Pax Canadiana in the Twenty-First Century

PAX Canadiana:    In the 20^th Century the term PAX Americana came to indicate the pre-eminent military and economic position of the United States in relation to other nations, just as PAX Britannia was used the 19^th Century (Wikipedia background).  In the 21^st Century, Canada will eclipse the United States and PAX Canadiana could become a reality. This article provides a satirical look at the alternate path we may choose to follow.

February 10, 2016 Update

1. Corporate Taxes

What got m thinking of this was the whole issue of “Corporate Tax Reductions.”  With our Federal rates approaching 15%¹,  I checked the G20 major economies and found none below 25%.   Then I checked on Ireland  – poor little Ireland (not a G20 by the way) – they went bankrupt – just when they achieved a Corporate Tax rate of 12.5%, lowest in the EU and lower than the rest of the world, save for a few OPEC countries.

This happened even after Google and dozens of big companies moved to Ireland to catch a piece of that generous corporate tax pie.  As supply-side economists, trickle-down theorists³ and deregulators predicted, unemployment shrank to near zero and “things were booming”.  Ireland was sitting at the top of the EU financial world.  Then bang – the crash – banks folded and massive debt took the country down.  The prescription for a sound financial future sounded great but the patient was dying.  On their knees, they went to their EU partners for a bailout.

Could this happen in Canada?  With a projected national debt exceeding half a trillion, with further tax cuts promised and cash being handed out for everything but the kitchen sink (well that too if the Conservatives reconstitute their billion-dollar “home improvement program”) it could happen.  We might very well be headed down the same path as Ireland and our good neighbour, the USA, whose move to supply-side economics and deregulation over the past several decades lead to the worst economic meltdown they have ever experienced.  They are now printing money so fast many of their presses have overheated and, if the rumors are correct, may have broken down⁴.

Then, to my great relief, two newspaper articles appeared – one in the National Post, the other in the Globe and Mail. The first was a three-page spread in the Post entitled: “Global Warming – Bring it On” and, the second, in the Globe, “Republicans Urge New Pipelines.”  Republicans?  Republicans?  It was no surprise to see the National Post calling ‘Global Warming’ a “good thing”, but US Senate Republicans calling for help from that great white, socialist enclave called Canada; that was when the loonie (our new penny) finally dropped.

Footnotes:

¹  Between 2000 and 2006, the Liberals reduced the Corporate Tax Rate from 29% to 21%.  From 2006 to 2011 the Conservatives further reduced to 16.5%. The Conservatives indicate a further reduction to 15% is needed to boost investment and reduce unemployment.  Now the question, if a reduction from 29% to 15% was needed to boost investment and decrease unemployment, would not a further reduction from 15% to 0% be even better? We might wish to ask: “For whom?”

³  Referencing “trickle-down theory” humorist Will Rogers, said during the Great Depression (known as the “Dirty Thirties”): “The money was all appropriated for the top in hopes that it would trickle down to the needy.” (partially Wikipedia)

⁴  Unless the US Congress takes drastic steps they will be dead broke and shutting down parts of government when they reach their debt limit. A debt default by the USA will have worldwide implications. No doubt they will find a way around that little problem, perhaps by borrowing from China that seems to have an endless supply of money.   If Canada is not careful they might start buying up all our tar sands as a hedge against a future downturn.

2. The Case of the United Arab Emirates (UAE)

I quickly checked out one OPEC country, the UAE, home of that famous airline with whom we are having a little spat and a city whose skyscrapers can be seen from London.  Guess what?  No corporate tax, no personal income tax, guaranteed income, health care, virtually everything needed to please everyone.  Could this be accomplished in Canada?  Yes, we could, but First, we would need to address the levies and royalties charged on our natural resources.

The UAE, a Constitutional Monarchy with a Presidential System, levies a tax on oil production of between 55-85%, it also charges royalties on all foreign companies and a 20% tax on all bank profits (and their profits are immense).  That creates boundless wealth from just two sources in a country of 3.5 million citizens who hire 6.5 million foreign workers to look after things. All this is accomplished while living on 30,000 square miles of desert (same size as New Brunswick). Shrewd investing then generates additional wealth.

While the downturn in real estate in Dubai has left the industry struggling (hmm, does Wall Street have long arms?), the oil-rich governing emirate, Abu Dhabi, is doing fine and continuing to stockpile cash as oil prices continue to rise. Whether Abu Dhabi will decide to bail out Dubai remains to be seen. Never-the-less, oil still provides that every UAE citizen is nicely looked after – work is optional but many prefer to do nothing other than jet to exotic locations

Who does the work?  Well, that migrant labour force of 6.5 million fills nearly all jobs (skilled and otherwise) and, with migrants, there is no need for any pinko labour laws and unions (Rob Ford and Don Cherry cite this on a regular basis). “Just like Wisconsin,” they say, “if any worker doesn’t like the working conditions, well, they can just pack their bags and head home.”  Nice. Could that not work in Canada? First, our own population needs financial security.

3. New Marketing Opportunities

We have this huge market just south of the 49th parallel that needs virtually every natural resource we possess in abundance. Most particularly, they need our oil⁵ , water⁶ and electricity⁷.  They have high unemployment⁸ and a quintillion dollar debt.  In short, for them, the future looks bleak.  Why not build our future on their misfortune just as the US-built theirs on the misfortunes of others.  How did that happen?

World War II provided the USA with a golden opportunity.  By staying out of the first few years of the war and extending massive credit to the U.K., that country became indebted to a level never before experienced.  The US finally entered the war to clean things up and save the free world, but not before they had England on its knees. Following the war, the U.K. and most other European countries were so far in debt they barely survived with the U.K. being the hardest hit. Between the Marshall Plan and other programs, the USA assumed the mantle as the world’s financial leader (and lender). Not long after, the financial power transitioned to New York from London.

Canada now has the same opportunity vis a vis the United States.

Diagram: Oil pipelines snake from Canada across the US. A similar network of water pipelines from North Central Canada will eventually stream to dry areas of the US.

For Canada, oil and gas pipelines flowing from Alberta and Saskatchewan to various locations in the US are a good start.  Enbridge, with head offices in Edmonton, has several plans ready to go.  Both the Republicans and Democrats recognize they need stable supplies from a “friendly” country, preferably one based on the principles of free enterprise, even if it has slightly socialist tendencies.  By keeping the oil and gas flowing to the US, we can make them totally dependent as their supplies diminish.  As their production falls, we can squeeze the market just as they squeezed others in the late ‘40s and ‘50s.

As for resource producers, we start charging reasonable taxes and royalties just as in the UAE.  A reasonable profit for the producers is fine but they must be made to remember who holds ownership of that vast pool of natural resources.  Voila! We then begin filling our Federal and Provincial coffers for the benefit of every Canadian, not just the benefit of big shareholders and the corporate few.

In BC, we need to work to complete the pipeline from Alberta to a northern coastal location in order to open up to tanker traffic along the coast and across the Pacific.  This will enable us to diversify our market prospects around the Pacific Rim.  By developing these markets we will have the opportunity to sell to the highest bidder and therefore keep prices at a maximum (a basic free-market tenet).

Photo: Gulf Islands, BC. The USA imports 12,000 metric tons of marihuana annually.  Of that, a large proportion comes from Grow Ops in British Columbia.

Greenpeace and other environmentalists might whine but, whatever, they are always looking for an issue on which to raise funds for their own purposes. Again, that is just free enterprise at its best. Besides, BC grows the best Bud outside South American and that is our key to controlling Greenpeace.  In exchange for environmental peace, we legalize marihuana.  Suddenly Greenpeace and other environmentalists, the loving, hippy souls they are, become supporters.  It also gives us more of that wonderful, problem-free product to export to the US.

Even if oil does not turn out to be the wedge that causes the United States to fail, we also have a couple of other aces up our sleeves.

Footnotes

⁵  Oil Reserves in Canada (180 X 10⁹) barrels.  Only Venezuela and Saudi Arabia have more.
UAE (98 X 10⁹); USA (21 X 10⁹):  China (16 X 10⁹)

⁶  Canada lucked out in the global water sweeps. We are near the top of water-rich nations, trailing only Brazil, Russia and China.  See CBC report at:  http://www.cbc.ca/news/background/water/

⁷  Canada trails only China in the production of Hydro Electric and our untapped resources are immense.

⁸  Unemployment of 12% reached in 2010 was the highest the US had experienced in the previous 60 years (I did not research prior to 1950)

4. Fresh Water and Hydro-Electric

For Nunavut, Manitoba, Ontario, and Quebec there is an unimaginable supply of freshwater. Water will soon be as valuable, perhaps more so, than oil and gas.  A few strategically placed pipelines to the US States that are rapidly running dry would be a godsend to those folks and a cash cow to those Provinces and Canada. By capturing fresh water¹⁰ from the Arctic Ice Cap as it melts, the supply will be continuous over the next two centuries.

Cartoon:  Can we protect our Arctic Sovereignty? Prince Harry thinks we have a solid claim.

Five or six dollars a barrel (of which at least half reverts to Federal and Provincial coffers) is not an unreasonable projection when you consider a bottle of Dasani (a US Coca-Cola product) currently fetches about two bucks and there are 158 one liter bottles in a barrel. As water export income is not likely to arrive online for one or two decades, the Provinces currently producing large quantities of oil, gas, and minerals for export will have to carry a greater share of the financial load (ref. distribution of wealth in the UAE).

Next, by expanding massive hydroelectric projects like the one the Conservatives have recently pledged to support in Newfoundland and Labrador, we can develop even more excess capacity for export to the US.  The BC Government is already lining up for a piece of that Federal cash give-a-way as our own Crown Corporation, BC Hydro, plans a number of massive new developments.

It seems likely the Conservatives will soon be passing out billions for similar projects across Canada – Manitoba, and Ontario is not that far down the line – majority governments, as we well know, do not come cheap.  Even Quebec, if they could just stop whining for a minute and promise to throw a few seats towards the Conservatives or Liberals, might qualify for even more of the largesse¹¹.

Photo: (Picture of a young Gilles Duceppe). As the leader of the Bloc Québécois, Gilles spends almost the entire time on the campaign trail and in Ottawa, whining about how unfairly Quebec is treated.  Even a significant number of citizens in that fine Province must be embarrassed by his antics.

Update: January 22, 2020.   Regarding the above photo.  It has now been replaced by one of Jason Kenny, the Alberta Premier, who has now taken the lead in whining about a lack of support from the rest of Canada.  It seems Newfoundland and Labrador took a page out of Alberta’s book on how to quickly spend all of that oil money windfall.  (Is Fiscal Conservatism Dead?)

Never-the-less, I think both the Conservatives and Liberals will come to understand that having sufficient money to fund their promises, will not be a problem if they play our resource cards right.  As for the NDP and Greens, they can be controlled in the same manner as the Environmentalists.  Elizabeth May is even running on a “Green” ticket in the Gulf Islands of BC, home to more Grow Ops per acre than any other place in Canada.  Is that not ironic?

With all the excess hydroelectric capacity we can generate over the next 20 years, we can pretty much corner the US power grid.  Once we have them dependent on our oil, water, and electricity, we will have them on the ropes just like California a few years back.  Come to think of it, California still owes BC several million from that last energy crisis when Enron went under?  You know there are great opportunities when the US Government keeps repeating the same mistakes over and over.  Privatize your energy, let the banks and investment houses control themselves, let them bleed you dry and then bail them out.

Oh, one last opportunity.

5. Global Warming

Further to oil, water, and electricity, we have a landmass very similar in size to the US and China and second only to Russia. Within this vast region, we hold a lion’s share of the world’s other natural resources – potash; diamonds; gold; copper; silver; zinc; coal; and uranium, to name but a few.  Throw in climate change over the next several decades and we will be strategically placed to open the Great White North to all kinds of new farming, mining and business opportunities.

The Northwest Passage will clear, new mines will open on the Arctic slopes and tropical weather will create massive opportunities for seaside resorts along Hudson’s Bay (reference the Post article).

This brings us the to subject of waterfront properties. As everyone knows, waterfront properties are far more valuable than landlocked properties. In the world today, Canada has more coastline than any other country in the world – 200,000 kilometers. That will hold a staggering number of waterfront lots and as global warming continues, that number will continue to grow. Beyond that waterfront, we also control more than 7,000,000 million square kilometers of territorial waters, again, far more than any other nation in the world.

Granted, as global warming continues, we will lose some landmass – it is reported Prince Edward Island, large portions of Nova Scotia and perhaps Vancouver Island might go under but with a new sub-tropical land opening in the north we can simply relocate the coastal populations to more suitable areas. Because of their declining economic position, many major US cities, for example, New York, may opt to relocate to Canada, as the opportunity for economic and political stability will be much greater.

Unfortunately, within Canada, Ontario will continue to be a “have-not” Province for many decades into the future. They were not blessed with an excess capacity of oil and gas as was the West.  When they failed to steal western oil through the National Energy Program¹², they decided to take the lion’s share of the manufacturing sector.  That worked well in the past, but it has left them vulnerable in recent years. What is going to hurt them in the near future is that most of their low-skilled manufacturing jobs will be exported to cheaper production locations, namely, India, China, the USA, and Mexico.  However, Ontario need not worry, for as we gain more of the high-skilled jobs and as our export income continues to grow exponentially, a guaranteed national income supplement will make employment for Canadians optional.

6. Employment

As Canadians transition out of the workforce and onto “Leisure Street” how do we maintain services in our country?  Again the United States comes to our rescue.  As their unemployment rates reach 15-20%, including thousands of highly skilled professionals, we will have a ready supply of migrant workers¹³ just as Mexico provides low-wage service workers to the US today.

These migrants will be welcome to enter Canada and work for minimum wage – but do not let them think it will be a free ride to our extensive social services network. We might wish to introduce a legislation package similar to Arizona. Also, we will certainly have to better secure our borders against illegal aliens trying to slip into Canada. Federally, I think we are already making progress in that area.

Finally, when we have our guaranteed national income in place, we need only to find something meaningful to fill the days. No doubt the arts will benefit as more Canadians begin to explore their creative talents while still others will choose work to provide extra disposable income. But, as an added attraction, would this not be an opportune time to introduce our own Royal Family?

Footnotes

¹⁰  Siphoning Arctic meltwater will also help to slow the rise in sea levels by moving fresh water to parched landscapes.

¹¹  It borders on the incredulous to watch Quebecers continue to elect the Bloc, a separatist party, and then expect all things will be “goodness and light” in Ottawa.  Even children soon learn that playing nicely in the sandbox will earn more rewards than kicking sand in everyone’s face.

¹²  While the National Energy Program of the 1980s was not well received out West (it was slanted toward Ontario) the concept that all resources in Canada belong to all Canadians is something that needs to be accepted in order to bring our country together in common purpose. Whereas the West and East have more oil and gas today, the Central Provinces have more water. Water will become more valuable than oil in the future.

¹³  The UAE requires two migrant workers for every citizen.  Assuming we will need the same proportion we could expect an influx of seventy million migrant workers from the US, both unskilled and professional.  That will most certainly help to reduce unemployment in the US and will create thousands of new business opportunities in Canada.

7. A Canadian Royal Family

As Ontarians have always held a strong sense of entitlement and privilege within the Dominion, the rest of us could play to that strength by forming and keeping a Royal Family in the Ottawa area.  Because of our previous close ties to England (since France lost that kerfuffle on the Plains of Abraham in the late 1700s) we would likely establish royal roots to England. The Ontarians, who can be easily entertained, would be pleased as punch.

Photo:  Prince Harry relaxes while on a break from training at the Military Base at Suffield, Alberta. Harry, like every other young man, cut a pretty wide swath while partying around Province. I believe most Canadians will strongly support Prince Harry becoming our first King.

In order to keep it “home-grown,” we could start poking around the birth records in hospitals around the Western military bases where Prince Harry completed his training a few years back – you remember the press clippings.  It would be preferable to have a link to the Royal Family in the west as that would serve as a balance against Ontarians trying to occupy the entire centre of the Universe, as has been the case since Confederation.  As far as linking to Prince Harry, he is still single and seems to have a great love for our country and its people, as demonstrated during his military training and by his current trek to the North Pole in order to help us assert our sovereignty.

By building a couple of castles along the Rideau Canal, Ontario would once again find themselves at the centre of the National and International spotlight as Royal weddings, births, changing of the guard and the occasional scandal filled the headlines.  Also, it wouldn’t hurt to build a summer palace out west, perhaps Banff. Imagine a fairy tale mountain palace on the far side of Lake Louise?

Let’s not forget Le Belle Province.  Our move to a British style Royalty is likely to chafe against those still bent on fighting battles lost so many eons ago but that will change. Initially, Quebec might wish to take a shot at being an independent nation, but bets are that after a few years in the cold with no oil and the expiration of their sweet deal hydroelectric contract in Newfoundland and Labrador, they will come knocking with beret in hand.  The benefits they will receive in the new order Dominion will even outdo those so lavishly bestowed upon them today.

8. PAX Canadiana – Our New Reality

A United Canada, Eh?  It is certainly possible.  With a little forward-thinking, we can do even better than the UAE and all other OPEC countries – our resource base is much stronger and we are strategically placed to take advantage of global warming.

In order to maximize our interests, we need only continue to encourage carbon-producing companies and get moving with other global warming programs. This will be easy as we have had a lot of practice and most of our big companies including all of our oil and gas companies are already on side. Both the Liberals and Conservatives have made great strides in that direction by “foot-dragging” on carbon reduction protocols over the past decade and the Conservatives, Le Sauvage est Monté l’Alliance¹⁴ and other political parties in Alberta are already on board. What Alberta and indeed most Provinces have not done well is to extract a fair return on publicly owned oil, gas and other natural resources¹⁵. That will change.

Map: The future of Canada will be secured as more US states decide to join the Dominion in order to gain financial and resource security.  

This is all just a starting point in our bid for financial control of North America. Who knows, if we play our cards right PAX Canadiana may one day become a reality. Granted we do not yet have the military capacity to wage war but, with an unlimited supply of money generated by US dependence on our resources, we could rent their military to fight our global battles. A trillion-dollar expense off their plate and a world-class military machine on ours is a win-win result, is it not? Even the US Congress Republicans, demanding a measly $500 million cut before they will pass the 2011 Budget, would eagerly support that kind of major expenditure cut.

The initial danger to Canada will come from a Republican-controlled government that may choose to drop all pretenses of democratic principles and invade Canada.  There are several factors that could mitigate that danger: First, several US States that have socialist leanings may decide to join Canada; second, with Canada’s high standing in the world, mutual defense packs could be signed with other superpowers and most of the G20 nations and, finally; the US States that wish to remain independent will recognize they are much better sticking with Canada even if it means taking a subservient role such as we have had to take in our relationship with them since 1867. These factors will serve to tip the balance of power in favour of Canada.

For Canada, even the acronym UCA works well and we won’t need an OPEC equivalent to manage our resources on the world stage.  Let’s all work to make sure our politicians begin to see these future opportunities and, more importantly, push them to act rather than promise, promise, and promise.

Footnotes

¹⁴  Also known as the Wild Rose, the party adopted the French name out of respect for the large French Canadian population in Alberta. The party was formed in response to the ‘leftist’ leanings of the Alberta Conservatives. It is rumoured Stockwell Day, originally from Alberta and former leader of the Canadian Alliance recently jumped from Federal Conservatives after Stephen Harper unceremoniously dumped the ‘Social Conservative’ wing. It is also rumoured Stockwell is likely to return to Red Deer to take up the torch for Le Sauvage est Monté l’Alliance where he can again feel comfortable putting his social agenda on the table.

¹⁵  It is inconceivable that Alberta and British Columbia should be going billions in debt. Both have a supply of natural resources beyond the wildest dreams of almost every nation on earth and yet, under the free enterprise system, have not been able to save one thin dime, cannot support their healthcare system, pension funding is strained and poverty and homelessness is an ever increasing problem.

By way of comparison, the UAE started with nothing more than a small patch of sand and a large amount of oil.    “Overall, UAE citizens can depend on a cradle-to-grave welfare state that has few peers in the world.” How can that be possible? To read more about the UAE go to, http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/United-Arab-Emirates-POVERTY-AND-WEALTH.html#ixzz1IrA8pcLd

A few more comparisons: Size (in thousands): Canada, 3,512 mi²; BC, 944 mi²; AB, 661 mi²; UAE, 30 mi².    Population (in millions): Canada, 34.5; BC, 4.5; AB, 3.7; UAE, 3.5.
Harold McNeill
Victoria, BC
April 5, 2011
Email: Harold@mcneillifestories.com
Facebook:  Become a Facebook Friend of McNeill Life Stories and get updates as they are posted. Today Canada, tomorrow the World, Eh!

  Photo and Cartoon Comments

I have always enjoyed Raeside Cartoons as they hit right to the core of so many issues that would take paragraphs to explain. This picture clearly sums up Canada’s relationship with the US since 1867.  It also sum’s up why the USA has such a difficult time on the world scene.  They have used their economic and military strength to push other countries to do their bidding beyond what was needed to help. In the schoolyard, they would be known as bullies.  Their time, however, is limited as other countries around the world surpass them.  While we can still be friends they will have to learn to play nicely in the sandbox.

The Political Parties at a Glance (from Right to Left)

This image of the Conservatives is one the Liberals also wear. Whereas the Liberals are tied a perception of elitism, the Conservatives maintain a populist approach. On the whole, each party accuses the other of sin’s they both commit.  The challenge for the Conservatives was partially solved by moving closer to the centre but this was done at the expense of their more extreme factions, Social Conservatives. The greatest fear among the public is that, given a majority, the Conservatives will again move forward on many issues not supported by a majority of the country.

Again, the cartoon aptly presents a public image of the Liberals.  As with Conservatives, the Liberals have modified their party position in a manner that places them closer to the middle.  In the process, they have lost votes to both the NDP and Greens.  The effect – the vote is being split three ways on the left.  In the current election, if you totalled the vote percentages of the Liberals, NDP and Greens (all left), then added half the Bloc vote percentage to each of the two main parties, 56% of the voting population would lean to the left and 44% to right.

The New Democrats serves an important role.  It forces onto the agenda issues that would not normally be considered by the Liberals or Conservatives.  If Canada is to make progress in a minority government situation, it will be the NDP who provides the impetus.  If the Liberals and the NDP eventually come together as did Reform and Conservatives, we will again move back to majority governments.  Will that be better?  Perhaps, but not if one remembers that most of the major advances in Canadian social programs (e.g. Universal Health Care) were made in minority government situations where reasonable compromise carried the day.

The Greens still draw a million voters toward their party and although they have never elected a member to house, they do provide a place for those who firmly believe in that particular cause.  The other parties will dress in green but the amount of attention they give to environmental issues could all be discussed by holding one session on St. Patricks Day.

The Bloc exists for one reason – it is the only safe way for Quebecors to vote for a Separatist Party. Quebecers once ventured close to the 50% line and nearly became an Independent Nation, something very few in the Province wanted. They now prefer to “talk the talk” but do not want to “walk the walk”. A threat at arm’s length using the Bloc is much safer. The only real strength of the Bloc is having an articulate leader.

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