Month: January 2017

Chief Policy Officer of the Business Council of British Columbia

Don Newman: There are a number of factors that make British Columbia one of Canada’s many “distinct societies.” Which ones stand out for you?

Jock Finlayson: I think B.C. differs from the other parts of the country in a number of respects. We are a coastal province that looks to Asia-Pacific increasingly, towards where our future lies. Immigration, which is having a big effect on Canada as a whole, has played out in a particular way for British Columbia. We are attracting overwhelmingly newcomers from Asian countries—particularly from China, but also from the Philippines and India and some other nations in Asia. So the population is increasingly made up of people of Asian descent to a greater extent than elsewhere in Canada.

DN: And on the political climate, does the fact that one of the two main parties is very far to the left of centre cause uncertainty in the business community?
JF: It has historically. We have had quite polarized politics of left and right, all with a populist tinge. So when governments have changed in British Columbia, we have tended to see bigger swings in economic policy direction than in the rest of
Canada. I think that’s now dissipated to some extent.

Part of it is due to the fact we’ve had the same party in power now for 16 years. One quarter of the population in B.C. is now foreign born, and there has also been a lot of migration of people from elsewhere in the country. Those newcomers don’t necessarily bring with them the traditional B.C. mindset when it comes to politics.

The environmental movement is very strong in the province, and that tends to shape the political thinking of a lot of people in government and politics, whatever their stripe. First Nations issues, unresolved indigenous land claims, the fact that indigenous communities are playing a much bigger role in resource development and economic development generally—that’s quite a new phenomenon. I’d say within the last 15 or 20 years it has had a big impact on the thinking of business and on certain government priorities.

So the traditional kind of left-right cleavages which I think the rest of the country would associate with B.C., I do think they’re fading.

DN: But I think you probably touched on a big issue: Indigenous participation in the economy. You talk about First Nations’ role in resource development but some people might see it as resource non-development. They’ve been opposed to pipelines, shipping terminals and other projects.

JF: I think that is the perception outside of the province. Historically, we never had treaties in place between First Nations and the Crown. We only have a handful of those today, so the vast majority of B.C. First Nations do not have any kind of treaty arrangement in place. That has created a more complex kind of backdrop for land-based economic activity. These indigenous groups that don’t have treaties have made claims to certain portions of land and certain amounts of natural resources, all of which have to be sorted out.

It does create uncertainty and complication. But it’s not true that First Nations generally are opposed to resource development or infrastructure development, nor is it true that they all have the same perspective on these matters. There’s often quite a bit of First Nations’ support for those undertakings, and increasingly they have a direct role in resource and infrastructure development in some cases as equity partners and in other cases through economic benefit agreements.

DN: I want to ask you about foreign investment, particularly in the B.C. real estate market.

JF: The controversy we’ve seen in B.C. is focused on offshore investment flowing into the residential real estate market. We’re not seeing much concern about foreign companies investing in resource projects or hotels or any number of major office buildings in downtown Vancouver.
The focus of public attention and political attention has been squarely on the substantial inflows of offshore money into residential real estate. Has it played a role in driving up prices? There’s no question about that.
At least 10 per cent of all property purchases in the metro Vancouver area, until recently, were being made by so-called foreign purchasers. That came to well over a billion dollars a month until very recently.
It’s not the only thing pushing up prices because we’ve had low interest rates and constrained land supply and population growth for a long time in Vancouver.

DN: How important is it to British Columbia that the Trans-Pacific Partnership be ratified and go ahead?

JF: It’s certainly important to Canada and British Columbia. The province has supported Canadian participation in the TPP. We would like to see it approved by Parliament. The TPP is probably the most advanced multilateral trade agreement out there. It’s state of the art, in terms of the architecture of it.

It also would link Canada with countries that are part of the fastest growing part of the global economy —namely, the Asia-Pacific Rim economies. It would give us improved access to the Japanese market; that’s something that we don’t have at the moment. Japan’s still the third largest economy in the world and still Canada’s third largest trading partner.

If there is no TPP, I think you’ll see the government looking at bilateral options with India, China and Japan, in particular.

DN: Thank you very much, Jock.

Ravaging wildfires transformed Fort McMurray from a city that polarized Canadians to one that united them. What comes next?

Vision can be a tricky proposition in the partisan political universe

In Canada, few economic issues have been as polarizing as the development of the oil sands in northern Alberta.

With stark images of the ravaged landscape around Fort McMurray as the background, the debate pitted environmentalists against companies and workers in the oil patch—and all who accepted the projects as simply the price of Canada’s resource-based economy. It was a politically explosive standoff that, amplified by social media, often spilled beyond national borders to involve finger-wagging celebrities.

Then came the wildfires.

As Fort McMurray burned and the entire community of more than 61,000 people was evacuated, a fundamental change occurred. The very community that had fragmented Canada brought it together in an outpouring of support and sympathy for the evacuees. Within weeks, $125 million had been raised across the country from individuals and organizations.

Now, as Fort McMurray begins the painful process of rebuilding—a task all the more onerous because of the depressed world price for oil—we can get a better sense of the broader long-term impact of the tragedy.

While the devastation served as an opportunity to transcend the divide over the oil sands development, reconstruction raises new issues, some of which are overtly political.

The way a government manages a public tragedy has significant ramifications. This is especially the case once the immediate threat recedes and focus shifts to recovery and renewal.

In the case of Fort McMurray, the fire presented a monumental challenge to Premier Rachel Notley’s new and largely untested NDP government. Occurring just one year after the government was elected, the tragedy came just when the province, and particularly northern Alberta, was already grappling with an economic crisis and job losses caused by the falling price of oil.

By the time the fire died down, nearly 1,900 homes were gone and the structural integrity of hundreds more was in question. Even though media attention has moved on to other news, the lives of residents, and the community itself, remain shattered. It remains to be seen what role the tragedy will play in the bitter debate over the oil sands that was put on hold.

Before the fire, Fort McMurray was portrayed and perceived as the very embodiment of the oil sands—a blue-collar town filled with transient workers who were there to make a quick buck and move on.

The crisis put a human face to those workers and exposed that view as simplistic. Canadians responded to the crisis with empathy, not criticism. “Fort Mac,” as people everywhere began affectionately calling it, was revealed as a diverse community of families, thoughtful neighbours, workers, schools, teachers, small businesses and dedicated first responders.

Embedded in this is an opportunity to reframe the narrative about Fort McMurray and its relationship to the future of the oil sands. While it will remain the primary service centre for the mega-projects that surround it, there may also be an opportunity to transform it for the long term.

Before that can happen, however, there needs to be a vision of what Fort McMurray could be, how it can proactively address its dependence on a notoriously cyclical global commodity, and face the uncertainty surrounding construction of a pipeline to carry product to market.

Vision can be a tricky proposition in the partisan political universe. But in the case of Fort McMurray, it’s essential for the future.

Federal and provincial funds, insurance money and donations can be directed in a way that transforms the city’s loss into a new way forward. The building of new energy-efficient homes and businesses, as well as new recreation facilities, community centres and roads will create not only jobs, but a reinforced sense of pride and hope for the future among residents of Fort McMurray and among Canadians who have supported them during the crisis.

As oil prices recover and oil sands production returns to centre stage in the debate over Canada’s economic and environmental priorities, Fort McMurray could play an important role in providing balance. In the end, this is the only way to avoid a reprise of the destructive polarization of the past.

The divide between a global financial capital and the rest of the country has come with the steep cost of uncertainty for Britain

The British vote to leave the European Union is ultimately less about foreign relations and trade than it is about purely domestic angst.

There’s no question that Britain chafed under the EU’s regulations and burdensome bureaucracy. Stories proliferated about absurd rules, such as the EU’s strict curvature rule for bananas or its ban on excessively powerful vacuum cleaners. Even the most ardent supporters of the “Remain” campaign conceded that change in the organization was long overdue.

But the real issue was internal rather than external.

There is a great disconnect among British citizens. The economic prosperity that exists in London has not extended to the more rural areas of the country.

The media, the political class (except for a portion of the Conservative Party) and the business establishment aligned themselves in support of remaining in the European Union, arguing that Britain’s continued economic success depended on it. But the assumption that everyone had the same perspective only fanned the flames of the “Leave” campaign.

The dramatic predictions of economic Armageddon failed to stir a population that had endured years of austerity policies that failed to help the ailing rural economy. That cynicism was compounded by images of immigrants flooding into the UK, frightening voters who felt there were already too few jobs available to them and their families.

Voters blamed elites that seemed utterly out of touch with the anxieties of the broader electorate. There was a clear sense that the elites had little idea about life outside London, and about the enormous economic gap between London and the rest of England—that they understood life in Bordeaux better than they understood life in Bolton.

This polarization has played out in a number of other countries, including the United States. Those who feel left behind despite politicians’ promises of hope and prosperity tend to put their energy into more extreme political expressions of their alienation. Just as the appeal to “Make America Great Again” has united millions of disaffected American voters, the urge by the Leave campaign to “take back control” resonated.

Feeling cut out of the conversation by entrenched elites, British voters took the opportunity presented by the referendum to express their frustration, assert themselves and indulge in the grim satisfaction of casting Britain into a period of extreme economic uncertainty.

It now falls to Prime Minister Theresa May, a quiet supporter of the Remain camp, to speak to those disaffected Britons. If her government is to succeed in gently guiding the UK out of the EU with minimal consequence, she must engage those who feel they have been too long ignored.

Prime Minister May is acutely aware of the challenge she faces. From the outset, she has stated that “Brexit means Brexit,” choosing to pay little heed to those who would refer she ignore the results of the referendum. Furthermore, she promptly announced in the weeks following her ascent to 10 Downing Street that her guiding motto would be to create “a country that works for everyone, not just the privileged few.”

But given the scars on both sides of the divisive vote, Ms May will have to rely more on tough actions than fancy words to convince millions of seething voters.

Le 24 juin, au lendemain du référendum, le choc est total, c’est 52 % des Britanniques qui décident de quitter l’Union européenne. Les marchés boursiers sont littéralement pris de court et la livre sterling (£) tombe à son plus bas en trente ans. D’ailleurs, c’est plus de 30 milliards (£) qui ont quitté la Grande-Bretagne suite au Brexit et ce, entre les mois de juin et septembre 2016.

Au Québec, évidemment, plusieurs souverainistes y ont vu l’opportunité de ramener à l’ordre du jour la souveraineté du Québec et de soulever la pertinence d’un nouveau référendum. Toutefois, il est important de noter que le Brexit n’a aucune similitude avec la question référendaire québécoise. Faut-il rappeler tout comme l’invoquait Stéphane Beaulac, professeur en droit constitutionnel à l’Université de Montréal que « le Brexit portait sur une entente internationale d’intégration politique et économique, l’Union européenne, ce qui n’a rien à voir avec la sécession d’un État. » En effet, il serait beaucoup plus habile de comparer le Brexit à une situation où le Canada désirerait par exemple, se retirer de l’Accord de libre-échange nord-américain qu’à une campagne référendaire comparable à celle de 1995.

Ceci dit, dans les jours qui ont suivi, économistes, politicologues, journalistes et polémistes ont tous tenté de mesurer les impacts éventuels de ce résultat sur le Canada et par le fait même, sur le Québec. Force est d’admettre que cela se voulait une analyse ardue puisque nous faisions face à l’inconnu. Nous voilà quelques mois plus tard et pourtant, le constat reste le même ; comment composerons-nous avec la décision des Britanniques ? Hormis l’effet sur les marchés boursiers, à moyen terme, la plupart des experts semblent d’avis que « les répercussions du Brexit sur les économies britannique, européenne et mondiale dépendront de l’issue des négociations entre le Royaume-Uni et l’EU ».

Conséquemment pour le Canada et le Québec, cela pourrait se traduire par la viabilité de l’entente entre le Canada et l’UE. En effet, certains membres de l’UE exprimaient déjà des inquiétudes sans compter que la signature du Royaume-Uni était nécessaire à cet accord. Faut-il comprendre que le Royaume-Uni voudra négocier une nouvelle entente avec le Canada. Si tel est le cas, il faudra s’armer de patience.

D’ailleurs, dans une lettre ouverte à La Presse, Éric Tétreault, président de Manufacturiers et Exportateurs du Québec, faisait part de ses craintes face à une possible rupture de l’Accord économique commercial et global (AECG) ainsi qu’à l’impact économique que cela représenterait pour le Québec. De plus selon lui, à moyen terme des difficultés pourraient surgir auprès des entreprises ayant une chaîne de fabrication située en partie au Royaume-Uni et de ce fait, celles-ci devront bien planifier leurs opérations. Toujours à ce sujet, lors d’une entrevue à Radio-Canada, le principal initiateur de cet accord, l’ancien Premier ministre du Québec Jean Charest invitait le Canada et le Québec à se mobiliser afin de ratifier l’AECG le plus rapidement possible avant que de nouveaux imprévus surviennent.

Cependant sur une note plus positive, la firme de gestion de placements globale, Letko Brosseau recommande aux investisseurs de ne pas jeter de regard trop négatif sur ce type d’événements, que le système économique et financier mondial possède des bases beaucoup plus stables depuis la crise financière de 2008, que l’impact économique négatif se fera plutôt sentir au Royaume-Uni qu’en Europe et que les risques d’une récession restent limités à l’échelle mondiale.

Il faut donc croire que pour l’instant, l’impact le plus important pour le Québec est l’incertitude face à la survie de l’AECG et malheureusement, il faudra attendre encore un certain temps avant que cet accord soit en vigueur et lorsqu’il le sera, comment profitera-t-il au Québec, avec ou sans le Royaume-Uni ?

Navigator’s favourite off-the-beaten-track art galleries in the cities where we live and work

01. The Power Plant, housed in what was an actual power plant until 1980, is a public gallery dedicated to showcasing new works. The gallery features a brick façade and a restored smokestack, harking back to Toronto’s rich past.

02. The OAG was founded in 1998 after Ottawa artists pushed for a gallery to better serve the local community. Today, the OAG has a growing permanent collection and loans works for special display in institutions, including the Senate and Rideau Hall.

03. For more than 40 years, the Bearclaw Gallery has promoted the development of Canadian First Nations and Inuit art. After Prime Minister Justin Trudeau presented a Cree artist’s sculpture to President Barack Obama this year, the gallery has received more attention than ever.

04. Founded in 1966, the Glenbow is dedicated to collecting objects that celebrate the history and culture of Western Canada. The gallery boasts one of Canada’s largest archives and has been a cultural hub of Albertans for 50 years.

05. There is more to experience in Regina besides life on the Prairies. The city’s largest public art gallery has been a long-time supporter of Indigenous artists, and boasts 4,000 pieces in its permanent collection.

06. Located in Old Montreal, DHC/ART is one of the city’s top galleries, presenting contemporary art from around the world. The non-profit gallery is known for featuring award-winning exhibitions in a variety of media, including art, film, music, design and technology.

07. The contemporary White Cube art gallery was originally established in 1993 and has expanded into a group of international venues. The White Cube Bermondsey facility is a refurbished warehouse and the largest of the White Cube sites, housing a number of impressive exhibits.