Tuesday, January 28, 2014

Falling loonie means just more milking of Canadian consumers: Neil Macdonald (senior Washington correspondent for CBC News)

[I just took $100 U.S. out of an ATM in Florida. Care to guess what it cost me, CAD$? Would you believe $117.00. Meanwhile we have some dork in federal Trade and Commerce saying an 89-cent loonie is good for business. Well it might be for manufacturing corporations (like General Motors, which is subsidized to the tune of hundreds of millions of taxpayer dollars) but the other side of the coin is that the consumer will be paying the higher cost of imports anyway. GAB]
Having lived for so long in the savagely competitive American marketplace, I'm always amazed when I return to Canada at how some of my more bovine fellow citizens are willing to rationalize being milked.
Whenever the discussion drifts to how just about everything in Canada costs more than it does across the nearby American border, some trusting soul pipes up with something like: "Well, that's just the price we pay for our health-care system."
Or: "If that's what it costs to have a more caring society, then I'm willing to pay it."
Even a few years ago, when the loonie was powerful and rising, you'd hear nonsense like that.
For some reason, Canadians tend to conflate the higher taxes we pay, which do go toward financing social programs like health care, and the higher prices we pay, which simply go into some greedy company's bank account.
If you had the gall, as I did after the loonie shot well past the U.S. dollar in 2007, to call one of those companies — say, a clothing retailer, or a big car company like Honda — and ask why Canadian prices were so slow to drop, you'd run into a trained shill who'd rattle off practiced talking points.
Such as: "We still have a lot of inventory in the system that we paid for when the Canadian dollar was weaker."
Or: "We discounted for many years when the Canadian dollar was weaker, so it's only fair that we'd want to recoup some of those losses now."
Well, now that the loonie is down and dropping fast, this "price stickiness" is vanishing. Suddenly, the market is a picture of flow-through efficiency.
Canada's travel industry is now deploying the wonderfully self-referential euphemism "currency surcharge" to cover itself from the falling dollar.
Air Canada, always brilliant at using its market position to maximize profits, is tacking the "surcharge" onto its vacation packages for those trying to escape winter. Other tour operators are doing the same.
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Saturday, January 18, 2014

Norway cut a proper deal with oil corporations. Canadians got screwed.

If Every Norwegian's a Millionaire, Why's Alberta in Hock?

By Mitchell Anderson, 15 Jan 2014, TheTyee.ca
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Feeling poor? A recent news itemshowed that Norway's massive pot of petroleum money, now totaling CA$909.364 billion, has made every citizen a millionaire in Norwegian kroner. That works out to about $178,000 for every man, woman and child in the country. By contrast, every Canadian lumbers under an individual debt of $17,000 as Ottawa is in hock to the tune of $600 billion.

Not only is Norway ahead of Canada by $1.5 trillion, it has fully funded social programs that Canadians can only dream of.* Norwegians enjoy universal day care, free university tuition, per capita spending on health care 30 per cent higher than Canada and 25 days of paid vacation every year. By owning 70 per cent of their own oil production and taxing oil revenues at close to 80 per cent, Norway is now saving about $1 billion per week.