Thoughts and Opinions On Today's Important Issues

Tuesday, March 23, 2010

Amazon And The Ambassador Bridge

The Prime Minister's secret mandate letter was really Canada's white flag of surrender. We ought to understand that now.

The brilliant, decade-long bureaucratic Plan to take over the Ambassador Bridge failed miserably, aided and abetted by an economic disaster that even the mandarins never saw coming.

They completely misread Moroun and his son as the Globe and Mail 2 1/2 page spread demonstrated. The reason is obvious---they are bureaucrats used to getting their way using limitless taxpayer money not business people who have to invest and risk their own money and who have to scrap to succeed.

The border war IS about to end. And not just because the US Federal Government has no interest in financing the DRIC project as the US Ambassador in polite diplomatese stated recently in his Ottawa speech.

Now we know the reason for the secret Harper mandate letter to buy the Ambassador Bridge NOW and to forget about DRIC. Read on and see how history is repeating itself.

Who is the smartest Legislator in Canada by far when looking at the border file: Liberal Senator Dennis Dawson.

In the Senate hearings in November, 2006, he stated the following:
  • "Senator Dawson: At the beginning, when this bill [Bill C-3] came in we were led to believe, and I am not saying there was any bad faith, it was going to be a bill that would pass easily as opposed to the division on a bill that had been proposed in the past, and it went through the House of Commons without practically any major discussion.

    All of a sudden we understand that there is an adverse effect for one of the strong participants in the bill. I was told last week by someone from the Department of Transport that Bill C-11 is now in the House committee and we should be expecting it here so we should be going on as fast as possible with Bill C-3. I want to be sure that as we process this bill through this committee that we understand it is not the same as Bill C-44, it is not the same as Bill C-26 and it does seem to have an adverse effect on a player that not been identified and, from what we have been told, has not been listened to reasonably by the department and not listened to at all by the minister. Therefore I want to be sure we understand that I hope we do not think we will be fast tracking this.

    Above and beyond the interests of the Ambassador Bridge, this government and governments will be going forward with PPPs in the future. We are hoping that more public-private partnerships will exist to share the responsibilities between the public and the private enterprise, whether it is Highway 50 or Highway 30 in Quebec or other bridges to be built. If we are not going to have respect for private projects that exist and that have been going well for 60 or 70 years, how can we expect private investors to risk, whether it is the "competing" project or the "existing" projects?

    ...However, I am now preoccupied that future projects and existing projects can be impeded by the fact that this legislation is not probably satisfactory at this time. I just want to be on the record on that, Madam Chairman."

He was prescient! He understood before others that Canada needed foreign investors to come here if projects were going to be developed and jobs created.

In Canada's latest budget, what did we see? Comments like:

  • "to attract foreign venture capital"

  • "Increasing Competition and Foreign Investment in the Telecommunications Sector

    The Government of Canada is committed to ensuring that Canadians can benefit from increased competition and investment in the telecommunications sector, which will lead to greater innovation and lower prices for consumers. Increasing foreign investment is an important way of strengthening market competition and attracting new capital and innovative
    ideas from abroad."

  • "Consistent with the recommendations of the Competition Policy Review Panel, the Government is acting in Budget 2010 to remove the existing restrictions on foreign ownership of Canadian satellites. This will allow firms to access foreign capital and know-how and to invest in new and advanced technologies. The removal of restrictions will also allow Canadian firms to develop strategic global relationships that will enable them to participate fully in foreign markets."

  • "Improve the ability of Canadian businesses, including innovative high-growth companies that contribute to job creation and economic growth, to attract foreign venture capital by narrowing the definition of taxable Canadian property, thereby eliminating the need for tax reporting under section 116 of the ITA for many investments. The Canadian Venture Capital Association has indicated, in making representations for changes of this nature, that “...a broader exemption...would make Canada a more attractive destination for equity investments by non-residents and, in particular, venture capital and private equity funds.”

  • "Government would, in response to submissions by the Panel and others, review its outstanding proposals with respect to tax issues associated with foreign investment entities and non-resident trusts before proceeding with measures in this area"

  • "In addition, the Accounting Standards Board will require Canadian public companies to adopt the International Financial Reporting Standards (IFRS) as of 2011, which could help these companies better access international capital markets and reduce their cost of capital."

As was reported in the media:

  • "Foreign investment anchors economic agenda

    OTTAWA—The Conservatives are throwing open the doors to foreign investment in telecommunications and other vital industry sectors as part of a corporate-friendly agenda intended to reshape Canada’s economy in the years ahead...

    The government’s proposed initiative to open up more segments of Canada's economy to foreign investment, including satellite and telecommunications sectors, was described as a recipe for hollowing out the economy.

    “The long-term plans of the Conservative, of course is to turn all these key industries into branch plants of the United States,” NDP MP Charlie Angus (Timmins-James Bay) commented.

    Angus said Canadians have to look no further than the takeover of Stelco by giant U.S. Steel, which in no time forced a lockout and threatens to drive a stake into the once-proud Canadian steel producer, and the takeover of Inco in Sudbury by Brazil’s mining giant Vale. More than 3,000 employees at Vale's mill, smelter, refinery and six nickel mines in the Sudbury area have been on strike for seven months.

    “We’ve got Vale Inco who have come and decided that Canadian workers are now going to work like Brazilian workers in the Third World. This government has seen failed takeover after failed takeover,” Angus said.

    Historically Canada’s telecom sector has been protected from foreign acquisition for national security and other reasons but the government insists the rules are already in place that would protect Canada’s industry from being victimized by foreign investment.

    Industry Ministry Tony Clement said investment from outside Canada is necessary if the country is to prosper and create jobs.

    “This whole mythology that is being created by members of opposition or critics that there is a hollowing out the economy is not accurate,” he said.

    Clement said investment rules for the telecom sector must be relaxed if the industry is to continue to grow and create new jobs, but critics fear this will allow foreign investors to buy up newspapers and televisions and radio stations, which have always be protected.

    The government also said it would ease foreign investment rules governing Canada’s uranium industry."

So explain to me, dear reader, how can the Canadian Government at one time try to destroy an American's business by trying to force Moroun to sell out cheaply through the use of DRIC and at the same time, try to attract foreign invetment to help bring jobs?

You cannot.

No wonder the secret madate was issued over Xmas, before the Budget was introduced that would open up our economy to foreigners. The Government had to act quickly since it no longer had the time to fool around with DRIC. Buy the bridge BEFORE Canada would be forced to work with Moroun is the obvious message that I read into the situation.

Moreover, the anti-NAFTA legislation introduced in Congress scares the hell out of Canada. NAFTA-gate is still remembered by the US President and if he is going to be re-elected, he needs to do something in his final few years to get the Unions, who helped get him elected in the first place, onside! Heck, he may be forced to do something NOW to ensure that he has a majority in Congress after the next Congressional elections.

This is absolutely reminiscent of the FIRA lawsuits and the settlement reached BEFORE the new Free Trade Agreement was entered into with the US.

Do you really believe that there would have been a Canada/US Free Trade Agreement if there was a FIRA lawsuit ongoing with an American Company or if an American Company was being forced out of business.

No, the decision was obviously made, looking back, to retreat, settle with Moroun, do the deal with the US and then go after Moroun subsequently.

Canada would be hard-pressed to attract foreign investment, especially American, with the dispute against the Ambassador Bridge Company ongoing a second time. Canada is in a very awkward position so the decision was made to buy.

And if you do not think that another American Company has not already figured out that Canada is in a tough position especially in relation to cultural matters...

  • "The battle over foreign ownership is about to take a literary turn.

    Internet bookseller Inc. is poised to open a “fulfilment centre” in Canada – believed to be a means by which the Web firm can distribute products bought on its site without resorting to a third-party shipping service.

    But that decision – because it entails Amazon having a physical, rather than virtual presence in Canada – means the company is subject to myriad reviews relating not only to foreign ownership, but also to Canadian cultural industries, such as bookselling."

Prime Minister Stephen Harper knows I am right and have been for a very long time. He knows as well as I do that the Ambassador Bridge matter better be resolved quickly or can you spell: