The Northwest Passage

The Danish National Space Centre confirmed that the Northwest Passage has now opened up and it is now possible to navigate from the Atlantic to the Pacific along the north coast of Canada. Given that the low point of sea ice in the Arctic typicaly occcurs in October, this means that we can look a month or more of navigability this year. If the arctic ice continues to melt at the pace that it has been over the last couple of years (far exceeding the predictions of the even the aggressive global warming models) this will likely mean that the Northwest Passage, after more than a half millenium of fantasy, will become a reality and we should expect to see regular shipping traffic in the near future.

When the Manhattan smashed its way through the Northwest Passage in the 1960's Canada defended its sovereignty in the Arctic by giving it unasked for 'permission' to carry on. Unless the government plans to create the Department of 'I Know You Did Not Ask, But Of Course You May,' we are now going to have to develop a serious position on how what position we are going to take on our sovereignty and, unless we concede the point, figure out how we are seriously going to defend (legally, militarily and practically) that position.

Our opponents in this regard will not be Afghan tribesmen using improvised explosive devices, they will the United States, the EU and the flag of convenience countries like Panama who will be dusting of their claims that the Northwest Passage is international waters open to free navigation by everyone. Moreover, what is at stake in these discussions is not peanuts. The ability to ship from Europe and the eastern seabord to Asia without passing through the increasingly limited Panama Canal is a huge financial prize. For larger vessels (such as supertankers) which would otherwise have to navigate around Cape Horn the stakes are even larger.

Now is the time to start this discussion in a serious way. Personally I believe there are good policy reasons (such as international security and environmental regulation) to assert and maintain the position that the Northwest Passage falls under Canada's sovereign jurisdiction as 'internal waters' however there are alternative positions and the legal nuances are mindnumbing (even for lawyers). Moreover, all of the legal argument in the world will not serve any purpose if Canada is not able to practically enforce its position. Enforcement of Canada's position does not just require military positioning -- no amount of military positioning will work if the United States and the major EU nations are not onside. Canada is going to have to get the powers in Washington and Brussels to engage in this debate and to be able to persuade them. This may require trade-offs in some areas ('yes, we will allow your warships through but not your tankers -- or vice versa'); it may require having a spine in others ('yes, we would love to continue to act as target practice for armed goatherders, but we are re-assigning these troops to picket duties in the Arctic, Denmark ... so we hope you enjoy Kandahar') but it is first and foremost going to involve pulling together a vision and plan for how we are going to look at the Arctic in a warmer time.

This is an issue that streches across party lines. I just hope that the current leadership can see that.

Show Some Spine Jim -- Stand Up to the Provinces

The Globe and Mail again reported on Jim Flaherty's support for a single Canadian securities regulator (article reproduced below). This is, as I have said before, an excellent idea for Canadians. It will increase protection for the public (who will be served by an effective, national regulator) and lower costs for businesses coming to Canada (who will only have to deal with one regulator and one set of rules). Taxpayers even win as ten bureaucracies are replaced with one.

But it is not going to happen if Ottawa waits around for the Provinces to voluntarily give up control over their regulatory empires.

Our Constitution gives Ottawa power over interprovincial and international trade, as well as matters of peace, order and good government, and the time has come for Ottawa to use these powers. Ontario -- which deals with the lion's share of the securities industry in Canada anyway -- has said it will be onside. Industry will be onside (except for a few provincial analysts who benefit from contracts from regulators) and the public is not going to rebel against this one. Even the Liberals and the NDP will fall in line -- the only real opponents will be the BQ and PQ.

Time to show some spine Jim and get on it with it. Pity you waited until so far into your minority mandate to do it.

Flaherty beats single-regulator drum
NORVAL SCOTT

With files from reporter Katherine Harding in Edmonton

August 31, 2007

CALGARY -- Federal Finance Minister Jim Flaherty has again sharply criticized Canada's provincially run system of securities-law enforcement, calling the current structure inadequate and saying that a national regulator is desperately needed to protect investors and improve Canada's reputation abroad.

"We are the only industrialized country without a common securities regulator," he said yesterday in a speech to the Canada West Foundation in Calgary.

"For many, our system is seen as cumbersome, fragmented, slow and repetitive, and lacking the proper tools of enforcement."

Mr. Flaherty has warned several times this year that investors are ill-served by the current patchwork of 13 provincial and territorial agencies charged with enforcing securities law, but all of Canada's provinces and territories - except Ontario - have refused to get behind the minister's drive for a single securities regulator.

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Instead, those provinces have moved ahead with their own "passport" system of regulation, where they retain separate securities commissions but recognize approvals granted by other participating jurisdictions.

However, the passport system does "not go far enough or fast enough" and is "simply inadequate for where Canada needs to be," Mr. Flaherty said, noting that Canada still has 13 separate securities regulators and a lack of national co-ordination.

The minister was scathing in his view of how Canada's security regulations are perceived internationally, saying: "Quite frankly, our reputation abroad is not strong - and I'm putting it mildly - with respect to securities enforcement."

While the provinces haven't given the national regulator proposal their blessing, they have said they're not opposed to a new panel that Ottawa is launching to flesh out the idea. Mr. Flaherty said he expects to announce the composition of the expert panel shortly.

Alberta Premier Ed Stelmach told reporters in Edmonton that Mr. Flaherty's latest plea won't do anything to budge his province's hard-and-fast position on the issue.

"I've agreed with other premiers, especially [B.C.] Premier [Gordon] Campbell, that we are committed to the passport system. Our position has not changed," he said.

Bill Rice, chief executive officer of the Alberta Securities Commission, told The Globe and Mail that the passport system does address the "fundamental complaints" of securities regulators, as it "substantively harmonizes laws across the country so participants need deal with only one regulator."

However, he conceded that Ontario's non-participation did pose problems for the passport system.