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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 />

7

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