Archive for April, 2016

Aid and Organization

April 25, 2016


Prompted by Hugh Segal’s latest book Two Freedoms (Dundurn Press, 2016) concerning Canadian foreign policy, two further issues struck me, Canada’s aid policy, and the country’s relationship to the US. The former has a large and growing lobby of those wanting more, for results that are frequently disappointing, while the latter is the elephant in the room, and often means that foreign policy is tightly interwoven with domestic policy.

Previous postings resulting from reading this excellent book were made on April 20th and 22nd, 2016

Foreign Aid

There is widespread support in Canada for foreign aid in general, but intense competition by NGOs clamoring for a larger share, in addition to a well organized lobby of those wanting a bigger overall budget. It is now just under C$5 bn a year. That’s not much when spread around the world.

What would C$5 bn buy in 2016?  Remax reports prices for different Canadian cities. Assuming C$500,000 to buy a house, the aid budget would buy the equivalent of 10,000 houses a year spread over Asia, Africa and Latin America, where much of the aid is spent. And part of the budget is used for administrative purposes at home and abroad. As I see it, Canada, at the federal level, is not spending much on foreign aid, and there is a substantial literature documenting the way it is often misspent abroad….and sometimes at home.

A more hopeful sign is the amount sent abroad from Canada as remittances by, for example, Haitians in Canada to their families in Haiti. In total to all countries, remittances are about five times the amount of official Canadian aid (see Should this be considered as part of a country’s foreign aid? Should more of it be encouraged? Can the cost of transferring private remittances be lowered?

Then there is the issue of reverse aid. Canada and other developed countries encourage students from developing countries to study in Canada. If they don’t return to their homelands, this does not help development abroad, but it may help the Canadian economy. Canada, similar to other countries, makes it easier for those who have studied in Canada to stay……good for us, not so good for them.

Too much emphasis, in my view, is placed on the size and distribution of the federal aid budget, and too little on closely related activities like remittances and reverse aid flows. Not surprisingly this is due to the pot of federal money being available for aid projects, and the lobby groups which spring up to administer them. One suggestion – if aid is to contimue, it should be concentrated on the education of women in developing countries. Studies show that this leads to positive results.


The US – a mix of domestic and foreign policy interests

Canadians often resent the impact that the US has on Canada, combined with a perceived lack of attention given by the US to Canada – an exception perhaps being sports. When there is an emergency like an ice storm, crews are sent from the US to provide assistance, and the reverse is true, leading to times of increased public awareness. In many policy arenas however, Canada is not a problem, and there are many other countries for the US to contend with abroad.

The two countries have extensive official presences. Canada has an embassy in Washington and consulates or trade missions in thirteen US cities. The US has an embassy in Ottawa and consular offices in seven Canadian cities across the country. Provincialy, Alberta, Ontario and Quebec have fully-staffed Washington offices, while Manitoba has a part-time representative. Other provinces are represented by lobbyists in Washington, a nice gig for former US ambassadors to Canada.

 In 2015, 75% of Canada’s exports and 66% of imports came from the US. At one point, the Ambassador Bridge linking Windsor and Detroit, an estimated 10,000 commercial trucks cross per weekday in both directions (over 2.5 mil per year). In other provinces, there are land, air and water crossings of persons and commerce, as well as the transmission of electronic signals over the air and by satellite and other means. Various statistics of trade and people flows illustrate how particular parts of Canada (and the US) are affected.

The US has an enormous impact on Canada in so many areas that Canadian foreign policy becomes increasingly intertwined with  parts of domestic policy, leading provinces and cities to want to be at the table when foreign policy negotiations are underway. While this has always been the case to some extent, today’s interdependencies between foreign and domestic policy require thought to be given to the administrative structure for their management. Today’s world is far different from when the forerunner of Global Affairs Canada was established, and while changes have taken place they perhaps need further revision. One alternative, which has happened, is for foreign policy to be made in the Prime Minister’s office, and the department bypassed entirely.



Let Others Do It

April 22, 2016

Canadian defense policy

Ambulances and fire engines spend most of their time waiting for a call. When it comes, we expect something to happen, not to be told sorry, but the staff and equipment are not available. With an understaffed and under-equipped military, successive Canadian governments have left defense policy in a state of unreadiness. If events at home or abroad call for action, Canada’s ability to respond falls short of what might be expected of one of the world’s wealthier nations.

Another way to look at it is that Canada has contracted out to others, and especially to the US, the capability to respond if the country is threatened and defense forces needed. Don’t be surprised if a future American administration asks us to pay an annual fee for the services provided. After all, some have proposed getting Mexicans to pay for building a wall on the US-Mexican border.

(This has always seemed a bit odd, because if a drone can deliver parcels for Amazon, surely one could deposit a person over the wall, and people could be hired to give advice on building tunnels.)

Canadian defense personnel are well trained and perform admirably when required to do so, but there are not enough of them, meaning that funds are not available to recruit, train, equip and retain them. The statistics are well known relative to those of other countries.

The number of army, navy and airforce personnel, level of defense expenditures, and number of ships and planes are low in absolute and relative terms in comparison with others. And it is not the amount of equipment owned, but what actually works that matters. Repeatedly documented is the age of Canada’s fighter planes and helicopters, and the decrepit state of its small navy. When it needs naval support, it has to rent or borrow from others. The Russians must feel threatened that a single Canadian ship was patrolling the Black Sea before having to withdraw for maintenance.

Luckily there are a few determined academics and journalists who document these issues. Politicians of all stripes see few votes in allocating money to defense, preferring to spend it on foreign aid and offering Canadians further entitlements at home.

Hugh Segal highlights these and other issues in Two Freedoms, Canada’s Global Future (Dundurn , 2016), where he writes p.166, “At present, our forces have a patrol deficit, a logistics deficit, an intelligence deficit, a training deficit, and the federal budget has an operational deficit.”  Academics like Jack Granatstein and Fen Hampson amongst others make a similar case: Hampson writes “We remain comfortable within the American cocoon.” And journalists including David Pugliese and Matthew Fisher actually visit troops on the ground, and provide the public with the current state of military play. There is one further dimension I would add.

Canadian forces are sent into combat zones to provide advice and training to foreign fighters, with the impression given to the Canadian public that they will not personally engage in fighting, and if fired on will not respond. The latter is not part of the Canadian mantra of peace-keeping. But it defies common sense to expect Canadian advisors, who come under attack, not to respond to protect their lives, nor should they be expected not to respond.

A related reality for Canadians to understand is that by directing allied fighters where and whom to shoot and bomb, after you have helped refuel their planes, and by making military sales to allied forces which actually fly attack missions, you are engaged in direct combat roles. While Canada wants to appear to be partially pregnant, it has to realize that the condition does not exist either in peace or war. You go in or stay out.

How others know us

April 20, 2016

Hugh Segal has written Two Freedoms, Canada’s Global Future (Dundurn Press, 2016) in which he discusses the future direction of Canadian foreign policy. It is written clearly, succinctly and provocatively. His proposals recognize the past and argue for change. Retired and active bureaucrats will be irritated by some of the ideas proposed. This is exactly what is needed, and probably intended, to generate debate and hopefully some changes, although these are hard to bring about even with a new government. As the Cardinals and Vatican bureaucrats know, popes come and go, while many of them will outlast him.

Segal proposes that foreign policy should aim to achieve two goals, freedom from fear and freedom from want. All else should follow from these. Implicit, but not stated is that Canada’s foreign policy today has lost its focus and needs to be brought back to the objectives which he proposes. I find his case persuasive.

Segal also writes, “Today’s Canadian foreign service is based on a post-war model. It sees as its primary roles the monitoring of economic, political and strategic developments around the world……It can best be called a “monitoring and sustaining operation,” one that is supervised by an establishment that has typically seen Foreign Affairs as a practice for a certain elite, preferably of the Oxbridge variety, and not really in the purview of ordinary citizens or communities. Its default position is one of passivity, which is abandoned only if some aggressor threatens the nation, or new government comes along with a more activist bias – something that officials seek to discourage at every opportunity (p.109).”


I would suggest that change will require, in particular, understanding two sets of factors. First, the world has changed in a number of ways which means that the conduct of foreign relations has to be revised. And second, as a result of some of these changes, foreign and domestic policies are more intertwined than in the past.

A diplomat working in 1900 would have difficulty in recognizing today’s world.

  • World population has risen from 1.7 bn in 1900 to 7.4 bn today (Canada from 5.3 mil to 36 mil).
  • Transportation costs by land, sea and air have fallen, which opens up the possibility for travel and with rising real incomes more people can afford it. Freight costs have also fallen.
  • Declining communication costs mean that people in one part of the world can know in real-time what happens elsewhere. The refugees from the Middle East all seem to be carrying cell phones. Newspapers and letters are not how people get most of their information. By the time a diplomatic report is filed it may be too late to be useful.
  • From 1950, the world economy grew as did the number of sovereign countries. These are now members of international organizations, many of which fall under the UN umbrella. In 1945, the UN had 51 member countries. Now it has 193, of vastly different geographic and population size and per capita income. All are supposed to be sovereign but in an interdependent world, this need not mean much especially for the smaller fry. If Scotland becomes independent, it will have to make concessions to join the EU and other international organizations, thereby limiting its sovereignty. The same is true for larger economies but size matters, and some can and do exercise more power than others.


Secondly, at least since the 1950s, and especially in today’s world, foreign and domestic policy are so intertwined that negotiations with other countries need to be handled so as to recognize the interdependencies. Of course, other departments and levels of government have had input into diplomatic negotiations, but the cooperation has not always worked well and needs to be restructured.

Consider the topics of trade, aid, immigration, the environment, industry, agriculture, communications, and transportation all of which have separate federal departments or agencies, as well as domestic and foreign implications.  Add to these the interests of provincial and municipal governments, and you have a raft of interests to organize for international negotiations.

Note: Other aspects of Two Freedoms warrant discussion which I will attempt in future postings. A former student told me to keep each entry brief….a wise suggestion.

Searching for employment openings

April 17, 2016

The third industrial revolution beginning around the 1960s has forced many occupations and industries to alter the way they operate. For example, all branches of the media, education, health care, the configuration of industries and occupations have undergone some transformation. Over time, different skills are needed requiring existing workers to be retrained, and new workers to receive the necessary training.

Consider two examples:

  1. Farming, over the past hundred years, has gone from being less labour to more capital intensive with mechanization, new strains of grains and breeds of cattle. More output is produced using both the product of researchers working in labs and less direct farm labour. In the past, refrigeration and railroads made an enormous difference to both output and the distance between producer and consumer. Those losing their farm jobs either had to retrain or move to another occupation. Adjustments were easier for some than others.
  2. Computers and the internet have an enormous impact on the way many goods and services are produced and distributed. Authors can deliver manuscripts electronically to publishers, who in turn make them available for readers to peruse and buy online. Cut out of this business are printers, wholesalers, bookstores and libraries, although the last may loan hard copies as well as eBooks.

In earlier times, changes occurred with the introduction of steam, the internal combustion engine and electricity. It is debatable which of these have had the greatest impact, and perhaps it is unimportant to know the answer. What is of interest is who is affected, and how capital and especially labour can adapt to the changes today.

The adjustment process is often associated with the argument that good, meaning higher paid, manufacturing jobs have been lost, while there has been a growth of lower paid unskilled jobs. Some, especially older workers, may find it difficult to retrain at all. For example, those employed using metal print type found it difficult to adapt to computer typesetting. Some did, while those entering the labour force have the opportunity to receive the education and training required by the technology in use today.


Employment statistics today show the allocation of firms to industry classes defined in earlier times, when the inputs and the technology used by these firms were different.

Consider agriculture. Employment in agriculture is about 2% of the Canadian labour force today, compared with around 40% in 1900, while agricultural output has expanded enormously. This is due to the output of the farm machinery industry (eg. tractors and combine harvesters), refrigeration, transportation, research into the production of new strains of grains, vegetables and fruit amongst others. Those working in these industries are counted as employees of these industries, not as agricultural employment. The loss of farm related jobs is not as great as imagined.

Consider automobile manufacturing. Output is more automated now than in the past, requiring less labour on the production line. At the same time, persons are needed to build, program and maintain the machinery used in production. These won’t be counted as part of automotive employment but as part of other industries. Similar changes can occur when a manufacturing firm has an accounting and legal department, and then decides to contract out the work to independent firms. Manufacturing employment declines and services employment rises. The output may remain unchanged.

A survey of employees by wage level does show that the proportion of lower wage and part-time jobs has increased. Why? It can mean that existing workers have not adjusted to the requirements of different industries and sectors, and may do so in the future. It may be that new workers are not receiving the type of training required by firms. More students do seem to be gravitating to community colleges, where trades are taught, either in conjunction with university classes or as a separate course of study. The conclusion that Canada is losing well paid jobs has to be understood in context.

An undergraduate degree in the arts does not hold out good job prospects, unless accompanied by postgraduate study, and work experience mixed in with academic study. A strong CV includes volunteer as well as paid work while studying and definitely during vacations. It may start with baby-sitting, gardening and dishwashing. There is no shortage of these types of jobs. Also an employer will search the internet for postings and communication by an employee applicant. Nothing is confidential and never has been.

NDP Continue to Waffle

April 14, 2016


Everything old is new again best describes the Leap Manifesto which, at its Edmonton convention, the NDP approved for further discussion. Leap follows Waffle and is applauded by Liberals and Conservatives, who see it as further eroding support for the NDP. In the 2015 Canadian federal election, the party lost 51 seats and official opposition status. If Leap had been there during the election, the NDP would have been competing with the Green Party for the smallest number of seats.

Michael Den Tandt writes

“As for the party, it has now cast its lot with the Lewises and their Manifesto. This amounts to a plan for Canada to cast aside the free market in favour of a deeply protectionist, managed economy, in which the happy citizenry drive state-funded electric go-cycles fuelled by state-funded wind turbines and live in straw bale houses that don’t require heat in winter. It is an addled, cockamamie vision like something out of Orwell, or the fevered imagination of British Labour leader Jeremy Corbyn.” (Vancouver Sun, April 9, 2016)

Alberta NDP Premier Rachel Notley comments “These ideas will never form any part of policy. They are naive. They are ill-informed. They are tone deaf.”

Robin Sears, a left leaning advocate, sees it as the product of “loony leapers.”


Two aspects of the Manifesto are what it represents, and the role played by three generations of the Lewis family. The NDP has always had a far left wing. In 1971 it emerged as the Waffle group lead by Jim Laxer, which was later barred from the party because of its extreme views. Today, Leap signals a re-emergence of the far left, and a challenge to moderate socialists.

David, Stephen and Avi Lewis, father, son and grandson have all played a role in left-wing politics. David Lewis had a distinguished career in Canadian politics as leader of the NDP from 1971, when he defeated a Waffle candidate on the fifth ballot. He had a reasonable leftish view of corporate private ownership in line with those of Tommy Douglas. In the 1972 federal election, he described Canadian corporations as “corporate welfare bums,” which did not endear him to some. In 1974, David Lewis lost his seat and resigned as NDP leader.

Son Stephen Lewis was elected to the Ontario legislature in 1963, and became leader of the Ontario NDP in 1970, at which time there were internal party struggles with the Waffle group. The NDP became the official opposition in 1975, but lost this role in 1977. In 1978, he resigned as party leader and as MPP, and took up the role of public intellectual.

At the party’s 2016 Edmonton Convention, Stephen Lewis was the keynote speaker where, for some reason, he declared himself “insufferably buoyant” about the future after the party’s federal loss of 51 seats and official opposition status. He noted that he had led the Ontario NDP to three successive second or third place finishes. In one of these it lost official opposition status. At convention time in Edmonton, the party stood at about eleven percent in the polls.

Grandson Avi, a broadcaster and filmmaker, has never been elected to a legislature. He is author of the Leap Manifesto, which so far has not only strengthened the other parties, but created a split within the NDP. It has probably undermined the Notley government’s ability to be re-elected in Alberta, while it is debated within the party for the next two years.. Little wonder that Liberals and Tories are applauding this outcome.

Supply Chains Need Policy Attention

April 10, 2016

 Supply chains – trade, investment and IP agreements

 A constant refrain in the developed world is that their economies have become service economies with the loss of good manufacturing jobs. In 2016, the Canadian labour force is assigned almost eighty percent to services, and ten percent to manufacturing, (agriculture is less than two percent)….see The conclusion reached by some is that the country is losing good manufacturing jobs and gaining lower paying service sector jobs.

This is only partly the case. What is also happening is a restructuring of employment in firms assigned to particular industries. An example would be an automotive firm, which employs in-house lawyers and accountants and has an advertising department, deciding to contract out these services to independent law, accounting and advertising firms. In the first instance these people are counted as part of a manufacturing firm’s labour force, and in the second case as service sector workers.

This is happening in North America and in other industrialized economies. The production of many goods and services are being reorganized, with the use of the term supply-chain management reflecting these changes. For example, at one time the parts and other inputs required to produce a car might all be done in one firm in one location, with the stages of production taking place onsite in a vertically integrated firm. Today, the industry is often made up of numerous firms, which provide the inputs (body, transmission, engine, brakes, design, advertising, financing and sales). These parts are now broken up and undertaken by different firms, which then trade with each other within or between countries. Outsourcing is another name for this process, which has a number of policy implications. It is not just of interest to industrial organization policy wonks. This is another case of Orwell’s warning about not paying attention that to what is going on in front of one’s nose.

A major implication is that a country, which fails to sign on to multilateral agreements affecting trade, investment and intellectual property in goods and services, may experience adverse economic consequences. See the Conversable Economist posting for March 14, 2016.

and Richard Baldwin, “The World Trade Organization and the Future of Multilateralism,” Journal of Economic Perspectives, Winter 2016, who writes as follows:

“[T]he rules and procedures of the WTO were designed for a global economy in which made-here–sold-there goods moved across national borders. But the rapid rising of offshoring from high-technology nations to low-wage nations has created a new type of international commerce. In essence, the flows of goods, services, investment, training, and know-how that used to move inside or between advanced-nation factories have now become part of international commerce. For this sort of offshoring-linked international commerce, the trade rules that matter are less about tariffs and more about protection of investments and intellectual property, along with legal and regulatory steps to assure that the two-way flows of goods, services, investment, and people will not be impeded. It’s possible to imagine a hypothetical WTO that would incorporate these rules. But in practice, the rules are being written in a series of regional and megaregional agreements like the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union. The most likely outcome for the future governance of international trade  is a two-pillar structure in which the WTO continues to govern with its 1994-era rules while the new rules for international production networks, or “global value chains,” are set by a decentralized process of sometimes overlapping and inconsistent megaregional agreements.”

“What all this suggests is that world trade governance is heading towards a two-pillar system. The first pillar, the WTO, continues to govern traditional trade as it has done since it was founded in 1995. The second pillar is a system where disciplines on trade in intermediate goods and services, investment and intellectual property protection, capital flows, and the movement of key personnel are multilateralised in megaregionals.”

Cry the beloved newspaper

April 9, 2016


A journalist writes “Is Journalism Doomed?” at

I think not, but the services which journalists provide are now delivered in a more efficient and effective way due to technology, as has happened in many other occupations and industries. Is the output as good? Opinions will differ. I read this article on an excellent website which focuses on Canadian news, and is an example of the changes underway.

Communications in general, and in particular broadcasting (radio and television), book and magazine publishing, the music and film industries, schools and universities, are all examples of where content and carriage has had to adapt to technological change.

Journalists see themselves as suppliers of content, some high quality and some less so. There is still plenty, perhaps more, high quality content out there, but it is not in the usual places. A combination of websites and search engines will probably find too much information on a given topic, especially if it is controversial. This means that the journalistic function is performed by many more people than in the past, and the reader has to work harder to find it. But technology provides a helping hand.

For example, the Encyclopedia Britannica has an online presence and contains half a million articles. Wikipedia contains five million articles, with 800 new ones appearing each day (according to its website); these articles receive a quality rating and can be revised. While neither provides daily news, they are used by journalists and others for research purposes.

Many journalists, affected by the changes, will find and are finding new ways to distribute their material, and newcomers can enter the profession creating more competition. I would argue that the current environment provides readers and viewers with the opportunity for better quality content, but they have to work to find it. Receiving a hard copy now turns out to be the lazy way to obtain news compared with an online search.  Interestingly, there are still publications which employ first class journalists, like the New York Times, the Wall Street Journal and the Financial Times.  They produce hard copies as well as having an online presence.

If old-time journalists despair of their profession, look at what happened to farm workers. In 1900, almost 40% of the labour force in North America was employed in agriculture. By 2000, it was less than 2%. Output mushroomed, and with it labour productivity. Some jobs were lost but others created, for example manufacturing tractors and other farm machinery, maintaining the equipment, and undertaking activities like research, transportation and storage. Overall there was a loss of jobs in agriculture but an increase in production, and an increase of jobs elsewhere.

Anytime technology changes existing occupations will be affected, and those who suffer will argue that the future will be worse for consumers, as well as for those previously employed. The latter is seldom the case, although the adjustments that workers and businesses have to make will take longer for some than for others. When electronic typesetting replaced hot metal type, the workers were taught how to tap keys instead of using metal plates.

Orwellian advice

April 6, 2016

“To see what is in front of one’s nose needs a constant struggle” – George Orwell

Orwell provides a constant reminder to examine what is often obvious but neglected. Canadians watch political events in the Middle East and the US with a smug feeling that they could not happen here. That may not be the cased. Consider two examples.

There is a migrant-refugee crisis in the Middle East and North Africa, which is affecting Continental Europe and to some extent Russia. Nightly on television, the plight of families with small children are seen struggling to cross boundaries in search of some livable haven in Europe. My impression is that there are more men than women making these journeys.

Canada and the US feel that the Atlantic and Pacific oceans protect them from such migrants. What they forget is that North America has a similar crossborder version of these events. With an estimated 12 million illegal immigrants in the US and 500,000 in Canada, this continent has its own type of foreign refugee crisis, one which is playing out in the US presidential election.


A second example derives from the conduct of political electioneering in the US. What is sad and sometimes amusing is how Republican presidential candidates behave. What is not sad is why their supporters like this behavior, and the message which accompanies it. Rising inequality and stagnant incomes cause voters to support leaders who recognize these conditions and offer alternative policies. Whether these would work is not known, but some politicians promise to take action.

Is this happening in Canada? I think so, but to a lesser degree so far and in Canada’s largest city.

Rob Ford in 2010 tapped a reservoir of suburban, ethnically diverse and primarily working-class Torontonians who had felt frozen out of politics. They connected with his mantra of respect for taxpayers, rough edges and a down-to-earth charisma that seemed to reflect themselves.

As city councilor and then mayor, the late Rob Ford governed in a way which upset some people, but he represented a large swath of taxpayers who felt they had been given a rough deal. It is not what a Ford or Trump say, but why their messages have support, which is the lesson for Canada.

You don’t have to look too hard to see that Canada and the US have their own versions of the migrant crisis. And the political vaudeville in the US has a staged presence in Canada.

A bleak future for democracy

April 2, 2016

Student governance at the University of Ottawa illustrates how the practice of democracy has been ably passed on from older to younger generations. Low voter turnout with a first past the post system, absence of financial accountability, and refusal to provide information are three examples of how the student council operates.

Aedan Helmer in the Ottawa Citizen, A2, April 2, 2016 notes that:

  1. About 8% of the 36,000 eligible voters took part in the latest election for the Student Federation. The unopposed president received less than 5% of the electorate (1699 votes) in a first past the post system.
  2. Each voter paid about $175 in dues to fund the council which collects $5 million dollars annually. The elected executive members get paid for their services.
  3. The outgoing executive inherited a surplus of nearly $10,000, and left a deficit of over $514,000 to the newly elected executive.
  4. Part of the deficit is due to the premiums paid for an optional health and dental plan for students where rising costs have not been addressed by successive councils.
  5. The Council has imposed a de facto gag order on elected members talking to the media.


Successive elected council members have learned from their elders how the system works and how to work the system. This example does not bode well for democracy.