Poverty cycle must be broken

Former prime minister Paul Martin knew a thing or two about innovation.

 

“Today, the strength of a nation is measured not by the weapons it wields, but by the patents it produces; not by the territory it controls, but by the ideas it advances; not only by the wealth of its resources, but by the resourcefulness of its people,” he said in a 2000 budget speech.

 

“In such a world, successful nations will only be those that foster a culture of innovation.”

 

Canada’s culture of innovation rests with its young people and children. During the 1970s, two in five Canadian children lived in poverty. Today one in five survive on welfare. More than one-third come from single-parent families and most live with their mothers.

 

The cycle of poverty is brutal and hard to shatter. It starts when families have little income and cannot afford nutritional food and safe water. This leads to hunger, inferior sanitation, disease and premature death. The local economy slows and welfare becomes a way of life.

 

Poor children are prone to health problems. Many run afoul of the educational system and quit school.

 

Others get caught in petty crime, drugs and alcohol. Poor children lack the opportunity to use their talents and creativity because their future is curtailed by the poverty of their parents and grandparents.

 

These kids are Canada’s future workforce. We cannot afford to waste the potential of a fifth of our citizens.

 

Interestingly, the Aboriginal population represents the largest and youngest untapped labour force in the country. Unfortunately, many remain trapped in a cycle of poverty and rising levels of unemployment.

 

Almost 27,000 Aboriginals call Calgary home. Statistics Canada reports about one-third are infants and school-aged children (7,060) and the rest are 15 and older. Of these, 6,005 earned post-secondary credentials (2,175 received apprenticeship or trades tickets, 3,680 obtained college diplomas or certificates and 150 attained university degrees).

 

According to a 2006 government survey, “First Nations children, aged six to 14 who lived in urban centres, were as likely as all children in Canada to do well in school.” The study noted most parents were pleased with the discipline, quality of teaching and types of extracurricular activities their kids accessed.

 

There is a clear need for a holistic partnership approach to improve Aboriginal participation in the labour market that involves government, business, Aboriginal communities and service providers.

 

The Calgary Chamber of Commerce has pondered what choices Canada has to make today to ensure this partnership successfully encourages skilled and productive workers. Here are a few suggestions:

• Strengthen network links on and off reserve to better connect clients to urban services and employers.
• Develop and present Aboriginal awareness programming to small and medium-sized businesses and ensure these firms are recognized for best practices.
• Support industry and service providers to effectively deliver workplace preparation, education and safety programs for prospective Aboriginal employees.
• Use innovative K-to-12 course material to ensure Internet literacy and creativity.
• Prioritize high school upgrading and literacy.
• Align business opportunities with the interests of aboriginal communities by understanding the communities’ needs and partnering for beneficial economic development.

 

This country will enjoy greater prosperity when the cycle of poverty is broken.

 

When our highly educated and skilled workforce uses everyone’s talents and creativity, Canada will be known as an innovative nation.

The public purse isn’t bottomless

She was born Margaret Roberts in 1925 and believed in hard work, achievement and that you paid for everything you bought.

If you didn’t have the money, you didn’t purchase it.

Later, as British Prime Minister Margaret Thatcher, she thought government was taking too much. “We should not expect the state to appear in the guise of an extravagant good fairy at every christening, a loquacious companion at every stage in life’s journey and the unknown mourner at every funeral.”

She aspired to replace the nanny state’s cradle-to-grave coddling with a more bracing risk-and-reward enterprise culture. “Our workers cannot create wealth. We need the wealth-creating, job-creating entrepreneur and the wealth-creating, job-creating manager,” she told a business crowd during her election campaign.

The Calgary Chamber of Commerce echoes Thatcher. Some of our members feel they are over-governed, over-taxed, over-borrowed and over-managed. Despite this, most thrive on the bracing risk-and-reward enterprise and can-do culture that earned Calgary its global reputation.

Most Calgary firms –from mom-and-pop shops to global corporations — forfeit an average 26.3% of their revenue to the tax collector. They remit 30 to 49 different taxes yearly, covering about 200 levy obligations.

Some must be sent annually, others are calculated monthly or quarterly. And that’s before they pay their business and property taxes to city hall. Or compensate their wealth-creating staff, suppliers and shareholders.

Last January, the members of the Calgary Chamber of Commerce identified fiscal management and accountability of city council as a top priority.

While few like to pay taxes, each understands the monies pay for valuable services and infrastructure. However, they neither need their money wasted on nanny state coddling nor their tax burden increased.

A well-managed, integrated and co-ordinated municipal decision-making process ensures the city is able to set clear priorities in a timely, effective manner.

In its pre-budget submission to city hall, the Chamber made these recommendations.

• Encourage the provincial government to establish an Office of Municipal Auditor General to undertake comprehensive auditing of municipal expenditures (verify compliance and value for money).
• Change the three-year binding budget to a three-year rolling budget introduced annually, so council can better respond to unanticipated events, like economic booms and busts and give opportunities for yearly robust public debate and discussion.
• Develop, implement and widely communicate a comprehensive expenditure management process to assess if existing programs achieve their intended results, are managed effectively and continue to be aligned with council’s priorities.
• Limit annual spending hikes to population growth plus inflation or real GDP growth plus inflation. For 2010 the maximum increase should be 5.5% or lower.
• Increase efficiencies in how the city delivers its services (such as move to E-Government).
• Mandating budget training for council members.
• Make greater transparency and citizen engagement a priority and encourage more public input in the municipal decision-making process.

Thatcher was successful in transforming Britain because she was part politician, part intellectual and part entrepreneur of ideas. She had the enthusiast’s belief that practical, resourceful yet invigorating ideas could solve political challenges.

As Thatcher was wont to say: “Government officials sometimes believe they have recourse to a bottomless public purse.”

Companies and citizens beg to differ.

We’re on right Plan It

For the past millenia, city planners have reverentially whispered about a mysterious solid gold amulet rumoured to transform poverty-stricken neighbourhoods into the handsomest of districts.

It was not until 1907 or 1908 that a senior official with the Austrian Chamber of Commerce finally exposed this magic talisman as an urban myth.

According to the Chamber’s Ludwig von Mises, neither central planners nor civic officials were able to calculate “how many shoes and cars, schoolbooks and office buildings, doctors and carpenters, people will need and then to produce that number at the right time and put them in the right places.”

The Austrian Chamber rejected the notion of establishing rigid setback regulations for sidewalks and supported the rights of individual property owners to adapt their houses to the changing needs of their families. There was no such thing as a perfect piece of zoning legislation or ideal method to conjure up semi-wooded, multi-family residential neighbourhoods.

“All these economic activities the central planners purported to organize,” stated von Mises emphatically, “involved making choices about where to put scarce manpower, natural resources, capital, and other elements of production to satisfy human needs.”

Aware of the lack of enchanted amulets in our post-modern civilization, Calgary’s city planners recently drafted a 60-year blueprint, called Plan It Calgary, highlighting their vision for how and where the city will grow. It includes new transit lines and stations, high-rise apartments and office towers, commons and playgrounds, all graced by public art.

With due respect to the Austrian Chamber, the Calgary Chamber of Commerce has applauded the initiative and key tenets of the central planners’ drawings and strategy. We support its ideas addressing traffic congestion, commuting times, housing affordability, environmental challenges and the high cost of living.

The Chamber also recommends that Plan It adopt the following principles:

• Institute lifecycle cost measurement to determine the true cost of growth associated with various types of development — infrastructure and maintenance costs per unit or single-family houses versus multi-family.
• Improve transit infrastructure and service levels outside the downtown core to facilitate movement of people and goods to business hubs in other communities.
• Publish objective criteria to identify communities intended for intensification and develop a process to support these communities to prepare for and respond to growth.
• Apply Plan It Calgary growth principles consistently in all communities to ensure elected officials, developers and residents adhere to the same high standards and principles in developing our city.
• Ensure there continues to be a 30-year supply of all-purpose developable land within the city to encourage housing affordability.
• Work with industry to implement the plan with sufficient transition time to allow landowners, developers and communities to adapt.
• Co-ordinate Plan It with the Calgary Regional Partnership’s metropolitan plan to avoid fringe development and corresponding issues of free-ridership.

The Calgary Chamber of Commerce is committed to helping Calgary transform itself into a renaissance city of the 21st century. We rely on smart planners, not gold amulets, to build communities to attract the best and brightest.

Chamber led fight for reform

Hercules is revered as Greece’s greatest mythological hero.

His story is a classic tale of redemption. One day, suffering from a fit of insanity, Hercules committed murder most foul. As punishment, he agreed to perform 12 exploits so tough they were deemed impossible.

Among other things, he fought a man-eating lion, killed a nine-headed hydra, hunted sacred animals, found golden apples and finally went to the depths of Hades, unearthed the horrible watchdog Cerberus and brought him to the Eurystheus, the Mycenaean king.

Hercules turned struggle and suffering into a virtue, made the world a better place and became the quintessential icon of pathos.

While the Calgary Chamber of Commerce claims to be no one’s mythological hero, we toil daily to make this city a better place for business. Occasionally, we turn our struggle into victory. Our latest success was a particularly gratifying one to celebrate.

In 2007, the Chamber launched a concerted advocacy effort to impose serious campaign finance reform on those running for municipal office in this city. At the time, there were neither guidelines on fundraising, nor requirements for what to do with campaign surpluses.

It was suspected the most generous donors were from the construction, development and real estate sectors. No one knew for sure.

Sadly, almost 90% of the Chamber’s membership believed city hall’s transparency and accountability had deteriorated since the 2004 vote. They also suspected Calgary’s campaign finance rules were among the most lax in Canada.

As part of its advocacy efforts, the Chamber made some astute recommendations to the province in the hope it would bring openness, transparency and equal access to city hall:

• Align municipal campaign financing rules with the federal and provincial governments by imposing a ban on contributions by corporations, unions, and all special interest groups.
• Limit contributions to $1,000/donor/candidate.
• Establish an electronic filing system enabling candidates to electronically track and file campaign donations and thus make it easier for the public to know who contributed to which campaign and how much.
• Establish a candidate conflict of interest registry with published lists of family members’ interests in corporations or organizations, land holdings and contracts.
• Require surplus campaign funds be donated to the city or a registered charity after each election.
• Make donations from individuals to municipal political campaigns tax deductible.

Last week, the Alberta government saw fit to close the loopholes on donations and elections spending. Bill 203 limits individuals from giving more than $5,000 to any candidate and requires nominees to publicly disclose all donors who gave $100 or more. It also requires surplus election campaign funds to be held in trust by the respective municipalities, then donated to charity if the candidate decides not to run in the next election.

The Chamber’s victory celebration has been tempered with the knowledge there are still more virtuous recommendations to implement to end Calgary’s Wild West finance rules.

Just as King Eurystheus gave Hercules a dozen impossible tasks to complete, members of the Chamber expect our advocacy efforts to change federal, provincial and municipal policies. We have fought our share of policy lions, hunted the odd sacred cow or two and harvested a small vineyard of golden apples.

Chamber membership does have its advantages. It makes Calgary the best city for business success.

New approach to energy game

It started with the brown-eyed sheiks’ anger at the U.S. The blue-eyed sheiks retaliated and the battle for energy super-power status was on.

In 1959, America, led by then-president Dwight Eisenhower, imposed a quota on imports of oil and refined products from the Mideast and gave preferential treatment to Canadian and Mexican crudes.

Four Persian Gulf countries — Iran, Iraq, Kuwait and Saudi Arabia — and Venezuela sought revenge by forming the OPEC (Organization of Petroleum Exporting Countries). By 1973, eight other countries — Algeria, Ecuador, Gabon, Indonesia, Libya, Nigeria, Qatar and the United Arab Emirates — had joined.

Since then, the cartel has tried to set the global oil price by either restricting production to keep prices high or flooding the market to prevent non-OPEC countries from bringing expensive crude on-stream. Saudi Arabia is the acknowledged global energy superpower. It has the world’s largest conventional oil reserves and pumps about 9.5- million barrels a day.

In defence, a shadow cartel of mostly blue-eyed sheiks emerged. These countries — Canada, Russia, the U.K., Norway, Mexico, Kazakhstan and now China — produce about 60% of the world’s crude. While Canada and Russia are recognized as the leaders, only Russia has attained superpower status as the world’s largest natural gas producer/ exporter and second biggest oil producer.

Canada ranks first in uranium, third in natural gas, fifth in oil, seventh in electricity and 13th in coal. The oilsands reserves are the second largest in the world.

Despite Prime Minister Stephen Harper’s claim Canada is an energy superpower, this country has failed to elbow its way onto the international public policy stage. It neither commands market share and market power to set world price nor sets or unilaterally changes the rules of the international energy game.

Undaunted, the Canadian energy industry has decided to explore the green-eyed route into super-power territory. These entrepreneurs are dedicated to producing energy that is reliable, affordable and secure while addressing the world’s concerns about CO2.

According to a recent paper National Energy Security from an Exporter’s Perspective , there is a growing gap between public expectations (the not-in-my-back-yard syndrome) and energy realities.

“Canada’s ability to develop and deploy its resources faces a potentially fatal erosion of community support and without this support Canada will fast become a fading superpower long before it ever emerges as one,” the paper states.

“If Canada wants to become a clean energy superpower, it needs to tackle the massive gap between expectations of Kyoto-like emission reductions and the role of Canada as an energy producer and consumer.”

Canada has taken great strides and leads North America in reducing carbon emissions. Alberta was the first jurisdiction to monitor greenhouse gases, first to pass legislation to manage large industrial emitters, and first to see real results. It has the potential to become a world leader in low carbon equipment and expertise.

The Calgary Chamber of Commerce recognizes it is a formidable challenge to move from carbon intensive to carbon smart, yet it offers entrepreneurs a tremendous business opportunity to create the Silicon Valley of energy innovation.

Meanwhile, the United Arab Emirates is building the world’s first carbon-free city, Masdar, which will be powered by renewable energy and surrounded by wind and photovoltaic farms.

In 2009, will U.S. President Barack Obama’s war on carbon mean the green-eyed sheiks actually come up the middle and win the energy battle?

The title of energy superpower is at stake.

Preparing Small Business

The Calgary Chamber of Commerce, with support from GlaxoSmithKline and Global Consulting, released A Pandemic Planning Toolkit for Business in late 2008. This week we are faced with a growing international pandemic threat. 

Today we are re-posting this toolkit, to ensure access for our members, and other interested organizations across the country, to this easy-to-use guide for developing an internal pandemic influenza response strategy.

http://www.calgarychamber.com/resources/docs/PGA/Policy%26Communications/2008/Publications/Calgary%20Chamber%20Pandemic%20Planning%20Toolkit%20for%20Businesses%20Final.doc

Some debt is ’smart’

The life of an indentured servant was unenviable.

 

Anxious to make a new life for themselves, poor labourers from England, Scotland and Ireland made contracts with wealthy ship owners in London to bring them to Canada. Many died of scurvy or starvation while crossing the perilous North Atlantic.

 

Those who survived agreed to repay their transportation, food and lodging costs by contracting their services to organizations like the Hudson’s Bay Company.

 

Hundreds were sent to work underground in various coals mines around Nanaimo, B.C. Their hours were long and hard. Living conditions were harsh.

 

It took three to seven years to settle the miners’ debts. Once paid-in-full, they were given new suits of clothing, tools or money and released from their contracts.

 

Just as the 19th-century indentured servants longed to be debt-free, so did Albertans in the mid-1990s. Debt was onerous and the province, under former premier Ralph Klein, made a giant effort to rid itself of its liabilities.

 

Albertans celebrated the day the debt was paid off and revenues were no longer needed to cover service charges.

 

The provincial purse strings opened to fund a backlog of infrastructure projects. Then the labour shortage hit and the cost of cement soared. Things changed again with the global economic meltdown and plunge in the price of oil.

 

Recently, the Alberta government announced it would spend $23.3 billion to fund its 2009 to 2012 capital project spending. It has $20 billion saved and has decided to borrow $3.3 billion to cover the shortfall.

 

Today, Albertans are again faced with a question of debt. Would we prefer financial debt or infrastructure debt?

 

For 15 years, the province chose infrastructure debt and all we got were crumbling roads, broken sewers, leaky schools, potholes and poor public transit. We were left with an infrastructure debt of $7 billion.

 

This time, the government has decided to try strategic financial debt, which economists have shrewdly called smart debt.

 

The Calgary Chamber of Commerce can support this type of debt-financing as long as it is used for critical, select capital projects that do not incur major ongoing operating expenses.

 

These include water pipelines, sewers and highways. Each asset must be built to last many decades, with the debt amortized over the useful life of the asset. The projects will be better managed, not based on arbitrary timelines or lowest cost financing mechanisms.

 

Smart debt programs require sustainable levels of borrowing or some notion of an optimal debt load versus future revenues and anticipated growth since no one wants unsustainable, out-of-control borrowing.

 

A total debt-servicing cost cap of 0.5% of total provincial revenues would give Alberta an extra $10 billion in financing (assuming an interest rate of 2%). That’s $3 billion over our current $7-billion infrastructure deficit but should not affect the province’s AAA credit rating.

 

The Chamber insists, however, that the province draft a comprehensive repayment plan before it borrows any money. We also want the government to pledge to buy down the debt as soon as it has the luxury of surplus revenues.

The downturn has freed many tradespeople from their commitments to now cancelled or delayed projects. Let’s employ them building competitiveness-supporting infrastructure while cement prices are low and the cost of money is cheap.

 

The Hudson’s Bay Company gave its previously indentured servants clothing, money or tools to celebrate their freedom.

 

Once our smart debt is paid in full, we can decide how best to position Alberta as the envy of the world.

Buy Canadian?

Hi Chamber Bloggers!

Today the Canadian Chamber of Commerce sent out this letter, discussing the pros and cons of “buy Canadian” (or American, or local) policies. 

I have attached below the letter, for your review and feedback.

 

To: The Canadian Chamber of Commerce Network

 

Dear Colleagues:

 

With the serious toll the recession continues to take on our economy and particularly given the reports that many American states and municipalities are denying Canadian companies a chance to bid on infrastructure projects, it’s not surprising to increasingly hear of calls for our provinces, territories and municipalities to discriminate against foreign suppliers. In particular, the Canadian Auto Workers Union is mounting a concerted campaign to have local councils adopt “Buy Canadian” policies that would limit the ability of foreign suppliers to compete for contracts.

 

Many chambers of commerce across the country have long encouraged both organizations and individuals to purchase locally-made products whenever it made sense to do so. After all, the companies that produce those products pay taxes locally and create jobs for local people. The quality of the goods and services produced in Canada is recognized throughout the world, so making sure that local suppliers are fairly considered and chosen when their price and quality are competitive is only logical.

 

The problem comes when we go beyond promoting these products and services to writing laws that discriminate against suppliers from other provinces, territories or countries.

 

When applied between regions, these policies balkanize Canada. An example was the costly and destructive “construction war” between Ontario and Quebec, but there are plenty of other examples that prevent out-of-province/territory companies from operating in other jurisdictions or make it hard for individuals to offer their services in other regions. For some time now, resolutions passed at the Canadian Chamber’s Annual General Meeting have supported eliminating those internal barriers to trade and mobility.

 

The CAW’s call to discriminate against foreign suppliers is in many ways a tougher challenge because it is much easier to argue for excluding companies from other countries, particularly when Canadian firms often have to deal with discrimination like U.S. “Buy American” laws.

 

Each chamber has to decide for itself how it wants to approach this issue. However, here are some factors you may want to consider:

 

1. When Canada objected to the “Buy American” provisions in the U.S. stimulus package, Congress amended the legislation to say that the United States would respect its trade obligations under international law. That amendment meant that Canadian companies would not be shut out of contracts at the federal level. However, Canadian companies can only get the protection offered under the law at the state and municipal level if we do not discriminate against U.S. companies operating here. We need to decide whether we’re prepared to “walk the walk” and not just “talk the talk.”
2. Canada is one of the most trade-dependent countries in the G8. Canadian companies need access to global markets to compete, grow, and create jobs – in communities across the country. Blocking foreign companies from bidding on Canadian procurement projects will result in other countries retaliating against Canada, in exactly the same way as many Canadians now argue that we should retaliate against American businesses.
3. Canada and the European Union are about to launch free trade negotiations, which are forecast to generate $40 billion in annual trade and investment gains. Shutting foreign companies out of our procurement market will jeopardize these negotiations, as well as undermine potential economic partnerships with other major economies like China, India, and Japan.
4.  Buy Local’ policies are designed to discriminate against companies that would otherwise win competitions because either their products or their prices are better – there is no need to shut out companies that cannot compete. The net effect is that taxpayers get less for their money.
5. According to the OECD, protectionist policies such as ‘Buy Local’ don’t pay. A recent OECD report stated that “retaliation will spread these risks like a virus and, as a result, governments wishing to protect the weakest firms will end up punishing the strongest”. Keeping markets open benefits the entire economy with a 10 percent increase in trade associated with a 4 percent rise in per capita income.
6. The Canadian Chamber network has looked into ‘Buy Local’ policies before. In fact, at two recent AGMs, local chambers voted against ‘Buy Local’ policies for Canada because of the importance of trade and global market access to our country.

There is no question that we are in difficult economic times and the status of jobs within our own towns and cities is uncertain. The reaction to “protect our own” is only natural, but it can also be self-defeating in the long run. Canadian companies in all communities – large and small – rely on both domestic and global markets to create and grow jobs for Canadians. By seeking to shut our markets, we put at risk the very businesses and jobs in our communities that depend upon global access. Our country’s future prosperity will depend on staying open to the world and keeping the world open to us.

 

Sincerely,

Perrin Beatty

What are your thoughts, as members of the Calgary business community on a Buy Local policy?

We can’t afford to waste talent

Just a few short months ago, there was much hand-wringing.

 

Alberta Employment and Immigration was predicting the province needed more than 93,000 hard-working adults to keep the province’s economy booming through the next decade. Calgary employers consistently rated the labour shortage as their top priority and much ado was made about the need for more bodies to get the work done.

 

Then the global recession hit.

 

Companies quietly started handing out pink slips. Suddenly, the few employers hiring were inundated by a plethora of resumes, many from outstanding applicants with graduate degrees and excellent employment credentials.

 

Consternation descended among all who had not previously ridden the notorious boom-and-bust cycles of international commerce.

 

With great certainty we can predict the hand-wringing will resume. The economy will pick up, boomers will retire and companies will search for new workers.

 

Only this time, we promise, it will be different.

 

The business community, having wisely learned its lessons, will spend the downturn shrewdly searching for emerging talent, then hire and train these gifted folks. But where will they come from? It turns out the largest and youngest untapped labour force in Alberta is the Aboriginal community.

 

Today, the Talent Pool Development Society and the Calgary Chamber of Commerce jointly released their first Aboriginal labour market report entitled, Completing the Circle: Realities, Challenges and Strategies for Improving Aboriginal Labour Market Outcomes.

 

There is a strong business case for employing Aboriginal people. Their employment rates are lower than the population at large and this translates into a pool of 14,000 new staff members already rooted in the province, who can provide firms with a stable and skilled workforce.

 

Businesses can achieve diversity in the workforce by accessing the growing Aboriginal market for products and services and gain internal competitive knowledge on how to advertise and sell to this segment.

 

Engaging Aboriginal people in the workplace helps companies develop a capacity and reputation for corporate social responsibility. Aboriginal employment programs help gain regulator and public support for projects, alleviating avoidable delays and cost escalations.

 

Canadians want to reduce support service costs to the Aboriginal population and improve their employment outcomes. This increases income tax revenues, decreases excess government spending on remedial health and social support programs and lowers Canada’s personal and corporate tax burden.

 

The Talent Pool and the Chamber’s report recommend a pathway forward:

• Align the priorities, values and interests of business, the provincial government and the Aboriginal communities to understand the objectives of each group.
• Co-ordinate services and ensure a single access point within the Calgary region to link prospective Aboriginal job-seekers with employers.
• Introduce accessible cross-cultural awareness training to small and medium-sized companies while developing pre-employment training for Aboriginal people to better connect each to the other.
• Use e:learning, high school upgrading, literacy and skills training programs to improve Aboriginal education levels to meet their needs as employees and the goals of entrepreneurs and the business community.

 

While we all hope this recession is short-lived, the smart and prudent businesses will strategically plan how to weather the storm and position their companies for success. Few can argue with the plan to develop a strong and talented workforce, Aboriginal people included, to make Calgary the economic engine of Canada.

Thank you!

I would like to thank the members of the Calgary Chamber of Commerce for your cards, flowers and prayers during my recent recovery from spinal surgery. Stay tuned to the blog as we continue to Lead and Serve the Calgary Business Community.