Issue 51 Vol III, November 15, 2007

T H I S  O U R  N O R T H  A M E R I C A

Canadian Economy: Strong dollar hits hard
Khushwant Toor

THE surprising rise and then a sudden fall of the Canadian Dollar is now a source of anxiety and economic speculation rather than a source of pride for the Canadian people.

In the mid of last week the Canadian dollar rose more than $1.10 compared to the U.S. dollar, which was the highest since 1870. However, by  Friday one Canadian dollar fetched only $1.06. Again on this Monday the Canadian dollar fell nearly 3 cents more in its biggest one-day dive since January 1971. It closed unofficially at $1.0307 on November 11.

The strength of the Canadian dollar was being attributed to the robust Canadian economy a few months ago. However the fall of the Canadian dollar has started to spark a sense of insecurity among the Canadian markets and the investors have started to doubt the robustness of the Canadian economy.

Overall strength and rise of the Canadian dollar is sharpening the line between those in Canada who are benefiting from a stronger currency and those who are already struggling with its impact. The ailing U.S. housing sector and its overall economy showing the signs of slowdown has not only effected the businesses such as the Canadian lumber industry and the huge automobile sector which are directly dependent upon the U.S. exports, but also have created a sense of insecurity among all other businesses in Canada.

The Canadian manufacturing sector as whole and the Canadian exporters now have to contend with a currency that makes their goods less competitive. As a result Canadian trade surplus dropped 38% in September as the strengthening currency and flagging demand from the U.S., Canada's largest trading partner, undercut exports.

Canadian manufacturers are going through a very tough time. Higher energy prices are translating into a big increase in electricity as well as production costs. At the same time, revenue is taking a hit because most of the manufactures are paid in U.S. dollars. It is estimated that for every penny the Canadian dollar rises above parity with the U.S. dollar, local manufacturers lose about 1.5 billion Canadian dollars in profit. The automobile manufacturing giants such as Chrysler and GM are planning to cut jobs in their Canadian operations. It is estimated that with one direct lay off in an automotive manufacturing plant, 7 other indirect jobs get affected.

The high priced Canadian dollar is also sending shock waves through the tourism industry and is hitting the retailers hard, as Canadians head south of the border to the U.S. for shopping. Canadians have even started to buy their cars from the U.S. which averages to paying about $6000 to $8000 less than that paid for the same car in Canada. Fewer American tourists are coming to shop or to gamble in his Canadian casinos near the border cities such as in Windsor. The Retail Council of Canada estimates retailers have lost about 5% of their sales as Canadians go to the U.S. to take advantage of their new purchasing power. In response, retailers in Canada have to and are slashing their prices to match those in the U.S.

The Canadian economists and the currency experts have started to come out of their celebration mode and are now trying to look more realistically about how this is going to affect the Canadian economy. Some analysts now predicts that the strong currency will crimp economic growth by lowering exports and will contribute to higher unemployment as manufacturers shed jobs due to lower exports. As a result, while Canada averaged 3.5% economic growth in the first half of this year, that figure may fall to 2% to 2.5% in the next few quarters. Speculative investors who invested at a fast pace in order to get quick profits are being blamed for this surge in the dollar price.

In the future, the Bank of Canada forecast that the Canadian dollar would average about 98 cents US over the next two years. In the short term, however, most analysts believe the Canadian dollar will continue to fall in the next few days, but could rebound should oil and other commodity prices bounce back creating a sense of uncertainty among the Canadian markets.

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Another ostracized Sikh leader elected Gurdwara president
Gurpreet Singh writes from Vancouver

Despite the verdict of the Sikh clergy that ostracized Kashmir Singh Dhaliwal several years ago, the local Sikh community elected him as the president of the Ross Street Sikh temple.

Dhaliwal and his slate won the Gurdwara election with 2,256 votes. Their rivals got only 502 votes. The defeated slate led by Surinder Singh Sidhu was supported by some well known Indian national Congress supporters, while Dhaliwal was strongly supported by the Communists.

He won the election comfortably despite the position of the Akal Takhat Jathedar, Giani Joginder Singh Vedanti, who had refused to reverse the edict that ostracized Dhaliwal in 1998.

Vedanti was here recently to inaugurate a Sikh temple in Surrey. Being a head of the highest temporal seat of the Sikhs his visit had brought a hope of reconciliation among the moderate Sikhs, who were ostracized by one of his predecessors on the langar issue.

Vedanti not only refused to visit the Sikh temples controlled by the moderates, but also endorsed the edict which had excommunicated the moderate Sikhs. In 1998, the then Akal Takhat Jathedar, Bhai Ranjit Singh had banned the moderate Sikhs from serving langar on tables and chairs, a practice which was considered as normal among the Vancouver Sikhs since 1906.

Bhai Ranjit Singh, who was an orthodox head of the Akal Takhat and most popular among the Sikh radicals, had ordered the Vancouver gurdwaras to serve langar on the floor in a traditional way. However, the moderate Sikhs had refused to follow the edict that brought a division among the local Sikhs. The defiant moderate leaders, including Dhaliwal were excommunicated by Bhai Ranjit Singh.

After his election as president, the two important Sikh temples in the lower mainland are now led by the ostracized leaders. Balwant Singh Gill, who is the president of the Surrey Sikh temple, is also a leader of the North America Gurdwara Parbandhak Committee.

The moderate Sikh leadership is currently divided on a number of issues. Earlier, the Congress and the Communists were together in their struggle to free the gurdwaras from the control of the Sikh fundamentalists. While the fundamentalists have established their own temples in BC, the Congress and the Communists have parted ways.

Balwant Singh Gill is also facing a rebellion from within his own group. The Communists are opposing him from behind the scenes and propping the temple vice president, Sadhu Singh Samra to replace Gill in the next temple election. This division has given room to political opportunism. Only recently, Gill’s supporters organized special prayers for the wife of Jarnail Singh Bhindranwale at the Surrey Sikh temple. She had died a few weeks ago.

Bhindranwale was an extremist leader, whose supporters had fortified the Golden Temple complex in early 1980s. This fortification had led to the infamous Operation Bluestar. While Gill admits that he never supported the ideology of Bhindranwale, he claims that the special prayers were organized by the people who hail from his native village. ``We cannot stop anyone from organizing prayers’’.

Earlier, the moderate supporters of Balwant Singh Gill had helped one of the two fundamentalist factions in the New Westminster Sikh temple election.  Khushpal Gill, a staunch supporter of Balwant Singh Gill was badly beaten during the election violence by a supporter of the rival group. This incident had exposed the alliance between the moderates and the fundamentalists.

Incidentally, Khushpal Gill was a member of the slate that opposed Dhaliwal in the Ross Street Gurdwara election.

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Cananda: Conservatives threaten Senate abolition if reforms rejected

THE Conservative government has re-introduced two bills on November 13 that could lead to provincially elected senators and shorter Senate terms. The party also warned that it would support the abolition of the upper chamber if the changes are blocked. Senate reform bills, originally presented to the Senate during the last session of Parliament were not pressed then as the provinvises objected to these.

The bills  allow Canadians to pass judgment on the conduct of senators. Senators will now have to be accountable for the decisions they make, the work they do and the pay they receive.  Conservatives claim that accountability — the basis of democracy — will finally come to the Senate.

The first bill calls for provincial referendums to choose preferred candidates for vacant seats in the upper house. The prime minister would then choose senators based on the results of those votes. Currently, senators are selected by the prime minister and appointed by the Governor General without public input. Two provinces, Alberta and British Columbia, hold Senate elections but the results are non-binding.

The second bill restricts senators to eight-year terms, rather than the existing limit of up to 45 years until the age of 75.

When the bills were introduced in 2006, several provinces, including Ontario and Quebec, argued that the Senate could not be reformed without provincial consent. This prompted Liberal senators to shelve the bill indefinitely, and the reforms languished on the order bill until Prime Minister Stephen Harper prorogued Parliament.

This time, the bills have been introduced first in the House of Commons, with the hope that if they receive approval from the opposition parties, the Senate will be persuaded to pass them into law. Such an outcome would allow Harper to reform the Senate without reworking the Constitution, which would require co-operation from the provinces.

Conservatives are declaring from the housetop that the Senate must change. And if that change cannot happen through reform, then it should be abolished. New Democratic Party on ther hand  has called  for a referendum on the future of the upper chamber. Harper just agree to that.

It's not easy making major changes to a Canadian institution. Just ask former B.C. premier Bill Bennett, former Alberta premier Peter Lougheed, Reform party founder Preston Manning and former prime minister Brian Mulroney. Former prime minister Pierre Trudeau would agree, too, but for different reasons. Now, add Stephen Harper as the latest prime minister to tackle the issue of Senate reform.

There have been several attempts to bring Canada's upper house into a more modern century. It came into being through the Constitution Act of 1867 and was originally meant to act as a balance to the unchecked democracy of the House of Commons.

Overhauling the Senate requires constitutional reform, which means the government has to persuade seven provinces containing at least 50 per cent of the population that its plan is in the best interests of everyone. Making subtle changes is much easier: the government only needs to get a bill through Parliament.

Calls for significant Senate reform began to be heard in the mid-1970s. Prime Minister Trudeau was making the case for constitutional reform, highlighted by a charter of rights. Bill Bennett, premier of British Columbia at the time, took the opportunity to introduce Senate reform into talk of constitutional change. The model he favoured was a "House of the Provinces" in which provincial governments would choose senators to act as their delegates to the central government.

The idea had some support from both sides — but for different reasons. Trudeau was an advocate of a strong central government. In his view, a Senate made up of provincial representatives could serve to weaken the provincial governments.

Canada was undergoing major demographic shifts. The populations — and economic clout — of Alberta and B.C. were growing much faster than Quebec's. Quebec still held 24 Senate seats while Manitoba, Saskatchewan, Alberta and B.C. held a combined total of 24.

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