Tuesday, July 31, 2012

SaskOil from Saskatchewan government owned to Chinese government owned

SaskOil began as a provincially owned Saskatchewan corporation in 1973. Privatization began in 1986. Eventually SaskOil assets became Canadian Occidental Energy (CanOxy) and finally Nexen in 2000. Chinese state owned CNOOC bought Nexen in July 2012.

 Saskatchewan Oil and Gas Corporation or SaskOIl as it was commonly called was created by the New Democratic provincial government of Allan Blakeney in 1973. Blakeney also created a crown corporation in the potash industry. In spite of Blakeney's pursuit of government ownership in oil and potash development Blakeney's leadership of the party was regarded as a victory for the establishment against the Waffle Group within the NDP who were campaigning for an independent socialist Canada. The Waffle group even had their own manifesto the Waffle Manifesto.

 The Blakeney government saw SaskOil as a means to facilitate government investment in Saskatchewan's oil and gas resources. The increase in oil prices in the period also encouraged the government to help fund its own programs through income from the developments. The corporation provided a means for the government to gain expertise and knowledge in the oil and gas development industries. In the seventies the company grew rapidly and took over existing companies as well. By 1976 SaskOil was producing 6 per cent of total Saskatchewan oil. However, it also also acquired properties in other areas of western Canada. SaskOil also had a research and development branch. With the start of privatization in 1986 these functions were transferred to the Saskatchewan Research Council. Profits from oil are for private companies. Costs for research are socialized.

 Privatization began in 1986 under a Conservative government. In 1996 SaskOil became Wascana Energy. In 1997 Canadian Occidental Petroleum bought Wascana Energy and the last government shares were sold off with the sale. Occidental merged all its Canadian assets under the corporate name Wascana Energy. Occidental in turn was taken over by Nexen and renamed Nexen Canada.

 In July of this year CNOOC bought Nexen for 15.1 billion U.S. although the deal still needs to be approved by the federal government. The history of SaskOil gives an interesting glimpse of the history of capitalism in Saskatchewan. During the seventies there was still a powerful movement towards socialism in Saskatchewan as exemplified by the Blakeney government's strong support for a government owned and financed oil development company. By 1986 the trend had turned toward privatization. Even when the NDP returned to power it did not return to the Blakeney nationalization policies. Eventually Sask Oil became part of Nexen a global player in the oil patch but with headquarters in Calgary Alberta.

Now as communist China itself has become a global capitalist player the powers that be see the Nexen takeover as a way for Canada to diversify markets and sources of investment. Of course Saskatchewan will not receive the profits of CNOOC although no doubt it will reap some benefits. First and foremost the Chinese will benefit. However, CNOOC promises that the new company will be listed on the Toronto Stock Exchange so global investors will also participate. I will watch with interest as the Harper Conservative government gives his blessing to a takeover of an Alberta based big oil company to a communist Chinese state owned company!

The takeover may be blocked. The U.S. is none too happy with the takeover. It will be interesting to see what position the Conservative government of Alberta takes. Nevertheless Harper seems to be committed to diversifying markets for Canadian energy resources and also diversifying investment sources. CNOOC has gone to considerable lengths to make the deal attractive for Canada. Another article on SaskOil can be found here.

Monday, July 23, 2012

Canadian oil firm Nexen accepts takeover bid of over 15 billion U.S. from Chinese oil firm

Calgary based oil producer Nexen approved a takeover bid of $15.1 billion U.S. by Chinese state-owned oil producer CNOOC Ltd. The price per share would be $27.50 a full two thirds higher than the average price over the last twenty days. Nexen is the 12th largest energy producer in Canada with an output of about 213,000 a barrel oil equivalent per day. Nevertheless the company has not been doing that well of late. 

The company has a global presence. North Sea production has just been hit by a new UK tax. Drilling in the Gulf of Mexico was delayed by the huge BP oil leak. It was also forced to abandon a project in Yemen. Even in Canada at Long Lake planned output has not been reached. In the second quarter net income for Nexen fell to only $109 million, a decline larger than analysts predicted. The company earned just 20 cents a share in the second quarter down form a year earlier. Never mind the gloom, China needs oil and is willing to pay a premium price to guarantee a secure source of supplies.

 The troubled Long Lake project provided China the first stage of the later bid. Back in November of last year CNOOC bought OPTI Canada Inc. a company that held a 35 per cent stake in the Long Lake project. CNOOC has already spent 2.8 billion in Canada. China has been moving cautiously with takeovers after a failed takeover bid for UNOCAL corporation in 2005. No doubt there will be considerable debate about the Nexen takeover. The deal will have to pass through a process of evaluation under Canadian foreign ownership rules

  CNOOC said it would retain the existing staff and management and also make Calgary the headquarters for North and Central American operations. The company also promised it would list shares on the TSX and fund oll sands research at Canadian universities. All of these moves may help the company gain approval for the takeover. Already a number of Asian companies have invested in Canadian energy projects. Athabasca Oil Sands Corp. earlier this year sold a 40 per cent interest in two projects to PetroChina Co. Last fall Sinopec bought Daylight Energy Ltd. for a price tag of $2.2 billion U.S. The giant Malaysian firm Petronas bought Progress Energy Resources for $5.5 billion in June of this year.

 Prime Minister Stephen Harper is very much pro-business. Harper has often been a critic of China but of late he seems to be interested in tapping into Asian markets and pools of Asian capital to help develop Canadian resources. Canada has traditionally been a supplier first and foremost for the U.S. market. NAFTA cemented this relationship. However Harper seems to have realized that diversifying markets and sources of investment would be beneficial for Canada. The Nexen deal will be a test of these policies. 

The Nexen takeover must be approved by two thirds of shareholders. It is subject to an almost half a million dollar break fee. Not all foreign takeovers are approved. When BHP Billiton of Australia tried a hostile takeover of Saskatchewan-based Potash Corp the deal was eventually blocked by considerable resistance from Potash management and the Saskatchewan premier. Some corporations are supposedly strategic assets for Canada. Perhaps Nexen will be another strategic asset although the government has not yet defined what the term means.

 Harper is likely to receive the most pressure to block the bid from the U.S. The U.S. will not look kindly on its Asian competitor securing supplies of scarce resources from its northern neighbor. The question is whether business prevails over politics or perhaps whose business interests prevail. For more see this article

Friday, July 20, 2012

As demand for ice cream increases Baskin-Robbins closes Ontario factory

      Because of the hot summer in parts of  Canada and the U.S Baskin Robbins ice cream sales have been soaring. However the company has decided it will lay off 80 workers in spite of the increased demand.
    Baskin-Robbins had $1.8 billion sales from 6,777 outlets spread around the world. In this first quarter of this year sales before the heat wave sales jumped by 9.4 per cent.
    The factory to be closed in Peterborough is the last place in North America at least where the company actually makes what it sells. The 80 workers at the plant provided products for about 1400 outlets outside of the U.S. including 113 stores in Canada.
    Production will now be moved to third party suppliers. Canadian supplies will come from Scotsburn Dairy  in the province of  Nova Scotia. However, much of what was produced in Peterborough will be produced in El Paso Texas. The Peterborough plant was unionized but only 5.3 per cent of worker in Texas are unionized. Texas is a right to work state with no minimum wage.
    Baskin-Robbins is not just seeking to itself produce in Texas because of cheaper labor rather it  has decided that it will not be bothered with producing anything itself. By getting out of manufacturing the company hopes to drive costs down and sub-contract production and the costs of labor to third parties.
   However don't expect the U.S. to gain much from all this. The company sees its biggest opportunities in emerging markets as disposable income rises there. These markets also offer a great opportunity to find even cheaper third party suppliers of product.
   The parent company of Baskin-Robbins is Dunkin' Brands. Dunkin Brands is owned by Bain Capital. This was Mitt Romney's company before he made a takeover bid for U.S.A. Incorporated. These firms together with Romney have been lobbying to get rid of the supply management system in dairy products that we have in Canada. This would reduce their costs further.
   There are new trade deals being negotiated with Europe and there are also to be talks with Pacific nations about free trade. On the table will be Canada's supply management system. The profits of  Bain Capital may go up but wages will go down. However perhaps a few cents of saving will trickle down to the consumer just like melting ice cream on a cone. For more see this article.

Thursday, July 19, 2012

Protecting the U.S. from a Canadian Kinder Surprise

       Kinder Surprise eggs are a chocolate-coated egg confection but inside they also contain a toy, the surprise. The eggs are banned from the U.S. The U.S. bans the eggs because of the "non-nutritive object" in the center. This is regarded as a choking hazard.
      Brandon Loo and Christopher Sweeney were bringing back the eggs for Canadian friends in the U.S. since they were not on sale in the U.S. Not only are they not on sale, there is a fine of up to $2,500 for bringing them into the U.S.
      The two were detained for two and a half hours explaining that they were not engaged in running illegal chocolate across the border for gain. In 2011 alone the U.S. Customs and Border control had confiscated 60,000 Kinder Surprise eggs.
       Surely they should ship these back to Canada to be distributed to under-privileged children. Most likely their destination is the dump or they are destroyed in some manner.
   The eggs were invented in Italy but are quite popular in Germany. "Kinder" is German for children. There have been reports of children choking on the toys because the parts are small and there are warnings on the egg containers indicating the hazards involved. For more see this article or here.

Sunday, July 15, 2012

Parts of Central and Eastern Canada suffering drought conditions

  As in the U.S. there are parts of  Canada that are experiencing drought conditions. David Philips a Canadian climatologist said that there no question it was a drought and on top of  that in many places there is a heat wave as well.  Record temperatures have been set in Ontario, Quebec as well as the Atlantic provinces.
    A farmer in Simcoe Ontario said that his yields would be half of normal. He said that not only will he feel the pain but as supplies dwindle prices we increase and hurt the consumer as well.
   Quebec apple farmers are also expecting reduced yields, about a 15 per cent decrease from last year. As in the U.S. corn is also hard hit by the lack of rain. During the past few weeks the price of corn has gone about 30 per cent. However if good rains come within the next two weeks the situation will be much improved.
  Apple growers in the Annapolis Valley in Nova Scotia have been dealing with 30 degree temperatures (Celsius) for almost a week. Irrigation ponds are becoming perilously low. For more see this article.

Wednesday, July 11, 2012

Canada: Toronto Dominion Bank closes accounts of some Iranian-Canadians

  A number of  Iranian-Canadians are distressed that the Toronto Dominion bank closed their accounts with little notice or explanation. The bank began sending letters to some of its clients last May indicating that because of  changes to the Special Economic Measures (Iran) the bank would no longer offer them banking services.
   In one letter the bank wrote: "A recent review has identified you as a person TD is restricted from providing financial services to, from, or for the benefit of under these new regulations," Recipient of the letter Soudeh Ghassemi of Toronto said she was shocked when she received the letter. She says she does not send any money to Iran at all. Her father also received a similar letter with respect to his mortgage and his line of credit. Her father did receive some money for a down payment on a house before the sanctions came into place.
    The Iranian Canadian Congress held a meeting in Toronto to discuss the issue. Sixty to seventy people attended. Kaveh Shahrooz vice-chair of the group said he heard many distressing stories. He noted:. "A lot of people [said] 'We've been loyal customers of TD for a number of years and we are in compliance with all the laws as far as we know. And yet unfortunately, with virtually no notice, TD has decided to close our accounts,'" "It's … given no explanation as to why this has happened and made some cryptic reference to the sanctions. But anytime they've sought some further explanation, they've been stonewalled and treated very, very badly." Shahrooz thinks that the bank may have been somewhat overly zealous in applying the new regulations concerning sanctions on Iran. There are no reports yet of other banks following the lead of  Toronto Dominion. For more see this article.

Tuesday, July 10, 2012

Wheel-chair bound man wins case against Montreal restaurant

Montreal - Michel Larochelle filed a complaint with the Quebec Human Rights Tribunal after a waiter told him his service dog must leave the restaurant. The dog helps Larochelle to push his wheelchair up ramps and hills.
 In August 2009 Michelle Larochette went with a friend and Larochette's service dog Cici to the Caverne Grecque restaurant in Montreal. The waiter said that Cici could not enter the restaurant but must stay on the sidewalk. Cici helps Larochette negotiate hills and ramps as he has a manual wheel chair. Larochelle has been using the services of dogs from the MIRA foundation in Montreal since 1992.
 According to Larochelle the waiter argued that Cici would disturb other clients even though Cici was lying under the table where they were sitting and there were few clients on the terrace. Larochelle threatened to file a complaint with the Quebec Human Rights Commission but the waiter still would not serve them while Cici was under the table.
 The Quebec Human Rights Commission came into being after amendments to the Quebec Charter of Human Rights and Freedoms. The Commission hears complaints on various issues."" As a specialized tribunal, the Human Rights Tribunal has jurisdiction to hear and rule on complaints concerning discrimination and harassment grounded on one of the motives prohibited under the Charter of Human Rights and Freedoms. It can also hear cases concerning the exploitation of elderly people and people with disabilities as well as matters concerning affirmative action programs""
. The decision of the Commission took some time but last week the Commission agreed with Larochelle's complaint and ordered that the waiter and restaurant pay him $6,000 in damages. Larochelle said that disabled people cannot be treated as second-class clientele. Larochelle won a similar complaint back in 2005 against another restaurant. Larochelle is surprised he had been forced to make two complaints over a period of ten years to enforce his rights. For more see this article.

Sunday, July 8, 2012

Canada silences short wave broadcasting

 For 67 years Radio Canada International broadcast short wave programming around the world. The transmission  from Sackville New Brunswick has now been shut down. Radio Canada International has had its budget cut by 80 per cent and has been reduced to a few staff and a weak web presence.
 As with vinyl records no doubt many think shortwave radio a thing of the past. Yet there are still many strong stations. It is not expensive to provide. Many church groups use it.
 Unlike the Internet which can often be disrupted short wave signals cannot easily be jammed. Many in the world just have no access to phones or electricity let alone the Internet. However battery and hand-cranked short wave radios are ubiquitous.
  In spite of  the Canadian Broadcasting Corporation being a prominent presence in Canada, Canada is just
16th of 18 countries in per capita spending on public broadcasting. Only the U.S. and New Zealand spend less. Conservatives are supposed to respect and encourage tradition. However short wave radio does not bring in any bucks or support the Conservative agenda so it should go For more see this article.

Saturday, July 7, 2012

Harper seems to be stalling on repatriating Omar Khadr

 The Khadr family have long been associated with Al Qaeda and the Canadian family are far from popular in Canada. Unlike other countries the Canadian government has done nothing to have Omar Khadr repatriated from Guantanamo. They sat back and let someone who was a child soldier when captured by the U.S. in 20002 in a firefight in Afghanistan stay in Guantanamo for a decade now. In fact the Canadian government said nothing about his treatment that included what amounted to torture nor the fact that he was tried by a military tribunal.
   Although he and his comrades were under attack Khadr was charged with throwing a grenade and killing an American soldier, The U.S. justifies holding Khadr and others indefinitely because there is a state of active hostilities between the U.S. and terrorist linked groups. Of course Obama does not call this the war on terror as Bush did but the legal justification is the same. Usually in such armed conflicts fighters on both sides would not be charged when in battle if they kill people on the other side. However in the legal mumbo jumbo used by the U.S. people like Khadr who fight without  uniforms and not as part of a recognized force are unprivileged belligerents and if they kill their enemies even if they are soldiers can be charged with murder. This is what happened to Khadr. Theoretically CIA drone operatives are in the same legal position. This has been pointed out as a problem by lawyers. Of course the difference is that CIA operatives are not likely to be caught and tried!
  To add insult to injury he was also a child soldier at the time. In fact he was badly wounded and would have been finished off as was a comrade who may have thrown the grenade except that an officer thought that Khadr might have useful information.
  Usually Canada does what the U.S.  wants. This was the case with  Abdullah Rahman who was arrested at the request of the U.S. when he returned to Canada. From this site:""Abdullah Khadr (born 1981), a son who returned to Canada in 2005, was arrested on behalf of the United States and held for 5 years while an extradition request was reviewed. Ontario Superior Court ordered him released in 2010 citing "shocking and unjustifiable" human rights violations." One son Abdurahman Khadr no doubt  regarded by the family as their black sheep worked for the CIA and gave numerous interviews with the press.
     Omar Khadr has been held at Guantanamo for almost ten years now. The U.S. has agreed to have him serve the rest of his sentence in Canada. An article here gives six reasons why he should be transferred to Canada. I will deal only with two.
   Since Khadr is a Canadian citizen he has the right to enter and remain in Canada. A Federal Court cited this right in another prison transfer case. The U.S. is waiting for Canada to consent. In this case the U.S. is not the holdup it is the Canadian Harper government.
   Secondly Khadr committed the alleged offenses when he was still a child and was 15 when captured. Both Canada and the U.S. have signed the Optional UN Protocol on the rights of the child that set 18 as the age for participation in hostilities. Child soldiers are to be psychologically and physically rehabilitated and reintegrated into society. Of course neither the U.S. nor Canada has paid the slightest attention to this aspect of the case. Perhaps one reason Harper does  not want him here is that there will be demands that he be treated as a child soldier. This could be politically inconvenient for Harper. For much more of this whole travesty of justice see the full article.

Wednesday, July 4, 2012

Canada: Manitoba Highway closed by giant sinkhole

 A sinkhole 200 meters wide and more than five meters deep has closed Manitoba Highway 83 near Asessippi Provincial Park. Recent heavy rainfall may be responsible for the hole caused by an underground slide.
    The area has had problems for some time however from underground springs  that cause erosion. The highway is constantly being repaired. A dip will be filled in paved and then it starts to sink again. However this time the huge hole made the highway impassable.
   The hole was continuing to sink as of  Tuesday. Infrastructure and Transportation Department geotechnical experts are on site to determine the extent of the slide. The highway is closed from the park valley to the town of Roblin. However there is a detour and local traffic can still use other parts of the highway. No one knows when the highway can be reopened. For more see this article. The site if a little more than a half hour drive from where we live.


Tuesday, July 3, 2012

Ontario Hydro crews help out restore power in U.S.

200 Hydro One crews members from Ontario Canada will help restore power in Baltimore,, Virginia, and the Washington DC area. The disastrous storms killed 22 people and power to three million homes is knocked out.

There are still almost 1.8 million people who do not have electricity as crews battle to clear downed trees and restore lines. Hydro One has an agreement with North American utilities to help out when there are emergencies of this type. In February of 2010 Hydro One helped out in Vermont and int Sept. 2008 in Ohio. U.S. officials fear that the death toll could climb as citizens face hearing heat without power for air conditioners.

Sunday, July 1, 2012

Body of Nunavut community mayor finally found

Nunavut is a far northern area of Canada formed in 1999 from part of the Northwest Territories. It is about the size of western Europe but has a population of less than 32,000 people.

Jamesie Kootoo was the mayor of the small village of Kimmirut. Last November 26 he went hunting for a day but never returned. Community members started an exhaustive search but in the winter the weather often prevents searches and after several weeks search efforts were stopped until Spring.

The body was finally found about 50 kilometers north of the village near a large lake. He will be buried next week. Cause of death was not listed but I expect he froze to death. For more see this article. Some traditionalists have noted that snowmobiles can break down and leave a rider stranded while sled dogs are more reliable.