Scribe's Prologue
Individual feeling of entitlement usually take precedence over the
collective sense of responsibility until a rare individual such as Al
Gore piques the collective conscience, leading to united action. In
this area, North America has lagged behind the European Union. As for
governments, although composed of men and women representative of those
in the country they govern, it is frequently not in their personal best
interest to accord precedence to what is right over what is expedient.
Largely due to its historical evolution, the degree of
centralization of our government does not permit federal policy to
treat differently, such provinces of disparate wealth as Alberta and
Newfoundland. Evidence of this can be seen in the difference in housing
prices between Montreal and Toronto, a disparity that is not likely to
change in the foreseeable future as housing prices are a function of
the health of the local economy and the degree of affluence of the
local citizenry.
Climate Change & the Antarctic
The Center for Biological Diversity
wants to use penguins, the new charismatic species ("The March of the
Penguins", "Happy Feet") many species of which are dwindling in number,
to help make a larger point, that the birds are, at least in part,
victims of global climate change.
Sunday 15 July 2007 rci WINNIPEG: BIGGEST ARCTIC STUDY EVER LAUNCHED
Meanwhile, the Canadian government has announced it will spend $25 million for fund the largest study ever of the country's Arctic. Treasury Board Secretary Vic Toews says the research will provide vital data about climate change and will focus in particular on the gigantic cracks in the northern ice that create open bodies of water. The research will be part of Canada contribution to International Polar Year, an international research project into the Arctic and Antarctica.
Although the Arctic is much more in Canadian news, the recent voyage of Jean Lemire and his ship Sedna
to the Antarctic has educated thousands of Québec visitors to the
Biodôme and listeners of Radio Canada to the mystery and plight of that
continent.
Under the UN Convention on the Law of the Sea,
which Canada ratified in 2003, coastal countries have the right to
control access to the belt of shoreline along their coasts. Barring
some exceptions, that belt is 12 nautical miles (22.2 kilometres) wide.
But the waterways dividing some of the islands in Canada's north are
often more than 96.6 kilometres wide. That would seem to leave plenty
of room down the middle for foreign ships.
A by-product of climate change is the slow disappearance of the
Arctic ice cap, requiring a clear definition of and established
sovereignty over Canada's Arctic boundary. To that end, Prime Minister
Harper has announced that the federal government will fund the
construction of six to eight new Arctic patrol ships to help reassert
Canada's sovereignty over the North. The Arctic Offshore Patrol Ships
will be Canadian-designed and built at a controversial cost of over
three billion dollars, but will be unable to operate in the Arctic in
winter,
Critics point to the fact that the Canadian shipbuilding industry
has been non-existent since World War II because it could not compete
in the world market. The enormous cost of these vessels is compared
with to that of year-round operable ships currently being produced and
used by other northern countries, as well as the temporary nature of
the employment that would be provided to Canadians if they were built
here.
The Northwest Passage
The melting of the Northwest Passage has been foreseeable but we
have been slow to react. The question arises as to why we should be so
interested in establishing our sovereignty in the Arctic Ocean; it is
pointed out that the St. Lawrence Seaway, an international waterway,
has never given rise to the same fervent, though belated, activity. The
answer lies largely both in the as-yet-unknown mineral and perhaps
petroleum wealth that lies under the ice and the unforeseeable width of
the continental shelf in that area. The latter can sometimes be a very
important factor in the ownership of the former.
The recent dispute over Hans Island,
claimed by both Canada and Denmark is in itself, except politically, of
little importance. As the Gibraltar of the Northwest Passage, it is,
however, of great importance. The unforeseen appearance of possible
wealth has a profound effect on the thinking of otherwise rational
human beings. As the various actors jockey for position around
unearthing, or perhaps deicing possible wealth, the Inuit claim, most
probably with reason, that the current government of Canada is giving
them no consideration in the distribution of the wealth in, under and
surrounding land that is traditionally theirs'. Seemingly unconsidered,
as well, in the establishment of sovereignty, is responsibility for the
prevention of and reaction to possible pollution in a more easily
navigable Northwest Passage.
On the first point, the Harper government, which seems curiously
oblivious to a number of its international treaty obligations, should
bear in mind that Canada is a member of the Arctic Council
which includes seven other Circumpolar nations: Denmark (representing
Greenland), Finland, Iceland, Norway, Russia, Sweden and the U.S. along
with representatives of Arctic indigenous peoples. Among the programmes
that come under the Council is the Arctic Monitoring & Assessment Programme which was designed to implement components of the Arctic Environmental Protection Strategy (AEPS). Additionally, there exists Canadian legislation, the
Arctic Waters Pollution Prevention Act.
Under the Act, there are useful definitions of the measurement of
Arctic waters which are defined as " the waters adjacent to the
mainland and islands of the Canadian arctic within the area enclosed by
the sixtieth parallel of north latitude, the one hundred and
forty-first meridian of west longitude and a line measured seaward from
the nearest Canadian land a distance of one hundred nautical miles,
except that in the area between the islands of the Canadian arctic and
Greenland, where the line of equidistance between the islands of the
Canadian arctic and Greenland is less than one hundred nautical miles
from the nearest Canadian land, that line shall be substituted for the
line measured seaward one hundred nautical miles from the nearest
Canadian land ".
Sunday 15 July 2007 rci IQALUIT: OTTAWA'S ARCTIC APPROACH QUESTIONED
Several politicians in Canada's Arctic say the federal government's northern policies aren't broad enough. They were reacting to the announcement earlier in the week by Prime Minister Stephen Harper that six to eight patrol boats will be built at a cost of $7 billion, in part to assert Canada's territorial claims in the Arctic. The premier of the eastern Arctic territory of Nunavut, Paul Okalik, says he welcomes the military spending but thinks the government should trying to affirm Canadian sovereignty in the North by investing in the infrastructure needed by its residents. The government hasn't made a decision on a proposal to build a series of small-craft harbours in Nunavut that would benefit fishermen and tourism. The mayor of Iqaluit and the head of the Nunavut Association of Municipalities, Elisapee Sheutiapik, says the government has a duty to invest in the territories because many of them were established precisely to affirm Canada's sovereignty. And the Member of Parliament for the Western Arctic, Dennis Bevington, says ownership means developing viable communities not just sailing at times through the Northwest Passage.
more
Illustrating the lengths to which nations will go to assert sovereignty, "Six colonies of coral have been planted
around an uninhabited rocky outcrop, more than 1,000 kilometres south
of the main islands of Japan. China recognises the rocks as Japanese
territory, but says Japan cannot claim exclusive rights to the
surrounding waters because they do not qualify as islands. Japanese
officials hope to establish Japan's claim by planting tens of thousands
of corals at the site."
Climate Change & China
Aside from issues of quality control and corruption, China has
serious environmental problems. No country can grow forever at the rate
China is growing, consuming the energy and water resources at its
current rate. But the most critical problem is that although three
hundred and fifty million citizens have benefited from their nation's
current affluence, over half the population has not yet done so but
insists on eventually sharing in the fruits of China's success. The one
hope is that there will soon be a realization that productivity is
affected by smog, environmental degradation and deteriorating health
among the work force and rural populations. However, it must be
recognized that their culture does not place the same value on human
life and well-being as do western cultures.
The economy
Canada
The global economy is much more resilient and stronger than anyone had
imagined it would be and the Canadian economy is doing well. Bank of
Canada has predictably, raised its interest rate and will continue to
do so, barring unforeseen developments, perhaps 5% by the end of the
year or at the latest, a year from now. Interest rates have been
artificially low and it is better to normalize interest rates when the
economy is strong than at a less propitious time. The purpose is to
target inflation. As inflation can only be assessed retrospectively, it
is predictable that the interest rates will gradually rise until some
the economy has been, to the least extent, harmed. The other problem,
shared with the European Union is the diverse regional/provincial
economies, causing local rates of inflation to differ by region.
The U.S. economy has grown at a very fast pace and the hope
is entertained that the continued growth will overtake the spiraling
national deficit. David Walker, a former U.S. Comptroller General and
current Chairman of the U.S. Intergovernmental Audit Forum, disagrees
and warns of a bleak future, in part due to the aging of the
population, as well as the ever increasing underfunded liabilities of
Social Security and Medicare. It took some eight years for the Canadian
government faced with a similar problem to convince Canadians of the
necessity to act. However, with only eighteen months to go in his
presidency it is unlikely that President Bush will take the political
risk of acting in a similar fashion.
Private Equity
Although not new, a more recently talked about investment instrument is the private equity fund. So far this year, private-equity deals have accounted for nearly half of all merger and acquisition activity,
based on dollar values, according to Thomson Financial. That's up from
less than a third in 2006. And this is at a time when M&A activity
is hitting record levels.
These are funds that invest in control of entire businesses, either
by becoming a majority shareholder or outright purchase in order to be
in a position to de-list them, restructure or revive them and then
re-list them to the benefit of the fund shareholders. Depending on the
skill of the fund managers, this can be far more profitable than mutual
funds and the yield, consisting largely of capital gains, is taxable at
a lower wait. A disincentive, however, in order to retain maximum
flexibility, is that investments by fund shareholders are usually
blocked for a period of time and in the case of some of the equity
funds that time can be as much as 18 years.
A recent article in the Economist
warns that:" It may well be, however, that the peak of the cycle is
close at hand. Private equity is inevitably a "feast and famine"
business: when one fund can raise a lot of capital, they all can.
Competition to buy companies then pushes up the price of doing deals,
increasing the interest burden and reducing the returns for equity
holders. More deals will be done this year, but they may not deliver
the kind of returns that investors are hoping for, just as the late
1980s buy-out of RJR Nabisco, the emblematic deal of the era, proved a
disappointment.
Gain is usually considered a function of risk. There has been a
great deal of recent criticism over sub-prime mortgages in the U.S.,
but many people had been enabled to buy homes that they would have been
otherwise unable to do had there not been investors prepared to take
the risk of investing in such a risky instrument.
Europe
The face of old Eastern European countries is changing rapidly
following their incorporation into the European Union. The historic
countryside and villages of Romania's Transylvania, Bosnia, Serbia are
being bought out by investors from the U.K., Russia, Germany as well as
other countries, and new highways are facilitating access to these
historic vestiges of times long past. Not too many 5-star hotels, but
one can be quite comfortable in small inns.
Incredible changes are taking place in France since the election of
Nicolas Sarkozy to the Presidency. He has gained unanticipated support
from the population with such unusual measures as his appointment of a
truly dynamic cabinet and undermining the opposition by appointing its
members to administrative government posts. There appears to be a new
cohesion in Europe and a changed relationship with the U.S., one that
is not receiving much attention in the North American press.
Videos Catherine Gillbert inro Diana Sanderson 1:17 who Meets Dr. Andre Pasternac 3:55
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