Wednesday, September 25, 2013

Tar Sands and Pipelines - What's the Gold Rush

I live in British Columbia.  At the moment there is a black-gold rush going on in Canada with regard to the efforts of large, multi-national petrochemical companies seeking to exploit the Canadian tar sands.

The tar sands represent a huge petrochemical resource in Canada, albeit one that is locked in a tar-like form, which when extracted is called bitumen.

The multi-national companies, with the support of the Canadian Federal Government are strip mining the Western Canadian hinterland.  The investments are in the multi billions of dollars.

From the point of view of the above players, since the primary anticipated markets for this oil is off shore, the difficulty they face is that the resource they are tearing out of the ground is landlocked.  The challenge they are currently attempting to overcome is one of moving the bitumen thousands of kilometres to ocean ports.

The challenges of movement are not technological as much as political.  Most of the population who live in areas through which the bitumen is intended to move do not want to have this troublesome product in their back yard.  Especially if the increased production is to be used primarily to feed the insatiable appetites of far off lands.

In fact, at the moment, these same corporations already move product from the tar sands to offshore markets.  And frankly, this is a solid export for the Canadian economy.

The problem is that they are currently in the process of attempting to hugely expand production, and it is the intended expanded production that has many crying foul.

Unfortunately, the dispute is often cast in terms of polar opposites.   On one side, people who are keen for growth in extraction and who argue that this creates great revenue for Canadian citizens and for government revenues.  The suggestion is that on the other side are people who only want to shut everything down and close the door to petrochemical extraction.

I think that the latter characterization is not helpful.  While the people with concerns likely are very concerned about human-cased global climate change, most of we Canadians also know that even with the best of intentions no nations are going to be able to immediately shut down our use of hydrocarbons.  And since tar sands petroleum is already part of the mix, one would hardly expect us to immediately close the existing extraction processes.

The biggest concern at the moment is the plans for INCREASED EXTRACTION.   If we don't increase the extraction, we don't need the additional capacity to export more than is being done at the moment.

Faced with climate change, we certainly need to think very seriously about the use of all carbon-based emissions; but more importantly at the moment, at least in terms of the tar sands, is that we need to BACK WAY, WAY OFF the idea of UNBRIDLED EXPANSION.

For the moment, it is impractical to turn off the spigot; but this is not an endorsement of opening ten fire hydrants full blast.


Public Service Pension Plans Not Created Equal

Based on a recent Fraser Institute report, the Vancouver Sun editorial (Sept. 20, 2013) headlined "BC must address problem of public service pension plans" is wrong both in fact and tone.  It is one thing for the Fraser Institute to pen a disingenuous, ideological offering in which it conflates various public pension plans across the country; it is quite another for the Vancouver Sun to uncritically transfer these whole-cloth ideas as an editorial.

The first distortion is that public sector employee plans are lumped in with the self-serving, gold plated pension plans of members of parliament and members of the legislature.  These plans are not the same and they are not funded in the same way.  The latter include taxpayers' contributions of many multiples of the contributions regular public employees.  With public service plans, the employee from earnings and the employer usually contribute very similar amounts.

The second contrast I would make is a very critical contrast between the public service pension plans in the Federal government and the public service pension plans in British Columbia. 

The Federal Government funds annual public-service pension payouts from general revenue.  Over the years, the contributions of employees from their earnings does not go into a separate pension fund.  Direct contributions from the employees' salaries are transferred into general revenue along with a 'matching' book-entry payment from the taxpayer. 

So, when a Federal Government employee begins to collect the defined-benefit pension at the end of her or his career, there is no separate fund.  These payments are funded by the general revenues, year to year.  Hence, in the case of the federal pension, there is an ongoing unfunded liability.  So, in the case of the Federal government, there is a 'pension problem'.  But the problem is not a problem created by the rich treatment of employees; it is a problem of poor fiscal arrangements made by the Federal Government policy makers -- the politicians.

The public service employee pension plans in British Columbia operate very differently and there is no taxpayer problem.  In British Columbia, on each pay cheque, the public sector employers and each employee make roughly similar contributions to specific defined-benefit pension plan funds (College Pension Plan, Municipal Pension Plan, Public Service Pension Plan, Teachers' Pension Plan, Work Safe BC).  In these cases, the funds are actually deposited and administered by an organization at arm's length from government, the BC Pension Corporation.  Ultimately, the BC public sector pensions are funded by these funds; not from ongoing general revenue.

I am a retired member of one of the BC plans.  My gross monthly pension is $1,564.47 or, in pay-cheque terms, about $782 by-weekly.  As indicated above, none of this before-tax pension money comes to me from the taxpayer.  It comes from the built-up pension fund and the revenue earned by the investments of that fund.  In this regard, the operation is similar to the manner in which the Canada Pension Plan operates. 

On behalf of current and future pensioners, those administering these funded plans, invest the monies in order to fund the future payouts.  For example, the March 31, 2013, report for the College Pension plan indicates that over the past 23 years, the fund has earned a return of in excess of 8% annually; and for the last year reported, investment income was in excess of 5%.  All the other BC plans operate similarly.  The BC pension payouts are funded overwhelmingly by earned income from investments.  Not from the taxpayer.

It is true that pension contributions by employees and employers are adjusted regularly to take account of actuarial assessment of the funds liabilities into the future; but just as with any other expenses one considers nowadays, the costs of future pensions is not static.  Costs go up.  Such costs likely would go up also for the defined contribution plans apparently favoured by the Fraser Institute.  In this world of ongoing inflation, surely no employer would hold employees to a one-time-only pension benefit amount.

While I am grateful to have the pension I have, I would argue that it is anything but gold-plated and though it is a defined benefit plan, it is NOT a problem to the BC tax payers.  In fact unlike the Fraser Institute, I pay income taxes just like most others. 

 The tax-free status of organizations such as the Fraser Institute -- now that really is an editorial worth writing.

Saturday, September 14, 2013

Quebec Secular Charter - Stop Yelling

Canada is the only formally-declared multi-cultural country in the world.

The Canadian multi-cultural policy was adopted by the Canadian government in the 1970s and 1980s.  The multi-cultural idea is based on the notion of cultural and religious pluralism, and the ideal that a wide variety of cultures and religions -- generally imported by immigration from elsewhere -- can coexist, and in a collage-like way, will make up what we call Canadian culture.

Generally, this collage or mosaic analogy is juxtaposed with the 'melting-pot' image generally declared as the way that immigration into the United States operated.

Regardless the Canadian multi-cultural social experiment as policy is very young and still very much in the process of being worked out in practice.  The most direct federal legislation related to this policy is the Canadian Multiculturalism Act and the Canadian Charter of Rights and Freedoms, specifically, section 27 of the latter.

The separatist government in Quebec recently proposed a Charter of Quebec apparently intended to curtail the wearing -- while actually on the job -- of religious adornments, by people employed in the Quebec public service or by government-supported agencies such as public schools.

At the time of the writing of this blog entry, I have found it impossible to find the actual text of the proposal, although there exist some sample images of religious adornments that the Quebec government suggests would be both unacceptable and acceptable under this proposed charter.

A key notion of the charter proposal apparently is that, in a 'secular society', clients of public services may feel uncomfortable, intimidated or pressured by being served by an employee who is wearing prominent religious garb or adornments.  Implicit is the idea of the separation of 'church and state' in the provision of government services.

The proposal, as some media have suggested, has set off a firestorm of controversy, now including public demonstrations.  Not just in Quebec, but across the country.  Indeed, many commentators have called the proposal abhorrent, especially in a multicultural nation such as Canada. Others -- particularly in the religious community --argue that the proposal is a violation of the right to have or practice religion, or even to be religious.  Frankly, there is so much hair on fire at the moment that I am having a good deal of difficulty trying to get to real substance of the arguments for and against, particularly as they might relate to the Canadian context.

Many political commentators have questioned the motivations of the Quebec government, suggesting that the government is less interested in the substance of the proposal than in attempting to deflect political interest away from the economy, and to something which may appeal to a disaffected segment of the Quebec electorate.  Others suggest that the motive is to perhaps create a diversion in terms of relations between the federal and provincial government.  Frankly, I am not interested in such speculations. I do not belong to an organized religion.

What interests me is that the Quebec government, intentionally or unintentionally, has offered Canadians an opportunity to discuss what it means for us to live in a secular, multi-cultural state.  If such a discussion has ever taken place in Canada, I have no recollection of it.  And if we think we do live in a secular but multi-cultural country, how ought that to look and operate as we go forward? Ought we to be involved in any mid-course corrections to the policy?

Since the notion of multi-culturalism was codified in Canada not all that long ago, and aside from an ongoing process of court proceedings around the various aspects of operationalizing the concept, the citizenry has not -- to my knowledge -- taken an opportunity to revisit the idea in open debate.  How we are doing?  Where are we headed after a few decades?  What, if anything, ought be happening in terms of the evolution of the ideas and ideals of multi-culcturalism and secularism as national values?

I think it is past time we had such a discussion and I hope that it emerges as a result of the Quebec proposal, regardless of what happens to their particular proposal.  Having such a discussion -- conducted in a mature fashion (if people would stop setting their hair on fire) -- would, I think, offer the opportunity to fine tune the Canadian multi-cultural ideal without resorting to the kind of sectarian name calling and ultimately to the violence that has erupted in many other nations across the globe.

Like most legislation, I do not think that the original Canadian multi-cultural legislation arrived full-blown, absolutely complete and evidence prescience about all matters that would arrive as Canada continues to develop as a country.   We need to talk.  We need to stop yelling at one another.





Nothing Like Being There - Conspicuous Consumption

A relative recently made a Facebook posting, expressing concern about the drop in the Great Lakes water levels.  The Great Lakes contain 21% of the world's fresh surface water.

Apparently the water level has been falling for some time now and shows no signs of recovering.  This, of course, is particularly disconcerting to those who live around the lakes and who, in many cases, depend on the lakes for such things as transportation, agriculture, drinking water and the like.

My relative is one of these.  She is retired and lives in a lovely home right on the margins of one of the lakes.  Her lake front, however, is receding into the distance.

My first reaction to the complaint is that this change may well be yet another example of the ongoing process of climate change.  I have no specific evidence of this, but the notion makes some sense.  There also may be other factors involved.  As I understand it, the geography around the Great Lakes has continued to rise as a result of the release of pressure from the last great ice age.  But the most immediate reason seems like it would be climate change.

Regardless, my relative is expressing some level of despair about the changes and is wondering out loud what ought to be done.  This presumes, I guess, that mankind might, in fact, be in a position to influence such climatic events.  I do happen to be a person who believes that a good portion of the circumstances we now see as climate change are being influenced by human activity.  Mostly the activity of those of us in industrialized nations, as well as those nations who are currently rapidly moving toward industrialization.  In general, this attribution is related to the release of greenhouse gases.

A few weeks back I used a computer application to take a snap shot of one the human activities that contributes to the increase in greenhouse gases.  The following is a snapshot of almost-world-wide commercial aircraft traffic at about 4:30 pm, Pacific Daylight time, August 28, 2013:



 My understanding is that this image does not generally include smaller, non-commercial aircraft and does not generally include military aircraft.  As I recall, there were in excess of 10,000 aircraft in the air at the time this snapshot was taken.

I and my relative are of an age and in a socio-economic strata, where many friends and acquaintances are happily fulfilling bucket list options with regard to retirement travel, or who think almost nothing about flitting about the globe to visit family and friends.  My relative, in the last year or so, has travelled at least three times to far-flung areas of the globe for 'wonderful vacation' events.   She has many more planned.

She is not alone in this regard among my acquaintances.  In fact, among we retired people, one of the most common topics of conversation when we get together is to talk about the exotic places to which we have travelled lately, or to which we plan to travel in the near future.  And when people of my age and stage are entering retirement, one of the most common plans for retirement is travel to distant and exotic places.

When I look at an image such as the above, I wonder about the degree to which many of these flights are booked mostly by such discretionary travellers.

As my relative expresses concern about the retreat of the lake in front of her home, and as she genuinely seeks for some solution to the water problem she sees, I have not yet had the heart to wonder out loud to her whether she has considered staying at home as one possible approach to the problem.

I should conclude by saying that I expect that a lot of the air travel one sees above also results from business-related travel.  I do not know if such travel is increasing or decreasing, but in the technological age of social media, applications such as Skype and many others, one wonders if a lot more of the business of the world (including the facsimile of face-to-face) ought not to be conducted electronically?

I am not suggesting that reducing air travel is the human behaviour that ought to be first in line in order to address climate change, but the above image certainly ought to give us some pause.

Friday, September 13, 2013

Shapeshifting

A recent offering in the Vancouver Sun newspaper,  "Issues and Ideas" page (Sept. 13, 2013), by the CEO of Urban Development Institute, caused me to reflect on the extent to which our shared ideas are being influenced by particular interests.

Most Vancouver Sun readers will be aware of two prominent policy advocacy organizations that often appear in the Canadian news media, The Fraser Institute and the Canadian Centre for Policy Alternatives.  Many will also know that these two organizations generally represent opposite perspectives on many matters of public policy.  The Fraser Institute being informed by a more libertarian, free-enterprise, corporate perspective and the Canadian Centre for Policy Alternatives having a more socially-progressive orientation based in part on the notion of the common wheel and support for a blended government-private sector economy in Canada.

The article authored by the CEO of the Urban Development Institute, however, caused me to pause and consider the variety of advocacy organizations that offer us viewpoints aligned more or less with either of the two perspectives represented by the above two organizations.

I am hard pressed to think of advocacy organizations similar to the Canadian Centre for Policy Alternatives except, perhaps, the Council of Canadians.  My recollection is, however, that the Council of Canadian offerings appear very seldom in the op ed pages of the Vancouver Sun or other other sources I regularly read.

On the other hand, there seems to me to be a huge variety of apparently different organizations that speak from a similar viewpoint to that of the Fraser Institute.  Upon investigation of the Urban Development Institute, the overwhelming corporate sponsorship indicated on their web page makes it clear to me that this organization would likely operate from a similar perspective to that of the Fraser Institute. But there are many other such organizations that are familiar by their presence in the media; for example:  the Frontier Centre for Public Policy, the C.D. Howe Institute, the Macdonald-Laurier Institute.  There are others, but these are the organizations I most often see represented in the conventional media.  My sense is that all of these Canadian-based organizations are significantly funded by the corporate sector, and their perspective certainly seems more oriented to that of the Fraser Institute than the Canadian Centre for Policy Alternatives.

I have begun to think of this perspective as having a shape-shifting presence in the media. The shape shifting gives appearance of a variety of perspectives being offered, but, in fact, they all come from a generally similar and well-funded viewpoint.

I have little difficulty with any of the above-mentioned organizations being free to offer comment from their viewpoint; but it strikes me that one perspective is more often represented than the other, regardless of the different labels.

Perhaps most interesting of all is that ALL of the above-named organizations -- regardless of sponsorship -- are registered charities for the purposes of Canadian taxation.  As such, donations by their supporters are treated as charitable donations, not unlike donations to religious organizations or to many community-based organizations which actually do charitable work.

So, because funding support is tax deductible, these advocacy organizations -- corporate or socially oriented -- are all taxpayer supported to a significant extent.  Having said that, it appears to me that organizations that offer a corporate or commercial viewpoint are significantly more represented and, based on the financial reports available, they are significantly better funded, including by the taxpayer contributions.

And unless readers are paying close attention, one might presume that we are getting a broader viewpoint than actually is the case.