Life in Canada

Conservationists on both sides of the border are using an obscure American trade law normally used against whalers to pressure Canada over its management of the entire industry. I am positive Canadian arrogance will prevail.

The push comes as protesters continue to fight a pipeline that would bring more oilsands crude from Alberta into the United States.

A coalition of American and Canadian environmental groups has filed an application under what's known as the Pelly amendment, which empowers the U.S. president to impose trade sanctions against any country weakening international efforts to conserve endangered species — in this case woodland caribou, whooping cranes and dozens of other species of migratory birds.

"(A) weak regulatory environment, lack of enforcement of existing laws, and the overwhelming influence of the oil and gas industry in Canada have allowed the tarsands industry to expand at breakneck pace without regard for the devastating impacts on migratory birds, woodland caribou and the ecosystems on which they rely," the petition reads.

"Canada has been unwilling to put mechanisms in place that would prevent or mitigate such harms and thus contributes to the lessening of the effectiveness of domestic and international efforts to protect these species."

The petition is intended to force a dialogue between the two countries, said Sarah Burt of Earthjustice, the California-based environmental law agency that filed the papers.

"There's a very rational conversation that can go on between the U.S. and Canada that goes something along the lines of, 'Hey, Canada, we really want to import this stuff, but we're getting a lot of push back from our constituents who are concerned about the environmental impacts. It would make it a lot easier on us if you could improve some of the environmental management.'

"This petition is designed to open up some of those conversations."

Last week, a Pelly amendment finding against Iceland caused President Barack Obama to suggest that co-operation with that country on Arctic issues should be linked to changes in Iceland's whaling policy.

Rudy Husny, spokesman for International Trade Minister Ed Fast, said Canada will fight the amendment.

"We will continue to oppose measures that unfairly target Canadian oil. Our government will continue to promote Canada, and the oilsands, as a stable, secure, and ethical source of energy for the world."

The environmental coalition has presented its case to U.S. Secretary of the Interior Ken Salazar, who must determine whether Canada's actions are harming conservation efforts. Salazar will then make a recommendation to Obama, who is authorized to impose a variety of actions, including trade sanctions.

In its brief, the coalition points to studies from both the Canadian and Alberta governments that acknowledge woodland caribou are disappearing in the province, largely due to habitat loss from industrial development. It points out that the species is listed under the Western Hemisphere Convention, signed by the United States and Canada in 1942.

The brief also highlights the whooping crane, one of North America's most endangered birds and a species covered under the Migratory Bird Convention, which dates from 1916.

Reduced to a mere 22 individuals in 1941, careful conservation efforts have restored whooper populations to about 300. The U.S. Fish and Wildlife Service continues to spend about US$6.5 million every year on those efforts.

But the birds migrate twice a year through the oilsands region. U.S. and Canadian studies have found some cranes pause there.

In 2006, an American biologist spotted several cranes with what appeared to be oil stains. The brief quotes him saying "although there is no proof, it seems possible to me that the oiling may have occurred in the tarsand operations in Canada."

The brief also lists dozens of other bird species, all covered under the same treaty, that migrate over the oilsands.

The Alberta government has proposed several conservation areas for the oilsands region. But an analysis released Thursday by Global Forest Watch found that only 18 per cent of the whooping crane migration zone and nine per cent of caribou population hot-spots would be within those areas. As well, it found oilsands leases cover two-thirds of the whooping crane and caribou habitat.

It's the second oilsands decision placed in front of the Obama administration.

The State Department is currently considering whether to approve the Keystone XL pipeline, which would increase the amount of oilsands product that flows south. Environmentalists fear leaks from the line could damage land and groundwater, as well as tie the U.S. to a high-carbon fuel source for years to come.

Hundreds of pipeline protesters have been arrested in front of the White House . Personalities as varied as the Dalai Lama and Canadian Dave Thomas, one-time TV hoser on the SCTV comedy show, have spoken out against it.

Studies have shown Pelly to be a successful pressure tactic at least some of the time.

One academic found the measure resulted in changes in the target country's approach 58 per cent of the time between 1971 and 1994. In 1986, Norway suspended its commercial whaling season one month after being certified under the amendment.

However, a finding against Canada in 1996 over the harvest of two bowhead whales by Inuit hunters didn't result in sanctions or changes to Canadian regulations.

Japan is currently under three different Pelly certifications.

OTTAWA - Canada plans to fight the Buy American provisions in the new U.S. stimulus package proposed by President Barack Obama , federal Trade Minister Ed Fast said Wednesday.

Obama has proposed a $447-billion bill to help revive the stalled U.S. economy, but the details unveiled Tuesday contain protectionist measures similar to Washington's original stimulus package in 2009.

Fast says in a release that the provisions are not acceptable to Canada.

He has instructed officials to initiate the consultation process that was established as part of the 2010 Canada-U.S. deal on government procurement.

He said Ottawa will also express its concerns to the White House and to Congress.

The offending passage is Section 4, headed "Buy American — Use of American Iron, Steel and Manufactured Goods."

The section contains a directive that none of the funds made available under the American Jobs Act may be used for "the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel and manufactured goods used in the project are produced in the United States."

The bill calls for more than US$100 billion towards the renovation of schools, the construction of roads and bridges and improving transit.

Fast said history shows protectionist measures stall growth and kill jobs.

OTTAWA - Canada is rapidly catching up to the United States as a country divided between haves and have-nots, according to a study issued Tuesday by the Conference Board.

The Conference Board says income inequality has been rising more in Canada than in the United States since the mid-1990s, and faster than in many peer countries.

In fact, the think-tank says Canada had the fourth-largest increase in income disparity among a sample group of 17 advanced economies in the period between the mid-1990s and the late 2000s.

"Even though the U.S. currently has the largest rich-poor income gap among these countries, the gap in Canada has been rising at a faster rate," said Anne Golden, the board's chief executive.

"High inequality raises a moral question about fairness and can contribute to social tensions," she added.

Overall, income inequality rose in 10 of the countries sampled, rising fastest in Sweden, Finland and Denmark.

Canada was next. Its Gini index, a complicated formula which measures income deviations from a perfectly equal distribution, rose 9.2 per cent to 0.320.

By contrast, the U.S. had the highest income inequality of the group with a Gini reading of 0.378.

The Conference Board notes that Canada's index number put it in group of countries considered to have a medium range of income inequality.

A reading above 0.4 would designate high levels of income inequality, and under 0.3 indicates a low income gap.

Overall, the Conference Board says income inequality has increased in countries representing 71 per cent of the world's population. Twenty-two per cent live in countries where inequality is declining.

Most people think interest is interest. In fact, you could have two loans that charge the same interest rate , and yet charge two different amounts of interest. Two factors affect the cost of borrowing:
1. The annual percentage rate ( APR )

* Includes all loan service costs and interest.
* May therefore be higher than the interest rate you see in the loan contract.

A lender must tell you the APR before you sign a loan agreement. Sometimes the lender for a car or other type of loan will advertise a low APR to win your business. It's a way of saying you can really trust the deal they are offering, and that you don't have to worry about hidden costs.

To understand the APR of a loan, make sure you ask:

* How much total interest will I pay?
* Are there any fees or extra charges?
* Are there any other costs, including loan insurance ?

2. How the lender calculates the interest

The method they use can really change the cost of borrowing. For example, interest on a mortgage is calculated in a different way than interest on a credit card .

How does interest work on mortgages and other loans?

* Most mortgages and some loans use the remaining balance method.
* The lender just multiplies the interest rate by the principal balance at the start of each term .
* You don't pay interest on any principal you have repaid.

How does interest work on credit cards?

* In some cases, you have to pay off all of your charges each month. If you don't, you'll pay interest on the full balance that you owe.
* Most cards ask only for a minimum payment each month - often 5% of the current balance or $10, whichever is more. You pay interest on the unpaid balance.
* Some cards give you a grace period when you borrow. If you pay back everything within that time, you won't have to pay any interest that month.
* Other cards charge interest from the day you made each purchase, until you pay in full.
* In some cases, you pay interest on your daily balance, or your average daily balance.
* With other cards, you pay interest on your highest monthly balance.

Remember: The interest rate you see in the ads doesn't tell the full story.

To understand the total cost of borrowing, you need to know the APR and any extra charges. You also need to understand how interest is being charged.

Patents are nice, but lovely tax losses are worth more a personal view

Analysis I think we all know that Google's pretty good at, um, obeying tax laws to the letter. For example, they've paid an entire £8m in UK corporation tax on revenues of some £6bn from 2004 to 2010.

Here the game is wrapped up in things like the "Double Irish" and the "Dutch Sandwich", entirely legal moves which put the revenues actually into Irish or other companies which happen to be in countries with low tax rates, even as those revenues and or the people who work to collect them are in higher tax countries. The next stage is that US corporation (or as they call it, the corporate income tax) is only payable on profits that are actually taken into that country. So if the profits made are sitting in Ireland or Bermuda or wherever, as long as they sit there they are not taxed again.

However, this deal to purchase Motorola Mobility might be a coup to beat that hands down. The headline price to purchase the handset-maker and their bundle of patents is $12.5bn but that's not what the net cost to Google might turn out to be. How about $3.8bn for that? For, along with the company and the patents, Google has also bought a series of tax losses.

The estimate of the net cost does depend upon this US accountant having got his sums right, this is true:

"The tax benefits of the deal make what was a good deal into a great deal," said Robert Willens, a New York accounting and tax expert. He estimated that through the acquisition, Google can expect to reap $700m a year in tax deductions from future profits each year through 2019. Google also will be able to immediately reduce its taxes by $1bn due to Motorola Mobility's US net operating loss, and by a further $700m due to its foreign operating loss, he said.

The way this works might be a bit of a mystery to some, but there's good and honest logic at the root of it. We don't actually want to tax a company on the profits it makes in any one year: we want to tax (assuming we want any profits taxes at all) the cumulative profit that a company makes. It might take you a few years to start making profits: so we say that those losses you made during start-up can be offset against the profits you make in the future.

In fact, any new line of business is going to be like that and we certainly want the losses on building a new factory, new product, to be offset against the profits from old ones. There are also companies that have wild swings in profits. (Oil companies are notorious for this, for as oil prices fall the value of the stuff that's in the system – from wellhead to pump – falls, creating shocking losses. The reverse occurs when prices are rising.) There are others that have nice predictable levels. If we don't allow loss offsets against profits in other years then the more variable the profit/loss, the more the company will be paying in tax – against one with regular profits for the same level of cumulative profits.

So, past losses being offset against future profits before we calculate tax bills is just fine.

But, and here's the fun part, Motorola Mobility has been losing a shed-load of cash in recent years. It has lots of those lovely tax losses: which can now be offset against Google's future profits. You're not allowed to buy a company (at least, under US rules you're not) solely to get your hands on their tax losses. But Google is buying the pile of patents, isn't it? I mean, look, they took part in the Nortel patent auction, everyone knows they're trying to buy patents.

You would really have to be very cynical indeed to think that Google didn't take the Nortel auction seriously. Did I mention that because Nortel was in Chapter 7 liquidation (or the Canadian equivalent) there were no tax losses that could be transferred? I didn't