MLI Newsletter
Vol. III, No. 6
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VIDEO
Check out MLI's short video on what led Canada to the huge fiscal reforms of the 1990s, the payoff they had, and what needs to be done so that we continue to reap the rewards of reform for years to come! | |
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European-style debt crisis could happen here,
MLI study says | |
 In Provincial Solvency and Federal Obligations, MLI raised critical questions about the future solvency of several provinces in the medium and long term and shed light on an issue that needed to be part of the ongoing public policy debate in Canada. The study attracted huge media attention across the country and won the editorial endorsement of The Globe and Mail.
According to the study's author, San Francisco credit expert Marc Joffe, the threshold for a provincial default is an interest to revenue ratio of 25%. With current low interest rates, none of the provinces appear to be at risk of reaching this level in the near term. At the longer end of the spectrum, defaults become much more likely.
The study found that Ontario has the highest probability of default at the 10, 15 and 20-year forecast terms. Alberta has the highest default probability at the 30-year threshold even though it currently has the highest bond ratings and no net debt. Meanwhile, Quebec has the lowest default risk 30 years out.
The study was covered across a number of newspapers and TV and radio shows such as the Wall Street Journal, Globe and Mail, Postmedia newspapers, CBC, CTV, Reuters, and Huffington Post Canada to name a few. Nationally syndicated columnist Andrew Coyne wrote a column on the study that appeared in Postmedia newspapers. MLI's Philip Cross and Marc Joffe published op-eds across the country detailing the default crisis in each province. Finally, Cross published an op-ed in the Financial Post on provincial fiscal follies. |
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What should Canadians think about CNOOC's bid for Nexen? | |
 Last month, MLI hosted a thought-provoking and timely panel discussion on the economic and national security costs and benefits of CNOOC's offer to buy oil and gas producer Nexen. The panel included leading experts Ray Boisvert, CEO of I-SEC Integrated Strategies and recently retired Assistant Director for Intelligence at CSIS; Roger Robinson, former Senior Director of International Economic Affairs at the U.S. National Security Council; David Kilgour, former Secretary of State for Asia-Pacific; and Gordon Houlden, Director of the China Institute at the University of Alberta.
Want to know what our experts had to say? Click here to view video from the panel discussion, read speaker notes and more.
The Globe and Mail, Financial Post, Sun News Network, Global TV, BNN, CPAC, Bloomberg, and The Hill Times all covered the MLI event. Following the panel discussion, Roger Robinson appeared on the Dave Rutherford radio show to discuss the CNOOC-Nexen deal. Click here for full media coverage.
In addition, MLI's Brian Lee Crowley wrote an op-ed in the Ottawa Citizen, Calgary Herald and Vancouver Sun about how Canada shouldn't fear nixing the Nexen purchase. He then appeared on TVO's The Agenda with Steve Paikin to discuss the proposed Nexen transaction and foreign direct investment more generally. |
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MLI Leading Indicator continues to show growth in Canadian economy | |
 According to MLI's latest Leading Indicator, the Canadian economy continued to show growth after several sluggish months of economic activity. The indicator showed a growth of 0.2% in September, the second straight month of improvement after the index decelerated steadily in the first half of the year.
"The MLI indicator shows there is still life in the Canadian economy and Canada will finish the year in a growth position as we predicted some weeks ago," said MLI's Philip Cross.
Since the release of the latest Leading Indicator, it has made headlines across the country. The Financial Post, Reuters, CTV, BNN, Global News, Canadian Business magazine, Ottawa Citizen, Montreal Gazette, Winnipeg Free Press, Regina's Leader-Post, and Saskatoon's StarPhoenix wrote about the index. For details, click here. |
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U.S. media look to MLI for advice on what the U.S. can learn from Canada's fiscal fix |
 Between 1995 and 1998, Canada transformed a $32 billion federal deficit, equivalent to 4 percent of its gross domestic product, into a $2.5 billion surplus. How did we do it? MLI's Brian Lee Crowley writes about how Canada achieved its budgetary turnaround in the mid-1990s and the lessons the U.S. could learn from the fiscal reforms in The Washington Post and Roll Call, a newspaper published in Washington, D.C. delivered directly to Congress and the White House.
He says, "Progress on the deficit only became possible when parties ceased to treat it as a matter of partisan contention and, instead, saw it as a vital national interest." He concludes, "The American political class is no less capable than its Canadian counterparts of taking up this challenge. It can strengthen the nation while bolstering its own political fortunes."
The Washington Post op-ed was included in The Atlantic Wire's "Five Best Monday Columns and it was republished in newspapers across the U.S. Click here for more information and to read the op-ed.
The op-eds are based on MLI's book, Northern Light: Lessons for America from Canada's Fiscal Fix. |
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Provincial squabbles threaten future energy exports,
study says | |
 Canada needs to think hard about its future energy exports and how it ensures that disputes between provinces do not become obstacles to our ability to export energy and maintain our standard of living, an MLI study says.
In Sustaining the Crude Economy, MLI Senior Fellow Laura Dawson and co-author Stefania Bartucci warn that provincial disputes over revenues and risk such as the current squabble between British Columbia and Alberta are bound to continue to flare up as the energy sector grows and new infrastructure crosses provincial borders. Dawson and Bartucci say, "The steps we take today will enable us to deal with similar challenges in the future, so that provincial disputes do not become obstacles to competiveness." For the full study, click here.
The study attracted the attention of The Globe and Mail, Sun News, and more. |
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Why do commodity prices rise? Hint: Don't blame speculators | |
 Each time commodity prices rise, there are calls for more curbs on speculation. According to a new MLI Commentary by Larry Martin, Canadian risk management expert in the agri-food sector, there are many complex factors that affect price movements and a very basic one is the stock-holding behaviour of end users. The world grain processing industry has moved almost exclusively to just-in-time shipping of their raw material. This just-in-time delivery keeps costs down when there is plenty of inventory and good infrastructure. But when there is shortage, not so much. Martin says, "The effect is to increase prices - and the lower the inventories and the more just-in-case buying there is, the more prices will rise." Click here to read the full Commentary, Are higher prices driven by speculation or fundamentals?.
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| MLI's latest Great Canadian Debate: Simpson vs. Granatstein on the War of 1812 | |
 Has the War of 1812 been over-hyped? Or is it a foundation stone for today's Canada and United States that deserves a place of honour in our respective national memories?
On November 7th, The Globe and Mail's Jeffrey Simpson and Canadian historian Jack Granatstein squared off to debate this very topic to a full house at the Canadian War Museum in Ottawa. Who won the debate? You can decide by reading the opening statements and watching the debate online courtesy of CPAC, thanks to whom the debate was also re-broadcast twice to a national audience. For more on the debate, view photos, read audience reactions, and get Moderator Michael Bliss's take on the debate.
The next debate, Resolved: The Liberal Party has no future in Canadian politics, will take place on March 21, 2013 at 7 PM at the Canadian War Museum. Canadian historian Michael Bliss will face off against Eddie Goldenberg, former senior political advisor to Canadian Prime Minister Jean Chrétien. Tickets are now available!
A special thank you to our sponsors: Ottawa Citizen, Certified General Accountants, iPolitics, coverage provided by CPAC, The Great Waterway, City of Brockville, St. Lawrence Alliance, Free Thinking Film Society, and The Dorchester Review. |
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MLI in Saskatchewan | |
 This month, MLI travelled to Saskatchewan to speak at the 2012 Saskatchewan Party Convention. The keynote address given by MLI Managing Director Brian Lee Crowley on November 3rd discussed the province's bright future and its growing influence in Canada. Following the talk, Crowley appeared on John Gormley Live to continue the discussion on Saskatchewan's growing national influence. Click here to listen to the interview.
On November 5th, the University of Saskatchewan invited MLI to lead a public lecture on thought leadership in Canada. Click here for more information. |
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More news from MLI | |
In his columns for The Hill Times, Vancouver Sun and Calgary Herald, MLI's Brian Lee Crowley writes about the over-the-top-reaction to the renaming of the Museum of Civilization to the Canadian Museum of History.
Crowley then writes about the U.S. fiscal cliff in the Ottawa Citizen, Calgary Herald and Vancouver Sun, and appeared on CTV News to discuss it. He says, "Two cheers for the U.S. fiscal cliff. Without it, America's disastrous public finances would not be forced on our attention."
In the Financial Post, MLI's Philip Cross says there's nothing super about the CAW-CEP merger.
In her blog for The Globe and Mail, MLI Senior Fellow Linda Nazareth answers a number of questions troubling Canadians these days: Why the expanding economy still has us grumpy; why part-time employment may be the new normal; and why good economic policy matters now.
MLI Senior Fellow Alex Wilner has a new co-edited volume, Deterring Terrorism: Theory and Practice, published by Stanford University Press. It offers insights as to when and where terrorism can be deterred and includes chapters by top deterrence and terrorism experts and case studies on Iraq, Israel, Iran, and Libya. Click here for more information. |
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