Canada’s Currency Games Counter Productive

by Graham Lane,

Published in the Winnipeg Sun, June 29, 2018

Our beleaguered loonie is being battered again, reducing the purchasing power of all Canadians. How far will
the loonie fall? Trudeau and the Bank of Canada, are not concerned, they prefer a weak currency. Recall the
heady days of five years ago, when the loonie was close to par and we were complaining that retail stores and
automobile dealers were not reflecting this in their pricing.

In his quest for his definition of ‘fair trade’, President Trump mostly ignores a large factor favoring other
countries over the United States. Canada, European states using the Euro, and many other counties pro-actively
depreciate their currency against the ‘almighty’ American dollar to promote exporting goods and services to
the United States while reducing non-essential buying of American goods and services. The Bank of Canada
talks down the loonie and holds back matching rising U.S. interest rates at an immense cost to consumers.

Bank of Canada Governor Stephen Poloz is far too cozy with a Liberal government that prefers huge deficits,
low interest rates, and a weak loonie. Recently our wounded loonie plummeted to 75 cents US, making imports
even more expensive while making our exports, housing and companies a bargain for American buyers.

If the Trudeau and Poloz brain tank thinks deliberately pushing the loonie down will not be noticed by the
grumpy Donald, think again – they are wrong. He correctly sees it as it is. Here, north of 49, Canadians find
our dollars buy less and less of American technology, fruits, vegetables and southern vacation time, while gas
at the pump rises as the loonie falls. The loonie is at least 10% lower than it should be.

Depreciating Canada’s currency remains a weak and poor strategy. Bank of Canada’s governor Poloz keeps
our dollar down in the face of an American President that threatens to throw out NAFTA and punish Canadians
with tariffs. The export trade with America supports our standard of living, creating and maintaining hundreds
of thousands of jobs.. Deliberately talking the loonie down and maintaining too low interest rates could rightly
be seen as risky currency manipulation.

Our dollar briefly hit $1.10 U.S. when oil was selling at over $100 a barrel. While oil, particularly in Canadian
currency, has risen from the depths, our wounded loonie struggles to keep above 75 cents US$. This is just one
cost of the Trudeau government’s climate change madness where deliberate “shoot ourselves in the foot” anti-
oil policies have shut down pipelines to higher priced global markets. Then, we also have the misguided B.C.
coalition government policies emasculating Alberta’s and Canada’s oil bonanza by blocking the last pipeline
now available to higher paying overseas markets. Meanwhile Bank Governor Poloz plays fiddle to
accommodate the weak and inexperienced Trudeau guided by his diverse band of green lefties.

Trump could correctly accuse Canada of currency manipulation. American subsidiaries in Canada are losing
value too. The best scenario in very difficult circumstances would have Trudeau surrender on the supply
management file (Canada levies massive tariffs on dairy, eggs and poultry – inconsistent with free trade and
damaging to Canadian consumers), increase interest rates and, finally, defend our dollar.

Trump smells weakness and will run over Trudeau’s brain trust and our consumers unless Trudeau acts

Trump Pressure Aids Canadian Consumers

by Graham Lane,

Published in the Winnipeg Sun, June 15, 2018

This week federal Conservative Party Leader Andrew Scheer booted MP Maxime Bernier from his shadow Cabinet.  Bernier’s sin?   Placing his longstanding and wise thoughts on abolishing supply management on his personal website. Recall that Scheer sold his soul to the dairy lobby during last year’s conservative leadership race by pledging to protect supply management.

This is the regressive system of government sanctioned cartels that artificially restrict production of dairy, poultry and eggs at huge cost to Canadian families. More broadly, the policy continues to damage our economy because it severely limits Canada’s scope to open up other export markets in other trade agreements. Ironically, supply management is the opposite of the free-market, pro-consumer thinking that the Conservative Party has traditionally stood for.

Donald Trump’s surprise win of the US presidency occurred because he unexpectedly took several states – including several coal mining states who voted against Obama’s anti-coal climate change policies that were progressively closing down entire communities, and Wisconsin – America’s largest dairy producing state.

Thus, it’s no surprise that dairy is of great political interest to Trump, who is now aggressively going after Canada’s restrictive dairy cartel policies. It now threatens NAFTA, with the American president specifically targeting the outrageous 270% tariffs the cartel system levies on U.S. milk exports to Canada, all to keep things cozy and soft for Canada’s roughly 13,500 dairy farmers.

Bizarrely and irresponsibly, both Trudeau and Scheer appear willing, so far, to sacrifice auto manufacturing and other more important sectors of our economy to remain holy with the anti-people church of supply management.

Why?

Ignoring the ridiculously high prices paid by consumers for dairy and poultry, Pierre Trudeau introduced dairy supply management in 1971. For almost 50 years consumers have been forced to pay high prices for less selection. Before the market was rigged, there was little price difference for dairy products between Canada and the USA.  Since then, the changes gave the Canadian dairy industry the ability to restrict supply and enjoy a monopoly. Prices for dairy and poultry in Canada are dramatically higher in Canada compared to what US consumers pay. Research from the C D Howe Institute showed consumers pay up to 77% higher prices for dairy than Americans,

Here’s more supply management nonsense. Restricted entry into the Canadian industry continues to severely punish younger generations of farmers. They are faced with an exorbitant high cost to enter an industry that fairly could be called the milk cartel. Simply gaining permission to produce milk requires buying or renting ‘quota’ – in Ontario $25,000 a cow, in B.C., $42,500. Effectively, a license per cow.

The dairy industry has been very effective at renting and buying politicians – Andrew Scheer is but the latest industry lapdog. But, its time to move on.

Forgiving Trump a win by ending supply management means NAFTA could survive and steel and aluminum tariffs lifted. In this case, Trump, despite being a bully and a master of false news, is correct, as is the principled friend of the consumer, Maxime Bernier

Trump needs a win. End supply management and let the bully walk away with a smile. Our consumers will stop getting ripped off on dairy and poultry products.

It’s time to get rid of supply management.

What’s happening with Education Minister Wishart’s Mandate Letter?

by Graham Lane

Published in the Winnipeg Sun, June 1, 2018

Two years ago, Premier Pallister gave the new Minister of Education, Ian Wishart, a “mandate letter” charging him with the responsibility to improve the performances of students in Manitoba’s public schools.

The mandate stated that: “you (Mr. Wishart) have a key role to play in delivering on our Most Improved Province commitments. Chiefly, improving student performance outcomes by focusing on early years reading improvements and other measures so that Manitoba is the most improved province in student results.”

Now mid-way through the government’s term, Minister Wishart advised the deans of education of the Province’s universities that they were not doing an adequate job of preparing teachers to help him meet Manitoba’s needs. In other words, the academic performance of Manitoba students has not improved.

A week later, two deans, Dr. David Mandzuk (University of Manitoba) and Dr. Heather Duncan (University of Brandon) responded to Minister Wishart through an op-ed letter published in the Winnipeg Free Press. They said that they were meeting expectations for diversity, but they had no intention of meeting Wishart’s expectations on improving student achievement.

In other words, our universities are not focusing on educating teachers to improve Manitoba student performance. Instead, they are focusing on training a diverse group of students to be teachers.  This means that, with time ticking away until the next election, the Minister of Education will probably not fulfill the Premier’s ask of him – failing partly because the deans of education are not prepared to work with him. As for the result, Manitoba students have a long way to go to become the most improved students in Canada.

With this stand-off, something drastic needs to be done. How about:

  • Minister Wishart could raise the stakes for the deans and their universities. He could tell them that he is preparing legislation requiring all new teachers to pass rigorous certification examinations. The Minister controls the certification of teachers, and research is clear that better educated teachers with high quality certificates would most likely be able to improve the academic performances of students.
  • The Minister could tell the universities that if their education deans decide not to support his objective, their overall budgets will be reduced by, say, 2 percent. This would mean that other senior university administrators would put pressure on their deans of education, and, then, perhaps they would buckle to the Minister’s demand.
  • Finally, the Premier could replace the Education Minister with a tougher person, someone that would hold schools, colleges, and universities to higher levels of account.

In this squabble, Manitoba parents would likely side with the government and not with the education deans. With more and more children being registered in Sylvan and Kumon Learning centres by parents paying big bucks, it is clear those and other parents are increasingly becoming disaffected from the public educational system. It does not help that schools and universities are focusing on diversity when their number one focus should be on student academic achievement.

As well, when businesses look for a place to locate, an important consideration is will they find a well-educated group of potential employees in Manitoba.  If such employees cannot be found in Manitoba, businesses will locate in other places where well-educated workers can be found.