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Report From Parliament's Hill - January 31st, 2008

By Prince George - Peace River M.P. Jay Hill

Thursday, January 31, 2008 03:44 AM

And we’re back!  Parliament resumed sitting this week and, as expected, it was off to a raucous start as MPs returned to Ottawa armed with the concerns of their constituents and ready to tackle a number of contentious issues.
The biggest issue by far is the economy and the unavoidable impact of the global economic downturn upon Canada.  No matter how solid Canada’s economic fundamentals are, recent volatility in financial markets threatens our economy and some of our traditional industries, including the forest sector in Prince George-Peace River.
 Yet the prudent fiscal steps that our Conservative Government has taken throughout the past two years have helped to avert immediate, widespread economic fallout. In other words, we’ve cushioned the blow by setting priorities and practicing fiscal discipline.
The federal tax burden faced by Canadians is at its lowest level in nearly half a century. We gave close to $200-billion in tax relief to Canadians since coming to office and cut the GST from 7 to 5 percent ahead of schedule.
Unemployment is at its lowest level in over three decades.  Business investment is expanding for the 12th consecutive year.  We have delivered more than $37-billion in debt relief, or $1,570 for each man, woman and child in Canada. 
 It is these measures that help to ensure inflation and interest rates remain low, important factors that impact the bottom line of every household and business in the country.
 Despite the progress made in the last two years, we cannot take anything for granted.  Still, the opposition parties suggest that we ’spend, spend, spend’ in a misguided attempt to avert an economic slowdown.  Worse yet, they would like to increase the GST and taxes, and start collecting a carbon tax to pay for interest groups, lobbyists and so-called ’experts’ that deliver little to Canadians.
 Thankfully, it’s only the opposition parties that seem to believe Canadian taxpayers, through their federal government, can somehow spend the United States economy out of a recession!
We, on the other hand, continue to take steps to ensure we remain well positioned for the future. This includes the Building Canada Fund, to strengthen our nation’s infrastructure, and the Community Development Trust, to assist vulnerable communities, like Fort Nelson, McBride, Mackenzie and Chetwynd, to develop and diversify their economy and create new jobs.
 This session of Parliament will also continue to focus on important justice reforms, such as the Tackling Violent Crime Act and the National Anti-Drug Strategy.  Plus, watch for continued progress on our mandatory emissions regulations for industry and measures to instill democracy and accountability in the Senate.
I can’t predict the future, but with certainty I can say the next few months in Parliament will be far from dull!  Even if the media and the opposition parties continue their current pre-occupation with ’election speculation’, our Conservative Government will carry on with getting things done for Canadians.  And if there IS an election in the near future ... we’re ready to face voters with a strong record of leadership and policies that benefit all Canadians.

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Comments

It amazes me how a minority government continues to move ahead with their agenda. Inspite of the opposition, resistance and hindrance from the other party's.

I do support the efforts of the Conservatives, I admire their determination to fulfill their vision and committments they have made. I support their intiatives regarding lowering taxes, reducing debt, fixing the senate, dealing with criminals etc. etc. What I don't understand is why there are so many who oppose these kinds of things that so many of us see as a common sense approach to running this country. Chester
A few quotes below that Jay might want to consider. How do you predict and regulate a financial market that has gone underground? With $500 trillion in mostly two party contracts: how can anyone ever predict how the market should react in a way it should if the known hidden market is at least 8-times the real market, and yet the prices it determines is what the real world has to live with. Is the world economy now nothing more than an internet casino with a hidden program and no place to hide? Is this a banking system for the people or is there another agenda?

The following is an excellent article that shows that we are in for tough times as long as not a single person in the world can claim for a certainty what is really going on in the financial markets. IMO as people begin to realize this more and more, then it will have a negative snowballing effect.

http://www.boston.com/bostonglobe/ideas/articles/2008/01/27/the_black_box_economy/
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The hiding places for these financial instruments are called conduits. They go by various names - the SIV, or structured investment vehicle, is one that's been in the news a great deal the past few months. These conduits and the various esoteric investments they harbor constitute what Bill Gross, manager of the world's largest bond mutual fund, called a "Frankensteinian levered body of shadow banks" in his January newsletter.

"Our modern shadow banking system," Gross writes, "craftily dodges the reserve requirements of traditional institutions and promotes a chain letter, pyramid scheme of leverage, based in many cases on no reserve cushion whatsoever."

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But today, increasingly, a new generation of derivatives doesn't trade on markets at all. These so-called over-the-counter derivatives are highly customized agreements struck in private between two parties. No one else necessarily knows about such investments because they exist off the books, and don't show up in the reports or balance sheets of the parties who signed them.

As the derivatives business has grown more complex, it has also ballooned in scale. Broadly speaking, Das - author of a leading textbook on derivatives and complex securities - estimates that investors worldwide hold more than $500 trillion worth of derivatives. This number now dwarfs the global GDP, which tops out around $60 trillion.
Essentially unregulated and all but invisible, over-the-counter derivatives comprise a huge web of bets, touching every sector of the world economy, that entangles a massive amount of money. If they start to look shaky - or if investors need to start selling them to cover other losses - that value could vanish, with catastrophic results to the owner and unpredictable effects on financial markets.

Derivatives can ripple through the market and link players that might not otherwise be connected. With some types of new investments, that fusion takes place within the security itself.
Makes one think the our safest bet would be to form an OPEC like organization for the control of the price of the lumber by the producers and not by the casino market that will kill us all one by one if we choose to live by their hidden derivative contract sward.

This can be said for any and all major trading commodities. It is also the reason why Stephen Harper is dead wrong on his view of the Canadian Wheat Board. This is also the reason why we in Canada should not be tied to world commodity prices for Canadian resources, but rather some other form of Canadian supply and demand pricing that is insulated to some degree from the global casino markets led by London and Wall Street....
Chester: "I support their intiatives regarding lowering taxes, reducing debt, fixing the senate, dealing with criminals etc. etc. What I don't understand is why there are so many who oppose these kinds of things that so many of us see as a common sense approach to running this country."

Actually one may be fully supportive of all those goals too, the only difference being that one may not be in full agreement with the methods that the Conservatives are using.

There are many roads that lead to *Rome* and the way one party chooses to get there doesn't mean that it is the only *correct* way.