Nfld Wants More Federal Money...

[blueblood]

That's not what I'm saying at all... Québec is not "poor" by any means. Not by international standards, not by the standards of other develloped countries. It's poorer than the Canadian average, when the Canadian average is severly skewed by oil revenu. It's true that we will likely not close that gap, because the gap with Alberta, Saskatchewan and NL is not caused by fiscal policy, or economic policy, but by the presence of ressources that are highly in demand. Other provinces are starting to fall behind as well, including Ontario. We're about median between the provinces, about average in unemployment... Average in growth, despite having higher taxes.

What I'm saying, is that if we were to drop our taxes to Alberta levels tommorow, our GDP per capita will not magically increase. Similarly, if large scale oil & gas operations takes off in Quebec, we could easily become a "have province" despite having 7$ daycare and cheap tuitions. I don't know how else to explain it.

Stop the Madness!

By Alberta, SK, and BC having attractive royalty rates, it makes it attractive for companies to exploit resources there than other places in the world. Having low rates has made it possible for small Canadian companies to start up and operate in that province where they would not have been able to under a higher tax regime.

If having high taxes and high gov't spending is such a good idea, why are companies investing in shale gas deposits in every other jurisdiction in North America other than Quebec?

In Manitoba the NDP of all parties dropped the small business tax rate to zero? (Hooray!! ) Why would a socialist party do that?

SK has had natural resources just as long as Alberta has and they only recently became a have province, why? Because the Sask party and prev. NDP slashed royalties and taxes to compete with Alberta next door.

[Smallc]

In Manitoba the NDP of all parties dropped the small business tax rate to zero? (Hooray!! ) Why would a socialist party do that?

Maybe because the Manitoba NDP isn't socialist? They've lowered taxes many times. They were to lower the business tax rate to 11% from 12%, but that's been put off because of the recession.

[blueblood]

Wild Bill, you don't get it.

If I own gold on the moon, am I rich? If someone provides a cheap way for me to bring this gold to Earth, does that make me rich? Or is the person who can bring the gold here the rich person?

No August, you don't get it.

I am a landowner in Western Manitoba, and with that there is a chance there might be oil or potash underground. As of now that oil or potash is gold on the moon.

However, if somebody wants to extract that gold or potash, I am entitled to surface rights. However, I have neighbours that also own land on top of the same potential resource. Now my land is completely drained, has better road access etc. Am I going to soak a mining company for that? No, and here's why, my neighbour can offer a better deal for the oil company in spite of having trees all over his land and poor road access.

Quebec tried soaking NFLD in the same manner, and NFLD just went next door. Quebec has no one to blame for this but themselves. This sort of thing happens all the time in the resource industry. Quebec thought they were the only land owner, and their arrogance has cost them billions of dollars.

[August1991]

I am a landowner in Western Manitoba...

You live in Western Manitoba. But what if you lived in the NWT?

Or what if the potash or oil was 20,000 meters under the ground you own?

However, if somebody wants to extract that gold or potash, I am entitled to surface rights.

Surface rights are one thing. But the greater question is how to extract this reource.

Quebec tried soaking NFLD in the same manner, and NFLD just went next door.

Blueblood, you still don't get it.

You're like Tim Horton's widow. You think that you should be rich because they use your husband's name. You fail to understand the source of the wealth.

Edited December 2, 2010 by August1991

[blueblood]

Maybe because the Manitoba NDP isn't socialist? They've lowered taxes many times. They were to lower the business tax rate to 11% from 12%, but that's been put off because of the recession.

Nope, the provinces take of the small business tax rate is zero as of today. All small business income tax goes straight to the feds. Having a strong PC opposition, and the PC's polling at 49% with a provincial election next year will centre any party.

[Smallc]

Nope, the provinces take of the small business tax rate is zero as of today. All small business income tax goes straight to the feds. Having a strong PC opposition, and the PC's polling at 49% with a provincial election next year will centre any party.

The Manitoba NDP has always been at the centre. That's why they've done so well for so long. I know what the small business tax is as of today, I'm talking about the general business tax. It is currently 12%, to be reduced to 11% when the budget allows for it.

Edited December 2, 2010 by Smallc

[August1991]

The Manitoba NDP has always been at the centre. That's why they've done so well for so long. I know what the small business tax is as of today, I'm talking about the general business tax. It is currently 12%, to be reduced to 11% when the budget allows for it.

Uh, what does the Manitoba NDP's position on the small business tax have to do with a hydro cable between Nova Scotia and Newfoundland?

Smallc, whatever you want to discuss - create a new thread.

[blueblood]

You live in Western Manitoba. But what if you lived in the NWT?

Or what if the potash or oil was 20,000 meters under the ground you own?

That doesn't matter, I still have neighbours in the NWT and elsewhere I have to compete with who could potentially allow more favorable access to the resource. Ed Stelmach tried that little game with his resource hikes and Brad Wall comes out laughing, why? Brad Wall offered more favorable terms of access to the resource than Stelmach did. As a result Stelmach had to slash royalty rates in order to bring drilling companies back to Alberta.

Same goes if it was 20,000 metres under the ground. If the neighbour can negotiate a more favorable surface rights compensation with a mining company, I'm out thousands of dollars. That resource can be 50,000 metres under the ground or at the centre of the Earth, but if the neighbour right beside me can negotiate more favorable terms with the company he wins and I lose.

Surface rights are one thing. But the greater question is how to extract this reource

That's not my problem, I'm in the same boat as Quebec. I provide the land, Quebec provides a possible route. If someone else can provide the land or another province can provide the route at a better price, then myself and Quebec lose.

Blueblood, you still don't get it.

You're like Tim Horton's widow. You think that you should be rich because they use your husband's name. You fail to understand the source of the wealth.

No, I think, I get it quite well, I've undercut neighbours with more favorable terms of access to gravel. I will take the first offer a company gives me because I know a neighbour down the road will try and get one for himself. I would rather take some money than take no money. Quebec got greedy and thought they were the only game in town, they lost.

Edited December 2, 2010 by blueblood

[blueblood]

The Manitoba NDP has always been at the centre. That's why they've done so well for so long. I know what the small business tax is as of today, I'm talking about the general business tax. It is currently 12%, to be reduced to 11% when the budget allows for it.

I'd say centre left, at the expense of the Liberal Party. I was confused because as of Today, the total tax bill for small business in Manitoba is around 11-12% as long as your under $500K after expenses.

If McFadyen wants to touch that, he's a fool and I'd spoil my ballot.

Edited December 2, 2010 by blueblood

[Smallc]

Uh, what does the Manitoba NDP's position on the small business tax have to do with a hydro cable between Nova Scotia and Newfoundland?

We're not really talking about a simple hydro project anymore. This discussion has broadened into one encompassing larger economic policy.

[August1991]

No, I think, I get it quite well, I've undercut neighbours with more favorable terms of access to gravel. I will take the first offer a company gives me because I know a neighbour down the road will try and get one for himself. I would rather take some money than take no money. Quebec got greedy and thought they were the only game in town, they lost.

Blueblood, you are starting to get it.

We Canadians in general owe our wealth to the fact that we are the only game in town. "We have energy" or rather, we have stuff/resources/energy accessible to users.

Now, to think in Canadian terms (French or English), what is the "only game in town"? Is it the gravel, or access to the gravel?

[blueblood]

Blueblood, you are starting to get it.

We Canadians in general owe our wealth to the fact that we are the only game in town. "We have energy" or rather, we have stuff/resources/energy accessible to users.

Now, to think in Canadian terms (French or English), what is the "only game in town"? Is it the gravel, or access to the gravel?

It is both access and the gravel itself. In my case, I only have surface rights and since my neighbours also have gravel and surface rights, I have to offer the best price to the people who want to extract the gravel. I can only offer access. If I had mineral rights, the gravel would be mine and I would get a bit more as the market would allow me, and I don't price myself out of access to gravel.

What Quebecer's don't get is that they aren't the only access game in town anymore. Nova Scotia has offered a better access deal for NFLD than Quebec did. And since there is no fees for laying cable underwater, that helps put Quebec and their pricing scheme at a disadvantage. If Quebec formed a ring all the way around Churchill falls and there was no alternative way of getting the power to customers I would agree with you. However, there is an alternative way under the water and through Nova Scotia, and that way was perceived as a better deal for NFLD to get there resource to customers, its a classic example of the market at work. Ed Stelmach learned this lesson about charging too much for access when there is someone next door willing to do it for cheaper, and now Charest will learn this lesson about charging too much for access when there is someone next door willing to do it for cheaper

[August1991]

What Quebecer's don't get is that they aren't the only access game in town anymore.

So, now you understand Canadian history - and the story of Churchill Falls.

Canadian history is about resource, and access. And you understand, in part, Smallwood and Williams (and Levesque).

But island people are different. (This "Newfoundland & Labrador" description is a modern political fiction. Newfoundlanders fished on the Labrador coast. Some now live rightfully on the lower North Shore. That's it.)

Newfoundlanders are island people, and the WASP males are fishermen - like Icelanders. (Catholic Newfoundlanders are transplanted Irish, another island story.)

---

The great thing about Newfoundland, or Quebec, or Canada itself - is that whether Catholic, or Protestant, we learned/managed to live together - as civilized human beings.

====

Margaret Atwood, a foolish woman, wrote a foolish book about Canada entitled "Survival".

We Canadians did not "survive". Cockroaches and squirrels "survive". We Canadians "compromised".

Edited December 2, 2010 by August1991

[Guy M]

Stop the Madness!

By Alberta, SK, and BC having attractive royalty rates, it makes it attractive for companies to exploit resources there than other places in the world. Having low rates has made it possible for small Canadian companies to start up and operate in that province where they would not have been able to under a higher tax regime.

If having high taxes and high gov't spending is such a good idea, why are companies investing in shale gas deposits in every other jurisdiction in North America other than Quebec?

In Manitoba the NDP of all parties dropped the small business tax rate to zero? (Hooray!! ) Why would a socialist party do that?

SK has had natural resources just as long as Alberta has and they only recently became a have province, why? Because the Sask party and prev. NDP slashed royalties and taxes to compete with Alberta next door.

I disagree... The Utica Shale was just recently discovered, and heavy interest has been shown... The Quebec government was actually going to permit drilling & fracking with some of the lowest royalties around. It was going to be a few percent of what BC is charging. The hurdle in this case has not been corporate taxes, or royalties, but environmental concerns about the process that would be used.

It's not more expensive for business to operate in Quebec than elsewhere... the personnal tax rate is higher, the corporate tax rate is about the same as everywhere else. It's actually 2 points lower than in Ontario for example

Edited December 2, 2010 by Guy M

[Wild Bill]

Wild Bill, you don't get it.

If I own gold on the moon, am I rich? If someone provides a cheap way for me to bring this gold to Earth, does that make me rich? Or is the person who can bring the gold here the rich person?

Newfoundlanders believe that since this phenomenal waterfall is in Labrador, that makes them rich. What they fail to understand, from Smallwood to Williams, is that Churchill Falls has no value unless it can produce electricity of use to someone.

The critical ingredient is not the waterfall in Labrador - it is the ability to bring this power to people who want it.

Now you talk "laissez faire"? August, I remind you that it was YOU complaining about the idea of Newfoundland getting any federal monies towards providing an alternative path for more Hydro-electric development that bypassed Quebec!

I was a salesman for many years. One thing you learned very early was to always leave the customer as happy as possible. If you boxed him into a corner so that he took your deal only because he had no choice it was guaranteed that the first time he was presented with an alternative he would drop you like a hot potato!

I understand your concept of ruthless capitalism. As a classic Liberal, I support it. I just think that your idea of how it works is a bit too shallow. I watched many old-fashioned companies die off from the 70's on, for being too short-sighted about business relationships. It was the Japanese who taught us that a deal should be good for both parties. I was very successful with my commission base. I found it paid more to have a smaller list of good customers that I could help grow much larger, instead of just trying to gouge any one I came across for the maximum profit on the one specific deal.

As an old hippy, I took great satisfaction at times giving some of these old companies their "comeuppance"! In the electronics industry we quite often went into shortages of some of the new computer integrated circuits. Delivery times would stretch out to more than a year! Some big company that up till then would never give me the time of day would phone up and try to buy out my entire year's commitment, at a good price. With a smile, I would refuse! Why should I leave all my regular customers high and dry for a one-shot deal that would not result in any lasting business? When the panic was over I would lose that huge company to the first competitor willing to drop his price by a penny! Meanwhile, my regulars would have been insulted by my abandoning them. They would have stricken me from their supplier's list and I wouldn't have blamed them.

To use an old phrase "You dance with who brung ya!"

It took a while but today's business has learned the hard way about the value of long-term relationships. There are hidden profits in having suppliers who can be counted on to support you when you need them. They may not be obvious on a General Ledger but they are very real. Sometimes it may take years but if you've ignored them sooner or later they will bite you on the ass!

By being so greedy with the original Churchill Falls deal, Quebec has ensured that there never will be another one. If she had left her customer feeling reasonably happy, the idea of an undersea cable would likely never have been considered.

Edited December 2, 2010 by Wild Bill

[Smallc]

It's not more expensive for business to operate in Quebec than elsewhere... the personnal tax rate is higher, the corporate tax rate is about the same as everywhere else. It's actually 2 points lower than in Ontario for example

Actually, last I checked, it's only .1% lower than Ontario.

[blueblood]

Actually, last I checked, it's only .1% lower than Ontario.

You forgot the small business rate of PQ is the highest in Canada at 8%. There are many small businesses that are utilized in the resource industry, which this puts Quebec at a major disadvantage. Then there is the tax rates of the other gas producing jurisdictions of Alberta and BC at 10 and 10.5% respectively.

Canada 2010 Corporate Income Tax Rates

From http://www.taxrates.cc/html/canada-tax-rates.html

Then there is the added cost of Royalties and Language laws/Enviro regulations. It all adds up to an expensive place to do business.

[Guy M]

Actually, last I checked, it's only .1% lower than Ontario.

Could be... I've seen 29% and 32% respectively. Not sure if this was for larger or small business. There's obviously many ways to make that comparaison

Edited December 2, 2010 by Guy M

[Smallc]

Could be... I've seen 29% and 32% respectively. Not sure if this was for larger or small business. There's obviously many ways to make that comparaison

The Federal rate is 18% (to become 16.5% January 1st), and the Quebec rate for corporations is 11.9%. Ontario's rate is 12%.

http://www.albertacanada.com/about-alberta/competitive-corporate-taxes.html

Compared to our neighbour to the South, Canada has low corporate taxes.

Edit: I think that the Oregon rate for manufacturing and processing has an improperly placed decimal.

Edited December 2, 2010 by Smallc

[Guy M]

The Federal rate is 18% (to become 16.5% January 1st), and the Quebec rate for corporations is 11.9%. Ontario's rate is 12%.

http://www.albertacanada.com/about-alberta/competitive-corporate-taxes.html

Compared to our neighbour to the South, Canada has low corporate taxes.

Edit: I think that the Oregon rate for manufacturing and processing has an improperly placed decimal.

This is what I've seen... it seems to depend on the case study

http://www.investquebec.com/en/index.aspx?page=1789

[Smallc]

This is what I've seen... it seems to depend on the case study

http://www.investquebec.com/en/index.aspx?page=1789

The 12% number is (I think), because of changes for 2010 on. The Quebec numbers are from 2009. Still, Quebec doesn't have high corporate tax. Really, only two places in Canada do (Nova Scotia and Prince Edward Island).

[August1991]

I was a salesman for many years. One thing you learned very early was to always leave the customer as happy as possible. If you boxed him into a corner so that he took your deal only because he had no choice it was guaranteed that the first time he was presented with an alternative he would drop you like a hot potato!

...

It took a while but today's business has learned the hard way about the value of long-term relationships. There are hidden profits in having suppliers who can be counted on to support you when you need them.

WB, I understand exactly what you are saying and I don't disagree with you when it comes to personal relations.

I too favour choice. When people have choices, they are richer. The freedom to choose is the best measure of wealth.

But the lack of choice is precisely what brings foreigners (and Canadian consumers) to Canada for their energy needs. Foreigners (or Canadian consumers) do not buy electricity or tar sands oil because we Canadians are nice or polite or because of personal relations.

The day that there is a better source of energy, they will drop us faster than Mick Jagger drops tour promoters. Politeness, friendliness will have nothing to do with the decision.

IOW, Canada's wealth is a gift of nature. We are not rich because of our talents, or niceness. We, like Norway, are rich because of glaciers about 20,000 years ago.

So, are Newfoundlanders rich because of Churchill Falls or are Quebecers rich because they are near Boston? It's all chance genetics.

----

As Canadians, our one claim to fame is that we have not squandered this natural wealth, the chance of glaciers, in foolish disputes. We have not behaved like children arguing over an inheritance. We have not done as Russians, Nigerians or Venezuelans. Instead, by and large, we Canadians have found a way to share this natural bounty in a civilized manner. We have compromised for the benefit of all. And as a result, we are a rich country.

People like Joey Smallwood and Danny Williams would have impoverished Canada by pushing it into a Nigerian fight for "the spiles". IMHO, Joey Smallwood and Danny Williams are typical third-world dictators. Like Mugabe or Chavez, they were at first popular among their people but in fact they did a great disservice to them.

Smallwood's reputation now is nothing like it was in 1965. Danny Williams' reputation will undergo a similar transformation.

Edited December 3, 2010 by August1991

[guyser]

The day that there is a better source of energy, they will drop us faster than Mick Jagger drops tour promoters.

So we find better sources and still use the old source for 20 more years?....and counting?

Edited December 3, 2010 by guyser

[TimG]

So, are Newfoundlanders rich because of Churchill Falls or are Quebecers rich because they are near Boston?

Governments build road and rail links to the US in order to allow Canadians to profit on proximity with the US. Helping NF build a transmission line is no different. It is only necessary because Quebequers have choosen to bad neighbors on this issue.

[blueblood]

...Instead, by and large, we Canadians have found a way to share this natural bounty in a civilized manner. We have compromised for the benefit of all. And as a result, we are a rich country.

People like Joey Smallwood and Danny Williams would have impoverished Canada by pushing it into a Nigerian fight for "the spiles". IMHO, Joey Smallwood and Danny Williams are typical third-world dictators. Like Mugabe or Chavez, they were at first popular among their people but in fact they did a great disservice to them.

Smallwood's reputation now is nothing like it was in 1965. Danny Williams' reputation will undergo a similar transformation.

You can put Levesque and every Quebec premier after him in the Williams/Smallwood - Mugabe Chavez comparison. The Quebec premiers acted like third world dictators and were out to be popular among their people with trying to soak NFLD with access and with out of control social spending. As a result Quebec is poorer and has slammed the door shut on a potential revenue stream to pay off a potential 45 billion dollar deficit in 2030.

As you put it, when people compromise everyone benefits. Quebec didn't want to compromise and is now forced to watch hydro line get buried under the water and put up in Nova Scotia.