jakke

Canadians Dominate World’s 10 Strongest Banks

CIBC was No. 3 in Bloomberg Markets’ second annual ranking of the world’s strongest banks, followed by three of its Canadian rivals: Toronto-Dominion Bank (No. 4), National Bank of Canada (No. 5) and Royal Bank of Canada (No. 6), the country’s largest lender. 

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Canada’s regulator, the Office of the Superintendent of Financial Institutions Canada, has gone beyond those levels in its requirements, a stance that has shielded lenders from some of the financial follies that undermined other global banks, especially in 2008. As far back as January 1999, OSFI sent a letter to Canadian banks telling them to set aside at least 10 percent of total capital as a cushion for losses. “I do not think it was popular at the time,” says Julie Dickson, OSFI’s superintendent. “That’s where having a supervisor with a pretty clear mandate allows you to take those unpopular decisions.”

The Canadian regulator also set criteria on the quality of banks’ assets, requiring them to hold 75 percent of their capital in equity. “When the crisis erupted, we realized we had stuck to a fairly basic rule, which was that the bulk of Tier 1 capital had to be in equity,” Dickson says. “That turned out to be very, very important.”

So that’s really surprising; it turns out that the country that enacted really strict capital safety restrictions during a boom still has really safe banks even though the economy is basically stagnating. What’s kind of cool is this:

TD Bank has accelerated a U.S. expansion strategy that Clark began in 2004. In 2008, the bank took over Commerce Bancorp of Cherry Hill, New Jersey, in a $7.1 billion transaction that helped give the Canadian lender 1,284 branches in the U.S. today — more than the 1,150 it currently has in Canada. TD’s green logo is now a common sight on the streets of New York, where it aims to become the city’s third-largest lender by number of branches within four years, and in Boston, where its name adorns the TD Garden, home to the Boston Celtics basketball team and Boston Bruins hockey team.

So basically, the overregulated Canadian banks are outcompeting the underregulated and highly-subsidized US banks. Seeing as the Canadian government is basically requiring the banks to park their assets in safe assets with low returns, this is basically the opposite effect you’d expect. This is basically a sign of how badly the modern banking system has misaligned incentives for top executives; they effectively have to be ordered to not drive their firms into the ground, or they end up requiring billions in emergency bailout funding.

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Taseko aims to ban prayers at hearings

A Vancouver company pushing the Harper government to reconsider a controversial gold-copper mining project in the B.C. Interior has privately urged Ottawa to ignore aboriginal requests to consider native “spirituality” as a factor in their determination, according to a letter the company sent to Environment Minister Peter Kent.

A new federal environmental review panel “does not have any right to attribute significance to the spirituality of a place per se,” wrote Taseko Mines Ltd. president Russell Hallbauer in a letter obtained under the Access to Information Act and provided to The Vancouver Sun by B.C. independent provincial representative Bob Simpson.

The chair of Tsilhqot’in First Nation near Williams Lake is quoted as saying “Let’s go turn the Vatican into a casino hall.” in response. Well played, sir.

The company also opposes one of the panel members despite her graduate-level qualifications in metallurgy and years of experience in environmental mining certification because of her affiliation with a First Nations organization that has expressed negative sentiments regarding the project. They certainly can’t object to her qualifications, so I’m going to assume they won’t recognize the legitimacy of any panel that doesn’t consist solely of lifelong mine enthusiasts. Anyway, Taseko is basically acting like the villainous mining corporation out of a children’s movie, here.

Incidentally, if you’re interested in finding the area in dispute on Google Maps but are stymied by the spectacularly unhelpful toponym “Fish Lake”, it’s here.

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results are coming in from the Alberta election

I may be posting more about this tonight (and, depending on how things go, in the next few days) so just a public service announcement that if you don’t want to see this you’ll want to block the “tarsands beef and democracy” tag.

Pay no mention whatsoever to the results that CBC is posting right now, by the way. Some candidates are recorded as leading with as few as two votes.

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Ottawa killed Katimavik – and missed boat on youth jobs strategy

Hey, look, another thing the government scrapped that isn’t the penny but is way more important: a program that set up three four-month internships for new high school grads in three different provinces and arranged for them all to live together in each city.

It did all the right things for new grads: gave them a chance to learn both English and French (because language education in Canada is terrible), a chance to see the country and meet new people and build their resumes, and enough support that it was generally feasible even if they were from relatively low-income families. Not saying it was entirely perfect, but Katimavik almost definitely had a way greater impact on employment outcomes per government dollar than, say, a BA in English from a heavily-subsidized university.

However, apparently the metric we’re using now for employment readiness is just going to be the completion of a degree. I guess this is because a degree is a signal of a middle-class background and the middle-aged people who vote want their kids to go get degrees. In terms of connecting all these highly-educated graduates to jobs in what’s increasingly a low-skills primary-resource-extraction economy, though, this was an absolutely terrible idea.

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SNC’s troubles widen as World Bank suspends subsidiary

Oh, goodness. SNC is one of the biggest (and shadiest) engineering firms in Canada; they’re already in quite a bit of trouble over tens of millions of dollars in (alleged) bribes and some uncomfortably tight ties with the Libyan government, whom it’s looking like they might have been bribing for contracts. This World Bank is suspending them because now it looks like they were also trying to win contracts via bribery in Bangladesh. Not cool, SNC.

This is a big problem for SNC because the World Bank underwrites quite a bit of infrastructure development in lower-middle income countries, and also being persona non grata with the World Bank is a pretty clear signal to governments that this is probably not a company that follows best practices.

So yeah, not cool at all. This is a company of almost 30,000 employees, and they’ve lost their CEO, and in general it looks like things are not going so well. They’re probably not going out of business anytime soon, but big cutbacks are possible.

To a certain extent the Canadian government should take this as a strong signal to tighten bribery laws. Currently, our legal standard for “due diligence” (that is, the degree to which executives are required to check that employees haven’t bribed anyone) is so low that the OECD has called us out for it. That’s definitely not a good place to be.

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Sexual behaviour and condom use of 15- to 24-year-olds in 2003 and 2009/2010

So this is kind of a cool new Statistics Canada release for those of you interested in public health, safer sex, and birth control. Or for those of you who want to see how much you’re getting laid compared to other 15- to 24-year-olds, I guess. Some highlights:

• Only 30% of 15- to 17-year-olds reported having had sex in the last year, compared to 86% of 20- to 24-year-olds. Don’t both of those numbers seem really low? I think there’s some underreporting, here.
• Compared to 2003, condom usage rose across the board in every province - especially with people who had only one partner in the last year. Good work, everybody.
• Overall basically everywhere in Canada around 32% of 15- to 24-year-olds reported multiple sexual partners in the last year. Except Yukon, where 54% did. You go, Yukon! I guess there’s not much else to do up there?

Click through for charts and such if that’s your thing. As someone who was 22-23 when this data was taken, I take some totally unfounded pride in these results.

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I watched the NDP leadership debate. Someone had to

The turning point was when moderator Yaffe was compelled to exclaim, “I want to remind you all to differentiate yourselves.” This was a fair point. In policy proposals and ideas, the candidates all seemed to be singing in harmony from the same kneedipper hymn book.

So I concentrated too. In truth, differences in policy details were difficult to discern. Green economy. Sustainable economy. Smart economy. Mind you, Brian Topp gave the impression – somewhat novel – that he thinks all young people should get jobs in the arts and have television careers.

The meat of the event, though, is about leadership and the way forward for the New Democratic Party. On these matters, and in particular the TV presence and smarts of the candidates, the impressions were stark. Thomas Mulcair, the alleged front-runner, is a bit of an alpha-male politician, cut from the same cloth as so many others. The hint of a short temper emerges in his statements and answers. On TV, affable he ain’t. He’s good with the stinging remark in the House of Commons but that’s meaningless in the glare of a general election campaign. He has the humourless force of a man whose ego has never been pricked. Topp’s strength, on the other hand, is affability. Too much of it, perhaps, to the point where he seems nice and very smart, but a bit flat-footed on TV.

Peggy Nash’s presence, measured tone and nuanced answers had the strongest resonance. There’s a fortitude and pragmatism projected in her onscreen persona that’s vivid and, memorably, she uses wit, not put-downs. There’s the air of a woman who has seen and heard plenty of male bluster but knows that bluster doesn’t get the job done. Interestingly, there were seven candidates speaking and debating, and some barely registered at all.

Yup, this sounds basically right. Mulcair seems so effing unpleasant, and as far as I can tell his main selling point is that he was elected in Quebec a few years before any other NDP - which, yeah, I can’t see having all that much appeal as a general-election selling point. (Other candidates, including Peggy Nash, speak French perfectly well, so that’s not a big concern here.)

Also, how has the NDP leadership race been so unexciting? I mean, whomever wins here has a decent shot of being Prime Minister someday (especially if they stick around for a few elections) but they’ve made the process so boring that it’s basically impossible to care about. I followed the French Socialist process more than I’m following the socialists at home.

The problem is almost certainly that the party’s frozen in a moment of veneration to Jack Layton, and they feel like they just need to recreate the situation that led to Jack Layton doing so well (viz. charming white French Quebecois while lying about advancing cancer) and they will be assured victory in the next election. This is not a healthy stance for the party that currently has the greatest role in holding the federal government accountable.

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Opponents of Alberta-B.C. pipeline travel to Ottawa to share concerns

Okay, so it’s really reassuring to see opponents of the pipeline organizing so effectively like this. The panel includes a lawyer from Vancouver, a representative of the fisheries industry, the owner of an expensive fishing resort, and the Chief of a northern BC First Nations government (who herself is there representing five northern BC First Nations). These are not people you would generally see working together in Canadian politics, and it’s very difficult to argue they don’t all have a real stake in preventing the pipeline construction.

I mean, I’m certain the federal government’s regulatory review will conclude that the pipeline is an excellent idea and that it should be built immediately. This is something that wealthy party backers want to see, and this is something that the base in Alberta wants to see, and this is something the government has invested its political capital in very heavily. So yeah, not much ambiguity here. But this degree of coordination between stakeholders in northern BC is promising for the inevitable court challenges once the pipeline gets approved. Already, it’s looking relatively likely that First Nations governments could have the pipeline overturned by court order as they have a case that they haven’t been reasonably consulted on the pipeline and possibilities for compensation. 

Remember, for the pipeline to be built it has to be approved by the federal government, clear all court challenges from First Nations or anyone else, be approved by the provincial governments (Alberta will definitely say yes, BC is less clear), have the terminus be approved by the municipal council in Kitimat (or move it), and actually move the equipment into place in the face of any direct opposition (e.g. roadblocks). And all of these things have to fall into place at the same time - if BC elects an anti-pipeline government next spring, they could kibosh the whole project right away. And they have to convince financiers not to pull out. So yeah, the project is very far from fait accompli.

(For those of you from the US who have expressed confusion on this topic in the past, this is not the Keystone pipeline that would have gone from Alberta down through the US to refineries in Oklahoma and port facilities in Texas. This one goes west from Alberta to the west coast of Canada - the part between Washington and Alaska. Type in “Kitimat” on Google Maps to see the location of the proposed pipeline terminus if you find this confusing.)

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