Friday, May 19, 2023

Ford has his reasons dissolving Region of Peel

The Ford government has committed to dissolving the Region of Peel, the area just to the west of Toronto that comprises the two large cities of Mississauga and Brampton and the scattered and largely rural township of Caledon. Under the plan, all three would become "single-tier municipalities" by 1st January 2025, whether they like it or not.

Mississauga (Ontario's third-largest city after Toronto and Ottawa) has been agitating for years to be independent of the Region, arguing that it feels unduly constrained and that it contributes disproportionately to Peel's coffers. Neither fast-growing Brampton (Ontario's fourth city) nor sleepy little Caledon have ever had any delusions of grandeur of this kind, as far as I am aware. In fact, Caledon's mayor is strongly opposed to the idea, saying that she feels like the child in the angry divorce of Mississauga and Brampton. So, this seems to be a provincial gift to 'Sauga, more than anything else. Maybe Ford sees it as a vote-winning policy, which knows?

Ontario's stated justification for the move is to give the municipalities "the tools and autonomy they need to deliver on local priorities, including meeting the ambitious housing pledges they have agreed to". It's not at all clear to me how cutting them loose from Peel is going to help them in that respect, although Municipal Affairs and Housing Minister Steve Clark has been up-front in admitting that the upgraded municipalities would be candidates for the controversial and anti-democratic "strong mayor" powers that this Conservative government espouses. He has also said that other regions in southern Ontario may follows including York, Durham, Halton, Niagara, Waterloo and Simcoe.

The logistical challenges are formidable, though. The municipalities within Peel share many services, including some roads, transit, housing, public health, garbage collectio, social services, policing and water. Each municipality would have to create its own infrastructure to offer these services to its residents, likely a long and costly process (no-one really knows how costly). Mississauga and Brampton are already arguing about who owes whom for past developments within each other's borders (although why that ever even happened is beyond me). And what will happen to the 5,000-odd full-time employees of the Region of Peel is anyone's guess.

The legal, administrative and physical difficulties involved will be prodigious, and I just don't see the business case for such a split. But the Ford government does very little that does not support their ideological and self-preservation agenda, so you have to know that, behind any move the government instigates, there us a self-serving rationale.

Thursday, May 18, 2023

Ontario power companies working against Toronto's (and the country's) climate mandate

Just a few days after Toronto City Council passed a motion specifically  opposing any new or expanded gas power generation in the city, Ontario's supposedly Independent Electricity System Operator (IESO) has awarded a contract to Ontario Power Generation (OPG) to increase the capacity of the Portlands gas plant on Toronto's waterfront by 50 megawatts

This is in spite of IESO's admission that its new plan to expand gas-fired power capacity in Toronto, Brampton, Thorold, Windsor and St. Clair will increase Ontario's greenhouse gas emissions by over 450% by 2034 (this according to the Ontario Clean Air Alliance). Also, Ontario's energy minister Todd Smith recently promised that any new gas plant capacity would specifically require municipal approval.

So, something has to give, no? The IESO and OPG appears to be working diametrically opposite to the wishes of Toronto City Council, and diametrically opposed to the climate change goals of the province and the country. Does anyone have control over these organizations? Or maybe, Toronto and the other municipalities just have to say "er, no" and it will all just go away (I wish!) 

Green bonanza spurring corporate greed

Call it the tyranny of the green revolution. The recent stand-off over the Stellantis-LG electric vehicle battery plant planned for Windsor, Ontario, is just one front in a trade war that looks set to continue and spread.

Long before Joe Biden introduced his Inflation Reduction Act (IRA), which allocated billions of dollars to expanding the US's green energy- and climate change-related industries, Amsterdam-based Stellantis and South Korea's LG formed a partnership and negotiated a project to build a $5 billion EV battery plant in Ontario, Canada, with $1 billion in federal and provincial support.

It seemed like a good deal for all concerned. But then came the IRA, and suddenly the clean-tech industry's horizons opened up, both in the US and in every other country that found itself competing against the Yankee dollar. It was in this heady atmosphere that Volkswagen negotiated a huge (and controversial) $13 billion sweetener from the Canadian government to locate an EV battery factory here rather than in the US. 

Then, rather belatedly, Stellantis realized that it too could benefit from this green bonanza, and suddenly reopened the Windsor plant deal, claiming that the federal government was not living up to its commitments ("not delivering on what was agreed to"). It immediately downed tools and stopped construction until it receives a VW-sized incentive payment from Ottawa. In effect, it is trying to blackmail the government, because it thinks it can.

In fact, it was a done deal months ago, and it is actually Stellantis that is not living up to its commitments, as it looks to cynically capitalize on the starkly changed landscape. I don't know how they can do that legally, but Stellantis clearly sees itself in such a strong position that it is going to browbeat the Canadian government into handing them yet more corporate welfare billions.

And if you don't believe that this is just Stellantis trying it on, it has also just threatened to pull out of a proposed battery plant in Britain (and re-locate it to North America, where they apparently offer all sorts of good government subsidies) if it won't re-negotiate the deal. Like Canada, Britain needs the batteries, and is stuck between a rock and hard place. And Stellantis, firmly in the driving seat, knows this very well.

The USA's IRA was a groundbreaking piece of legislation, and evidence that Biden at least is very serious about improving America's green credentials. But it is also having all sorts of unintended consequences far from America, and spurring on corporate greed to hitherto unknown levels.

Wednesday, May 17, 2023

How much does it cost to shoot down Russian missiles?

I was reading about Ukraine shooting down Russian hypersonic missiles, and I got to wondering what was the cost/benefit of all these missiles and anti-missiles. 

As I understand it, each Patriot interceptor missiles costs about US$4 million (the US recently donated 252 missiles at a cost of US$1,037 million), and the Patriot launcher itself costs around US$10 million. The Russian Kinzhal hypersonic missiles, on the other hand, supposedly cost US$10 million each.

Ukraine claims it shot down six Kinzhal missiles headed towards Kiev yesterday. Russia denies they were intercepted, but who would you believe, given a choice? Furthermore, Russia claims that one of their missiles destroyed a Patriot launcher (Western observers think it more likely that the launcher was just damaged, as Ukraine claims, and should be salvageable). 

So, Russia's six Kinzhals cost $60 million, and Ukraine lost 20 Patriot missiles (the best estimate of the number of missiles fired at the Kinzhals, according to local Ukrainian media) and a launcher (total $90 million), that's a pretty clear financial victory for Russia. But, of course, the value of the lives saved is incalculable.

It just goes to illustrate, though, how ridiculously expensive these modern weapons are. How can one missile cost $10 million? 

It also shows that, notwithstanding Vladimir Putin's claims, Russia's hypersonic cruise missiles, the most sophisticated weapons in its inventory and billed by the Kremlin as too fast for any missiles in the world to intercept, can in fact be stopped by Ukraine's new American-provided air-defence systems. 

It's not clear how many Kinzhal missiles Russia has at its disposal, but the Ukrainian Defence Ministry claims its stocks are critically low, and that it is not able to make more due to the restrictions of sanctions.

What if the United States were to increase its taxes...?

I recently looked at the United States' ridiculous debt cliff snafu, which rears its ugly and embarrassing head each year, and puts the world's richest country in limbo, teetering on the edge of bankruptcy, while political machinations play out.

It happens because the US spends more than it raises in taxes each and every year, so the national debt keeps in rising inexorably. This currently stands at a mind-boggling $31.46 trillion, which is about 122% of GDP, higher than any other developed country except Italy (145%), Greece (177%) and Japan (261%), Which suggests that there is a systemic problem: it does not raise enough in taxes to pay for its profligate lifestyle. The idea of raising taxes, though, is anathema in the States, and political suicide. The Republicans would lower them still further given half a chance, making the chronic debt problem even worse.

But are American taxes actually that low? A look at total tax revenues as a percentage of gross domestic product (GDP) shows the USA as somewhere in the middle of the pack, with a tax-to-GDP ratio of 27.1%, putting it at no. 56 in the rankings, just below Australia (27.8%) and just above South Korea (26.9%). But a look at just which countries lie above and below it gives a more illuminating picture.

The highest tax-to-GDP counties are almost all European, which may come as no surprise, headed up by France (46.2%), Denmark (46.0%), Belgium (44.6), Sweden (44.0) and Finland (43.3%). In fact, the top 30 countries are all European, with only Cuba (40.6%) preventing a clean European sweep. These are, in the main, high-functioning developed countries, with strong social safety nets.

Most of the countries with lower tax-to-GDP ratios, on the other hand, are poorer countries from Asia, South America and Africa, with poorly-developed state social programs, as well as wealthy Middle Eastern countries with more oil than sense. The only developed country with a significantly lower ratio than the USA is Ireland (22.6%), which makes a rather controversial virtue of its low taxes in an attempt to attract multinational headquarters.

Just for reference, Canada's taxes-to-GDP ratio comes in at no. 33 with a ratio of 32.2%, alongside Brazil and New Zealand. Canada's national debt sits at 106% of GDP, better than the USA, France and Spain, but still significantly higher than Australia, New Zealand and most other European countries with whom we might wish to compare ourselves.

Anyway, my point in going into all this is that the USA could stop constantly adding its national debt by increasing its taxes to a level consistent with most other developed countries. Not that that is ever going to happen, but just putting it out there.

Monday, May 15, 2023

100 million Canadians by 2100? Well, why not?

There's good commonsense article by Andew Coyne in this weekend's Globe and Mail about Canada's (and Quebec's) immigration policy.

The Liberal government's immigration targets are ambitious: 465,000 this year, 485,000 in 2024, and a cool half million in 2025. All these people have to be absorbed, fed, housed and employed. Immigration-averse Quebec, however, wants to keep its annual immigration numbers at just 50,000, which would mean many more Anglos moving into the rest of Canada, and Quebec losing some of its population share (and its influence). 

You could argue that Quebec's influence within Canada has always been outsized compared to its population anyway, but Le Journal de Montréal published a series of articles last week on the subject, arguing that this is all a dastardly plot by Anglophone Canada to deliberately sideline Quebec and to kill off the French language in Canada. This is clearly not the case, but that is how many Quebeckers are apparently seeing it.

One thing Le Journal de Montréal accuses the federal government of is that they have signed on to the policies of the Century Initiative (an admittedly Liberal-adjacent activist group), which is calling for a Canadian population of 100 million by the end of the century. The federal Liberals have never expoused that particular target, and they have no links to the Century Initiative.

Except... in reality, 100 million by 2100 is not actually a particularly radical or ambitious goal. Through the magic of compounding, to get from our current almost 40 million to 100 million in 77 years implies a growth rate of just 1.2% a year. This, as it turns out, is exactly the same as Canada's historic population growth rate since 1970. So, the Century Initiative is actually just a continuation of the status quo. And we have 77 years to adapt and figure out how to feed and clothe all the newcomers.

Quebec's immigration plan, on the other hand, will lead to a progressively smaller Quebec, from 22% of the country's population to just 15% by the end of the century, with a concomitant decrease in the number of French speakers. Quebec used to have an even larger share of the national population, but 50 years of language wars, secession threats and economic uncertainty put paid to that, immigration policy notwithstanding. The language may not be exactly thriving, but don't blame federal immigration policy for it. 

And anyway, even with Quebec's self-imposed low immigration targets and its low internal fertility rates, the province's population would still almost double by century end. So, lots of new Francophones to keep the language going. 

Certainly, we should not allow Quebec to dictate the country's immigration policy, nor give in to demands that Quebec be guaranteed its current share of the seats in the House of Common in perpetuity (as has been suggested). Quebec thinks it is special, and it has been treated as special ever since Confederation for one reason or another. It's about time they came down to a level playing field with the other provinces.

Saturday, May 13, 2023

Sustainable chocolate is unsustainable

Up to half of all chocolate these days claims to be from sustainably-sourced cocoa (cacao). It's a marketing sine qua non for chocolate companies, and one that has been very good to the $140 billion a year chocolate industry. The confectionary divisions of the Big 4 - Hershey, Lindt, Mondelez and Nestlé - have made nearly US$15 billion in profits over the last three years, an average annual increase of 16% since 2020.

The reality is, though, that "sustainability" is a vaguely-defined and slippery concept, and most certified farmers in West Africa and elsewhere still earn much less than a living income. It is a scam and a scandal that has flown for years below most people's radar.

Most of the cocoa that goes to make our cheap chocolate bars comes from West Africa: Ivory Coast (39%), Ghana (15%), Cameroon (5%) and Nigeria (5%). The other large producer is Indonesia (15%). South American countries like Brazil (5%) and Ecuador (5%) are surprisingly small players (who knew?). All are tropical countries, of course, and almost all are poor developing countries. 

Most cocoa-producing farmers exist at or below the poverty line. For example, more than half of cocoa farmers in Ivory Coast earn less than the official national poverty line of US$3 a day (by Fairtrade International calculations, 88% earn less than a "living wage"). Many poor cocoa farmers have never been able to try chocolate, and do not even know what the final product tastes like. Most farmers only use fertilizers when they feel they can afford it (maybe every three years), and yields are inexorably falling as soil conditions degrade.

Given the pressure to produce more to try and escape the low wage trap, child labour is endemic in the industry. An estimated 1.5 million children are working in the cocoa farms of Ivory Coast and Ghana alone. 

Producing countries are also competing against each other to some extent, deliberately keeping their prices low to attract investment. Internal political considerations also play into the equation: for example, the price Ivory Coast farmers were offered for their cocoa mysteriously increased just before a recent election, only to mysteriously fall again right after the election. The farmers themselves are just expendable pawns in this game, and most have no idea how prices and payments are calculated. 

Climate change, droughts and hurricanes, as well as pandemic-related inflation and general market chaos resulting from the war in Ukraine, have all taken their toll on cocoa farms in recent years. Just to make things worse, bandits armed with Kalashnikovs have been hijacking cocoa truck in some areas.

Fair trade organizations like Fairtrade International and Rainforest Alliance were established to advocate for farmers and to negotiate with producing countries and manufacturers to help ensure farmers receive a "living income". 

The fair trade system is supposed to wnsure that cocoa farmers are paid more, and that their farms adhere to labour and environmental standards. And they have had some limited success in that respect, and their system of third-party verification and certification has been a model for the industry. 

The establishment of local selling cooperatives has also given farmers some limited power over the prices they can charge, although they are still very much at the mercy of industry forces, and only a small percentage of producers are represented by coops anyway.

However, many large chocolate producing companies have established their own corporate in-house sustainability programs. This maybe sounds like a good thing, but they tend to be much less transparent than the likes of Fairtrade International, and commercial pressures and their divided loyalties typically do not encourage improvements in the lots of local farmers, rather setting off a "race to the bottom", while at the same time allowing the companies to claim sustainability on their marketing labels.

The raw materials provided by cocoa farmers only represents around 7% of the cost of a bar of chocolate. So, chocolate producers - making those huge, and increasing, profits, remember - could easily afford to, say, double what they pay to the farmers.(although, by some estimates, their incomes need to be tripled or even quadrupled to bring them up to a living wage).

The word "fairtradewashing" has not made it into general usage - in fact, I just made it up as far as I know - but I'm sure you know exactly what it means. The whole industry needs a lot more regulation, a dirty word in globalized corporate circles. But without it, those struggling farmers will continue to struggle, and they never get to try a bar of chocolate. Think of that!

And check those labels: make sure it is certified by Fairtrade International or another non-profit organization, not by the producing company itself.

Friday, May 12, 2023

CNN's Trump interview may have back-fired badly

After CNN's recent foray into high-risk television, people are speaking out about its decision to interview Donald Trump. With views ranging from "outright disaster" to "major inflection point" to "worthy exercise in democracy", it has certainly generated debate.

Given that CNN has been Trump's main media punching bag for years, and his most vocal and outspoken critic, it was a brave and certainly a strange move on CNN 's part to hold a prime-time "town hall" style interview with Trump, held in New Hampshire with a deliberately partisan audience of Republican voters who cheered his every word and laughed at all his jokes. It went pretty much how you might have expected it to, with Trunp doubling down on his various lies, interrupting and bad-mouthing the interviewer, and steamrolling over any attempt at fact-checking (as CNN should have known, Trump's lies and errors come thicker and faster than any fact-checker can respond).

CNN's journalists have been at pains since the event to justify it. Event interviewer Kaitlyn Collins called it "a major inflection point in the Republican Party's search for its nominee and potentially the starting line for Anerica's next presidential race" (an inflection point implies a change of direction - I see no such change). Anderson Cooper argued, "Do you think staying on your silo and only listeningcto people you agree with is going to meet that person go away?" (But does Trump really need CNN to help him get his message out, I think most people on the right and the left know where he is coming from). CNN Worldwide's CEO Chris Licht defended it by claiming that "people woke up and they know what the stakes are in this election in a way that they didn't the day before" (ditto: most CNN watchers were quite aware of Trump and the existential threat he poses).

Many disagree. Former CNN correspondent Keith Olbermann called it "the Hindenberg of TV news", noting that "CNN gave its credibility to Trump's madness", and called for resignations. MSNBC's Mehdi Hasan opines, "I would argue that 'making news' is not our job; holding power to account is. And on that measure, the town hall last night was a complete and utter failure". Rep. Alexandra Ocasio-Cortez points out that "CNN allowing sexual assault to be treated like a joke to an applauding audience is egregious".

Frankly, I think the nays have it. Trump does not need more free publicity from his opponents.