Business Profile: Winning at the Carney-val

May 28, 2012 4:23 pm

By: Dan Donovan and Harvey Chartrand

Bank of Canada Governor Mark Carney was called a “hot commodity” by Postmedia News in April. Carney, 47, has been credited with shielding Canada from the worst effects of the 2008 global financial meltdown, when the United States’ and Europe’s financial systems nearly collapsed. At the time, Carney was the untested wunderkind at the Bank of Canada who had replaced the highly respected David Dodge, a revered giant with professionals in the Canadian banking and investment world. By 2009, Carney’s response to the financial meltdown had earned him recognition by the Financial Times and TIME magazine as a superstar in the world of high finance.

By 2012, Carney had enough respect from international governments that he was selected to chair the powerful Financial Stability Board, an institution of the G-20 major economies based in Basel, Switzerland charged with co-coordinating the overhaul of international banking regulations. (While there has been no indication of Carney’s priorities as chairman, on the day of his appointment, the Board published a list of 29 banks that were considered large enough to pose a risk to the global economy in the event that they failed). In April 2012, a rumour circulated that the British Cabinet was interested in naming Carney as its Governor. Carney put an end to that rumour by stating that he was staying at the Bank of Canada, reassuring Canadian banks it was business as usual.

Mark Carney worked his way up the ranks of Goldman Sachs, the Department of Finance Canada, and the Bank of Canada, as deputy governor. Armed with his great pedigree and understanding of the complex international finance system, combined with his experience at Finance under David Dodge, Carney was able to devise a strategy to allow Canada to navigate through the worst tremors of the crisis. Most importantly, he set in motion a plan to protect Canada from the delayed financial aftershock that is now undermining many First World nations and threatening the once overheated economy of China, which Canada is increasingly reliant upon as an export market.

By 2009, Carney’s response to the financial meltdown had earned him recognition by the Financial Times and TIME magazine as a superstar in the world of high finance.

Part of this strategy was recently uncovered. In a study  released  on April 30 by the Canadian Centre for Policy Alternatives (CCPA) titled The Big Banks’ Big Secret: Estimating Government Support for Canadian Banks during the Financial Crisis, the previously secret extent of  the extraordinary support required by Canada’s banks during the 2008-2010 financial crisis was revealed. For much of the past three years, Canadian banks were touted by Federal Finance Minister Jim Flaherty, the federal government—and the banks themselves—as being much more stable than other countries’ big banks. Canadians were assured that our banks needed no bailout and, because of their management and lending practices, were the most secure banks in the world. The CCPA’s latest study suggests that this was not the case.

According to the study by CCPA senior economist David Macdonald, support for Canadian banks reached $114 billion at its peak.

“At some point during the crisis, three of Canada’s banks—CIBC, BMO and Scotiabank—were completely underwater, with government support exceeding the market value of the company,” says Macdonald. “Without government supports to fall back on, Canadian banks would have been in serious trouble.”

Between October 2008 and July 2010, Canada’s largest banks relied heavily on financial aid programs provided by the Bank of Canada, the Canada Mortgage and Housing Corporation (CMHC) and the U.S. Federal Reserve—all at the same time. The study estimates the value of government support by combing through data provided by CMHC, the Office of the Superintendent of Financial Institutions and the Bank of Canada, as well as quarterly reports of the banks themselves. Carney might call it “liquidity support” but Macdonald says it was a bailout. “Whatever you call it, Canadian government aid to the tune of $114 billion for the country’s biggest banks was far more indispensable than the official line would suggest.”

Because of this necessary but secret infusion of multi-billion-dollar loans, no Canadian banks failed – as opposed to 400 U.S. banks that did – the loans to Canadian banks were quickly repaid. The Government of Canada even made a $2.5-billion profit on the bank loans, according to CBC Ottawa. Ironically, over the entire aid period, Canada’s banks reported $27 billion in total profits between them, and the CEOs of each of the big banks were among the highest-paid Canadian CEOs. Between 2008 and 2009, each bank CEO received an average raise in total compensation of 19 per cent. There is a serious ethical question related to why the CEOs of the CIBC, BMO and Scotiabank paid themselves so handsomely when their banks were so stretched. That is quite a contrast to Carney, who left behind millions of dollars in salary when he quit Goldman Sachs to take up public service. He believes policy can make a difference. And he has made a difference. The reality is that the strategy Carney put in place for those types of loans to be accessed by Canadian banks worked and everyone, including taxpayers, came out on the winning side. Internationally, Carney was seen as the smart go-to guy on how to fix the international banking system.

Carney’s biggest worry is the explosive growth in household debt.

Prior to being selected to chair the Financial Stability Board, Carney showed some good old Canadian grit. It became clear that he could not only take a punch but deliver one as well. At a September 2011 meeting of some of the world’s most influential bankers, Jamie Dimon, head of JPMorgan Chase & Co, directed a tirade at Carney during a private gathering of the world’s most influential bankers in Washington, D.C. Carney was the lead in presenting the efforts by the Group of 20 major economies to overhaul an international regulatory regime that was exposed as weak by the financial crisis. Carney was pushing for an international policy makeover to reshape global financial regulation. Dimon opposed this.

The confrontation occurred when Dimon attacked a plan backed by Carney that would require a few dozen lenders (including JP Morgan) to hold reserves at levels 2.5 percentage points higher than other banks – a measure inspired by the economic destruction caused by the collapse of Lehman Brothers Holdings Inc. After listening to a tirade from Dimon, including the suggestion that his proposals were anti-American, Carney pushed back with a cogent and firm defence of the G-20’s efforts to construct a regulatory regime that will significantly reduce the risk of another global financial crisis. It was a dressing down of significant proportions.

Three weeks later, when the Occupy Wall Street (OWS) demonstrations and other expressions of frustration with the global economic and financial system highlighted the need for policymakers to show they are serious about forcing change, Carney commented  that the movement was an understandable result of the “increase in inequality” – particularly in the United States – that started with globalization. “You’ve had a big increase in the ratio of CEO earnings to workers on the shop floor and then on top of that, a financial crisis. There’s a frustration with policy and a frustration that, ‘are things going back to business as usual?’  If I may say, that is not going to happen, but I can understand the frustrations.’’

Carney then added that it was his view that the OWS protests are a “democratic expression of views”’ and “entirely constructive.” A few months later, Carney was named Chairman of the Financial Stability Board. Clearly, he was not one to be cajoled or pushed around.

Canada has by no means emerged unscathed from the global financial turmoil. Carney’s biggest worry is the explosive growth in household debt.

His concern follows the release on April 18 of the Bank of Canada’s latest monetary policy report – a quarterly economic overview compiled by the central bank. The report highlights the exponential growth of home equity lines of credit (HELOCs) and mortgage refinancing in the past decade, which have surged to $64 billion as of 2010 from $8 billion in 2001. Since the Bank of Canada sets the interest rate that determines the monthly mortgage rate paid by Canadian families, a comment on interest rates from Carney can give banks the jitters and surely affects the blood pressure of millions of mortgage-paying Canadians each month. Carney continues to steadfastly pursue policies which discourage increasing personal or household debt. He insists that mortgages must have strict conditions attached to avoid a U.S.-style mortgage crisis.

The report once again pegged the massive debt loads of Canadians as one of the biggest domestic risks to Canada’s economy. While the bank sees an eventual reversal in the growth of household debt, Carney said that household debt-to-GDP ratios are expected to grow even higher for the foreseeable future, and gave no forecast for when Canadians might start paring down their debt. “It’s hard to predict exactly when the process will come to an end,” he said. The good news is that under Carney’s steady helmsmanship, the central bank now sees Canada’s economy growing by 2.4 per cent in 2012 over its earlier 2.2 per cent target.

Carney lives in Ottawa with his wife Diana, an economist specializing in developing nations, and his four daughters.

Broken and Bankrupt: Greece Stares into the Abyss

May 24, 2012 8:24 am
Greek riot police confront rioters in Athens

Before the turn of the twentieth century, America’s premier financier, John Pierpont (JP) Morgan, famously coined a phrase which has since become a common saying in the English language. Morgan remarked that, “If you have to ask how much it costs, you can’t afford it.” More than a century later, Morgan’s comments could be used to characterize the ongoing disorderly unraveling of the Greek economy. The breakdown of Greek social structure and law and order which have accompanied the nation’s economic collapse pose a very real threat whose consequences could spill over into other Mediterranean countries and could scuttle the viability of the European integration project.

Nearly all of the Mediterranean nations within the European Union’s (EU) seventeen member economic and monetary union known as the “Eurozone” are frozen in a state of economic paralysis due to unsustainably expensive social welfare programs, crippling deficits and runaway public spending. Add to that the lack of political will needed to implement the austerity measures and structural reforms required for slowing the EU’s economic free-fall and for initiating a path towards economic solvency. At the same time, a signal must be sent to global markets that the EU will not continue to spend more than it can ever hope to repay. However, no other EU country is in as dire a condition as Greece. Greece has been the focal point of violent protests, looting and widespread social disruption caused by both depression-era unemployment rates and a population that is unwilling to make the lifestyle sacrifices needed to begin the painful task of putting Greece’s financial house in order. One particular example is worth highlighting as characteristic of the unsustainably expensive social programs that have allowed the small nation to accumulate deficits and debt large enough to threaten the global market. If you were a member of Greece’s swollen public sector, the year would have fourteen months instead of the twelve months everywhere else. That is because Greek public sector employees receive fourteen monthly paychecks per year. Nor does this extraordinary practice end when a public sector employee retires. In fact, former Greek public sector employees receive fourteen monthly pension checks for the remainder of their lives.

John Pierpont (JP) Morgan

Nonsensical forms of spending such as this, coupled with rampant fraud and unwillingness to pay income taxes, have resulted in a lack of the capital reserves necessary to keep the nation afloat and have led to runs on Greek banks which, as a whole, have lost upwards of 30% of their deposit values over the past two years. Without another injection of stimulus funding from Germany, the most economically and politically powerful nation in the EU, as well as from the European Central Bank (ECB) and the International Monetary Fund (IMF), Greece will run out of money by July. Almost immediately thereafter, it will default on its debts. The prospect of this scenario is heightening fears among policymakers and politicians across the globe and is initiating discussion amongst ECB bankers and other economists about the possible consequences for global markets should Greece exit the Eurozone either at the behest of the other member states or by its own choice.

Still, more than three quarters of Greeks continue to express their desire to remain in the Eurozone and the EU despite the fact that they are adamantly opposed to making the financial and lifestyle sacrifices required to do so. To make matters worse, Greece is hurtling towards another election in which the man who may well be the next Greek prime minister is a 37-year-old by the name of Alexis Tsipras who serves simultaneously as both the president of Greek’s ultra-left political party Synaspismos and as the leader of the Greek parliament’s Coalition of the Radical Left, better known as “SYRIZA.” Tsipras is riding a wave of popular support due to his election platform of calling the bluff of the IMF, the ECB and Germany by insisting that Greece will be permitted to remain in the Eurozone even if it refuses to implement the austerity measures and structural reforms which were attached as conditions to earlier bailouts. This is clearly a risky and unrealistic proposition.

The more likely scenario is that Greece will eventually fail to receive further financial assistance from the international community and will subsequently default on its debts, eventually being forced to leave the Eurozone. This would not be pretty. The consequences could be further rioting, pillaging and unemployment, all sending a dangerous shock wave through the global economy. Other struggling nations within the EU would have to face the fear that they too could be next in being forced to fully implement the required austerity measures or be cut out of the EU’s Eurozone. Even worse, the global economy which is struggling to maintain a modicum of growth, could be sent into a tailspin since fear and uncertainty almost always send markets into a steep decline.

Alexis Tsipras

Yet, regardless of whether Greece were to exit the Eurozone of its own free will or not, some are speculating that the economic consequences would not be that severe once the protesting, rioting and looting have subsided. Greece would have to abandon the euro and return to using its old currency, the drachma, thereby implementing a plan of rapid currency devaluation which would make the country a more competitive place to do business and hopefully boost Greek exports at the same time. Such a path back from the economic brink has worked before for other nations but Greece may not be able to enjoy the same results as Argentina which successfully pursued this policy option in 2002. Unlike Argentina, Greece has a limited volume of exports and fewer profitable business ventures to offer at the reduced price that its newly reinstated and devalued drachma would support given that the Greek economy relies predominantly on tourism, agriculture and shipping.

And so, Greece like other Mediterranean nations within the EU continues to limp on towards an uncertain future. But if the international community’s patience wears thin and if current trends in markets persist, Greeks may find out the hard way that, “If you have to ask how much it costs, you can’t afford it.”

The Uncertain Future: France’s Socialist Resurgence

May 18, 2012 9:00 am
Hollande & Sarkozy

All is not well in Europe. The European Union (EU) in general and the Eurozone financial union in particular are in a precarious position. Crushing debts and deficits as well as unsustainably expensive social welfare programs — not to mention unemployment rates in excess of 20% in certain EU countries — have turned what many academics call “Eurosclerosis” (the lack of economic growth and consistently high unemployment rates) into reality for much of Western Europe. International institutions like the International Monetary Fund (IMF) have contributed billions of euros (the EU’s international currency) to stabilize the toxic economies of nations like Greece and Spain in an attempt to prevent them from defaulting on their debts. Should default occur, it could trigger a collapse in the value of the euro, a move which would likely lead to the demise of the Eurozone and possibly the EU as a whole. Such a monumental economic and political collapse would unquestionably plunge the highly interconnected global economy into a severe recession at best and a global depression at worst. But, all of this is old news.

However, the surprising results from both the French and Greek national elections last week have the potential to exacerbate political differences and to further polarize both the European public and European policymakers. At issue is the difficult, but necessary, task of writing and implementing policies that would reduce member states’ deficits as well as government expenditures, all the while spurring growth and reducing unemployment throughout the EU. It is no small task to do so and still remain palatable to European voters. It would be difficult in any country but it is far more so in countries like Greece and Spain which, for all intents and purposes, are currently in depression and not recession. This act of political tightrope walking will be much more challenging in the near future due to the fact that both the Eurozone and EU may well be placed on life support in coming months. While France may not suffer from the same depression-level unemployment rates common in Greece, nor does its balance sheet contain as many toxic assets, France faces a number of challenges which, if not defused, could harm the Eurozone, the EU and the interconnected global economy even more than a Greek default.

Nicolas Sarkozy

Incumbent politicians often share the praise and the blame for their nation’s economic performance. Given the EU’s lack of economic performance, it is not surprising that any incumbent politician seeking re-election in the EU would face public opposition. Last Sunday, French President Nicolas Sarkozy and his centre-right Union for a Popular Movement (UMP) Party lost their re-election bid by a narrow, but still significant, margin of 48% to 51% in favor of Sarkozy’s Socialist challenger Francois Hollande. In the past, the French Socialist Party (PS), now led by Hollande, has only elected one man to the highest office of government. Thirty-one years ago, in 1981, the Socialist Party’s Francois Mitterrand was elected President of France. He remained in power throughout much of the 1980s and served a second term in the first half of the 1990s.

Generally speaking, financial markets did not react positively to Mitterrand and the Socialists’ tenure. There is a likelihood that markets will again react negatively to a France led by a Socialist government, but today the consequences could be more serious than when Mitterrand was in power. Francois Hollande has taken an anti-austerity stance which resonated with the large population of French unemployed and also with the public sector workers who would likely bear the brunt of any austerity program intended to stabilize the Eurozone countries. Doubtless, these positions played a crucial role in the defeat of Nicolas Sarkozy, a man who led a party which advocated the merits of austerity and whose flamboyant personality has taken its toll on French voters’ good will. Hollande has advocated the need for protectionism, has called for the implementation of a 75% income tax on wealthy French individuals (which would strangle growth and innovation) and has rejected the austerity measures required to keep France’s fiscal house in order. Hollande says he prefers to have the French economy “grow” its way out of recession and that he is not averse to using quantitative easing to spur that growth.

At best, Hollande’s agenda will likely create an unpleasant environment in which the 27 member states will seek to solve their debt and unemployment problems, a task made more difficult since his views directly challenge those of German Chancellor Angela Merkel. Merkel leads the EU’s strongest, most economically solvent country and has stressed the importance of balancing the EU’s books and of reducing deficit and debt by way of austerity measures. Negotiating and implementing successful policies could be more difficult when the EU’s most powerful country (Germany) and second most powerful country (France) have two conflicting ideologies separating them on the important issue of countering the ongoing European economic crisis. At worst, this conflict could make any further coherent economic policy-making an impossibility, thereby derailing future hope for the stabilization of the EU’s economy and the lifespan of the euro as a viable currency.

Francois Hollande

France and Germany, along with the other 25 nations in the EU, would suffer greatly should this occur. This scenario would deal the global economy a crippling blow that could suddenly halt the current anemic recovery in the majority of the world’s developed economies. Unlike Greece, France is well-integrated into the larger European marketplace in terms of the business it conducts beyond its borders. For instance, French companies operating outside of France, but within the EU, provide some 4.5 million jobs in a cross-section of virtually all forms of business. Furthermore, unlike Greece, these 4.5 million satellite French workers create products and services which, when combined, account for almost one fifth of all European investments in terms of monetary value.

To raise the stakes even further, France’s financial system provides significant capital and loans to other EU countries like Greece, Spain, Portugal, Ireland and Italy — countries which are burning through money as if there were no tomorrow. Some of those countries may well default on their debt no matter how much money the International Monetary Fund (IMF) or Germany may reluctantly provide to shore up their hemorrhaging economies. Should President Hollande obstinately pursue his hard-line, hands-off position against austerity which runs counter to that advocated by both Germany and the IMF, France and its creditor nations could fall into the abyss.

Queen In Disgrace: Canadian Task Force in Ukraine

May 17, 2012 6:01 pm

Once she was the face of the Orange Revolution.With a peasant-braided hairstyle that she wore as a crown, Yulia Tymoshenko led mass protests that swept Ukraine in 2004. She was a leader of the Fatherland Party. In 2005, Forbes magazine pronounced her the third most influential woman in the world. Tymoshenko served twice as Prime Minister of Ukraine. In 2010, she became the first female to run in presidential elections. But shortly after losing to Victor Yanukovich, the queen of the Orange Revolution has fallen into disfavor, to put it mildly.

Today, Tymoshenko is a prisoner and a patient at a hospital in Kharkiv.

Shortly after Yanukovich became president, Tymoshenko was arrested and charged with allegations of abuse of her office in striking a gas deal with Russia in 2009. Analysts claim the deal was doomed because of market fluctuations and the country’s economic crisis – it was a political error, not a criminal offense. The court nevertheless found Tymoshenko guilty, also charging her with tax evasion and embezzlement.

She was sentenced to seven years in prison.

Tymoshenko is a prisoner and a patient at a hospital in Kharkiv.

Many European countries and the United States condemned these actions against Tymoshenko; human rights organizations called them politically motivated, as other members of the opposition were also prosecuted.

In April, Tymoshenko went on a two-week hunger strike protesting her inhumane treatment in jail. Tymoshenko, who suffers from chronic back pain, said she was beaten by guards. As pictures of a bruised Tymoshenko emerged on TV screens and in newspapers, European leaders have been putting more pressure on the Ukrainian government to relent.

German Chancellor Angela Merkel refused to attend a European summit in Yalta. Merkel went as far as calling Yanukovich’s regime “a dictatorship.” The leaders also halted the Association Agreement with Ukraine – an agreement aimed at bringing economic benefits to Ukraine. Earlier, some leaders threatened to boycott the EURO 2012 soccer championship to be hosted by Ukraine and Poland, but later withdrew their threat.

The members, however, are clear: EU doors will be shut to the Ukraine, as long as Tymoshenko remains in prison.

Why Canada Cannot Remain Neutral

While turmoil over Tymoshenko is broiling in Europe, Canada cannot afford to remain neutral.

To Canada, the Ukraine is more than just a faraway Eastern European country. Canada is home to 1.2 million Ukrainians, who settled in Western Canada 120 years ago. Today’s foreign policy is mostly built on bilateral trade agreements, too valuable for both countries to put at risk.

In 1994, Canada proclaimed Ukraine a “special partner.” Over the years, after signing several trade agreements, Canada has become one of the major exporters of fish, seafood, pork, pharmaceutical products and aircrafts; and importer of mineral fuels, oils, fertilizers, iron and steel. In 2010 alone, trade between the two countries totaled $252.2 million. In 2011, this number exceeded $507 million, according to Ukrainian embassy statistics.

This week, a Canadian delegation is paying a visit to the Ukraine to conduct hearings on economic, political and judicial issues, upcoming fall parliamentary elections as well as human rights.

Tymoshenko, once a popular figure in the Ukraine, has been sentenced to 7 years in jail.

Tymoshenko is in the limelight of Canada’s Standing Committee on Foreign Affairs and International Development hearings, led by Mississauga-Erindale MP Bob Dechert.

Taras Zalusky, an executive director of the Ukrainian Canadian Congress and a member of the delegation, said the committee has a busy schedule. Zalusky said that they have already met with Tymoshenko’s lawyers, as well as officials from the prosecutor’s office and of the ministry of justice. It’s a four-day visit, and the committee will present a report of their findings on Thursday.

Canada, Free-Trade Agreement and International Pressure

Canada and the Ukraine are in the process of round table talks on signing a Free Trade Agreement (FTA) that will give Canadian businesses even broader access to the Ukrainian market without tariffs. The Foreign Affairs and International Trade website states that the FTA will be “consistent with Canada’s foreign policy objectives, which support Ukraine’s democratic transformation and economic reforms.”

Even though Rudy Husny, spokesman for Minister of Free Trade Ed Fast, said the government is “concerned by the apparently arbitrary and politically-biased nature of judicial proceedings against Ms. Tymoshenko, and other individuals, which undermines the rule of law;” Canada will still proceed with the FTA. Unlike Europe, Husny said, Canada does not believe in the politics of isolation. In fact, according to Husny, signing the FTA will foster economic growth in the Ukraine, which in its turn will help to “secure democracy where human rights are respected.”

The Ukrainian Stand

Marco Shevchenko, a chargé d’affaires of the Embassy of Ukraine, said he isn’t be able to comment on Tymoshenko’s case, claiming that neither diplomat or politician should interfere with the judicial process. Shevchenko only hopes that both governments won’t become hostages of political situations in their economic decision-making.

Marco Shevchenko

“We separate political and economic content,” Shevchenko said. “Both sides consider business above all.”

Shevchenko said Tymoshenko is planning to appeal her case to the Supreme Court of Ukraine.

Asked how the country could have fair parliamentary elections when the leader of the official opposition party is in prison, Shevchenko said, as a citizen of the Ukraine, he would never vote for a party that can’t survive without its leader.

On May 9, Tymoshenko ended her two-week fast and was transferred to the clinic to treat her back pain and the effects of her hunger strike. A German doctor was brought in to treat her. According to the latest news, after Kharkiv’s hospital made her treatment schedule publicly available, Tymoshenko refused to undergo any further treatment. The opposition leader says it is private information that is not to be shared.

It’s still unclear what the future holds for the Ukraine, a country that is torn between Europe and Russia. It’s unclear whether President Yanukovich will remain autocratic or make necessary democratic reforms before Europe turns its back on him. But what’s certain now – the disgraced queen of the Orange Revolution will still keep drawing the world’s attention.

The Natural: Laureen Harper Talks Family, Fitness and Canadian Pride

May 14, 2012 8:48 am
Screen shot 2012-05-13 at 9.55.15 PM

Laureen Harper is a natural. She’s found the secret to balancing her official duties, being a mom and finding time to do what she loves most.

There is more to Laureen Harper than meets the eye. Charismatic and unpretentious, her personality is a refreshing reminder that although she may be the woman alongside Canada’s Prime Minister, she’s also busy with work of her own.

Laureen Harper grew up in Turner Valley, a rural town in the foothills of the Rocky Mountains, southwest of Calgary, where she developed a lifelong passion for the outdoors and a love for animals at an early age. Today, she advocates for the proper care of animals and opens her home to kittens waiting to be adopted from the Ottawa Humane Society. Known for her extensive volunteer work and her support of important community causes, Laureen Harper’s focus on family, community and charity is a reflection of her down-to-earth sensibilities.

I caught up with the on-the-go mom at 24 Sussex Drive to talk about raising a family in the spotlight, her no-fuss fitness regime and what makes Canada the best place to live in the world.

Alexandra Gunn and Laureen Harper. Photo by: Deborah Ransom

ALEXANDRA GUNN:  Being in the spotlight day in and day out must be difficult to manage. How do you separate your personal life from your public life or is that even doable?

LAUREEN HARPER: You’d be surprised; a lot of people don’t recognize me. I walk around Ottawa and no one knows who I am. I think it’s because most of the time no one knows who you are or they don’t put two and two together. The other day, I was coming out of Walmart and a woman came running after me to see my receipt.

AG:  I’m sure you’re always recognized at public functions and political events. I would assume that a lot of people want to respect your privacy.

LH: That woman wanted to see that receipt! She was making sure I wasn’t stealing (laughs). In Ottawa, I go to a lot of events, so people are used to seeing me, but most of the time I just think they don’t know who I am. I’m not a celebrity or a movie star, so I can run down Wellington Street right in front of the House of Commons, past all the reporters who don’t even notice. It makes me smile because they are so busy talking that I go running on by with no makeup in my running gear and they don’t even look twice. I think sometimes they are going to say hello but they keep on walking.

AG: You may be able to go unnoticed on your runs, but raising a family in the public eye while juggling your official commitments must be tricky at times, so how do you stay grounded?

LH: I am a stay-at-home mom, so I spend a lot of time with my kids. They’re getting older, so they don’t want to spend as much time with you (laughs).

AG: Family always comes first but you’re also generously donating your time to a variety of charities. Are there any particular organizations that you believe support a great cause?

"I’m always focused on animal charities and animal welfare." Photo by: Deborah Ransom

LH: I’m always focused on animal charities and animal welfare, so when I’m in Calgary or Ottawa, I work with the Humane Society. There are so many great charities doing wonderful work, so if I can help them I will. I work with the Trans Canada Trail and the National Arts Centre Gala benefitting the National Youth and Education Trust. In 2017, the Trans Canada Trail is going to go from coast-to-coast-to-coast. It’s 75 per cent done now and I’ve already been on sections of it and I’m hoping Canadians will take advantage of it when it’s done. The National Arts Centre has really become the National Arts Centre. It brings in artists from across the country and bring music to Canadians from all over. The NAC Gala allows for the foundation to do work across the country. It isn’t just here in Ottawa; it goes across the country and helps a lot of kids who otherwise wouldn’t get music education. I really think they do a great job. I also really like regional theatre. I love all of these regional theatres that we have across the country; they’re little treasures. We are really lucky to have great theatre houses. Some are them are in the middle of nowhere and they are creating jobs and opportunities for actors and playwrights.

AG:  It’s nice to see that you dedicate so much time and effort to Canadian charities. If you had a few extra hours every day, how would you spend them?

LH: I would go hiking or doing something outside. I love being outdoors.

AG: Growing up near the Rocky Mountains must have inspired your love for adventure and hiking. What are some of your favourite outdoor activities that you like to take part in?

LH: I love to snowshoe – that’s my favourite. I try to snowshoe as much as I can in the winter. In the spring, I like to hike because there’s always something interesting going on in the hills. Anytime of the year I can snowshoe or hike. I love the Gatineau Hills in Quebec, but when I’m in Calgary, I hike in the Rockies or along some great hiking trails in and around Calgary. I don’t care if there’s a hill – I just like hiking. When I was growing up in Turner Valley, my family loved to hike. People were poor and so there wasn’t much to do. There was no going to theatres or concerts. We had the mountains 20 minutes away so we did what was available. We would head to the mountains to hike and camp and it was great because it didn’t cost any money.

AG:  Do you encourage your two children, Ben and Rachel, to enjoy the outdoors as much as you do?

LH: Yes, as much as I can. There are some great parks in Ontario and Quebec and we’ve recently learned to canoe. And we always do one mother-daughter canoe trip every year, which I really enjoy.

AG:  You must know some great spots across Canada. Where do you usually go?

LH: (laughs) I don’t want to say because then other people would go there! Where we go is such a great place and it’s so close to Ottawa, but very few people know about it. Rachel and I usually canoe and camp for three days and two nights, but you can’t make kids go too long because they can get bored. It’s our secret canoe spot.

AG:  Hiking and adventure are high on your list, but do you have a particular fitness regime that you try and stick to during the week?

Photo by: Deborah Ransom

LH: I know I should, but I don’t. I love to run and that’s what I do. Everybody does different activities but I try and run five times a week. In the summer, I run outdoors and in the winter, I just go on the treadmill. There are no excuses with the treadmill. If you run outside, it can be too windy, too hot or too cold. I love the treadmill. There are so many great activities, but they go in and out of style, so I stick with what works.

AG: There are quite a few big races in Ottawa throughout the year. Do you ever participate?

LH: We do charity races but I only compete against myself. I like doing charity runs for fun, but I’m not under any illusions! I tried to keep up with Peter MacKay for the Army Run and I only lasted about a kilometre and told him to go on without me. He did five kilometres in 22 minutes and I can’t!

AG: Aside from running, what are some of the things you do to stay healthy?

LH: I try to eat lots of fruits and vegetables. Well…we try (laughs). I think snacks should be snacks, but we try to stick with fruits and vegetables and then we have one day a week where we cheat. Salt-and-vinegar potato chips are the perfect cheat food. I want the whole bag, which is why I hate those 100-calorie bags – there are only four chips in there!

AG: You’ve had the opportunity to travel the world with your husband and as a solo traveler many years ago. Now that you’ve seen so much of the world outside of our borders, what do you most appreciate about Canada?

LH: The space. It’s so clean in Canada. When I come back from trips, I think how we are the luckiest people to have a country that is as big and beautiful as it is. Canadians appreciate what we have.

AG: What do you recommend to an out-of-country guest as a must-see if they will be traveling across Canada?

LH: Every region of the country has something amazing. So many Canadians travel outside the country on their vacations, which I think is a real shame. There are people from Western Canada who have never been to Eastern Canada and there are lots of Eastern Canadians who have never been to Western Canada and I think they should travel around Canada. Anyone who has been to Newfoundland knows it’s a great time. Niagara has great wineries. I’d recommend Toronto’s theatre district. Vancouver is one of the most amazing cities on earth. And, of course, head to Calgary for the Stampede! Every region of the country has fantastic festivals and it’s the people who make Canada a great place to live and visit.

AG: The Calgary Stampede will be celebrating its 100th anniversary this year. Will you be attending?

LH: You betcha! I’m inviting every person I know to come to Calgary. We will likely run out of space and will need to put mattresses down, but it’s a great festival that everyone needs to experience at least once. It’s difficult explaining the Calgary Stampede to someone who has never been to one. The entire city gets involved in the Stampede festivities – every street, every shopping centre and every community centre. I think it’s going to be the biggest party we’ve seen in a long time. This is the year to go. You have to experience it!

AG: Now that the warmer weather is here, what else are you looking forward to doing?

LH: I always do a big hike somewhere in Canada in the summer with a group of friends. We try to pick a different place every year. Last year, we went to the Yukon and this year, we are going to go hiking in the Kootenays in British Columbia. It’s nice to go somewhere where no one else is, even if it takes two or three days to get there. It’s always a wonderful feeling. A couple of years ago, we hiked for five days and only saw two people and one grizzly bear.

Photo by: Deborah Ransom

AG: Your keen sense of adventure must translate well when you accompany your husband on official business at home and abroad. What are some of the memorable moments that you often look back on?

LH: Traveling across this great country and getting to go to every province and every territory, which most Canadians don’t get to do. My husband and I get to do that all the time, but it never gets old and we love it. Every time you go somewhere you’ve never been before, it’s amazing and I always say that I want to come back here and spend more time.

AG: Looking back on the past few years, is there anything you’d wish you had done differently?

LH: No, I don’t think so. My husband works very hard and sometimes I wish he didn’t, you know? But that’s the nature of the job and he loves his job. He loves going to work and we are very lucky that we get to spend time with our kids. We miss our families back in Alberta, since we only see them three or four times a year. I’ve made lots of good friends across the country so there are no big regrets. We just miss our family in Alberta, so we’re thankful we get to go back so often to visit. All in all, it has been amazing.

Canada’s First Lady, Laureen Harper Supports These Charities:

The Humane Society The Humane Society of Canada (HSC) works across the street, across Canada and around the world helping people, animals and the environment.

Canada Army Run The Canada Army Run is about Canadians and the Canadian Forces – Air Force, Army and Navy – joining together in the spirit of camaraderie and mutual respect. It’s a chance for the troops to extend the military esprit de corps to Canadians and to thank them for their support.

Trans Canada Trail The Trans Canada Trail promotes and assists in the development and use of the Trail in every province and territory. Today, more than 16,500 kilometres of trail have been developed. When completed, the Trail will stretch 22,000 kilometres from the Atlantic to the Pacific to the Arctic Oceans, linking 1,000 communities and all Canadians.

National Youth and Education Trust (NYET) provides funding for the performing arts, programming and educational initiatives for young artists, young audiences and schools across the country.

Photography by Deborah Ransom

Hair & Makeup by Noah at

The Price of the Word: It’s Time for a Change in Kazakhstan

May 10, 2012 9:33 am

Journalism and fear never go well together.

Just one day before I interviewed CBC foreign correspondent Nahlah Ayed, who has been covering the Middle East for over a decade, I learned that somebody tried to kill my colleague in Kazakhstan, journalist Lukpan Ahmediarov.

As I was interviewing Ayed, I couldn’t help but admire her courage. She is always packing her bags to report from a conflict-torn part of the world, leaving behind her safe and comfortable life in Canada. She said if you are not brave, just don’t go there. Her words echoed what once Ahmediarov told me: “if you are afraid of your own work – don’t be a journalist!”

Ahmediarov was shot three times and stabbed eight times from behind. Even though his vital organs remained intact, he is still in critical condition after a three-hour operation.

A week later, Ahmediarov was able to record an eight-minute video message to the public – a video that might cause his enemies to try to kill him yet again.

In the video, Ahmediarov says he has no doubts that his profession and civil activities are the main reasons somebody wanted to silence him. Moreover, he says, once stable, oil-rich country ruled by President Nursultan Nazarbayev for more than 20 years, are now torn by rifts which appeared as the president feverishly tried to hold onto his power.

With a bandaged head, Ahmediarov addressed many issues the country is facing, heavily criticizing the government. The correspondent says that by silencing journalists the government can’t hide its problems. It’s time for President Nazarbayev to step down, he says, and allow the country to have a proper democracy with a rotation of powers. “His [President Nazarbayev’s] project is exhausted,” says Ahmediarov.

(CP-Raul Uporov)

Lukpan Ahmediarov being taken to hospital after his attack

But the journalist is more amazed at how the president is out of tune with his citizens’ mood. He says in 20 years, since the USSR collapsed, people have learned how to think critically. They can’t just read and believe self-censored, state-owned papers, nor do the citizens accept the messages conveyed by the presidentially-owned media.

Now, Ahmediarov says, people are realizing how absurd the regime has become.

By absurd the journalist means holding last year’s referendum to allow 72-year old President Nazarbayev to remain in power for life, and allowing the President’s supporters to erect monuments to him, claiming that it’s the peoples’ wish. It’s absurd, the journalist says, for the police without any investigation, to make a statement which claimed his attempted has nothing to do with politics or his profession.

“Kazakhstan has realized: That’s it! We can no longer live in such a country, and we must not live in such a country,” Ahmediarov declares. “It must be a normal country with a change of governments. That’s why people started talking – I was not the first.”

Indeed, Ahmediarov wasn’t the first citizen to raise concerns. In December 2011, the police opened fire on protesters in Zhanaozen, leaving 16 people dead, 100 injured. On the 20th anniversary of Kazakhstan’s independence from the former Soviet Union, laid-off oil workers stepped out onto the main street. The police claim that they shot protesters out of self-defense, while some witnesses say the striking workers were unarmed.

Meanwhile, Ahmediarov’s case left Uralsk and its citizens shaken. Uralsk is a city with a population of 350 000, situated on the northwestern border of Kazakhstan and Russia. Everybody in town knew the journalist had many enemies because of his bold articles and civil activities, but nobody had ever expected that somebody would attempt to kill him.

“I think in Uralsk, local powers got mad because in the battle with me they could not present anything adequate. I fought for my rights, for my freedom, for the rights of other Kazakhstanis. I never broke the law. Whatever I did, whether it was protesting on the streets or writing articles, I always told officials that I have a right to express my opinion.”

But not so, according to the Freedom House. In its 2012 charter on worldwide freedom of the press, Kazakhstan ranked 175th out of 196 countries, while Canada ranked 25th. For a democratic Kazakhstan with an embedded constitutional right to free speech and press, its status still remains “not free.”

Uralsk City Hall

Last year’s report on freedom of the press raised concerns about the country’s law that classifies libel as a criminal offence, with high penalties for the defamation of the president, members of the Parliament and state officials. In the first six months in 2010, there were 44 libel suits against journalists – the majority came from government officials. In 2009, for instance, Ramazan Yesergepov, the editor of the independent weekly Alma-Ata Info, was arrested in the hospital where was being treated for hypertension. Yesergepov was detained for eight months, and later, sentenced to three years in prison.

Tamara Eslyamova, editor-in-chief of the Uralsk Weekly, is familiar with every challenge that independent media face. Her newspaper is the only independent paper in Uralsk. It’s also the paper Lukpan Ahmediarov was writing for. Eslyamova says the government always pressures the print houses, distributors, sale outlets, denying them services. She and her journalists always receive angry calls and are harassed and threatened on the streets.

A botched contract-killer hit on Ahmediarov came to her as no surprise. In a telephone interview, Eslyamova said Ahmediarov had just written an article on how government officials are distributing multimillion-dollar projects to their families and relatives. Eslyamova says she knew after this article, officials wouldn’t go easy on the journalist, but the editor says Ahmediarov was always reporting such stories.

Why? Because he is not afraid to start a whirlwind or expose the truth.

More on the story:
Struggle for free press in Kazakhstan

Polling Déjà vu in Wild Rose Country

May 3, 2012 9:01 am
The day after the 1948 election President Truman holds the Chicago Tribune with its faulty prediction

In November of 1936, in the depths of the Great Depression, incumbent Democrat President Franklin Delano Roosevelt was running for re-election in what appeared to be an extremely hostile political climate. The American unemployment rate was roughly 25% and there was an ideological divide in much of the country regarding the reception of Roosevelt’s New Deal plan to boost employment, not to mention the then-unprecedented expansion of the Federal government required for its implementation. According to the Literary Digest, the nation’s most respected polling source at the time, the Republican Governor of Kansas, Alf Landon, was well on the way to defeating Roosevelt with a commanding margin. But, when election night drew to a close on November 3, 1936, the polls would tell a different story.

FDR on the cover of the magazine that three years later would inaccurately predict the results of the 1936 US presidential election.

Franklin Delano Roosevelt not only defeated Landon, but he did so by the largest Electoral College margin in American history. Roosevelt obtained a staggering 523 Electoral College votes, representing over 60% of the popular vote and 46 of the then 48 states. Landon, on the other hand, was only able to gather a miniscule 8 Electoral College votes and roughly 36% of the popular vote as well as just 2 states. The Literary Digest’s dead wrong polling prediction resulted from an unrepresentative and skewed sample which was concentrated in the state of Maine alone and which relied upon responses from fewer than one quarter of the anticipated respondents in that state. Furthermore, due to the Literary Digest’s predominantly white-collar readership base, the majority of those who did participate in the already under-represented survey were more likely to support Republican Governor Landon than the incumbent Democrat President who advocated a less business friendly and more regulatory laden approach to governance, thereby skewing the poll’s sample even further. Not surprisingly, in the wake of the unanticipated election results, the Literary Digest’s polling operations lost all credibility, and the magazine ceased publishing shortly thereafter.

History would repeat itself twelve years later when, in the general election of 1948, another American polling miscalculation again predicted a victory for a candidate who would never move into the White House. In 1948, Democrat President Harry Truman — who had served as Vice-President in Roosevelt’s fourth term and who was sworn in as President after Roosevelt’s death in the spring of 1945 — ran his first campaign for the presidency against the moderate Republican New York Governor Thomas Dewey and the more radical States’ Rights or “Dixiecrat” Party candidate Strom Thurmond. At the time, renowned pollster Elmo Roper, like the majority of the other pollsters in America, was predicting a large win for Thomas Dewey. In fact, the Chicago Daily Tribune was so confident that Truman would be defeated that, on the evening of the election, it set the headline “Dewey Defeats Truman” on the front page of the morning edition for the following day without waiting to confirm the election results.

Alberta's Progressive Conservative (PC) Premier Alison Redford.

The results were not quite what the Chicago Daily Tribune, and much of America for that matter, expected. Not only did the incumbent President Truman defeat his Republican challenger, but the Democrats also picked up a majority in both the House of Representatives and the Senate. Once again, the pollsters were dead wrong and, as was the case in 1936, this discrepancy could be traced back to an unrepresentative sample. The majority of the pollsters stopped canvassing and sampling respondents in the pivotal final few weeks before the early November election. Elmo Roper’s polling ceased almost two full months before election day based on the assumption that voters’ opinions wouldn’t change in the period between the end of the primary contests and the general election itself. Thus, the belief in the inflexibility of voters’ opinions, which resulted in a lack of up-to-date polling, led to a polling blind spot: the increasing favorability of Truman and the Democrats that was building in the final few days of the election campaign went almost completely unnoticed.

Sixty-four years later, the recent unexpected defeat of Alberta Wildrose leader Danielle Smith by incumbent Progressive Conservative (PC) Premier Alison Redford in the Alberta provincial election demonstrates that the same reasoning which led to the unanticipated election victories in 1936 and 1948 is alive and well inCanada. The vast majority of Canadian political pundits, pollsters and commentators were predicting that an easily-won Wildrose majority government would form the next provincial government with Danielle Smith as the first non-Progressive Conservative Premier in 12 election cycles — or more than 40 years. They had it wrong, most likely because of a flawed sample.

Wildrose Party Leader Danielle Smith.

In the weeks preceding the election, virtually all the polls across the province of Alberta reflected the likely scenario that Danielle Smith and her recently formed, more conservative Wildrose Party would be swept into power. These polls were neither inaccurate nor misleading. However, what the majority of these polls missed was the change in voter opinion which took place in the last three days before Albertans voted. Many of the polls relied on by political pundits, pollsters and commentators as barometers for the public opinion of Albertans consisted of out-of-date sampling research and responses. In other words, since most pollsters in the province stopped contacting respondents to gather information prior the critical 72 hours before the election itself, the polls were inaccurate due to a sampling method that was beyond its “best before” date and which was therefore unrepresentative of the voters’ true perceptions. At least three days out-of-date is better than the nearly two months out of date which characterized the polling of Elmo Roper and that of many others during the 1948 American presidential election.

Today, it is business as usual in Alberta politics. Premier Alison Redford and her Progressive Conservatives (PC) will remain in power with the party’s 12th consecutive majority government, albeit with a smaller majority than has been the case since the year of Canada’s centennial celebration in 1967. But when it comes to conducting the accurate polling of voters’ public opinion, mistakes from yesteryear surface yet again in 2012, shocking the political pundits, pollsters, commentators and the general public. Once again, the more things change, the more they stay the same.

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