German politics and may prove very uncomfortable for Bavaria’s conservative Christian Social Union party. 

Karlheinz Schreiber still has friends in Bavaria, but no longer among the highest circles. Nowadays, the senior members of Bavaria’s conservative Christian Social Union party, agents with the German foreign intelligence agency BND and defense industry executives he once counted among his friends barely give Schreiber the time of day. 

But Schreiber, a jovial 75-year-old from the small Bavarian town of Kaufering, is very popular among the employees at the correctional facility in the southern German city of Augsburg. While in detention awaiting trial, Schreiber made himself popular, telling the guards exciting stories from the world of international business. He knows the names of their children and even remembers their birthdays, and is on a first-name basis with some of the staff. 

Schreiber’s engaging manner even helped to convince the prison administration to refurbish the shabby latrine in his cell. His new facilities, according to prison gossip, are everything but standard issue. Schreiber knows how to inspire people, and he’s an excellent negotiator. “I’m one of the best salesman in the world,” he once said. 

In the coming weeks, Schreiber’s powers of persuasion could become very important for him — and very uncomfortable for some of his former associates. On Monday, his trial on charges of tax evasion, bribery and accessory to fraud began in Augsburg District Court in Bavaria. Schreiber’s attorney Jan Olaf Leisner read out a written statement by his client in which Schreiber categorically rejected the charges against him. 

High-Profile Scandal 

It’s 15 years since the Augsburg public prosecutor’s office first initiated an investigation against Schreiber and a number of his associates in the business and political worlds who were suspected of taking bribes from the lobbyist. It’s also 10 years since Schreiber, who holds dual Canadian and German citizenship, fled to Canada because of the investigation against him, marking the beginning of a seemingly endless extradition battle. That ended in August 2009, when Schreiber was extradited to Germany.

Back in 1999, the investigation triggered one of the biggest scandals in postwar German political history. It involved political contributions to the conservative Christian Democratic Union (CDU) and led to the resignation of the then-party head Wolfgang Schäuble, who is now Germany’s finance minister, as well as tarnishing the reputation of former Chancellor Helmut Kohl and helping Angela Merkel in her rise to power. The trial could now be the source of further explosive revelations involving party funding. 

Schreiber, a former arms lobbyist, has threatened several times to expose the sources of millions of German marks he received in commissions, some of which point to the CSU, the CDU’s Bavarian sister party and a partner in Angela Merkel’s coalition government. Schreiber resents the leaders of his former party for not having put a stop to the investigation against him in Bavaria. “If someone challenges me, they shouldn’t be surprised if I shoot back,” he said a few years ago, in a remark clearly directed at the CSU. 

Where Did the Cash Go? 

The Augsburg court has scheduled 26 days of hearings for the mammoth trial, which will revolve around the sale of helicopters and Airbus aircraft to Canada and 36 Fuchs armored personnel carriers to Saudi Arabia. Between 1988 and 1993, Schreiber is alleged to have received about 46 million German marks (€23.5 million), paid via front companies, in return for his brokering services. 

Aircraft manufacturers MBB and Airbus are believed to have paid commissions for the Canada deal to a firm called International Aircraft Leasing (IAL). In the case of the armored vehicles deal, investigators believe that large sums of money were paid to a Panamanian firm called ATG. Schreiber is believed to have owned both companies. 

The prosecution alleges that Schreiber never paid taxes on the money. It also alleges that some of the money was used to make contributions to political parties in Germany, via Swiss bank accounts, in the hope of securing political influence — a charge Schreiber denies. 

What can’t be denied, however, is the fact that millions were paid into the Swiss accounts by IAL and ATG. To determine how much Schreiber owes in back taxes, the court will have to find out what happened to the rest of the money. Did Schreiber keep it? Or were there others who benefited from the cash? 

Illustrious Group 

Over the next few months, the court will hear testimony from witnesses who are well known to the public from other trials involving the Schreiber affair. The familiar faces will include Max Strauss, who was acquitted, and two executives from the German company Thyssen, who were given prison terms. Then there is the convicted former CSU senior official Ludwig-Holger Pfahls and Walther Leisler Kiep who, during his tenure as CDU treasurer, accepted a briefcase filled with 1 million German marks from Schreiber during a clandestine meeting at a shopping center. Other witnesses will include former sales managers at Airbus and MBB, negotiators for Arab consortiums, Swiss bankers and trustees. The illustrious group is hardly likely to offer much in the way of additional information, however. 

The defendant’s testimony, on the other hand, could shed new light on the affair. While still in Canada, Schreiber had spoken about a fund for the CSU, a war chest of sorts, which he was supposed to set up on behalf of the then-party chairman Franz Josef Strauss. Schreiber was supposed to pay money from commissions into the fund, which was set up in the 1980s with upcoming election campaigns in mind. After all, as Schreiber pointed out, campaigns “cost a whole lot of money.” 

Schreiber claims that the only people who knew about the fund were Strauss, his son Max and the later CSU Chairman Edmund Stoiber — and, of course, the party’s powerful donations administrator, Munich attorney Franz Josef Dannecker, who died in 1992. 

Under Financial Pressure 

In addition to being the only person who was fully informed about the flow of funds and donations in and out of the CSU, Dannecker was a close adviser to the Strauss family. Strauss had authorized Dannecker to collect contributions to the party and deposit them in suitable locations. 

An account for the “election campaign” fund was allegedly set up in the tiny Alpine principality of Liechtenstein. By Nov. 25, 1994, according to Schreiber, the account had accumulated a balance of the equivalent of 4.82 million German marks. “As I recall, sums were withdrawn from this fund twice,” said Schreiber. 

Stoiber, Max Strauss and the CSU consistently dismissed such reports as pure fantasy, but now Schreiber is supposedly able to provide account statements to back up his claims. The Augsburg judges will only reduce the immense sum Schreiber presumably owes in back taxes if he can prove who actually received the money. Besides, things could become so tight financially for Schreiber that his former cronies can not expect to be spared. 

Close Friends 

New evidence has emerged that reinforces Schreiber’s description of illicit CSU accounts. The trail leads to Liechtenstein, and there is also a connection to Dannecker. For about the past year, the public prosecutor’s office in the western German city of Bochum has been investigating a businessman from Munich, who has ties to the CSU, in connection with suspected tax evasion, as the defendant’s attorney has told SPIEGEL. Information about a foundation ascribed to the businessman was found on DVDs containing data from the Liechtenstein-based private bank LGT Treuhand, which the German foreign intelligence agency, the Bundesnachrichtendienst (BND), purchased in 2007. The man was a close friend of CSU contribution manager Franz Josef Dannecker, as well as the executor of his estate. 

The foundation in question also played a role in a fraud trial in Switzerland. The Zurich District Court suspected that it was being used as a depository for funds stemming from questionable investment transactions. During the trial, one of the witnesses testified that he was convinced that the foundation was also used for transactions involving the CSU. Prosecutors have so far been unable to prove the claim. Nevertheless, the Bochum investigators believe that there are parallels between the Swiss case and Schreiber’s claims about the Liechtenstein party fund. 

A Memorable Visit 

At the beginning of 1996, there was an incident at LGT Treuhand in the Liechtenstein capital Vaduz that employees there remember to this day. On Feb. 7, just after it had been revealed that Bavarian prosecutors were planning to conduct new raids relating to the Schreiber affair, an attorney from Munich appeared in person at the bank. 

The man, who had only notified bank officials of his upcoming visit at the last minute, identified himself and demanded the immediate surrender of all documents relating to the foundation in question. 

The request seemed odd to the LGT employees, particularly as their customers normally had no interest in removing potentially incriminating documents from the premises. The scope of the documents was also unusual. According to bank employees, the attorney left LGT with six to eight thick, gray files filled with copies relating to a wide range of financial transactions. Other foundations generally limited themselves to a few pages of rudimentary information about assets and beneficiaries. 

Were LGT’s Bavarian customers worried about possible searches by the authorities? According to sources at LGT, once the files had been removed, the money in the foundation was also withdrawn and transferred to an institution in Monaco. 

Clear Message 

The businessman under investigation by the Bochum prosecutors, as well as his attorney, claimed that they were unaware of any of this, and that there had been no ties between the foundation and the CSU or Karlheinz Schreiber. The attorney, for his part, said that he did not recall ever having paid a visit to LGT Treuhand. Officials at CSU party headquarters in Munich said that they had no knowledge of the Liechtenstein foundation. 

The Augsburg prosecutors are aware that they will be unable to use all of the evidence from Schreiber’s past to support their case. Much of the information that could emerge in the trial in the coming weeks is likely to be statute-barred and, therefore, will only be of political relevance. 

Besides, the prosecutors are not intent on putting Schreiber, who is in poor health, behind bars for the rest of his life. For them, the fact that the trial is taking place at all is a success, because it will send the message that “no one will be able to escape prosecution in the future by fleeing to another country.” 

Schreiber’s attorneys have so far remained silent on their trial strategy. It is clear, however, that the defendant has been spending much of his time in his Augsburg prison cell diligently sorting through documents relating to flows of funds, and that he will be well-prepared by the time he enters the courtroom. When it comes to defending his honor as a businessman, Schreiber isn’t the kind of person who is likely to take things lying down. 


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Halted in mid-debate

Canada without Parliament

Stephen Harper is counting on Canadians’ complacency as he rewrites the rules of his country’s politics to weaken legislative scrutiny

THE timing said everything. Stephen Harper, the prime minister, chose December 30th, the day five Canadians were killed in Afghanistan and when the public and the media were further distracted by the announcement of the country’s all-important Olympic ice-hockey team, to let his spokesman reveal that Parliament would remain closed until March 3rd, instead of returning as usual, after its Christmas break, in the last week of January.

Mr Harper turned a customary recess into prorogation. This means that all committees in both houses are disbanded and government bills die, no matter how close they are to approval. The prime minister, who heads a Conservative minority government, clearly reckoned that giving legislators an extra winter break, during which they might visit the Winter Olympics (in Vancouver between February 12th and 28th), would not bother Canadians much.

He may have miscalculated. A gathering storm of media criticism has extended even to the Calgary Herald, the main newspaper in his political home city, which denounced him for “a cynical political play”. There are plans for demonstrations on January 23rd, just before Parliament would have reconvened. “Parliamentary democracy is in danger,” declared Peter Russell of the University of Toronto, who was one of 132 political scientists who signed a letter condemning the prorogation and calling for electoral reform.

Past Canadian prime ministers have normally asked the governor-general (who acts as Canada’s head of state) to prorogue Parliament only after the government has completed most of its legislative business in order to start afresh with a new speech from the throne outlining new priorities. But nothing has been normal in Canadian politics since 2004, when more than two decades of majority government ended with voters electing a Liberal minority government. They then returned Conservative minority governments in 2006 and 2008.

Far from completing its work, Parliament was still considering important measures, including bills that are part of Mr Harper’s crackdown on crime, as well as ratification of free-trade agreements with Colombia and Jordan. All must now be reintroduced. So why shut down Parliament? Breaking six days of silence, Mr Harper said this week that it was a “routine” move to allow the government to adjust its budget due on March 4th. His spokesman claimed that the 63-day gap between sessions was less than the average prorogation of 151 days since 1867. However, the average in the past three decades has been just 22 days.

Opposition leaders claimed Mr Harper’s real reason was to end an embarrassing debate on the government’s apparent complicity in the torture of Afghan detainees, and in particular to avoid complying with a parliamentary motion to hand over all documents relevant to those charges. They also claim that the prime minister wanted to name new senators and then reconstitute the Senate’s committees to reflect the Conservatives’ additional representation, something that could not be done if Parliament was merely adjourned.

Having prorogued Parliament last winter to dodge a confidence vote he seemed set to lose, Mr Harper has now established a precedent that many constitutionalists consider dangerous. No previous prime minister has prorogued the legislature “in order to avoid the kind of things that Harper apparently wants to avoid,” says Ned Franks, a veteran political scientist and historian of Parliament. Although other prime ministers may have had ulterior motives, they were less blatant, he says.

The danger in allowing the prime minister to end discussion any time he chooses is that it makes Parliament accountable to him rather than the other way around. Some of Mr Harper’s critics are also affronted by his high-handedness in not bothering to call on the governor-general personally to ask for prorogation, as tradition demands, but instead making his request by telephone. “That was gravely insulting to the governor-general and the country,” says Mr Russell.

Whether Mr Harper gets away with his innovative use of prime ministerial powers depends largely on whether the protest spreads and can be sustained until Parliament reconvenes in March. Mr Harper is doubtless counting on the Winter Olympics to reinforce Canadians’ familiar political complacency. But he has given the opposition, which is divided and fumbling, an opportunity. It is now up to it to show that Canada cannot afford a part-time Parliament that sits only at the prime minister’s pleasure.

The Economist


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Home-owning nation

Canada’s Nisga’a

An Amerindian experiment with property rights

THE Amerindian peoples of Canada, where they are known as First Nations, like those in Bolivia, have traditionally held land in common. So the decision by the Nisga’a First Nation of north-western British Columbia to grant private property rights to its members, insignificant though it might seem to most Canadians, has potentially revolutionary implications.

Who owns the land is unfinished business in British Columbia where, unlike in the rest of Canada, only a few treaties covering small areas were signed in colonial times. The First Nations lay claim to most of the province. In 1998 the Nisga’a, after more than a century of negotiation and litigation, were the first to sign a modern treaty. The 6,400 Nisga’a gained ownership of almost 2,000 square km (770 square miles) in the Nass valley, plus powers of self-government comparable to a municipality, some control over language and cultural issues, ownership of forestry and mineral resources, a share of the fisheries and a C$190m (then worth $280m) development fund. This deal has served as a benchmark for leisurely talks involving 60 other native groups. Earlier this year the Tsawwassen, one of the smaller ones, became the second to conclude a new treaty.

Now the Nisga’a are pioneering the idea of private property among First Nations. Their new law grew out of three years of discussion about how to get richer, in which they identified restrictions on property ownership as a big obstacle, according to Kevin McKay, the acting head of the Nisga’a government. Under Canada’s Indian Act, natives on reserves are given certificates of possession for their homes which they rent, but do not own. They cannot use them as collateral for a loan. Their new law allows Nisga’a to obtain freehold title to their homes, and to mortgage, transfer, lease or sell these to anyone, including outsiders. In the future, Mr McKay says, the law might be extended to commercial or industrial property.

In their treaty, the Tsawwassen opted for a compromise: the nation keeps the freehold while individuals have the right to buy and sell homes but only to fellow-Tsawwassen. Their chief, Kim Baird, said that many native people fear unrestricted individual freehold has the “potential to leave them worse off than now”. The Nisga’a think the opposite, that property rights may help them start businesses and become better off.

Change is certainly needed if the First Nations are to escape the poverty, unemployment and welfare dependency in which they have long languished. If the Nisga’a prosper, they may also calm the fears of some Canadians that the First Nations are bent on creating separatist enclaves. So the leaders of other First Nations will not be the only ones watching the Nass valley with interest.


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The oil sands have been Gored

Apparently they jeopardize the very survival of our species

Well, it was a very calm and totally unexceptional week, nothing to ruffle the nerves or agitate the conscience. Things rolled demurely along and, in words that Pierre Trudeau borrowed from an inscription that ornaments many an old hippie dish cloth, the universe was very placidly “unfolding as it should.” Everything was normal, predictable and just so right.

Mr. Al Gore came to Toronto (there will be deep sales on winter parkas as a result, I am sure – as being no longer necessary, you understand) and was his ever and delightfully cheerful, buoyant self. I took in a headline concerning his visit from one of The Globe’s sister dailies in this great and occasionally cold city and smiled back at the paper. “Oil sands threaten our survival, Gore warns” – that was the valentine from our Earth’s very own climate plenipotentiary. From the headline, I mistakenly thought he was merely talking about the survival of the physical planet – boiling core, tectonic plates, crust, oceans, mountains, plains, prairies, cities and outports – the lot, but the sentence under the headline offered a heartening expansion. The oil sands jeopardize “the survival of our species.”

It was us, the Homo sapiens crowd, our climate Jeremiah was speaking of. We were doomed, all of us. And it was Alberta’s fault. He made it very clear. Further on in the article, the “jet-hopping environmental activist,” as he was described therein, noted his words would not make him popular in Alberta, but no mind, speak out he must because “the future of human civilization [is] at stake.”

I received this as very encouraging news. For what I took from both headline and story was that the great science-is-settled climate crisis has been drastically foreshortened. It’s been localized. It has, as the bard put it, a local habitation and a name: It’s the oil sands and it’s Alberta.

On prior visits, Mr. Gore had set alarms off in all directions. The threat was variegated and multipronged, a great cabal of nature-haters and conscienceless tycoons. It was a combination of slope-browed naysayers – the Harper government, the U.S. Congress, a gaggle of Exxon-zombies and the oil plutocracy, packs of renegade scientists, anarchist meteorologists, perverse columnists and mischievous statisticians that were holding the world to ransom, and leading us all down the rosy humid path to a sauna-bath of an Armageddon.

Mr. Gore backed up his new more limited prospectus, by the way, with a terrifically engaging disquisition on the differences between a gas tank of a Prius and that of a Hummer but this got far, far too technical for me. I can take off a hubcap but classification systems, taxonomies make me dizzy. As between genus Prius and genus Hummer, well I give up – it would take an advanced degree in Detroitology to sort out the subtleties. Besides, when Al goes technical, I lay off the Sominex.

But, if the calm declaratives of the headline and the lead sentence were anything to go by the range of agency, what’s causing all this menace, has been strictly delimited. It’s the oil sands that threaten the survival of our kind. It’s not every day that we are simultaneously faced with a threat to the very survival of our species and told almost in the same breath that it comes from – in global terms – so picayune a cause.

The oil sands may be a deep gouge in Alberta’s northern earth, but in comparison with the frantic industrialization of all of China with its 1.3 billion people and its coal-fired plants going on line every week, or the great leaps that India and its population of 1.2 billion is making toward a modern economy – the oil sands are a mere pit stop on the broad raceway to our ecological doom.

But carbon entrepreneur Gore put it out as an equation that the oil sands are the problem. “Oil sands threaten our survival, says Gore.” You can see why I was reassured. If that’s the only problem, the solution is at hand. Another equation. Stop the oil sands. All of us survive.

It is very refreshing when the possible extinction of the human race can be reduced to such manageable practicalities.

But, you know, I had a very naughty thought. Mr. Gore was, after all, speaking in Toronto. Was it even slightly possible he villainized the oil sands during his Toronto visit – not quite the same thing as doing it in Fort McMurray – knowing it was both safe and provocative. Were we seeing a little of that famous political guile that almost – almost, mind you – brought him victory over the wily, deep-thinker George Bush coming into play here? As I say, it was an unworthy thought and I repent it.

What I now take away from all this is very simple. The oil sands are the problem. Cancel them. We’re saved. Civilization is saved. Global warming over. And Al can rest.

It was such a calm and reassuring week.

Rex Murphy, Globe and Mail


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Don’t turn up the heat on the West

By making Western provinces pay for adventures in global warming policy we will be playing with Confederation.

An article on The Globe’s front page carrying the headline “Canada can meet its climate goals, but the West will write the cheques” raises, among many others, two very interesting points. The article is about a study, conducted by two ardent environmental advocacy groups – the Pembina Institute and the David Suzuki Foundation – and was sponsored by the Toronto Dominion Bank.

The headline has the virtue of capturing the first point I want to underline. In our new green-genuflecting age any substantial, purely Canadian effort to curb greenhouse gases – any policy, economic or otherwise – will have a massive and negative impact on Alberta and Saskatchewan.

If there are taxes on oil development, if we introduce carbon penalties on industry, if there is a deliberate brake put on the oil sands, or an effort to shut them down altogether – this latter not an unthinkable proposition in certain quarters – whatever is done will, sooner or later, take revenues and jobs, take enterprise, out of Alberta in particular. For purely projected and speculative benefits to the world’s climate a century hence – and, despite the unctuous insistence of many to the contrary, speculative they remain – people are seriously considering policies that will penalize the West for its success as an energy producer now.

This is reckless. The oil industry of some Western provinces has been Canada’s dynamo these past few years. It has been our major shield during this recession. It has given the dignity of jobs to tens of thousands of Canadians. It is all that. But if “Central” Canada, as the political and economic axis of Toronto, Ottawa and Montreal is still known in some quarters out West, now – under the impetus of the green craze – is seen to be setting limits, placing penalties, or bleeding disproportionate taxes, particularly in Alberta’s case, it will churn a backlash that will make regional hostilities set loose by the national energy program a few decades ago seem like warm-ups for a yoga class.

It will shape a whirlwind of political discontent, set the West against East, and far from incidentally have deep repercussions in the many other provinces that have their citizens working in one capacity or another in the oil patch. The fury over the national energy program may be spent, but its memory – pardon the word – is green. That fury, I reiterate, will be as nothing compared with the political fury of a second attempt to “stall the West.” Should some global warming action plan attempt to put the oil sands and Western energy development at significant disadvantage, or draw taxes out of the economies of the Western provinces to pay for adventures in global warming policy, we will be playing with Confederation.

That is a prediction it takes no computer modelling to make. If Alberta in particular, and the Western provinces more generally, come to be portrayed as villains in the global warming morality play, more than the climate a century hence is at stake.

Secondly, I would urge a caution to all people working in the oil sands in particular. The TD study – farmed out to the economic specialists of the David Suzuki Foundation and the Pembina Institute – should be seen as a loud, low shot across the bow. The oil sands project, already castigated by every green-blooded organization on the planet, featured in a full-blown National Geographic hit-job some months back, is going to be the great emblem of a world “toxifying” itself, and paving the way for global warming Armageddon. It is now boilerplate in news stories as the “dirtiest project on the planet.” It photographs vividly – as National Geographic’s glossy toss-off demonstrates – because of its scale and makes for wonderful anti-energy posters. The oil sands are a target.

Environmentalists are very good at what they do. They play the news media better than Glenn Gould doing a Bach prelude. They know how to sell their point of view, how to build a villain, how to shortcut an argument. Big Green – and there is a Big Green as much as there is a Big Oil – knows the game. Find a symbol. Find one project that, superficially, can stand for all others. The oil sands, despite the hundreds or thousands of less scrupulous and governed energy projects all over the world, despite China’s spectacular use of coal, or the accelerated developments all over the Third World, will be the emblem of choice for the eco-warriors. The media-smart apostles of Al Gore, the Sierra Club and hundreds of other NGOs and eco-lobbies will turn the oil sands into the blight of our time.

It’s only a number of weeks ago, remember, that the great crisis in the auto industry called forth billions to rescue the great manufacturing base of Central Canada. The West will note the contradiction. Spend billions to save an industry that runs on petroleum – it’s here in Ontario – hit the source industry to “save the planet” – that’s in the West.

Pursue this course and things will get warm. And I’m not talking about the climate.

Rex Murphy, Globe and Mail


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The secret Mali deal to release two Canadians


Canadian diplomats Robert Fowler, right, UN special envoy to Niger, and his assistant Louis Guay are pictured as they meet with Mali President Amadou Toumani (out of camera range) after they were released along with two European tourists by al-Qaeda-linked captors after months as hostages, in Bamako on April 23, 2009.

Four terrorists, including a bomb-maker, were released from prison in the African nation of Mali in exchange for the freedom this year of Canadian diplomats Robert Fowler and Louis Guay, high-ranking government sources in Mali have confirmed.

The released prisoners were members of al-Qaeda’s increasingly powerful branch in the Sahara region of northern and western Africa. Two of them had been arrested in the northern Mali desert town of Gao last year after an accidental explosion while they were manufacturing a bomb, the sources say.

The prisoner release, which the Canadian government maintains it played no part in, was confirmed by government sources in Mali and by a local intermediary who was intimately involved in negotiations to free the Canadian hostages from the Sahara terrorist group, known as al-Qaeda in the Islamic Maghreb (AQIM). The group, formed in 2006 after a merger between al-Qaeda and an Algerian-based terrorist group, seeks to expel Westerners and set up an Islamic theocracy in Africa.

Several sources said three of the released prisoners were Mauritanian members of AQIM, which has members from across West Africa and North Africa. One of the prisoners, known as Sidi, was a “chemist,” a bomb-maker, who was involved in last year’s explosion. A second prisoner, known as Tayoub, was a logistics expert who was caught after the same explosion.

A fourth prisoner, Mohamed, was in the process of being released, but was killed in a car accident during the transfer.

In addition to the prisoner release, Malian sources support earlier reports that several million dollars in cash was given to the kidnappers, although the exact origins of the money remain unclear.

Mr. Fowler and Mr. Guay, kidnapped in Niger last December, were taken across the border to Mali and held in captivity for 130 days in a remote corner of the Sahara desert. They were the focus of a massive Canadian effort to free them.

Mr. Fowler had been one of the most powerful bureaucrats in Ottawa, where he served as deputy defence minister and as a senior prime ministerial adviser. He was also Canada’s longest-serving United Nations ambassador. In July, 2008, he took an unannounced assignment as a special UN envoy to mediate between the Niger government and a rebel movement. Mr. Guay, his aide in the Niger mission, is a former Canadian ambassador to Gabon.

Speaking in detail for the first time about the circumstances that led to the diplomats’ release, Mali officials said they felt under heavy pressure to find ways to resolve the hostage situation, to the point they were worried that Canada might withdraw aid if the hostages were not freed.

Canada’s aid to Mali has increased sharply in recent years, from about $20-million in 2002 to more than $100-million last year. Mali is now one of the five biggest recipients of Canadian aid, and it is one of the few African countries to remain on Ottawa’s trimmed-down priority list for foreign aid this year.

Mohamed Ag Mahmoud, director of the Northern Mali Development Agency in the Mali government, said the four prisoners were released because Canada is a “big partner” of the country and needed to be kept happy. The prisoners who were involved in bomb-making were “very dangerous” but “not very well-known,” he said in an interview.

“Maybe releasing … prisoners won’t make such a big difference,” he said. “Sometimes, with an enemy, a prisoner exchange takes place.”

Shortly after the two Canadians were freed on April 21, Algerian news reports suggested that terrorist prisoners were released in exchange for the hostages. A statement by al-Qaeda claimed that four of its fighters were freed from prison as part of the hostage deal. But until now, the prisoner swap has never been confirmed by government officials.

The deal paved the way for the release of Mr. Fowler and Mr. Guay, as well as two European tourists who had been kidnapped by the same terrorist group in January. A third tourist was later released, while the fourth tourist – a British man – was killed by the kidnappers in May.

Sources say that the British government complained to Canada about its willingness to let Mali negotiate with the kidnappers, arguing that Ottawa had “betrayed international convention.”

The informal complaint, which was made below prime ministerial level, came after Mr. Fowler’s release and before the death of the British hostage, Edwin Dyer. It was a terse criticism. “The job of releasing Mr. Dyer was made more difficult,” said a source. “There was considerable anger.”

The hostage takers had demanded the British government release Abu Qatada, a Jordanian being held in jail in Britain. London refused, and Mr. Dyer was killed.

While Prime Minister Stephen Harper has denied that his government made any concessions, he would not discuss whether other governments might have offered considerations to the kidnappers on behalf of Canada.

“The government of Canada does not pay ransom or money, the government of Canada does not release prisoners,” he told a news conference in April after the release of the two Canadian hostages. “What efforts or initiatives may have been undertaken by other governments are questions you’ll have to put to those governments.”

Soumeylou Boubèye Maiga, a former Malian defence minister and former head of its secret services, said two of the prisoners who were exchanged for the Canadians included a bomb-maker and an expert in logistics and military tactics for AQIM. They were handed over to AQIM in the far north of the country, near the Algerian border, while a third prisoner was released near the border of Mauritania, he said.

Mr. Maiga confirmed that cash was given to the kidnappers. “The problem is that the ransom gives financial resources to al-Qaeda, allowing them to acquire more equipment and more capacity to engage in terrorism,” he said.

A hostage negotiator, a key figure in the final deal, said the three released prisoners were Mauritanian members of AQIM, which has members from across West Africa and North Africa.

The negotiator said he was recruited by Mali President Amadou Toumani Toure. “The president was almost crying. He really wanted to find a solution. He liberated the prisoners to please Canada.”

Another northern Mali leader, a member of parliament, said he is certain that the government released al-Qaeda prisoners in exchange for the Canadian hostages. He said the prisoner release triggered a bitter reaction from Mali’s northern neighbour, Algeria, which has been fighting the same terrorist group for years.

“The Algerians were angry,” he said. “The Algerians have openly said to me that they were upset about this.”

And Mr. Fowler himself has acknowledged that concessions were given to his captors in exchange for his release.

“I mean, they got something. I don’t know from whom or how,” Mr. Fowler told CBC television in an interview last month.


July 2008: Robert Fowler is appointed special UN envoy to Niger, with a mandate to explore ways to bring peace to the country. It is a hush-hush mission; not even the UN Security Council is informed.

Fall: He holds several meetings with government leaders and civil-society groups in Niamey, Niger’s capital, and meets some of the country’s rebel leaders in Europe.

Dec. 14: Mr. Fowler and his aide, Louis Guay, along with their driver, are taken at gunpoint while driving on a main road about 40 kilometres northwest of Naimey.

Feb. 4, 2009: UN spokesman Farhan Haq says the United Nations is working on the belief that its missing Canadian diplomats are still alive, but it has had no contact from anyone claiming to have abducted them.

Feb. 7: Malian sources claim to have seen a video showing Mr. Fowler and Mr. Guay alive. “It is Robert Fowler who appears first before the camera,” the source says. “Behind him there are armed men. Mr. Fowler asks for a response to the demands of his kidnappers, but doesn’t provide any more details.” The description is reminiscent of al-Qaeda tapes.

Feb. 18: Al-Qaeda’s North African branch claims it is holding two missing Canadian diplomats hostage. The statement’s authenticity can not be independently verified, but it is confirmed by the SITE intelligence group, a U.S.-based organization that monitors militant messages. AQMI, an Algeria-based militant group that joined Osama bin Laden’s terrorist network in 2006, conducts dozens of bombings or ambushes each month.

April 22: It is announced that the two diplomats have been freed by Islamic militants claiming ties to al-Qaeda. Prime Minister Stephen Harper says Ottawa paid no ransom and exchanged no prisoners for their release.

Sept. 7: Mr. Fowler says in an interview with the CBC that he believes someone in the government of Niger or possibly with the UN betrayed him to al-Qaeda.

Geoffrey York, Globe and Mail


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Slush fund

The Canadian Arctic

Canada’s armed forces wave the flag up north


EVERY summer Canada’s armed forces conduct military exercises in the Arctic, allowing them to test their abilities far from southern supply centres. This year they have chosen Iqaluit, the capital of the territory of Nunavut, as the jumping off point for what they are calling Operation Nanook.

Members of the national and international media have been invited to observe this show of Canadian fighting prowess. Some 700 soldiers, sailors and airmen will search for a downed aircraft, hunt a submarine and deal with a mock explosion at the tank farm that supplies all of Iqualuit’s fuel.

True North

Ostensibly, we’re here to witness Canada asserting its control of the Arctic, which is attracting increased military and commercial interest due to the melting polar ice cap. But a political motive lurks behind the PR: Stephen Harper, the Conservative prime minister of a minority government, may well be facing an election in the autumn. He has made the Arctic one of his signature issues, and will drop by for grips and grins.

We are told to be at Apex Beach, a five-minute drive from central Iqaluit, at 5:30am to witness the first part of the exercise. Around 140 soldiers and their guides, known as Canadian Rangers, will land from the frigate HMCS Toronto and icebreaker CCGS Pierre Radisson. Midway through the two-month arctic summer, the waters of Frobisher Bay are glass-smooth and ice-free.

Although the sun has already been up for an hour, the weather is cool, more like a crisp autumn day than a midsummer morning. The military has thoughtfully provided a tent stocked with coffee and muffins for the journalists. Those who forgot their hats and gloves shelter there as the first of the Zodiac boats zip across the calm waters to the beach. Aside from the Sea King helicopter circling overhead, there is little drama in the landing. The soldiers, clad in green camouflage, calmly disembark and march off in groups of four to assemble at the top of a rocky hill.

Lorne Carruth, a naval commander, observes from the beach, and seems slightly chagrined that calm air and seas made the landing look easy. Still, he says the point was to see whether the army, navy, air force and rangers could work together well in a remote location. Apparently they can. This is not an assault exercise, he adds unnecessarily; the soldiers are meant to find an unmanned aerial drone that has hypothetically crashed nearby.

This is where the Canadian Rangers, in their distinctive red sweatshirts and caps, come into their own. Reservists from northern communities, they make up the bulk of Canada’s permanent military presence in the Arctic. In winter, they patrol on snowmobiles. On summer exercises like Operation Nanook they act as wilderness guides for the troops from the south. “We help the soldiers fit in with the communities,” says Tom Buzzell, a ranger from Haines Junction in the Yukon territory. “And we watch out for bears.” In the Yukon, grizzlies and black bears are the threat. Here on rocky and treeless Baffin Island, it’s polar bears.

Rangers reflect the communities they are drawn from, says Mr Buzzell. In the western Arctic, where he is from, they are a mix of white, Indian, Métis and Inuit. In Nunavut, where Inuit make up 85% of the territory’s population, they are mainly Inuit. In any exercise on land, the regular forces would be lost without the Rangers’ survival skills, as would the numerous expeditions from all over the world that set out each year for the North Pole.

The Inuit are usually too polite to make a point of this. But a video I picked up in Iqaluit called “Quallunat: Why white people are funny” provides a rare glimpse of how Inuit view hapless southerners. The scene in which an Inuit on a snowmobile rescues two so-called explorers, equipped with the latest gear but little sense, makes for funny, if uncomfortable viewing.

There’s no prospect of snow today; the temperature has been climbing steadily. Two hours after the landing began, it’s warm enough for T-shirts. The soldiers tramp across the uneven tundra, headed for the Road to Nowhere, which, not surprisingly, peters out in the wilderness. They will spend the next couple of days out on the land.

Fortunately, we do not have to join them. The military bundles the assembled journalists into a school bus that will take us to a rocky spit where we will board the Zodiacs. We head across Frobisher Bay to the frigate HMCS Toronto and the maritime part of the exercise.


A BLAST of the bosun’s whistle at 7am starts the day on the HMCS Toronto. Footsteps echo through the metal hull as the day watch makes their way to breakfast. We journalists lag behind. It is not easy to climb out of the bunks (or racks, in navy slang) stacked three high in areas kept permanently dark because someone is always sleeping. It was even harder to get into our racks the night before, as there were no ladders and no obvious way to get up to the middle or top racks.

Yesterday we were warned that we might have to climb a rope ladder to board the frigate from the Zodiacs. This threat was withdrawn and a set of steep metal steps with handrails was provided. Perhaps they took pity on the sedentary hacks that normally spend their days staring at computer screens. More likely, it was because the Canadian prime minister, the defence minister, and the top military brass are joining us.

While having the leaders assembled in one place appears risky—one well-aimed torpedo from an enemy submarine could cripple the Canadian government and wipe out its military command—we are assured that there is no conventional military threat in the Canadian arctic.

Three Canadians get into a boat…

This raises the question of who exactly the military is training to fight in the far north. When we buttonhole the defence minister and the head of the Canadian Forces on this question they talk vaguely of increased “activity” due to the melting ice cap and the need to project Canadian sovereignty. They will not be drawn on whether they have the Russians in mind. Two Russian submarines were detected in international waters off the east coast of Canada the week before and Russia’s fleet of arctic icebreakers puts those of Canada and the United States to shame.

We are given free rein on the ship, told only not to push any buttons and to walk backwards down the ladder-like steps between decks. We can ask anyone anything; they will answer unless it is deemed a matter of top security. This makes a pleasant change from dealing with bureaucrats in Ottawa who have been muzzled by Stephen Harper, the Canadian prime minister. He has a reputation for being a control freak. When he arrives I can see how he earned it.

The captains of the frigate, submarine and icebreaker are instructed to align their vessels so that journalists can get a photo of the prime minister, his defence minister, and the captain of the frigate with the assembled maritime might in the background and a trio of CF-18 fighter jets roaring by overhead.

The sailors bear it all with good humour and are endlessly accommodating. When the prime minister’s staff made it known that he wanted to address the crew from behind a podium, they built one overnight and even had it painted and decorated in time for his arrival. They redirect journalists lost in the bowels of the ship and answer what must seem to them stupid questions. The only time that conversation seems subdued is during meals in the mess, when the sailors were distracted by the multiple televisions showing “Gran Torino”. Or perhaps they were just hungry.

Life on board revolves around food. Thursdays, for instance, is steak night: most of the crew like it, and the tradition reminds them what day it is. Alex Grant, the frigate’s captain, notes two essential pantry items: coffee and ketchup, otherwise known as “navy gravy”. I question André Savard, the logistics officer in charge of food stores, who confirms he has more than enough of both to make it through the current cruise. Fresh muffins and cookies are available in quantity in the mess. The exercise machines tucked into nooks and crannies throughout the ship begin to make sense.


HAVING come off the boat with one more day in Iqaliut, I decide to interview a stone carver. Inuit art is a niche product (supposedly Jacques Chirac is a fan), but it has been receiving more attention since organisers of the 2010 Vancouver Winter Olympics picked as the games’ symbol the inukshuk—rocks piled in the shape of a man that the Inuit use as signposts. Carvers from across the north are busy turning out small inuksuit (the plural of inukshuk) that will be packaged with the Olympic logo.

Still, finding an artist to interview turns out to be surprisingly difficult. Few have phone numbers; many have no fixed address. In frustration, I phone a woman who knows the local art scene. “When I want to find a carver,” she says, “I either go to the lobby of the Frobisher Inn or I go to the Baffin Correctional Centre.” The prison, she explains, has a programme that allows experienced carvers to keep working and novices to learn the craft. So off I go to the local prison.

Colin Kilabuk, a jolly man who tells me he loves his job running the carving programme, meets me at a shed outside the fences topped with barbed wire that surround the main correctional centre. He only accepts sentenced prisoners, not those on remand, he says, and they must complete a course relevant to their crime before they are allowed to carve. If imprisoned for wife beating, for instance, they take an anger management course. If their crime was alcohol related, they must join Alcoholics Anonymous. All this is dealt with by the prison administration, he says; he prefers not to know what the carvers are in for.

He takes me across to a work area where Rocky Aula, a 26-year-old from Iqaluit, is perched on a block of wood, surrounded by chips of stone, filing a soapstone neck pendant in the shape of a whale’s tail. On the table in front of him lies an almost finished inukshuk about six inches high. Mr Aula tells me that he used to sell the work of other carvers in restaurants before he started carving himself. A novice, he does not expect to be a full-time carver when he gets out, he says. When I ask what he plans to do, he smiles. “I don’t know yet, but I’ve got a lot of time to think about it.”

Each Friday, Mr Kilabuk holds a carving sale at the prison. The inmates set the prices for their work, but if they are too high or too low, they are advised to adjust them. The prison keeps 20% of the money for the carving programme. The inmates keep the rest and use the funds as they choose. Some buy more soapstone for C$2.75 ($2.54) per pound. “I know one carver who bought his father a boat when he got out,” says Mr Kilabuk. Mr Aula thinks his inukshuk will fetch C$75.

bearWhile we’ve been talking, another of the carvers has been standing in the background. He had told Mr Kilabuk he was too shy to talk to a journalist, but now he has changed his mind. He is Alariaq Shaa (pictured), and he comes from Cape Dorset, an artists’ colony a short plane ride from Iqaluit (there are no roads between any of the communities on Baffin Island, so all travel is done by air or by sea). Mr Shaa is 31 years old, and he has been carving for 16 years, honing a skill that was passed down to him by his father, grandfather and uncles, all renowned artists. He is almost finished a polar bear (his favourite subject) for the sale that afternoon. It needs smoothing and polishing, but even in its rough state, the carving strikingly conveys the muscular form of the polar bear. Mr Shaa says he will likely get C$500 for the carving. Mr Kilabuk concurs. He says people seem to know when master carvers are at the prison. Art dealers and galleries call to see what pieces are likely to come up for sale.

I would love to buy Mr Shaa’s polar bear, but I leave the prison empty-handed. Sadly, a correspondent’s salary doesn’t stretch to luxuries like original Inuit works of art.


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Schreiber extradited to Germany

DEU Kanada Schreiber

On July 28, 2009 file, German-Canadian businessman Karlheinz Schreiber watches the proceedings during the final day of the Oliphant Commission at the University of Ottawa in Ottawa, Canada.

Karlheinz Schreiber was whisked onto an overnight flight by RCMP officers Sunday night after an Ontario Superior Court Judge dismissed his last-gasp court challenge to delay his extradition to Germany.

At about 7:45 p.m., about three hours after the 75-year-old lobbyist turned himself in at a Toronto area jail, he called his wife from a cellphone belonging to one of the Mounties.

“He couldn’t speak long. He only said to me he is on the plane and I should be not worried,” his wife, Barbel Schreiber, said Sunday night.

The red-eye flight back to his native country came only a few hours after he lost an emergency application for a court injunction Sunday to block his extradition.

The weekend hearing in the near-empty Toronto courthouse was negotiated by Mr. Schreiber’s legal team after the federal justice department told the German-Canadian at 5 p.m. on Friday that he had 48 hours to surrender to the authorities.

At the emergency hearing, Mr. Greenspan accused the federal government of using underhanded tactics – exploiting the holiday weekend to ensure that no courts would be open to accept another one of Mr. Schreiber’s frequent court challenges before he was on the tarmac.

Madame Justice Barbara Conway, however, sided with the federal government, ruling that Mr. Schreiber has not met the basic tests that are required for such an injunction.

“Mr. Schreiber has travelled a long road in fighting his extradition to Germany. He is now at the end of that road,” Judge Conway said Sunday.

After the hearing, Mr. Greenspan said he was confident that Mr. Schreiber had bought himself a little more time with one final move. When Mr. Schreiber walked into the Toronto West Detention Centre – just a few blocks from Pearson airport – the first thing he did was serve the director of the jail with an application for a judicial review of the Justice Minister’s latest decision to not overturn his extradition, Mr. Greenspan said. Under a provision of the Criminal Appeal Rules, inmates can serve jail officials with applications, Mr. Greenspan said.

“It acts as a stay before he can be extradited,” Mr. Greenspan said, a few hours before his client was shepherded onto the airplane. Playing on Judge Conway’s road metaphor, the veteran criminal defence lawyer added: “He’s at the end of the paved road. Now he’s on the dirt road.”

Mr. Schreiber was somewhat defiant when he spoke briefly with reporters as he approached the jail Sunday afternoon. “I don’t think it’s my last chance,” he said of the judge’s decision.

It’s been almost a decade since Mr. Schreiber was arrested at a Toronto hotel at the request of Germany, where he ignited a scandal that ruined political careers and sent others to jail. The professional middleman, who has brokered deals for tanks, helicopters and airplanes around the world – Saudi Arabia, Thailand, Canada – dominated headlines and newscasts in the German media in the 1990s when it was revealed that he made payments, sometimes in cash, to high-profile German political figures. Former German junior defence minister, Ludwig-Holger Pfahls, fled the country over payments he accepted from Mr. Schreiber, but was arrested in Paris and later convicted. When it emerged that Mr. Schreiber handed a briefcase containing more than one million deutschmarks to the treasurer of former Chancellor Helmut Kohl’s party, it exposed secret slush funds designated for the ruling Christian Democratic Union.

The last time Mr. Schreiber was behind the brick walls of the Toronto area jail, he resurrected one of the most complex scandals in recent Canadian political history – the Airbus affair – and extended his stay in his adopted country.

Shortly after he surrendered to the jail in 2007, he filed an affidavit in court that detailed the cash payments he made to former prime minister Brian Mulroney as well as a little-known hotel meeting between the two men in Zurich in 1998.

The day after he filed the affidavit, Prime Minister Stephen Harper announced that he was assigning an independent, investigator to review the allegations. That review led to the recently wrapped up Oliphant inquiry into the cash that Mr. Schreiber gave to Mr. Mulroney, but not the deal that earned Mr. Schreiber most of his riches – the 1988 purchase of $1.8-billion in Airbus planes by then-Crown corporation Air Canada.

During his brief, rambling interview outside the courthouse, Mr. Schreiber complained about the inquiry’s exclusion of anything related to the Airbus sale. “The elephant is still in the room,” he said, adding that the Oliphant inquiry looked at only “a small piece.”

Mr. Justice Jeffrey Oliphant, who chaired the inquiry, has until Dec. 31 to issue his report.

Standing outside Toronto’s main criminal courthouse after the judge issued her verdict, Mr. Greenspan reflected on his long ride with Mr. Schreiber.

He looked back at the courthouse, and explained that it was at 361 University Avenue where he first met the boisterous and aggressive deal maker at his first bail hearing.

“Politicians who spent time with him over the years are proof positive that he was not a difficult person to be with. He was entertaining, funny, intelligent,” the defence lawyer said.

“Whatever else there was that went on between him and some of the politicians, the fact of the matter is that he had access to the corridors of power that I don’t have.”

The justice department painted a much different picture in its submission in court, however, underscoring Mr. Schreiber’s manipulation of the court to stay in Canada.

Mr. Kramer said the German-Canadian has made 11 submissions to the minister of justice, five applications for judicial review at the Ontario Court of Appeal, and sought leave to the Supreme Court on four occasions – all of which have been denied but had the effect of extending his stay.

“If Mr. Schreiber has lacked anything in his extradition, it is not access to procedural fairness,” Mr. Kramer said.


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Figure in CDU Party Donations Scandal Returns to Germany

Canadian officials have deported former German industry lobbyist Karlheinz Schreiber, who sought to evade prosecutors in Germany for a decade. He was at the center of one of Germany’s biggest postwar political scandals and will likely face trial on multiple charges.

The plane from Toronto arrived in Munich at 9:22 a.m. on Monday. Two police vans and three unmarked vehicles awaited the arrival. Their quarry: Karlheinz Schreiber, the infamous 75-year-old former arms lobbyist with dual Canadian-German citizenship, who had been at the center of Germany’s biggest postwar political scandal.

After the other passengers had disembarked, police escorted Schreiber to one of the waiting cars. He was taken straight to Augsburg, Bavaria, where a cell measuring nine square meters awaits the businessman who had allegedly made millions acting as a go-between for industry giants and top politicians in both Germany and Canada.

Proceedings against Schreiber, who had exhausted every legal option to escape extradition to his homeland, will begin either later on Monday or first thing on Tuesday. Schreiber is wanted for tax evasion, bribery and fraud. According to the Augsburg prosecutor’s office, Schreiber made around €15 million after he did work on behalf of German industrial giant Thyssen Krupp AG in several arms projects.

A Million Deutsche Marks In The Carpark

The accusations against the businessman also have a hefty political dimension. Schreiber was a key figure in the Christian Democratic Union (CDU) donations scandal that rocked Germany’s parliament in the 1990s, cost Wolfgang Schäuble, then the chairman of the party, his job and disgraced former Chancellor Helmut Kohl, who lost his position as honorary party chairman.Allegations that Schreiber had donated cash to Walther Leisler Kiep, the former treasurer of the CDU, started a scandal that only got worse when Kohl, who was in power from 1982 to 1998, admitted that he had accepted off-the-books — and therefore, illegal — donations from supporters.

From the mid-80s through to 1995, Schreiber is accused of transferring money to various German and Canadian businessmen and politicians using a network of Swiss bank accounts. He is alleged to have handed a donation of one million deutsche marks to Kiep in a supermarket parking lot on August 26, 1991. The donation allegedly came in the form of thousand mark banknotes stuffed into a suitcase. Former defense ministy official Holger Pfahls also received 3.8 million marks for his help in securing a Saudi Arabian deal involving armored vehicles. When the scandal broke, Pfahls fled, but he was eventually arrested in Paris and convicted.

A Temporary Safe Haven in Canada

Schreiber fled to Canada in 1999, and prosecutors in Germany have attempted to extradite him since August of that year. In the ensuing decade, Schreiber used every legal weapon to remain in Canada.

But on Friday evening, Canadian television channel CTV reported, representatives from Canada’s justice department paid a surprise visit to Schreiber and told him that he would be taken into custody within 48 hours, pending deportation to Germany. Schreiber then applied for an emergency hearing during the weekend, in order to obtain an injunction.

Justice Department lawyer Richard Kramer told the Toronto-based daily Globe and Mail that Schreiber had already exhausted all remaining opportunities to appeal his deportation. “If Mr. Schreiber has lacked anything in his extradition, it is not access to procedural fairness,” Kramer said, according to the newspaper.

In ruling against him this time, Ontario Superior Court Justice Barbara Ann Conway told news agencies Schreiber “has travelled a long road in fighting his extradition to Germany. He is now at the end of that road.”

Schreiber: Politics Will Prejudice Any Trial

Upon reaching the jail on Sunday evening, Schreiber held a hurried, impromptu press conference with waiting reporters. He told them that he believed the decision to extradite him now was a political one. He has said as much previously in a letter to Canadian Prime Minister Stephen Harper, which was also sent to German Chancellor Angela Merkel, a member of the CDU and Kohl’s former protege, and to German newspaper Der Tagesspiegel. In the letter he said he feared he would not receive a fair trial in Germany due to political prejudice against him.

“We have an election coming up in Germany in September,” he told gathered reporters on Sunday night. “The Social Democrats won three elections with my case in the past. Now you can read about it in the paper. If I would come now that would be the greatest thing. It would start a huge circus and investigation and Chancellor Kohl and everybody would be there. And with that they would think they could win the next election.”

However, Canadian Justice Minister Rob Nicholson noted that the extradition was based on an order issued against Schreiber on Oct. 31, 2004 by Nicholson’s predecessor, Irwin Cotler. Last Thursday, his department had received a fax in which German Justice Minister Brigitte Zypries — a member of the CDU’s government coalition partner, the Social Democrats (SPD) — urged that he consent to German extradition requests so that “the proceedings against Schreiber can finally be carried out.”

There have been other reasons for Schreiber’s ongoing stay in Canada. The former lobbyist has also been part of a Canadian political scandal. Schreiber claims that the former Canadian Prime Minister Brian Mulroney accepted money from him — 225,000 Canadian dollars – in exchange for promoting a light armoured vehicle factory on behalf of Thyssen Krupp. Mulroney says the deal was struck after he left office, but Schreiber says it happened while Mulroney was still in power — which would breach Canadian rules about ethics.

A Prisoner Just Like Any Other

There has been an official commission of enquiry into the matter and Nicholson had agreed to a stay of extradition in 2007 so Schreiber could testify before the public inquiry. Schreiber had said he would not cooperate with the enquiry unless he was allowed to stay, and Bavarian prosecutors agreed to abide by Canadian decisions in this regard. But the final hearing took place last Tuesday and conclusions will be published by the end of the year. That development left the path clear for a surprise visit from Canadian Justice Department officials on Friday evening.

For the next few days, his home will be a nine square meter cell. “He will be treated the same as any other prisoner awaiting trial,” the head of the Augsburg prison told the German press agency DPA. He can have two half-hour visits a month, he will have a daily hour of exercise in the prison yard. And if he wants a television in his cell, he will have to pay for it himself.

It’s the same sort of cell that the ex-defense secretary Holger Pfahls also had when he was awaiting trail on charges in the corruption scandal, in which Schreiber allegedly played such an integral part.


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On climate change, Ottawa’s still emitting hot air

It’s not an issue the Tories feel passionately about, and given Canada’s track record, silence might be the preferred option

Last, dead last. That’s where Canada stands among the G8 when it comes to climate-change policies.

In fairness, Russia gets a slightly better mark – finishing seventh – in the study by the World Wildlife Federation and the German-based insurance company Allianz only because it gets credit for the emissions that disappeared when the Soviet Union evaporated. So Canada should really rank seventh out of eight. So let’s hear it for Canada: “We’re No. 7”

Canada’s emissions have risen faster than those of any industrialized country since the Kyoto Protocol was ratified. At Kyoto, Canada pledged to reduce emissions by 6 per cent from 1990 levels. Instead, they have increased by 26 per cent.

Germany, Britain and France, by contrast, have met or exceeded their Kyoto-reduction targets, although Japan and Italy have not. (The U.S. did not sign the pact; its emissions have risen slightly less rapidly than Canada’s.) Not surprisingly, Germany, Britain and France rank first, second and third in the WWF/Allianz rankings.

Okay, so that was the past. What about the future? Can Canada rise up the ranks? Not with current policies, although Prime Minister Stephen Harper undoubtedly will assert the contrary when he addresses the issue at this week’s G8 summit in Italy.

Various provinces are taking action. British Columbia has its carbon tax. Quebec has ambitious targets. Manitoba has reduced emissions. Ontario is phasing out, or so it says, coal-fired plants. But Alberta and Saskatchewan remain wedded to “intensity based” reductions, which mean more, not fewer, emissions over time.

And yes, investments are being made: some wisely, some stupidly. Alberta has its $2-billion carbon capture and storage plans, although we’re still waiting to see which projects will be selected. Ottawa has its $1-billion capture and storage budget, plus subsidies for alternative energy projects. Provinces, too, are subsidizing alternative energy.

But the $1.5-billion spent from 2008 to 2017 for corn-based ethanol is a complete waste of money, except as a farm subsidy. The tax credit for public transit is also money down the drain from a climate-change perspective.

The good news is that the Harper government has essentially handed over important parts of Canada’s climate-change policy to the United States; the bad news is that some of the emerging U.S. policy isn’t very useful.

Canada will follow the announced U.S. limits on auto emissions, a step forward, although not as aggressive a step as if the countries had followed California standards. Nonetheless, it is a step. Canada has also said it will create a cap-and-trade system for industrial emitters, although no details have been announced while the country waits to see what the Americans will do.

The House of Representatives narrowly passed a clean energy bill but proposes giving away 85 per cent of the pollution permits, thereby vitiating in the early years the effectiveness of the proposed cap-and-trade system.

If this becomes the U.S. policy – we’ll see what the Senate does, and how the Obama administration reacts – the system will be a weak one. Undoubtedly, the business lobby in Canada will immediately demand a similarly weak system, just as the lobby always insisted, post-Kyoto, that Canada should do nothing unless the United States acted, in case we injured our “competitive position.”

The G8 discussion on climate change will be the last one before the December negotiations in Copenhagen toward a new international emissions reduction treaty. In the talks thus far, Canada has hardly been a leader, demanding consideration for “national circumstances” – that is, our particular characteristics of climate, distance, forest cover and so on.

In fairness, other countries are also moving away from more aggressive action. Japan recently presented watered-down policies, and Australia pushed back its measures by one year. Both came in response to the recession. Even Germany advocated extensive exemptions for its heavy industry in auctioning pollution credits within the European Union Emissions Trading System. The U.S. political system’s ability and willingness to produce anything meaningful remains in doubt.

Climate change is not an issue that Mr. Harper feels passionately about, or at least reckons carries any political advantage. Neither he nor Environment Minister Jim Prentice try to educate or exhort Canadians to take action.

Mind you, given Canada’s track record, silence might be the preferred option.

Jeffrey Simpson, Globe and Mail


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Jeez, Louise: When Did We Annex Canada?

alberta july 9

On a Senate committee’s Web site, our purple mountains’ majesty is illustrated with a beautiful shot from the great state of Alberta. (Screenshot Of The Environment and Public Works Website)

The U.S. Chamber of Commerce alerted us Monday to an interesting photo on the Web site of the Senate Environment and Public Works Committee. Seems, with summer heat bearing down soon on the area, as “readers consider how to escape the heated climate change debate and spend their vacation dollars this summer,” that senators wanted to be sure Americans don’t forget the glories of . . . the Rockies, the Chamber told us by e-mail.

The committee’s home page featured a beckoning photo of a spectacular vista in that mountain range. One problem, though: It was of Lake Louise, which happens to be in the Canadian Rockies.

We called the committee’s majority Democrats to ask about this promotion of foreign travel. But a spokesman referred us to Republican members, saying “they were responsible” for the photo.

And indeed, a committee GOP spokesman said that back on Dec. 22, 2006, with Democrats poised to take over the Senate, “we put together this fantastic new Web site,” and the Republicans were rushing to put it up “before they took over.”

So the outgoing Republicans decided to use some placeholder pictures that a vendor provided. Had they regained control, they most likely would have added pictures of Oklahoma (ranking GOP member Jim Inhofe‘s state) or maybe some oil rigs to the ones being used.

The Democrats changed some of the pictures. It became more California (Chairman Barbara Boxer‘s state), and more polar bears and such were added. But “they haven’t seen fit to take this one down,” the Republican spokesman added.

Wait a minute, a Democratic staffer retorted. “We didn’t vet their selections. We inherited the site.” The Democrats changed a few pictures, that staffer said, but “if they’d wanted to change a picture, they could have said so.” The foreign picture has been taken down, we were told.

But some of those bears looked distinctly Canadian. Did anyone check?

Al Kamen, Washington Post


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Abdelrazik back in Canada after six years in exile in Sudan

abdelrazik june 28

‘I’m very glad to come back home,’ he says in statement. ‘I am proud to be a citizen of this nation.’

Smiling broadly and flashing a peace sign, Abousfian Abdelrazik has been reunited with his son and stepdaughter in Montreal.

After spending the past six years stranded in Sudan, he said it’s great to be home.

Mr. Abdelrazik arrived back in Canada Saturday, landing in Toronto where he was met by cheering supporters at Pearson Airport.

“I’m very glad to come back home,” he said in a brief statement after getting off the airplane. “I am proud to be a citizen of this nation.”

Before continuing on to Montreal, where he arrived around midnight, he thanked supporters for making his homecoming possible.

Mr. Abdelrazik had the same message for the approximately 40 supporters who greeted him in Montreal.

The 47-year old was arrested during a 2003 visit to Sudan to see his ill mother.

He was accused of having ties to terrorists, but was never charged.

Mr. Abdelrazik claims he was tortured before Sudanese authorities eventually released him.

The RCMP investigated and found no evidence linking him to criminal activities.

But it was not until the Federal Court of Canada ordered the Harper government to issue him a passport that he was finally cleared to come home.

He spent his last 14-months in Sudan at the Canadian embassy in Khartoum.

As for the future, Mr. Abdelrazik says he wants to relax with his family, get to know them again, and readjust to life in Canada.

His lawyers will go to court on July 7 to try to get his name removed from the United Nations no-fly list.

Mr. Abdelrazik says CSIS and American FBI officers interrogated him over alleged terrorist links and also claims he was tortured.

Canada says it knew nothing of the alleged abuse.

His lawyer, Yavar Hameed, boarded a flight Wednesday to bring his client home.

A document recently posted on the UN Security Council terrorist blacklist website claims Mr. Abdelrazik has been closely tied to senior al-Qaeda leadership.

It alleges Mr. Abdelrazik has close ties to Osama bin Laden’s former lieutenant, who recruited and ran al-Qaeda’s network of training camps in Afghanistan.

The document further asserts Mr. Abdelrazik trained at a paramilitary camp in Afghanistan with other al-Qaeda operatives, and provided administrative and logistical support to the terrorist network.

“(Abdelrazik) was a member of a cell in Montreal, Canada, whose members met in al-Qaeda’s Khalden training camp in Afghanistan,” it says.

None of the allegations are new. It is already known that Mr. Abdelrazik was added to the UN list in summer 2006 after the United States branded him a supporter of al-Qaeda – the Federal Court found no supporting evidence for this claim.

A UN terror watch listing freezes that person’s assets and forbids anyone inside or outside the country from providing funds to them.

That didn’t stop scores of Canadians from chipping in to buy Mr. Abdelrazik an airline ticket earlier this year.

But his passport had expired and he could not leave Sudan without one.

In April, Foreign Affairs Minister Lawrence Cannon reneged on a promise to issue Mr. Abdelrazik an emergency passport if he could get a plane ticket.

Federal Court Justice Russel Zinn ruled that the government violated Mr. Abdelrazik’s Charter right to enter Canada by failing to justify its decision to deny him a temporary travel document.


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In a class of his own

Abdelrazik is unique among Canadians imprisoned abroad in known torture states

When Abousfian Abdelrazik returns home from Sudan, as expected today, the question will be whether the suspected terrorist was tortured, and if so, whether Canada connived at his torture.

Mr. Abdelrazik may or may not have terrorist affiliations. In any case, Canada was wrong to have in effect sentenced this citizen, without trial, to permanent exile. (It let him set up camp in the lobby of its Khartoum embassy for 14 months, one of the many strange features of this story.) If authorities in Canada believe Mr. Abdelrazik is guilty of a crime, they can charge him when he returns. Canada has an anti-terrorism law that has been used to convict terrorists.

Even to say “suspected terrorist” is to reinforce the power of the state to accuse someone on the basis of an untested suspicion. Mr. Abdelrazik is a Sudanese-born 47-year-old who knew Ahmed Ressam, the convicted Millennium bomber, in Montreal; he testified for the prosecution at Mr. Ressam’s trial. Having obtained refugee status in Canada, Mr. Abdelrazik raised legitimate questions about himself by returning to Sudan, ostensibly to visit his ailing mother and to get away from what he said was hounding by Canadian security authorities. The United States says he was an associate of the senior al-Qaeda terrorist Abu Zubaydah. It seems likely that this information emerged under torture techniques used on Mr. Zubaydah; it may not be reliable. He is on the UN’s terrorist watch list, probably at the request of the U.S. The RCMP and the Canadian Security Intelligence Service say they have nothing substantive on him.

Terrorist or not, he is in a class of his own among Canadian citizens known to have been imprisoned abroad in known torture states. Canada, through CSIS, probably asked for him to be arrested, according to the Federal Court. In four other high-profile cases, including Maher Arar’s, there is no evidence that Canada sought the jailing of its citizens. If Mr. Abdelrazik is a terrorist, it would not justify Canada’s connivance in torture.

Was he tortured? He maintains he was beaten with a rubber hose, made to stand at attention hours at a time and confined in a freezing cold cell. Twice, he was chained to a doorframe and beaten, he says. Canada says if it happened, it didn’t know about it. Mr. Arar and the other three Arab-Canadians detained abroad were tortured, two federal inquiries found.

“For the terrorist, the end justifies the means. A democracy, however, must justify the means to any end,” says former Supreme Court justice Frank Iacobucci. Can Canada justify its means in having Mr. Abdelrazik arrested in Sudan?

Editorial, Globe and Mail


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How many more Abdelraziks?

Recently, it seems like every new day has brought new revelations about the depth of involvement of Canadian government agencies, past and present, in the torture of Canadian citizens. Despite the clear conclusions of Mr. Justice Dennis O’Connor’s inquiry and the findings of former Supreme Court judge Frank Iacobucci’s inquiry, the unique stamp of Canadian involvement in the torture of its citizens is actually growing.

An inquiry into the case of Abousfian Abdelrazik, which now seems inevitable, will certainly shed more light about the widely used practice of “obtain information by proxy.” But Canadians need not wait for a full-blown inquiry to learn the facts in this case: A glimpse into the heart of a possible inquiry can already be gleaned from a recent federal court order ruling that the Canadian Security Intelligence Service was, at the very least, complicit in Mr. Abdelrazik’s initial detention. We can add to that all the rest of what we have learned recently from extensive investigative journalistic reporting, which has mostly quoted official Canadian government documents.

What is particularly puzzling is how CSIS keeps repeating its hopeful mantra that it was never complicit in any of these cases. What the agency may not realize is that, regardless of how often or loudly it denies the obvious, Canadians have learned enough from two federal inquiries and the work of reporters to draw their own conclusions. CSIS should be more worried about its credibility, and be open and forthcoming about the facts of this most recent matter. This is the only path that will allow it to restore its credibility, and the most direct route to providing Canadians with the truth.

Canadians deserve to know why so many of this country’s citizens, all of Muslim background, have been imprisoned and tortured abroad. Human-rights organizations, activists and national-security experts have been calling for the current government to establish the credible oversight agency that was recommended by Judge O’Connor several years ago. Their calls have landed on deaf ears.

How many more victims will it take before our government realizes that it needs to act? If the government had established this agency, Mr. Abdelrazik could launch a complaint upon his return. The time required for him to get answers and justice would be much shorter. For taxpayers, it would be a much cheaper alternative than a full-blown federal inquiry.

Most importantly, Canadians would have a reason to trust that their security agencies are being properly held to a higher standard.

In the meantime, even before another inquiry is called, agencies that have played any role in the ordeals of Canadians detained and tortured abroad should be truthful in their statements and not defensive in their rhetoric. They should apologize to the victims of overzealous national security practices. Moreover, they need to take actions assuring Canadians that this will never happen again. It is that simple.

Maher Arar


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How Canada Does Banking

Prime Minister Stephen Harper is among many Canadians these days who are boasting about the strength of the country’s banking system.

During the credit crisis, no Canadian banks failed, and none required government capital infusions. And last week when Canada’s major banks issued their quarterly statements, all but one were profitable. Even that exception, a second-quarter loss of 50 million Canadian dollars (on 6.8 billion Canadian dollars in revenue) at the Royal Bank of Canada, was largely related to a write-down in the value of its American operations.

Mr. Harper, a Conservative who generally favors limiting government influence in markets, credits Canada’s regulatory system for the banks’ good fortune and suggests that it should be a model for the world.

He’s not alone. Julie Dickson, the superintendent of financial institutions, has gone from being an obscure bureaucrat to something of a minor celebrity. A recent cover story in The Report on Business Magazine, which is published by The Globe and Mail newspaper, said she was “integral to the policy that is being credited with keeping the nation afloat during a financial storm that saw banks just about everywhere else in the world pushed to the brink because they had taken on too much leverage and excessive risk.”

Canada’s regulatory system, of course, is not perfect. And Mr. Harper’s enthusiasm aside, the health of its banking industry may have more to do with its structure than its watchdog.

Ms. Dickson’s office is known to be risk-averse. When the market for Canadian structured debt products collapsed because the banks, apparently at the suggestion of the regulator, declined to support it, Ms. Dickson rejected criticism from investors.

“Our primary job is to protect the interests of depositors,” she said at a news conference.

Her office also requires Canadian banks to maintain relatively large capital holdings. Brenda Lum, the managing director for Canadian financial institutions at DBRS, a debt rating agency in Toronto, said that Canadian banks have an average  Gier 1 capital level of 10.8 percent. By comparison, even after substantial recent growth, the comparable figure for American banks is 8.4 percent.

Helping Ms. Dickson with her job were other government policies that ensured that subprime mortgages accounted for only a tiny portion of Canada’s housing market. And because Canadian tax rules never allowed mortgage interest deductibility, home purchases in Canada are not effectively subsidized by the government.

But looming above all of those factors is the scope and market power of Canadian banks within their home market. While many foreign banks have subsidiaries in Canada, Ms. Lum estimates that Canadian banks hold 80 to 85 percent of their home market. Most of that business, in turn, is concentrated in the five largest banks.

The big five are also one-stop shopping banks offering everything from retail services (a particularly profitable line of work) to investment banking through networks of branches and offices spanning the country. On top of that, government rules prohibit anyone or any company from owning more than 20 percent of a Canadian bank, effectively making it impossible for foreign competitors to enter the market through an acquisition.

All that makes for what Ms. Lum described as “an orderly market.”

While such order may seem desirable compared with the current alternative in the United States, it is not without significant side effects.

A report by the International Monetary Fund last year found that the resulting lack of competition makes life difficult for small borrowers.

“A range of analysts and business representatives have argued that the major banks, comfortable in their entrenched positions, have little incentive to venture into areas where borrowers are small, the cost of ascertaining creditworthiness may be higher and returns are more uncertain,” the I.M.F. paper said.

Catherine S. Swift, a former government and bank economist who is now the chairwoman and chief executive of the Canadian Federation of Independent Business, a lobbying group, criticized the banks for “going around and beating their chests right now.”

“While the United States has what we economists refer to as destructive competition, in Canada we have the opposite: ultraconservative financial institutions,” she said. “What we’d like to see is some true competition in the Canadian market.”

Being a central banker, Mark Carney, the governor of the Bank of Canada, is not as blunt as Ms. Swift. In fact, when testifying before the banking committee of Canada’s Senate last month, he didn’t even directly name the country’s bank regulator when speaking about it.

But Mr. Carney did suggest that Canada, and all Western countries, should control banks in a way that considers not just the health of those financial institutions, but the broader needs of the economy: “one of the most important things is that all regulators, in the broadest sense, must take into account the implications of their actions for financial system stability, that is, they must think about the system as a whole as well as their core responsibility.”


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Nobody’s saviour

Julie Dickson has kept our banks stable through one of the worst economic crises in recent history. But please don’t give her the credit.


The most powerful woman in Canadian banking has a corner office on the 23rd floor of a tower in Toronto’s financial district that looks as if it were furnished in one hurried trip to Ikea. To enter it, visitors first pass a large bathroom, then a spare room that lies dormant and dark—both were once part of the original office, but were amputated by her predecessor in a display of frugality. You could be forgiven, upon entering, for briefly mistaking Dickson for a college student, sitting facing the wall in a chair that’s too low, behind a no-frills desk that could have been assembled with an Allen key. There are no pictures of her two sons or her husband, no trinkets, no mess—just a squeeze bottle of Purell, a Porter Air water bottle, and a small black suitcase lying on the floor near the doorway.


Stop, border ahead

New border controls and protectionist bills have dashed Canadians’ hopes that the change of occupant in the White House would mean warmer relations

WHENEVER Canadians grow anxious about heightened security at the United States border—as they are now because of America’s new requirement, from June 1st, for passports or other approved identification to be shown at entry points—their news media invariably invoke the twin towns of Stanstead, Quebec, and Derby Line, Vermont. In these towns, the line that looks so neat on maps is a messy business, running through a factory, a combined library and opera house, and a number of homes. In some cases it lies between the bedroom and a morning cup of tea.

To Canadians, this pleasing informality underscores their special relationship with Americans, with whom they share the world’s closest country-to-country trade ties as well as bonds of kinship. Until September 11th 2001 Americans and Canadians crossing the border often only needed to state their nationality. Even after the attacks a wide range of informal identification documents was accepted.

Such laxity is an anomaly to Janet Napolitano, President Barack Obama’s homeland-security secretary, who wants controls along the United States’ northern border to be brought closer in line with those on the frontier with Mexico. Speaking to reporters before a two-day visit to Canada, on May 26th and 27th, Ms Napolitano said she wanted to “change the culture” along the 8,900km (5,500-mile) line to make it clear that “this is a real border.”

Her words are a clear sign that the Obama administration will not only uphold but enhance measures introduced since 2001, despite complaints from both sides of the border that they impede movements of all sorts, particularly trade in goods that was worth $1.6 billion a day in 2008. Ms Napolitano tried to assuage Canadian concerns during her visit, talking of the need to help trade, jobs and growth. But her department’s plans to install heat-detecting sensors along the border, put more surveillance drones in the sky and place additional cameras along the St Clair river in Michigan and the Upper Niagara in New York are taken by some frontier communities as a personal affront.

American officials say the millions of new identity documents they have issued should ensure that there will be no big delays at the border after June 1st. But if their confidence is misplaced, heaping more trouble on Canadian exporters already struggling to cope with the recession, the bilateral relationship is likely to sour.

Some Canadians understand that their southern neighbour has real concerns about security, given the relative openness of its northern border. “We’re not going to go back, no matter how much we want to, to the situation before 9/11,” says Shirley-Ann George, head of policy at the Canadian Chamber of Commerce. “But we can make it better.” The chamber has been working with its American counterpart to propose ways of reducing border delays while maintaining adequate security. These include clearing shipments and people before they get to crossing-points.

Canadians are already worried at signs of rising protectionism in their neighbour’s Democrat-led Congress, in the form of Buy American provisions in the economic-stimulus package and proposals in a new environmental bill to impose trade sanctions on countries with high levels of greenhouse-gas emissions. Their indignation has been heightened by two unfortunate incidents. A contractor at the Camp Pendleton Marine base in California ripped out a section of sewerage pipe because it was Canadian-made; and a Canadian salesman travelling to an equestrian-products trade show was turned back at the Washington state border on the ground that he was “stealing” American jobs.

Tony Clement, Canada’s industry minister, says all this risks provoking a backlash among his countrymen. It has already begun. The industry group representing Canadian manufacturers has identified seven bills with protectionist provisions making their way through Capitol Hill and is calling for Canada to threaten retaliatory action. On May 25th a member of Canada’s left-leaning New Democratic Party introduced a private member’s bill that would require the government to give Canadian companies priority when buying goods or services.

Like many others, Canadians had unrealistic expectations of how much things would change when Barack Obama replaced George Bush. Ms Napolitano’s words both before and during her visit to Canada have put an end to such optimism. For the new occupant of the White House, as for his predecessor, the noisy demands of Capitol Hill will always drown out any whimpers from across the border.

The Economist


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Canadian mapping flights venture into Arctic claimed by Russia: federal officials

chopper may 24

Flights mark a step forward in Canada’s bid to assert sovereignty over areas past the North Pole.

The beaver is starting to push back against the bear in the debate over who controls the top of the world.

Federal officials have confirmed that Canada’s Arctic mapping flights have ventured beyond the North Pole into areas claimed by Russia. The flights are the first step towards building a case that Canada’s Arctic sovereignty could reach past the Pole despite Russia’s determination to extend its own northern footprint.

“We are surveying where appropriate to define the outer limits of Canada’s continental shelf,” Jacob Verhoef, the Natural Resources Canada geophysicist in charge of the project told The Canadian Press in an e-mail.

Canada and Denmark recently completed a series of joint mapping flights from three remote northern airstrips to begin studying the series of undersea mountains and ridges that will determine how the United Nations will divvy up most of the Arctic Ocean.

The flights were originally said to end at the North Pole. But Mr. Verhoef now confirms some of those flights continued past the Pole.

“We are also investigating the possible continuity of the Lomonosov Ridge beyond the North Pole and therefore have collected supporting data beyond the pole on some of the flight lines during the recent survey,” Mr. Verhoef said.

Although Russia hasn’t filed a formal claim for those waters leading up to the North Pole, it has made no secret of its intent to do so.

As well, Russia has undertaken a variety of moves that some call sabre-rattling, from announcing the formation of special Arctic army units to the release of a policy document that warns of the possibility of violence over the North’s resources.

Still, Russia has consistently promised it would abide by the United Nations Law of the Sea process for settling all claims.

A summary of meeting held last February between Canadian and Russian diplomats said the two countries, together with Denmark, are considering making a joint submission to the United Nations.

But the fact Canada hasn’t simply accepted the North Pole as the extent of its claims shows a willingness to play some diplomatic hardball, said Rob Huebert at the Centre for Military and Strategic Studies at the University of Calgary.

“We’re not backing off on this one,” he said. “We’re going to have to wait and see what the Russians do about it.”

Dr. Huebert adds that neither country must submit claims to the UN until 2013, so there’s plenty of time to come to an agreement. Still, he suggests the aerial mapping means Canada intends to bargain from a position of strength.

“The government is acting on its promise not to be intimidated.”

Mr. Verhoef cautions that the aerial mapping is only the start of assembling a claim.

“The next step is to analyze that [aerial] information and then decide what, if anything, we should do in terms of collecting primary data [ie: bathymetry and seismic] in that region,” he wrote.

Aerial mapping, which “reads” the seafloor by measuring minute changes in the Earth’s gravitational field, must be backed up by extensive actual measurements. To that end, two miniature submarines are slated to be deployed under the ice by spring 2010.

Although much is made of U.S. Geological Survey estimates that the equivalent of 412 billion barrels of oil lie undiscovered beneath the sea ice, jurisdiction over the pole is unlikely to bring a huge resource bonanza.

Most of those hydrocarbons lie just off the coast of Russia. Most of the rest lies on or near continental shelves, which are largely within existing jurisdictions.


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G.M. Reaches Deal With Canadian Workers

The Canadian Auto Workers union said on Friday that it had reached a second cost-cutting agreement with General Motors of Canada, even as bondholders for the parent company stood firm in their decision to reject an offer to convert their debt into G.M. stock.

The automaker and the Canadian union had agreed to several concessions in March. But the governments of Canada and Ontario subsequently said they would not provide financial assistance to G.M.’s Canadian unit without additional concessions from labor, forcing another round of talks.

The union’s president, Ken Lewenza, was vague Friday about the exact amount of savings under the second contract. He said, however, that the pact matches the labor costs at the Canadian operations of Honda and Toyota. That was the target for the governments, which estimate the Japanese companies’ costs at 57 Canadian dollars an hour.

Friday’s accord followed one on Thursday in the United States, where the United Automobile Workers union said it had reached a tentative agreement with G.M. on how to finance obligations estimated at $20 billion for retiree health care.

While G.M., which is subsisting on $15.4 billion in government loans, has made progress with its union, its bondholders threaten to derail its efforts to eliminate $27 billion in debt before June 1, the deadline for meeting President Obama’s mandate for a broad restructuring.

The automaker has offered its bondholders 225 shares for each $1,000 worth of debt, which over all would give them a 10 percent stake in the company.

The company has said it needs 90 percent approval from its bondholders by Tuesday if it is to avoid bankruptcy filing. But the committee of G.M.’s biggest bondholders, which represent 20 percent of the overall debt, said there was no support for the current offer. Bondholders have said that competing creditors, like the U.A.W., have received better treatment.

“It’s been a universal ‘no’ from the get-go,” a spokesman for the committee, Nevin Reilly, said. “Bondholders are being seen as speculative bad guys, but bondholders are investors, many of whom put their retirement money into G.M.”

Other, smaller investors have also protested the offer as unfair.

With their agreement, union members in Canada will give up some tangible benefits, assuming they approve the latest contract, but some of the savings appear to be a matter of redefinition.

Mr. Lewenza told a news conference said that some savings came from the company agreeing to count “the incredible productivity” of G.M.’s Canadian assembly plants when calculating costs. Although he subsequently declined to define that amount.

The 2008 edition of Oliver Wyman’s Harbour Report, an annual productivity study, found that a Canadian assembly plant jointly owned by G.M. and Suzuki used the least amount of labor per vehicle of any factory in North America. Two G.M. plants in Oshawa, Ontario, where the Canadian operation is headquartered, took second and third place.

(While the study included Toyota’s North American plants, Honda did not participate.)

The largest direct cost savings appears to be an agreement by the union to forgo previously negotiated, annual increases in pension rates until September 2015.

The union also agreed to divert a payment of 3,500 Canadian dollars that was originally intended to compensate members for reduced vacation time to the pension fund.

In turn, Mr. Lewenza said that G.M. agreed to fully finance its Canadian pension fund once its restructuring plan is approved and it begins receiving money from the governments in Canada and the United States.

Several years ago, the Ontario government allowed G.M. to break its pension financing rules by underfunding the plan to alleviate the company’s cash shortage.

There has been some public resistance to auto industry aid in Canada, particularly in rural regions where other hard-hit industries, like forestry, have not received similar assistance.

It is not clear if the two Canadian governments have received a guarantee from G.M. to maintain its current share of North American production in Canada, an amount that has been estimated at 15 to 20 percent, in exchange for financial assistance.

Mr. Lewenza said the union was told on Thursday that the matter was still being negotiated.

In a statement, General Motors of Canada said that “the tentative agreement is a critical step forward toward ensuring G.M.’s future in Canada.”


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Canadian Judge Convicts Rwandan in Genocide

A Rwandan who entered Canada more than a decade ago claiming to be a refugee was convicted Friday on seven charges related to the 1994 genocide.

The conviction of was the first under a Canadian war crimes law introduced nine years ago and followed an unusually complex, two-year trial that involved hearings in Africa and Europe as well as Montreal. The accused, Désiré Munyaneza, a Hutu and the son of a wealthy businessman, was 27 years old at the time of the massacres. Juctice André Noel of the Quebec Superior Court found him guilty of war crimes, crimes against humanity and genocide for his participation in murders and rapes in the Butare region.

“The accused’s criminal intent was demonstrated beyond a reasonable doubt, as was his culpable violence,” Justice Denis wrote in his 210-page decision, adding that: Mr. Munyaneza “generally treated Tutsi inhumanely and degradingly.”

The judge said that while he found prosecution witnesses, some of whom testified behind closed doors for their security, to be generally credible but he had a difficult time believing any of the defense witnesses.

The mass killing began in April 1994 when Hutu extremists mobilized the majority population in the tiny central African country to root out and kill Tutsi and moderate Hutu. The extent of the killing — which took an estimated 800,000 lives — and the sheer number of killers involved has made prosecutions difficult.

An international criminal tribunal, backed by the United Nations and based in Tanzania, has convicted around 30 people and acquitted 6. The court, which has been criticized at times for its slow pace, was meant to supplement Rwanda’s own justice system by focusing on prominent figures, including politicians, journalists and members of the clergy.

The Montreal case was aided by an ongoing case at the international tribunal, where six people are being tried by international tribunal for massacres in Butare region. The defendants include a government minister and her son, both accused of leading efforts to murder and rape Tutsis. Mr. Munyaneza was described in his trial as a militia leader who worked with them.

In 1997 — the year the international tribunal began its work — Mr. Munyaneza arrived in Toronto seeking refugee status, a claim that was ultimately turned down. Accusations against him led to an investigation, and he was arrested in 2005 at his Toronto home.

Under the war crimes law, which allows Canada to prosecute residents for acts they committed in other countries, Mr. Munyaneza faces up to life in prison. Mr. Munyaneza, who is now 42 and the father of two children, will be sentenced on Sept. 9.


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Munyaneza becomes Canada’s first convicted war criminal


Two counts of genocide, two counts of crimes against humanity and three counts of war crimes for his part in the 1994 Rwandan genocide

A killer who led a marauding gang of Hutu murderers and rapists in the Rwandan genocide became Canada’s first convicted war criminal this morning.

In a landmark decision, Désiré Munyaneza was convicted on two counts of genocide, two counts of crimes against humanity and three counts of war crimes for his part in the 1994 mass slaughter.

Quebec Superior Court Justice André Denis delivered the verdict in a brief statement summarizing his 560-page judgment.

The judge imposed a publication ban on his reasons until noon to allow prosecutors and the defence team to read the judgment.

In a trial that spanned two years and five countries, Mr. Munyaneza, 42, was found guilty of conducting a ground-level campaign of rape and murder which was part of a Hutu-led effort to wipe out the country’s Tutsi population.

Several Rwandan witnesses who testified under a cloak of anonymity in Montreal’s courthouse described how Mr. Munyaneza forced them into sexual slavery and helped round up people for execution around Butaré in the spring and summer of 1994.

Genocide experts, including former general Roméo Dallaire and human rights activist Alison Des Forges, who died in the Buffalo plane crash in February, described the overall scale of the killings. At least 800,000 Tutsis and Hutu moderates were killed by Hutu extremists during the 100-day massacre.

None of the experts knew of Mr. Munyaneza, who was described as 27-year-old local leader and not among the genocide’s masterminds.

Mr. Munyaneza’s trial was full of logistical hurdles. Department of Justice documents reveal the prosecution cost an estimated $4-million. The amount includes Mr. Munyaneza’s defence and travel costs but does not count salaries for court staff, the judge or interpreters.

The trial also bent many conventions in the Canadian legal system. Many hearings were held behind closed doors and most of Mr. Munyaneza’s victims testified behind a cloak of anonymity to protect them from reprisals.

Judge Denis sealed some 350 pages of his judgment summing up the facts in the case as he delivered his verdict yesterday.

Throughout the trial, Mr. Munyaneza’s defence lawyers questioned the independence of interpreters and accused witnesses of colluding to fabricate stories.

Key hearings in France, Tanzania, Rwanda and Belgium were mostly held in secret, often under constraints imposed by local judicial systems.

The defence has said appeals are almost certain, regardless of the verdict, to test the 2000 Crimes Against Humanity and War Crimes Act.

Mr. Munyaneza arrived in Canada in 1997 when he sought refugee status in Toronto. He appealed after his claim was rejected. He was arrested in 2005 after a five-year RCMP investigation. He has remained in custody since.

Mr. Munyaneza was badly beaten while he was detained near Montreal, interrupting his trial.


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Report Weighs Fallout of Canada’s Oil Sands

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Oil sands projects like this extraction facility in the boomtown of Fort McMurray, Alberta, produce 1.3 million barrels a day.

In the tense debate between energy security and environmental sustainability, Canada’s vast oil sand reserves hold a special place.

Canada has the second-largest petroleum deposits after Saudi Arabia and the biggest in the Western hemisphere. Its oil sands produce 1.3 million barrels of oil a day, up from 600,000 a day in 2000. As a result, Canada has become the biggest foreign oil supplier to the United States, accounting for 19 percent of imports in 2008.

But the development of these sands in the Alberta region has also been sharply criticized by ecological groups, local communities and even Catholic bishops, for their impact on the environment, and their intensive use of both water and natural gas.

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A view of an oil sands pit, a controversial source of energy, near Fort McMurray in Alberta.

The growth in oil sands is the reason Canada has failed to contain its greenhouse gas emissions in recent years despite its commitments to do so. Critics refer to the bituminous deposits as tar sands, calling them the dirtiest fossil fuels on earth.

Trying to balance the size of Canada’s reserves and their environmental impact is a tough act. But a new report, to be released Monday by IHS CERA, an energy consulting group, sees big opportunities for the oil sands, shrouded in vast uncertainty.

“The oil sands are an immense resource in North America, and so they represent an opportunity to enhance energy security,” said James Burkhard, the managing director of IHS CERA’s global oil group. “But there are also questions about the future economic feasibility of oil sands, given the drop in oil prices, and second, there are a number of issues related to greenhouse gases, land and water use, on which there is a wide spectrum of views.”

Producing fuels from oil sands requires large amounts of natural gas and water and produces large quantities of waste material and carbon dioxide. In one process, steamed water is injected at high pressure to melt the dense, oil-bearing bitumen. In another, the sands are strip-mined and then cooked to release the oil.

Environmentalists would like President Obama to set strict limits on some of the dirtiest fuels, including heavy oil from Canada. They urge the administration to resist calls by the Canadian government to exempt oil sands from greenhouse regulations now being considered in the United States.

Canada’s oil sands industry has been hit hard by the recession and a 60 percent drop in oil prices since their peak last year. As prices tumbled, more than 70 percent of proposed heavy oil projects were postponed. But if economic growth eventually pushes up oil demand and prices rebound, the oil sand production could rise as high as 6.3 million barrels a day by 2035, according to CERA’s report. On the other hand, stringent regulation, weak economic growth or low energy prices could trim investments and result in production of as little as 2.3 million barrels a day within the next two decades, according to the report.

One of the most controversial issues related to oil sands is figuring out how much they contribute to global warming. According to CERA, which provided an analysis of 11 previous studies, producing oil sands emit 30 to 70 percent more greenhouse gases than the average oil consumed in the United States.

The CERA report points out, however, that once the total life of the fuel is considered, from the production phase to when the fuels are burned in engines — a so-called wells-to-wheels analysis — oil sands emit only 5 to 15 percent more greenhouse gases than the average fuels consumed in the country. The difference, CERA says, comes because 70 to 80 percent of total emissions come from the combustion of refined products, like gasoline and diesel, irrespective of their source.

The report recommends more research to reduce the use of natural gas in the production of oil from sands, as well as investing in technology that captures and stores carbon dioxide underground instead of emitting it into the atmosphere.

But environmental advocates point out that while Congress is looking at cutting carbon emissions in the United States 80 percent by 2050, the growing reliance on oil sands from Canada would offset some of those benefits.

“It’s not small potatoes when you stack it up against efforts to get carbon reductions,” said Matt Price, an analyst at Environmental Defence in Toronto.


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The Costly Compromises of Oil From Sand

Political animals

European politicians are breathtakingly hypocritical about sealskins

ROUGHLY handled, and incompetently stunned, terrified animals may awaken several times before they are slaughtered. Some have their throats slit fully conscious. Europe’s industrial farms dispatch 1m sheep, cattle and pigs every day. You cannot cater to the welfare of a large animal like a pig when the line must kill five in a minute.

If the European Parliament were really interested in animal welfare, then it might look rather more closely at the farming industry that the European Union so lavishly rewards with subsidies. But it has more pressing business.

On May 5th MEPs, suddenly disgusted by the cruelty of people far away hunting seals, voted to endorse a ban on the trade of seal products, most of which come from Canada. Their hypocritical recommendation, which still has to be approved by the European Commission and Council, isn’t even much good for the seals.

Bash it on the head, quick

Every year, 300,000 seals meet their end not by mauling from a polar bear, but instantaneously from gunshot or a blow from a club. Four years ago the WWF, an environmental organisation, commissioned an independent vet’s report which concluded that seal clubbing is not cruel if it is properly done by competent and trained professionals. The report judged that the Canadian hunt was professional and highly regulated. And the vets said that popular horror of the seal hunt seemed to be based largely on emotion and on images that are difficult even for experienced observers to interpret.

By the grim standards of Europe’s farrowing sheds, millions of seals enjoy a blissful life fishing and breeding on the Canadian ice. At least Canadian seals have the luxury of being stunned before they die. Compassion in World Farming, a lobby group, says that half the sheep killed in France are conscious when their throats are slit. Such treatment is possible through a loophole that allows for religious slaughter—a loophole that the same champions of animal welfare in the European Parliament voted to avoid closing on May 7th.

A few seals are killed to protect fish, others as a source of blubber or food. Most are indeed killed for their fur. That may not be to everyone’s taste, but it is hardly unEuropean. Europe’s fur farms produce over 30m mink and fox pelts a year. Every four or five days Europe kills more animals for their fur than the entire annual Canadian hunt does in a year. Seal hunting sounds unfair; but Europeans are reluctant to ban the hunting of similarly defenceless game birds, deer or wild boar.

A ban on the seal hunt would spare individual seals, but it may not do much for the seal population as a whole. When wildlife cannot be traded, it loses its value and thus the incentive for people to conserve it. Today the hunters exploiting the seals have an excellent reason to maintain a healthy and growing population. A trade ban would mean that the management or maintenance of a wild population becomes just another drain on resources. Sometimes ecotourism pays the bills, but it works only in places that are easy for tourists to get to.

Why did the European Parliament overlook all this? Seal-murdering foreigners are a soft target and animal-welfare groups have been lobbying MEPs for years. It may not be a coincidence that they finally voted for a ban just a month before they face elections. Having been invisible to their constituents for the past five years, what better way for MEPs to save their own skins than to fight valiantly for those of baby seals?


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Canadian PM Harper lands in seal-hunt showdown in Europe

Baby Seal Death Day

Slaughter of the seals in Russia is stopped by Vladimir Putin

Ottawa to GM: Cut costs or be cut off

Federal, provincial governments push union for concessions, setting up fierce battle over pensions

The federal and Ontario governments have ordered the Canadian Auto Workers to make further cuts in labour costs at General Motors of Canada Ltd. – including addressing the deficit in the company’s pension funds – or they will cut off financial support, leaving few options but liquidation.

The government ultimatum was made at a meeting with the company and the union on Wednesday and sets up what will be a fierce battle over how to repair a pension mess that the CAW insisted yesterday cannot be fixed at the bargaining table.

GM Canada’s pension plans had a shortfall of $4.5-billion as of the most recent public information in November, 2007, but that has almost certainly ballooned to $6-billion or more based on declines in stock markets last year.

“If we don’t get a deal, the governments will provide no financial support and GM Canada will be liquidated,” CAW president Ken Lewenza told reporters yesterday. “This is an unbelievable situation.”

The governments set a deadline of May 15 for a labour agreement.

Government officials asked GM Canada during the meeting to redo its restructuring plan, based on what was achieved in the Chrysler LLC agreement with the CAW, said an Ontario government source familiar with the talks. GM has been asked to achieve the Toyota Motor Corp. benchmark of $49 an hour for all-in labour costs, he said.

Mr. Lewenza spoke on a day when General Motors Corp. reported a first-quarter loss of $6-billion (U.S.), three weeks before a June 1 deadline set by Washington, Ottawa and Ontario for the company and its Canadian unit to come up with acceptable restructuring plans.

“Everyone seems to believe this will involve a Chapter 11 restructuring in the United States and probably a Companies’ Creditors Arrangement Act filing in Canada,” he said. “We don’t know for sure, but it seems likely.”

In the United States, GM must also reach a cost-cutting agreement with the United Auto Workers union and scores of debt holders to avoid bankruptcy protection.

However, sources say the company could secure U.S. government assistance to remain in operation, even through bankruptcy protection, but be forced to shutter its Canadian facilities if it can’t reach an acceptable deal here.

The pension issue will be turned over to a committee of representatives from the union, the company and the two governments, though Ottawa has insisted that the Ontario government is responsible for GM Canada’s pension issue.

The solution will likely involve concessions by existing CAW workers at GM, who will be forced to accept pension payments lower than those received by current retirees. In addition, a solution to the shortfall would also likely require financial contributions by government and the company itself.

Pension benefits for the company’s 25,000 retirees are sacred, Mr. Lewenza said.

“Over our dead body will the CAW throw 25,000 retirees overboard,” he vowed.

The union and GM had reached an agreement just two months ago that both parties claimed made the Canadian operations competitive with Japanese-owned rivals.

But federal Industry Minister Tony Clement said that deal did not provide enough savings to make GM viable in the long run and ordered the two sides back to the table.

Ontario Premier Dalton McGuinty said yesterday that the governments want auto workers to agree to make concessions with GM Canada that are similar to those they made with Chrysler Canada. “I would ask folks to keep in mind what happened in the case of Chrysler,” he told reporters.

But the two auto makers are in dramatically different situations, CAW officials said, pointing to the gaping pension hole at GM and its higher ratio of retirees to active workers. The ratio is about five retirees per active worker at GM, compared with about 1.5 to one at Chrysler Canada.

The pension deficit at Chrysler Canada was settled by the union agreeing to give the company 10 years to make up its pension shortfall, compared with the current requirement of five years.

That can’t be done at GM Canada because it is still operating under Ontario legislation passed in the early 1990s that allowed it to contribute to the province’s pension benefits guarantee fund instead of making annual payments to keep GM’s plans solvent.

Mr. McGuinty warned, however, that his government “cannot come to the table on behalf of Canadian taxpayers unless there are significant contributions made by everybody else.”

The Canadian governments could be asked to take equity in General Motors, even though they did not enter the bailout talks looking to become shareholders of an auto company, Mr. McGuinty said.

GM Canada has not said publicly how much financial help it is seeking from the two governments, which lent it $500-million (Canadian) this week.

The latest GM request to the U.S. government is for as much as $30-billion (U.S.). A Canadian contribution would be $6-billion based on the commitment made by Mr. McGuinty and Prime Minister Stephen Harper in December that Canada would provide 20 per cent of the money the beleaguered auto makers need in return for a commitment that the companies maintain 20 per cent of production here.


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Pigs in Canada Contract Flu Virus


Senior research scientist Dr. Karuna Karunakaran works in the vaccine research lab at the British Columbia Centre for Disease Control during a demonstration for media following a news conference in Vancouver, B.C., on Thursday.

The U.S. Agriculture Department said late Saturday that swine in Canada have tested positive for the currently circulating strain of H1N1 influenza that is circulating around the world and has already caused more than 100 deaths..

This is the first detection of the virus in hogs that up until now was considered to be circulating only from human to human.

According to USDA Secretary Tom Vilsack, a Canadian carpenter who had been to Mexico came down with flu syptoms upon his return home. He then did work on a hog farm in Alberta and subsequently his family and the swine fell ill, exhibiting influenza symptoms.

If the virus is indeed jumping from humans to animals and vice versa, as the Canadian case suggests, the seriousness of the disease will likely be heightened.

The development could cause new problems for the pork industry, which has so far gone to great lengths to distance itself from the current outbreak as it has hammered trade and consumer sentiment.

On Friday, the National Pork Producers Council, said “the flu virus…never has been found in pigs anywhere in the world.”. As a result, the pork council “urged U.S. pork producers and others involved in the pork industry to address influenza outbreak misinformation, which already has exacerbated an economic crisis in the pork industry.”

Last week, the pork lobby successfully persuaded the USDA and other international health agencies to stop referring to the virus as “swine flu”.

As soon as Saturday morning Mr. Vilsack of the USDA and his counterparts in Mexico and Canada issued a joint statement urging its trading partners that there was no need to disrupt trade because “Canadian, American and Mexican authorities have emphasized that they have not found a case of influenza in swine herds.”

In its announcement Saturday evening, the USDA said “this detection does not change the situation here in the United States” since there “have been no reports that the novel H1N1 strain currently causing illness in humans is in U.S. swine.”

However the agency said that as a precaution people with “flu-like symptoms should not interact with swine, and swine showing influenza symptoms should be kept away from the public.”

The USDA also said that no sick swine connected to the Alberta situation have left the farm and that the animals have been quarantined.

The Canadian government is awaiting final confirmatory test results and the USDA said it won’t make any decisions on restricting trade with Canada until the test results come back.

Meantime the USDA said it is “actively working to develop an H1N1 vaccine for swine, just as the CDC is doing for humans.”


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Canada and Ontario to lend Chrysler $3.8-billion

Federal and Ontario governments secure 2% stake; car maker agrees to maintain 20% of output in Canada.

Canadian governments are providing a $3.8-billion lifeline to Chrysler LLC, one they say is crucial to securing a future for the auto sector in Canada.

The loans are part of a $15-billion (U.S.) bailout package announced on Thursday by the Obama administration in Washington and the federal and Ontario governments on this side of the border.

In return for the $3.8-billion (Canadian) in assistance here, the federal and Ontario governments will receive 2 per cent of the equity in Chrysler, one seat on its nine-member board and a pledge from the company to maintain at least 20 per cent of North American auto production in Canada.

The announcements came as Chrysler sought Chapter 11 protection in the United States from creditors Thursday and formed a new partnership with Italy’s Fiat SpA.

Mr. Harper said on Thursday that Canada had no choice but to participate in the restructuring once the former Bush administration in the United States got involved late last year. He and Ontario Premier Dalton McGuinty concluded that the only realistic option was to have Canada participate as well in the restructuring, he said.

“Otherwise, through a politically directed restructuring in the United States, we would stand a serious risk of the complete restructuring of the industry outside of this country,” he said at a news conference in Toronto.

Mr. Harper stressed that the loans from Ottawa and Ontario come with strings attached, including a requirement that Chrysler produce 20 per cent of the cars it makes in North America in Canada. If it falls below that threshold, both in auto production and investment, the company will be in default on the loans and the federal and Ontario governments can demand repayment.

“Let not anyone suggest that the money we are giving today is a gift,” Mr. Harper said. “We have insisted that the very difficult decisions that are necessary to ensure the viability of this company have been made.”

But the governments did not extract commitments from Chrysler on job quotas in Canada and Mr. Harper acknowledged that a smaller company will emerge out of the restructuring.

“Let’s be clear,” he said. “We’re choosing between a smaller company or if we had stayed out of this, simply allowing the collapse of the company.”

Premier Dalton McGuinty, who was at Mr. Harper’s side during the news conference, said Ontario is the No. 1 auto producer in North America and a collapse of Chrysler would have rippled through the economy.

“The auto sector exercises such a powerful and disproportionate influence on our economy,” he said.

Canadian Auto Workers president Ken Lewenza said maintaining the 20 per cent threshold was a crucial issue for the union. “From our perspective that was a deal breaker.”

Mr. Lewenza endorsed the proposed partnership between Chrysler and Fiat. He referred to his face-to-face meeting this week with Mr. Sergio Marchionne, Fiat’s CEO. “He is a talented, fair person, and I look forward to working with him. Canada has been very good to Chrysler over the years, and we will be very good to Fiat, too,” he said.

Mr. Lewenza commended the Canadian and Ontario governments for their efforts to safeguard Chrysler’s presence here. “By participating in the restructuring, and confirming Chrysler’s continuing footprint here, our governments are helping to ensure that Canadians capture a fair share of the benefits once the company turns around in the future.”

He said he expects Canadian Chrysler plants will be shut for most of the duration of the Chapter 11 proceedings, once they run out of parts.

“Our plants will run for as long as the supply base allows them to,” he said. “Once the supply chain exhausts its inventory, we will be down.” But it won’t take long to use up available parts, he said, because of the just-in-time inventory system.

Chrysler will have up to eight years to repay the Canadian loans, which will carry an interest rate of at least 7 per cent.

Ottawa is providing two-thirds of the funding, and Ontario the remaining one-third. The loans will be provided in three separate tranches:

– Interim loans of $1.21-billion, including $1-billion that has already been committed;

– A $1.45-billion contribution to the debtor-in-possession financing in the United States;

– A restructuring loan in the amount of $1.16-billion.

There are no plans for Chrysler Canada to seek bankruptcy protection in this country.

In comments Thursday, Mr. Lewenza also stressed the need to develop a broader national auto strategy to reinforce the industry’s underlying fundamentals in the future.

“It’s essential to help the industry survive the side-effects of the global financial crisis,” he said. “But we also need a long-term vision to build this industry well into the future, one that addresses key challenges like infrastructure, the environment, and trade imbalances.”

Mr. Lewenza called on the federal government to recommit to the work of the Canadian Automotive Partnership Council, the multi-stakeholder body which has been developing a long-run industrial policy for the automotive sector.


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Pope expresses sorrow for Canadian residential-school abuse


Assembly of First Nations National Chief Phil Fontaine, left, walks in St. Peter’s Square in Vatican City ahead of a private audience with the Pope on Wednesday.

The Pope expressed sorrow on behalf of the Catholic Church for the “deplorable conduct” of some of its members at Canada’s Indian residential schools during a private, half-hour meeting at the Vatican with Canadian bishops and native leaders.

The Canadian representatives described the expression of sorrow as an apology, even though that exact word does not appear in the Vatican’s public statement.

Those in the room Wednesday said that they were struck by the depth of Pope Benedict XVI’s knowledge of what happened in Canada and the forceful way he spoke against the abuses. While the meeting was private, the Pope acknowledged the delegation of Canadian aboriginals during a general audience address to thousands of people gathered outdoors at the Vatican.

Phil Fontaine, the national chief of the Assembly of First Nations, led the delegation and delivered a statement to the Pope about the schools. “I sensed his anguish and pain. He acknowledged our suffering and that is important to me and that was what I was looking for,” Mr. Fontaine told a news conference. “We heard him speak about the pain and suffering of so many for so many years, and to also speak about the abuses that were inflicted on so many people and to acknowledge the role of the Catholic church.”

The Vatican issued a two-paragraph statement on its website.

“Given the sufferings that some indigenous children experienced in the Canadian residential school system, the Holy Father expressed his sorrow at the anguish caused by the deplorable conduct of some members of the church and he offered his sympathy and prayerful solidarity,” the statement read. “His Holiness emphasized that acts of abuse cannot be tolerated in society. He prayed that all those affected would experience healing, and he encouraged First Nations peoples to continue to move forward with renewed hope.”

Nearly 75 per cent of the residential schools that operated in Canada from the 1880s to the 1970s were run by Catholic Church missionary congregations. Churches received federal funding on a per student basis to run the schools and implement federal government policies aimed at assimilating aboriginals into the Christian European majority.

Before his trip, Mr. Fontaine had called a Catholic apology “the missing piece,” because the other churches involved in the schools had already apologized. Prime Minister Stephen Harper apologized on behalf of the Canadian government last June.

The Catholic entities involved with the schools issued two written apologies in 1991. The Missionary Oblates of Mary Immaculate apologized in a four-page letter for the physical and sexual abuse as well as for the very existence of the schools. The letter said the system was inspired by a “European superiority complex” that dismissed native spiritual practices as “pagan and superstitious.”

Indian Affairs Minister Chuck Strahl, whose department funded the $95,000 trip by the aboriginal delegation, called the Vatican’s expression of regret a very significant step.

Canada’s Conservative government completed an out-of-court settlement with former residential school students in 2006 that will provide billions in compensation. The settlement also called for a five-year truth and reconciliation commission that would tour the country and compile the official history of the schools.

Disagreements over process led to the resignations of all three original commissioners and the project is essentially on hold. “I’m hopeful, very soon, to be able to announce some new commissioners,” Mr. Strahl said.


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In Quebec, proof that love really does conquer all

The romance between an opposition MNA and the Deputy Premier wins warm bipartisan support

It was a match made in the corridors of power, a secret romance between rival members of Quebec’s National Assembly that is now in full public view.

Deputy Premier Nathalie Normandeau, a Liberal, found her knight in shining armour across the floor of the assembly when Action Démocratique du Québec MNA François Bonnardel, who until recently had considered running to replace Mario Dumont as leader of his party, became the love of her life.


Quebec Prime Minister Charest (left) and Nathalie Normandeau (right)


Reporters gather around MNA François Bonnardel in the Quebec National Assembly on Thursday, eager for news about his romance with Deputy Premier Nathalie Normandeau.

Premier Jean Charest said yesterday that he never expected anything like this, but he is completely at ease with the situation, adding that love is more important than politics.

“In the end, I can’t help but feel this is life. … Behind all of this, there’s actually a pretty beautiful story,” Mr. Charest said.

Ms. Normandeau appeared relieved yesterday that the affair is out in the open, saying she is prepared to live with the consequences. Being in love with someone from another political party is not unethical, she said.

“Loving somebody is not a question of ethics,” said Ms. Normandeau, 40. “We are in different political parties and we are aware of what that means,” she said, insisting that she doesn’t discuss confidential political matters with Mr. Bonnardel.

Nobody seems to remember a previous situation in Canadian politics in which a senior cabinet minister was dating an opposition party member.

Ms. Normandeau, 40, who is also Minister of Municipal Affairs, refused to say when the romance began. Some contend it goes back to last fall, when the Liberals began attempting to seduce ADQ members to cross the floor of the National Assembly. Two ADQ members eventually joined the Liberals. But Ms. Normandeau said she never attempted to persuade her partner to become a Liberal.

Mr. Bonnardel, 41, said he will manage the campaign of potential ADQ leadership candidate Gilles Taillon and has no plans to become a Liberal.

“You can be sure of one thing. I am an ADQ at heart and I will remain an ADQ,” Mr. Bonnardel said.

Colleagues from both the Liberal and ADQ caucuses have accepted the situation, and most refused to comment, saying it is a private affair. ADQ caucus president Janvier Grondin said there is nothing wrong with men and women of different political stripes being together.

“Are we at the point where, before entering politics, you will have to see a doctor to get castrated?” Mr. Grondin said to reporters.


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Freed diplomats celebrate in hilltop palace


Released hostages Louis Guay, left, and Robert Fowler, centre, talk with Malian Foreign Affairs Minister Moctar Ouane at a reception the day after their release in Bamako, Mali on April 23, 2009.

Two Canadian diplomats sporting full white beards celebrated their freedom in an opulent hilltop palace Thursday — a day after being released by their al-Qaeda captors.

Robert Fowler and Louis Guay showed no sign of physical harm. Their long beards were the only hint of a kidnapping ordeal that began in December in neighbouring Niger.

“They seem tired but they are doing OK,” said Diarra Diakite, spokesman for the president of Mali.

The high-ranking diplomats planned several stops to thank the African governments that helped them gain their freedom. Their first stop was a reception at the gleaming white presidential palace overlooking Mali’s capital.

President Amadou Toumani Toure delivered a toast in which he thanked Canada for making Mali one of its biggest recipients of foreign aid, and said he considered it his moral duty to help a friendly nation.

The Malian government negotiated with the diplomats’ captors, using elected officials and tribal chiefs in the Sahel desert region as intermediaries between them and al-Qaeda.

Mr. Diakite said Mali did “not pay a single penny” in ransom money. He declined to say what might have been offered in exchange for the diplomats’ freedom.

Prime Minister Stephen Harper told a news conference Wednesday that Canada does not pay ransom or make exchange prisoners for hostages — but he was careful to note that two other countries participated in the release.

Mr. Harper called then men and spoke to each for several minutes Thursday.

A Canadian official said the two suffered a terrible ordeal. They were not, however, beaten during their months in captivity.

“There’s no indication of any physical torture,” said the government official. “We are a bit concerned about the mental or psychological abuse they may have endured.”

The men were transported to freedom by military convoy across the Sahel — a sweeping, sandy, craggy landscape with dramatic rock formations similar to the Arizona desert.

They also planned a trip to Burkina Faso to thank that country for it’s help in securing their freedom.

Mr. Harper’s office said Mr. Fowler and Mr. Guay will soon be joined by their families and will return home on a Canadian government aircraft.

A relative of Mr. Fowler’s, Liberal MP Dominic LeBlanc, said the veteran diplomat would be reunited with his wife and four daughters in Europe.

The diplomats were on a United Nations mission in Niger when they were abducted.

The men were freed in northern Mali this week and transported by military vehicles across the desert to the capital, Bamako.

The plight of faraway Canadians provoked a rare spirit of conviviality in a normally combative parliamentary arena.

A government official said NDP Leader Jack Layton and Liberal Leader Michael Ignatieff approached the Prime Minister before Wednesday’s question period to discuss the hostages.

They asked Mr. Harper whether they should raise the issue publicly, and agreed to hold off until the hostages had arrived in a safe location.

Mr. Fowler is among Canada’s highest-ranking diplomats — having advised several prime ministers, served as Canada’s ambassador to the UN, lobbied successfully for a temporary seat on the UN Security Council, and waged a successful campaign against so-called blood diamonds in Africa.

He was in Niger as the UN’s special envoy to that troubled country.


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‘Iran time limits could be effective’


Canada’s Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa.

“Time limits on negotiations with Iran could be effective,” Canadian Prime Minister Stephen Harper said on Monday in response to a question from The Jerusalem Post. 

“Having time lines is always an effective approach,” Harper said during a media conference call arranged by The Israel Project. But he added, “It immediately raises the question: Time limits for what, and then what are the fall back actions? And these are very difficult questions.”

Israel has said that while it doesn’t oppose the Obama administration’s approach of engaging with Teheran, such conversations should not be open-ended so that Iran doesn’t use the opportunity to run out the clock while gaining a nuclear capability.

The US has been unwilling to publicly put any time limits on the talks as it seeks maximum flexibility in its outreach efforts.

The Conservative Party’s Harper said he didn’t oppose Obama’s approach – stepping up American involvement in talks with Iran over its nuclear program – but that it must be conducted with eyes wide open.

“I’m always open to trying new approaches. But I think it is important that we not be under any illusions whatsoever about the nature of the Iranian regime, what it stands for and the nature of its activities, particularly as it involves the development of uranium enrichment and weapons capacity,” he said. “I’m all for new approaches if we don’t turn a blind eye to any realities.”

Harper also rejected the notion that the West lacks the stomach to keep Iran from going nuclear.

“I think what we all are struggling with is how can we best be effective. I don’t think it’s a matter merely of will,” he said. “I think the reality is that we’re in a complex world where the United States and its allies do not have an unlimited ability to make happen what we want to have happen.”

Harper was speaking to reporters on the day that the UN-sponsored World Conference Against Racism opened in Geneva, a conference he noted Canada was the first to boycott, followed by Israel, the US and a handful of other Western countries.

“We are very concerned that around the world anti-Semitism is growing in volume and acceptance,” he said of the event, which follows up on a similar 2001 conference in Durban, South Africa, which he described as “scapegoat[ing] the Jewish people.”

“Canada will not lend its name and reputation to an international conference that promotes these kind of things,” he said.

The US consulted with Canada over its decision not to attend, according to Harper, who praised America for following suit.

Increasing anti-Semitism was not limited to actions abroad, Harper said, expressing concern about growing anti-Semitic and anti-Israel discourse on Canadian college campuses.

In such a context, Harper said he was glad to hear of the rejection of Iranian President Mahmoud Ahmadinejad’s views by Europeans and other members of the audience during his address at the conference in Geneva on Monday.

“Anything that shows that there is strong opposition to that is a very positive development,” he said.


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Canadian PM champions free trade at Americas summit

Harper insists he’s not at odds with other leaders, but clash of ideologies still evident

Prime Minister Stephen Harper says he’s not at odds with most leaders at the Summit of the Americas, arguing that the vast majority of the 34 leaders here are free-traders, barring a small block of leftists who are still fighting the Cold War.

While U.S. President Barack Obama has proffered “equal partnership” with Latin America and the Caribbean, and promised to help alleviate poverty during an economic crisis, Mr. Harper has championed free trade and emphasized the need to avoid protectionism.

“There are some countries that want to keep fighting the Cold War and frankly wars that go a lot farther back than that,” Mr. Harper said at a brief press conference. He added: “I thought President Obama really demonstrated how in this business, less is often more.”

Despite friendly handshakes between Mr. Obama and Hugo Chavez, Venezuela’s leftist leader, there has been an evident clash of ideologies at the summit.


Canadian Prime Minister Stephen Harper waves as he gets into a van during the 5th Summit of the Americas in Port of Spain, Trinidad and Tobago, on April 18, 2009.

Bolivian President Evo Morales called for the world to reject the neo-liberal capitalism which he said caused the economic crisis. And on Friday, in a long, winding speech reminiscent of Fidel Castro’s marathons, Mr. Morales’s ally Nicaraguan President Daniel Ortega railed about the dictatorship of global capitalism, keeping the assembly waiting an hour to hear Mr. Obama’s more pithy oration.

The Prime Minsiter’s free-trade refrain has made him appear a bit of a lone wolf at this summit – the very forum that four years ago angrily sunk a proposal for hemispheric free trade. He said he raised it in two plenary sessions Friday; officials from other delegations said no one else did.

But Mr. Harper argued he is in the majority, and that outside of a small block, all the leaders are free-traders, and share his views.

“There are a lot of differences between these countries of Latin America. There are countries with very conservative economic policies. And for the vast majority, they are countries that accept the principle of the globalization of the economy. Obviously there’s a certain group that has a very different tendency, but the dialogue’s there.”

Oddly, Mr. Harper, who two years ago told Latin Americans that Canada offers a third way between the unbridled capitalism of the U.S. and state socialism – a presumed reference to Mr. Chavez – has seen Mr. Obama claim that terrain. The U.S. President called such extreme alternatives false choices in his speech Friday.

Mr. Harper has focused far more on free trade this time, but it certainly does not fit the rhetoric of this summit, where the phrase raises a reminder of the failed Free Trade Agreement of the Americas, killed four years ago in acrimonious battle at the Summit of the Americas in Mar del Plata, Argentina.

Many Latin American and Caribbean countries no longer want to talk about classical free-trade agreements, and instead want trade-and-development deals that see developed countries commit aid programs. Mr. Harper noted countries like Colombia and Peru have signed trade deals with Canada, and Panama is negotiating.

Mr. Harper’s free-market approach, however, did not stop him from urging the U.S. to take a different tack with Cuba – in fact, it was the basis of his argument.

He went further than previously in urging a thaw in U.S.-Cuba relations, arguing the trade embargo should be ended.

“If one wants to break down a state-socialist economic nationalist model with walls, I don’t think a trade embargo’s the way to do that. So we would obviously urge a different course of action.”

“That said … we don’t turn a blind eye to the fact that Cuba is a communist dictatorship and that we want to see progress on freedom, democracy and human rights as well as on economic matters.”


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The linguistic divide

A Botox treatment can mask your age – but the way you speak gives you away.

A University of Toronto sociolinguistics professor has discovered that those under 40 are much more likely to use the word “like” when narrating a story, than those over 40. As in “I’m like, ‘What are you talking about?’ ” instead of “I said, ‘What are you talking about?’ ”

This linguistic difference is a key demographic marker, says Sali Tagliamonte, who has published a paper exploring the use of “be like” in the scholarly journal Language Variation and Change.

“The use of ‘like’ is a watershed. It captures a change in how people narrate their stories,” she says. “We think it came from California in the 1980s and it gained prestige as a trendy and socially desirable way to voice a speaker’s inner experience.”

She and her research team painstakingly analyzed more than 300 hours of recorded conversation with 200 volunteers and identified subtle differences in speech pattern and storytelling.

“The new trends reflect the evolution of Canadian society,” Prof. Tagliamonte said.

The volunteers all grew up and live in Toronto, one of the world’s most multicultural cities, and varied in age from under 17 to 80.

The study found that the rate of use of “be like” was, for example, 65 per cent for 17- to 19-year-olds, 29 per cent for 30- to 34-year-olds, 18 per cent for 35- to 49-year-olds, and 0 per cent for 80-year-olds. “People are really identifiable by the way they speak,” she concluded.

Older people often criticize the use of “like,” which peaks at about the age of 30. But it doesn’t reflect stupidity or poor grammar – it is merely a recent linguistic trend. In fact, Prof. Tagliamonte says, it’s not really so new any more, and has reached a saturation point in common conversation. In formal linguistic parlance, the use of “like” is called a “quotative” – a storytelling device used to indicate who said what.

There are several other conversational markers that divide the generations. For example, the under-40 set also tends to use the word “stuff,” as in “I have the stuff in my bag,” and “right” as a sentence ender, for example, “It’s a girl, right.”

Also popular is the use of “so” as an intensifier (“it’s so cold outside”), and the use of have as a “deontic modal,” as in “I have to go.” Prof. Tagliamonte has identified these trends as she records the particular characteristics of “Canadian” English. Canadians are known to follow both American- and British-style English, she says, and are best known for lexicon such as eh, tuque, two-four (beer), washroom and mickey (small bottle of liquor).

But the professor has found other, more subtle trends, including the development of the tense system and the use of qualifiers. The under-40 set in Toronto is more likely to say “I’m going to the store” instead of “I’ll go to the store,” she notes. As well, Canadians say “I have to go to the doctor,” whereas those born in Britain say “I’ve got to go to the doctor.” There is not a lot of social class differentiation in Canada by speech, she adds, unlike in Britain.

“This research matters because we can look at who the agents of change in language are, and what direction the language is going in,” she says. As Canada’s demographics shift, so too does its language. Some words or expressions will be lost forever. “No one says doth, shall, shan’t or sayeth any more,” she says. “Some people mourned this loss.”

Prof. Tagliamonte’s childhood inspired her to study sociolinguistics. She is Italian on her father’s side, but it was the speech patterns of her maternal relatives in rural Southern Ontario that intrigued her. “The accents my aunts and uncles had were mind-boggling to me,” she recalls. “They sounded alien. They would say things like ‘I come up from the garden and I seen a skunk.’ They used very old features.”

These days, she eavesdrops on her four children, aged 5 to 17, hoping to discover the latest teen bon mot. Her current research project – to be published this fall – involves studying how gays and lesbians act as agents of linguistic change.

It’s so, like, interesting.


Here are words that under-40s use more than over-40s:

“Like” as an approximating adverb (e.g. It’s like three blocks down the street.)

“Stuff” as a generic  (e.g. I have the stuff in my bag.)

“Stuff” in extensions (e.g. The place has rivers and valleys and stuff like that.)

“Right” as a sentence ender (e.g. It’s a girl, right.)

“Have” as a deontic modal (e.g. I have to go.)

“So” as an intensifier (e.g. It’s so cold outside.)


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Iranian-born Canadian charged after allegedly trying to export nuclear technology

A Toronto man is facing numerous charges after allegedly trying to send nuclear technology to Iran, a country under intense international pressure to curtail its nuclear ambitions, police said Friday.

The RCMP, through a joint investigation with the U.S. Dept. of Homeland Security, allege the man tried to procure and export pressure transducers, which are used in the production of enriched uranium.

At a news conference Friday, police said the man was attempting to move the transducers from Boston to Toronto and onto Dubai, with Iran as the final destination.

The transducers have a legitimate commercial use, the RCMP said, but can also be used for military purposes.

Iran insists it is enriching uranium to produce nuclear energy for civilian purposes, but the United States and some European countries accuse Tehran of secretly seeking to build nuclear weapons.

Mahmoud Yadegari, who police said is a Toronto businessman in his mid-30s, is charged under the Customs Act and Export Import Permits Act, and is also accused of violating UN sanctions on Iran.

Police said Mr. Yadegari was born in Iran and is a Canadian citizen.

He is in custody awaiting a bail hearing.

It’s alleged he took steps to conceal the identification of the transducers so he could export them overseas without export permits.

The charges follow an investigation by the RCMP, customs agents, The Dept. of Foreign Affairs and the U.S. Dept. of Homeland Security.

In February, U.S. President Barack Obama’s administration said it would seek to end Iran’s nuclear ambition and its support for terrorism.

That drew an immediate rebuke from Iran’s envoy to the United Nations, who said Iran has never and will never try to acquire nuclear weapons.


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Residential school survivors granted a rare private audience with the Pope


Canada’s Prime Minister Stephen Harper and other MP’s listen as National Chief of the Assembly of First Nations Phil Fontaine speaks in the House of Commons on Parliament Hill in Ottawa June 11, 2008. Canada, seeking to close one of the darkest chapters in its history, formally apologized on Wednesday for forcing 150,000 aboriginal children into grim residential schools, where many say they were abused.


A delegation of residential school survivors has been granted a rare private audience with the Pope in the Vatican, fuelling hope that Benedict XVI will apologize for abuse in institutions run by Roman Catholic missionary congregations.

The Pope will express his concern for aboriginal peoples in Canada who continue to suffer the impact of residential schools, according to the Canadian Conference of Catholic Bishops, and will also present the survivors with a signed declaration of the church’s determination to work toward reconciliation with aboriginal people.

“It’s a historic and momentous occasion,” said native chief Phil Fontaine, who is leading the delegation. “We’ve had apologies from the other denominations, the United Church, the Presbyterian Church and the Anglican Church. We’ve had the historic apology from the Prime Minister on June 11. The one missing piece was the apology from the Catholic Church. When this happens we will be able to begin the important work of healing and reconciliation.”

It’s not known, however, how far Pope Benedict will go in his statement, or whether it will be the full apology that native leaders and elders are hoping to receive.

“We’re mindful of one thing, and that is traditionally the Catholic Church does not apologize,” said Mr. Fontaine, national chief of the Assembly of First Nations. “But we hope and pray that there will be an apology, one that will acknowledge the harms inflicted upon innocent children and an acceptance of responsibility for their role in the tragic experience.”

Catholic Church missionary congregations ran nearly 75 per cent of Canada’s residential schools, which operated from the 1880s up to the 1980s, part of a policy of cultural assimilation whose goal was religious conversion and the extinguishing of native culture. Children were taken from their families against their will, and many suffered physical and sexual abuse at the schools.

The other religious denominations that ran residential schools began apologizing for their role in the 1980s, and only the Catholic Church has so far held out.

Mr. Fontaine met with Pope John Paul II more than 10 years ago in Rome, but made no statement on residential schools despite saying beforehand that he would raise the issue. The Vatican reportedly grew nervous at the prospect of residential schools being raised and downgraded the meeting from a private audience. Mr. Fontaine suffered sexual abuse at a school run by Catholics in Manitoba.

The meeting at the Vatican, scheduled for April 29, came about after more than two years of diplomatic efforts between native leaders and the Catholic Church, led by James Weisgerber, Archbishop of Winnipeg.

Mr. Fontaine said that as part of the negotiations, he forwarded a copy of the moving apology that Prime Minister Stephen Harper read from the floor of the House of Commons on June 11, 2008, as well as the statements from the leaders of the opposition and the AFN’s response.

“We’ve done that so His Holiness and the Vatican will have a reference on how we would like [them] to respond to this very tragic, sad experience,” Mr. Fontaine said.

Although many details are unresolved, Mr. Fontaine said he and four other residential school survivors will meet with the Pope after his Wednesday morning general audience. The meeting will also include representatives of the Catholic missionary congregations that ran the schools in Canada.


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Baby Seal Death Day

It isn’t every day that one’s very own hakapik arrives in the mail.

It is probably reasonable to assume that I’m the only person on my block to be the un-proud possessor of the aptly named bludgeoning and hacking instrument used to slaughter baby seals. ‘Tis the season.

April 15 may be tax and tea-party day in the U.S., but it’s baby-seal death day in Canada. Although the season began March 23 (19,411 down), the largest phase was to begin Wednesday, during which sealers will destroy and skin another couple hundred thousand seals, most between 25 days and three months old.

It’s a living. I guess.

Like most, I’ve known about the baby seal hunts for decades and have averted my gaze. From my fetal curl, I’ve merely wished feverishly that someone would put a stop to it.

I might have managed another year without weighing in on the world’s largest maritime massacre if not for my hakapik, delivered compliments of PETA. It arrived innocuously enough in a flat, 5-foot long package.

Unsheathed, the hakapik is menacing — like having a “Shining” Jack Nicholson crouched in the corner — and seems more suitable to an exhibit of medieval torture instruments than to the office of someone who delivers to the outdoors (rather than squishes) visiting insects.

My hakapik — a phrase I never expected to utter — has a 42-inch long handle with a combo hammerhead/spike on the end. The hammer portion is used, theoretically, to crush the seal’s skull, while the spike is used to haul the carcass away. (Older seals are usually shot with rifles.)

Those who favor hakapiks argue that they are efficient and humane. Efficient because they allow for a “clean kill,” meaning the pelt isn’t damaged. “Humane” because a properly delivered blow to the head causes instant, painless death.

Opponents of this gruesome drill claim it isn’t possible to properly administer a blow to the head when one is standing on a slippery ice floe swinging a heavy club at a small moving animal. Consequently, at least some animals are not killed humanely — or even killed at all before being skinned and gutted.

A 2007 European Food Safety Authority report concluded that effective killing doesn’t always occur, causing animals pain and distress. Another 2007 report by scientists at the University of Bristol found “widespread disregard for the Marine Mammal Regulations” during seal hunts (though bashing the head of a defenseless baby hardly qualifies as “hunting”).

The researchers said that a maximum of 15 percent of seals observed on videos were killed in a manner that conformed to the regulations and that violations were probably worse because they didn’t have access to continuous sequences for all seals.

Andy Butterworth, senior research fellow, wrote that “although many of the seals observed were clearly wounded by the clubbing and shooting, sealers did not routinely monitor for unconsciousness (as required) befoe skinning them.”

Too gruesome to consider, but then, hunters argue, so are slaughterhouses. The baby seal “harvest” is simply more visible than, say the factories where baby calves and lambs are destroyed for scaloppini and party chops. But does one cruelty justify another?

Increasingly, the answer is “no,” as other countries follow the lead of Americans, who banned seal products in 1972.

As of March 18, Russia has banned its own seal hunt after the bear-hunting Vladimir Putin called sealing a “bloody industry.” And, the European Parliament has adopted a declaration banning commercial seal products (but still allows for traditional hunting, e.g. Inuit). The Parliament plans to vote on a complete ban later this month, which could further emasculate the seal market.

In the meantime, market and other forces seem to be tilting favorably toward the baby seals. Pelt prices are down from $100 per animal in 2006 to just $15 this year, thus undermining government claims of the seals’ economic importance.

In other news, which one may interpret as one wishes, the weather is making life difficult for sealers. Strong winds and freezing rain have been slowing them down. The pelts they seek so that human bipeds can be fashionably warm are secure for the time being on the animals who need them most.

Pressures, meanwhile, are mounting across the border where U.S. Sens. Carl Levin, D-Mich., and Susan Collins, R-Maine, recently introduced a resolution urging the Canadian government to end the commercial seal hunt.

Come on, Canada. See things Putin’s way and I’ll donate my hakapik to the museum of your choice.


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Fighting old battles

A 250-year-old defeat still rankles

The taking of Quebec


This engraving is based on a sketch made by Hervey Smith, an aide-de-camp to General James Wolfe during the siege of Quebec in 1759.The siege, which led to British victory in the Battle of the Plains of Abraham, took place during the Seven Years’ War. Here, Smith depicts British troops scaling the cliffs that lead to the Plains. Their transport ships lie in the St. Lawrence River just below.

The Battle of the Plains of Abraham was brief and not all that bloody, but it was historic. On September 13th 1759, France’s loss of its colonial territories in North America was set in motion when British redcoats scaled cliffs protecting Quebec City and defeated troops and militia loyal to Louis XV. A modern-day battle over the battle, which concluded on February 17th, lasted somewhat longer and ended very differently. It flared up over plans to mark the battle’s 250th anniversary with a re-enactment, and ended with Quebec separatists crying victory and Canada’s federal government beating a hasty retreat.

The re-enactment was to have been the centrepiece of a summer-long commemoration of 1759’s events. But to some Quebeckers commemoration sounded like celebration. “Dancing on the graves of our ancestors,” was how the Réseau de Résistance du Québécois (RRQ), a group of sovereigntist hardliners, described it. They demanded the re-enactment’s cancellation. For several weeks debate raged. The re-enactment was an exercise to pay tribute to the fallen and educate the living about one of Canada’s most important episodes, said its supporters. These included 2,000 or so mostly American “re-enacters”, the federal government and Quebec City’s mayor, who was loth to lose millions of dollars in tourist spending.

The Death of Wolfe


The Death of General Wolfe, 1770, by painter Benjamin West depicts the death of Gen. James Wolfe at the battle of the Plains of Abraham in 1759.

Opponents, and most of the French-language press, cursed the proposed re-enactment as a “repugnant federalist propaganda operation”. When it reached a point where its organisers were receiving threats—including having “our bayonets shoved up our butts”, according to their leader—the National Battlefields Commission, which administers the Plains of Abraham, cancelled the mock battle and other activities planned for the summer. Or, as the Gazette, Quebec’s only English daily, wrote, it “cravenly surrendered the field”.

If there was an edifying component to the brouhaha, it lay in displaying the different light in which the Conquest, as it is known, is seen by those on opposite sides of the Quebec independence debate. For many sovereigntists it was the beginning of domination by the wretched English, and of the struggle for cultural survival. Federalists, however, both Francophone and Anglophone, argue that after the Conquest the French of New France got rights they could only dream of under the exploitative, authoritarian ancien régime.

The Death of Montcalm


La mort du marquis de Montcalm (Death of Montcalm) engraved by Juste Chevillet after Watteau, in 1783.

Whatever the case, the re-enactment was probably doomed from the moment in mid-January when the RRQ pledged “to go on the warpath” against it. Support for Quebec’s sovereignty spikes whenever it is felt that English Canada is taking it for granted or not respecting it. Wise federal politicians are thus wary of anything that may rile Quebec sensitivities. Nevertheless, a few cabinet ministers took opposing positions on the re-enactment.

abraham may 24 1

A View of the Bishop’s House with the Ruins as they appear in going down the Hill from the Upper to the Lower Town (Québec) Painted by Richard Short in 1761

Quebec’s premier, Jean Charest, was shrewd enough not to get involved. He simply announced that he would not attend. This is a decision Generals Wolfe and Montcalm, the commanders of the British and French forces in 1759, should probably also have made; both died of wounds suffered on the Plains of Abraham.


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The Great Solvent North

Has the world turned upside down? America, the capital of capitalism, is pondering nationalizing a handful of banks. Meanwhile, Canada, whose banking system had long been notorious for its stodgy practices and government coddling, is now being celebrated for those very qualities.

The Canadian banking system, which proved resilient in the global economic crisis, is finally getting its day in the sun. A recent World Economic Forum report ranked it the soundest in the world, mostly as the result of its conservative practices. (The United States ranked 40th).

President Obama has joined the adoring throng. He recently said that Canada has “shown itself to be a pretty good manager of the financial system in the economy in ways that we haven’t always been here in the United States.” Paul Volcker, former chief of the United States Federal Reserve, commented that what he’s arguing for “looks more like the Canadian system than the American system.”

Most people don’t know that the vision behind Canada’s banking system, made up of a few large, national banks with branches from coast to coast, actually had its beginnings in the United States. Canada’s system is the product of a banking framework inspired by Alexander Hamilton, the first American secretary of the Treasury. Hamilton envisioned the First Bank of the United States, chartered in 1791, as a central bank modeled on the Bank of England.

Canadians found inspiration in Hamilton’s model, but not all Americans did. In the 1830s, President Andrew Jackson opposed extending the charter of the Second Bank of the United States, perceiving it as monopolistic. Money-lending functions were then assumed by local and state-chartered banks, eventually giving rise to the free-market, decentralized system that America has today.

Today, Canada’s system remains truer to Hamilton’s ideal. The five major chartered banks, the few regional banks and handful of large insurance companies are all regulated by the federal government. Canadian banks are relatively constrained in the amounts they can lend. Canadian banks are required to have a bigger cushion to absorb losses than American banks. In addition, Canadian government regulations protect the domestic banks by limiting foreign competition. They also keep banks broadly owned by public shareholders.

Since Canada’s financial services sector was deregulated in 1987, permitting the banks to buy brokerage houses, they have enjoyed vast earnings power because of their diverse businesses and operations. And in contrast to the recent shotgun marriages at bargain prices between ailing Wall Street brokerages and American banks, Canadian banks paid top dollar decades ago for profitable, blue-chip investment firms.

Canadian banks are known to be risk-averse, and this has served them well. While their American counterparts were loading up their books with risky mortgages, Canadian banks maintained their lending requirements, largely avoiding subprime mortgages. The buttoned-down banks in Canada also tended to keep these types of securities on their books, rather than packaging them and selling them to investors. This meant that the exposures they did have to weak mortgages were more visible to the marketplace.

The big five Canadian banks — Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Bank of Montreal — survived the recent turmoil relatively unscathed. Their balance sheets remain intact and their capital ratios are comfortably above requirements. Yes, Prime Minister Stephen Harper’s government may buy as much as 125 billion Canadian dollars (about $100 billion) worth of mortgages, increasing banks’ capacity to lend. But this is small change compared with the scale of Washington’s bailout.

Few would have predicted that Canadian banks, long derided as among the least autonomous because of stringent government oversight, would emerge from the global mayhem as some of the more independent international players.

Since Mr. Obama seems to admire the Canadian banking system, his administration might want to take a page out of its playbook.

This would entail building a national banking system based on a small number of large, broadly held, centrally and rigorously regulated firms. Imitating the Canadian model would require sweeping consolidation of American banks. This would be a very good thing. Washington had difficulty figuring out the magnitude of the financial crisis because there are so many thousands of banks that it was impossible for regulators to get into all of them.

Washington is already on the path to achieving consolidation. Eventually, some of the larger banks into which the government is injecting taxpayer money will probably be deemed beyond help, and will either be allowed to die or be partnered with other banks. The market will take its cues from this stress-testing, and make its own bets on which banks will survive. It’s hard to predict how many will have survived when the dust settles, but the new landscape might consist of only 50 or 60 banking institutions. More radically, Washington could take over the licensing of banks from the states, or, at the very least, consider more stringent regulation of global and super-regional banks. After all, the Canadian system is considered successful not only because it has fewer banks to regulate, but because regulation is based on the tenets of safety and soundness.

There is no time to waste. Reconfiguring the American banking structure to look more like the Canadian model would help restore much-needed confidence in a beleaguered financial system. Why not emulate the best in the world, which happens to be right next door? At the very least, Hamilton would have approved.

Theresa Tedesco is the chief business correspondent for The National Post.


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See also: John Gibbens’s tour of second-hand bookshops turns up a neglected humorist


My Financial Career (Stephen Leacock)

He started writing pieces for periodicals in the 1890s, and in 1910 he brought them out as a book, Literary Lapses. It was a smash. A wag commented in 1911 that more people had heard of Stephen Leacock than had heard of Canada. His most lucrative book, however, was his first, Elements of Political Science (1906), which became a standard university text.

Like Literary Lapses, Laugh with Leacock opens with ‘My Financial Career’. If this was actually his first piece, few writers can have made a debut so near their peak. Describing his attempt to open a bank account, Leacock captures minutely the psychopathology of the ‘customer’ – bullied, belittled and bewildered. The detail may be historical, but the theme has only grown more universal, now that we spend so much of our lives being treated as ‘customers’ by someone or other.

A lot of his satire still stands up like this. The clothes and settings have changed, but the pretensions, follies and fads are all recognisable. Take, for instance, his assault on the magazine short story, ‘The Snoopopaths or Fifty Stories in One’: ‘ “Back,” she iced. And then, “Why have you come here?” she hoarsed. “What business have you here?” “None,” he glooped, “none. I have no business.” They stood sensing one another.

“I thought you were in Philadelphia,” she said – her gown clinging to every fibre of her as she spoke.’

Leacock’s durability may result from a rule he made himself. Apparently, when he was in teacher-training he carried off a wicked impersonation of the principal of his college that deeply wounded the man, and from then on the precocious humorist vowed to keep personal mockery out of his comedy. Someone who’s funny without either malice or obscenity – it’s increasingly hard to imagine, nowadays.

The sleepy lanes, by the way, turned out to be vergeless and patrolled by ferocious 4x4s. And though we scanned every single headstone, we never found Andrew Young. Was that precise description of his own funeral the canon’s little joke?


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Ottawa rebukes Russia for military flights in Arctic


Canadian CF-18s deployed on eve of Obama’s Ottawa visit when Norad detected Russian bomber.

Two Russian military bombers came close to breaching northern Canadian airspace on the eve of U.S. President Barack Obama’s visit here last week, Defence Minister Peter MacKay revealed Friday.

The Russians’ behaviour drew a rebuke from Prime Minister Stephen Harper, who said he was concerned about what he called encroachment into Canadian territory.

“This is a real concern to us,” Mr. Harper said during a visit to Saskatoon. “I have expressed at various times the deep concern our government has with increasingly aggressive Russian actions around the globe and Russian intrusions into our airspace.”

He vowed to “respond every time the Russians make any kind of intrusion on the sovereignty of Canada’s Arctic.”

The incident occurred Feb. 18, about 24 hours before Mr. Obama travelled to Canada for his first foreign visit.

Canadian CF-18 fighter jets were scrambled from Cold Lake, Alta., to intercept the long-range Tupolev TU-95s and signal them to back off, Mr. MacKay told reporters in Ottawa.

The Defence Minister noted that the Russian flight took place when Canada’s security focus was on Ottawa, in preparation for the Obama visit.

“I am not going to stand here and accuse the Russians of having deliberately done this during the presidential visit, but it was a strong coincidence,” Mr. MacKay said.

Canadian jets intercepted the Russian aircraft — commonly referred to as “Bears” — 190 kilometres northeast of Tuktoyaktuk, NWT. They had not entered Canadian airspace but did stray into a zone of international airspace under Canada’s monitoring and control.

The Russian embassy did not return phone calls yesterday.

Mr. MacKay said Canadian pilots sent their Russian counterparts “a strong signal that they should back off and stay out of our airspace.”

Mr. MacKay said this incident was one of an increasing number of exercises by Russian military planes near northern Canadian and U.S. airspace in recent years.

It’s a resumption of the probing Cold-War-era training flights by Russian aircraft that were suspended when the Soviet Union fell. But in 2007, flush with money from high oil prices, the Russians resumed regular air exercises in the name of protecting the sovereignty of their Arctic.

Opposition parties accused the Tories of using tough talk on Russia to shift the political debate away from mounting deficits and economic woes.

“Everything the government does in these circumstances is an effort to change the channel,” Liberal MP Bob Rae said.

U.S. General Gene Renuart, commander of North American Aerospace Defence Command, said Canadian and U.S. jets have visually identified more than 20 Russian aircraft in recent years that were conducting exercises near North American airspace.

Mr. MacKay said the Russians have turned a deaf ear to his request for advance notice of such near incursions.

“It’s not a game at all … I have personally asked both the Russian ambassador and my counterpart [in Russia] that we are given a heads up when this type of air traffic is to occur, and to date we have not received that kind of notice.”

Gen. Renuart said, however, that Russia has not broken international rules or entered the internal airspace zones of Canada or the United States.

“The Russians have conducted themselves professionally; they have maintained compliance with the international rules of airspace sovereignty and have not entered the internal airspace of either of the countries.”


Full article and photo: (last udated on April 10, 2009)


Canada ‘turns back Russian bomber’


Russian Tu-95 Bear bomber - file photo
Russia has increased the number of long-range bomber flights

Canadian air force jets intercepted a Russian bomber approaching Canadian air space the day before President Barack Obama visited Ottawa, officials say.

Two fighter jets met the long-range Bear bomber over the Arctic last week, Defence Minister Peter MacKay said.

The Russian plane turned around after being signalled by the Canadian pilots, he said.

There has been an increasing number of similar Russian flights in the Arctic in recent years, Mr MacKay said.

The Canadian jets “met a Russian aircraft that was approaching Canadian airspace. They sent very clear signals that the Russian aircraft was to turn around – turn tail – to its own airspace, which it did,” Mr MacKay told reporters after meeting North American Aerospace Defense Command (Norad) officers in Ottawa.

He said he did not know if the flight was deliberately timed for when Canadian security efforts were focused on Mr Obama’s upcoming visit to Ottawa.

“I’m not going to stand here and accuse the Russians of having deliberately done this during the presidential visit, but it was a strong coincidence,” he said of the 18 February flight.

Mr Obama visited Ottawa the next day.

An official at the Russian embassy in Ottawa said he did not think the flight had anything to do with Mr Obama’s visit.

“Americans have routine flights. Russians do, different Europeans do,” he was quoted as saying by Associated Press news agency.

“The routine is there. All the sides are generally informed.”

Mr MacKay said Russia had refused Canada’s requests for advance notification of such flights.

Arctic claims

Russian aircraft regularly probed North American airspace during the Cold War, but such flights ended after the collapse of the Soviet Union.

Activity has picked up lately however, Mr MacKay said.

“It began just a few years ago when then-President Putin… [said] Russia was going to take a more active role in asserting itself. That apparently includes coming close to and up to Canadian airspace.”

Moscow has claimed a large portion of the Arctic Ocean seabed and used a mini-submarine to plant a flag on the ocean floor under the North Pole two years ago.

Canada, along with the US, Norway and Denmark, also have Arctic claims. The area is believed to be rich in natural resources.

Russian bombers have also overflown American naval vessels and last year Tokyo complained that a Russian bomber had entered Japanese airspace.


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Photo: BBC News

From BeaverTails to bloopers


President Obama makes a surprise visit to Le Moulin de Provence bakery.

He had us at merci.

Barack Obama’s visit to Ottawa Thursday was a six-hour romance with a country eager to return his affections.

Indeed, the whole nation seemed weak in the knees.

It was easy to forgive the little slip at the beginning of an afternoon news conference when he started to explain what a “great pleasure it is to be in Iowa, er, Ottawa.”

How could we not adore him when he followed that faux pas with a mention of his Canadian brother-in-law and two Canadian staff members and declared: “I love this country and think that we could not have a better friend and ally.”

Mr. Obama even said he looks forward to coming back “as soon as it warms up.”

But just how serious could we take his complaints about the weather when, instead of hightailing it to the airport in the late afternoon, he set out in search of a BeaverTail, the large, flat fried pastry that is one of Ottawa’s winter traditions?

The presidential motorcade headed to the ByWard Market just east of the downtown where Mr. Obama first stopped at the Oxxo Silk Market, which sells assorted tourist goods. He emerged with a keychain that he purchased with Canadian dollars.

“I was looking for a keychain and a snow globe for my daughters,” said the President, explaining that he was continuing a tradition, started during his election campaign, of picking up memorabilia at every place he visits.

Soon after, he got his BeaverTail – a special “ObamaTail” topped with a chocolate and maple syrup O – and then he walked into Le Moulin de Provence, a French bakery and bistro.

“He shook people’s hands walking through, saying hi, walking through, everything,” said Isabelle Corriveau, 18, an employee at the bakery.

Mr. Obama pointed to an iconic Canadian shortbread cookie – shaped like a maple leaf, covered in red icing, with white trim and white lettering reading: Canada. For the common folks, those cookies sell for $2.34 each, including taxes. Mr. Obama got a special rate.

“He said, ‘I’d like to buy some cookies for my daughters,’” Ms. Corriveau said. “We said ‘no, you don’t buy it. It’s a gift.’”

Mr. Obama took three of the cookies, not telling staff whether the third was for the trip home, or for his wife Michelle.

After he left, the store was buzzing with activity, with patrons, neighbours and staff asking about the famous customer who’d stopped in around 4 p.m., less than an hour before Air Force One was wheels-up and on its way back south.

“I really wanted to see him,” gushed Ms. Corriveau, a student who has worked at the store for about a year. “I came into work, and all of the sudden all the policemen were here, and he was here.

“He said ‘Hi, nice meeting you,’ shook my hand,” she said. “It’s the biggest surprise, but it’s the nicest surprise.”

And there were a few others throughout the day.

Mr. Obama stepped off Air Force One at the Ottawa airport in midmorning to be greeted by Governor-General Michaëlle Jean and other dignitaries, including Foreign Affairs Minister Lawrence Cannon. When Mr. Cannon welcomed the President in French, Mr. Obama responded: “ Merci.” It was a single word that sent French-speaking reporters into giddy delight.

But, for the most hardcore Obama watchers, it was the broad smile and wave from behind Plexiglas on Parliament Hill that made the six-hour visit of the newly inaugurated American President worthwhile.

The 2,500 fans who huddled in the snow Thursday morning were warned they would get just a fleeting glimpse of Mr. Obama he dashed from his limo to the doors of the Centre Block.

When the large blue helicopter signalled his arrival and the motorcade finally pulled into sight, they erupted into a frenzy of cheers and applause.

The lanky President emerged from the limo to be greeted by Prime Minister Stephen Harper at the Parliament doors. “Do you mind?” he asked Mr. Harper, gesturing to the crowd to indicate his desire to reciprocate some of the love.

The two leaders walked around the limo and, for what seemed like the better part of 10 seconds, Mr. Obama beamed at the throng of soggy, and slightly frozen, admirers. Then, with a gentle hand on the back of the Prime Minister, he disappeared into the Centre Block.

There were none of the customary gifts exchanged between the President and the Prime Minister because, as one of Mr. Harper’s aides put it: “When you go to visit a close friend, you don’t need to bring a present.”


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Obama compliments Canadian regulation

President Barack Obama said the United States should take note of Canada’s banks, which have avoided government bailouts and are now among the strongest in the world.

In advance of his first foreign trip, Obama said in an interview with the Canadian Broadcasting Corp. on Tuesday that Canada has shown it is a good manager of its financial system.

Obama heads to Canada on Thursday as the financial crisis threatens the solvency of U.S. banks.

“One of the things that I think has been striking about Canada is that in the midst of this enormous economic crisis, I think Canada has shown itself to be a pretty good manager of the financial system in the economy in ways that we haven’t always been here in the United States,” Obama said.

“And I think that’s important for us to take note of, that it’s possible for us to have a vibrant banking sector, for example, without taking some of the wild risks that have resulted in so much trouble on Wall Street.”

Canada has avoided the mortgage meltdown and banking crisis that are hitting the United States and Europe hard.

The country has not experienced the failure of any major financial institution and Canada’s banks now have the largest market capitalization’s in the world. Royal Bank of Canada has a $30 billion market cap compared to Citigroup’s $16 billion market cap.

The stock prices of Canada’s banks are down but not nearly as much as U.S. or European bank stocks. Canada’s financial system is dominated by five banks, unlike in the U.S. where there are scores of banks.

The World Economic Forum said recently Canada had the soundest financial system in the world, with a rating of 6.8 out of 7.

Toronto-Dominion Bank economist Craig Alexander said regulation force the banks to have a Tier 1 capital ratio of 7 percent, but that in practice the median in mid-2008 was 9.8 percent.

“This is a higher capital ratio that in many other countries,” Alexander said in a recent report.

Alexander also noted that investment banks in Canada were folded into a larger diversified institutions late 1980s when the government allowed for it.

“There appears to be a more risk adverse culture in Canada running through government, the public and banks. One feeds off another. It may be instrumental that Canadian banking is relatively dominated by a fairly small number of large banks that have been in business for a very long time,” Alexander wrote.

“Perhaps this long history deters actions to boost short-term profits at the expense of long-term risk.”

Robert Bothwell, director of the international relations program at the University of Toronto, said government oversight has prevented the Canadians banks from behaving like U.S. banks.

“My suspicion is that the Canadian banks deeply desire to behave as badly or stupidly as the British or American banks but government wouldn’t let him,” Bothwell said.

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In Canada, Obama gets warm welcome – and tips on managing an economy
Among industrialized countries, Canada is the only one not to have seen a major bank fail. The World Economic Forum ranked Canada’s banking system as the healthiest in the world in 2008, while the US took the 40th spot. And while Canada’s largest five banks reaped profits of $8.2 billion, the top five US banks lost a combined total of $8.3 billion last year.

Stronger federal regulations and lower leverage ratios borne by Canadian banks have allowed them to weather the global banking storm. Canadian financial institutions didn’t engage in the subprime mortgage lending that sideswiped the US banking industry and forced millions of American homeowners into foreclosure.

“The difference with Canadian banks is that they never succumbed to the temptation of huge profits. It also allowed them to avoid the downside of more aggressive behavior,” says David Haglund, a professor of international politics at Queen’s University in Kingston. “It speaks to the more conservative nature of Canadian society in general. Canadians are simply more risk averse.”

Canada has not escaped the global economic crisis. Its economy tipped into recession in the last quarter of 2008. In January alone, 129,000 jobs disappeared – the biggest one-month increase in years – pushing the unemployment rate to 7.2 percent. And this week brought more bad news: Alberta, Canada’s cash cow, which has led the national economy over the past several years, is also in recession, hit by a slowdown in oil prices and sales. To combat the downturn, Prime Minister Harper’s Conservative government introduced a $39 billion (about $31 billion US) stimulus package, to be rolled out over two years.

But analysts believe Canada’s strong balance sheet will position it better than other embattled countries to weather this recessionary storm. For 12 consecutive years, Canada has posted budgetary surpluses, compared with the $1 trillion US federal deficit – a figure that doesn’t include the $787 billion stimulus package signed into law this week.

To hear the analysts tell the story, Canada appears to have been getting a number of other things right. For example, even the most ardent proponents of big business are fans of the universal healthcare system. As Professor Haglund points out, the Big Three automakers have been able to produce cars more cheaply in their Canadian plants because the government absorbs the cost of healthcare.

And healthcare costs are lower in Canada, accounting for 9.7 percent of the GDP, compared with 15.2 percent in the US.

Higher taxes or regulation and a vibrant economy aren’t necessarily mutually exclusive, Haglund says. “If Barack Obama can take away any lesson from the Canadian experience, it’s that things can be changed while preserving what’s best in North American life.”


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Obama visit aims to rebuild alliances

U.S. President Barack Obama is embarking on his first foreign visit conveying a tone of courtship – hinting that he hopes progress in Afghanistan will convince Canada to keep troops there after 2011, but saying he won’t ask Stephen Harper to commit this week.

And despite a lobbying and advertising campaign mounted by environmental groups pushing the new President to “say no to dirty oil” from Canada, Mr. Obama is avoiding singling out Alberta’s oil sands as a polluting pariah – saying that, as with coal in the U.S., the goal must be to mitigate its impact, not stop using it.

The soft-sell tone – on trade, oil and Afghanistan – is part of the broader message that he is trying to get across on his first foreign trip as President, a baby-step quickie trip to his country’s close neighbour and largest trading partner: that the U.S. is trying to rebuild its alliances.

In an interview with CBC television Tuesday, the President said he won’t press Prime Minister Harper for Canadian troops to stay past the 2011 deadline set for their withdrawal from Kandahar. But he also hinted that there’s still time for progress in Afghanistan to change Canada’s mind.

“I think, you know, we’ve got until 2011, according to the Canadian legislature, and I think it’s important for the Canadian legislature and the people of Canada to get a sense that what they’re doing is productive.

“…Obviously I’m going to be continuing to ask other countries to help think through, ‘How do we approach this very difficult problem?’ But I don’t have a specific ‘ask’ in my pocket that I intend to bring out in our meetings.”

The U.S. President has said that he will make Afghanistan a top foreign-policy priority, and is set to announce a major troop surge. He has appointed prominent diplomat Richard Holbrooke as his special envoy to Afghanistan and its neighbour, Pakistan.

Mr. Obama expressed thanks for Canada’s efforts, and said problems in Afghanistan cannot be solved by military means alone, but require diplomacy and development efforts in a comprehensive strategy that he hopes will be “one that ultimately the people of Canada can support. …”

His half-day visit to Ottawa will be a brief dip of the toe outside the U.S. He arrives at 10:30 for two sessions with Mr. Harper lasting a total of two or three hours, a short news conference, and a 20-minute courtesy meeting with Liberal Leader Michael Ignatieff at the airport before he leaves at 3:40 p.m.

Aides say the gentle approach is part of the signal the President wants to send – that alliances matter. Denis McDonough, a National Security Council staffer, said Mr. Obama wants to the trip to underscore “that it’s vitally important that America revitalize its alliances.”

Although he had mused during his election campaign about reopening NAFTA, he tried to be reassuring on trade – to avoid, according to Mr. McDonough, any recession-time signal that he wants less trade rather than more.

The President said Canadians should not be “too concerned” about Buy American provisions in his stimulus bill because the U.S. will live up to trade treaties, and made his NAFTA concerns sound like a matter of details.

When asked about Alberta’s oil sands, Mr. Obama chose to soothe concerns in Ottawa, rather than respond to an environmental movement that supported his election.

Mr. Harper has proposed a joint Canada-U.S. climate regime, in part out of fear Canadian oil might face U.S. punitive regulation, but environmental groups have been running ads in U.S. newspapers urging Mr. Obama to “say no to dirty oil” when he visits Ottawa.

“What we know is that oil sands creates a big carbon footprint,” Mr. Obama said – but he stressed that technology like carbon-capture-and-storage could mitigate the impact.

“I think that it is possible for us to create a set of clean energy mechanisms that allow us to use things not just like oil sands, but also coal. The United States is the Saudi Arabia of coal, but we have our own homegrown problems in terms of dealing with a cheap energy source that creates a big carbon footprint.”

Those comments will be received warmly by Mr. Harper’s Conservatives, who have been trying to shed the oil sands’ “dirty oil” label and insist its pollution is comparable to that from U.S. coal.

But environmentalists are skeptical about whether the carbon-capture technology is viable, especially in the oil sands, and using it to mitigate pollution will be a different proposition in the oil sands if developments there continue to expand rapidly.

“I’m sure the Canadian government is going to take this as the kind of language that they are looking for, but the devil is in the detail,” said Susan Casey-Lefkowicz, a senior attorney at the Natural Resource Defence Council in Washington.

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Running on Book Sense and Charm


CEREBRAL TACTICS Some see Michael Ignatieff, the opposition Liberal Party leader, as a throwback to Pierre Trudeau

Should his party win control of the government, something it came close to doing last week and still hopes to in the coming months, he would become the next prime minister of Canada.

Among the circles in which Mr. Ignatieff once traveled, there might be a sense that anybody capable of writing a novel (“Scar Tissue”) that becomes short-listed for the Booker Prize — anybody, for that matter, who had the writer Martin Amis and Michael Palin of Monty Python as guests at his wedding — could figure out a way to jump the queue of Canadian politics.

Even so, his ascendancy puts his country on the cusp of an unusual moment, in some ways a throwback to the era of the dashing Pierre Trudeau, another smart-set intellectual who served as prime minister.

“He was brought in to reinvigorate the liberal brand, to go for the big game right away,” said Nelson Wiseman, a political scientist at the University of Toronto. “I think a lot of the party thought, ‘We need someone who has the intellectual gravitas of Pierre Trudeau.’ Like Trudeau, he came in as a fresh figure, but he also had a reputation abroad that Trudeau didn’t.”

Mr. Ignatieff has proven savvy enough in his own country. Although his opposition coalition split apart and backed down last week from its efforts to defeat the Conservative government led by Prime Minister Stephen Harper, political watchers say that Mr. Ignatieff is probably just biding his time.

“He wants the crown in his own right — not through a coalition but via an election, which most of the pundits think we’ll have later this year,” Mr. Wiseman said. “He also wants the Harper administration to have to wear the recession for a while.”

Mr. Ignatieff’s rise in Parliament happened fast, he said in an interview in late January. He said that he gave up a lot by leaving behind the private contentment of a serious writer’s life to run for office.

“But I’m in here to be serious,” he said, and added: “This is the only place where I can be a participant, not a spectator. I’ve been a spectator, and now I’m in the boat fishing. That part of it, from a spiritual point of view, it feels good.”

A FEW years ago, a survey conducted by Foreign Policy magazine and Prospect, a British journal, ranked Mr. Ignatieff as the 37th-most influential “public intellectual” in the world (the Nigerian writer Chinua Achebe was 38th). Although the clauses “for a Canadian” or, now, “for a politician” are often attached, people almost always describe Mr. Ignatieff as glamorous. Maclean’s magazine once named him Canada’s “Sexiest Cerebral Man.” He was famous in London during the 1980s and 1990s when he was the host of a television talk show devoted to books and ideas. He was a sort of Anglophone version of Bernard-Henri Lévy, but with a pedigree and without the money or aversion to shirt-buttoning.

Mr. Ignatieff’s big-time ambition is so much a part of his public identity that he often scores points by making fun of it himself. At a recent address to a group of 700 business leaders, he opened with a shout-out to a member of the audience who, he kindly noted, had run against him for his parliamentary seat. “And I beat him,” Mr. Ignatieff said, after a nicely timed comedic pause. The crowd laughed heartily.

Mr. Ignatieff’s life story is positively novelistic in its detail. His father, George Ignatieff, was a Canadian diplomat, and his grandfather and great-grandfather were both Russian counts who served as cabinet ministers in the czarist government. His mother’s brother, George Grant, was a famous political philosopher.

Mr. Ignatieff held the captainship of his boarding-school soccer team, produced a Harvard dissertation that involved spending nights watching over state prison inmates in Massachusetts and has written more than a dozen books: political tracts, three novels, a family history, a biography of his former mentor Isaiah Berlin, and — mobilized by what he saw in the Balkans — several books about human rights and intervention.

In 2004, when he was serving as the director of Harvard’s Carr Center for Human Rights Policy, Mr. Ignatieff was visited by three strategists from Canada’s Liberal wing who were leading an effort to infuse a party weakened by scandal with new blood. “It was a bolt from the blue,” he recalled, when during dinner they asked him to consider coming back to run for office.

“The chance to be in the arena was pretty irresistible,” he said.

It was simultaneously of a piece with his background and somewhat incongruous. “My dad worked for four prime ministers,” he said. “I grew up in a house where public service was something you ought to do. But elected public service my father thought of with horror, because he knew how brutal it was.”

In seeking his party’s leadership position in 2006 and 2008, Mr. Ignatieff ran both times against Bob Rae, a longtime politician who happened to be one of his best friends; they had been roommates at the University of Toronto.

“It was difficult running against Bob — we are old, old friends, and our dads were in the foreign service together, ” Mr. Ignatieff said.”

In 2006, neither was elected leader, but in 2008, Mr. Rae bowed out of the contest at the last minute to throw his support to Mr. Ignatieff.

“We had some very emotional conversations,” Mr. Rae said in an interview in Toronto. “My feeling was that Michael had the support of the small and influential group of party officials who were voting — these were special, last-minute circumstances — but that if it had been a broader election throughout the party, I’d have won.”

To this, Mr. Ignatieff said, “We’ll never know, because Bob pulled out of the race, because he made a very fine gesture.”

Mr. Ignatieff’s friend Leon Wieseltier, the literary editor of The New Republic, described him as “a genuinely introspective individual,” but said that in the more than two decades he has been editing him, he had never heard mention of an interest in running for office. “He is, in spirit, a humanist, not a politician,” he said.

Mr. Wieseltier added: “When I would see Michael, he and I would stroll arm in arm around Covent Garden singing — poorly, of course — some of the great quintet in the first act of ‘Così Fan Tutte.’ There was in him a hunger for intellectual authority and for a certain degree of social recognition, but it was never about power.”

While Mr. Ignatieff is blessed with many attributes that an elected official is supposed to possess — poise, focus and an instinct for self-preservation — he has a number of other traits that probably wouldn’t play on an American stage.

He has openly acknowledged, without much self-censorship, regret over his initial support of the Iraq war and has movingly — if painfully — wrung his hands in print, most notably in The New York Times Magazine, over both the decision and his ensuing volte-face.

In Canada, he has faced criticism for his stance on the war, not simply because of all the agonizing, but because, as Andrew Potter wrote in a 2006 issue of Maclean’s, “his arguments reek of the necessary compromises you need to make as a liberal in the U.S.”

In fact, over the years, Mr. Ignatieff has been very plain about his affinity for a country not his own. In 2002, writing in Granta, a literary magazine, he discussed his youthful opposition to the Vietnam War: “I loved my own country, but I believed in America in a way that Canada never allowed. I was against the war because I thought it betrayed something essential about the country. I marched because I believed in Jefferson and Lincoln.”

Considering those words now over tea and biscuits in Toronto, Mr. Ignatieff said, “There are moments when I’ve identified passionately with America, and there are moments of total recoil.” (The invasion of Iraq, he said, came to encompass both feelings.)

“I think I’ve always felt passionately and proudly Canadian, and the way I prove that is that I’ve never sought another passport,” he said, then smiled as he added that he keeps a statue of Thomas Jefferson in his study.

Charges of carpetbagging — Mr. Ignatieff and his second wife, Zsuzsanna Zshoar, moved into a condominium in an area of Toronto that he doesn’t represent — and impatience to rise to the top have also provided red meat to conservatives and Canadian tabloids.

David Rieff, an American friend and author, said: “Canada, like a lot of culturally small countries, has an ambivalent relationship with countrymen who leave and make it big in the United States or in Europe. He’s considered a celebrity at home, and they’re very proud of him, but there’s also some graceless carping. It’s tall-poppy syndrome.”

MR. IGNATIEFF’S next book, “True Patriot Love: Four Generations in Search of Canada,” will be published in late April, on the eve of a possible federal election. He described it as an exploration of Canadian identity — his, as well as those of his grandfather, father and children (he has two).

“Every generation, they are all obsessed with the idea of how to maintain a Canadian empire in the face of America, this behemoth right next door.”


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Obama, Canada’s Harper will have plenty to talk about


Stephen Harper, the Prime Minister of Canada, and Michaëlle Jean, the Governor General of Canada , Speech of the Throne, on January 26, 2009

Relax! Harper’s not really the president of the Great White North. He’s prime minister. For now anyway.

But in the summer of 2007, candidate Obama told a labor (labour for Canadian readers) rally in Chicago that one of the first things he’d do in the White House is tell “the president of Canada” that he wants to renegotiate parts of the allegedly job-gobbling North American Free Trade Agreement.

Since he knows better now and has already won Ohio and Pennsylvania, that Obama promise may be, in a Nixonian kind of phrasing, no longer operative. But Harper, whose country is the U.S.’ largest energy provider, and Obama will have plenty to talk about anyway. Both are political pragmatists. By Canadian standards, Harper is a conservative, which on the U.S. political spectrum would make him about as conservative as, say, Ted Kennedy.

Their two countries have by far the biggest bilateral economic relationship in the world, with about $1.6 billion in trade flowing back and forth each day. That’s more than $1.1 million per minute, even better than Obama’s fundraising.

And, as it happens, both countries’ economies are in recession right now.

Don’t tell Daily Kos, but Obama, like President Bush in Iraq, favors (favours) a U.S. troop surge of perhaps 30,000 into Afghanistan, which may take a little selling. A recent BBC America/Harris Poll shows barely one-third of Americans support such an order. Goodbye, honeymoon.

Also like Bush, Obama would like more NATO combat troops in Afghanistan, where Canadians have loyally fought since Day 1 of the ongoing but unsteady Taliban-overthrowing. But their costly casualty involvement is an increasingly emotional issue at home. Harper has vowed his country’s military involvement there ends in 2011, period.

As president-elect, Obama met in Washington with Mexico’s President Felipe Calderon to reassure that amigo.

Relations between Canada and what Canadians call “the States” have improved considerably since the War of 1812, when British troops assaulted Washington and torched a now-famous white house where Obama currently resides.

Americans easily forget, however, that that little bit of neighborly (neighbourly) arson was in retaliation for American soldiers sacking the city of York, now Canada’s economic capital and named Toronto.


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Photo: Canadian Prime Minister’s Office

As to the medals worn by Mrs. Jean:

Upon taking office, the Governor General is entitled to wear a number of insignia. Depending on the occasion, the Governor General may wear the following insignia, in order of precedence:

The Order of Canada

The Order of Canada was created on July 1, 1967 to recognize Canadians who have made a difference to our country. It is Canada’s highest honour for lifetime achievement. Her Majesty The Queen is Sovereign of the Order and the Governor General is its Chancellor and Principal Companion.

The Order of Military Merit

The Order of Military Merit was established on July 1, 1972 to recognize a career of exceptional service or distinctive merit displayed by the men and women of both the Regular and Reserve Forces. Her Majesty The Queen is Sovereign of the Order, and the Governor General is the Chancellor and a Commander of the Order.


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