Thursday, November 2, 2006

Briefing notes (2006-11-02)

Several broad observations today:

Income trust backlash: Stephen Harper in my view did the right thing by shutting the door on the tax shelter, broken promise or not; but CBC Radio One and other media outlets report this morning that by giving the middle finger to Bay Street (which traditionally support the Liberals), he has also turned his back on oil and gas exploration companies in the energy producing provinces of British Columbia, Alberta and Saskatchewan. Because there are so many upfront costs associated with risky ventures of that nature, the flow-through entity (FTE) structure was perfect as up-front costs could be written off right away instead of amortized over a number of years as corporations are required to do on capital expenditures -- and as I noted yesterday, it allowed ordinary people to get in on the ground floor.

With the shelter gone, and distributions from FTEs about to be taxed like dividends, many long time Reform / Conservative supporters have torn up their cards, seeing it as the ultimate betrayal. It's also bringing things in a way full circle -- the Western alienation movement started in large part because Trudeau believed Western resources should not cost as much as the world markets dictated; up to Montréal that was. (The rest of Québec and Atlantic Canada was stuck with the world price, which explained the huge difference in gas prices between East and West that had existed for years until relatively recently.) Now, the man once seen by the Oil Patch as God's Annointed Servant (TM) may have just become slightly better than Judas Iscariot; and the energy industiry does not easily forgive transgressions like this one. Harper may have given both the Liberals and the Green Party the opening they need.

How big a story is the end of the FTE free ride? Even Paul Kangas, the long-time host of PBS' Nightly Business Report, mentioned that companies like Telus, BCE and Precision Drilling -- all of which trade on the Big Board in NYC and are widely held stocks in the US -- took a huge hit from the decision. When you piss off Wall Street, you're in big trouble and better clean up the bird droppings. Just ask Paul Martin, who was forced into his draconian cuts of the 1990s faster than anyone imagined after the Wall Street Journal threatened to call the IMF.

Venezuela and Guatemala pull out of Security Council running: I wrote a couple of months ago that Hugo Chavez' stinkbomb at the General Assembly was a not-too-well disguised attempt to court support for his bid to get the Latin American seat at the UN's Security Council. Well, after 47 ballots and neither Venezuela nor Guatemala unable to get the 2/3 majority of all UN members needed to win the seat, both countries have withdrawn their bids and decided to support a third candidate -- Panama. Along with South Africa, Belgium, Italy and the winner of the Asia-Pacific contest, Indonesia, the UNSC will see its biggest ever freshman class; all five have never been on the "world's police force" before. This is good news for badly needed reforms at Turtle Bay as a fresh perspective may finally push them through, and it also saves the US a huge potential diplomatic headache had Venezuela won.

Five days to go till Congressional Elections: The much respected House Speaker during much of the 1970s and 80s, Thomas "Tip" O'Neill, once said that all politics is local, and the Republican National Committee has tried to deflect worries about the Iraq situation by turning the House and Senate rases into local ones, a strategy that has worked before. But after the Mark Foley fallout, George Allen calling a web-blogger "Macaca" and a racially incendiary ad in the Tennessee Senate race -- not to mention Rush Limbaugh's jiggy dance that actually made Michael J Fox look good -- the Democrats may be on the way to pulling off what was unthinkable even a few weeks ago, a landslide. Today's "poll of polls" from shows that if the election were held today, the Dems would easily take the House 241-193 with one district too close to call, a pickup of 38 seats. (They only need 15 more). The Senate could wind up deadlocked 50-50, with the Repubs retaining control as Dick Cheney would hold the tie-breaking vote. Tennessee is still too close to call, but if it tips in favour of Harold Ford Jr the Dems would win it 51-49.

The unfortunate comments made by John Kerry the other day were indeed uncalled for, but unless US forces capture Osama Bin Laden this weekend, the Rubicon has been crossed -- and Nancy Pelosi will almost certainly be the next Speaker of the House. And like Margaret Thatcher once remarked: "If you want something said, ask a man -- if you want something done, ask a woman."

Ann Coulter's possible electoral fraud: This is a story going back all the way to March, but after election officials in West Palm Beach tried repeatedly to get Ann to answer questions about her possibly voting in the wrong precinct, which may have been entirely inadvertent -- but getting no answers -- the county clerk has now turned over the investigation to the District Attorney. Thus, the right to remain silent may come back to haunt the conservative columnist as the maximum penalty for electoral fraud in Florida is five years in prison.

Anyone can make an honest mistake. But the whole point of this was to make sure that no one could be able to vote twice. If Coulter wants to continue to garner what respect she may have left after a summer of attacking the Jersey Girls and the people of NYC, she'd better start talking now, or the only blogging she'll be doing is from behind bars and whether her girlfriend is bigger or smaller than she is.

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