Canadian PM Trudeau and the loonie: What’s up?

Matein Khalid  http://www.khaleejtimes.com  October 26, 2015

The Canadian dollar’s strength may not last.(AFP)

Even though Trudeau is the son of a political legend Pierre Trudeau, he has no economic or diplomatic policy making experience.

So justin Pierre Trudeau is the new Premier Ministre of Canada. Stephen Harper’s decade in power as the Tory grand vizier in Ottawa was ultimately doomed by the oil shock, the commodities bust, the 2015 Canadian recession and voter discontent in Ontario, Quebec, Alberta and the Atlantic seaboard states. Even though Trudeau is the son of a political legend Pierre Trudeau, he has no economic or diplomatic policy making experience. Yet he will rule the first Liberal majority government in Ottawa since Jean Chretien in the late 1990s.

I can envisage higher public spending as Trudeau (and the electorate) does not share the Conservative Party’s commitment to a balanced budget or a Canadian combat role in the US led military coalition against Daesh in Iraq. This means tensions with Washington beyond the Keystone XL pipeline issue. Trudeau could even resurrect the ghost of his father’s Third Option in a world where China and Russia both challenge the US. All this reinforces my conviction, outlined in my October 12 KT column, that the Canadian dollar’s strength will not last.

So it did not surprise me that the loonie fell against 15 major currencies in Singapore trading the night Trudeau unseated Harper and entered the world stage. Once the Tories resorted to the xenophobic, anti-niqab campaign, I knew Harper had run out of ideas and political risk was going to rise in Canada even as oil prices and economic growth rates/mining capex fell. Trudeau’s C$60 billion infrastructure pledge (funded rise in deficits) and two shock Bank of Canada rate cuts, fiscal populism and higher US economic momentum means a lower loonie. So does the monetary policy divergence between the Yellen Fed and the Poloz Bank of Canada I expect will widen in 2016.

As a personal friend of former Liberal Prime Minister Jean Chretien and father of (a UAE dirham-financed) McGill undergrad, I will not disguise my pleasure at the election result and the softness of the Canadian dollar. Yet the free-fall in the Canadian dollar began in spring 2014 under the conservatives, when I recommended a loonie short at 1.06 (or 94 cents) against the US dollar.

Justin Trudeau will only add fiscal stimulus to Governor Poloz’s ultra-dovish monetary policies which have failed to use loonie depreciation to revive the Canadian economy. The yield on the 10-year Canadian Government bond is a miniscule 1.46 per cent at a time when Canada’s federal and provincial debt burden will only rise. In any case, the oil shock and $500 billion reserve falls in China will force sovereign wealth funds to jettison their holdings of Canadian government debt, which has historically been correlated with a rise in Federal budget deficits. A strategic put option on Canadian dollar government debt makes total sense since the yield on the 10-year Uncle Canuck note could well rise to two per cent or higher by late spring. Does Justin Trudeau’s proposed fiscal stimulus threaten Canada’s AAA credit rating? No.

Canada had the stablest banking system in the Western world in 2008 while Wall Street, the City of London and even the Bahnofstrasse/Paradeplatz went ballistic on subprime debt/credit derivatives. The commodity supercycle and China’s spectacular economic growth since 2001 was a financial windfall for Canada. Yet that was then and this is now. Canada is now in near recession, the commodities bust has just begun, epic consumer debt presages a housing crash, energy loans will gut banking profits and the loonie hit 12-year lows in September. Even though Alberta oil sands boast the world’s third-largest oil reserves, they are high-cost marginal producers who are toast during a global oil glut with no swing producer in either Riyadh or West Texas/North Dakota. Paradoxically, Harper’s “energy superpower” boast now haunts the loonie, since oil and gas is 25 per cent of Canadian exports. Other than the Norwegian kroner, the Canadian dollar is the ultimate Western world petrocurrency now, the political pendulum has shifted back from Alberta to the Liberal bastions of West Montreal.

Are Canadians “fickle, wing nuts”? Is Trudeau “unprepared, gaffe prone”? Former U.S. Senate Aide Says They Are

October 21, 2015   Andrew Phillip Chernoff  Just Saying….Just-saying

Trudeau Victory Bad For U.S., World At Large: Sean Kennedy

Sean Kennedy did not like the 2015 Federal Election result.

He  is all sad and crying tears for the nation of Canada, after years of having a man crush on Stephen Harper.

“The downfall of the Harper government is a defeat for a conservative admired by many on the right in U.S. politics,” according to Kennedy.

Who is Sean Kennedy?  Sean Kennedy is a writer based in Washington. Previously, he was a U.S. Senate aide, television producer and a fellow at public policy think tanks. He lived in Canada and observed the last federal election in Canada firsthand., according to CNN.

I think his head was in the cloud on some wacky-tobacco, and in reruns of his favourite Richard Nixon home movies, when he coined his dribble.

In his article for CNN, titled “Justin Trudeau victory in Canada is bad news for U.S. conservatives”, Kennedy let’ it all hang out, not flattered in the least about the Canadian election outcome;  sulking over the Harper conservatives loss  and his disdain for the Canadian voters for getting his man in Canada,  “…booted out of office after nine years of steadily manoeuvring the ship of state.”

Steadily manoeuvring Canada? Maybe, over Niagara Falls.

On how and why Canadians voted for Justin Trudeau and the Liberals in resounding fashion, Kennedy explains it this way:

The fickle Canadian voters were tired, though. Tired of the scandals and unforced errors that come with years of unchecked power (Canada’s parliamentary system is a unitary executive-legislative branch). Political appointees and friends of Harper’s couldn’t resist feeding at the taxpayers’ trough. Though the trail never led directly to Harper, the scandal only fed a public perception that the cool-to-a-fault, calculating (and yes, even Nixonian) Prime Minister was up to no good.

We fickle Canadians…..The majority of the Canadian electorate punted Harper to the sidelines, and did not vote for the  Lord and Saviour Stephen Harper. Canadians instead were:  patriotic, tried, responsible, true, pertinacious, tenacious, secure, staunchincorruptiblenationalistic, unalterable, sure.

Kennedy just can not understand it. His American peanut-sized brain just can’t put his head around it.

Harper was defeated by, “ the unprepared, gaffe-prone but well-coiffed son of a former prime minister, Justin Trudeau.” , Kennedy writes, probably after another puff of his wacky tobacco.

How is that possible?  How was it that the Harper punch bowl just did not have enough of that elixir to make us all Harperites and submissive to his voting will at the ballot box from coast-to-coast-to-coast?

After all, look what  what Harper and the Conservatives did for Canadians,eh:

Canada under Harper’s leadership was a conservative wonderland with balanced budgets, increasingly low taxes and a robust foreign policy aimed at taking on terrorists and bullies the world over.

Harper’s fate is all the more shocking when you consider how well Canada weathered the 2008-2009 financial crisis under his watch. He didn’t bail out anyone (except the U.S.-based auto industry), no financial institutions failed and the Canadian economy hummed along.

With sky-high oil prices and other resources reaching record highs, Canada got rich as other industrial powers paid top dollar (or top loonie, if you will) for the raw materials they needed to grow. As oil prices fell off a cliff, the Canadian economy slowed, even briefly dipping into recession this year. But Harper made the necessary cuts and kept taxes low. Amazingly, he balanced the budget ahead of schedule as the commodity markets nosedived.

When Harper introduced anti-terror legislation called C-51, or “Canada’s Patriot Act,” after prominent attacks inspired by radical Islam, the wing nuts of Canada’s left came out of the woodwork, painting the Prime Minister as a tyrant in the making.

Harper took a stand for an inclusive, but fully Westernized and assimilating Canada — banning the niqab, or face veil, from being worn at citizenship swearing-in ceremonies.

Canada is in for it now. Prepare for end times. The world will now turn its back on Canada.

According to Kennedy, Harper and the Conservatives,  were the authors and implementers of, “Canada’s Miracle”, which was:

….surviving the financial crisis, balancing budgets, slashing red tape and taxes while maintaining a healthy welfare state….

According to Kennedy, “The Conservative Party’s loss is to the detriment of its neighbours to the south and the world at large…”

Well, in the Great White North, in a country called Canada, on October 19, 2015, the Canadian voters took back Canada from Stephen Harper and the Conservatives.

Stay within your borders United States and Global community; or be prepared to suffer the consequences of challenging Canadian sovereignty, if you dare; upon which every disobedient nation  will be subjected to the unleashing of hundreds of thousands of hockey pucks.

My advice to Kennedy, the United States of America, and the rest of the Nations in the world, who have issue with democracy at its finest,  as demonstrated by the massive, historic, resounding landslide of Justin Trudeau and the federal Liberal Party: Most unlearned reviewer! fortunate would it be for your own sakes and ours, could you but fix your eyes upon the stifling smoke issuing from your own home, instead of keeping them busy with your spy-glasses in watching our  motions across in Canada.{Note: thanks be to Louisa Susanna Cheves McCord, and her book Political and Social Essays for assistance in the advice}

Just Saying…..

Trudeau Quickly To Be On International Stage…Just Saying…

Prime Minister Elect Justin Trudeau To Shape Canada’s Domestic And Foreign Policies In The Shadow Of His FatherJust-saying

October 20, 2015        Andrew Phillip Chernoff         Just Saying….

Justin Trudeau will have little time after his inauguration as Prime Minister to sit and gloat about his good fortune as he will quickly be on the international stage with:  the G20 Summit in Turkey, November 15-16; APEC Summit in Philippines, November 16-18; Commonwealth Heads of Government Summit in Malta, November 27-29; and, the UN Climate Change Conference, November 30-December 11.

But that is not all facing the new Prime Minister and Liberal government:

Both at home and abroad, Trudeau faces several pressing priorities and a raft of longer-term promises.

The immediate issues for the prime minister-designate include a major international conference on climate change, a military mission in the Middle East he has pledged to end and the still-churning refugee crisis enveloping Europe.

On the horizon domestically loom keystone promises from his party’s successful campaign: lower taxes for the middle class, the legalization of marijuana, and a slate of democratic reforms including a new electoral system to replace the venerable first-past-the-post regime under which he swept to power.

Trudeau will no doubt be riding an electoral high from the 184 seats the Liberals captured — a whopping 149-riding increase from the last election — but he will already be facing tough questions on how and when he will implement his plan. http://www.cfra.com/NationalCP/Article.aspx?id=483607

Justin Trudeau hopes to develop a positive legacy with respect to domestic, and foreign policy and international relations, as his father, Pierre Elliott Trudeau did.

Pierre Elliott Trudeau led Canada as Prime Minister for16 years and with his governing Liberal party, left Canadians the legacy of  a new Canadian Constitution and the Charter of Rights and Freedoms.

Justin Trudeau hopes to follow in his father’s footsteps as he attends upcoming, and further international events during the next four years, outlining Canada’s position on foreign and international affairs and events; putting his own stamp on Canadian domestic and foreign policy; and international relations.

And Justin Trudeau will have a lot to live up to.

Jeremy Kinsman, a retired Canadian career diplomat, who was the Canadian High Commissioner to the United Kingdom (2000–2002) and the Canadian Ambassador to the European Union (2002–2006), said of the late Prime Minister in his paper “Who is my Neighbour? Trudeau and Foreign Policy”, published in the London Journal Of Canadian Studies 18: 2002/2003:

Pierre Elliott Trudeau’s impact on Canada was enormous. His dual commitment to individual civil liberties and to building the Canadian nation resulted in a charter of rights enshrined inside a patriated constitution and a changed country. In foreign policy, where he dealt with a wider and changing world, not so amenable to shaping by any one middle power, his impact was less convincing. Moreover, a political leadership career spanning 16 years inevitably takes one down a long and winding road. Inconsistency-seekers can feast on a record that long—no matter what the vision.

Trudeau’s foreign policy was assembled from within a conceptual framework analogous to his view of Canada and Canadians that emphasized nation-building within a general vision on the great fault-lines of global relations: North-South and East-West. For all the twists in his foreign policies, Trudeau was remarkably consistent in his commitment to individual civil rights, and to the rights of individual states, to be free from arbitrary interference in their affairs, which necessarily involved something of a contradiction. At the time, the doctrine of humanitarian intervention had not yet been developed. Though Trudeau the anti-racist abhorred apartheid, and the assumptions governing the conduct of racist Rhodesia, Trudeau the international jurist was less confrontational on the issue of individual political freedoms within the socialist states of Eastern Europe. Whatever he thought of individual regimes, he endeavoured to work with them.

As for the North Atlantic Treaty Organization (NATO), Trudeau was his own man. Kinsman writes:

In 1968, NATO was a closed-doctrine shop. But maintaining a Canadian military almost uniquely for the purpose of fighting a land war in Western Europe made no sense to the new prime minister. Over 10,000 Canadian soldiers and 108 Canadian combat aircraft with dual reconnaissance/nuclear strike roles were stationed in an already prosperous Germany, along with heavy tanks and armour of no use to Canada in any other theatre. He didn’t buy the official advice that Canada’s alliance obligations or the state of the cold war removed any choice in the matter. His unilateral reductions in 1968–9 to Canadian forces in Europe created a stir in Washington and fed the notion that he was a ‘lefty’ who was soft on the challenges of the cold war. It was an impression that would dog him for the next twenty years.

Trudeau was never soft, but he did have enduring concerns about the need to reduce tension in the East-West standoff, especially over nuclear détente. He firmly believed in the need to move back from the danger of direct conflict—he knew NATO helped by being a clear deterrent but worried it locked Canada into a culture of anti-communist conservatism.

The Americans and others frequently found Trudeau infuriating because he questioned received wisdom. His decisions on nation-building and on internationalism were assertive, and inevitably his actions were felt in the immediate neighbourhood.

Canadian sovereignty and environmental protection in the Arctic, was high on Trudeau’s foreign policy, according to Kinsman, saying, “Trudeau made the north part of Canada’s idea of itself.”

During Trudeau’s first term in office, another issue at the core of Canadian ‘business’ that the United States saw as a threat was a product of Trudeau’s legal reasoning and his bent for ‘nation-building.’ That was the Canadian response to the planned voyage through the northwest passage in September 1969 of the United States super-tanker, Manhattan, which sought a way to bring newly discovered Alaskan energy to east coast markets. Ivan Head, Trudeau’s personal foreign policy adviser and intellectual companion during his first several years in office, has written comprehensively about this defining episode in Canadian foreign policy in which Canada asserted jurisdiction over its Arctic waters because its responsibility for protecting the fragile Arctic environment insisted upon it. In strategic terms, of course, the cold war rivalry between the USSR and the United States took concrete form most dramatically under the sea, especially under the polar icecap. Few prerogatives have been held as tenaciously by United States government lawyers as those favouring the maximum freedom of the sea for the United States navy. The possibility that Canada would draw straight baselines to enclose the northwest passage in Canadian internal waters and assert economic sovereignty over the waters by establishing an economic protection zone extending 100 miles offshore posed a dangerous challenge to the United States.

Trudeau made the north part of Canada’s idea of itself. His initiative to assert Canadian sovereignty in the Arctic for the purposes of environmental protection was a precursor to the drafting of a new law of the sea convention that would eventually codify the existence of coastal state responsibility for a 200-mile economic zone. The 1970 Arctic Waters Pollution Prevention Act anticipated a whole body of vital international law and of practice regarding the regulation of the transport by sea of bulk cargoes. If the Trudeau administration did nothing else that was new in foreign policy, this concrete and very real contribution to international law and to Canadian sovereignty would stand as a fine monument.

What will history say of “Prime Minister” Justin Trudeau with respect to foreign policy and international relations.? The diary is about to be written, and a book to follow after all is done and said.

“We need to keep working hard to show Canadians that we can have an open, optimistic and positive Canada, positive government, and that we can build a better Canada for everyone,” Trudeau said after the election victory.

Governments plan to gather in Paris in December for a global summit on climate change. That leaves the Liberals just weeks to come up with a national position based on the party’s promise to join with the provinces and territories to take action on climate change, put a price on carbon and reduce carbon pollution.

The Liberals have also committed to ending Canada’s combat mission in Iraq against rampaging radical militants — instead focusing Canada’s military contribution in the region on the training of local forces, while providing more humanitarian support and immediately welcoming 25,000 more refugees from Syria.

Trudeau has said that the first piece of legislation his government would put forward is one to lower taxes for the middle class and raise taxes for the wealthiest Canadians.

A Liberal government is also committed to revamping the recently enacted omnibus security bill, known as C-51, that gave Canada’s spy agency substantial new powers and angered civil libertarians.

Trudeau has also promised the largest new infrastructure investment in Canadian history. The plan would nearly double federal spending on public transit, affordable housing, recreational facilities and other items to almost $125 billion over the next decade.  http://www.cfra.com/NationalCP/Article.aspx?id=483607

It is clear that there are many domestic and international issues coming out of the starting gate that will give both Canadians and global leaders an indication just how “Prime Minister” Justin Trudeau will act compared to “Member of Parliament” Justin Trudeau.

Trudeau knows he is not just the Liberal leader, and Member of Parliament for Papineau, but that he speaks and acts for all Canadians both in Canada and abroad,  as Prime Minister.

“Many of you have worried that Canada has lost its compassionate and constructive voice in the world over the past 10 years,” Trudeau told a boisterous rally in Ottawa on October 20, 2015.

“Well, I have a simple message for you: on behalf of 35 million Canadians, we’re back.” http://www.cfra.com/NationalCP/Article.aspx?id=483607

As said in an earlier column, Trudeau and the Liberals now have to answer the bell of parliament and put action behind the hype, the rhetoric, the promises, and the bold statements of the election campaign.

May God be with him, and the shadow of his father be kind…..Just Saying….

G20 Leaders Summit 2015 Logo / The tenth annual G20 Leaders Summit, a platform which brings together the 20 developed countries of the world, will be held in Antalya between 15-16 November 2015. November 15-16, 2015        https://i0.wp.com/apec2015.ph/wp-content/uploads/2015/01/Screen-Shot-2015-01-08-at-4.03.43-PM.png November 16-18, 2015

https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcQmFu-kANcdYUaJ5VZOieNtGV4L6l0rsX5KSePVvrkVdJt-ROLHYQ  November 27-29, 2015  COP21/CMP11 logo  November 30-December 11, 2015