LMT August 6th 2018
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Loggerheads<br />
AG NOTES<br />
CALVIN DANIELS<br />
You don’t have to have been<br />
involved in agriculture all that<br />
long to recall that the biggest<br />
detriment to Canadian farm exports<br />
used to be subsidies paid<br />
by the United States and the European<br />
Union to their farmers.<br />
The two sides were battling for<br />
markets by undercutting each<br />
other to attract buyers, and then<br />
backfilling losses to their farmers<br />
by cutting subsidy cheques<br />
out of government accounts. For Canada it was a<br />
case of being caught in the middle, forced to sell<br />
low, but without the financial resources of the two<br />
big players to bolster farm accounts with a subsidy.<br />
It took years to level the playing field in large part<br />
thanks to framework deals such as the North American<br />
Free Trade Agreement which put in place some<br />
common sense rules to trade. That is not to suggest<br />
NAFTA, or any other trade deal between trading<br />
partners, is flawless, and disputes do arise, but they<br />
are at least a foundation to keep trade flowing under<br />
a set of agreed to rules.<br />
And trade deals did help reduce subsidy wars,<br />
evolving farm trade beyond a wild west atmosphere<br />
where sales were often made by cutting someone<br />
a cheque on the side either to support framers, or<br />
offset costs for the buyer. Enter American president<br />
Donald Trump and the wild and woolly west<br />
reappears. Trump seems to operate by one guiding<br />
principle in terms of business, never sign a deal<br />
where you don’t come out the big winner.<br />
Trickle, trickle<br />
CURRIE’S<br />
CORNER<br />
ROGER CURRIE<br />
Some basic economics today<br />
about the infamous ‘trickle<br />
down’ theory. That’s the passionate<br />
belief, long espoused<br />
by Republicans in America,<br />
and their Conservative fellow<br />
travellers here in Canada. It<br />
argues that rich people and big<br />
corporations should pay lower<br />
taxes, so their earnings and<br />
profits will grow. They will then<br />
use that ‘windfall’ to expand<br />
their business and create more<br />
jobs with higher pay. The only<br />
problem is the fact that precise evidence is somewhat<br />
hard to find.<br />
Since Donald Trump became the U.S. President<br />
18 months ago, the only significant measure he<br />
has managed to push through Congress has been<br />
a major tax cut. It seemed to be the one thing that<br />
all Republicans could agree on, regardless of what<br />
other battles were taking place.<br />
The U.S. economy appears to be doing really well,<br />
especially if you’re a CEO earning millions a year.<br />
Difficult questions<br />
Have you noticed that journalists are an endangered<br />
species, but there are still some important<br />
people who care, for now? I remain proud to call<br />
myself a journalist, and it still gives me a bit of a<br />
shiver to observe the ‘stable genius’ who masquerades<br />
as the 45th President of the United States.<br />
It is slightly comforting to see that Donald<br />
Trump’s daughter Ivanka does not agree with Dad<br />
that “the press are the enemy”, and I wish her well<br />
as she moves on from the fashion industry.<br />
Then I read about what Canada’s newest Premier<br />
is up to. Twas bad enough that Toronto had to endure<br />
the total embarrassment of having the late Rob<br />
Ford as its mayor, but now they have brother Doug<br />
as Premier? Rather than merely sitting on a golden<br />
throne and ranting about the media on Twitter as<br />
Trump does, the Ontario Premier is taking things<br />
to a whole new level. His government is cranking<br />
out slick propaganda videos at taxpayers expense.<br />
Political staff are showing up at news briefings and<br />
bursting into loud applause to drown out reporters<br />
when they try to ask questions that might prove<br />
Last Mountain Times • Monday, <strong>August</strong> 6, <strong>2018</strong> • lmtimes.ca<br />
Some might suggest that is the crux of business,<br />
but if you win by limiting the trade partner’s ability<br />
to also make a reasonable dollar you could end up<br />
without partners to deal with. Trump doesn’t seem<br />
to care.<br />
So NAFTA has been reopened and sits in tatters<br />
with little likelihood it will be resuscitated anytime<br />
soon. And on a grander scale Trump’s posturing has<br />
thrown the United States into what is fast becoming<br />
a full-scale global trade war. Trump is already at<br />
loggerheads with China, Mexico, Europe and Canada,<br />
and that is highly disruptive to trade in general,<br />
and it is having an impact on the agriculture sector<br />
specifically.<br />
The impact is having a blow back effect on<br />
American farmers too, so the US has announced it<br />
is going to prop up the sector with those frightful<br />
subsidies. The U.S. Department of Agriculture has<br />
announced US $12 billion in federal aid programs<br />
for farmers to help them cope with declining prices<br />
and falling demand for American soybeans, pork,<br />
fruits, and other crops, demand lost based on<br />
Trump’s high-handed approach to trade.<br />
This move has to send a shudder through the farm<br />
sector because it is one of those things that producers<br />
have no control over, but that can affect profitability<br />
in a major way. Subsidies are not a trade<br />
mechanism where Canada can reasonably compete,<br />
nor is it a way to facilitate reasonable trade between<br />
partners.<br />
- Calvin Daniels<br />
Disclaimer: opinions expressed are those of the writer.<br />
Most often a substantial portion of their earnings<br />
are paid in stock options, and a closer look suggests<br />
that a majority of the folks in the ‘one per cent’ are<br />
selling their shares and not necessarily re-investing<br />
to help grow the economy. Also, most companies<br />
that are publicly traded are using much of those<br />
stronger earnings to buy back shares, hoping that<br />
the price will rise even higher.<br />
It’s a similar story in Canada, especially for<br />
companies that do business in both countries. A<br />
good case in point is Great West Life which began in<br />
Winnipeg more than 60 years ago. Nowadays they<br />
employ more people at their American headquarters<br />
in Denver, and their earnings were up 17% in<br />
the second quarter. The insurance business is not<br />
creating large numbers of jobs these days. The work<br />
force at Great West has been shrinking in recent<br />
years as more and more routine workers are being<br />
replaced by technology. The company quietly acknowledges<br />
in their second quarter report that the<br />
Trump tax cuts didn’t hurt them at all.<br />
By the way, they’re not getting ‘wet’ from the<br />
‘trickle down’.<br />
Twas ever thus.<br />
difficult.<br />
It all began during Ontario’s recent election campaign<br />
that saw Ford Nation take over Queens Park,<br />
sweeping aside Kathleen Wynne and the Liberals.<br />
There was no campaign media bus, and almost no<br />
substantial interviews. Like Trump, Premier Doug<br />
and his people have already been caught in a growing<br />
list of downright lies. At the annual Premiers<br />
conference in New Brunswick last month, the Ford<br />
regime announced that Ontario would be joining<br />
Saskatchewan in taking the Trudeau Liberals to<br />
court over the national carbon tax plan, and oh yes,<br />
Manitba’s Brian Pallister would be on board also.<br />
Not so. Pallister used taxpayers money to get a legal<br />
opinion that said such a legal case would most likely<br />
be a loser.<br />
Ontario used to be regarded as a leader in this<br />
country in many ways, just as the United States<br />
used to be a leader in the world. The times they are<br />
a’changing.<br />
- Roger Currie<br />
Disclaimer: opinions expressed are those of the writer.<br />
Overheard at the coffee shop<br />
A friend of mine says she didn’t plant a<br />
rock garden this year because last year a<br />
bunch of them didn’t come up. I think she<br />
was just kidding ...<br />
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