The True North Strong and Free

November 16, 2010 11:11 pm

Canada is a northern country. The North has inspired our artists and adventurers. It defines us all as Canadians. And it is more central to our national destiny than ever before. Our Government has recognized this since taking office in 2006. It is the reason that we have has made the North a much higher priority that it had been for many, many, years. This is especially timely, given increased interest by other nations in the Arctic region.

Increased access to ice-free Arctic waterways comes with the serious risk of pollution. The gathering global demand for northern resources -widely thought to be so abundant that they should be considered transformative economic assets – has generated worldwide interest. And in 2013, the nations of the North, Canada, Denmark, Norway, Russia and the U.S., begin complex, sciencebased negotiations to set national boundaries in the Arctic. At stake is control over vast swathes of the Arctic sea bed.

With these things in mind, our government has developed a Northern Strategy, based on four objectives:

• Protection of Canada’s Sovereignty

• Environmental preservation

• Economic and social development and

• Improved governance for northerners themselves

The protection of our sovereignty is the highest responsibility of any Canadian government. That is why we have undertaken several initiatives.

The Canadian Armed Forces have conducted regular exercises in the Arctic over the past five years, and will continue to do so.

We passed legislation to prevent pollution of the fragile Arctic ecosystem, by doubling the reach of our authority to regulate shipping in the Arctic.

We’re also mapping the continental shelf in the high Arctic, to assemble the geographic data needed to assert our sovereignty under the abovementioned negotiations through the United Nations Convention on the Law of the Sea.

We have striven to promote the reasonable expectation among northerners that they will have the leading role in advancing their own development.

Our claim to sovereignty over the Arctic is most strongly embodied in the communities of the far North. From Iqaluit to Ellesmere to the Beaufort, Canadians are working, raising families and helping build those communities.

We understand that living in the North is not always easy, as Aboriginal peoples have understood for centuries. In return for its breathtaking beauty and extraordinary opportunity, it exacts a toll: cold, darkness and isolation. But many people choose to live in the North today, and pay that price, for they have a sense of the greatness that awaits.

They have the same hardy, adventurous spirit that defined southern Canadian pioneers in centuries past. They are hunters and trappers, sealers and whalers, hard rock miners and tourism outfitters. They’re teachers and nurses, doctors and lawyers, entrepreneurs and public servants. No matter what they do, they are today’s Canadian pioneers, and they are charting the destiny of the North. In another century, Canada’s government helped pioneers develop, by building railroads, highways, ports and other economic infrastructure. They also helped local communities deliver the schools, hospitals and cultural and recreational facilities that are so vital to our quality of life. Today, our government is doing the same for the pioneers of the New North.

We share their belief that Canada’s future is inextricably linked to our Northern frontier.

It is the same belief in Canada’s northern imperative that former prime minister John G. Diefenbaker proclaimed nearly half a century ago, with these words: “I see a new Canada, a Canada of the North.” Then, his government took the first steps to bringing this vision to life, building airports, icebreakers and paving over 2,200 kilometres of roads across the territories.

Our government is the proud inheritor of that great Northern legacy. We too, have a dream to unleash the region’s vast potential, to advance and prosper a great Northern future – one that will benefit northerners, and all Canadians. And we have a vision of one Canada, East, West and into the far, far North – a vision that we will continue to press vigorously.


Plenitude: The New Economics of True Wealth

September 6, 2010 12:18 am

Juliet B. Schor • The Penguin Press, 2010, 258pp.

Oxygen depletion, the formation of ecological dead zones and the further disruption of the food chain will be among the effects of the Deepwater Horizon explosion and subsequent oil spill in the Gulf of Mexico. In light of such consequences, U.S. President Barack Obama made the prudent decision to impose a 6 month moratorium on all deepwater drilling. Yet a U.S. Supreme Court judge has struck down the moratorium, calling it “arbitrary and capricious.” Not surprisingly, oil companies like Chevron and Exxon are relieved by the ruling, pointing out that they weren’t responsible for the unfolding tragedy in the Gulf. What is surprising is the support for the judge’s ruling on the part of many in local communities devastated by the oil spill. In Louisiana and Florida the accident has thrust tourism, fishing and all of the other industries dependent on healthy ocean ecosystems into steep declines. People remain outraged at BP, to be sure. Yet for the devastated local Gulf communities, stopping deepwater drilling remains a prospect that most are not prepared to entertain.

The sorry episode illuminates a series of unfortunate truths. Deepwater oil drilling is more common due to the depletion of most of the world’s more easily accessible oil reserves. The deeper the drilling, however, the more environmentally hazardous and unpredictable is the outcome. For many, the risks associated with such drilling only add to the urgent need to reduce our oil dependency. But, as anyone in Fort McMurray will tell you, a transition away from oil would seemingly destroy the city’s most important generator of wealth. It is these types of tensions between the environment and the economy that Juliet B. Schor examines in her new book, Plenitude: The New Economics of True Wealth. Schor insists that the environmental crisis exposes the limits

of conventional models of economic growth and analysis. In order to effectively address the environmental crisis, economies must effectively transition themselves to models of growth that do not accelerate carbon emissions or promote other forms of environmental degradation. But how is such a transition to be achieved?

Schor expertly outlines the impasse in the relationship between the environment and economic theory. As she reminds the reader, the variety and extent of environmental degradation is staggering in scope. Carbon emissions continue their relentless rise. Polar ice caps are melting. Species are being lost at an exponential rate. Coral reefs are dying. Desertification continues. Much of the degradation is attributable to unsustainably high carbon emissions stemming from economic activity. Yet what Schor refers to as ‘mainstream economics’ hasn’t even begun to acknowledge the need for economies to adjust. This is due, in part, to many economists’ insistence that economic growth is itself the best mechanism for resolving any tensions between the economy and the environment. If countries must commit resources to combating environmental degradation, the only way to do so is by generating wealth through conventional economic growth. Growth will also be cause and consequence of the sort of technological advances conducive to addressing environmental hazards. If deepwater drilling is highly risky, the solution is not to cease drilling but rather to develop technologies to minimize the threat of spills. Similarly, markets are best suited to addressing the problem of resource scarcity: the scarcer the resource, the higher the price and thus less the demand. Resources will thus be preserved. Market equilibrium, according to this view, will somehow also create environmental equilibrium.

Such optimism, according to Schor, is misplaced. In particular, linear models of economic growth do not sufficiently accommodate the need for balance in our ecosystems. Consequently ecosystems are at risk of being subject to feedback loops. To take one example, accelerated carbon emissions do not simply make the planet warmer. On the contrary, beyond a certain point warming will initiate processes that serve to compound the warming. Thus as northern land masses warm, melting permafrost will release methane into the atmosphere, thereby intensifying the warming process. Warmer temperatures, in turn, accelerate the loss of polar ice, one consequence of which is to again exert upward pressure on temperatures. The loss of polar ice will also contribute to rising sea levels which, in turn, may facilitate the inundation of coastal communities. In other words, warming may reach a tipping point, beyond which unpredictable and far reaching forms of environmental catastrophe will likely ensue.

Although Schor writes with a sense of urgency, Plenitude is still imbued with a sense of optimism. She stresses the need for important changes to economies, but insists she is not preaching the need for austerity. Rather she suggests that individuals and communities can live creatively and joyfully without taxing the earth to the extent we do now. This may mean, among other things, working less and no longer obsessing over material goods. But it will also mean more opportunity to spend time with family or to develop alternative sets of skills. Some readers will dismiss such suggestions as radical or unrealistic. Others, however, will embrace Schor’s more benign approach for “living rich on a troubled planet.”

G8 and G20: Steph Davidson’s Final Thoughts

July 20, 2010 6:30 am

The headlines beckon to newsstand passersby: “Budget watchdog probing summits’ $1-billion price tag,” “Tories defend $2M fake lake,” “Faux Canada,” “Summit security, $1B; fake lake, $57K; jokes, priceless.” The press, the opposition and public alike have spent the months leading up to June’s G8 and G20 – in Muskoka and Toronto respectively – decrying the growing cost of hosting the world summits while the government defends its decisions down to the last dime.

Harsh critique of government spending is hardly a new trend, but it seems have gone into overdrive regarding the summits. “There is often a strong reaction to the amount of money spent by the host country,” Jenilee Guebert, research director of the G8 and G20 Research Groups at the University of Toronto, says. “But it often only comes in the host country.”

According to a report released by the group on June 4, tallying up a final cost for G8 and G20 summits is difficult, as the factors are as varying as “already available facilities at the summit sites, regular and overtime salaries, accommodations, travel expenses, meals, security, technology, infrastructure, communication and service staff.” The report also points out that some host countries benefit from existing facilities, and some of the costs can become ‘lost’ in the different ways the hosts report their spending.

Previous summits in Canada have cost taxpayers a pretty penny: $5.5 million in 1981, between $20 and $29.3 million in 1988, $192-300 million in 2002 and an estimated $1.1 billion this year (all figures CDN).

This year’s price tag includes a whopping $933 million in security alone, but Canada appears to be in good company on that end: most of the host countries report well over half their summit expenditures were on security (with some as high as 90 per cent).

Guebert says countries often justify this spending as an opportunity to showcase areas or regions of their country on the world stage (particularly ones that aren’t already well known).

While the benefits of the massive summit spending are equally hard to quantify, the research group has separated them into four general categories: “1) the immediate, visible short term stimulus of higher spending at hotels, restaurants and shops; creation of temporary jobs; 2) longer term economic benefits such as increased tourists and investment that come from increased global name recognition from the knowledge of the host location, media and advertising coverage; 3) new permanent, public infrastructures and upgrades; and 4) the training for security forces and other first responders to prevent and react to mass emergency events.”

Smaller, lesser-known cities such as Huntsville, reap more rewards from hosting than cities such as Toronto, which already has a higher world profile.

The report suggests that Hunstville has already seen a “substantial economic boost.” Of the $1.1 billion, about $50 million has been earmarked for the G8 Legacy Infrastructure Fund, which the group claims has been used for things such as road upgrades, signage, office buildings, etc., which fulfills three of the four aforementioned categories. Prime Minister Stephen Harper and Huntsville Mayor Claude Doughty have both been touting the cost versus reward to the Huntsville area in the press leading up to the event. The G8 summit alone is officially expected to generate $300 million in economic benefits.

The 2002 G8 summit in Kananaskis, Alberta (with a media centre in Calgary) cost somewhere between $192 to $300 million, according to the report. The Calgary Herald reported just before the summit that it would “create the equivalent of 1,500 ‘full-time’ jobs in the Calgary region and a total of 1,800 jobs in Alberta, worth more than $499.5 million in wages and salaries for the province. Tax revenue from G8 related spending will exceed $50 million, with $29.7 million going to Ottawa, $15.5 million to Alberta and $5.1 million to Calgary and other local municipalities.”

While the press and taxpayers criticized government spending for this summit as well, costs were scaled back in comparison to the 2000 summit in Okinawa, Japan. Guebert says rather than trying to out do the previous host, “ Each country deals with summits in their own way. They do not necessary always try and up one another. For example, the summits following Okinawa in 2000 were much less expensive.”

As noted by Global Maritimes,“The G20 summit is expected to generate about $100 million in economic activity for Toronto . . . After taking several questions on security preparations, Tourism Toronto president David Whitaker sought to steer journalists back to a discussion about “celebrating” what the city had to offer.” It is to the government’s advantage to keep the press focused as much as possible on the benefits, and not on the amount of taxpayer dollars being used to fund extravagant meals, conference and meeting costs and of course, man-made lakes. If the coverage leading up to the summit is any indication, the cliché that all press is good press does not hold true in this situation.

Woe Is Ottawa

July 13, 2010 1:33 pm

Weighing in on City Plight Before Going to the Polls

As Ottawa’s population swiftly approaches 1 million, we have a chance to redefine ourselves. Do we want to continue our urban sprawl and house a massive suburban area? Do we want to build up — not out — and increase density by intensifying the downtown core, thus having buildings closer together and become more reliant on public transit? Do we want to spend $2.1 billion on a transit tunnel? Do we want our tourists to be approached by the army of homeless people in the ByWard market? Do we want Sparks Street to be a vibrant pedestrian street that showcases our diverse culture — or should we just give up and open it to traffic? Landscape Architect and urban expert George Dark puts it nicely: “All cities find their own time. Toronto became a huge multicultural focal point around the world; Vancouver became the vertical city among the mountains; Montreal became a city deep with culture and history; Ottawa is going through this busting out phase, and we need to determine how much it’s going to define itself in its own terms.” It’s not up to the federal government, the NCC, or the province. It’s up to us, Ottawa citizens, and with a municipal election coming up on October 25, 2010, there has never been a better time to shed light on some areas of distress with hopes that these plights will find solutions.


Last year I found myself at the Munich Airport in Germany with a few hours to kill. Like any good journalist, I made way to the bookstore and was flipping through the pages of The Lonely Planet—I’m always curious to see what people around the world are reading about Ottawa. Under the crime section it read, “It’s best to avoid Rideau Street between Sussex Drive and King Edward Avenue. In the daytime it’s cluttered with smoke-spewing buses and hoards of commuters, and in the evening it’s the preferred hangout for vagrants. The friendly ByWard Market can get a bit of an edge in the late evening with minor drug and prostitute traffic.” Having worked for tips in the ByWard Market to help with university tuition, this scathing remark came as no surprise.

In reading this disconcerting review halfway across the world, one has to wonder about Ottawa’s reputation on an international stage. Back in Ottawa, I trekked through the hoards of commuters, holding my breath through the smoke-spewing buses and head into Chapters on Rideau Street to see what other international publications are saying about our beautiful ByWard Market.

Sadly, they all echo a similar sentiment. Frommer’s writes, “In recent years the number of homeless people and panhandlers has increased,” and warns “two specific places to avoid are the pedestrian underpass on the South side of Confederation Square just West of the Rideau Centre and the main East- West ByWard Market streets between Dalhousie and King Edward.” a lot of readers across the globe being warned about our underbelly.

In the 2006 Municipal election, Larry O’Brien promised to solve homelessness in the ByWard Market through a “businesslike” method. Local political activist Shawn Menard suggests, “O’Brien’s solution was to put up these kindness meters,” they look like parking meters but the money donated goes toward solving Ottawa’s homeless problem, “but did they help anything? No. They were a huge failure because they weren’t a realistic solution,” and suggests “Ottawa needs to invest in affordable housing stock. Even if you look at it from a financial standpoint, it makes sense: Affordable housing costs about $18,000 a year per person, but it can cost $100,000 to keep them on the street because of the services they are using.”

Ottawa is the Capital of one of the greatest countries in the world, and the ByWard Market is without a doubt the epicentre of hustle and bustle. Perhaps it’s time we vest a little more interest in our reputation abroad and instead of wasting time and resources on utterly useless solutions we should spend more time considering real solutions, like affordable housing.


Sparks Street never used to be a dump. In fact, it attracted thousands of tourists and locals daily looking to shop and dine. But as far back as most memories go, Sparks Street has suffered from an unfortunate decline in pedestrian traffic. Go there after sunset and you’ll hear crickets. Have you ever graced a piazza in Italy? On any given night, they are full of people sipping espresso, enjoying gelato or simply people watching.

Copenhagen, the capital of Denmark, shares a similar population and demographic to Ottawa. Their pedestrian Street, Strøget, sees up to 250,000 people every day. The potential for Sparks Street to be great is there, but why has it been under utilized for so long? Most would argue, because it’s a logistical nightmare. Trying to find whose in charge of Sparks Street is like playing Where’s Waldo with a blindfold on.

According to Jean Wolff from the NCC, “The entire north side (closest to Parliament) belongs to federal Public Works,” and as for the south side, “33.8 per cent is privately owned, 49.5 per cent is federal Public Works again, and only 16.7 per cent is the NCC.” It should go without saying that the NCC is willing to take only 16.7 per cent of the blame… if that.

But, the NCC’s mandate in accordance to the National Capital Act is to “organize, sponsor or promote such public activities and events in the National Capital Region as will enrich the culture and social fabric of Canada.” Well, what’s wrong Sparks Street? Can’t it play a role in enriching the culture and social fabric of Canada? Even with its claimed 16.7 per cent of ownership, the NCC’s assets on Sparks Street must be in the tens of millions, and yet nothing happens. What about Winterlude? Surely they could facilitate an ice sculpture display, or for that matter, a Bluesfest stage? Or incorporate the Jazz Festival? Or even the Tulip Festival? These aren’t ground breaking ideas, so why haven’t any been implemented?

Sad thing is, when things do happen on Sparks Street, it’s usually haphazard. Dr. Bruce Firestone asks, “Why does the City spend $5.5 million on cobblestone walkways and fountains that barely work,” and suggests “it’s like rearranging the deck chairs on the Titanic.” But Sparks Street doesn’t have to sink. Dr. Firestone exclaims “fixing Sparks is no secret; the solution is the same for any street or community. We need to follow the neo-urbanism movement and have at least 35,000 people living within a 10 minute walk.”

The City Councillor that represents Sparks Street, Diane Holmes, agrees that Sparks is in need of more housing close by, and points out that when sold and rezoned the old Ottawa Technical High School site would allow for 1,000 extra units to be built. So, 1,000 down and 34,000 to go!

Having so many different players on Sparks Street isn’t working. Something needs to be done. The NCC, the City, The BIA, the private owners, and the federal Public Works need to work together or somebody needs to step up to the plate and take charge. Sparks Street is bursting at the seams with potential; we just need to harness it.


For the most part, Ottawa citizens ignore municipal politics. It’s a government city and federal matters often overshadow city affairs. Trouble is, nothing affects our day to day life more than the decisions made in the Council Chambers.

This lack of citizen engagement is starting to rub off on City Council— who as of late has seemed a little too laissez-faire about things. Part of this problem can be blamed on Ottawa’s raging incumbency issue, which, as Shawn Menard points out, “is a huge problem in Ottawa. After two straight elections where no incumbents lost a bid for re-election, it has some hoping for a cleaning of the house similar to what Crombie and Sewell did in Toronto in the 1970s.

But George Dark suggests it’s not as bad as many suspect, stating our Council isn’t any more or less dysfunctional than any other big city, “There’s maybe a tendency to rely on the government for a solution and to think the government will quickly deliver a solution.” Perhaps that is too much to ask for, but whether Ottawa expects too much from the government or not, there is a problem.

A few years back the CBC ran a story about an Ottawa business having to pay $45,000 in fees to relocate in a similar neighbourhood. So it packed up and went to Gatineau were it was significantly less expensive, the process went faster and the City even provided a free all day street parking pass.

Average people running small businesses should not need to pay exorbitant amounts to simply relocate. They shouldn’t need to cut through yards of red tape or pay for a planning consultant. These kinds of regulations are detrimental to our entrepreneurial spirit. It’s no wonder Ottawa ranks 9th in Canada when it comes to small business growth.

If we are going to take economic growth seriously, we need to foster a friendly environment to do business. As it stands, there’s not much that is friendly about it.


How long have we been hearing about Ottawa’s transit debacle? The same song has been playing like a broken record for the past… how many years? Ottawa’s transit system has been inadequate well before the 55-day bus strike. Shawn Menard argues, “you have a bus strike that cost the city over $500 million that simultaneously debilitated small businesses and further eroded public trust in the system and what’s their genius marketing campaign to improve ridership? A 5.4 per cent rise in fares slated for next year. That compounds to just over 30 per cent in the past 3 years.” How raising the cost, again, is supposed to increase ridership is beyond me.

Another transit issue that needs to be solved is the east-west tunnel system that will cost $2.1 billion and won’t be complete until 2031. Menard insists, “There are less expensive, equally effective options are available now,” suggesting, “we extend the O-Train’s north and south rail lines right now— the tracks already exist,” But the powers that be have this fixation on an elaborate LRT tunnel and a huge fleet of new buses.

If you missed the headlines, the fleet of new buses came from a “limited time offer” that New Flyer so graciously extended to Ottawa. New Flyer offered us a 19 per cent discount on 226 buses. The City was only planning on buying 80 new buses but Councillors voted 18-3 in favour of an impulse buy that cost taxpayers $155 million. But wait, since we bought the buses using borrowed money, we actually paid $210 million after interest. How much was that discount again?

Yes, repairing the older buses was costly, and the new buses are more fuel efficient, but as Councillor Christine Leadman says “one week [to take the offer] to me, that’s not enough time. To me, that’s accommodating New Flyer,” and we have more buses spewing smoke on Rideau Street. The song is getting old and its high time proper decisions are made. If you’re going to build a ridiculously expensive tunnel to house a train, don’t buy 226 brand new buses—it makes no sense.

A Refugee Camp in the Heart of Ottawa

June 15, 2010 7:37 am

Upon entering the gated area at Confederation Park, a group of strangers were asked to hand over their money, jewellery, food and any valuable possessions to a demanding border guard. The mock checkpoint was the entrance to the Refugee Camp in the Heart of the City, an interactive awareness-raising event by Medecins Sans Frontiers/Doctors Without Borders (MSF), which ran from May 13-16. A scenario-based tour, visitors were asked what they would do if told to leave their homes and run for their lives. In learning the challenges a refugee faces including gunshot wounds, bandit attacks, sexual violence and general chaos, they walked through replicas of a shelter, latrine area, cholera treatment clinic and vaccination tent.

“It’s effective because it’s hands on, especially for the kids; when they can see something and touch it as they learn about it, it makes a greater impact,” said Susie Tector, a doctor with MSF who has provided medical aid in Darfur, Chad, Pakistan and the Congo. She led tours with fellow MSF doctors and volunteers who shared personal anecdotes of their experiences working in refugee camps. Making do with limited medical resources, MSF workers provide aid to the world’s 42 million displaced persons. Of these people, 26 million are Internally Displaced Persons (IDPs) versus the 16 million who are categorized refugees.

© Miljena Dukanovic/MSF “In Nyanzale, Democratic Republic of Congo, Doctors Without Borders/Médecins Sans Frontières (MSF) treats moderately malnourished children on an outpatient basis and admits severe cases to this therapeutic feeding center (2007).

“The only difference is a refugee crosses an international border whereas IDPs do not,” explained Dr. Tector. “Refugees are protected by the UN Convention for Refugees. The people who are displaced in their own countries are seen as an internal problem in their country.”

Of her experiences, witnessing children fight for their lives against common infectious diseases rarely seen in Canada has been heartbreaking and frustrating.

“When you see a child with tetanus, it’s the most horrific thing – they are completely conscious as the jaw locks, they spasm and are in pain,” said Dr. Tector. “It’s very striking to see and given the resources we have, very few survive from it. If they had been born in Canada or any other country, they would have been fine.”

For more information or to donate to MSF, visit or 1-800-982-7903.

Opposition Leader Tim Hudak says with Ontario facing unprecedented job losses and a massive deficit, six million in bonuses to LCBO management is wrong

May 1, 2010 9:46 pm

Premier Dalton McGuinty recently announced that the Ontario government is considering selling off crown assets such as the LCBO to reduce the deficit. Ontario PC Leader Tim Hudak is convinced that such a move is not the right way to go.

“Selling off crown assets is the wrong approach to deal with out of control government spending”. Hudak sees McGuinty’s plan to sell the LCBO as a final act of desperation. “Mr. McGuinty’s move to sell off the LCBO comes out of a need to address his reckless spending,” he explains. “A panicked fire sale is not going to solve Dalton McGuinty’s money problems. He has no credible plan to get Ontario’s economy back on track.”

Hudak sees concerns with the LCBO monopoly as symptoms of a greater flaw. “I think that sadly after six years in office, the McGuinty government has run out of gas. Their tax-more, spend-more and regulate-more policies have brought Ontario to a new low as a have-not province.”

Hudak is not impressed with the six million dollars in bonuses that were awarded to LCBO management in 2008. “During these challenging economic times, where we’ve seen unprecedented job losses and a massive deficit, six million in bonuses to LCBO management is wrong,” Hudak says. “We have always maintained that public sector contracts need to reflect private sector realities. Right now, we’re saddled with a $25 billion deficit, more than all the other provinces and territories combined-thanks to the reckless spending of this Liberal Government. Ontario taxpayers should never pay for Dalton McGuinty’s waste, mismanagement, and pay-outs to Liberal friends and insiders.”

The Ontario PC Leader points out that LCBO bonuses are just one of many examples of taxpayer money being mismanaged by McGuinty’s government. “Whether it’s a $750,000 pay-out to the former CEO at OLG, a $114,000 bonus to the eHealth CEO after just 4 months on the job, followed by a $317,000 pay-out when she was fired, or the channelling of excessive salaries through hospital budgets for Ontario bureaucrats, it is apparent that Dalton McGuinty is using public agencies as his own slush fund for Liberal friends and insiders.”

Hudak places the infamous $7 billion deal with Samsung high on the list of McGuinty’s sins. When McGuinty passed legislation for the Feed-in Tariff program under The Green Energy and Green Economy Act in May 2009, he promised to give green energy developers in the province an equal opportunity to develop renewable energy technologies while receiving stable prices under long-term contracts. Soon after the Feed-in Tariff program came into effect, he signed what Hudak refers to as “a back-room, secret sweetheart deal” with Samsung’s South Korean consortium, granting the multinational corporation a monopoly over the province’s green energy market.

In return for Samsung’s $7-billion dollar investment in the construction of four renewable energy manufacturing plants which will generate 2,500 megawatts of wind and solar energy, Ontario agreed to allocate 500 megawatts of transmission capacity off of the grid and pay a $437-million bonus. According to Hudak, this bonus will mean significantly higher energy costs for Ontario ratepayers. The deal also means that producers in Ontario have been overlooked to support a foreign-based, multi-national corporation. “What Dalton McGuinty did, was he exported those jobs in technology and development to Korea, instead of having them in our province.”

The PC party has called in the Auditor General to review whether taxpayers are getting a good deal, but Hudak is already convinced that Ontario rate-payers and businesses are getting the short end of the stick. “What would be fair to those who are in the industry is a level playing field,” Hudak states. “If there is a private sector supplier who wants to put energy on our grid, they should be able to do so in a fair and open marketplace and in a transparent way so that we would get the energy supply at the best price for Ontario rate-payers.”

Hudak says that the Samsung deal “will put a chill on the confidence of Ontario-based companies to do business with the government… and it means that hydro bills for senior citizens and small businesses are going to go up.” His solution? “I think we need to get the cost of the public service in line with the ability of the private sector to pay. Some of the collective bargaining agreements that McGuinty has signed don’t reflect what’s happening in the private sector, especially in this recessionary environment.”

How does this factor into the privatization of the LCBO? Much like the Samsung deal, which puts local companies at a disadvantage, the LCBO prevents local wineries from being able to compete with other producers in the wine industry. “In Niagara, where I am from, Ontario wineries are restricted to operating a single store at the vineyard and praying for limited shelf space at the government operated LCBO, dramatically limiting Ontario consumers’ ability to purchase local product,” Hudak explains.

In 2008, Hudak released a report detailing steps the provincial government could take to help Ontario wineries and grape growers. One of the recommendations was for a parallel system of private retail stores that specialize in Ontario VQA wine to open up in Ontario. In 2005, he tabled a Private Member’s Bill calling for just that. The Liberal government voted it down.

Hudak points out that it is McGuinty’s irresponsible spending that has allowed the LCBO to be compromised. Simply selling it off will not solve the greater issues. “The concern I have is that Dalton McGuinty has brought the province to such financial straights that he may be looking at a fire sale of the province’s assets to try to balance the books for one particular year. It doesn’t solve the underlying problem of a runaway deficit caused by program spending.”

Hudak proposes a solution: “I always think that it’s important to look at government services like the LCBO and say, ‘is there a better way of providing the service? Is there a better return for the taxpayer? Can we supply a higher quality product?’ It’s always important for us to examine those things,” he explains. Rather than privatizing the LCBO, he suggests that we re-evaluate how funds are used in the system, and ensure that taxpayers are getting the best deal possible. “In Ontario, the wine industry has a direct impact on the agriculture and tourism industries. The LCBO must increase the presence of award-winning Ontario wines and micro-brews, while continuing to support the safe and responsible sale of wines, beers and spirits,” Hudak explains.

At the end of the day, it’s hard to say whether the LCBO will stay or go. While all party Leaders seem intent on keeping the liquor board under provincial control, do we taxpayers see it as an asset or as an inconvenience? The solution is not simple, perhaps something to ponder over a glass of Ontario wine.

Canadian Innovation and 21st Century Challenges

2:46 pm

Like other countries, Canada faces profound challenges in the decades ahead. An aging population, the need to mitigate and adjust to climate change, the transition to a low greenhouse gas emissions economy and pressures from rising economic superpowers are issues we all confront. Science, technology and innovation will be crucial to ensuring that Canadians’ health, well-being and quality of life continue to improve in the midst of these challenges.

Renewed interest in innovation and the knowledge economy has increased over the last twenty years and governments have focused on investing in Canada’s universities and research institutions. The results have been remarkable. Canada now ranks near the top of the OECD in higher education research as a share of GDP.

However, despite the increased research funding, innovation by business enterprises continues to lag. According to Canada’s Science, Technology and Innovation Council, the Council of Canadian Academies’ Expert Panel on Business Innovation and others, business sector innovation in this country is falling short and R&D expenditures remain below average when compared to Canada’s advanced industrial trading partners. If this poor performance continues, experts warn, Canada’s productivity growth and ultimately living standards will be in jeopardy.

While manufacturing and primary industry will play a key role in boosting innovation and productivity growth, Canada’s growing service sector still has much to contribute – including public services. In the last year, the federal public service responded with professionalism and efficiency in preparing for and responding to the H1N1 pandemic, reacting to the crisis in Haiti, and planning and carrying off the 2010 Olympic and Paralympic Winter Games. As the Minister of Finance has observed, Canada’s professionally-regulated financial system has been recognized worldwide as the key to Canada’s superior economic performance during the recent financial crisis and economic recession. More recently, the Prime Minister’s Advisory Committee on the Public Service congratulated the public service on the innovative methods used to plan and implement the government’s economic stimulus package “in a timely and efficient way.”

Canada’s performance over the past two years demonstrates that good governance is a fiscal asset and competitive advantage, and that the professional public service is an essential component of Canada’s success. But it is not yet viewed as a potential source of innovation and service sector productivity gains. To be sure, after years of budget cuts, today’s federal public service workforce is remarkably lean. The number of employees working in Canada’s core public administration has increased only slightly (less than 5 per cent) since 1983, well behind the growth of the Canadian population or economy and real spending on federal programs. Canada’s professional federal employees are doing far more than ever.

Yet the federal government’s approach has been to financially squeeze the public service with budget cuts, forcing employees to do more and more with fewer and fewer resources. Such austerity will not lead to greater innovation and efficiency, only demoralization and a failure to renew the public service, as a wave of retirements carry knowledge and the most experienced out the door. There is enormous potential for innovating in the way public services are designed and delivered in Canada – we need an approach that explores ways of delivering higher quality services more efficiently and at lower cost to Canadians.

More and more, the public service consists of knowledge workers: professionals who apply the fruits of years of specialized training and research in the service of Canadians. The thousands of public service professionals represented by The Professional Institute of the Public Service of Canada use their education, talent and expertise to provide a wide range of services that ensure the health and safety of all Canadians. For example, and this is to name just a few, there are meteorologists who monitor the weather and warn us of impending storms. Engineers ensure our roads and bridges are safe. Nurses provide care to Northern communities and veterans. Auditors recover millions in unpaid taxes from large corporations, and the list goes on.

These professionals understand their work processes better than anyone. They have to — in many cases, they design and implement these processes themselves. With years of experience serving Canadian businesses, families and individuals, they are uniquely positioned to identify and propose ways of meeting Canadians’ needs more efficiently and conveniently, with less cost. Public service professionals have sought to increase their involvement in workplace decision-making precisely because they have no shortage of ideas for conducting their work more efficiently, and delivering timely, high-quality services at a lower cost to Canadians.

Following the March budget, the Clerk of the Privy Council has signaled a renewed interest in examining work organization and the use of technology in the federal public service. We think this is an important step and one that needs the input of public service professionals to succeed. We look forward to putting public service professionals on the leading edge of Canadian innovation.

Farmers In Crisis: While the Provincial and Federal Government Argue – Farmers Pay the Price

2:15 pm

Ontario’s leading agricultural agencies recently signed a joint letter to Ontario Agriculture Minister, The Hon. Carol Mitchell, expressing their concern that the McGuinty government and the federal government do not have a strong enough sense of urgency about Ontario agriculture. “We are living the crisis every day on our farms and our farmers need more than another intention to examine the issue through consultation.” The letter, signed by the head of the Ontario Federation of Agriculture and several other leading agricultural associations, goes on to state that, “Ontario farmers need a real and assured commitment from your government that it is behind us fully and will provide the provincial investment needed to stabilize and sustain our businesses. This commitment cannot hinge on federal support being given first. We understand the necessity of securing a federal commitment, but without a strong announcement from your government over the next few weeks, we will continue to be caught between the rhetoric of both governments. Ontario farmers deserve better than this and are depending on you and your government to stand up for Ontario agriculture at this critical time.” The impact of this federal and provincial bickering is explained through our Ottawa area farmers’ story.

It all started in Lanark County thirteen years ago. The rural revolution in the Region began with the fiery rhetoric of Randy Hillier (now the MPP for Lanark-Frontenac-Lennox-Addington). The daring moves of local farmer John Vanderspank also ignited sparks of defiance through Carleton County. And from there, the revolution took off.

“Governments are attacking us,” Hillier said at a raucous meeting of 500 people in the small village of Lanark back in 1997. That night, he set the tone for a over a decade of bold protests.

“We have no property rights. We aren’t protected,” Hillier told the audience. “Governments have no rights. Everything government has is a privilege. We can say no.”

“We’re with you, Randy,” resonated from the audience.

“Bureaucrats are like water and electricity,” Hillier said to applause. “They take the path of least resistance.” And that became his modus operandi.

Soon signs began appearing in Carleton County and across Ontario. “Back Off Government This Land is Our Land.” Now, you can’t help but notice those red, white and black signs as you drive in rural areas throughout the province.

In one of his most celebrated and legendary acts of defiance, Hillier instructed a young farmer who sold illegal eggs in Ottawa to drive his tractor in front of a Canadian Food Inspection Agency truck and block it from leaving his farm laneway.

In one of its most storied actions, the Lanark Landowners Association invited television and print media to Vanderspank’s farm in Lanark on Father’s Day in 2004 to see a deer hunt staged in defiance of the Ministry of Natural Resources (MNR). There were some deer that were damaging crops but MNR wouldn’t issue permits to hunt them unless farmers first constructed an eight-foot-electric deer fence. The cost of the fence for Vanderspank’s 1,200 acres would have been well over a half million dollars.

The government sent 14 wardens, two canine units, a spotter aircraft along with an OPP tactical squad and two cruisers for standby. A couple of local boys fired their rifles in the air and, as Vanderspank explained, by some great act of Providence, two deer were flushed and ran across the back of a field. The TV crews had pictures.

Vanderspank was later charged and paid $600 in fines, but farmers no longer had difficulty getting permits.

Government handling of the Walkerton tragedy was the first major incident that fed the feeling for a rural revolution. Under media pressure to fess up, Tories used farmers as their scapegoat. Though E.coli from a beef farm had seeped into the town’s drinking water, the real cause was the negligence of two boozing brothers responsible for the water treatment plant. As the farmers aptly described, the problem was “two brothers with a beer fridge.”

Fighting for their political lives, the Tories funneled the debate into rural environmental controls. More than a year of hearings on a proposed Nutrient Management Act placated urban voters. However, the flashpoint for revolt among farmers, many of whom lived on the land for four generations or were self-reliant post-war Dutch immigrants to Canadian farms, was a regulation giving inspectors the right to enter a property without a warrant. They needed only a reasonable suspicion of pollution.

The nutrient management ruse didn’t fool everybody. Matt Mattson, president of the Lake Ontario Water Keepers Association, in an interview with Farmers Forum in 2004, said “people are spending a lot of money on a small part of the problem. The Don, Humber and Grand Rivers enter the cities clean and exit as open sewers.”

In 2003, the Department of Oceans and Fisheries charged real estate broker Michael Hunt with pollution after an inspector found two of his horses and a couple of cows in a stream. He had to sign a peace bond in Napanee provincial court and pay $32,000 in court costs. Meanwhile, the City of Kingston, 25 kilometres away, pumped enough raw sewage into rivers and creeks to fill 8,750 backyard swimming pools and was never prosecuted.

Pollution regulations were definitely one of the first issues feeding a rural revolution. Amalgamation was the second. In 2005, “Carleton County Yes” signs became the slogan for de-amalgamation, a movement to bring the four rural townships into one unit called Carleton County, with its own governance. “We don’t care if they call us Ottawa as long as they give us some model of government that will allow us to control our own affairs,” said Tom Black, president of the Carleton Landowners Association. “We are represented by three councillors in a city with 23 councillors. We can’t carry a vote. Our councillors have to make deals before they can make things happen. We and the other municipalities forced to amalgamate with the City of Ottawa have been shafted. The City of Nepean was well run and we were well run. We all came into amalgamation with surpluses. Only Ottawa came in with a deficit. They took everyone into the black hole with them.”

Black, a fourth generation sheep farmer living in a century-old farmhouse on Fallowfield Road, proposed that the City of Ottawa manage essential services and mandated programs while a local borough manage the rest. “The new city started to apply city values and rules to the country and now we have to go through a committee to have things changed,” Black said. When city building codes were sometimes applied to rural development the results were patently ridiculous. A neighbouring dairy farmer had to install illuminated exit signs from an alternative source of electricity on the barn he was building. The city inspectors wouldn’t sign off until the sign was completed.

While better relations have been achieved through the City’s rural affairs office, Black still has a litany of horror stories. There is the story of an arborist in Galetta, near Arnprior, who wanted to erect a $20,000 cloth-covered building. The City asked $32,000 for the permit. “They charged as though the building were insulated and constructed of solid building blocks,” Black said. Someone found a loophole to reduce the price of the permit to $18,000 but the cover or roof had to be erected in three sections. However, the roof only came in one section and City inspectors refused to allow him to finish.

People who live in urban Ottawa rarely see the problems faced by landowners in rural areas. They don’t know that 60 landowners in Carleton own designated wetlands, and with that designation comes potential regulatory horrors. A wetland is defined as an artificial or natural channel that carries water continuously or intermittently and grows plants that prefer the continuous presence of water. Farmers find it incomprehensible that a drainage ditch, dug at considerable expense to landowners and rural municipalities to increase crop yields, can be classified wetland because certain plants grow in the stagnant waters. Once designated a wetland, the ditch can no longer be cleaned and flooding occurs.

In the City of Ottawa, a landowner who wants to develop property has to go through the conservation authority, the Ministry of Natural Resources, the Ministry of Environment, all of which deal with the impact on water. And if fish habitat becomes an issue, throw in the federal Department of Fisheries and Oceans who will investigate a single complaint from a person who can remain anonymous.

Rural landowners in the region understand that the political route is best, but they also understand that broad political success is achieved with great difficulty. Ottawa has just over 1,000,000 people but only 85,000 of them are in rural areas. While farms cover 120,000 hectares or 40 per cent of the City’s rural lands, only 4,000 people live on them. To make matters worse, urbanites with different values and needs are increasingly moving onto scattered lots and into villages.

The rural divide has never been this formidable and that may explain why rural landowners must chase so many targets. While that reality poses many challenges for landowner associations, their work will ensure that rural issues remain on the political agenda for officials at all levels of government.

By: Terry Meagher

Cuba-Canada Celebrates 65 Years of Diplomatic Relations: Cuba’s Ambassador Weighs in on Canada-Cuba Bonds, Hunger Strikers and Obama

2:00 pm

Her Excellency Ms. Teresita de Jesus Vicente Sotolongo, the Cuban Ambassador to Ottawa, recently sat down with Ottawa Life Magazine Publisher Dan Donovan to discuss Canada-Cuba Relations on the 65th Anniversary of the beginning of official diplomatic relations between the two countries.

Dan Donovan: Canada-Cuba relations can be traced back to the 18th century, when vessels from the Maritimes traded codfish and beer for rum and sugar. Our current bilateral ties date back to 1945 when Prime Minister Mackenzie King sent Emile Vaillancourt, a noted writer and historian, as Canada’s first representative in Cuba. How would you describe Cuba’s relationship with Canada today?

Ambassador Sotolongo: It is a very, very important relationship. We have a very comprehensive relationship with Canadian partners. There is a strong commercial trade relationship and strong country-to-country friendship. Bilateral merchandise trade between the two countries was over $1.6 billion last year and continues to increase. This includes machinery, agricultural products and bilateral trade in resource materials in mining, in goods like copper and in tobacco, beverages, fish and seafood. Canada is Cuba’s largest source of tourists, with almost 900,000 Canadians visiting in 2009, which is nearly 35 per cent of all visitors to Cuba.

DD: Has the large influx of so many Canadians visiting Cuba over the last decade impacted our relationship?

Ambassador Sotolongo: Absolutely. Friendships have developed that go beyond the government-to-government relationship. Cuba was an early supporter of Ontario’s bid for the Pan AM Games-and I am pleased they won. Many of the ties are people-to-people, family-to-family. This is a strong bond that strengthens our friendship and our mutual understanding of our countries. When we have had horrible hurricanes in the past years, thousands of individual Canadians have contacted their friends in Cuba and offered financial, moral and other help. There are thousands of binational children between our countries. This is a relationship of cooperation and true friendship.

DD: What are some of the things between Canada and Cuba that you have noticed in your time as Ambassador that have surprised you?

Ambassador Sotolongo: Well one thing is that The Terry Fox Run in Cuba has become the largest in the world outside of Canada. I would also point to the interest in Canada by our academics and students. In Cuba, there are six universities that have Canadian Studies Centres that teach the history, geography, policies and programs of Canada to Cubans. Canadians are well liked and respected by Cubans. We have other mutual interests. Each year we visit New Brunswick to select the New Brunswick potato seeds we will use for our annual harvest. These seeds are the best in the world and are critical to Cuba’s agriculture industry. We have had relations with Sherritt International Corporation, a very successful Canadian company, for many years and there are many other Canadian resource companies and businesses who are doing business with Cuba.

DD: Canada and Mexico were the only two countries in the hemisphere not to break relations with Cuba following the Cuban revolution in 1959. The United States at various times since then has put great pressure on Canada to cut ties with Cuba or to refrain from engaging in business with Cuba. Some in Canadian business may be hesitant to do business in Cuba because of this. How does that impact the relationship?

Ambassador Sotolongo: There were 52 Canadian companies at the last trade show in Havana. Cuba is undertaking big efforts the moment to improve its society in all areas. We are reforming the structure of government to have fewer ministries. We have initiated a program where unproductive land is given to the people so they can make it productive and be part of the production of the land for themselves. Eighty per cent of Cubans live in cities so this is an important reform in Cuba to ensure our agriculture industry stays healthy. There are agricultural opportunities for Canadian companies, along with joint ventures in health and pharma care. Canada, India, Brazil, and China are all involved in joint ventures in Cuba and many American businesses have pre-signed agreements in place and are ready to go once the blockade, which is now is its 51st year, ends.

DD: Recently a Cuban journalist Zapata Orlando Tamayo died after a long hunger strike in Cuba to protest the lack of freedoms in Cuba. There are two other dissidents who are currently on a hunger strike. One, Guillermo Farinas could be the second hunger striker to die in 2010 in Cuba protesting for freedoms. Canada takes every opportunity to make it clear to the Cuban government its concerns about human rights practices on the island. The Canadian government has consistently called on the Cuban government to release all political prisoners and to dismantle the limits on freedom of expression. How do you respond to this?

Ambassador Sotolongo: This is a difficult issue and is not accurate. The death of Mr. Zapata Tamayo was tragic and the Cuban President said he was sorry. We did not want Mr. Zapata to die and we offered medical and health assistance to his family, which he refused. We have offered the same to Mr. Farinas and the other hunger strikers — four of whom have since stopped their protest. These people were not in jail, they were in their homes doing this. They call themselves dissidents because they have a different project for Cuba and their actions are a type of ideological warfare against Cuba. I deeply regret that they use these means but we are not the ones bullying anyone. What they are doing is designed to hurt Cuba but the irony is that the real bully is the blockade by the United Sates that has gone on for 51 years. Mr. Obama can end this absurd and mad situation and there would not be these dissidents or problems. Cuba has been mistreated by a 51 year blockade by the United States that has greatly damaged our country and opportunity for our people. It is because of this blockade that our people are people are having some difficulties. The irony is that the blame for these problems lies with the Americans who have continued this unjust and unfair blockade of our country for over half a century. This hurts Cubans who want access to health and medical and food supplies and other amenities. It drives the cost of living up in our country and makes things very costly for our people. It is unjust.

DD: What are your thoughts on President Obama and any thawing of the Cuba —USA relationship?

Ambassador Sotolongo: Personally, I am very disappointed in Mr. Obama with the non-negotiation to date. Mr. Obama can take steps to end this absurd situation. The President of Cuba is willing to talk to the USA anytime on all matters, as a sovereign nation, with him. The reality is that this cannot go on forever. It will come to an end. But in the meantime we must move forward with countries who respect our sovereignty, like Canada and others. We will continue to build on these relationships.

Andrea Horwath, M.P.P. and Leader of the New Democratic Party says LCBO Bonuses Show a Culture of Entitlement Fostered McGuinty Liberals

11:50 am

OLM: Ex-LCBO employee Larry Paterson discovered through Freedom of Information requests that the LCBO dished out over 6 million dollars in bonuses to employees in 2008 (which had increased from just over 400 thousand in 1997). Can you comment on why these bonuses were awarded? What was the reason for such a dramatic increase in their size?

HORWATH: This is a problem that is endemic to this Liberal government. You just need to look at the scandal in eHealth and the things that we’re uncovering all kinds of agencies, boards and commissions, including even the hospital sector where we see all kinds of outrageous salaries and bonuses and these kinds of inappropriate payments.

I don’t think it’s just the LCBO. I think it’s actually a culture of entitlement that’s been fostered by this Liberal government that’s spread through all kinds of organizations and agencies. So the issue is more: how do we control that? How we do make sure that that culture, if you will, is nixed? We need get to an understanding that these agencies are serving a greater purpose: to provide value for the tiacipzTer, the people of the province.

OLM: Would you say that the LCBO is asset or an inconvenience?

Horwath: My opinion is pretty clear that the LCBO is an asset to the province that will continue to provide a revenue stream from here on in, until eternity from my perspective.

I’m pretty sure we make well over a billion dollars in revenue every year from the LCBO, and that’s not just for this year, but for next year and for the year after that. As my son has children, and his children have children, it’s a revenue stream for the government.

Although in tough times like these, people like the current Liberals and the Tories before them, look at these agencies as a way to get a quick cash infusion. Ultimately the long-term value of these kinds of organizations or agencies has to be the primary focus. It’s the fact that they bring in a secure revenue stream over time.

You know, a quick fix of a couple of billion dollars, even ten billion dollars, is fine when you’re looking at only the short term and the fact that we’re in tough economic times right now But, I think the value over time is much more important. We shouldn’t sell off these publicly-held assets, these cash generators that are really publicly-owned, for the short term, because the public should be able to benefit from them over the long term.

OLM: In 2005 the Beverage Alcohol System Review Panel found that the LCBO system ‘falls considerably short of getting the maximum return for the taxpayer.’ Could you comment on that?

HORWATH: There’s no doubt that any organization can always find better ways of maximizing the value that they bring but this particular study indicates that there is greater value that can be gained. That should be the call to the organization to pull up its socks and to ensure that better value is produced.

I certainly don’t believe that it’s a matter of saying: they said this so we throw the baby out with the bath water. I really believe that if the agency has an opportunity to provide a greater value, than we should be looking at how to make that happen, as opposed to simply saying, ‘well it’s got some problems so let’s just wash our hands of it’.

If improvements can be made then they certainly should be made so that our benefit as taxpayers could be maximized. But I don’t believe that includes the privatization of the LCBO.

OLM: The LCBO has built large box stores all over the province and invested funds in creating the glossy Food and Wine magazine. Do you think that these are good uses of our tax dollars?

HORWATH: There’s no doubt that huge stores are being developed by the LCBO. Again, I think that the key has to be not so much the idea that by selling this asset off we’re going to cut off these exorbitant and some would say luxurious expenses. In fact, I think what we put ourselves up for if we sell off the LCBO is something that looks like a lot of reduced access and a lot of reduced product availability for all kinds of different communities. So, with every suggestion that this should be done to fix this problem we have to then see what the impact would be on other parts of the business.

I believe if we say, ‘well, these big stores are there and they’re just a big white elephant so we should sell the LCBO,’ we’d be making a mistake. There are all kinds of communities where if you sell the LCBO and make it a private venture, the kind of availability of product would be severely reduced, especially in smaller markets. I think that’s one of the things that the LCBO in the current form is able to provide. It’s able to provide a broad choice of products to even smaller markets and I think that is something of value.

OLM: What impact does the LCBO monopoly have on provincial wineries and breweries? These retailers must provide the LCBO detailed data about their location and sales, do you think that this is just?

HORWATH: The issue is broader than that. This issue is, does the LCBO do as much as it actually can to promote our local, meaning Ontario-based, wineries and wine products?

I have to say that that’s something that we’ve been very critical of over the years and for which we remain very critical. -I mean the LCBO really has the opportunity to provide a lot more support, a lot more visibility and a lot more prominence to our Ontario wines and our Ontario grape growers. This is an ongoing issue that I think the LCBO needs to look at. I think that there’s a lot of opportunity that they’re not taking advantage of to help us with our local domestic sales of our own home-grown products.

OLM: What impact would it have on taxpayers if alcohol sales were privatized, and the alcohol brought in was taxed like it is in BC?

HORWATH: The amount of revenue and the opportunities that the LCBO provides in some of the areas that we’ve talked about (even the areas where it’s under-performing) I think that there’s value there. I also think that the ongoing concern about accessibility in terms of smaller markets and access to a broader variety of products would be an issue. Also, making sure sales are being made within the legal framework of this province is something that we talk about a lot. The extent to which we know that public employees of the LCBO are charged with the responsibility of upholding the legislation around the sale of alcohol to minors, to people who are already intoxicated and that kind of thing. It seems to me that there is a sort of public accountability that comes with this current structure that would be lost with a privatized model.

OLM: The LCBO has allegedly struck sweetheart deals with suppliers like Bacardi. Also, foreign wineries claim it is difficult to fit within the LCBO’s ‘requirements’ and get their products on the shelves in Ontario. Could you comment? Do you think that this is fair?

HORWATH: Do we throw the baby out with the bath water, or do we identify the problems (or the potential problems depending on what side of the coin you’re looking at) and try to address them specifically?

At this point, I would say, you know, let’s get at that issue and let’s spend some time on it, try to address the problems and figure out how to make sure that these sweetheart deals are not simply feathering the nest of some Liberal insider (which again is the pattern of this government) or some person who is friendly with the current government. Let’s make sure that any relationships that are built by executives at the LCBO are built in the interest of the people in this province, because, in fact, as an agency of this province, that’s what their mandate is.

There’s a great deal of opportunity in terms of the Ontario producers of wine and grapes. We need to make sure that we’re hearing what their perspectives are in terms of making sure that they have the shelf space that they need to promote their product, that their pricing is such that it’s competitive, so that would be one of the first things. From my perspective, that’s a huge opportunity lost at this point.

In terms of the other issues, like relationships with these producers around the world, I think that it’s a matter of putting in a concerted effort to ensure that the corporate culture is one whose primary interest is not the top executives and their jet-setting around the world to make friends and make deals, but rather always looking at the value that it brings to the people of Ontario.

By: Dina Zeldin

LCBO Strings Attached: LCBO requests Letter to Editor be published “with no strings attached”

March 1, 2010 11:58 am

In the January 2010 issue of Ottawa Life Magazine, (OLM) we published a feature article by wine writer, Michael Pinkus, (www.ontariowinereview. corn). Pinkus reported that the LCBO handed out over 6 million dollars in bonuses during the economic downturn of 2008. The feature was read by thousands of readers both in print and online at and readers’ opinions were all similar, ranging from anger to complete disgust.

On January 25, 2010, Chris Layton, LCBO, Corporate Communications, contacted OLM. He suggested the writer had a personal bias against the LCBO, cited what he claimed were inaccuracies in Pinkus’s article, and said that the LCBO had not been contacted by Pinkus to inform the story. When OLM immediately responded that our Editor would be pleased to interview the CEO of the LCBO whenever it was convenient, we were advised that an interview would not be possible. The magazine was also told that the communications shop at the LCBO would “consider” answering questions about the operation only after OLM published, in full and with no edits, a letter the LCBO had prepared refuting Pinkus’s “inaccuracies.”

Our questions to the LCBO management team would first be screened by LCBO communications staff to ensure they were appropriate for management.

In an email to OLM, LCBO spokesperson Layton replied that the LCBO would not agree to an interview saying, “When we have responded to articles in other publications with letters to clarify incorrect or misleading information, those letters have been published.

Mr. Layton’s boss, a Mr. Williams, then contacted OLM (and we are not making this up!) to inform us that Mr. Pinkus and other writers like him from media groups such as the Toronto Star, held grudges against the LCBO. Williams continued to refer to the Pinkus article in a derogatory manner while avoiding many of the numerous key issues it raised. When asked about the LCBO’s response, Pinkus replied, “the LCBO can get mad but there is nothing untrue in my article. As you can see for yourself, they have no interest in disclosure or in anyone questioning them, period. They even refused the requests of the Publisher and Editor of OLM to interview them after the story of their bonuses and other questionable conduct was raised. They see the best form of communication as no communication but they pretend otherwise.” Williams and Layton outright refused OLM’s request to do an interview with the LCBO President and CEO Bob Peter. Layton then added tersely, “should OLM choose not to publish the letter in response to the Pinkus article, the LCBO will have to consider other options to publicly correct the misinformation in Mr. Pinkus’ opinion piece.” (This was taken as a veiled threat of legal action against the magazine) We reminded Mr. Williams that we do not report to him. Ironically, Williams’ and Layton’s boorish attitude and response mirror the very bad behaviour and presumption of entitlement described by Pinkus in his article, LCBO Monopoly.

OLM continues to have a growing response to the January 2010 feature story LCBO Monopoly. Conservative Party Leader and Official Opposition Leader Tim Hudak told OLM that he sees concerns with the LCBO monopoly as symptoms of a greater flaw. He cites the LCBO as a perfect example of this reckless spending and refers to the six million dollars in bonuses that were awarded to LCBO management in 2008. “During these challenging economic times, where we’ve seen unprecedented job losses and a massive deficit, six million in bonuses to LCBO management is wrong,” Hudak says. “We have always maintained that public sector contracts need to reflect private sector realities. Right now we’re saddled with a $25 billion deficit, more than all the other provinces and territories combined-thanks to the reckless spending of this Liberal government. Ontario taxpayers should never pay for Dalton McGuinty’s waste, mismanagement, and pay-outs to Liberal friends and insiders.” The Ontario PC Leader points out that LCBO doling out bonuses is just one of many examples of taxpayer money being mismanaged by McGuinty’s government.

“Whether it’s a $750,000 pay-out to the former CEO at OLG, a $114,000 bonus to the eHealth CEO after just 4 months on the job, followed by a $317,000 pay-out when she was fired, or the channelling of excessive salaries through hospital budgets for Ontario bureaucrats, it is apparent that Dalton McGuinty is using public agencies as his own slush fund for Liberal friends and insiders.” NDP Leader Andrea Horwath echoed Hudak’s comments about the LCBO adding, “This is a problem that is endemic to this Liberal government. You just need to look at the scandal in eHealth and the things that we’re uncovering in all kinds of agencies, boards and commissions, including even the hospital sector where we see all kinds of outrageous salaries and bonuses and these kinds of in appropriate payments. I don’t think it’s just the LCBO. I think it’s actually a culture of entitlement that’s been fostered by this Liberal government and that has spread through all kinds of organizations and agencies. So the issue is more: how do we control that? How do we make sure that culture, if you will, is nixed? We need get to an understanding that these agencies are serving a greater purpose: to provide value for the taxpayer, the people of the province. Horwath is on to something there.

The LCBO is not a private sector company. It is a government agency, which, at the end of the day, is accountable to Ontarians. As such, it’s affairs are of public interest. Premier McGuinty himself has indicated he expects a much higher level of accountability and transparency from Ontario agencies. OLM decided to publish the LCBO letter in the interests of transparency. In the interest of accuracy and LCBO shareholders, we added some facts (in bold) that they left out in their rebuttal. If the LCBO President and CEO Bob Peter and his management team are confident in the way they are running things, then they should have no problem with an open and transparent interview process.

The letter from the LCBO speaks for itself. Be sure to check out the next issue of OLM for the full interview with PC Party Leader Tim Hudak and NDP Leader Andrea Horwath.


January 25. 2010

Dear Mr. Cornforth:

Michael Pinkus’ January opinion piece, LCBO Monopoly, is contradictory. He has positive things to say about the LCBO. He quotes a wine agent saying privately owned stores can’t offer the LCBO’s selection or its one-stop shopping experience throughout Ontario. He recognizes the LCBO delivered a $1.4 billion dividend to the government last year.

But then he regurgitates old and largely unfounded allegations against the LCBO. We have responded publicly to these allegations, but none of our responses appear in his piece. Nor did he contact us for comment.

His piece is also misleading and inaccurate. Here are the true facts:

1. LCBO investment in new and upgraded stores provides a solid return on investment, helping LCBO increase annual dividends to government. (LCBO has no competition in Ontario and is widely disliked by Ontario wineries.)

2. Off-site winery stores are regulated by the Alcohol and Gaming Commission of Ontario, not LCBO. (The LCBO has been criticized for years for not buying Ontario wines and for not promoting the Ontario domestic wine industry with its own purchasing power and marketing dollars. For example, the LCBO buys hundreds of thousands of bottles of Australian wines and sells them at their Food and Wine Shows in Ontario but local wine producers from Ontario are not allowed to sell their wines at these same shows unless they are approved by the LCBO. The LCBO was at the centre of a dis-information scandal last year regarding the selling of wines with the title “Cellared in Canada”. Consumers thought they were buying Canadian wines, but did not read the small print on the bottles. The grapes were from abroad and mixed with some Canadian grapes. The LCBO sold these as “Canadian wines” until they were forced to publicly admit they were not Canadian, but a mixed blend.)

3. LCBO “executives” didn’t receive $6.2 million in salary bonuses in 2007-08. That total was spread among 900 employees, most of whom were not managers, let alone senior managers or executives. (LCBO refuses to disclose the breakdown of the amounts of the $6 million in bonuses, the salaries for its executive team and its Board Members or their expenses.)

4. LOBO proudly supports Ontario wineries. Ontario VQA wine sales at LCBO rose by more than 16 per cent last year. driven in large part by LCBO initiatives. (The volume of purchases of Ontario wines is dismal compared to the volume of wines LCBO buys abroad. Notice the LCBO does not say 16 per cent of what. That is because the number is so small compared to their other purchases.)

5. LCBO promotes social responsibility beyond TV commercials by marketing its products with food. refusing to serve minors and intoxicated adults and providing responsible hosting tips and solutions. (The majority of LCBO’s promotions relate to consumption, primarily of foreign wines and spirits.)

6. LCBO is profitable. It has delivered 15 straight record dividends to the Ontario government. Those dividends increased from $680 million in 1996-97 to $1.4 billion in 2008-09. despite few increases to taxes or LCBO markups. (It is easy to be profitable when you are a monopoly. The 2005 Beverage Alcohol System Review Panel chaired by John Lacey submitted its report to the McGuinty Government in 2005 which declared: “We have found that the current system falls considerably short of generating the maximum return for taxpayers. In recommending LCBO privatization, the report stated: “We conservatively estimate that, …this plan (privatization) would produce at least $200 million more government revenue than the government currently receives from the beverage alcohol system.”)

Most disappointingly, Mr. Pinkus, whom we respect as a wine writer, questions the integrity of hard working LCBO retail employees who help consumers better appreciate beverage alcohol, much like he does. That’s something he should applaud. (The LCBO wrote this in a letter but in several documented emails and phone calls to OLM, LCBO “communications” staff said they did not like Mr. Pinkus, that he was biased like many other writers at the Toronto Star and elsewhere and they would never meet with him and he would not be allowed to meet with LCBO officials.)

By: Rob Cornforth

The Future of Northern Resource Development in Canada — Optimism or Pessimism

11:46 am

Natural resource development in the Canadian North is emerging as one of our country’s most interesting economic policy issues. Climate change, mineral prices, Aboriginal relations, northern sovereignty, and environmental review efficiency are environmental review efficiency are among those issues that are closely integrated with northern resource development and will influence the pace of such development.

The relationship between natural resources and northern development has been hit and miss throughout Canada’s history. It remains unclear to this day whether the necessary array of variables will fall into place, leading to a sustained boom, or whether key pieces will go missing and the full economic potential again missed. In this sense, one could have either an optimistic or pessimistic take on future development.

On the positive side, there are three variables that should lend an air of optimism. First, the level of mineral exploration spending underway in northern Canada is significant. In recent years, around one of every twenty dollars in mineral exploration worldwide has been spent in the Canadian territories as companies seek potential developments in uranium, diamonds, gold, copper and other minerals.

Second, the question of northern sovereignty has gained political potency. The planting of a Russian flag on the seabed, disputes over the Lomonosov Ridge, expeditions by countries such as Denmark and US questioning of the sovereignty of Canada’s northern passage, are among recent developments. Canadian plans to acquire northern vessels and invest in a deep-sea port in Nunavut have added to this profile. Furthermore, all federal parties in Ottawa are reading the winds of change and developing policy positions.

A third positive consideration relates to the strides made by Canadian businesses in Aboriginal relations. Industry-Aboriginal partnerships have become common practice. Over 50 socio-economic agreements have been signed in recent years. These agreements can bring jobs, supply contracts, training and related benefits to Aboriginal communities. Since the discovery of diamonds in 1991, the GDP of the NWT has tripled, school graduation rates dramatically increased and dependence on government income support reduced by half. This progress is mirrored in The Mining Association of Canada (MAC’s) Toward Sustainable Mining initiative where a new framework and performance measurement protocol have been adopted and where an MOU with the Assembly of First Nations is being implemented.

Among the causes for pessimism, a key impediment to sustained northern development remains the cost and complexity of infrastructure. As one example, a Bathurst Inlet Road and Port proposal has been in play for several years as a possible method of accessing and transporting resources in northern NWT and Nunavut. Although the economics of a number of mining opportunities could be enhanced through the existence of such infrastructure, various incarnations of the project have been in discussion for the better part of a decade without real progress. It is evident that the territorial tax base is far too small to support these kinds of infrastructure expenditures, while those funds that do come from Ottawa could be diverted toward other social or economic priorities. Further infrastructure challenges are being seen in ice-roads, where the effect of global warming is diminishing the seasonality of these routes. Diamond companies in the NWT, for example, can no longer depend upon the availability of a three-month ice-road to facilitate their construction and operational activities.

Another infrastructure-related obstacle relates to the fact that Canadian governments have not been fulfilling their fundamental role of mapping the country and building modern databases of geoscience information. Annual investment in this area has fallen by half over the past two decades, with the consequence that much of the northern territories remain poorly mapped. Business requires quality geological information in order to improve the effectiveness of its exploration spending. Governments are showing signs in recent years of addressing this challenge, although this requires a long-term commitment.

A second main impediment to resource development relates to uncertainty around the Aboriginal consultation and revenue sharing theme. In response to court rulings, governments have not yet provided clarity regarding how they and industry should best accommodate Aboriginal interests – a question further complicated through recent rulings attaching importance to the “spiritual value” of geographic claims. Public policy clarity is also lacking with respect to what constitutes a proper sharing of resource revenues and from what funding source. The existence of unsettled land claims adds a final layer of complexity affecting the development of northern resource projects.

If industry, government, and Aboriginal groups can successfully address these main obstacles, then it seems likely that business investment in resource development will be able to help break the pattern of economic and social dependency on the south that has existed for so many decades in Canada’s North. It will take some time to observe the evolution of this issue — before deciding whether one should be optimistic or pessimistic in this regard.

By: Gordon Peeling and Rick Meyers

Canada’s Role and Responsibility on the International Stage

January 1, 2010 11:11 am

Canada’s expertise in mining and mineral development dates to the earliest days of our country, with the establishment of the Geological Survey of Canada a quarter-century before Confederation and with a first mining settlement in the Sudbury region in 1883. In the ensuing decades, wealth has been created in many other regions of the country – from gold in Quebec, base metals in Manitoba and metallurgical coal in BC to oil sands in Alberta, uranium in Saskatchewan and diamonds in the Northwest Territories. This activity generates significant employment, supplier relationships, tax payments and other benefits. In 2008, for example, the industry benefited over 3000 supplier companies and paid over $11 billion to governments.

Canada’s mining industry plays a similar role internationally, with large global footprints being established by many companies. While our international presence grew most significantly after the wave of global nationalization sentiment diminished in the 1980s, there are examples of earlier investments such as Noranda’s gold mining interests in Nicaragua dating to the 1930s. Investment abroad by the Canadian mining industry has grown five-fold in two decades – from a stock of $13 billion in 1990 to $67 billion today. Companies such as Barrick, Breakwater, Kinross, Inmet, IAMGOLD, Teck and Carneco have operations in dozens of countries, including the US, Peru, Chile, Panama, Argentina, South Africa,Australia, New Guinea and Tanzania. Almost 5000 mining projects outside of Canada are being financed through the Toronto Stock Exchange. This hub of expertise and wealth creation is something that all Canadians should be proud of.

Mining activities have never been, nor will they ever be, environmentally benign. The process of extracting ore from rock, where the ore may constitute only 1% or less of the volume, poses many technical challenges. Similarly, the process of turning raw concentrate into a 99.99% pure metal also poses a long list of challenges, many of which have environmental considerations. Society needs this purity of metal for use in cellphones, aircraft, computers, solar energy technologies, medical equipment, and the host of other products used by social groups, environmental groups, businesses and average Canadians. The Canadian mining industry has strong expertise in minimizing and managing the environmental risks and also draws upon global networks and information sharing to fill gaps in knowledge where they exist. Within MAC, we facilitate a regular dialogue on environmental and social issues through several committees and well-respected organizations dealing with acid rock drainage, abandoned mines, and other issues.

MAC and its members also show commitment to sustainable development principles through adherence to the widely-respected Towards Sustainable Mining (TSM) initiative. The consultations, measurement, reporting and verification associated with TSM is a mandatory condition of membership of MAC – and addresses areas such as Aboriginal relations, tailings management, energy efficiency, biodiversity, crisis management and health and safety It is important to note that operations in developing countries can bring added layers of complexity, involving transporting product to the market over inadequate infrastructure, working with environmental and tax regimes that may not be fully formed, and drawing upon labour that may not have advanced mining skills. Canadian companies work within these situations and there is a long list of social investments and capacity-building commitments that have been made by our companies, generally documented within their Corporate Social Responsibility reports. Individual companies are active in helping pay for schools, roads, electrical grids, hospitals, clinics, school breakfast programs, community buildings, child health and nutrition programs and a range of other social investments.

Beyond these CSR investments, the international operations of Canada’s mining and processing industry are regulated at numerous levels. Companies seeking financing to build projects are guided by rules espoused by financial institutions such as Export Development Canada, the World Bank and the Equator Principles adopted by commercial banks. Companies dealing in dangerous substances are guided by realities such as the Transportation of Dangerous Goods Act, the Basel Convention, and the International Cyanide Management Code. The practices of many companies are guided by the UN’s Global Compact, the Extractive Industries Transparency Initiative, the Devonshire Initiative, the Kimberly Process, ISO 14001 certification and other targeted sustain-ability programs. Many companies have Impact Benefit Agreements in place with local Aboriginal groups. The Mine Environment Neutral Drainage Program and the International Network for Acid Prevention shape the practices and technologies being adopted to minimize acidic leaching challenges. All of these measures and initiatives, and dozens of others, are in addition to the laws, regulations, permits, and enforcement mechanisms that exist in host countries.

Canadian mining companies are world leaders in working within host country laws, in making local and regional CSR investments, and in adhering to guidance contained within a number of international bodies. Companies are fully aware that strong community relationships are essential for a productive, profitable, sustainable and socially responsible mining operation.

By: Gordon Peeling

Holding Mining Accountable for Actions Abroad

10:55 am

The core argument of the mining industry is that C-300 (The Responsible Mining Bill) would cause reputational damage to mining companies. This is nonsense. C-300 didn’t cause reputational damage in the case of the allegations of murder against Blackfire in Mexico. It’s not even clear that C-300 would apply to the Mexican situation. What is clear, however, is that Canada’s reputation is being harmed by the actions of irresponsible mining companies. When our own Governer General is faced with protesters chanting “Canada go home”, it’s hardly a good day for our relationship with the Mexican people.

Our troubles don’t end in Mexico. In Honduras, Guatemala, Chile, Argentina and in literally dozens of other countries, complaints are being raised against Canadian-based mining companies. Our national reputation is being abused. Witness after witness at the House of Commons Foreign Affairs and International Trade committee testified of incidents, which if they were to happen here, would give rise to jail terms, fines and lawsuits. With an image such as this of our companies abroad, it is no wonder then that Canadians are no longer being met with the warm reception which we once took for granted.

Witnesses appearing before committee such as Tyler Giannini of the Harvard Human Rights Law School and Sarah Knuckey of the University of New York Center for Human Rights gave damning testimony on the practices of Canadian mining companies, which they witnessed in the developing world. Testimony was also given by Alex Neve, the Secretary General of Amnesty International Canada, Michael Casey Executive Director of Development and Peace, Richard Janda from McGill law school, Daviken Studnicki-Gizbert, a McGill history professor, Stephan Hunt, district director from United Steelworkers, Toby Heaps, the founder of Corporate Knights and even the former Minister of Environment from Argentina, Romina Picolotti, who has fought her fair share of battles with Canadian mining companies. This is only part of a long list of very credible and respected individuals who have come forward to speak to this issue. The mining industry’s response to this testimony has been to brush it off, deny it’, or attack the credibility of the witness.With the evidence mounting to substantiate the testimony though, this tactic of deny deny, deny is becoming less and less believable.

The hearings before the Foreign Affairs committee are just one small part of the growing and incontrovertible evidence that shows Canada has a serious corporate social responsibility problem in the extractive industry. It also points to Bill C-300 as a step in the right direction. C-300 seeks to bring accountability and transparency to incidents of breaches of environmental and corporate social responsibility standards. If a company is found to be non-compliant the sanctions to be applied would be a direction by a Minister of the Crown to withdraw our investments in Export Development Canada (EDC) and the Canadian Pension Plan (CPP).

These sanctions are neither drastic nor unreasonable. It should be the responsibility of companies operating overseas to use mining practices that respect basic human rights. The witnesses and the Canadian public want Canada, as the world centre for mining financing, to be accountable for its investments. If Canada invests in these companies through EDC & CPP, surely it’s not too much to ask that Canadian mining companies account to the Canadian taxpayers and pensioners in a transparent fashion.

The mining companies and their lawyers have made the argument that this small bill will destroy the Canadian mining industry and drive companies out of Canada. Their “sky is falling” argument is losing credibility. Canada is the world centre for mining. It has the best technology, the biggest companies, the most expertise and the most favourable conditions. When C-300 passes, these facts will remain the same. Good corporate social responsibility is good for business, and good business is good corporate social responsibility. A responsible mining bill is good for Canada. It is more than a little perplexing to me then why the mining companies have put up such an enormous fight against such a modest bill.

So as abuse heaps upon abuse and the government stonewalls and ridicules the credibility of witnesses and appoints a toothless counsellor, the problems of the mining industry remain. The call for action on this issue is neither drastic nor frivolous nor vexatious. Yet it has been met with enormous resistance, for simply suggesting that the “emperor has clothes”. Bill C-300 is a modest proposal that can be seen as a limited stepping stone to better corporate practice. Perhaps the only reason that can be given for the resistance is a Biblical one, “there are none so blind as those who will not see”.

By: John Mckay

LCBO Monopoly

10:46 am

Awhile back, my brother and I were talking and the topic of the LCBO came up. “How exactly does it work?” he wondered. I gave him my layman’s knowledge. Imagine, if you will, that for every camera that comes into Ontario (he happens to work for a camera retailer so it seemed an appropriate analogy), whether you had anything to do with it or not —sourcing it, selling it, whatever — you made a dollar. (The LCBO makes much more than a dollar per bottle, but you get the picture.)

“Nice racket,” my brother said. “You don’t know the half of it,” I responded. As it turned out, neither did I.

Now, I’m not an activist, nor am I a crusader, but I was interested, as you might be, on the inner workings of that great provincial monopoly, the LCBO. Much in the same vein as eHealth and the OLG were working at arms’ length from the government, so too is the LCBO. (And we all know how eHealth and OLG turned out.) So, off I went to investigate. I interviewed agents, winery owners, and other people around the industry to find out how the LCBO is perceived and what exactly it does, besides putting $1.4 billion into the provincial coffers.

Before I reveal the secrets and scandals, first let me tell you a couple of stories I recently heard.

Friend A, we’ll call him Fred, found himself in New Zealand about a year back with his wife. They were touring around and tasting wines. They walked into one tasting room that was packed with people sipping fine Kiwi vintages. Many of them, while enjoying the wine, wanted to know if they could purchase it and have it shipped to their home.

“Where are you from?” the owner asked. Some were from the U.S., others Australia, Mexico and parts of Europe. The answer to each patron was yes. Yes, until Fred piped up.

“Ontario, Canada.”

To hear Fred tell it, you could have heard a pin drop.

“No, I’m sorry, that is the only place in the world we can’t ship to. It’s a logistical nightmare and not worth the hassle and red tape.”

Friend B, we’ll call him Dave, found himself with his wife in Portugal this past summer. Quite by chance they found themselves at the door of a little winery and decided to check it out. The place was quiet with a gentleman standing behind the counter wiping down the tasting bar. He greeted them with a smile, invited them to sit down and poured them a taste. As is always the case in a foreign winemaking country, the folks behind the bar want to know where you are from. Dave replied.

“Ontario, Canada.”

This time there was no silence and for about 15 minutes the man behind the bar gave him an earful of what he thought about the LCBO. Dave said that none of it was good and the language was not all that clean either. When they left, the air was blue. (For those who are interested, Dave says the wines were very good.)

So, why do people get so riled up about the LCBO from countries as far away as New Zealand and Portugal? They are little mom and pop wineries that you would not expect to know much about Canada, let alone one of her provinces. The LCBO seems to have put us on the map in winemakers’ minds and not in a good way. These feelings exist not only in Portugal and New Zealand. They are worldwide.

Sitting down with producers, winemakers and owners from around the world was not possible, so I decided to look into the state of affairs a little closer to home. What do industry insiders in Ontario think about the LCBO?

The first thing you have to know about the LCBO is that it has a history of questionable practices (to say the least), uncovered by reporters David Menzies and Kevin Donovan_ Their stories were published in such reputable publications as the Toronto Star and the Toronto Sun, but it is stuff worthy of the National Enquirer, except the stories were all proven to be true. In December of 1999, for example, Donovan uncovered that then LCBO Chair Andy Brandt had taken trips to the Caribbean courtesy of Bacardi, the LCBO’s largest rum supplier. In fact, Brandt went to a lot of places courtesy of Bacardi (Bahamas, Paradise Island, Puerto Rico) and also ate a lot of lunches and dinners thanks to the spirit maker. At the time, Bacardi held 60 percent of the Ontario rum market and yet had only 49 percent of the world market. Donovan also discovered that Brandt was travelling to southern Italy (Sicily, both in 1996 and 1997) on what seemed to be the dime of a “counsellor” for the Italian wine industry named Fuda. Brandt accepted stock options and directorships in three Fuda-related companies. In this time period, the LCBO purchased six new southern Italian wines in 1997 and seven in 1998. Much more ink was spilled by Kevin Donovan about other irregularities at the liquor monopoly and yet Mr. Brandt stayed on as Chair of the LCBO for another 6 years.

In 2004, it was learned that Brandt was living in a $2,100 a month Toronto condominium paid for by the LCBO. This same kind of transgression that year got a gentleman by the name of Glen Wright in trouble. He resigned abruptly as Chair of the Workplace Safety and Insurance Board. (He had a $2,800 a month apartment in Toronto covered by the Board). And yet, despite even this, Brandt remained on for another 2 years as LCBO Chair. Here is another little gem. Mr. Brandt was getting rare wines for buddies and cronies, using his connections at the LCBO. Nothing was ever done about any of these proven misdeeds.

All this was happening at the top, so you can be sure it was happening all the way down the food chain. In fact, it wasn’t until the summer of 2008 when the cork was finally put in the bottle of LCBO freebies by now President and CEO Bob Peter. Even that seems a little ironic, considering his own daughter benefited from a scholarship handed out by Spirits Canada. (She now works for Molson.)

What is past is prologue and what we the public are most interested in is the here and now. We want to know if the LCBO has really changed. Are we seeing a new LCBO? To listen to some of the agents I spoke with, you would believe that the bad old days are well behind us.

“The only corruption could be where contracts are awarded,” one agent said to me. “As for listings there haven’t been any of that [wrong doing, people on the take] for years, due to the gift rules brought down by the organization a year ago. We certainly push any levers available to us to get a listing, but there aren’t too many levers available.”

“Personally, I’m very happy with the system,” said another. “Privately-owned stores can’t afford the inventory that the LCBO has and the LCBO is one-stop shopping no matter where you are. Besides, I don’t think the consumer would like privatization if they’ve seen what I’ve seen.”When asked about the gift giving and potential for corrupt behaviour he added, “those things don’t happen anymore because of the conflict of interest.”

When told about these comments, freelance journalist and LCBO watchdog David Menzies doesn’t mince any words. “These guys lack the testicular fortitude to say anything, they complain in private but don’t want to go on the record.”

Lawyer Arnold Schwisberg is someone whom David considers “the LCBO’s worst nightmare because he knows more about the Liquor Licence Act and the LCBO’s soft underbelly than anybody else.”

Schwisberg explains that “any of those who deal with the LCBO are fearful of reprisals, and reprisals can be very subtle and hard to prove — not ordering as much next year, subjective conclusion about the quality of your wine, stuff like that.” He adds, “many amongst the regulated parties, such as the wineries, agents and distributors, have some legitimate issue but are afraid to proceed.”

His implication here is, of course, do you really want to piss off the ‘make it or break it’ organization that runs your profession? After all, where else can you sell booze in Ontario?

Agent 3, is a little more critical but seems to understand his role in the process. “Agents are not importers, the LCBO is the importer, agents buy nothing. The LCBO pays suppliers, they distribute, and they’re the retailer. I’m the sales agent. Basically, I’m part of the marketing department of the LCBO.”

According to Agent 3, here is how the process works.

“The LCBO cuts the purchase order, arranges freight, receives the product, stocks and warehouses it, pulls it and delivers it to its stores. It’s then shelved and sold to the public. Only when the LCBO sells it does it see any return on investment.”

In the case of a consignment agent, the product remains stored at the LCBO warehouse until the agent sells it and picks it up for immediate delivery to the customer, though storage is not indefinite.

In private systems such as Alberta and to some extent British Columbia, the onus is on the supplier and importer to get the product to the province. Once it is there, the government starts taking its cut of taxes and fees, needing to recoup nothing. “The LCBO is great for protecting agents. It is a good security system because LCBO cheques don’t bounce. It’s like a government subsidized agent support system.”

The problem, according to Agent 3, is not the LCBO, it’s the “antiquated liquor laws that govern this province. They prohibit the modernization of the system.” He freely admits that “the Ontario government should not be in retailing, it should be in charge of police, firemen, social services, health care and such. It doesn’t sell pharmaceuticals so why should it be selling alcohol? I could have a whole warehouse full of pharmaceuticals and there would be little to no government intervention, but if I have one bottle [over my limit in my possession] of alcohol I could be arrested.”

This sentiment is shared by David Menzies who wrote, in his article of February 6, 2006, with tongue planted firmly in cheek: “Alcohol is a potentially addictive and even dangerous substance; therefore, the province can’t possibly entrust the sale of booze to private-sector entrepreneurs (we’ll overlook the fact that an even more potentially addictive and dangerous substance, tobacco, can be obtained at the local variety store.)” And yet, the LCBO preaches its mantra to all who’ll listen, and we all do, about being the bastion of social responsibility and our last line of defence between sobriety and chaos in the streets. However, it finds itself in a “catch-22 of its own making,” says David Menzies. “Social responsibility boils down to preaching moderation via the occasional ‘don’t drink and drive’ TV or billboard advertisement. Yet, the lion’s share of the Board’s marketing budget goes toward promoting consumption.”

Menzies, Schwisberg, agents, winery and many other critics of the LCBO point to a variety of entitlement factors, which the LCBO holds so dear. “The Liquor Licence Act,” says Schwisberg, “is a very short piece of legislation, it hasn’t been changed in … actually, it has never been changed. It gives the LCBO very, very, broad, sweeping, loosely-defined powers, which have never been challenged in court. Unlike the OSC (Ontario Securities Commission), which is very, very detailed, with a huge statute setting out its powers … the Liquor Licence Act is very, very general. This gives a lot of room for the regulator to operate and, at the end of the day, be fairly confident the courts are gonna back it up. For example, it says in the Act that the LCBO has the power to price fix, meaning the LCBO feels it can override the federal Competition Act.” (FYI: In early 2006, 2 V.P.s of the SAQ (the liquor board of Quebec) were fired for doing just that.)

“Agents have little to complain about when compared to the domestic industry’s treatment by the LCBO,” said one agent. And it’s true. Many of the wineries in Ontario are limited by so many of the LCBO’s policies that they consider shutting their doors if they didn’t love what they do so much. “I love this industry. If I won a million dollars in the lottery tomorrow, I would pay off my debts and continue on, but the policies continue to keep me down,” said one winery owner. “Without a doubt, my major competition is the LCBO,” says another. “The government pushes VQA through the LCBO, not the wineries’ cellar doors. Three years ago, they did a promotion to push sales to the wineries and my sales took off. When they stopped the campaign my sales leveled off. This Go Local campaign has been a failure for direct winery sales because the urbanites feel that all they have to do is go to the LCBO to pick up an Ontario wine, which is true, but what about the 50+ wineries that don’t retail through the LCBO? And of course, the mark-up stays with the LCBO and doesn’t filter down to the wineries.”

When asked if it’s just about getting a listing, my cynical, cash strapped, small winery owner shows off not only his biting wit but his clear memory of LCBO past transgressions. “They ask you to buy shelf space, buy air miles, defer payment past 90 days, the list goes on and on … the only question they don’t ask is, will you take Andy Brandt down to the Bahamas for a week.” He concludes on a serious note. “There are rules and there’s the game, and everybody bends the rules, which is part of the game. The more you give away the more they’ll sell your product.”

There is no doubt that most Ontario wineries see the LCBO in a negative light and as the major stumbling block to their success in this industry in Ontario. Here are some other opinions.

“I no longer differentiate the government from the LCBO, they’re one and the same.”

“The LCBO is a government cash cow and patronage house, it’s where they send retired politicians and those they owe favours to.”

“Aside from the political issues, there is the fact that here we are, supposedly in a free market enterprise system, and yet we have this dinosaur of a government agency squatting on everybody’s chest, preventing any sort of growth.”

There are also comparisons made to their brethren across the country in B.C.

“British Columbia vineyards cost twice as much per acre and their wineries are worth twice as much, not because they make better wine but because they have access to the market.”

Then there’s the manner in which the LCBO treats its competition, the wineries of Ontario. “They go out of their way to bring inexpensive wines into my market, foreign wines that are highly subsidized. Now, if you’re an LCBO product consultant and you had a choice to go on a buying trip to Burgundy or Bordeaux to be wined and dined or head down to [Niagara] to sit at someone’s kitchen table and be fed a cracker while you tasted the wines, what would you do? There’s a prestige to the department you’re in and Ontario is the bottom rung, they switch people in and out so quickly it is kinda like the LCBO’s penalty box.”

The lack of access to market is a bone of contention. “Where else can you go as a small winery with 2-3 thousand cases of single vintage wine, that’s hard to push through your own little, out of the way store? I’d much prefer to take my wine to Toronto than try to drag customers down to Niagara one by one.”

But what really toasts the barrels of the winery owners continues to be their lack of access especially at shows like the Wine and Cheese, Food and Wine and others held in places like London, Ottawa and Toronto. “Nothing infuriates me more than going to a show in London, Ottawa or Toronto. I’ve rented a booth, I’m pouring my wine and patrons will ask me if they can buy a bottle of this to take home, but I can’t, it’s against LCBO regulations. But if Vintages/LCBO is there, I see people walking out with Yellow Tail tucked under their arm. The LCBO can sell Australian wine at a show in Ontario but I can’t sell Ontario wine in my own province. Where’s the fairness and the logic in that?”

Speaking of things that aren’t fair and logical, Menzies, agents and others want to know why the LCBO is putting up these gigantic Taj-Mahal-like stores?

“Every LCBO store going up is like a big box store,” says Menzies. “They’re beautiful with towers, demo kitchens and other incredible frills. Truth is, you could make these stores look like nuclear fallout shelters and you’d still be ringing up sales at a record pace because consumers have no other option of where to shop. So why spend like drunken sailors on these stores? [No other retailer’s] cost per square foot is higher than the LCBO’s, and yet they have no competition, why is that?” Menzies answers his own question. “It’s to ward off privatization. Privatizing the LCBO was the third pillar in Mike Harris’ Common Sense Revolution in 1995, and the only promise he didn’t keep. Because they own so many properties and so many leases, if you were to privatize, you’d be left with a whole lot of orphaned assets. The LCBO is also the last remaining government graveyard for political hacks to get jobs, where officials go to live out their years in the public sector. So really, there is no political will to dismantle it.”

The next time you walk into a big beautiful 6-million dollar LCBO store, remember it was paid for with your tax dollars, money that could be better spent building hospitals, upgrading health care or improving social programs. Menzies wonders aloud if Ontarians’ priorities are really that skewed. “We are spending money on making the most beautiful liquor stores in the world in a monopoly system. Does that make sense to you?”

The issue is not just with the size and money spent on those stores but also their geographical location. Where is the marketing data coming in terms of where to build or house them? The answer to that lies with the competition. Off-site stores, mainly run by Peller and Vincor (Jackson Triggs, Inniskillin), are governed by a letter of authorization issued by the LCBO. Each is required to submit any relocation information and all sales data. Amongst other things, regulations state that they can’t be close to an LCBO store. (Of course, this is not a reciprocal agreement.) What happens to those sales numbers that each store must submit? “It is my opinion,” says Arnold Schwisberg, “they use this data to locate their new stores in advantaged locales.”

So, the LCBO puts its store next to the wineries’ best performing off-site stores, thus forcing them to relocate again. Talk about insider information. With one hand the LCBO learns from the competition and with the other it eliminates it.

Then there’s the bee in the bonnet of Ontario’s publishing industry: Food & Drink magazine Everybody I spoke with agrees that it is truly a beautiful magazine (the layout, the articles, the recipes). That may be the case, but since when is it acceptable for a government agency to compete with its own people? The LCBO is out there fighting for precious advertising dollars at a time when the publishing industry is struggling.

Agent 2 told me early on in my interview process, “I don’t think they are taking advertising dollars away from other magazines, and besides, they are doing a better job of advertising to the consumer.” The data does not support that analysis. A 2005 submission to the Ontario Beverage Alcohol System Review Panel by the Canadian Magazine Publishers Association (CMPA), cited many reasons and competitive advantages the LCBO has over its privately-owned competition.

1. “There is a belief among alcohol beverage manufacturers that the decision to purchase advertising space in Food & Drink magazine is directly tied to the level of support LCBO provides to the sales of their product.”

2. “LCBO incurs none of the normal costs of building and maintaining a subscription base and none of the expensive promotional costs associated with newsstand sales.”

3. “A further advantage is fueled by an editorial budget … tied directly to it subsidization from Ontario liquor sales.”

4. “Food & Drink is based on an economic model made possible only by the advantages of government ownership and alcohol sales. It is a business model that cannot be replicated…”

The CMPA also noted the ad revenue in Food & Drink is not based solely on businesses in the beverage alcohol industry. “Slightly less that 46 percent of Food & Drink advertising space was sold to the beverage alcohol system.” That means that 54 percent is non-booze related. The CMPA also said that, “these products have nothing whatsoever to do with the LCBO’s raison d’etre: the promotion and sale of beverage alcohol.” These arguments fell on deaf ears and Food & Drink continues to be published.

Menzies is not surprised. “Food &Drink is a horrendous conflict of interest. The publishing industry should hire a lawyer like Arnold Schwisberg and launch a multi-million dollar lawsuit. The LCBO has absolutely no mandate for this magazine and to be competing in the private sector.” And when it comes to the question of being forced to buy ad space in the magazine, Menzies explains, “it’s not as blatant as ‘buy space or lose your listing’, it’s a more subtle kinda thing, like when the mob approaches you and says, ‘let’s go for a ride’. If you want to remain in the good books of the LCBO you know which way the land lies.” Schwisberg echoes Menzies’ opinion. “The bottom line is that many advertisers and agencies complain that the rate card is so high it draws ad budgets away from other media, but they feel compelled to make the buy regardless (F&D’s rate card is equivalent to a national media buy in top ranked magazines like Macleans or Time).” We’d better like Food & Drink magazine because we pay for it through our hard-earned tax dollars.

In mid-December 2009, some interesting information came to light from ex-LCBO employee and watchdog Larry Patterson. Now, some people consider Larry to be one of the LCBO’s strongest and harshest critics, while others consider him to be a bit of a one note song when it comes to the LCBO, a fellow with an axe to grind. Regardless, you can’t discount his recent findings, obtained through Freedom of Information requests. (They are posted on his website, This one is a doozy. Larry wanted to know how much the LCBO has paid out in bonuses to management from 1997 to 2008. He discovered that bonuses in 1997 were $416,908. In 2008, they had climbed to $6,084,011 … that’s over 6 million dollars in bonuses to the liquor monopoly hierarchy, a job that could be performed, some critics say, “by a hamster in a cage”. In a monopoly, how could you not succeed, especially when you’re selling something as popular as booze? Furthermore, the bonuses paid far exceeded the percentage increase of the dividend the LCBO pays to the province. Larry Patterson elaborates. “In 2001 the dividend was $850 million, which by 2008 had increased to $1.345 billion, an increase of 1.58 times. The rate of increase for bonuses is more than three and a half times the rate of the increase of the dividend.” Try as you might to discount these numbers, you can’t ignore the gross number of 6 million dollars in bonuses (2008) during a recession year. People were losing their jobs and the LCBO was passing out your money to its executives for a job well done.

Is there a better way than the wasteful bureaucracy we call the LCBO? In July 2005, the Beverage Alcohol System Review Panel, chaired by John Lacey, submitted its report to the Minister of Finance (at the time, Greg Sorbara). In his letter to the minister, Lacey wrote, “the: challenge you put to us was to determine if the beverage alcohol system is delivering the maximum benefits to the people of Ontario. It is not.”

The Panel’s conclusions were very clear and straightforward:

“Our conclusion: in order to ensure the socially responsible sale and use of beverage alcohol, it is not necessary for government to own and operate retail and wholesale facilities. In the 21st century, government can protect the public interest just as well, as if not better, through modern regulatory tools such as pricing policies and active enforcement.”

“[We call] on the government to focus on its regulatory role and leave wholesale and retail operations to the private sector. We unanimously recommend that the government create a regulated, competitive market that would expand opportunities for producers, improve convenience and selection for consumers, extract the government from commercial risks and increase revenues for the public purse.”

“We have found that the current system falls considerably short of generating the maximum return for taxpayers. We conservatively estimate that, following a transition period, this plan would produce at least $200 million more government revenue than the government currently receives from the beverage alcohol system.”

In his letter, Lacey concluded that “some may prefer to keep the system as it is and muddle through. This, however, would solidify the existing vested interests and make it much harder to effect change in the future. After 78 years, action is long overdue. It is time to transform Ontario’s beverage alcohol system.”

This government-requested and sanctioned report that was 6 months in the making and cost $600,000 was shelved and never heard from again.

Now, I have to admit, when I was handed this assignment, I rubbed my hands together with glee thinking, ‘I’m going to be the one to find the scandal that’ll bring down the LCBO. But the more you research, interview and learn, the more you discover the LCBO is loaded with skeletons both past and present. The LCBO is like an onion, the more layers you peel the more it stinks. Scandal after scandal has past over this monopoly and each has been treated like water off a duck’s back.

The LCBO can’t leap buildings — but it sure does build some pretty ones to sell booze, a product we’d buy anyway from a dingy, troll-run store, if that was our option. But this monopoly seems to be so mired with policies and practices that date all the way back to their 1930’s beginnings. That, in turn, has given them a sense of always being right and one of absolute entitlement to do whatever it chooses. Why do we even care? The LCBO brings money to the provincial coffers, publishes a fabulous magazine and looks beautiful. Who cares if it spends a little money doing it? Well, to that, I say it’s our money the LCBO is using. We, as taxpayers, pay for the glossy, recipe-filled magazine, the multi-million dollar stores and everything else the LCBO sells back to us — all the while making a tidy profit. In the process, it squashes all forms of business standing in its way of achieving that profit, be it a winery or a magazine, which isn’t even part of its mandate. Think about it this way: in essence, wineries and magazine publishers pay taxes to put themselves out of business.

I bring up the past LCBO transgressions because those who forget the past are doomed to repeat it. Well, the LCBO has done it time and time again, and yet we, the people, give the organization a pass each and every time. The LCBO is a monopoly system of the past and should seriously be revamped and/or sold off. Premier Dalton McGuinty recently announced that the Ontario government will consider possibly selling crown agencies such as the LCBO to lower the deficit. One can only hope.

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