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The massive military disaster that wasn't

Canadian military leaders narrowly avoid a potentially devastating (and embarrassing) accident. The worst drought since the 1930s drags on. A judge blocks the extradition of a U.S. military deserter avoiding Iraq service. Nortel's wireless assets are one step closer to being acquired by Ericsson. And the Vatican makes an exception for a married priest.

Canadians learned this week about an incident that was very nearly the deadliest day for the country's military since the Korean War. The fact that it happened in the skies over Canada and not in a war zone made it all the more baffling.  A plane carrying nine of Canada’s most senior military officers on a flight from British Columbia to Ottawa in April was forced to dive out of the way of an Emirates Boeing 777 jet that was descending into Vancouver. 


In the end, the senior officers — which included the vice-chief of defense staff, as well as the heads the navy, the air force and the army — were shaken but otherwise unhurt as the jets passed within 700 feet of each other. However, the near-miss prompted urgent calls for a review of Canada’s rules regarding how many top officers should be permitted on one aircraft.


The military aircraft was about the only thing to nearly fall from the sky in Western Canada. Staggering heat and almost no precipitation has resulted in what is now officially the worst drought in Canadian history since the 1930s. To make matters worse, the six-fold increase in population and the significant shrinking of the glaciers in the Canadian Rockies since the so-called Dirty 30s, have raised concerns that parts of the Prairies could suffer prolonged water shortages.


While rain on the Prairies was at an all-time low, a drought of summer jobs has resulted in all-time high levels of student unemployment, a condition experts warn could hamper Canada’s nascent economic recovery. Unemployment among students rose to over 20 percent last month, a level that economists say will have a trickle-down effect on the economy as these students will have to borrow money to return to class in the fall. As a result, it’s likely that household debt will increase and drain funds that would otherwise be used to bolster the economy.


If rising unemployment wasn’t enough to chill talk of a robust recovery, bankruptcies are up sharply – more than 50 percent – since last year.


All this worrisome news has rekindled talk of a fall election that would likely be fought over the Conservative government’s handling of the economy and unwillingness to make Canada’s employment insurance scheme available to workers who have not worked the requisite number of hours to qualify.  The problem is that were an election held now, Canadians have no consensus for whom they would vote. In recent polls, Prime Minister Stephen Harper and Liberal opposition leader Michael Ignatieff are in a dead heat, likely resulting in a fourth consecutive minority government and ensuring even greater paralysis in Ottawa.


Harper went to Mexico and Panama for a few meetings, including one with U.S. President Barack Obama, during which he again urged Obama to get Congress to revise the Buy America provisions in the federal stimulus package. Obama praised Harper for his tenacity, and then told him change the subject because the provisions don’t hinder free trade. Harper begged to differ, then flew off to Panama to sign a new free trade deal.


A Canadian judge granted a temporary stay order to block the extradition of a U.S. soldier accused of desertion after she refused to return to the U.S. for a second deployment to Iraq. Kimberly Rivera has been living in Toronto with her husband and three young children and had sought protection from extradition. There are an estimated 200 Americans taking refuge in Canada to avoid being forced to return to duty in Iraq.


Money: The Nortel saga continued this week, taking one predictable turn and another not-so-predictable one. Harper said this week that the federal government has no intentions of blocking the $1.3-billion sale of Nortel’s cutting-edge wireless technology assets to European giant Ericsson. The news came just hours after Nortel’s president and CEO Michael Zafirovski resigned following the release of $274 million in new losses facing the already-bankrupt company.


Nortel wasn’t the only thing the Harper government seemed eager to sell this week. After three years of frosty relations with China, the Harper government’s financial minister Jim Flaherty urged Chinese companies to invest in Canadian resource companies. The news was greeted with mixed reactions on both sides of the Pacific. The Chinese weren’t sure what to make of Canada’s sudden shift in tone, and many Canadians weren’t sure what to make of it either.


Quebec’s Caisse de Depot, the province’s principal investment arm and pension manager, is wondering if it will ever get out from under its toxic assets. Caisse announced this week it would take another $5.7 billion hit, this on the heels of a $40-billion loss in 2008, about 25 percent of the fund’s value.


Elsewhere: Canadian rocker Neil Young will at long-last receive a Grammy Award next year, but it’s not for his musical brilliance. Instead, the singer-songwriter will receive the Grammy’s MusicCares award for combining musical achievement and philanthropic efforts for a lifetime of good works.


A Roman Catholic priest was ordained in Prince Edward Island Sunday and then went home to his wife.  Martin Carter, a long-time Anglican minister, received special dispensation from the Vatican after he said he felt called in another direction. Carter won’t have his own congregation, but will be able to minister to the flock in Charlottetown.


With the Toronto Blue Jays grounded near the cellar of the American League East and the new-look Maple Leafs still a month away from training camp, all of Toronto’s sports focus last week seemed to be on the “friendly” between Toronto FC and powerhouse Real Madrid. The game, which ended 5-1 for Madrid, was sure to be a rout from the moment it was announced in the spring. Undaunted, fans lined the streets and packed the BMO Field stadium for a practice and the game to catch a glimpse of one of Europe’s greatest teams —  and its heartthrob superstar Cristiano Ronaldo — in action.