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The strong Canadian dollar is crimping recovery. The government gets embroiled in a classified document controversy. Harper decries American protectionism, and proposes to let victims sue terrorism sponsors. PetroCanada shareholders green-light Suncor merger. And a Montreal couple delivers its own baby in a hospital after nurses ignore a call button.
Top news: Prime Minister Stephen Harper announced plans to change Canadian law so that victims of terrorism could sue alleged terror sponsors, including foreign governments, in Canadian courts. The measure was widely applauded by victims groups and supporters of Israel, but international lawyers fear it will cause considerable friction in diplomatic circles.
Harper also called on the U.S. and Mexico to reopen the North American Free Trade Agreement to halt what he called the “creeping protectionism” taking hold in Congress. Harper was responding to growing concern that Canadian exporters and service providers were being closed out of stimulus projects in the U.S.
“I ask you to raise the 'Buy American' issue when with President Obama as soon as possible. The president should be encouraged to issue an executive order stating that Buy American conditions contained in federal legislation will not apply at state and local levels,” wrote Jayson Myers, president of the 2,000-member Canadian Manufacturers and Exporters. “In turn, we would strongly endorse an offer by the Canadian government to enter into negotiations with the United States to secure a more open procurement agreement between our two countries involving provincial, state, territorial and local governments.”
The House of Commons erupted this week in calls for the resignation of a senior cabinet minister who left classified papers behind at a news studio following the taping of an interview. Natural Resources Minister Lisa Raitt tendered her resignation to Harper, but he refused to accept it. While Raitt was spared the axe, her 26-year-old aide, who was ostensibly in charge of the binder, was allowed to take the fall.
Opposition MPs pounced at what they called a clear double standard and a lack of accountability, and turned Harper’s own words against him. Just a year ago, Harper had accepted the resignation of then-Foreign Affairs Minister Maxime Bernier, who had left classified documents in his girlfriend’s apartment.
It turned out his girlfriend, Julie Couillard, had past links to one of Quebec’s notorious biker gangs. As an opposition member and leader, Harper often decried the lack of ministerial accountability and, in responding to Bernier’s resignation, said his government would have zero tolerance for careless handling of sensitive documents.
"The minister admitted that he failed to protect classified documents. That is why he offered his resignation and why I accepted it," Harper said.
Raitt’s misplaced documents were her briefing notes on the forced shutdown of an aging nuclear power facility upriver from Ottawa that is a vital world provider of medical isotopes. The shutdown of the Chalk River facility now threatens to stretch into the autumn and could ultimately result in its complete closure. When first reported, it was feared a worldwide shortage of some isotopes would develop, but more recently some other Canadian facilities appear poised to pick up the slack.
Money: Rising commodities prices and a corresponding rise in the Canadian dollar is threatening to stall any hope of a recovery in the country’s manufacturing sector and exacerbate regional tensions.
For much of the 1990s and early 2000s, Canada effectively maintained a low dollar in an effort to make goods, particularly automobiles and auto parts, manufactured in the central Canada industrial heartland more competitive. However, as energy prices skyrocketed in the latter part of the decade, largely benefiting Alberta, Saskatchewan and Newfoundland, the dollar has kept pace.
In just two months, the loonie (as we call our dollar) has soared from 79 cents U.S. to as high as 93 cents, and threatens to keep climbing. Economists and business leaders say the problem is not the actual level of the dollar, it’s the volatility that hampers any ability to make long-term investments in new property, plants and equipment.
Despite the volatility, the Bank of Canada predicts Canada’s recession will bottom out later this year and that growth will resume in the middle of 2010.
The recession is putting a lot of pressure on Ottawa’s vaunted reputation for sound fiscal stewardship. Following a decade of budget surpluses and debt reduction, the Harper government appears poised to take on more than $170 billion in new debt over the next five years, a major bank project. The size of the debt increase, which comes from a mix of stimulus spending and revenue shortfall, is being blamed on a series of what opponents deem reckless tax cuts that were done more for electoral advantage than out of good economics.
PetroCanada shareholders gave the green light to the company's proposed $43 billion merger with oil sands giant Suncor. The merger, announced in March, was designed to shield Suncor from foreign takeover at a time when the Canadian dollar was low. Now, as oil and gas prices rise and the Canadian dollar reduces the risk of a takeover, the new combined venture appears poised to revive its extensive mining and upgrading operations in northern Alberta.
Elsewhere: While Canadians generally like their public health care system, sometimes it doesn’t quite work as it should. Such was the case recently in Montreal when a couple had to deliver its own baby despite having been admitted to the hospital. Mark Schouls and his common-law wife Karine Lachapelle were waiting in the prenatal wing in the very early hours of May 12 when the six-pound, five-ounce boy began pushing his way out. Schouls repeatedly pressed the nurse call button, but no one answered. So, with little other option available, the couple went about the delivery themselves.
Humiliated by the Boston Bruins in the first round of the playoffs, the Montreal Canadiens have taken the first step in righting the ship. The 100-year-old club, regarded by Canadians as the winning-most sports franchise in history, broke with its tradition of appointing first-time coaches and hired Jacques Martin, who has previously coached four other NHL teams. Canadiens General Manager Bob Gainey said he concluded that he needed a seasoned coach behind the bench.