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"A conversation with the Prime Minister" Stephen Harper and L. Ian MacDonald For the third time since taking office in February 2006, Prime Minister Stephen Harper sat down with Policy Options editor L. Ian MacDonald for a look back, and a look ahead. The half-hour interview took place in the PM’s Centre Block office in the afternoon of January 15. "The Harper peril for Canadian federalism" by Tom Kent Tom Kent, present at the creation of cooperative federalism in the 1960s, is concerned that Stephen Harper's version of classical federalism, closely respecting the constitutional division of powers, "could provide cover for a federal government to implement a neo-conservative agenda by shuffling national responsibilities to the provinces." While our Founding Editor supports Harper's plan in the Throne Speech to strengthen the economic union by eliminating trade and mobility barriers between provinces, he strongly opposes proposed limits to the federal spending power in provincial jurisdictions. "The Constitution," he writes, "does not limit, never has limited, federal spending." "Charlie Wilson's whoppers" by Arthur Kent Arthur Kent covered the Soviet occupation of Afghanistan in the 1980s. He was the Canadian television journalist who, as he writes, "tramped across Afghanistan, filming the exploits of the mujahideen guerrillas." Now, in a moment of art imitating life, some of his footage and voice-overs ended up in Charlie Wilson’s War, the Hollywood film version of how the Soviets got the boot, largely because of US funding of covert operations, supplying arms and rockets to the insurgents. Except nobody asked permission to use his footage, and the story told in the film is only loosely connected to actual events. "Alberta's joy - and pain - of $100 oil" by Todd Hirsch [summary not available] "Canada's floating rate needs fixing" by Thomas J. Courchene The Canada-US exchange rate is the most important price in our economy. Yet volatile energy prices are generating exchange rate swings that are rendering some sectors uncompetitive. The underlying problem is that our currency area is too small to accommodate a dynamic energy sector and a world class manufacturing/services sector. We need to immerse the Canadian economy into a larger currency area via a fixed-exchange-rate regime with the US in the near term and to work toward a North American version of the euro in the longer term. "Three myths about Canada's flexible exchange rate" by Christopher Ragan The dramatic changes that have been observed in the Canada-US exchange rate over the past 25 years have led many people to argue that something needs to be done to reduce this apparent volatility. This paper examines three popular views about Canada’s flexible exchange rate. First, that a fixed exchange rate would reduce overall economic volatility. Second, that a fixed exchange rate would be a useful way to prevent currency "misalignments." Finally, that the Bank of Canada should always reduce its short-term interest rate target to offset the effects of an appreciation of the Canadian dollar. In each case, there is a superficial logic to the position, but a deeper economic understanding, in particular regarding the underlying causes of exchange rate changes, reveals all three views to be incorrect. "Putting ourselves in a fix" by William Watson With the loonie soaring to unaccustomed altitudes, discussion of fixing the Canada-US exchange rate is back on the table for the first time since the loonie was on life support just five years ago. In this skeptical view of a currency fix, William Watson looks at whether a fixed exchange rate would work and what it would cost. The goal of fixing the loonie’s value would be to reduce uncertainty for investors by eliminating an important vehicle for speculation. Watson argues that even with the loonie out of play, speculators would find other ways to bet on (or against) Canada. One very important cost of fixing the loonie would be abandoning inflation-control targets, which are the linchpin of a hard-earned and so far successful monetary policy. "The other side of the loonie: the greenback in historical perspective" by Patrick Leblond With the growth in the value of the Canadian dollar, there have been renewed calls for some kind of monetary integration with the United States. Although, as Patrick Leblond, assistant professor of international business at HEC Montréal, acknowledges, such a monetary union is unlikely in the foreseeable future, it is useful to assess what kind of monetary partner the United States would be should Canada ever opt for such a union. Here he looks at "the other side of the loonie’s exchange rate volatility, namely, the behaviour of the greenback." Since the Second World War, he finds, the US dollar is no beacon of stability, and it bears its share of responsibility for the volatility of the exchange rate between the two North American dollars. "Environmental and economic benefits of tree-based intercropping systems" by Robert L. Bradley, Alain Olivier, Naresh Thevathasan and Joann Whalen While the Canadian furniture and wood-cabinet industry is a significant economic player, employing over 100,000 workers and shipping goods valued at $14 billion per year, it is currently facing a cycle of decline. And this, write Robert Bradley and his colleagues, is unlikely to change, "unless we improve our ability to compete without compromising the quality of our products." In this article, they articulate a vision in which Canada would increase its domestic production of high-value hardwood trees required to produce high-end furniture. They look at the benefits of this option and the factors militating against it. "Agroforestry in the world: lessons for Canada" by Andrew M. Gordon and colleagues While their potential for contributing to the economic diversification of Western agriculture remains largely untapped, agroforestry practices are well ensconced in several temperate regions around the globe. But in Canada, their rate of adoption remains low. To Andrew M. Gordon and his colleagues, the biological, physical and chemical interactions introduced through agroforestry systems are crucial for improving the quality of the environment for future generations of Canadians. They review common agroforestry practices in China, Europe, Argentina, Australia and New Zealand, and discuss the socio-economic implications for Canadian agriculture of adopting these practices. Agroforestry, they maintain, has considerable potential to resolve many current concerns about the viability of rural agricultural communities. "Developing a national agroforestry and afforestation network for Canada" by Ken Van Rees Forests represent about 40 percent of Canada’s total land area, and they have been instrumental in its economic development. Today, however, the forestry industry is facing great challenges from global market pressures, and several thousand jobs have been lost since 2003. In this article, Ken Van Rees, AFIF Chair in Agroforestry and Afforestation at the College of Agriculture and Bioresources in Saskatchewan, argues it is time to change our approach to forest management and introduce silviculture on agricultural land, to reduce costs and rotation ages. He explores the development of agroforestry practices in Canada and why we need a national agroforestry network. "Les hauts et les bas de la forêt feuillue : sommes-nous prêts pour un nouveau changement de paysage ?" by Alain Cogliastro, André Bouchard, Gérald Domon and Louis Bernier From the time the first Europeans arrived here the Canadian landscape has changed considerably, mostly as a result of farming and then urbanization. Deciduous forests in Quebec have suffered greatly from these activities, write Alain Cogliastro, André Bouchard, Gérald Domon and Louis Bernier. As they explain, "in agricultural regions the landscape is uniform, with few trees and forests, and there are a number of environmental problems connected with field crops." They propose that deciduous forests on our agricultural land be rehabilitated to integrate their environmental and economic functions, and suggest several ways of doing it. "Revisiting the democratic deficit: the case for political party think tanks" by Irvin Studin In this article, Irvin Studin of Osgoode Hall Law School and formerly of the Privy Council Office, argues that Canada’s true democratic deficit lies in the incumbency and division-of-labour advantages of an increasingly complex federal bureaucracy over an "unarmed" elected executive. He proposes that state-funded political party think tanks be created to remedy the problem. "Canada in North America: from political sovereignty to economic integration" by Robin V. Sears Contributing Writer Robin Sears begins from the textbook premise that sovereignty is indivisible, and goes on to make the point that security and trade agreements usually involve some surrender of sovereignty. He points to NATO and the European Union, as well as the Canada-US Free Trade Agreement, as prime examples. NATO member states serve under NATO command. A united Europe, rising from the ashes of war, is a global economic powerhouse. The FTA has given Canada and the US secure market access, but not without costs in sovereignty to both countries. Since the time of Sir John A. Macdonald, he notes, Canadian sovereignty has been, for better or worse, a function of the relationship with the United States. "The true white north: reflections on being Canadian" by Colin Robertson For Colin Robertson, Canadian sovereignty is primarily framed as a question of identity. "If our national sport is hockey, then our national preoccupation is our identity," he writes. And always, Canadian identity is defined in contrast or comparison to "our huge neighbour to the south." He adds: "The Confederation of British North America was as much an unintended consequence of the American Civil War," which saw hundreds of thousands of American troops still in uniform, and many casting covetous eyes northwards. Both of Canada’s two founding language communities have had issues of identity, the English in affirming their essential difference from Americans, and the French concerned with their survival on an English-speaking continent. Book Excerpt: The Unexpected War: Canada in Kandahar by Janice Gross Stein and Eugene Lang In this excerpt from their important book, The Unexpected War: Canada in Kandahar, the authors tell the story of how Canada’s redeployment from Kabul to Kandahar under the Martin Liberals in 2005 became the Harper Conservatives’ war, from the moment the House passed a resolution extending the Afghan mission in May 2006. Book Review: Hugh Segal reviews The Unexpected War: Canada in Kandahar by Janice Gross Stein and Eugene Lang [summary not available] Book Review: Michael Hart and Bill Dymond review Uneasy Neighbo(u)rs: Canada, the USA and the Dynamic of State, Industry and Culture by David T. Jones and David Kilgour [summary not available] "Droits sociaux virtuels" by Alain Noël [summary not available] |
