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This is a very rough draft of a personal research project that is ongoing.  I am not an economist,  a politician, nor am I involved in the Canadian dairy industry or related NGOs, other then as a consumer. June 15, 2018

The #NAFTADairyDivide affects US and Canadian 7th generation farmers with fewer than a 100 dairy cows, industrial-size dairy farms, large-scale producers like Saputo and Parmalat Canada, headquartered in Canada, with operations in the US, Canada, and other countries, dairy cooperatives, trade groups, lobby groups, international trade organizations and agreements like GAFF, WTO, TPP, NAFTA, and CETA, politicians, and consumers.

One of the most contentious issues reached a boiling point in 2016, as Canada responded to the exponential increase of the booming Dairy Ingredients Market, specifically MPCs like diafiltered milk (UV), produced in facilities in the U.S. along the CA-US border and sold tariff and quota free to producers in Canada from c. 2008 through 2016. US producers do not use (UV) and Canada does not produce its own. It became the catalyst for placing Canada’s dairy supply management system under the microscope. “[I]t’s all about an imported American dairy ingredient used to create pizza cheese — that’s right — a few hundred million dollars worth of a product called ultrafiltered milk (Verboven 2018).” The American agricultural economy represents $300-billion.

I want to understand what is currently being done in the name of Canada’s dairy supply management, as an overarching concept and in its regulatory details,  and how and why did this evolve historically. Who benefits from Canada’s dairy supply management and who calls for its removal at the local, regional, provincial, national and international level? Who calls the Canadian dairy industry a “success” in 2018, and why? To what extent is the Canadian dairy SM policy a protectionist device that conflicts with liberal trade principles? The dairy industry in particular, and the agricultural industry in general, places farmers at very high risks due to lack of control over prices, environmental conditions, etc, resulting in higher rates of suicide. Is this not the ideal place to re-calibrate capitalism and neoliberalism market policies at the level of WTO, CETA, NAFTA, etc through supply management and other devices to protect farmers first (those who nuture healthy soil using soil science and provide healthy, nutritious food), placing them at the top of the hierarchy, even above consumers, manufacturers, etc., instead of at the bottom? My economist friend is puzzled that such a miniscule section of the GDP, less than 1% has such staying power.

Below is a loosely generated collage of quotes and summaries from a wide variety of sources which I have read to help me enhance my own understanding, not only of the dairy industry in the age of open and free trade, but also the differing cultures between countries that affect the calibration of international liberal trade negotiations and policies.  This contextual material is organized into a webliography in alphabetical order with some of the content on related events from the articles, reports and a thesis, organized in a reverse chronological order timeline.

The Economist, which has championed the liberal worldview incorporating “freedom of speech, freedom of the press, freedom of religion, free markets, civil rights, democratic societies, secular governments, gender equality and international cooperation” since 1843,  recently created a Facebook Group, Open Future to “spur discussion about these liberal values and principles…for people who want to do that in a civil forum”.

I am proposing the topic of liberal trade policies with Canadian diary as an example.

I am developing a 3 sentence summary question that would be a catalyst for a discussion using the June 14, 2018 article in The Economist, “Breaking a few eggs: Donald Trump stomps on Canada’s economy: To avoid further damage, Justin Trudeau may have to stop coddling farmers” as a recommended read. http://bit.ly/NAFTATrumpStomps

Proposed question (draft)

As countries enter into international trade negotiations, with a long-term goal of decreasing and even eliminating barriers to the liberal ideal of free trade, how much consideration should be granted to differences between values within and between countries along the way. Using the Canadian dairy supply management system as a case study, at what point should a country be compelled to give up a system that works domestically. The US dairy industry production method is considered to be an open market in spite of $22 billion in subsidies a year whereas Canada’s is a supply management system. The Canadian Crown corporation, the Canadian Dairy Farmers (CDF), representing Canada’s roughly 12,000 dairy producers, defends the system which restricts overproduction and the number of imports on the supply side based on demand, and has resulted in a thriving domestic dairy industry. Globally the price of milk is low due to overproduction which benefits large milk processors but harms dairy farmers. The use of the Bovine Growth Hormone (rBST) to increase dairy production is illegal in Canada and legal in the U.S. The exponential increase in the amount of Milk Protein Concentrates (MPC) and Milk Protein Isolates (MPI) imported from the US facilities along the Wisconsin/New York/Canada border to Canadian processors, Montreal-based Saputo Inc and Parmalat Canada Inc.  as a cheap alternative which has cost millions of dollars to Canadian dairy farmers. This post-NAFTA invention, relatively inexpensive milk proteins, was previously listed as proteins not milk ingredients at the Canadian border. Through these bureaucratic loopholes, the American dairy industry was at an advantage for many years. In a recent article in The Economist, it was suggested that with the Canadian economy “already suffering” “Canada may have to stop coddling farmers” but warned the tri-partisan unified front behind Trudeau now, would be lost if Trudeau chose the economy over farmers. 

“Defenders of the current system say eliminating it would create new problems — starting with the billions it would cost to buy out existing quotas. They say the status quo provides stability in rural communities, allows farms to survive without boom-bust cycles, and makes taxpayer bailouts unnecessary. The U.S., meanwhile, maintains numerous support programs to prop up its farmers, they note. No major Canadian political party has ever opposed the system (Panetta 2017).” In 2015, the American government gave out “approximately $22.2 billion dollars in direct and indirect subsidies to the U.S dairy sector” which represents “the equivalent of 73% of the [dairy] farmers’ marketplace revenue” according to a February 2018 which focused on “changes introduced by the 2014 Farm Bill” (Grey, Clark, Shih and Associates 2018).

For example, in terms of cultural differences that emerged from different histories, it has been argued that, “Canadians tend to see government as a more positive force in the economy, hence the willingness to use public policy tools, including Crown corporations [like the Canadian Dairy Farmers (CDF), for example] to develop the economy and industry and to meet broader Canadian needs. The US Constitution, with its strict separation of powers, is based on a greater distrust of government (Crane 2009-2015).”

In her 2016 MA thesis, Canadian supply management : a food sovereignty policy? : British Columbia and New Zealand industry stakeholder“, Samantha Gambling described how “since its inception in the 1960s, Canadian supply management has been a contentious policy framework. Both the overarching concept and regulatory details of supply management have been debated extensively amongst political, industry and civil society groups; in recent years, supply management has garnered particular attention during the development of international trade negotiations ( Gambling 2016:5).”

Gambling’s thesis compares and contrasts Canada’s dairy supply management framework with New Zealand’s neoliberal model, which is often cited as a dairy-industry success story (Gambling 2016). (New Zealand rejected Canada’s entry into the TPP because of its SM policies). “New Zealand, which dismantled its supply management system and is a huge exporter of milk, has seen farm revenues decrease while consumers pay higher prices (Council of Canadians 2017).” “According to the Les Producteurs du lait du Québec, “In New Zealand, which exports more than 90 per cent of its production, things are even worse. Milk producers have absorbed revenue losses of more than 50 per cent. Farm debt has tripled in three years and 85 per cent of producers operate at a loss. Consumers do not benefit from the situation. They pay more for a litre of milk than Canadians do.” In New Zealand, prices went down in the short term, but rose over five years (Council of Canadians 2017).”

The Canadian Dairy Supply Management system is popular with dairy farmers who are protected from the extreme risks of market and price volatility faced by farmers elsewhere. Canadian consumers pay the price for this security through “artificially” higher prices for milk and yogurt, but they are not complaining loudly. Most Canadian politicians from all parties do not want to touch the thorny subject and it has been defended in tough negotiations through NAFTA and TPP.  It is regulated by WTO rules, which limits Canadian dairy exports. By 2018, the political climate has changed as have Canada’s relationship with the Trump administration, and NAFTA 2018 negotiations are much more aggressive. The supply-management system is under attack for not being an open system of liberal trade.

“The [Canadian] dairy industry is thriving like never before – and like none other in the developed world. Family farms milking an average of 80 cows each have prospered under a heavily regulated system that supports prices at sustainable levels by restricting domestic overproduction and keeping imports at bay (Barber 2018).” Meanwhile, in the United States, there has been an increase of suicides by dairy farmers on inter-generational family farms, who faced with debt, low milk prices and no prospect of improvements. Many aggressively expanded the size of their herds in 2014 when the price of milk reached a peak high.

By the numbers

92% of Canadians are “happy with the range and quality of dairy products available in Canada, and two thirds are satisfied with prices.” (Anderson and Coletto 2017) Canada does not allow the use of bovine growth hormone (BGH) whereas it is legal in the United States. The market would expand to include milk from U.S. farms that may have bovine growth hormone (BGH) in it, unlike the milk here in Canada, which doesn’t allow BGH.” “Only 23% of Conservative voters believe Canada should open up markets; 24% among Liberal supporters, and 9% among NDP voters (Anderson and Coletto 2017).

$1.51 The cost of 1 litre of rbST-free milk in Canada (AC Nielson, 2017 cited in Conway 2018). Canada does not allow the use of bovine growth hormone (BGH) rbST whereas it is legal in the United States (Council of Canadians 2017).
$1.63 The cost of 1 litre of rbST-free milk in the United States (AC Nielson, 2017 cited in Conway 2018).

20 CDN$20 billion The dairy industry in Canada supports nearly $20 billion towards the GDP (Conway 2018).

0 Canadian subsidies to the dairy industry (Conway 2018).

215,000 The Canadian dairy industry sustains about 215,000 jobs (Conway 2018).

10% No World Trade Organization (WTO) approved tariff rate quotas (TRQ)  are paid on the first 10 % of milk products imported by Canada from the United States (Conway 2018). Once this World Trade Organization (WTO) approved tariff rate quotas (TRQ) are reached tariffs are added.

3% No tariffs are paid on the first 3% of milk products imported by the United States from Canada (Conway 2018). Once this World Trade Organization (WTO) approved tariff rate quotas (TRQ) are reached tariffs are added.

41 countries, including the U.S., have World Trade Organization (WTO) approved tariff rate quotas (TRQ)  (Grey, Clark, Shih and Associates 2018).

14, 000 metric tons “nearly 14,000 metric tons of milk protein isolates (MPI) were imported to Canada in 2014, a “37 percent increase compared to 2013 imports (Howard 2017?).” For years the WTO TRQ could not be applied against the U.S. because of NAFTA. “As a result, U.S. exports of milk proteins over 85 percent protein to Canada have grown steadily in recent years (Howard 2017?).”

10, 000 metric tons is the WTO TRQ limit set for market access to Canada for the rest of the world for MPC and MPI products. Above that, the WTO over-quota tariff rate is 270%  (Howard 2017?).”

USD$22.2 billion In 2015, the American government gave out “approximately $22.2 billion dollars in direct and indirect subsidies to the U.S dairy sector” which represents “the equivalent of 73% of the [dairy] farmers’ marketplace revenue” according to a February 2018 report by Grey, Clark, Shih and Associates, which focused on “changes introduced by the 2014 Farm Bill” (Grey, Clark, Shih and Associates 2018). Because of the subsidies, processors can “purchase milk at prices below the costs of production” which “offers a significant competitive advantage to the American dairy industry (Grey, Clark, Shih and Associates 2018).”

 

USD600 The “entire trade in dairy products between [Canada and the U.S.] is worth less than US$600 million (Barber 2018).”

USD 30 million The amount the Greenwood, Wisconsin-based Grassland Dairy Products of Greenwood claimed it lost overnight in 2016 when Canadian producers Agropur stopped importing U.S. Milk Protein Concentrates (MPC) and began to use Canadian milk to make cheese in April, 2016 when Ontario’s dairy farmers set a new price Class Six for MPC to compete with U.S. (Barrett 2017).” As a result Grasslands ended their contracts with 75 farmers in Wisconsin (Morgan 2017).”

75 The number of farmers whose contracts were cancelled by Grasslands in April 2016 ((Barrett 2017, Morgan 2017) which raised the ire of US politicians in Wisconsin and New York states and caught the attention of President Trump.

9,200 The number of dairy producers in Wisconsin in 2016.

4,500 The number of dairy farms in the state of New York (Kilgannon 2018).

3.4 “Those working in farming, fishing and forestry were 3.4 times more likely than other American workers to commit suicide on the job (Kilgannon 2018).”

270 The 270% tariff on U.S. milk cited by Mr. Trump to criticize Canada’s trade imbalance. Canada placed a new 200% to 300% tariff on American dairy products through its Class Seven program in 2017 (Orol 2018).” “[T]hose tariffs range from nearly 300 per cent for excess imports of butter and cream to 270 per cent for certain dairy powders to 240 per cent for cheese, whole milk and yogurt (Berthiaume 2018).” They apply only after the WTO quotas have been reached. 

USD 86.97 billion The predicted growth by 2024 of the booming “Global Dairy Ingredients Market (lactose, milk powder, casein & caseinates, MPC & MPI and whey ingredients) up from 13.7 million tons in 2015 (PR Newswire 2018) .”

85 85% or more protein is the percentage of protein in Milk Protein Concentrate (MPC) and Milk Protein Isolates (MPI) products that the United States dairy industry can export into Canada with unfettered access to the Canadian market according to the current NAFTA agreement.

80-85 The average number cows milked daily on Canadian family farms that prosper “under a heavily regulated system that supports prices at sustainable levels by restricting domestic overproduction and keeping imports at bay (Barber 2018).”

225 The average number of cows on American farms (Conway 2018).

11,000 Number of dairy farms in Canada  (Conway 2018).

41,800 Number of dairy farms in the United States  (Conway 2018).

0 Canadian political parties have ever opposed the supply management system (Panetta 2017).”

3 The number of milk processors in Canada who control 80% of production. Montreal-based Saputo Inc, Agropur Cooperative, and Parmalat Canada Inc.

10 10%, By 2014, Montreal-based Saputo Inc controlled 10% of the American market by 2014 (Marowits 2014).

$100 million The value of small deals Saputo made in Canada compared to the “larger growth prospects for the dairy” in the “fragmented United States”, Australia and Brazil (Marowits 2014).

7 or 8 The number of players controlling  90 to 95% of the dairy industry in Australia in 2014 (Marowits 2014).

1 billion litres The volume of milk processed in Argentina in 2014 compared to 400 million litres in 2003 (Marowits 2014).

5% The percentile growth targeted in US Dairy Export Council (USDEC)‘s September 2017 new strategic plan “The Next 5%” where they aim to “increase their dairy export market by 5% by 2021 by ensuring access to the Canadian market by fighting “Canada’s actions to block U.S. dairy exports (Shoup 2017).”

15 USD15 $15 per hundredweight The amount the the price of conventional milk dropped in the U.S. by March 2018.

25 USD25 The price per hundredweight at which the price of conventional milk peaked in 2014 (Kilgannon 2018).”

Overview

The American dairy invested in building processors along the Canadian-U.S. border to produce milk protein concentrates (MPC), such as ultrafiltered milk or diafiltered milk. MPC, whose origins can be traced to research in France in 1969, became very popular in the late 2000s. The Global Dairy Ingredients Market (lactose, milk powder, casein & caseinates, MPC & MPI and whey ingredients) is a booming market with predicted growth expected to reach USD 86.97 billion by 2024, up from 13.7 million tons in 2015. The growing interest in MPC and ultrafiltered milk is partly because of greater consumption of healthier foods globally. The increased production of MPC was a huge boost to the American dairy industry as they were faced with a milk glut (global milk prices were low, their herds were too large, they were overproducing – stockpiles were even purchased by the American government). Canada had no facilities for producing ultrafiltered milk so all the MPC was imported. Since the commercial production of MPC was invented post-NAFTA, it is not subject to the WTO’s tariff rate quota (TRQ) that capped the amount of product allowed in (AGCanada 2016).” That’s meant the American dairy industry has had complete and unfettered access to the Canadian market place for diafiltered milk for several years. (Diafiltered milk is not used by American dairy processors.)  To complicate the issue, MPC also created a “bureaucratic problem since Canada’s border agency treats the proteins differently than its food inspection agency, resulting in tariff-free access (Nickel, 2016).

This changed in April, 2016 when Ontario’s dairy farmers set a new price Class Six for MPC to compete with U.S. MPC. As a result, Canadian dairy co-operative Agropur stopped importing U.S. proteins and began to use Canadian milk to make cheese. With this abrupt change, one Wisconsin facility claimed they lost $30 million overnight.

Bloomberg claimed, “Again and again, Trump has assailed Canada’s 270 percent tariff on U.S. milk. But the reason he’s worried about milk exports to Canada is a non-tariff measure. Deterred from exporting whole milk to Canada by the tariff, the U.S. dairy industry began selling so-called ultrafiltered milk, a protein-rich product used in the making of cheese that wasn’t subject to the tariff. U.S. exporters did great until last year, when a regulation pushed through by Canadian dairy farmers priced local milk product ingredients at below international market prices, hurting the viability of U.S. imports. Canada still buys more dairy products from the U.S. than the other way round. If it were to cancel its 270 percent tariff, it can still protect its farmers through moves similar to the National Ingredient Strategy, which created a new milk product class (Bershidsky 2018).”

In September 2017, the US Dairy Export Council (USDEC)  introduced a new strategic plan called “The Next 5%” to “increase their dairy export market by 5% by 2021 by ensuring access to the Canadian market by fighting “Canada’s actions to block U.S. dairy exports (Shoup 2017).”

The Canadian Dairy Supply Management system is a “labyrinth of intertwined regulations and a symbiotic relationship between the Federal and Provincial governments. While it is true that some things are in the direct control of the Provinces, it is generally the case that a Province could not effectively maintain these controls without the Federal system and sanction (FactCheckNovakovic 2017).”

My interest was really piqued by John Barber’s June 9, 2018 article “Why Canadian milk infuriates Donald Trump.” Barber observed that the “entire trade in dairy products between the two countries is worth less than US$600 million (Barber 2018).” The article also quoted a Canadian professor who had visited the States and interviewed the Wisconsin Farmers Union and reported that they “really want” a supply managed system like the Canadian dairy industry (Barber 2018).

The issue that the U.S. negotiators bring to the table is that Canada has placed a new 300% tariff on American dairy products through its Class Seven program introduced in 2017 (as a follow up to Ontario’s Class Six), which the U.S. claims is devastating the dairy industry particularly in the states of Wisconsin and New York.  The “United States and other countries are allowed to export a certain amount of dairy to Canada duty-free” based on “quotas set by the World Trade Organization (Orol 2018).” “Once the threshold is reached, Canada imposes huge tariffs — usually between 200 and 300 percent — on imports of certain dairy products, essentially restricting their entry (Orol 2018).”

To be continued…

A selected timeline of related events in reverse chronological order

June 15, 2018 In an interview on CBC’s Island Morning, Agriculture Secretary Sonny Perdue Yarr, who was meeting with Canadian Agriculture Minister Lawrence MacAulay on Prince Edward Island  on June 15, 2018, “denied any U.S. plan to end supply management (Yarr 2018).” Perdue said, “The United States is not about trying to get Canada to ditch its supply management system. What we are saying is if you’re going to have a supply management system, you’ve got to manage the supply, and not over-produce and not over-quota where you dump milk solids on the world market and depress prices from our producers south of the border (Yarr 2018).” MacAulay added, “Regarding Canadian over-supply, MacAulay said Canada produces about one per cent of the world milk solid supply (Yarr 2018).”

2018 “There has been a spate of suicides in the state [of New York] as the dairy industry has nose-dived, resulting in the closing of hundreds of small farms…Whatever the prevalence of suicides, there is no doubt about the widespread hopelessness afflicting the industry…. While the dairy industry nationwide is in the grip of an economic crisis — fueled by decreasing demand as customers turn to milk alternatives…New York is the third largest milk-producing state in the country and low milk prices have not only devastated farmers financially — most are selling milk for less than it costs to produce — but also emotionally….There are about 4,500 dairy farms across the state of New York (Kilgannon 2018). “Those working in farming, fishing and forestry were 3.4 times more likely than other American workers to commit suicide on the job, according to a 2016 study by the federal Centers for Disease Control and Prevention (Kilgannon 2018).”

June 9, 2018 In Quebec, Canada “the dairy industry is thriving like never before – and like none other in the developed world. Family farms milking an average of 80 cows each have prospered under a heavily regulated system that supports prices at sustainable levels by restricting domestic overproduction and keeping imports at bay (Barber 2018).”

June 8, 2018. President Donald Trump tweeted, “Canada charges the U.S. a 270% tariff on Dairy Products! They didn’t tell you that, did they? Not fair to our farmers!”

June 5, 2018. PRS Newswire reported that “The Global Dairy Ingredients is extremely competitive with a huge number of companies trying to capture the market.” “The Global Dairy Ingredients Market size was estimated at 13.7 million tons in 2015 and is expected to reach USD 86.97 billion by 2024. Factors such as population starting to age, increased health issues, better awareness about the benefits of food products rich in nutrition, better production and sluggish lifestyle are expected to benefit the overall market. A shift in food habits, from customary food to nutritional food has been observed. The industry is extremely competitive with a huge number of companies trying to capture the market (PRS Newswire 2018). “High concentrate ingredients such as …milk protein isolates are majorly found in developed countries like the U.S., Germany, and France…Skim Milk Powder (SMP) is gaining popularity in the market. The United States and The European Union are the major SMP producers worldwide. They produce above half of the world’s supply of SMP. In 2013, the U.S. had the foremost share signifying 28% of exports. Whereas, the E.U. exhibited around 21% of the total exports in the same year. Industry participants are investing in R&D and new production sites to come up with innovative production techniques to cater to the existing hindrances in the market. Major industry participants include Euroserum (France), Dairy Farmers of America (U.S.), Murray Goulburn Co-Operative Co. Limited (Australia), Saputo Inc. (Canada), Arla Foods. (Denmark), Volac International Limited (U.K.), Fonterra Co-Operative Group (New Zealand), Groupe Lactalis (Germany), FrieslandCampina (The Netherlands) and Glanbia Plc. (Ireland)(PRS Newswire 2018).” “On the basis of type, the dairy ingredient is segmented into lactose, milk powder, casein & caseinates, MPC & MPI and whey ingredients (PRS Newswire 2018).”

June 2, 2018. Trudeau indicated on NBC’s “Meet the Press” that the government was open to relaxing the system as part of a new NAFTA deal (Todd 2018).”

May 2018. According to their May 2016 report,  Research and Markets predict that the Global Dairy Ingredients Market would “register a Compound Annual Growth Rate CAGR of 5.2% during the forecast period 2018-2023 (Mordor Intelligence. Research and Markets 2018.”

 

April 17, 2018. Chuck Schumer (D-NY) called for an end to Canadian program hurting upstate dairy farmers (Magnarelli 2017 ).

March 2018 The price of conventional milk dropped “below $15 per hundredweight from its peak of over $25 in 2014 (Kilgannon 2018).”

January 2018 StatsCan reported a domestic herd of dairy cattle “increase of 2.7 percent, with 1.4 million cows and heifers on Canadian operations (StatsCan 2018).”

January 23 – 19, 2018 NAFTA negotiators were to meet in Montreal for the sixth set of renegotiations talks (Orol 2018).

October 15, 2017 Unexpectedly, near the end of a week-long round of NAFTA negotiations, the U.S. called for an end to Canada’s “supply management system for dairy, chicken, eggs and turkey within the next decade…with an initial phase-in period of five per cent more market access per year, leading to total duty-free, quota-free trade in protected supply-managed areas within 10 years (Panetta 2017).” “The supply management request follows an earlier request for a de-facto veto over Canadian milk-classification decisions, which in the case of diafiltered cheese-making products has advantaged Canadian producers  (Panetta 2017).”

2017 ” ultrafiltered milk and other protein-rich dairy ingredients used to make dairy products such as cheese and yogurt in Canada was imported from the US to the tune of $133-million last year…”

2017 Serge Riendeau, President of Agropur Cooperative from 2002 to 2017, was appointed CEO of the Ottawa-based Crown corporation, the Canadian Dairy Commission (CDC). (Agropur 2017)

September 2017 The US Dairy Export Council (USDEC)  introduced a new strategic plan called “The Next 5%” to “increase their dairy export market by 5% by 2021 (Shoup 2017).” The aim of the USDEC is to USDEC also aims to ensure “access to key international markets such as the EU and Canada where they have faced the most resistance.” The USDEC continues to “fight European Union efforts to restrict the use of common cheese names and Canada’s actions to block U.S. dairy exports, and to preserve the trade framework with Mexico that has delivered tremendous U.S. dairy export growth (Shoup 2017).”
August 2, 2017 While, Sagging global prices for milk are now forcing farms around the world out of business. Not so in Canada (McGregor 2017).” A Chinese corporation, Feihe International, Inc., a “manufacturer with over 50 years of experience and keen to expand to North America”, is constructing a state-of-the-art baby formula plant a “40-acre site in Kingston, Ontario” which will open in 2019. It will “employ over 200 people in manufacturing and research jobs” and about 1,000 in construction.  It represents “unprecedented $225 million investment” in eastern Ontario. One of the major reasons is Canada’s supply management. As China phases out its one-child policy, the country will need baby formula and therefore cow and goat milk. About “Roughly 85 per cent of the powdered formula” will be sent back to China. Many Chinese distrust Chinese dairy products following the 2008 incident when hundreds of thousands of babies became ill and six died after drinking baby formula tainted with melamine. “New Zealand’s dominant dairy cooperative was a minority shareholder in Sanlu, the company at the heart of the melamine scandal“, so the Chinese could not invest in the New Zealand dairy industry (McGregor 2017).  The New Zealand dairy cooperative Fonterra owned a 43% stake in Sanlu (Lee 2008, Ritchie 2009).

August 1, 2017 Then-Canadian Trade Minister François-Philippe Champagne announced that Canada’s newly revised allocated tariff rate quota (TRQ) on European cheeses coming into Canada, as part of the new Comprehensive Economic and Trade Agreement (CETA), would be “for 16,000 tonnes of fine cheese and 1,700 tonnes of industrial cheese.” This disappointed Canada’s dairy industry concerned about the influx of c. 18,000 tonnes of European cheeses will be imported once the Canada-EU trade deal takes effect in September, [2017] (McGregor 2017-08-01). Canadian negotiators initially planned on giving 60 per cent of this quota (TRQ) to the Canadian “domestic dairy industry, to compensate for market share it’s about to lose” but further negotiations resulted in half the new quota going to the “domestic industry’s cheese makers while the other half is allocated to distributors and end retailers” (McGregor 2017-08-01). “Small and medium-sized businesses will receive the majority of the quota in each half, helping artisanal cheese makers and independent vendors. The Liberal government wants to help smaller enterprises realize the economic benefits of future free trade agreements (McGregor 2017-08-01)…Under Canada’s supply management system for dairy products, imports are severely limited in order to manage domestic market prices. Few European cheeses come into Canada duty-free, with enormous tariffs applied to all others to discourage high volumes of imports. Canada will nearly double the amount of EU cheese it imports duty-free. It’s the first time it has awarded new cheese quota since the 1970s (McGregor 2017-08-01).”

May 2017 “The U.S. ha[d] more than 800 million pounds of American cheese in reserve, the most since 1984, according to the USDA. The amount of butter in reserve [totaled] 272 million pounds, the most since 1994. Some U.S. farmers [were] dumping millions of pounds of excess milk onto fields. In the Midwest and Northeast, nearly 78 million gallons of milk [were dumped by May 2017], up 86% from the same period [in 2016] (Haddon 2017).”

March, April 2017 The U.S. dairy industry “embarked on a fierce letter writing and lobbying campaign in the spring of 2017, both at the state and federal level, to urge their representatives to retaliate” against Canada’s new milk class Class 7 for protein concentrates, skim milk and whole milk powder

First week in April 2017 Grassland Dairy Products of Greenwood “notified about 75 Wisconsin farms that as of May 1, it is canceling their contracts because it has lost its Canadian business (Barrett 2017).”  Stewart-Peterson’s Bryan Doherty said, “75 farmers in Wisconsin, there are 9,200 dairy producers, it’s a small percentage, but the big part is it’s a big anxiety for all producers (Morgan 2017).” Commodity Risk Management Group ‘s Mike North said, “This is a very different situation, because it has more to do with politics and less to do with markets or bad financial situations that are broader than agriculture itself. They really didn’t change their position, they just cleaned up some of the loose ends that existed since that position was first taken. Ultimately, I wouldn’t blame them, so to speak, but at the same time, their action is what quickly caused this scenario. If this whole affair wouldn’t have taken place in April but rather in July, none of this conversation would have been had (Morgan 2017).” North called the situation “unprecedented”.

In their c. April 7, 2017 statement, “Blame Canada” the Dairy Farmers of Canada (DFC), “The truth is, both the U.S. and world dairy markets are currently over-saturated, which has led to low prices at the farm-gate and a lower price received by the processors. Simply put, in the U.S, and around the world, too much milk is being produced. In the U.S, the oversupply of milk is exacerbated in an environment where processing capacity is lacking. When too much milk is produced, prices crash and there is no incentive to invest in increased processing capacities. The end result is job loss, loss of income for farmers, and in some cases, farmers having to shut down their farms. By contrast, in Canada, supply management (literally matching supply with demand) avoids overproduction, and reduces the impact of devastating market fluctuations, such as those that the U.S is currently experiencing. We know that dairy producers in the U.S are going through tough times; however, incorrectly laying the blame on an unrelated Canadian domestic policy will not improve their situation. To further put things into perspective, Canada only has a population of approximately 36 million people – less than the state of California. No matter how one views the situation, exports to a comparatively small Canadian market – one that is already filled with Canadian milk – are a drop in the bucket that will not solve the problems currently impacting the U.S dairy industry. It is wrong to use Canada as a scapegoat for the situation in the U.S (DFC Blame Canada 2017).”

April 2017 Grassland Dairy’s Goedhart Westers learned that “their Canadian market was gone, a destination worth 1 million pounds of milk a day (Morgan 2017).”

April 1, 2017 Cayuga Milk Ingredients in Auburn, New York, which produces powered milk mainly for export to developing countries, claimed they lost $30 million in export sales when Canada implemented their pricing program in 2016 through which Canada stopped purchasing ultra-filtered milk (Nickel, 2016).”

April 2017 United States dairy farmers are producing too much milk, and the price of milk dropped just as milk product importers cut back their purchases which “may pose one of the biggest challenges yet to the U.S. dairy industry. Milk product importers, such as China, Russia, Venezuela cut back on their dairy purchases since c. 2015. “The European Union…greatly increased its dairy production after lifting 30-year-old quotas in 2015.”  There is a “world-wide surge in agricultural production that has pushed down prices for grains and meat as well as for dairy (Haddon 2017).

2017 “Though about 550 dairy farms closed in the state from 2012 to 2017, the number of dairy cows has increased to 625,000, up from 610,000 (Kilgannon 2018).”

March 2017 By 2017 there was a “very heavy demand for butterfat in Canada” which resulted in “a surplus of ‘non-fat solids’”. To deal with the surplus of ‘non-fat solids’, the “Canadian dairy industry created a new milk class in March (Class 7) “, backdated to February 1, to “price milk ingredients like protein concentrates, skim milk and whole milk powder .” It was “one part of a National Ingredient Strategy [under negotiation in 2017] between Canada’s dairy farmers and its dairy processors

March 2017 By March 2017, “there were 9.4 million commercial dairy cows in the U.S., a 20-year high, according to the Agriculture Department (Haddon 2017).

October 28, 2016 In their October 2016  Research and Markets @researchmarkets report, they announced that Dairy Ingredients Market was “projected to grow significantly from an estimated value of USD 45.55 billion in 2015 to USD 66.11 billion by 2022 at a Compound Annual Growth Rate (CAGR) of 5.61% ).”

June, 2016 There was pressure from Canadian dairy farmers as the demand for domestic milk was decreasing faced with “$150 million worth of U.S. milk protein isolates (ultrafiltered milk or diafiltered milk) used to make cheese and yogurt (Mussell 2006:1, Nickel, 2016). “Canadian imports of U.S. milk protein isolates have jumped 10 times by volume over five years to 2,700 tonnes in January 2016, according to Farm Credit Canada. The proteins are a cheap alternative to skim milk for Canadian processors such as Saputo Inc and Parmalat Canada Inc, who must meet federal standards for milk and protein content in cheese…A move toward consuming more butterfat, through butter and cheese, and less milk, is partly behind Canada’s problem. The trend has already generated a surplus of domestic skim milk…It’s also a bureaucratic problem since Canada’s border agency treats the proteins differently than its food inspection agency, resulting in tariff-free access…Ontario’s dairy farmers set a new price for certain milk ingredients in April to compete with U.S. proteins. As a result, Canadian dairy co-operative Agropur has stopped importing U.S. proteins and uses Canadian milk to make cheese… The U.S. dairy industry has noticed a drop in demand from Canada since the Ontario farmers’ move, and is also wary of government action, according to Wisconsin-based Grassland Dairy Products Inc, which exports the proteins (Nickel, 2016).”

April 1, 2016, the Ontario Class Six regulation changed the pricing for milk proteins, including ultra-filtered milk, and this year most of the other provincial boards followed suit (Cuomo 2016)  Class Six included milk ingredients like protein concentrates, skim milk and whole milk powder. “The Americans, Australians and New Zealanders insist the new pricing class has effectively pushed them out of the Canadian dairy market. They want the new pricing regulations challenged at the World Trade Organization

March 2016 Saputo Inc, with a  revenue of C$11.2 billion in 2017announced they were closing their plant in Sydney, Nova Scotia and they were laying off 230 people, some of whom had worked there for over three decades. The plant made “milk, sour cream, coffee cream, ice cream mix and plastic milk jugs (Shannon 2016).” Saputo has been closing plants in the U.S. and Canada since at least 2014. They closed a facility in Princeville, Que., in August, 2016 and a third facility in Ottawa in December 2017 “to cut costs and boost efficiency (Shannon 2016).” Saputo’s facility in Montreal consolidates its distribution activities (Shannon 2016).

May 1, 2016 The Canadian Milk Supply Management Committee (CMSMC) set a “stop-gap” interim national program effective from May 1 to July 31, 2016 by modifying the “prices paid in milk class 4(m) for milk protein concentrates (MPC) to “support access to Canadian ingredients at competitive prices.” By subsidizing the use of Canadian dairy ingredients it made it easier for milk processors to end their imports of diafiltered milk from the United States. Agropur Co-operative, was the first Agropur becomes the “first major national processor” in Canada to halt its use of diafiltered milk. It halted their purchase of U.S. diafiltered milk immediately (AGCanada 2016).” “The CDC said the change was put in place to level the playing field among Canadian cheese makers after Dairy Farmers of Ontario implemented a new class 6 in that province. DFO’s new class, the commission said, gave a “competitive advantage” to Ontario cheesemakers compared to those in other provinces  (AGCanada 2016).”

April 12, 2016 “Pierre Paradis, Quebec Minister of Agriculture, Food and Fisheries, Marcel Groleau, President of the Union des producteurs agricoles (UPA), Bruno Letendre, Chair of Les Producteurs de lait du Québec”, and Riendeau, then-President of Agropur cooperative, now CDF President, backed by 59 Quebec dairy processing companies, demanded that the federal government “enforce cheese compositional standards (Agropur 2016)”.  “Milk producers claimed that the federal government was “not enforcing its own regulations and treating diafiltered milk as what it really is: a milk ingredient whose use in cheese is limited (Agropur 2016)”. In 2015 Justin Trudeau had promised during his federal election campaign that the Liberals were “formally committed to review the standards, rules and practices regarding food product imports, particularly milk proteins (Agropur 2016)”.  Bruno Letendre, Chair of Les Producteurs de lait du Québec, added “The exponential increase in imported diafiltered milk destabilizes supply management and has a very negative impact on producer income. If nothing is done soon, this breach, in addition to Canada’s major concessions in the free trade agreements with the European Union and the member countries of the Trans-Pacific Partnership (TPP), clearly threatens the sustainability of Canadian agricultural policy in the dairy sector. And while our sector generates major economic benefits for the Canadian economy, these benefits are now at risk (Agropur 2016).”

February 5, 2016  In a February 5 email from Canadian Minister Lawrence MacAulay, he wrote that,  “We are aware of the industry’s concerns about the use of diafiltered milk in cheese production. Under the cheese compositional standards, the intention was never for diafilitered milk to be used instead of milk. We are working to make sure that the rules are clear for everyone. Canada recognizes the importance of effective import control measures and manages its imports in accordance with its international trade obligations” [translation](Agropur 2016)”. MacAulay, stated that he was working on clarifying the rules for everyone (Agropur 2016)”.

2016  In every year from 2005-2016, farmers in the United States have operated at a loss, with the cost of production “higher than what they earn from the marketplace.” represents a loss to the farmer (Grey, Clark, Shih and Associates 2018).” The American government provides heavy subsidies to dairy farmers (Grey, Clark, Shih and Associates 2018).”

2016 Dairy  was a “significant contributor to the New Zealand economy” and is currently New Zealand’s “most valuable export commodity…In New Zealand, dairy is the biggest exporter earner; 95% of dairy products are exported to over 150 countries, generating roughly $14 billion a year  (Gambling 2016:7).”

2015 In 2015 Justin Trudeau promised during his federal election campaign that the Liberals were “formally committed to review the standards, rules and practices regarding food product imports, particularly milk proteins (Agropur 2016)”.

2015 In 2015, “Canadian producers lost a total of over $220 million” due to the “exponential increase” in imported diafiltered milk (Agropur 2016).

2015 Brothers, Luke and Matt Gartman are the seventh generation to run a Wisconsin dairy farm, milking more than 100 head of cows a day. In 2015 their processor Sheboygan gave them 3 months notice that they would not be pruchasing their milk but directed them to Grassland Dairy Products. In the first week of April 2017, they learned on Facebook that Grassland would no longer purchase their milk (Morgan 2017).”

December 2015 The World Trade Organization’s “Nairobi Package,”  adopted in Nairobi, Kenya in December 2015, contained a “Ministerial Decisions on agriculture, cotton and issues related to least-developed countries (LDCs).” including an agreement to “eliminate agricultural export subsidies in all developed countries”. Under the Nairobi Agreement, “Canadian subsidized exports of dairy products will need to stop by 2021.” “Milk currently marketed in Class 5(d) will need to cease by 2021.”

2014 “Supply management quota systems restrict the amount of dairy Canada can export internationally; in 2014, Canada exported 95.3 million kg dairy products (Canadian Dairy Information Centre [CDIC] 2014a), generating CAD$281 million in revenue (Gambling 2016:7).”

2014 Beginning in 2014, dairy farmers in the United States, “aggressively expanded” their herds “when milk prices were driven up by growing demand from middle-class consumers in North America, Asia and other markets (Haddon 2017).”

2014 The price of conventional milk peaked at over $25 per hundredweight (Kilgannon 2018).

June 5, 2014 Saputo Inc,  with its headquarters in Montreal, Canada’s “largest cheese and dairy processor” sought “more global acquisitions.” For Saputo, the deals in Canada at c. $100-million are small compared to the “larger growth prospects for the dairy” in the “fragmented United States”, Australia and Brazil. Milk consumption increased in Brazil. By 2014, Saputo controlled 10% of the American market (Marowits 2014). Saputo acquired Warrnambool Cheese & Butter (WCB), toldest dairy in Australia for $450-million in 2014. In Australia at that time there were only “seven or eight players control[ling] 90 to 95 per cent of the industry  (Marowits 2014).” In Argentina, where Saputo also made acquisitions, the volume of milk processed “more than doubled”, from  400 million litres in 2003 to over one billion litres by 2014 (Marowits 2014). In 2014, the price of higher block cheese was higher in the U.S. and the Canadian dollar was low. Saputo made profits from “ncreased international volumes and prices, which offset higher costs in Canada (Marowits 2014).”

2014 “Major diafiltered milk production plants have been built in recent years along the Canada-U.S. border in states like New York and Wisconsin to service Canadian demand. Because of an ongoing oversupply of milk – and its ingredients – within the United States, the American dairy industry has been exporting the product in liquid form to Canadian processors. The Canadian Border Services Agency considers it to be a protein ingredient and therefore it is not subject to Canada’s high dairy tariffs…Further, because the product was invented post-NAFTA, Canadian officials have been told that they are not allowed to subject American diafiltered milk imports to what’s known as a tariff rate quota (TRQ) – that cap the amount of product allowed in. That’s meant the American dairy industry has had complete and unfettered access to the Canadian market place for diafiltered milk for several years. (Diafiltered milk is not used by American dairy processors.)  “Riendeau and Agropur have previously criticized a loophole in Canadian import rules that allows diafiltered milk to enter the country as a “protein substance” ingredient while still considered “milk” by the Canadian Food Inspection Agency for the purposes of Canadian processing  (AGCanada 2016).”

2013 “Butter perceived as healthier than trans fat after a 2013 announcement by the U.S. Food and Drug Administration (FDA): Trans fat no longer “generally regarded as safe (Cessna 2017).”

October 8, 2012 Canada formally joined the TPP

May 12, 2012 Reuters reported that “U.S. business groups… say agriculture and intellectual property rights protection for Canada” were the main issues that had to be resolves before Canada could join the TPP.

December 2011 Canada expressed interest in joining the TPP during the Asia Pacific Economic Cooperation (APEC) trade ministers meeting.

2012 The Canadian government was participating in the Trans-Pacific Partnership (TPP) trade negotiations.

2011 By 2011 Milk Protein Isolates (MPI) imports were under the Import for Re-Export Program (IREP) program (Doyle 2011). In accordance with the World Trade Organization (WTO) requirements, the Canadian Tariff Rate Quota (TRQ) allows a predetermined quantity of dairy imports controlled under the Import for Re-Export Program (IREP) at a lower rate of duty. Above that cap, imports are subject to a higher duty.

November 10, 2010 Canada, under the Premiership of Stephen Harper became an observer  at the Trans-Pacific Partnership (TPP)  talks, and expressed interest in officially joining (CBC News 2010).

By 2011, the three processors, the Toronto-based, Parmalat Canada, Montreal-based Saputo Inc and Agropur, controlled 80% of all milk production in Canada. From 1990 to 2000 there were many Canadian acquisitions; from 2000 to 2010 there were not many more (Doyle 2011).

March 11, 2010. Idaho Senators Mike Crapo and Jim Risch and other U.S. senators representing dairy farmers called on President Obama to be wary of proposed “one-sided dairy provisions” in the Trans Pacific Partnership to be negotiated with Australia, Brunei, Chile, New Zealand, Peru, Singapore, Vietnam and possibly additional countries (Crapo 2010).” They were particularly concerned about “anti-competitive practices in New Zealand’s dairy industry could greatly harm U.S. dairy farmers…[They were concerned that “losses to U.S. dairy producers may total up to $20 billion over the first decade of the agreement if U.S. dairy restrictions on exports from New Zealand are fully phased out in the TPP…Despite New Zealand’s small size, its dairy industry is a global power. New Zealand’s dairy industry is dominated by one company that operates as a virtual monopoly in controlling more than 90 percent of the country’ milk production and approximately 40 percent of trade in key internationally traded dairy commodities. In light of this market power, the Administration should consider whether genuine competition is possible as it proceeds with the TPP….New Zealand has demonstrated its capacity to funnel product to the U.S. market as evidenced by the sizable quantities of milk protein concentrates (MPCs) and casein imported each year into the U.S. from New Zealand. MPC and casein imports enter the U.S. virtually tariff-free and with no volume quotas unlike imported nonfat dry milk, butterfat or most cheeses (Crapo 2010).”

2010 There was a very strong demand for Milk Protein Isolates (MPI)  in Canada (Doyle 2011).

2009 There was a very strong demand for Milk Protein Isolates (MPI)  in Canada (Doyle 2011).

October 2008  “In 2008, Canada undertook an Article XXVII action to create a new TRQ for milk protein included in chapter 35 of the Harmonize Trade Schedule (Howard 2017?).” According to the Department of Agriculture and Agri-Food (AAFC), the Tariff Rate Quota (TRQ) that caps the amount of Milk Protein Isolates (MPI) allowed into Canada, has been in place since October 2008 (Doyle 2011).

2008 In their 2008 article, “Sensory properties of dairy proteins“, Drake and Wright described milk protein concentrates (MPCs) and isolates (MPIs) as a “newer category of dried dairy ingredients that are rapidly gaining in popularity. These products are manufactured by concentrating milk proteins (whey proteins and caseins) from fluid milk by membrane processing followed by spray drying. Recent work in the primary author’s laboratory has addressed the sensory properties of milk proteins across increasing protein concentration (Drake and Wright 2008).”

2005 “Canada had the chance in 2005 to join the nascent [TPP], but chose not to (Dawson 2012). ”

2003 “U.S. powdered-milk stockpile has grown to a record 1.28 billion pounds (Webb 2003).

December 18, 2002. The FDA wrote a warning letter to Kraft Foods North America, Inc. concerned a violation of the violation of Section 403(g)(1) of the Act. “The use of milk protein concentrate (MPC) in these products constitutes a violation of Section 403(g)(1) of the Act because the products are represented as foods for which standards of identity have been prescribed by regulation and the use of milk protein concentrate in these products does not conform to the standards (FDA 2002).”

2001 ” Most Economic Cooperation and Development (OECD) countries, including Canada and the United States maintained “large dairy trade barriers” with the exception of “New Zealand, and to a lesser extent Australia”. Trade barriers are used with
significant intervention in the domestic market to achieve a variety of policy
objectives including income support, producer equity, price enhancement and
price/income stability (Cox, Le Roy, Goddard 2001:254).”

2000 “On 23 December 1999, Canada, the United States, and New Zealand
jointly announced the terms under which Canada’s subsidized exports of dairy
products will be reduced. Under the agreement, Canada will immediately
comply with its WTO export subsidy commitments on butter, skimmed milk
powder, and other dairy products. Moreover, Canada has committed to reduce
substantially the amount of milk made available to cheese producers during the
remainder of the current marketing year (ending July 30, 2000) and to cease
issuing permits for such milk on 31 March 2000. Beginning in the 2000/01
marketing year (Aug./July), Canada will not be able to export more than 9,076
tons of cheese. This total is less than half of the volume exported in recent
years (Cox, Le Roy, Goddard 2001:254).”

1997 The Canadian unit of Parmalat SpA of Italy, which is a subsidiary of Lactalis, was established in Canada with the acquisition of of Beatrice Foods Canada and Ault Foods (Wikipedia. “Parmalat Canada”).

By 2011, the three processors, the Toronto-based, Parmalat Canada, Montreal-based Saputo Inc and Agropur, controlled 80% of all milk production in Canada. From 1990 to 2000 there were many Canadian acquisitions; from 2000 to 2010 there were not many more (Doyle 2011).

January 1, 1995  The World Trade Organization (WTO) was established.

January 1, 1994 The North American Free Trade Agreement (NAFTA) was signed. American milk protein isolates (MPI), also known as milk protein concentrates (MPC) such as ultrafiltered milk or diafiltered milk, was invented post-NAFTA. “Canadian officials have been told that they are not allowed to subject American diafiltered milk imports to what’s known as a tariff rate quota (TRQ) – that cap the amount of product allowed in. That’s meant the American dairy industry has had complete and unfettered access to the Canadian market place for diafiltered milk for several years. (Diafiltered milk is not used by American dairy processors.) 

1990s  Commodity Risk Management Group ‘s Mike North, “says this dates back to General Agreement on Trade in Services (GATT) from the 1990s when Canada decided to take a protective stance on its dairy industry, creating a quota system. North says Canada isn’t necessarily to blame…This is a very different situation, because it has more to do with politics and less to do with markets or bad financial situations that are broader than agriculture itself. They really didn’t change their position, they just cleaned up some of the loose ends that existed since that position was first taken. Ultimately, I wouldn’t blame them, so to speak, but at the same time, their action is what quickly caused this scenario. If this whole affair wouldn’t have taken place in April but rather in July, none of this conversation would have been had (Morgan 2017).” North called the situation “unprecedented”.

March, 1992 “In March of 1992, the FDA Division of Regulatory Guidance issued an opinion letter after 18 months of study [1990-1992], that a product “made by the removal of non-protein components such as lactose, water, and minerals from skim milk by the ultrafiltration procedure, thereby concentrating the protein components to higher levels” could be called a milk protein concentrate…FDA supplied a further description by stating that the milk protein concentrate should contain protein representative “of all the fractions of milk proteins in the same ratio as they are found naturally occurring in milk.” Although there is no official, legal identity for a milk protein concentrate in the Code of Federal Regulations, the above definition is the FDA’s intention for an identity of MPC. There are some MPC’s being offered in the USA today that do not fit within the identity stated above. There are MPC’s being offered today that are mixtures of caseinates and whey protein concentrates. There are also mixtures of caseinates and skim milk that are being offered as MPC. Be very careful to ensure that your ingredient is true, filtered MPC within the spirit of the FDA opinion (Idaho Milk Products 1992).”

1989 Canada joined The Asia-Pacific Economic Cooperation (APEC) forum at its inception.

1980s  “Considering its small size, NZ has become a disproportionately large player on the international stage since the 1980s, trading with over 150 countries and possessing one of the most open economies amongst Organisation for Economic Co-operation and Development [OECD] countries (Patman & Rudd, 2005 cited in Gambling 2016:6).”

1975 Maubois, J.L., Mocquot, G. (July 1975). Application of Membrane Ultrafiltration to Preparation of Various Types of Cheese“. Journal of Dairy Science. Volume 58. Issue 7. , Pages 1001-1007. https://doi.org/10.3168/jds.S0022-0302(75)84672-8 Abstract: “A liquid product with the same composition as a cheese can be obtained by ultrafiltration of milk under appropriate conditions. After rennetting and addition of starter, soft fresh or ripened cheeses have successfully been prepared from the pre-cheese. Both cows’ and goats’ milk have been used as starting material. Preparation of a liquid pre-cheese offers advantages compared to the standard process in which rennet is added to cheese milk. These include an increase in yield due to retention of soluble proteins in the curd, better adjustment of the weight of each cheese, use of much less rennet, less space for equipment and handling, and whey with a lower biological oxygen demand than normal whey. Other possible applications of ultrafiltration in the cheese making field are presented.”

1971 Federal legislation was enacted to establish supply management in its current form under the tenure of then-Prime Minister, Pierre Trudeau, (Liberal). Trudeau has expressed support for the system since 1949 when he was as an assistant to Robert Gordon Robertson (Geddes 2011). Supply Management was “implemented in its current form” in Canada “to ensure a fair return for farmers and price stability for processors and consumers (Findlay 2012:3).”

1969 Maubois, J.L., Mocquot, G. and Vassal, L., 1969, Procédé de traitement du lait et de ses sous-produits laitiers, Brevet Français 2 052 121.

1960s “Since its inception in the 1960s, Canadian supply management has been a contentious policy framework. Both the overarching concept and regulatory details of supply management have been debated extensively amongst political, industry and civil society groups; in recent years, supply management has garnered particular attention during the development of international trade negotiations ( Gambling 2016:5).”

1949 Pierre Elliott Trudeau, then assistant to head of the Privy Council Office’s economics division wrote in a memo that, “Price support is only a means; the end we seek should be a livable income for every citizen. And as a means, price support cannot be used systematically; for it naturally tends to prevent equilibrium of demand and supply (Trudeau cited in (Geddes 2011).”

1948 Many countries signed the General Agreement on Tariffs and Trade (GATT) to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas.

1938 Canada and the United States signed the Reciprocal Tariff Act that combined with the 1936 agreement, “made it easier to export commodities such as fish, lumber, cattle, dairy products and potatoes, as well as machinery and equipment to the US, while Canada reduced some of its barriers to imports (Crane 2009-2015).”

1938 During the economic crisis of the 1930s, the Saint-Hubert, Québec-based Agropur Cooperative, was established in 1938, along with hundreds of other dairy cooperatives at that time. By 2011 it was one of three major players in the Canadian dairy industry controlling 80% of milk production. Agropur has 8,300 employees in 39 plants and many distribution centres in both Canada and the United States, and works with roughly 3,290 dairy farmers.  Agropur “processes more than 6 billion litres of milk annually”. )Agropur Canada Wikipidia).

1936 A Canada–US agreement in 1936 “marked the beginning of an economic relationship that over time led to steadily declining tariffs and other trade barriers (Crane 2009-2015).”

1934 President Franklin Delano Roosevelt obtained “the authority from Congress, through the 1934 Reciprocal Tariff Act, to lower or raise tariffs up to 50 per cent from existing levels in bilateral negations with other countries (Crane 2009-2015).”

1930 “The origins of current dairy trade disputes stem in part from the desire
to prevent a repeat of the trade wars during the 1930s and the World War that
followed. The collapse of world trade during the 1930s made a lasting impact
on the negotiators of multilateral trade agreements following the War
(Cox, Le Roy, Goddard 2001:254).” “President Franklin Delano Roosevelt and, yes, Prime Minister Mackenzie King “began crafting the first agreements to liberalize trade relations (Bershidsky 2018).”

1930 “In 1930, the US enacted the Tariff Act of 1930 — the Smoot-Hawley Tariff — which took US tariffs to record levels, not only dealing an immediate and devastating blow to the Canadian economy but precipitating competitive rounds of protectionism worldwide, making the Great Depression much worse. In 1930, Canadian exports to the US totalled $515 million; by 1932 they had fallen to $235 million. Canada responded quickly, raising tariffs twice, in its 1930 and 1931 budgets. For example, tariffs on “luxury” cars from the US were raised to 40 per cent (Crane 2009-2015).”

Supply management system regulations

There were 5 classes of milk prior to 2016: Class 1 included fluid liquid products; Class 2 included yogurt, ice cream, soft products; Class 3 included Cheese; Class 4 included butter, milk powders and Class 5 included exports under access, permits 5(d) subsidized exports. In April 2016 Ontario began to implement a new milk price (Class 6) and Manitoba did the same in August 2016 (Mussell 2006:1).

Canada’s dairy industry compared to New Zealand’s

Comparisons with New Zealand’s dairy industry from a table by  (Gambling 2016:8).”

Human population Canada: 35.99 million  New Zealand 4.65 million
Number of dairy farms Canada: 11,683 New Zealand 11,927
Number of milk cows Canada: 953,200 New Zealand 4.92 million
Average herd size Canada: 77 New Zealand 413
Milk produced Canada: 7.83 billion litres New Zealand 20.7 billion litres
Cows/capita Canada: 0.03 New Zealand 1.06
Litres milk/capita Canada: 217.6 New Zealand 4451.6
Gross Domestic Product (GDP) (direct) of dairy production (year; % national GDP)
CAD $5.6 billion (2013; 0.35%) NZD $5 billion (2010; 2.8%)

Value of international dairy exports
CAD $281 million  NZD $14-18 billion

Critics of Canada’s dairy

“The system’s critics of Canada’s supply management system “say the tightly controlled program stifles innovation, bars Canadian companies from selling onto international markets, limits choice at the grocery store and saddles Canadian consumers with higher prices (Panetta 2017). Critics of Canada’s dairy include:

  • President Donald Trump on behalf of the American dairy industry.
  • US Senate minority leader, Chuck Schumer (D-NY) who called for an end to Canadian program hurting upstate dairy farmers on April 17, 2018 (Magnarelli 2017 ).
  • New Zealand, often cited as a dairy-industry success story that followed the neoliberal model and therefore compared and contrasted with Canada’s supply management policies. See (Gambling 2016). New Zealand rejected Canada’s entry into the TPP because of its SM policies.
  • Maxime Bernier (PC) who posted his chapter on June 5, 2018 on supply management (April 2018) from a book he is writing entitled Doing Politics Differently: My Vision for Canada.
  • “Montreal Economic Institute, a free-market think tank in Montreal, urged Canadian policy-makers to seize the opportunity to dismantle a system that it says costs Canadian families an extra $339 a year in grocery bills (Panetta 2017).”
  • Martha Hall Findlay Why the dairy industry’s defence of supply management is so flawed Findlay, Martha Hall. (May 14, 2014). “The evidence against supply management is overwhelming. What are politicians waiting for?Macleans. (Findlay 2014)

to be continued

Webliography

AgroPur Cooperative. (2017). “Serge Riendeau to head Canadian Dairy Commission.” Serge Riendeau, President of Agropur Cooperative from 2002 to 2017, was “appointed CEO of the Canadian Dairy Commission (CDC).” (Agropur 2017)

As CEO of the Ottawa-based Crown corporation, CDC Riendeau is responsible for “cooperating and negotiating with dairy industry stakeholders to reconcile their interests and maintain compliance with the supply management system”. Riendeau was a farmer and dairy producer before becoming President of Agropur Cooperative in 1992. He advocates for the “supply management system” and “was instrumental in the establishment of a national strategy to promote the use of Canadian dairy ingrédients (Agropur 2017)“.

Agropur Dairy Cooperative. (April 12, 2016). “Imported diafiltered milk : a common front by the dairy industry to get Ottawa to act.” Montreal. (Agropur 2016)

Anderson, Bruce, Coletto,  David . (April 25, 2017) “Trade, Trump & Milk: How Canadians React To Tough Talk.” Abacus Data. (Anderson and Coletto 2017)

Barber, John. (June 9, 2018). “Why Canadian milk infuriates Donald Trump” The Guardian (UK). (Barber 2018)

Barrett, Rick. (April 11, 2017) “Canada says don’t blame it for Wisconsin dairy woes.”

Berthiaume, Lee. (June 11, 2018). “Canadian dairy farmers accuse Trump of trying to drive them out of business.” CTV News. (Berthiaume 2018)

 

CBC News. (November 10, 2010). “Tories consider joining TransPacific trade group”.

Cessna, Jerry. (2017). “Situation and Outlook for the U.S. Dairy Industry USDA Agricultural Outlook Forum.” (Cessna 2017)

Alberta Dairy Farmers Stand Up Against President Trump.” Alberta Milk. (Conway 2018)

Council of Canadians. (November 20, 2017). “Factsheet: NAFTA and Farming“. Ottawa, Ontario. (Council of Canadians 2017).

“Given the subsidized U.S. industrialized farming industry, allowing U.S. farms more market access would mean Canadian small farmers would be in competition with larger industrialized U.S. farms. The market would expand to include milk from U.S. farms that may have bovine growth hormone (BGH) in it, unlike the milk here in Canada, which doesn’t allow BGH.”

Cox, Tom L., Le Roy, Danny G., Goddard, and Ellen W. (2001). “Dairy Disputes in North America: a Case Study.” NAFTA – Report Card on Agriculture. AgCon Research in Agricultural & Applied Economics.

Crane, David. (2009-2015) “Canada–US Economic Relations: Economic relations between Canada and the US are of paramount importance to Canada“. Historica Canada. (Crane 2009-2015).

Crapo, Mike. (March 11, 2010). “Crapo, Risch fight for fair trade agreement for U.S. dairy farmers: bipartisan group raises concern over anti-competitive practices in New Zealand’s dairy industry”.

Cuomo, Andrew. (October 2016). Correspondence to PM Trudeau (regarding milk supplies).

Dawson, Laura. (February 12, 2012). “Can Canada Join the Trans-Pacific Partnership? Why just wanting it is not enough“. PDF.

“The expanding Trans-Pacific Partnership trade agreement could eventually account for half of global output and 40 percent of world trade. How can Canada get a seat at the negotiating table?” 

Doyle, Pierre; Asgarali, Aamir;  Beaulieu-Charbonneau, Olivier. “Canada’s Dairy Industry s Dairy Industry: Position for the future.” Department of Agriculture and Agri-Food (AAFC). (Doyle 2011)

Drake, M.A., Wright, J.M. (2008). “Sensory properties of dairy proteins Milk Proteins. Abstract: “Milk protein concentrates (MPCs) and isolates (MPIs) represent a newer category of dried dairy ingredients that are rapidly gaining in popularity. These products are manufactured by concentrating milk proteins (whey proteins and caseins) from fluid milk by membrane processing followed by spray drying.” 

Gambling, Samantha Jane. (2016). “Canadian supply management : a food sovereignty policy? : British Columbia and New Zealand industry stakeholder” MSc Thesis. Integrated Studies in Land and Food Systems Vancouver: University of British Columbia Library.

“[Gambling] conducted 27 in-depth interviews with stakeholders from the BC dairy sector as well as textual analyses of industry reports. I also conducted interviews with 10 stakeholders from the New Zealand (NZ) dairy sector as a comparative case study of producer perspectives on dairy production in a liberalized policy environment. Results suggest that supply management in the BC dairy industry is more conducive to food sovereignty than the neoliberal and neo-cooperative organization of the NZ dairy industry.” 

The Economist. (June 14, 2018). “Breaking a few eggs: Donald Trump stomps on Canada’s economy: To avoid further damage, Justin Trudeau may have to stop coddling farmers.” Ottawa, Ontario.

Findlay, Martha Hall. (June 2012).  “Supply Management: Problems, Politics and Possibilities”. Volume 5. Issue 19. SPP Papers. The School of Public Policy. University of Calgary.

Hall makes the “case for liberalizing the Canadian dairy industry” and argues that the supply management system is in effect, a cartel.

Findlay, Martha Hall. (May 14, 2014). “The evidence against supply management is overwhelming. What are politicians waiting for?Macleans. (Findlay 2014)

Food and Drug Administration (FDA). (December 18, 2002). “Warning Letter CHI-6-03“. U.S. Department of Health and Human Services. Chicago, Illinois.

Foreign Affairs and International Trade Canada. (December 3, 2012).   “Canada Joins TransPacific Partnership Round.”

Geddes, John. (November 15, 2011). “A novice bureaucrat (and future PM) on supply management.” Macleans.

Grey, Clark, Shih and Associates Limited. (February 8, 2018). “American dairy farmers depend on government subsidies.” (Grey, Clark, Shih and Associates 2018)

Haddon, Heather. (May 21, 2017). “Got Milk? Too much of it, say U.S. dairy farmers.” Market Watch. (Haddon 2017)

Howard, Fran. “NAFTA provides unfettered access to Canadian market for U.S. high-protein milk ingredients—at least for now.” (Howard 2017?)

Idaho Milk Products. (1992) “What is Milk Protein Concentrate (MPC)?” (Idaho Milk Products 1992)

Inside Trade. (January 28, 2012). “TPP Countries Say Canada Not Ready To Join Talks, Press Vietnam To Decide.” Paywall.

Johnson, Kelsey. (April 22, 2017). “Dairy 101: The Canada-U.S. milk spat explained”. ipolitics.ca.

Kilgannon, Corey. (March 19, 2018). When the Death of a Family Farm Leads to Suicide The New York Times. Eaton, N.Y.

Laca, Anna-Lisa. (May 3, 2018). “Will NAFTA 2.0 Kill Canada’s Class 7?” Farm Journal & MILK Magazine. The target audience of this magazine are large-dairy producers—those with 500 or more cows.

Lee, Klaudia. (September 16, 2008) “NZ alerted China to tainted milk, PM saysSouth China Morning PostHong Kongpage A1 (Lee 2008)

Magnarelli, Tony. (April 17, 2018). “Schumer calls for an end to Canadian program hurting upstate dairy farmers.” WRVO Public Media.

Saputo seeks global acquisitions to offset Canadian competition.” The Globe and Mail. Montreal.

Maubois, J.L., Mocquot, G. and Vassal, L., 1969, Procédé de traitement du lait et de ses sous-produits laitiers, Brevet Français 2 052 121.

Maubois, J.L., Mocquot, G. (July 1975). Application of Membrane Ultrafiltration to Preparation of Various Types of Cheese“. Journal of Dairy Science. Volume 58. Issue 7. , Pages 1001-1007. https://doi.org/10.3168/jds.S0022-0302(75)84672-8 Abstract: “A liquid product with the same composition as a cheese can be obtained by ultrafiltration of milk under appropriate conditions. After rennetting and addition of starter, soft fresh or ripened cheeses have successfully been prepared from the pre-cheese. Both cows’ and goats’ milk have been used as starting material. Preparation of a liquid pre-cheese offers advantages compared to the standard process in which rennet is added to cheese milk. These include an increase in yield due to retention of soluble proteins in the curd, better adjustment of the weight of each cheese, use of much less rennet, less space for equipment and handling, and whey with a lower biological oxygen demand than normal whey. Other possible applications of ultrafiltration in the cheese making field are presented.”

Maubois, J.L., Tareck A., 1981. “Ultrafiltration-thermisation du lait à la production: aspects bactériologiques”.

McGregor, Janyce. (August 2, 2017). “A winning formula? China invests in Canadian dairy to help feed its baby boom: Feihe International investing $225 million to build infant formula plant in Kingston, Ont.” CBC News.

Mordor Intelligence. (May 2018).  “Global Dairy Ingredients Market – Growth, Trends, and Forecast (2018 – 2023).” Research and Markets. ID: 4402743. 110 pages. Mordor Intelligence.

Morgan, Tyne. (April 25, 2017)”Grassland Dairy Dump: Is Canada Really to Blame?” US Farm Report. Ag Web. (Morgan 2017)

Nickel, Rod. (June 7, 2016). “Canada weighs options as farmers spar over U.S. milk.” Reuters.

FactCheck.org (April 2017) Email correspondence with Andrew Novakovic.

“The Canadian system is a labyrinth of intertwined regulations and a symbiotic relationship between the Federal and Provincial governments. While it is true that some things are in the direct control of the Provinces, it is generally the case that a Province could not effectively maintain these controls without the Federal system and sanction (Novakovic 2017).”

Orol, Ronald. (January 23, 2018). “NAFTA’s Dairy Divide: Canadian and American dairy sectors don’t agree on trade data.” The Centre for International Governance Innovation. Waterloo, Ontario. (Orol 2018)

Palmer, Doug. (May 13, 2012). “Some secrecy needed in trade talks: Ron Kirk.” Reuters.

Panetta, Alexander. (October 16, 2017). “The final NAFTA bombshell: U.S. demands Canada end supply management for dairy, poultry, eggs: With that demand, the U.S. has now adopted a highly aggressive posture on virtually all the key issues expected to arise in the current NAFTA talks.” National Post. (Panetta 2017)

PR Newswire. (June 5, 2018). “Dairy Ingredients Market to Grow Swiftly Due to Rising Awareness About Benefits of Healthy & Nutritious Diet Till 2024.” Million Insights. Felton, California.

Ritchie, Kerri. (December 28, 2009). “Fonterra denies advocating melamine use in milk scandal“.  New Zealand. ABC. (Ritchie 2009)

Robertson, Lori. (April 28, 2017). “The U.S.-Canada Dairy Dispute.” FactCheck.org. A Project of The Annenberg Public Policy Center.

“The Canadian system is a labyrinth of intertwined regulations and a symbiotic relationship between the Federal and Provincial governments. While it is true that some things are in the direct control of the Provinces, it is generally the case that a Province could not effectively maintain these controls without the Federal system and sanction.”

Workers ‘in shock’ over Sydney dairy closure.”

Shoup, Mary Ellen. (September 7, 2017). “USDEC ushers in strategic plan to grow US dairy exports market by 5%“. Daily Reporter. (Shoup 2017)http://bit.ly/USDECNext5Percent

Smith, Wally (May 4, 2016). “What is diafiltered milk?”dairyfarmers.ca.

Stats Canada. “Canadian farmers had 11.6 million cattle on their farms.” (March 6, 2018). Livestock estimates, January 1, 2018. The Daily. (StatsCan 2018)

Todd, Chuck. “Full Trudeau: Canada and U.S. most successful alliance ‘in the history of the modern world’.Meet the Press. NBC News. (Todd 2018)

Trudeau, Pierre Elliott. 1949. “On Price Support for Commodity Surpluses.” Memo to Gordon Robertson, the head of the Privy Council Office’s economics division cited in (Geddes 2011).

Verboven, Will. (June 16, 2018). “It’s hard to believe dairy farmers hold the key to NAFTA.” The Calgary Herald.

Watson, William. (June 12, 2018) “How should Canada respond to the Trump-quake? By not being stupid: Trade with the rich folk who live just down the road will always be best for Canada. Without the U.S., this country would be worse off“. Financial Post. (Watson 2018) Watson argued that Canada should “Keep our trade and investment policies liberal and get rid of policy stupidities such as supply management (i.e., legislated high prices for essential foodstuffs). Australia did it in 2000, almost 20 years ago now. We aren’t as smart as Australians?” [“In Australia, large producers paid milk producers $1.00 Australian – about 99 cents Canadian – for a litre of milk, which was less than what it cost to produce. Many farmers abandoned farming. Because of this, Australia provided more that $555 million in farming subsidies  (Council of Canadians 2017).”] In the comments section of “How should Canada respond to the Trump-quake?  (Watson 2018), this response: Supply management ” is a very excellent system that controls production and guarantees a steady supply and fair return for the producer. Most family farms in the US have been taken over by big operations because of slim margins. Those family farms still operating are being subsidized by off farm income. They are hoping just to last another year until things improve. The cost of quota in Canada,( the tool to manage supply, ) is not used in calculation of the milk price, producers get. It is the best system out there to date.
Chicken farms have been taken over by big companies in the US and farmers have now become just hired hands for feeding and taking care of the big companies animals. This same thing is happening in Canada to hog farms. …Why destroy a system that works and replace it with one that does not?” Another added: “Supply management is the best alternative to subsidies. American dairy producers are subsidized to the tune of over 70 percent of market returns. This drives the massive overproduction of dairy and they constantly need to find export markets to dump that surplus. As long as the Americans continue their own indefensible system of supporting agriculture, we’d be fools to open up our markets for dairy. A third said, “Canadian dairies are subsidized just about the same amount but it is the consumers that pay that subsidy in the form of higher prices. A fourth added, “Overall the US has a 1.5 billion surplus with Canada in overall dairy trade.” A fifth wrote, “But there are significant differences between our two systems that lead to very different market results. US dairy farmers have used government subsidies to continue to ramp up production, resulting in a massive market glut. Because dairy farming is now so unprofitable, these farmers have become more reliant on subsidies. It’s a vicious cycle based on the conceit that increasing production is always best. Supply management was designed to prevent this exact scenario from happen. It provides the discipline that US dairy is sorely lacking. It’s not a perfect system. IMO, we should be lowering tariffs for specialty products that meet our standards. But the real danger to opening up the issue is from the American producers who desperately want to dump their surplus and keep their broken system going.” Another contributed, ” I just happen to think that co-operative supply management is a superior system to government subsidizing a free-for-all of production.” Another clarified that “The 270% is NOT an across the board tariff. The tariff is ONLY applied when a relatively high level of dairy is has already been imported. And Canada imported in the range of 130 million worth of dairy from the USA and exported about 30 million. Whose trade is imbalanced?” And another, “Does everyone understand that the tariff only kicks in once we buy more then 10% of all our milk from the US. This is to protect our farmers and consumers from the us dumping crappy growth hormoned milk into our economy.” And again, “Yes, certain food industries are protected in Canada mainly because they aren’t the mega-operations in the USA and because they can’t be competitive given the seasons and price of feed. If we allow those industries to be controlled by another country, how do we ever stand up to a bully who then controls our food supply.” And, “countries like Australia put an end to it, but that has not turned out well for any of them – they are all suffering now. Good for Canada for protecting their own. The US made bad choices to deregulate in the 80s and 90s – they can’t go whining about other countries bullying them 30 years later. Trump needs to get some supply regulations in his own country instead of threatening Canada.”And, “Yes, the Australian’s dumped supply management nearly 20 years ago and earned a better deal in trade relations. However, New Zealand got rid of supply management and other farm subsidies in the late 1980’s, under a socialist government, no less and wacked the hell out of most other countries in agricultural products, and are still doing it to a large extent. New Zealand lamb in the store, cheaper by far, than local lamb, as just one example.”(Watson 2018).”

Webb, Tom. (August 20, 2003). “Growing Powdered-Milk Surplus Is Blamed on Price Support Policy

Womach, Jasper. (June 16, 2005). “Agriculture: A Glossary of Terms, Programs, and Laws, 2005 edition.” US Congressional Research Service (CRS) Report for Congress. The Library of Congress.

Yarr, Kevin. (June 15, 2018). “U.S. isn’t trying to get Canada to end supply management, its agriculture secretary says: ‘You dump milk solids on the world market and depress prices from our producers,’ Sonny Perdue says.” CBC News. (Yarr 2018)

Appendix

Who’s Who

Organizations

Agriculture and Agri-Food Canada (AAFC)

American Dairy Association (ADA) [www.ilovecheese.com/default.htm].

British Columbia Dairy Association (BCDA)

British Columbia Farm Industry Review Board (BCFIRB)

British Columbia Milk Marketing Board (BCMMB)

British Columbia Ministry of Agriculture (BCMA)

Canadian Border Services Agency import rules considered American U.S. milk protein isolates, also known as milk protein concentrates (MPC) such as ultrafiltered milk or diafiltered milk, to be a protein ingredient, which is “not subject to Canada’s high dairy tariffs …Further, because the product was invented post-NAFTA, Canadian officials have been told that they are not allowed to subject American diafiltered milk imports to what’s known as a tariff rate quota (TRQ) – that cap the amount of product allowed in. That’s meant the American dairy industry has had complete and unfettered access to the Canadian market place for diafiltered milk for several years. (Diafiltered milk is not used by American dairy processors.)  “Riendeau and Agropur have previously criticized a loophole in Canadian import rules that allows diafiltered milk to enter the country as a “protein substance” ingredient while still considered “milk” by the Canadian Food Inspection Agency for the purposes of Canadian processing  (AGCanada 2016).”

Center for Dairy Profitability at the University of Wisconsin-Madison. Director, Mark Stephenson, says “To cope, [American] farmers need to stop expanding their herds (Haddon 2017).”

Canadian Dairy Commission (CDC) is a “Crown corporation that supervises, supports and regulates the dairy industry, serving the interests of farmers, processors and consumers. Among other things, it administers the supply management system, manages programs that target the industry, upholds milk quality standards and supports Canadians working in the dairy industry (Agropur 2017).”

Canadian Dairy Information Centre (CDIC)

Canadian Milk Supply Management Committee (CMSMC), “chaired by the Canadian Dairy Commission (CDC), is a permanent body created by the provincial signatories to the National Milk Marketing Plan (NMMP) and is responsible for policy determination and supervision of the provisions of the NMMP. The CDC acts as the national facilitator and mediator in helping build consensus between all parties (Canadian Dairy Commission CMSMC).”

CoBank Acb, an agriculture cooperative bank

Dairy Industry Restructuring Act (DIRA)

Dairy Farmers of Canada (DFC) is a well-funded lobby group, considered by some to be Canada’s most powerful lobby. The DFC spends an estimated $80 to $100 million each year (Findlay 2014). The Dairy Farmers of Canada’s Isabelle Bouchard responded, “We don’t feel good about U.S. farms going out of business. But you know what? It’s not our responsibility. It’s your own responsibility, as a country, to manage your production,” …We are a nation of 36 million people, less than the population of California. How do you expect us to (consume) your over-supply of milk when we already produce milk for our market?” (Barrett 2017

Food Secure Canada (FSC)

International Dairy Foods Association (IDFA), Washington, DC. Michael Dykes, CEO, claims that “Class 7 is top of mind for the Trump Administration and they understand the short and long-term impacts Class 7 is having on American dairy farms…I believe dairy will be probably one of the last things addressed, but I remain optimistic we’ll get something done on Class 7 (Laca 2018).”

National Farmers Union (NFU) “Jan Slomp, President of the National Farmers’ Union, a grassroots group of small farmers says, “We need Canada to stand firm against any temptation to negotiate away supply management. Our system ensures farmers are paid the cost of production, processing plants are able to run at full capacity, and consumers have a reliable, wholesome and affordable supply of dairy, poultry and eggs – all without any government subsidies (Council of Canadians 2017).”

National Milk Producers Federation U.S.

New Zealand Dairy Board (NZDB)

Organization for Economic Co-operation and Development (OECD )

University of British Columbia (UBC)

U.S. Dairy Export Council

Individuals

Dawson, Laura. Dr. Laura Dawson is a “member of the C.D. Howe Institute International Economic Policy Advisory Council and president of Dawson Strategic. Dr. Dawson is former Senior Economic Specialist at the US Embassy in Ottawa.”

Lighthizer, Robert U.S. Trade Representative Robert Lighthizer

Twitter

The Guardian (UK).

Canada and the US “remain implacably opposed on the comparatively minor matter of milk,” The entire trade in dairy products between Canada & US is worth less than US$600m Dairying is a “key economic support of traditional rural life throughout central Canada”

75% of Canadians support even greater government efforts to defend the industry in the face of current US demands.” “Supply management enjoys strong government support It obviates the need to subsidize farmers directly”

“Dairy deregulation has spread hardship” in the US In 2017 “US farmers dumped almost 100m gallons of surplus milk” because of overproduction There has been a surge in dairy-farmer suicides in the US because of a widespread hopelessness in the dairy industry In Canada they prosper

Working definitions of key terms

Dairy Price Support Program The United States “federal program that maintains a minimum farm price for milk used in the manufacture of dairy products. USDA indirectly assures a minimum price for milk by purchasing any cheddar cheese, nonfat dry milk, and butter offered to it by dairy processors at stated prices. These purchase prices are set high enough to enable dairy processors to pay farmers at least the support price for the milk they use in manufacturing these products. The 2002 farm bill (P.L. 107-171, Sec. 1501) mandated a support price of $9.90/cwt, effective through December 31, 2007, when the program by law is scheduled to expire. Also, the farm bill established a Milk Income Loss Contract (MILC) program that makes direct payments to participating dairy farmers whenever the minimum monthly market price for farm milk used for fluid consumption in Boston falls below $16.94 per hundredweight (cwt.). The MILC program expires September 30, 2005 (Womach CRS 2005:71) .”

Dairy Export Incentive Program (DEIP) — A program in the United States that offered “subsidies to exporters of U.S. dairy products to help them compete with other nations. USDA pays cash to exporters as bonuses to help them sell certain U.S. dairy products at prices below the exporter’s cost of acquiring them. The program was originally authorized by the Food Security Act of 1985 (P.L. 99-198) and extended by the 1990 farm bill (P.L. 101-624) and the Uruguay Round Agreements Act of 1994 (P.L. 103-465). The total tonnage and dollar amounts of these and other export subsidies have been limited by the Uruguay Round Agreement on Agriculture. The 2002 farm bill (P.L. 107-171) extended the program through 2007 (Womach CRS 2005:71) .”

Global Dairy Ingredients Market Dairy ingredients market include Whey Ingredients Milk Powder, Milk Protein Isolates & Milk Protein Concentrates, Casein & Caseinates, Lactose, and Others.

Milk protein concentrate (MPC) “Any type of concentrated milk that contains 40-90%
milk protein. In addition to ultrafiltered milk products, the MPC classification includes
concentrates made through other processes, such as blending nonfat dry milk with highly concentrated proteins, such as casein. Currently, almost all MPC used in the U.S. is
imported and is not subject to a tariff rate quota. Many dairy producer groups are
concerned that foreign manufacturers are using nonfat dry milk in the production of MPC, and hence circumventing existing quotas on nonfat dry milk (Womach CRS 2005:165) .”

The Canadian Dairy Farmers lobby “contends that milk protein substances with 85 percent or more protein are diafiltered milk, and products made with diafiltered milk are prohibited under the Canadian compositional standards for cheese making.” Diafiltration is a process used in conjunction with ultrafiltration in which water is added back into ultrafiltered milk. The resulting substance is then dried to a power. Dried milk protein concentrate (MPC) can be made using a combination of ultrafiltration and diafiltration. Other products are also made using a combination of these techniques. For example, production of lactose-free, sugar-free or low-carbohydrate ice cream can also be made using ultrafiltration in conjunction with diafiltration to remove up to 96 percent of the lactose normally found in milk (Howard 2017?).”

Neoliberalism “values market logic and aims to re-orient the state to adopt market mechanisms. This is generally achieved through deregulation, trade liberalization, and privatization of public services (Bockman, 2013). Neoliberalism is also reflected in individual and community ideals of efficiency, competition, profitability, and selfhelp
(Bockman, 2013; Hamann, 2009 cited in Gambling 2016:3).”

Supply Management is a “system of controlled markets that applies in Canada to dairy, poultry (chicken and turkey), and eggs (both table eggs and hatching eggs). It evolved over time, implemented in its current form in the 1970s, primarily to ensure a fair return for farmers and price stability for processors and consumers (Findlay 2012:3).”

“The Institute for Supply Management broadly defines supply management as ‘the identification, acquisition, access, positioning, management of resources and related capabilities the organization needs or potentially needs in the attainment of its strategic objectives’. It involves an integration of multiple components such as inventory
control, distribution, procurement, quality and materials management, and manufacturing supervision (Cavinato, 2010 cited in Gambling 2016:5).”

“Supply management is a system in which the Canadian government produces licences that allow farmers to produce quotas of dairy, poultry or eggs. It also controls the price and taxes of imports into Canada. This process guarantees a sustainable living for farmers, and ensures that local, small farms are not flooded by agriculture from large mega farms (Council of Canadians 2017).”

And unlike the European Union or the United States, which have high subsidies for farming, Canada has not had to subsidize its farmers.

Wikipedia categories

Agriculture in Canada
Dairy farming in Canada
Poultry farming in Canada
Anti-competitive behaviour
Cartels

Wikipedia: Related articles

Supply management (Canada)
Dairy farming in Canada
Agriculture in Canada

Random notes

The subtitle of a June 9, 2018 article “Why Canadian milk infuriates Donald Trump” by Toronto-based freelance journalist, John Barber, published in The Guardian (UK), read “Trump’s latest trade war target is Canada’s protected dairy industry. But Canadians have no intention of abandoning it – because it works.”

Barber reported that the Wisconsin Farmers Union “really want” a supply managed system like the Canadian dairy industry.

He also noted that Canada imports 10% of its dairy consumption which represents 5 times more than the U.S. He also noted that the “U.S. restricts dairy imports to 3% of domestic consumption.”

Not that long ago, I had watched an informative documentary comparing the American and Canadian dairy industries but I was unable to find it.

I still have a lot of questions so I am looking for some answers.

As a veteran Wikipedia editor, my third step was to check what my fellow editors have to say. Not surprisingly there was a maintenance template on the Wikipedia article Supply management (Canada),  warning that the “neutrality of this article is disputed”. On the article’s talk page, one editor argued that too much of the article’s content comes from University of Calgary’s, School of Public Policy  Executive Fellow,  Martha Hall Findlay‘s 2012 article  “Supply Management: Problems, Politics and Possibilities.


Along with vast improvements in material conditions capitalism’s dark side has created insatiable appetites, limitless monetization of contemporary life through privatization for-profit (hospitals, schools, prisons…) commodification and commercialization. Harvard political philosopher, Michael Sandel claims we have gone too far and calls for an informed public debate, a robust conversation on the moral limits of markets? Sandel argues that the left and right, the Democrats and Republicans have abandoned civic virtue, and have impoverished views of citizenship and community. Sandel does not suggest precise limits but invites discussions. Things that were once considered repugnant as marketable commodities, have become or are gradually becoming normalized: paying people to give an organ or blood or to submit to risky drug tests; the sale of naming rights in classrooms, for sports stadiums, etc; paying school children to read more or get good grades; the right of corporations to pollute the atmosphere; hiring mercenaries to fight wars or using private corporations in the U.S. military presence in Iraq; selling citizenship to immigrants; selling admission to elite universities.

Selected Timeline of Related Events in the Social History of Moral Limits of Markets

Barely begun, work in process. Please note that efforts are made to acknowledge sources but this is a blog post not an academic paper and there might be unintentional omissions. See webliography and bibliography.

2012-10-15 Roth received a Nobel Prize for his innovative exchange concept applied to kidney transplants. In a 2007 article he noted that his exchange concept may have been repugnant to some as it created a grey area in benefits from organ donations. Economists Alvin E. Roth of Harvard University and Lloyd S. Shapley of the University of California at Los Angeles whose work has led to nearly 2,000 kidney transplants across the United States have received 2012 Nobel Prize for economics Monday at a news conference in Stockholm, Sweden.  Roth and Shapley were honored for “the theory of stable allocations and the practice of market design.” (Smith 2012-10-15 ”  Nobel economists’ big impact: Kidney transplants ). See also Roth, Alvin E. 2007. “Repugnance as a Constraint on Markets.” Journal of Economic Perspectives. Summer: 21:3. pp. 37–58.

2012-07-12 In a book review entitled “Money and the markets: Insatiable longing,” The Economist examined limits of capitalism.

2012-04-24 Michael J. Sandel’s book entitled What Money Can’t Buy: The Moral Limits of Markets was published. Sandel asks, “Should we pay children to read books or to get good grades? Should we allow corporations to pay for the right to pollute the atmosphere? What about hiring mercenaries to fight our wars? Auctioning admission to elite universities? Selling citizenship to immigrants willing to pay? (Amazon)”

2007 “The laws against buying or selling kidneys reflect a reasonably widespread repugnance, and this repugnance may make it difficult for arguments that focus only on the gains from trade to make headway in changing these laws. That does not mean that no gains from exchange can be realized; in fact some gains are beginning to be realized in the kidney exchange programs that Tayfun So¨nmez, UtkuU¨ nver, and I helped to design in New England and elsewhere. In the simplest form of kidney exchange, a patient with a willing donor who has an incompatible blood type (or who is incompatible for another reason) can exchange a kidney with another such incompatible patient–donor pair. (That is, the pairs are matched so that the donor from one pair is compatible with the patient from the other, and each patient receives a kidney from the other patient’s donor.) This sort of “in kind” exchange has gained acceptance in the transplant community (Roth, Alvin E. 2007. “Repugnance as a Constraint on Markets.” Journal of Economic Perspectives. Summer: 21:3. pp. 37–58.).1″

2005-02-09 Michael J. Sandel presented his paper entitled the “The Moral Limits of Markets” in which he raised these questions: “Are there some things that should not be bought and sold, and, if so, why? The proliferation of markets in recent years makes this issue difficult to avoid. Consider, for example, recent proposals to establish markets in organs for transplantation, the race among medical entrepreneurs to patent human genes and other life forms, the aggressive marketing of drugs as consumer goods, and the proliferation of for-profit schools, hospitals, and prisons. The rampant commodification, commercialization, and privatization of contemporary life give us reason to reconsider the moral limits of markets: Are there some things that money should not buy?” (Hoffmann and Sandel 2005-02-09).

2003-07 [T]he U.S. Department of Defense included terrorist attacks or terrorism futures market in a speculative list of  predictive markets. Public repugnance forced the Pentagon to hastily cancel the program (wiki).

1996  Michael J. Sandel’s book entitled Democracy’s Discontent was published.  In it Sandel called for a rejuvenation of civic life and civic voice in the United States. He argued that the vision of citizenship and community shared by both Democrats and Republicans was impoverished ( Amazon).

1990 “[T]he Clean Air Act was amended to allow trading of rights to pollute through tradable emissions entitlements (Roth 2007).”

1980s Alvin E. Roth of Harvard University’s market design experiments based on Shapley’s 1960s work were used for such matches as students with schools and organ donors with patients who need a transplant  (Smith 2012-10-15 ”  Nobel economists’ big impact: Kidney transplants ). See also Roth, Alvin E. 2007. “Repugnance as a Constraint on Markets.” Journal of Economic Perspectives. Summer: 21:3. pp. 37–58.

1960s Economist Lloyd S. Shapley co-developed a mathematical theory on resource allocation as applied to the job market (Smith 2012-10-15 ”  Nobel economists’ big impact: Kidney transplants ). See also Roth, Alvin E. 2007. “Repugnance as a Constraint on Markets.” Journal of Economic Perspectives. Summer: 21:3. pp. 37–58.

1907 George Simmel’s book on economic sociology entitled The Philosophy of Money  was published. Simmel investigated the consequences as money penetrated everyday life. “Hannes Böhringer has argued, “Money…objectifies the ‘style of life’, forces metropolitan people into ‘objectivity’, ‘indifference’, ‘intellectuality’, ‘lack of character’, ‘lack of quality’. Money socializes human beings as strangers…money also transforms human beings into res absolutae, into objects. Simmel’s student, Georg Lukács, correctly noticed that this objectification (in his words: reification and alienation) did not remain external, cannot, as Simmel maintained, be the ‘gatekeeper of the innermost elements’, but rather itself becomes internalized (H.Böhringer, ‘Die “Philosophie des Geldes” als ästhetische Theorie’, in H.J.Dahme and O.Rammstedt (eds), Georg Simmel und die Moderne, Frankfurt, Suhrkamp, 1984, pp. 178–82, esp. p. 182. cited in Simmel, Georg. 2004 [1907]. The Philosophy of Money. Third enlarged edition. Ed. David Frisby. Trans. Tom Bottomore and David Frisby from a first draft by Kaethe Mengelberg. London and New York.)” Roth ( 2007) cited Simmel (1907 as a starting point in sociology literature on “how the introduction of money changes many kinds of social relationships and their meanings.”

Who’s Who?

Michael J. Sandel “is professor of government at Harvard University, where he has taught political philosophy in the Faculty of Arts and Sciences since 1980. He was educated at Brandeis University and received his Ph.D. from Balliol College, Oxford University, where he was a Rhodes Scholar. He is a member of the National Constitution Center Advisory Panel, the Rhodes Scholarship Committee of Selection, the Shalom Hartman Institute of Jewish Philosophy, and the Council on Foreign Relations. He has received fellowships from the Ford Foundation, the American Council of Learned Societies, and the National Endowment for the Humanities. He is the author, most recently, of Democracy’s Discontent: America in Search of a Public Philosophy (1996), as well as Liberalism and Its Critics (1984) and Liberalism and the Limits of Justice (1982) (Tanner Lectures Introduction. 1998-05-11/12. “What Money Can’t Buy: The Moral Limits of Markets).” While at Balliol College, Oxford, as a Rhodes Scholar, Sandel studied under political philosopher Charles Taylor.
[edit]

Selected Webliography and Bibliography

The Economist. 2012-07-12. “Money and the markets: Insatiable longing.” The Economist.

Hoffmann, Stanley; Sandel, Michael J. 2005-02-09. “Markets, Morals, and Civic Life”  Introduction by Stanley Hoffmann. Presented at the 1887th Stated Meeting, held at the House of the Academy. http://www.amacad.org/publications/bulletin/Summer2005/MarketsMoralsCivitLife.pdf

Roth, Alvin E. 2007. “Repugnance as a Constraint on Markets.” Journal of Economic Perspectives. Summer: 21:3. pp. 37–58.

Sandel, Michael J. 1996. Democracy’s Discontent.  Belknap Press of Harvard University Press. Amazon.

Sandel, Michael J. 1998-05-11/12. “What Money Can’t Buy: The Moral Limits of Markets.” The Tanner Lectures on Human Values. Delivered at Brasenose College, Oxford.

Sandel, Michael J. 2005. “The Moral Limits of Markets.” Bulletin of the American Academy of Arts and Sciences. Summer: 6–10.

Sandel, Michael J. 2012-04-24. What Money Can’t Buy: The Moral Limits of Markets. Farrar, Straus and Giroux.

Simmel, Georg. 1907. The Philosophy of Money. 

Smith, Aaron. 2012-10-15. “Nobel economists’ big impact: Kidney transplants.” CNN Money.


IN PROCESS

Journalists acted as cheerleaders for buying stocks […] The market values journalists advice more then of analysts, and journalists advice are believed to contain more new information compared to analysts advice […] The lesson for investors is this: If either journalists or analysts come with a “sell” recommendation the stock drops significantly right away and continues to yield abnormal negative return. If an analyst issues “buy’s” there is only a slight chance that the stock will show abnormal positive return and more likely that the return will be negative. But if journalists issue “buy’s” it offers investors a short time of positive and significant abnormal positive returns, before the returns disappear and become severely negative. This is what Lidén calls a classic overreaction. “…it is obvious that analysts and journalists were fooled by the over-optimism from the positive information, but they were not from negative information. In turn, this is due to positive information being more intricate to interpret.”
25(source 2005).”

“The British financial journalism had been molded in the hands of people like J.R. McCulloch the editor of the Scotsman and the first real economist to write regularly in a newspaper. The influence of McCulloch is evident as he edited such works as The Wealth of Nations by Adam Smith in The Works of David Ricardo (source). Today magazines like The Economist and The Financial Times rely on McCulloch’s heritage while the American Barron‘s and the Wall Street Journal have for long been more finance oriented sources based on Alsanger’s foundation. In general this could be described as Speculators vs. Economic theory. This difference is important when retrieving, analyzing and valuing information from different sources on both sides of the Atlantic Ocean. Different cultural background and general rivalry has for example led many US financial journalist still today to consider The Economist the most overrated journal in the world!
(source 2005).”

2005 “Publishers such as Pearson (Financial Times, Economist) and Dow Jones (WSJ) are striving to become journalistic brand names that integrate news content and media around the basic product which paper is. The environment of the 90s has been called paradoxical concerning these two publishing giants. On one hand they are forced to adopt multimedia strategies, particularly developing a range of non-print products. On the other hand they have to do so while maintaining a historical focus on financial news, with clear growth limitations when considered nationally (source 2005).”

2005-1995 This “decade has been described by some scholars as the decade of popular capitalism, materialized in the growth of the “citizen investor” and of the globalization – primarily corporate and financial (Arrese and Medina (2002). The success of electronic financial media has forced economic dailies to stop identifying with just the traditional newspaper.”

2005 An example of the opposite opinion would be how Michael Bloomberg the Governor of New York City starts up his day. Bloomberg is a former stockbroker and owns one of the worlds most powerful finance quotation and informational media bearing his name. Remarkably enough Mr. Bloomberg says he gathers information the old-fashioned way starting with printed media. Among these are The Wall Street Journal, The Financial Times and The New York Times but he seldom goes to a story inside. He reads The Economist from cover-to-cover, never misses Fortune and usually reads Business Week. As for TV news, “I never watch TV, even my own [news channel].”

2004 Rupert Murdoch, “president of the News Corporation which publishes newspapers such as The Times in the UK and The New York Post, has urged newspaper editors “to embrace the internet saying print news executives sat by and watched as a generation of digital consumers turned away from newspapers…The challenge for each of us in this room is to create an internet presence that is compelling enough that users make it their home page. Just as people traditionally started their day with coffee and a newspaper, in the future I hope that the way they start their day online will be with coffee and our website,” Murdoch said at the annual meeting of the American Society of Newspaper Editors last April. If quotes of closing price would have been accessible to investors in a similar way back in 17th century surely there would have been no need for papers like the Lloyd’s List.” (source 2005).”

1996 Dan “Dorfman was fired from his 450.000 dollars-a-year job in 1996 after he refused to turn over his confidential sources. Federal investigation was made whether he had personally profited from his reports, either by trading on them or tipping others in exchange for favors. In an investigation made by the WSJ it was found that Dorfman maintained a brokerage account that was managed by one of his frequent sources, a broker who later left the business after being acquitted of fraud charges (source 2005).”

1990s “Dan Dorfman worked as a financial journalist at the Money magazine and as a commentator for the CNBC in the early 90s to become the highest-paid and the most influential business reporter in his time. Dorfman’s expertise was tied to his linguistic skill – not his analytic skills. He was a reporter, not an analyst. Dorfman went on television and mentioned a stock that someone had told him that was a possible
takeover target. The stock moved up and although only briefly, everybody was happy – for a while [. . .] But that evolution seems to be part of the everyday life of the modern journalist. Investment bankers, arbitrageurs, corporate raiders, analysts and people in corporate public relations all try to spin the story to their favor. To analyze how this evolved into a serious problem is the case of one of the most influential US business journalist who “moved market” for years with exclusive stories, but then was found guilty in the court of public opinion for unethical behavior regarding his work (source 2005).”

1980s As the golden age of economic controversy came to pass in the 80s the turmoil left a deep mark on the financial press. Privatization, deregulation of the financial markets, advances in information technology along with increased private share ownership helped to unleash a powerful new figure in the financial media which had mostly been overlook for many decades – the financial analyst. The bull market of
the 80s and again in the late 90s led “the tipster” to become in greater demand then teachers and scholarly journalists. “Now, as in the 1920s, speculation is a game all the family can play for the price of an evening paper.” (source)

1973 The oil crisis in 1973 and the collapse of the Bretton Woods exchange system seriously dented the limelight of the Keynesian economic gurus and gave rise to antiKeynesians intellectuals such as the Nobel-winning Austrian economist Friedrich A. Hayek (source).

1960s and 1970s The standing of the American economic profession rose highest and the leading men of this period became celebrities and gurus (Galbraith, Samuelson and Friedman) and in demand as commentators. Some people hoped that the ideas of a new breed of economists would rid the world from economic and financial crises [. . .] A prime example of this is the successful selling of Milton Friedman’s “supply-side economics” in the Wall Street Journal and the “monetarism” in the Financial Times. Both journals experienced tremendous success at this time where the WSJ climbed to a top position in circulation, toppling such newspapers as the New York Times and the Washington Post. The basis for creating a solid specialized news groups in the 60s was supported by the lack of interest for economic and financial news of the general news media (source).”

The seeds of this craze were planted in 1593. A man by the name of Conrad Guestner imported the first tulip bulb into Holland from Constantinople, in present day Turkey. After a few years, tulip bulbs became a status symbol and a novelty for the rich and famous. Eventually, tulip bulbs became a hot
ticket item in neighboring Germany, as well. Initially, only the true connoisseurs bought tulip bulbs, but the rapidly rising price quickly attracted speculators looking to profit. By 1634, tulip mania had feverishly spread to the Dutch middle class. Pretty soon everybody was dealing in tulip bulbs, looking to make a quick fortune. The majority of the tulip bulb buyers had no intentions of even planting these bulbs! The name of the game was to buy low and sell high, just like in any other market. The whole Dutch nation was caught in a sweeping mania, as people traded in their land, livestock, farms and life savings all to acquire 1 single tulip bulb! (Source: http://www.stock-market-crash.net; http://cepa.newschool.edu/het/profiles/mcculloch.htm)”

Analysts,
financial journalists,
stock recommendations,
efficient
market
theory,
contrarian signal
“dead tree media”


There is a high degree of uncertainty in predicting future commodity prices that baffles those engaged in monetary policies, academics, economists, and the everyday consumer.

High frequency trading (see Direct Edge 2005-) using proprietary algorithmic trading programs accounted for over 25% of all shares traded by the buy side by 2009. In 2009 73% of US equity trading volume was attributed to the activities of a small number of high-frequency trading firms, including divisions of Goldman Sachs and UBS but many more obscure, startup firms (with only 12-100 employees) such as Archelon, EWT Trading, Getco and Peak6 (Heires, Katherine. 2009-07-20Code Green: Goldman Sachs & UBS Cases Heighten Need to Keep Valuable Digital Assets From Walking Out The Door. Millions in Trading Profits May Depend On It Securities Industry News). The entire event/analysis/action cycle has been reduced for traders with the fastest machines to a few milliseconds. Fast computing not rational decision-making counts. Arnuk and Saluzzi (2009) call these activities toxic trade and claim that the high frequency trader seize the best deals at the expense of real investors whose machines are not as fast.

NYSE specialists no longer provide price stability. With the advent NYSE Hybrid, specialist market share has dropped from 80% to 25%.

There is a saturation of equity quotes with the entire event/analysis/action cycle has been reduced for some traders to a few milliseconds.

CQS Capacity (Quotes per Second) capacity was increased was increased by 33% to 1 million quotes/second on July 4, 2010 and on July 5th there was a micro-burst of activity. July 5th was 33% more active than any trading day in history.] CQS is already planning to increase capacity an additional 25% in October 2011. How long before that limit is hit ? We think it will be hit the very next trading day. If 3 years ago someone told us that equity quote traffic rates for NYSE, AMEX and ARCA issues would exceed 1 Million/second (not even counting Nasdaq stocks), we would have thought the market would have entered the greatest bull or bear market ever known. Instead, you can’t even recognize from a 1 minute chart where these bursts of out-of-control quote traffic rates occur. And when they do occur, a significant percentage of those quotes will have already expired before they even leave the exchange network. At these rates of growth, we will no longer have a diversity of trading participants with accurate market data, and regulators will have no hope of ever piecing together what happened after the next disaster. It took the SEC five months just to assemble equity data to analyse the flash crash [of May 6, 2010]. When the next disaster strikes, they will have to contend with 5 to 10 times more data (“Equity Quote Saturation” Nanex).”

“The market itself creates events in the form of imbalances of supply and demand that could be of value to traders who are fast enough to respond to them. There is no doubt that being faster than others entails private advantage, but is it socially beneficial? The first mover in the case of fundamental news imposes costs on other traders, and high adverse selection costs could cause market failure. The fast traders that take advantage of market events could provide valuable liquidity to those seeking immediacy and hence enhance market quality, but could also step ahead of large orders in the book, thereby imposing costs on other liquidity providers (as described in the specialist context by Seppi (1997)) (Hasbrouck, Joel; Saar, Gideon. “Low-Latency Trading“. p. 1. Retrieved 18 July 2011).”

Canadian-born, Harvard-educated economist Dean of the University of Toronto’s Rotman School of Management, Roger L. Martin argued in his publication entitled Fixing the Game: How Runaway Expectations Broke the Economy, and How to Get Back to Reality (2011-05) “The mayhem in our capital markets is ultimately the unfortunate effect of tightly tying together two different markets: the real market and the expectations market.” In her article printed in The Atlantic Lane Wallace (2009-07-07) admired Martin’s use of an easy-to-understand football analogy to explain how flawed economic theories about compensation and investment contributed to the 2008 melt-down on Wall Street. I have been unable to find the original Financial Times article to which Wallace referred but Martin has used the example of the New England Patriots’ stellar 16-0 record in their 2007 winning streak in Fixing the Game (2011) and this section is posted on Huffington Post. In it Martin explained how MVP Quarterback Tom Brady, the head coach and the team’s superlative 2007 performance was perfect even in measurable “real” terms. He uses Brady’s real performance value as an analogy for real stock market values and real embodied customers. He contrasts this with the speculators’ expectations market based on the point spread. The Patriots’ performance for example was only mediocre because the Patriots covered the point spread only ten times. Martin explained that “In betting vernacular, a favored team covers the spread when it wins the game by more than the point spread. In this case, the point spread is the moral equivalent of the stock price, in that it captures the consensus expectations of all bettors (Huffington Post).” Martin argued that it is impossible to meet bettors’ expectations forever and expectations grow to unattainable levels in both football and the stock market. In “American capitalism, CEOs are compensated directly and explicitly on how they perform against the point spread; that is, against expectations (Martin 2011 cited in Huffington Post).” And CEOs increasingly focus on managing share price over the short run something that is easier to manipulate. Shareholders are better off however when the focus of their investment managers is on the long term, on increasing share price more or less forever. In this horse-race spread-covering betting scenario, the interests of shareholders and executives are not aligned.

In 2009 (Stiglitz Commission 2009).” warned that financial speculation exacerbated the mortgage meltdown, the phenomenal increase in the price of energy including oil. As the price of energy increases countries’ purchasing power decreased. “The transfer of income from those who suffered from these price increases to those who benefited weakened global aggregate demand and contributed to the global imbalances which played an important role in the crisis (Stiglitz Commission 2009).”

There are those who claim that perceptions not realities create oil prices (Dicker 2011:309). He argued that the illogical outcome of BP disaster (the decrease in the price of oil when the supply was less than demand) is another example of the way in which oil markets and prices are influenced by quick analysis of traders and investors looking to benefit from a well-placed bet not by legitimate changes in fundamental supply.

While gurus such as Bernstein (2000) argue that gambling is for anyone but speculation is for professionals, the chaos and unpredictability of the current global economy have been linked to a growing culture of gambling in futures trading rather than level-headed professionalism. Gamblers create risk simply by placing a bet; professional speculators “transfer risk from the hedgers to the speculators” and it therefore called risk management instead of gambling.

“It rained last night so the price of soy beans will be down today.” Although the basis of fundamental analysis in economics is supply and demand, the actual fundamental analysis of specific markets that might generate accurate price predictions are complicated as numbers of factors overlap and massive quantities of data need to be considered. The simple equation involves how much of a commodity or service are buyers willing to pay at a given time and place. There used to be a correlation between price and consumption. Factors that impact on price of commodities include the state of the economy (local, regional, national and international – inflationary, recessionary with rising or falling employment), availability of alternate products or services, storage possibilities, weather, seasonality, price cycles, price trends, government subsidies, political influences, protectionist attitudes, international tensions, fear of war, hoarding, stockpiling, demand for raw materials (sugar, petroleum, copper, platinum, coffee, cocoa), currency fluctuations, health of the economy, level of unemployment, housing starts. Most technical systems are not effective in making traders money.

In examining implications regarding monetary policies the US Federal Reserve Board theoretical analyses often focus on: “commodity prices and inflation, the role of labor costs in the price-setting process, issues arising from the necessity of making policy in real time, and the determinants and effects of changes in inflation expectations (Bernanke 2008-06-09).”

While some argue that “policymakers care only about expected economic outcomes and not the uncertainty surrounding those outcomes” Pesenti and Groen claim that policymakers are concerned about the risks to their projections as well as the projections themselves (Pesenti and Groen 2011-03)?” Should and how does this affect the way in which policies are made?

Selected Timeline of Critical Events

2011-08-09. “In recent days, the high-frequency operation at Tradeworx Inc., a Red Bank, N.J. firm, juggled its largest daily volumes since its 2009 launch, resulting in some of its most profitable days on record, according to its founder, Manoj Narang. The reason: High-speed firms’ profits are highly correlated with increased volatility in the market. The more stock are rising and falling, the better they are able to make profits on the difference between buy and sell prices. A gauge of volatility, the Chicago Board Options Exchange Volatility Index, or VIX, rose more than 100% from Aug. 1 to Aug. 8. (Patterson, Scott. 2011-08-09. “High Frequency Traders Win in Market Bloodbath.” Wall Street Journal Blog Marketbeat.)”

2011-08-13 ANDREW ROSS SORKIN: “[T] he issue of what’s called high-frequency trading and electronic trading that she just mentioned is absolutely right. The reason why you’re seeing these huge gains and huge losses is because there are people who are making these decisions based on the headlines, but then there are computers, there’s machines that are effectively taking over and exacerbating the ups and the downs, because what they’re looking to do is — these are machines with algorithms that are looking to pick up pennies, lots of pennies in many instances. But they’re looking for one stock to go up and one stock to go down, and they see different correlations. And that’s really exacerbating the big moves in volatility we’re seeing in the stock market these days.” CATHERINE MANN: [The] ordinary investor, the person on Main Street is affected by these gyrations. [The ordinary investor] feels a disconnect between the big profits that some Wall Street, the big financials or non-financials companies get by trading on this high frequency and the ups and the downs, and the average person on Main Street. “The disconnect there has been there for a while. It’s been worsened because of the lack of credit being extended to Main Street, as — as — even though the banks have gotten better, in better shape, they have not extended any credit to Main Street. And so that disconnect is worse. And they really feel like Wall Street is out to get them. And they’re probably right about that (“Uncertainty, Computerized Trading Fuel Wall Street’s Wild Ride.”)

2011-07-07 Melloy, John. 2011-07-07. “New Way High-Speed Traders Get Edge on Investors.” Fast Money. CNBC.com

2011 High-frequency trading firms using high-frequency techniques (software-based mechanisms: high frequency algorithmic trading) earned $12.9 billion in profit in the last two years (2009-2011), according to TABB Group, a specialist on the markets.

2011-07-18 The price of gold climbed to c.”$1604 an ounce, putting the precious metal on track for a 10th-straight rise and another record settlement. The U.S. dollar strengthened against the euro but declined versus the yen. Crude-oil prices fell below $95 a barrel (Wall Street Journal).”

2011-07-10 Anderlini, Jamil. “Trade data show China economy slowing.” “In a sign that industrial activity in the country was moderating, imports of key commodities like crude oil, aluminium and iron ore all fell in June from a month earlier. Crude oil imports fell to the lowest level in eight months and were down 11.5 per cent from the same month a year earlier and, while copper imports rebounded in June, they were significantly down on 12 months ago.”

2011-07-08 U.S. stocks slumped. Crude-oil futures fell 2.9% and traded just below $96 a barrel (Wall Street Journal).

2011-07-04Speculators unburned.” The Economist. Oil traders are free to bid for it. And it seems they did. The Department for Energy says its auction was heavily oversubscribed with bids from more than 90 parties. For reference, there are 148 refineries in America, but most are owned by a few major players such as Exxon, who would do the actual bidding. Traders who anticipate the oil price will rise, and have the capacity to store oil, can buy physical stocks now, and sell oil forward. As long as the price rises enough to cover storage costs, they will turn a profit. If a trader was able to purchase West Texas Intermediate—the oil held in America’s Strategic Petroleum Reserve (SPR)—at the spot price on June 24th, they would already be sitting on a tidy profit.

2011-07-04 Capacity (Quotes per Second) CQS capacity was increased by 33% to 1 million quotes/second. On July 5th, 2011 there was a micro-burst of activity: 33% more active than any trading day in history (Nanex Research).

2011-06-27 “The London Stock Exchange (LSE.L) has launched a super-fast trading service in its latest bid to court more business from high-frequency trading (HFT) firms.” (Jeff, Luke. 2011-06-27. “LSE makes latest high-frequency move.” London:Reuters.

2011-06 “A recent report produced by a joint advisory committee of the SEC and the Commodity Futures Trading Commission urged the SEC to work with the Financial Industry Regulatory Authority and the exchanges “to develop effective testing of sponsoring broker-dealer risk management controls and supervisory procedures.The concern from Washington prompted a group of 12 brokerages to collaborate on a set of risk guidelines intended for adoption across the industry. Working under the aegis of FIX Protocol Limited, the group recently published a checklist of 13 risk controls it hopes will deter the acceptance of orders that might disrupt the marketplace. FIX Protocol is a pan-industry group that promotes and supports electronic trading through the ubiquitous FIX communications standard. The guidelines devised by the members of the FPL Risk Management Working Group focus strictly on algorithmic and direct-market-access orders for cash equities. The members include the nine largest trading firms, which account for the vast majority of industry orders (“New Checks Unlikely to Satisfy SEC.” Traders Magazine).”

2011-06-29

2011-06-28 “Futures advanced a second day as Brent crude oil climbed. Gasoline and heating oil rose as crude and equities gained and the dollar weakened against the euro.”(Powell 2011-06-28).

2011-06-23 In its commitment to keep oil markets well-supplied the Paris-based International Energy Agency (IEA) announced that the 28 IEA member countries for the third time in the IEA history, they would release 60 million barrels of oil (2 million barrels of oil per day from their emergency stocks over an initial period c. June-July 15) to offset the ongoing disruption of oil supplies from Libya. By May 30 132 mb of Libyan light, sweet crude oil was not available to the market and analysts expect this to continue through 2011. This supply disruption has been underway for some time and its effect has become more pronounced as it has continued. The normal seasonal increase in refiner demand expected for this summer will exacerbate the shortfall further. Greater tightness in the oil market threatens to undermine the fragile global economic recovery (International Energy Agency 2011-06-23).

2011-06-16 Fletcher, Sam. “Energy prices tumble; Brent-WTI spread at 3-month low.” PennEnergy- Energy News. West Texas Intermediate to “the weakest level” since March, said Olivier Jakob at Petromatrix, Zug, Switzerland. In Houston, analysts at Raymond James & Associates Inc. said the European debt crisis and continued worries of a weakening US economy …

2011-06-15 Britain’s top banks will have to protect their retail business from investment banking activities (casino banking) after “the government backed a plan to overhaul the industry and shield taxpayers from future losses (more).” See Financial Times also.

2011 Debates in the UK on how to make our financial institutions safer include ring-fencing utility operations from casino banking, new capital requirements and living wills. Megabanks (Barclays, Lloyds, RBS and Santander) were rescued by taxpayers as well as through worsening savings and loan rates. Read more: http://www.thisismoney.co.uk/money/article-2004841/SUNDERLAND-ON-SATURDAY-Banks-need-customers-queue.html#ixzz1QbQ38DAGSee Sunderland “The scale of the taxpayer bailout of the banking system has led to lengthening dole queues and severe cuts to public spending (more).”

2011 Megabank Barclays was ordered by the Financial Services Authority to pay a fine of £7m and to repay up to £60m to mainly elderly customers who had been duped into gambling their savings on the stock market. Read more

2011-06-17 In the Alberta oil sands, oil prices tripled from their 2009 lows. Drilling activity was on the upswing. Unemployment was falling and oilsands investment was surging (Read more)

“When you see oil prices spiking by $2, $3 or $5 a day, that’s not a situation Alberta wants to be in because it’s not driven by (market) fundamentals, it’s being driven by speculators”.

2011-05-02 through 2011-05-07 The price of silver dropped 25% in just four trading days.

2011-04 Investors pushed the price of silver up 57% in 2011 before a massive correction started on May 2, 2011.

2011-03 In the wake of the U.S. real estate collapse, declining returns in the bond market, worries about a global slowdown and fears that after a nice run, equities have nowhere to go but down, big hedge funds and other sophisticated market pros have been loading up on cotton, corn, soybean oil and other soft commodities. Milner, Brian.

2011-03. “Soaring commodity prices at mercy of demand – from speculators.” Globe and Mail.

2011-03 A rally in commodity prices resurrected inflationary threats (Pesenti and Groen 2011-03).

2011-01-12 American International Group, which received a massive bailout in 2008, claimed it expected to complete a recapitalization that would allow it to fully pay back the government (more).

2011-02 Coffee prices: In New York, the benchmark May futures contract hit $2.784 a pound, their highest level since $3.40 in 1977, an all-time record. During the past 12 months alone, those prices rose by 145%. Last week the International Coffee Organisation said the price had hit a 14-year high. By July 2011 “Coffee futures are up 53% over the past year, although the front-month contract for July delivery fell 1.9%, or 4.8 cents, in Friday to close at $2.5255 a pound.”

2011-06-01 Investors should prepare for renewed swings in prices of commodities (oil, natural gas, orange juice) “swings expected after weather forecasters predicted a busy Atlantic hurricane season.” Blais 2011-06-01 .” Financial Times. London.

2010-12 From 1977-2010 the compound annual sharehold value continues to decrease compared to pre-shareholder-value era (1933-1977) (Martin 2011 cited in Huffington Post).” Companies tend to boost earnings per share without creating value but gross-margin return on inventory investment drives longer term value creation. CEOs need to be held accountable for long-term performance by linking compensation to such metrics as multiyear stock performance. see Lek.

2010-09 Investment banker multimillionaire 59-year-old American Bob Diamond was appointed as head of Barclays megabank raising concerns that the Treasury should separate traditional retail banking from casino banking. Casino banking can lead to potential massive profits or loss depending on the level of risk of investments. Vince Cable: “Diamond, with his £20m bonuses, is the unacceptable face of this bonus-driven banking,” Oakeshott said. “This highlights the need to break-up and de-risk the British banking system.” Barclays appointment highlights ‘casino’ banking fears Business secretary says Barclays’ appointment of Bob Diamond illustrates dangers of having retail banks with massively profitable investment arms attached to them.

2010—08-16 The CFTC sanctioned ConAgra Trade Group, Inc. (CTG) $12 Million for causing a non-bona fide price to be reported in the NYMEX Crude Oil futures contract. On January 2, 2008, CTG was the first to purchase NYMEX crude oil futures contracts at the then-historic price of $100. As a result of CTG’s effort to be the first to trade at the $100 level, CTG caused a non-bona fide price to be reported, according to the CFTC order. (CFTC Press Release 5873-10, August 16, 2010) (more).

2010-07-21 President Obama signed the Dodd-Frank financial regulatory bill. “Title VII of the Dodd-Frank Act amends the Commodity Exchange Act to establish a comprehensive new regulatory framework for swaps and security-based swaps. The legislation is enacted to reduce risk, increase transparency, and promote market integrity within the financial system by, among other things: 1) providing for the registration and comprehensive regulation of swap dealers and major swap participants; 2) imposing clearing and trade execution requirements on standardized derivative products; 3) creating robust recordkeeping and real-time reporting regimes; and 4) enhancing the Commission’s rulemaking and enforcement authorities with respect to, among others, all registered entities and intermediaries subject to the Commission’s oversight. On the same day, the CFTC releases a list of 30 areas of rulemaking to implement the Dodd-Frank Act. (CFTC Press Releases 5855-10 and 5856-10, July 21, 2010) (more). The Dodd-Frank Act included the Volcker Rule which requires that “regulators implement regulations for banks, their affiliates and holding companies, to prohibit proprietary trading, investment in and sponsorship of hedge funds and private equity funds, and to limit relationships with hedge funds and private equity funds. Non-bank financial institutions supervised by the Fed also have restrictions on proprietary trading and hedge fund and private equity investments. The Council will study and make recommendations on implementation to aid regulators (more).”

2010-05-24 A YouTube video of High Frequency Trading explained by William Arnuk, the 13-year-old son of Sal Arnuk, who works for the HFT research firm, Themis Trading.

2010-05 With the flow from BP’s Deepwater Horizon huge oil spill unstaunched both stock and oil markets crashed with the brunt of the losses in the energy sector. Oil prices fell. (Dicker 2011:305).

2010—05-06 Major stock indexes and stock index futures experience a “flash crash”, a brief but severe drop in prices, falling more than 5% in a matter of minutes, only to recover a short time later. Dow Jones industrials fell roughly 900 points, only to quickly recover. Some individual securities experience more volatility than the stock indexes. (Statement by SEC and CFTC, May 6, 2010). (more) The joint CFTC/SEC report on the “flash crash” of May 6, 2010, examined the role of high-frequency trading in this extreme episode (U. S. Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission, 2010). Whether or not a single large order caused the “flash crash” in May 2010, as the Securities and Exchange Commission has alleged that a single large order may have caused the crash and has placed pressure on brokers to make sure they don’t toss any oversize or out-of-control orders into the market (Traders Magazine). “The regulators’ official October report on the 15-minute plummet in the Dow Jones Industrial Average on May 6, 2010, blamed a liquidity crisis that followed a bad trade in S&P 500 futures. Officials have since taken action to prevent a similar catastrophe by instituting circuit breakers that halt individual stocks in the S&P 500 after a 10 percent move (Melloy 2011-07-07).”

2010—04-06 It took $20 trillion of public funds over a period of two-and-a-half years to lift the total world market capitalization of listed companies by $16.4 trillion. This means some $3.6 trillion, or 17.5%, had been burned up by transmission friction. Government intervention failed to produce a dollar-for-dollar break-even impact on battered markets, let alone generate any multiplier effect, which in normal times could be expected to be between nine and 11 times. In the meantime, with the exception of China’s, the real global economy continues to slide downward, with rising unemployment and underemployment. The massive government injection of new money managed to stabilize world equity markets by January 2010, but only at 73.5% of its peak value in October 2007. It still left the credit markets around the world dangerously anemic and the real economy operating on intensive care and life support measures from government. This is because the bailout and stimulus money failed to land on the demand side of the economy, which has been plagued by overcapacity fueled by inadequate workers’ income, masked by excessive debt, and by a drastic reversal of the wealtheffect on consumer demand from the bursting of the debt bubble. The bursting of the debt bubble destroyed the wealth it buoyed, but it left the debt that fueled the bubble standing as liability in the economy. Much of the new government money came from adding to the national debt, which taxpayers will have to pay back in future years. This money went to bail out distressed banks and financialinstitutions, which used it to profit from global “carry trade” speculation, as hot money that exploited interest rate arbitrage trades between economies. The toxic debts have remained in the global economy at face value, having only been transformed from private debts to public debts to prevent total collapse of the private sector. The debt bubble has been turned into a dense debt black hole of intense financial gravity the traps all light from appearing at the end of the recovery tunnel.(Lui, Henry C.K. 2010—04-06. “Bailouts, Stimulus Packages and Jobless Recovery: The Crisis of Wealth Destruction. Part I).”

2010-04-20 BP’s Deepwater Horizon rig caught fire resulted in oil spill.

2010-03 Michael Lewis published his book entitled The Big Short in which he returned “to his financial roots to excavate the crisis of 2007–2008, employing his trademark technique of casting a microcosmic lens on the personal histories of several Wall Street outsiders who were betting against the grain—to shed light on the macrocosmic tale of greed and fear.” “Lewis is a capable guide into the world of CDOs, subprime mortgages, head-in-the-sand investments, inflated egos–and the big short.” Lewis provides “a savvy assessment of the wisdom of the financial bailout and where-are-they-now updates on the book’s various heroes and villains.” (more)

2010—01-14 The “CFTC votes at an open meeting to publish in the Federal Register a proposal to set position limits for futures and option contracts in the major energy markets. (CFTC Press Release 5771-10, January 7, 2010) (more).”

2010-01 Organizations “representing the electric and natural gas industries and serving nearly all energy customers in the United States, support the goals of the Administration and Congress to improve transparency and reduce systemic risk in over-the-counter (OTC) derivatives markets. As the Senate considers financial reform legislation, [they argued] that it preserve the ability of companies to access critical OTC energy derivatives products and markets. engaged in off-market trading for oil which is unregulated. Estimates for the OTC derivative market for all assets range upward of $600 trillion. See (Edison Electric Institute (EEI). 2010-01. “OTC Derivatives Reform: Energy Sector Impacts.”).

2009-12-17 “Automated market makers (AMM) co-locate their servers in the NASDAQ or the NYSE building, right next to the exchanges’ servers. AMMs already have faster servers than most institutional and retail investors. But because they are co-located, their servers
can react even faster.” “According to Traders Magazine the number of firms that co-locate at NASDAQ has doubled over the last year (Arnuk, Sal L.; Saluzzi, Joseph. 2009-12-17. “Toxic Equity Trading Order Flow on Wall Street: The Real Force Behind the Explosion in Volume and Volatility.” A Themis Trading LLC White Paper.)

2009-10-08High Frequency Trading Technology: a TABB Anthology.” TABB reported that software capable of electronic routing and execution based on algorithms account for more than 25% of all shares traded by the buy side today. A relatively few high frequency proprietary trading firms experienced a meteoric rise and now wield far greater influence on the markets today than most people recognize.

2009-10-30 Market analysts argued that oil markets were no longer tied to supply and demand fundamentals. They were concerned with the extremely high correlation between crude oil prices and US currency (“Flood 2009-10-30).

2009-08-06 Computer-based algorithmic programs carry out transactions in 400 microseconds which is 1000 times faster than the human eye. Few ordinary investors are aware of or have access to this frenetic, technology-driven world of high-frequency trading which accounted for 50% of daily volume in US stocks, up from estimates of 30 per cent in 2005 (Mackenzie, Michael; Grant, Jeremy. 2009-08-06. “The dash to flash.” Financial Times.)

2009-07-20. Goldman Sachs and UBS filed charges against former employees they allege stole proprietary computer code key to their high-speed trading programs, now the most tactical and strategic weapons on Wall Street (Heires, Katherine. 2009-07-20Code Green: Goldman Sachs & UBS Cases Heighten Need to Keep Valuable Digital Assets From Walking Out The Door. Millions in Trading Profits May Depend On It Securities Industry News).”

2009-03 UBS filed papers “charging three ex-employees with “misappropriation of trade secrets,” specifically the misappropriation of 25,000 lines of source code for the firm’s high-speed, algorithmic trading programs (Heires, Katherine. 2009-07-20Code Green: Goldman Sachs & UBS Cases Heighten Need to Keep Valuable Digital Assets From Walking Out The Door. Millions in Trading Profits May Depend On It Securities Industry News).”

2009-07-03. Goldman Sachs brought charges “against a former vice president for equity strategy and computer programmer on July 3 for allegedly copying 32 megabytes of the bank’s trading codes and uploading them to an encrypted server before sending them to a home computer and other
devices (Heires, Katherine. 2009-07-20Code Green: Goldman Sachs & UBS Cases Heighten Need to Keep Valuable Digital Assets From Walking Out The Door. Millions in Trading Profits May Depend On It Securities Industry News).”

2009-06 Signs of an approaching global economic recovery re-emerged (Pesenti and Groen 2011-03).

2009-06-28 Evans-Pritchard, Ambrose. “China’s banks are an accident waiting to happen to every one of us.
Fitch Ratings warned that China’s banks have lent up to $1,000bn (£600bn) since December 2008. “Money is leaking instead into Shanghai’s stock casino, or being used to keep bankrupt builders on life support.” This does not help the world economy.

2009-06-26 “The Iraq War and other events which helped set off an increase in the price of oil had a further depressing effect on countries which import energy, including the U.S. The magnitude of the increase in energy prices was exacerbated by financial speculation. This change in the price of energy, accompanied by governments’ attempts to develop alternative bio energy sources contributed to higher food prices. The sharp increase in energy prices thus directly and indirectly brought further reductions in purchasing power within many countries. The transfer of income from those who suffered from these price increases to those who benefited weakened global aggregate demand and contributed to the global imbalances which played an important role in the crisis (Stiglitz Commission 2009).”

2009-05 During “an annual conference of the Securities Industry and Financial Markets Association, top executives from Direct Edge and the NYSE angrily debated the merits of flash orders. Flash orders are a type of high frequency trading. Institutional paying participants get a flash peek at prices before they are released to the broader, public market (more).”

2009-03-24 The Federal Reserve, working closely with the Treasury, made the decision to lend to AIG on September 16, 2008. It was an extraordinary time. Global financial markets were experiencing unprecedented strains and a worldwide loss of confidence. Fannie Mae and Freddie Mac had been placed into conservatorship only two weeks earlier, and Lehman Brothers had filed for bankruptcy the day before. We were very concerned about a number of other major firms that were under intense stress. AIG’s financial condition had been deteriorating for some time, caused by actual and expected losses on subprime mortgage-backed securities and on credit default swaps that AIG’s Financial Products unit, AIG-FP, had written on mortgage-related securities. As confidence in the firm declined, and with efforts to find a private-sector solution unsuccessful, AIG faced severe liquidity pressures that threatened to force it imminently into bankruptcy (more). Claims of bondholders and counterparties were paid at 100 cents on the dollar by taxpayers, without giving taxpayers the rights to the future profits of these institutions. Benefits went to the banks while the taxpayers suffered the costs (more).

2009-02-03 The “U.S. government announced a restructuring of a bailout plan for the troubled insurer American International Group Inc. Monday, extending $30 billion in additional aid to the company. News of the additional funds came as AIG, once the world’s largest insurer, said it lost $61.7 billion in the fourth quarter, the biggest quarterly loss in U.S. corporate history, amid continued financial market turmoil.”

2008-10-18 The President of the United Nations General Assembly, “Miguel D’Escoto Brockmann, announced his intention to establish a taskforce of experts to review the workings of the global financial system, including major bodies such as the World Bank and the IMF, and to suggest steps to be taken by Member States to secure a more sustainable and just global economic order (http://www.un.org).” Noted economist and Kerala State Planning Board Vice-Chairman Prabhat Patnaik was included in a four-member high-power task force of the United Nations (U.N.) to recommend reforms of the global financial system. The task force Commission of Experts on Reforms of the International Monetary and Financial System (2009), informally known as the Stiglitz Commission, was headed by Nobel Prize-winning economist Joseph Stiglitz.

2008 Morgan Stanley and Goldman Sachs, the last two investment banks left standing, announced they would become traditional bank holding companies, marking the end of an era for Wall Street (more).

2008-09-16 American International Group, Inc. (AIG) (NYSE: AIG), an American insurance corporation, suffered a liquidity crisis following the downgrade of its credit rating. “The Federal Reserve, working closely with the Treasury, made the decision to lend to AIG on September 16, 2008. It was an extraordinary time. Global financial markets were experiencing unprecedented strains and a worldwide loss of confidence. Fannie Mae and Freddie Mac had been placed into conservatorship only two weeks earlier, and Lehman Brothers had filed for bankruptcy the day before. We were very concerned about a number of other major firms that were under intense stress. AIG’s financial condition had been deteriorating for some time, caused by actual and expected losses on subprime mortgage-backed securities and on credit default swaps that AIG’s Financial Products unit, AIG-FP, had written on mortgage-related securities. As confidence in the firm declined, and with efforts to find a private-sector solution unsuccessful, AIG faced severe liquidity pressures that threatened to force it imminently into bankruptcy (more).”

2008-07 2008 Lehman Brothers failed. Bubble popped and money fled from oil investment. Trading value of oil dropped by 80% (Dicker 2011).

2008 Oil reached $147 a barrel (Dicker 2011).

2008-06 Federal Reserve Chairman Bernanke “singled out the role of commodity prices among the main drivers of price dynamics, underscoring the importance for policy of both forecasting commodity price changes and understanding the factors that drive those changes (Pesenti and Groen 2011-03 citing Bernanke).”

2008-04 The macroeconomic outlook changed rapidly and dramatically as the global economy experienced the near-collapse of trade volumes and the associated plunge in commodity prices was the harbinger of pervasive disinflation risks (Pesenti and Groen 2011-03).

2008 In the ten years after Born’ s 1998 proposal, the market in derivatives exploded from $27 trillion to one worth more than $ 600 trillion. By comparison, the entire U.S. economy was worth $ 14 trillion. Hirsch, Michael. 2010. Capital Offense: How Washington’s Wise Men Turned America’s Future Over to Wall Street. New Jersey: John Wiley.

2008-06 “NYSE Floor Brokers Get New Tools.” The New York Stock Exchange introduced two new technologies to give brokers on the NYSE trading floor the ability to trade algorithmically and to strengthen the brokers’ ability to locate large sources of liquidity. more

2008-06-17 Ross Levin, a Wall Street NYC hedge fund analyst with Arbiter Partners, who calls himself a “passive speculator in securities” met Lionel Lepine, a member of the Athabaskan Chipewyan First Nation whose family and friends living on the contaminated watershed upriver from the oil sands’ effluence are suffering from unprecedented numbers of cancerous tumours. Levin attended Calgary’s prominent energy investment forum and “found himself in the eye of a growing environmental storm battering Alberta’s oilsands — one of several clashes centred on the energy sector.”
read more | digg story

2008-04-02 – After two decades spent expanding in Britain, the United States and other developed economies, the world’s third biggest bank is shifting its ….. or if the government forces banks to separate their retail arms from investment banking, dubbed “casino banking” by some politicians. .

2008 PM Harper apologized for past treatment of Canada’s First Nations.

2008 Pollution of the Athabaskan River north of the oil sands

2008 Impatient development of nonrenewable resources in the oil sands.

2008-03-24 Reich, Robert B. 2008-03-24. Is the Game About to Stop? American consumers’ buying power was less than the goods and services the U.S. economy is capable of producing. Reich predicted fewer jobs, even less consumption which would lead to even fewer jobs and possible a recession which could become a full-fledged depression. Reich argued that fiscal and monetary policies could perhaps make up for consumers’ lack of buying power. American consumers were already deep in debt, their homes were losing value, their paychecks were shrinking.

2008 Meteoric rise of oil commodities market directly caused by irresponsible speculators playing with volatile, unpredictable hedge funds that play havoc with the market making a fortune for some while destroying economic, social and ecological environments all around them.

2008 Calgary has a high percentage of young millionaires with lots of disposable income. There are also c.4000 homeless people in Calgary, the oil capital of Canada. c. 40% of the homeless are working poor who are unable to afford housing.

2007-10-31 Meredith Whitney, an obscure analyst of financial firms for Oppenheimer Securities “predicted that Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust. It’s never entirely clear on any given day what causes what in the stock market, but it was pretty obvious that on October 31, Meredith Whitney caused the market in financial stocks to crash. By the end of the trading day, a woman whom basically no one had ever heard of had shaved $369 billion off the value of financial firms in the market. Four days later, Citigroup’s C.E.O., Chuck Prince, resigned. In January, Citigroup slashed its dividend (Lewis, Michael. 2008. The End).”

2007-08 Arnuk and Saluzzi argued in their white paper entitled Toxic Equity Trading Order Flow on Wall Street: The Real Force Behind the Explosion in Volume and Volatility” (2009-12-17) that electronic trading, the new for-profit exchanges and ECNs, the NYSE Hybrid and the SEC’s Regulation NMS all came together in unexpected ways in the late summer of 2007. This perfect storm caused the Volatility Index, [stock market volatility index (VIX) “fear gauge” measures the expectation of price movement over the next 30 days. The higher the reading, the more likely stocks are to move in one direction or another] to climb, trading volumes to increase explosively, stock prices and indexes to experience rapid change. ”
This has resulted in the proliferation of a new generation of very profitable, high-speed, computerized trading firms and methods that are causing retail and institutional investors to chase artificial prices (Arnuk and Saluzzi 2009-12-17).”

2006-03-07 The merger of NYSE and Archipelago was completed forming the NYSE Group, Inc., a holding company that operates two securities exchanges: the NYSE and NYSE Arca, Inc. They are a leading provider of securities listing, trading and market data products and services (more).

2007-06-18 Wolf, Martin. 2007-06-18. “Unfettered finance is fast reshaping the global economy.” “In Rome everything is for sale.”

2007-01 “Both the switch to trading in penny increments in January 2007 and stepped-up activity by high-frequency traders have cut into dealer profits. That has made the dealers less willing to shoulder the entire burden of supporting the exchanges. Almost 90 percent of industry volume is now being traded in options subject to the “penny pilot.” With the minimum trading increment down from 5 cents to 1 cent in the most active options, competition has cut dealer spreads dramatically. “Options Market Makers Catch a Break on Fees as Customers Pick Up.” Traders Magazine

2006 “[F]lash orders – a key focus of the New York Times article, which prompted an almost instant response from politicians and regulators. Flash orders first appeared in US equity markets in 2006, with the launch of the Enhanced Liquidity Provider (ELP) programme by Direct Edge. The idea was that if an order had been sent into Direct Edge and not found a match, it would be shown to other market participants before being routed out to alternative markets, as would normally happen. In theory, more of the orders placed with Direct Edge would be filled, and more customers would have a shot at trading at the price they want (Wood, Duncan. 2009-09-04) “Murky business.” Risk magazine.” tags: Algorithmic Trading Topics: Equities, Trading

2006-2008 Mainly cautious elderly customers were ill-advised by Barclays between 2006 and 2008 to put money into high-risk investments Aviva Global Balanced Income or the Aviva Global Cautious Income funds. No one at Barclays lost jobs even though this scandal cost Barclays shareholders close to £80 million and inflicted untold damage on Barclays’ reputation. Read more

2005-12-15 NYSE Hybrid Market was launched, creating a unique blend of floor-based auction and electronic trading. NYSE Hybrid Market claimed to provide customers with more choices and greater flexibility in accessing the superior liquidity and best prices of the NYSE marketplace. In 2005, the combined dollar value of transaction volumes of the NYSE and NYSE Arca represented approximately $17.8 trillion dollars, which was greater than the value of trading of Nasdaq ($10.1 trillion), the London Stock Exchange ($5.7 trillion), the Tokyo Stock Exchange ($4.4 trillion), Euronext ($2.9 trillion) and the Deutsche Börse ($1.9 trillion) (more)

2005-06-29 70 FR 37496, 37627 Rule 603 — Distribution, Consolidation, and Display of Information with Respect to Quotations for and Transactions in NMS Stocks. “In Regulation Fair Disclosure, the SEC took the stand that firms cannot release fundamental information to a subset of investors before others. On the other hand, Rule 603(a) established a different approach to market data, whereby market centers could sell data directly to subscribers, in effect creating a tiered system of investors with respect to access to information about market events. Rule 603(a) prohibits an SRO or a broker-dealer from supplying the data via direct feeds faster than it supplies it to the Securities Industry Automation Corporation (SIAC) that processes the data and distributes the “tape.” However, the operation of processing and retransmitting data via SIAC appears to add 5 to 10 millisecond and hence subscribers to direct exchange data feeds “see” the information before others who observe the tape (more).”

2005-07-31 CEO, John Thain discussed NYSE plans to merge its floor-based trading system with a relatively new electronic market known as Archipelago creating a hybrid system that allows electronic, instantaneous and anonymous trades. Thain’s former employer, Goldman Sachs, was on both sides of the deal representing the NYSE and Archipelago. Goldman was the biggest NYSE seat holder, owned a specialist firm and 15% of Archipelago “NYSE chief: Hybrid trading system’s the way to go.”

2005Many banks operated proprietary trading units that were organized much like hedge funds. Risk exposures of the hedge-fund industry began to have a material impact on the banking sector, resulting in new sources of systemic risks (more).

2005 High-frequency trading accounted for 30% of daily volume in US stocks (Mackenzie, Michael; Grant, Jeremy. 2009-08-06. “The dash to flash.” Financial Times.)

2005 Direct Edge, a small, electronic trading company opened for business using high-frequency trading (lightning-fast computers equipped with sophisticated and powerful algorithms that are capable of executing trading strategies) and flash orders (literally flashing their orders to their own investors for about a tenth of a second before releasing it to the public market).

2005-07 S&P upgraded China’s sovereign rating by one notch to A-minus, citing China’s aggressive overhaul of its financial sector and improved profitability. China is rated ‘A2’ by Moody’s Investors Service and ‘A’ by Fitch Ratings. Liu, Henry C. K. World Trade Needs a Global Cartel for Labor (OLEC).

2005 According to one study, if the share of world trade and world gross domestic product for non-industrial countries had remained at its 2000 levels, then by 2005, real oil prices would have been 40 percent lower, and real metals prices 10 percent lower, than they actually were (Pain, Koske, and Sollie, 2006).  Since 2005, continued strong growth in the demands for resources of emerging market economies have likely put further considerable upward pressure on commodity prices  (Bernanke 2008-06-09). ”

2004 The “demand for oil by members of the Organisation for Economic Co-Operation and Development (OECD) has been essentially flat since 2004 (Bernanke 2008-06-09). ”

2004-08-02 Revolutionary electronic trading practices transformed the stock market. The NYSE filed to expand using the NYSE Direct+® system. NYSE Direct+® eliminated limits on the size, timing, and types of orders that can be submitted via Direct+, significantly increasing the level of purely electronic trading at the NYSE.

2004 The “demand for oil by members of the Organisation for Economic Co-Operation and Development (OECD) has been essentially flat since 2004 (Bernanke 2008-06-09). ”

2003  The price of oil had remained relatively stable from 1990 to 2003 when the price of oil became volatile. The price increased sixfold in five years then lost 80% of its value in 6 months (Dicker 2011:viii).

2001 There was “an overnight change in the trading patterns of the Nasdaq 100 Index which highlighted the competitive impacts of the SEC reforms and foreshadowed the dominance of the high frequency traders and all-electronic marketplaces. At the time, the ETF for the Nasdaq 100 Index (then known as the QQQ) was the most actively traded security and was primarily traded on the American Stock Exchange which utilized a manual floor-based specialist system. Using ATSs, the high frequency traders began using their efficient automated trading systems to narrow the quoted spreads in the QQQ from several pennies down to tenths of a penny, saving investors millions in the process (Traders) .”

Within months, investors voted with their feet and made the electronic markets that featured the liquidity and narrower spreads of the high frequency traders the dominant venues for the QQQ. Investors never looked back. Ultimately, the NYSE and the Nasdaq Stock Market were compelled to purchase these electronic markets that catered to high frequency traders (Archipelago was purchased by the NYSE and INET by the Nasdaq Stock Market). The traditional, uncompetitive Wall Street market maker model was replaced and the exchanges were transformed to open, fair and transparent electronic marketplaces.

2000 More than 90 foreign futures exchanges emerged with the ever-increasing demand for new financial instruments “to hedge against fluctuating interest rates, changing foreign exchange rates and institutional securities portfolios (Bernstein 2000:46).

2000 The Chicago Mercantile Exchange (CME) trades futures in livestock futures, currency futures, interest rate futures, stock index futures (Bernstein 2000:70).

1999 The most actively traded future contracts were interest rates, futures, stock index futures, energy futures, currency futures and agricultural futures (Bernstein 2000:72).

1998 Long Term Capital Management collapsed.

1998Security and Exchange Commission ruling allowed electronic communication networks (ECN’s for short) to trade equities in competition with the traditional exchanges. New technologies made the automation possible resulting in the development of high frequency trading: Lightening-quick computers, aided by powerful algorithms, buy and sell stocks based on price or other markers (more).

1998 Brooksley Born, chairman of the Commodity Futures Trading Commission declared that the unregulated regulation of private derivative contracts could “pose grave dangers to our economy.” He argued forcefully for regulation of private derivative contracts but lost to Alan Greenspan and Robert Rubin who were against policing the deals.

1990 The price of crude oil rose dramatically when Hussein invaded Kuwait.

1986 The total volume of futures contracts trading was 184 million and the T bonds were among the most actively traded future contracts (Bernstein 2000:71).

1989 Michael Lewis’ novel entitled Liar’s Poker was published. He intended to write a period piece about the 1980s in America. He had expected readers to be outraged that in 1986, the C.E.O. of Salomon Brothers, John Gutfreund, was paid $3.1 million. He expected readers to be horrified that one of the traders, Howie Rubin, had moved to Merrill Lynch, where he lost $250 million. He expected readers to be shocked to learn that a Wall Street C.E.O. had only the vaguest idea of the risks his traders were running.” Writing in 2008 he expressed dismay that Wall Street continued for another 20 years and the public were more in awe than angry. Read more: http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom#ixzz1Qd1u5MLZ

1987 The World Commission on Environment and Sustainable Development (Brundtland Commission) defined sustainable development as meeting the needs of the present without compromising the ability of future generations to meet their own needs.

1987-10-19 “The Dow Jones Industrial Average tumbled more than 20%, and the swoon extended into the following day, before a rebound. Floor traders, working by telephone, dominated the action and computer-generated trading was still in its infancy. Dark pools and high-frequency trading were the stuff of science fiction. Trading reached 600 million shares, according to the SEC (source).”

1982 Futures trading in the US was self-regulating and anyone in the business had to become a member of the National Futures Association (NFA).

1970s The Bretton Woods system broke down in the early 1970s. This was followed by a period of financial market liberalization and deregulation, by a surge of private capital flows and by the increasingly global reach of financial institutions.

1974 The US Congress passed the Commodity Futures Trading Commission Act and established Commodity Futures Trading Commission (CFTC) to protect participants in the futures market from fraud, deceit and abusive practices such as unfair trading practices (price manipulation, prearranged trading, trading ahead of a customer), credit and financial risks, and sales practice abuses (Bernstein 2000:32). Individual nation states have similar regulating bodies.

1973/4 The International Energy Agency (IEA) was founded as an autonomous organisation to ensure reliable, affordable and clean energy for its 28 member countries and beyond. The IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. The Executive Director in 2011 is Nobuo Tanaka “Total oil stocks in IEA member countries amount to over 4.1 billion barrels, and nearly 1.6 billion barrels of this are public stocks held exclusively for emergency purposes. IEA net oil-importing countries have a legal obligation to hold emergency oil reserves equivalent to at least 90 days of net oil imports. These countries are holding stock levels well above this minimum amount, currently at 146 days of net imports (http://www.iea.org)”

1972 The total volume of futures contracts trading was 18 million and the top ten most actively traded future contracts were agricultural futures (Bernstein 2000:71).

1970s There was increasing volatility in international currency exchange rates as the Bretton Woods agreement began to break down. Business people transferred risk of volatility in international markets by hedging with speculators willing to take the risk. Futures markets began to expand into foreign currencies as fluctuated wildly competing against each other and the US dollar.

1960s Futures trading, also known as commodities trading, the final frontier of capitalism, became a popular speculative and investment vehicle in the US in the 1960s (Bernstein 2000:1).

1960s Futures trading, also known as commodities trading, the final frontier of capitalism, became a popular speculative and investment vehicle in the US in the 1960s (Bernstein 2000:1). These financial instruments offer unlimited profit potential with relatively little capital. Speculators are drawn to the possibility of quick money or what I like to call impatient money. The great wealth accumulated from speculative financial instruments has spawned careers in brokerage, market analysis, computerized trading, computer software and hardware, accounting, law, advertising which themselves subdivide into more recent opportunities such as those related to risk-management.

1929-30 “As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth — not of existing wealth, but of wealth as it is currently produced — to provide men with buying power equal to the amount of goods and services offered by the nation’s economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.” Eccles, Marriner S. 1951. Beckoning frontiers: Public and personal recollections Ed. Hyman, Sidney. Alfred A. Knopf.

1919 – 1945 The Chicago Mercantile Exchange (CME) traded futures in eggs, butter, apples, poultry and frozen eggs (Bernstein 2000:70).

1865 The Chicago Board of Trade (CBOT) organized trading of futures contracts.

1848 The Chicago Board of Trade (CBOT) was formed as a price risk occurred in the grain markets of Chicago. It was a cash market for grain. Forward or “to-arrive” contracts began trading at the CBOT almost immediately.

1710 The first modern organized futures exchange began with the Dojima Rice Exchange in Osaka, Japan.The Japanese feudal landowners began to use certificates of receipt against future rice crops. As these futures certificates became financial instruments in the general economy the value of the certificates would rise and fall as the price of rice fluctuated. The Dojima Rice Exchange emerged as the world’s first futures market where speculators traded contracts for the future delivery of rice or “certificates of receipt.” The Japanese government outlawed the practice when futures contracts (where delivery never took place) began to have no relationship to the underlying cash value of the commodity leading to wild and unpredictable fluctuations (Bernstein 2000:30).

Actors and Actants

Electronic Communication Network (ECN) “An electronic system that attempts to eliminate the role of a third party in the execution of orders entered by an exchange market maker or an over-the-counter market maker, and permits such orders to be entirely or partly executed.”

High-frequency trading firms (they self-identify as Automated Trading Professionals) use high-frequency techniques (software-based mechanisms: high frequency algorithmic trading) with real-time, co-located, high-frequency (sub-millisecond) trading platform—one (data collected then orders: created-routed-executed). Wall Street banks and hedge funds also use high-frequency techniques but new (ie emerged formed in c. 1999-2001) small (most have as few as 12 to 100 employees), independent firms account for most high-frequency trading, handling 60 % of the 7 B shares that change hands daily on US stock markets on Wall Street and hedge funds. These high-frequency trading firms have formed a trade group called Principal Traders Group in an effort to hold off regulators who want to curb their activities. The members of the FIA Principal Traders Group is the industry’s response to the Joint CFTC-SEC Advisory Committee examination of the market structure and policy issues arising from the extraordinary market turmoil that occurred on May 6, 2010. See (Bowley, Graham. 2011-07-18. “ Split-second traders aim to polish image.New York Times.) High-frequency trading firms using high-frequency techniques (software-based mechanisms: high frequency algorithmic trading) earned $12.9 billion in profit in the last two years (2009-2011), according to TABB Group, a specialist on the markets. TABB Group content focused on the business and technology issues facing US equity and options trading.

RGM Advisors, is a high-frequency trading firm in Austin, Texas. RGM CEO Richard Gorelick, is leading his company to seek a higher public profile.

Low latency Algorithmic Trading is used to process market updates and turn around orders within milliseconds. Low latency trading refers to the network connections used by financial institutions to connect to stock exchanges and Electronic communication networks (ECNs) to execute financial transactions. With the spread of computerized trading, electronic trading now makes up 60% to 70% of the daily volume on the NYSE and algorithmic trading close to 35%. Trading using computers has developed to the point where millisecond improvements in network speeds offer a competitive advantage for financial institutions. (Low latency is also being discussed in the advertising community, as a form of advertising that responds rapidly to consumer inputs, often from tweets.)

International Energy Agency (IEA) The International Energy Agency (IEA) is an autonomous organisation which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. It is at the heart of global dialogue on energy, providing authoritative and unbiased research, statistics, analysis and recommendations. The IEA is committed to keeping the oil supplies well-stocked. The Executive Director in 2011 is Nobuo Tanaka “Total oil stocks in IEA member countries amount to over 4.1 billion barrels, and nearly 1.6 billion barrels of this are public stocks held exclusively for emergency purposes. IEA net oil-importing countries have a legal obligation to hold emergency oil reserves equivalent to at least 90 days of net oil imports. These countries are holding stock levels well above this minimum amount, currently at 146 days of net imports (http://www.iea.org)”

Henry C.K. Liu “is an independent commentator on culture, economics and politics. Born in Hong Kong and educated at Harvard University in architecture and urban design, Liu developed an interest in economics and international relations while pursuing interdisciplinary work on urban and regional development as a professor at UCLA, Harvard and Columbia universities. He was a planning/ development advisor to the late Winthrop Rockefeller, governor of Arkansas, and has received a national urban design award. Liu is currently the chairperson of a New York-based private investment group, a contributor to Asia Times Online and a visiting professor of global development at the University of Missouri at Kansas City. He is an occasional advisor on economic policy to several governments of emerging economies. Liu coined the term “dollar hegemony” to explain that the dollar, a fiat currency since 1971 and the major reserve currency internationally, distorts global trade and finance. Liu is a critic of central banking. He also calls for the use of sovereign credit in lieu of foreign capital for financing domestic development in developing countries. Liu has also been vocal in his critique of Chinese economic policy, which he argues includes imbalances that result in severe income disparity and environmental neglect. In a series of articles in Asia Times Online, Liu proposed the establishment of the Organization of Labor-Intensive Exporting Countries (OLEC), an international cartel, to restore the balance of market power between capital and labor in the globalized economy. He blogs at henryckliu.com. Huffington Post.”

Soft commodities:

OTC Over-the-counter derivatives markets engage in off-market trading for oil which is unregulated. Estimates for the OTC derivative market for all assets range upward of $600 trillion. See (Edison Electric Institute (EEI). 2010-01. “OTC Derivatives Reform: Energy Sector Impacts. p. 1.”). “Use of Financial Derivatives: A typical, large independent oil & natural gas exploration and production company regularly deals with volatility in oil & natural gas exploration. Such companies regularly make extensive use of financial derivatives with the discrete purpose of ensuring a stable cash flow from which they can consistently fund their capital program to find and bring much needed energy resources to market. Although they may make use of exchange-traded instruments, many of their financial transactions are concluded overthe-counter (OTC) under bilateral credit agreements. These frequently use the OTC markets for efficiency and economic reasons and allows the companies to: 1) customize the instrument specifically to operations;
2) reduce the need for cash by permitting more flexibility in the types of collateral leading to a more efficient use of capital and greater liquidity; 3) provide credit exposure diversification; and 4) have the ability to modify credit arrangements depending on a variety of factors during the term of a trade (more).”

Universal Banking Model – Investment and retail banking in one organisation. There is widespread concern that casino banking endangers security of traditional retail banking.

Webliography and Bibliography

Bernstein, Jake. 2000. How the Futures Markets Work. New York Institute of Finance.

Although it is quite old for the fast-paced risk management industry, there are certain basics that ring true. He briefly traced the history futures contracts leading to the volatile environment where agricultural futures were replaced by the less predictable currency markets. Of course, his book was written long before the meteoric rise of private equity funds. My concern remains with the absent ethical component on trading floors. Ethical responsibilities are as elastic as the regulations that govern the centuries old practice of hedging. In the period of late capitalism and the emergence of risk society, the cost of destructive unintended byproducts have created havoc in ways that far exceed the commodities/service value. The road to profits and impatient money, is paved with casualties. Berstein’s facts of market life are telling. He encourages simple methods and systems which require few decisions and little mental conflict. Too much thought is not conducive to successful trading. Too much analysis costs lost opportunities. Keep systems simple. Control your emotions. Practice caring less so that you remain more objective. Don’t ask why. Knowing why may hinder you more than it will help you. Patterns are the best indicators available (What feeds into a “pattern” however is not a science). Timing is what makes money in the futures market (Bernstein 2000:282-3). In other words, futures’ gurus encourage young hedge fund analysts to not think too much about factors such as displacement of peoples, the degradation of living conditions and the way in which they unwittingly contribute to making vulnerable ecologies and peoples even more vulnerable. Their gurus tell them to not think about the impact of their actions. They are told to not ask why the prices of essential commodities like fuel and food that they are playing with, are pushing certain groups into unimaginable levels of social exclusion. In the end groups at-risk to health degradation are always those least able to protect themselves. How convenient that the gurus do not factor in these social issues. They are entirely absent from finance reports. But then a lot of information is purposely not included in financial and business reports. Bernstein argues that the simpler systems that take fewer things into consideration will lead to more profits. Yet when he lists off all the potential factors in operation in even a simple fundamental analysis, it is not at all simple. It begins with the highly complex. The algorithms involved may appear to be simplified through the use of databases that seem to generate accurate, objective hard facts. In reality, the accuracy of any query depends on what was fed into it.

Bernanke, B. S. 2008. “Outstanding Issues in the Analysis of Inflation.” Speech at the Federal Reserve Bank of Boston. 53rd Annual Economic Conference. Chatham, MA.

Blais, Javier. 2011-06-01. Commodity swings expected after US storms forecast.” Financial Times. London.

Coyle, Diane. 2011. The Economics of Enough: How to Run the Economy as If the Future Matters. Princeton University Press.

nature of global capitalism, fiscal policy, inequality and the environment with reflection on civil society, economic growth ought not to be a policy goal, use of a greater range of economic indicators–she backs output growth as an objective, bond holders are safe; citizens are not; beyond traditional measures of debt in thinking about future obligations; top-rank economist’s view from the summit, challenge the neo-classical economic purist; economics and sustainability; serious and difficult changes made to economic systems’ structure and function; Herman Daly’s Steady-State Economics; long-run development; resource depletion, population growth, world poverty, rising debt, rates of innovation;

Cuthbertson, Richard. 2008-06-17. “Energy battles boiling over: A Wall Street analyst attending Calgary’s prominent energy investment forum found himself in the eye of a growing environmental storm battering Alberta’s oilsands — one of several clashes centred on the energy sector Monday.Calgary Herald.

Eccles, Marriner S. 1951. Beckoning frontiers: Public and personal recollections Ed. Hyman, Sidney. Alfred A. Knopf.

Flood, Chris. 2009-10-30 “Markets: Oil dips after US GDP boost.” Financial Times.

Hirsch, Michael. 2010. Capital Offense: How Washington’s Wise Men Turned America’s Future Over to Wall Street. New Jersey: John Wiley.

Lewis, Michael. 1989. Liar’s Poker. W.W. Norton & Company.

Martin, Roger L. 2011-05. Fixing the Game: How Runaway Expectations Broke the Economy, and How to Get Back to Reality. Harvard Business School.

Orphanides, Athanasios, and John C. Williams (2007). “Robust Monetary Policy with Imperfect Knowledge,” Leaving the Board Journal of Monetary Economics, vol. 54 (July), pp. 1406-35.

Pain, Nigel, Isabell Koske, and Marte Sollie (2006). “Globalisation and Inflation in the OECD Economies,” Leaving the Board OECD Economics Department Working Paper Series 524. Paris:  Organisation for Economic Co-operation and Development, November.

Pesenti, Paolo A. Groen, Jan J.J. 2011-03. Commodity prices, Commodity Currencies, and Global Economics. Directorate-General for Economic and Financial Affairs. European Commission. Economics Papers 440. Brussels. Commodity prices,  forecasting, exchange rates, factor models, PLS regression

Powell, Barbara. 2011-06-28. “Gasoline Futures Gain as Crude, Equities Advance, Dollar Drops.” Bloomberg.

Rich, Robert W., and Charles Steindel (2007), “A Comparison of Measures of Core Inflation,” Federal Reserve Bank of New York, Economic Policy Review, vol. 13 (December).

Wallace, Lane. 2009-07-07. “The Uncommon Navigator: What Wall Street Should Learn from the NFL.” The Atlantic.


WORK IN PROCESS UNDER CONSTRUCTION

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The following dates and events are a collage of data from various researchers, journalists, etc. compiled in reverse chronological order by speechless as a personal research tool. At the last edit in June 2012 there may still be incomplete referencing. This is unintentional. Like all my posts it may at any time by updated and modified.

2012-08-20 “The Calgary Homeless Foundation’s last count was conducted Jan. 18, when it was –32 Celsius and at least 3,190 people were homeless — an 11.4 per cent decrease from the May 2008 count.” (Ferguson, Eva. 2012-08-20. “Homeless count in Calgary finds fuller shelters: Growing economy lures more job seekers to Calgary.Calgary Herald.)

2011-06-09 One of the major reasons Canadian cities, including Calgary, are unable to implement sustainable solutions to affordable housing is the lack of money and power at the municipal level. In an article published in The Economist entitled “Canada’s cities Poor relations: Mayors need more money and more powers” there is a list of urban crises including growing ghettos of crime, poverty and drug addiction; soaring house prices, increasing homelessness, the middle class fleeing to the suburbs, deteriorating civic buildings, roads, bridges, sewage systems. Provincial governments have neglected their responsibility for such matters as social housing, welfare, mental illness, drug addiction and policing. “Canada’s big cities need at least C$238 billion to repair and expand infrastructure, according to the Federation of Canadian Municipalities. Municipalities get only eight cents out of every tax dollar. Their revenues come mainly from property taxes. Under constitutional arrangements that date back to the time when Canada was largely rural, mayors have fewer powers than their counterparts in some other developed countries.”

2011-06-06 In the statement released by Berry Vrbanovic, President of the Federation of Canadian Municipalities (FCM) on the 2011-06 Federal Budget Commitment to Develop a New Long-Term Infrastructure Plan for Cities and Communities, Vrbanovic applauded the federal Government for a budgetary commitment to a shift in the municipal-provincial-federal and private sector partnerships that will lead to “a reversal in the decline in our aging infrastructure, and also to keep police on the streets, fix cracks in our housing system, and protect core services.”

2011-06-04 In a recent poll conducted by the Canadian Union of Public Employees 89% of those surveyed supported increased federal and provincial funding for municipal governments.

2011 The City of Calgary is currently involved in the following affordable housing developments: Manchester North Comprehensive Development, Crestwood (Millican-Ogden community), Vista Grande (Vista Heights community), The Bridges: Affordable Housing (Bridgeland-Riverside community), Inglewood Residence Housing Development (Inglewood Community). These initiatives will create approximately 255 new homes for families, singles, couples and individuals with disabilities. It is curious that on closer inspection many of these are already completed. What are the current (2011-06) affordable housing developments?

2011-05-04 Alberta put out a $100-million request for proposals through the provincial 2011-12 Housing Capital Initiatives grant program. A minimum of 660 housing units could be developed, depending on the projects funded. In addition to this year’s funding, more than $1 billion has been invested in more than 10,000 housing units in Alberta since 2007. Increasing the supply of housing for lower-income Albertans is a key part of preventing and ending homelessness, under Alberta’s 10-year plan to end homelessness (more). The provincial government has committed $2.2 million to a 29-unit low income housing project to be run by the Meadowcroft Housing Society in a northwest neighbourhood. The Brentwood Apartments, located at 13535 115th Ave, an ideal location for low-income families (near a major shopping centre, close to the big west Edmonton bus terminal, across the street from Coronation Park). The provincial money covered about 45 % of construction costs for the project. The building contains two bachelor, and 27 one-bedroom units. The suites were supported through a previous housing capital initiative and include barrier-free units. The built-in green features, such as solar power, high-efficiency windows, and geothermal heating, will help lower utility costs.

2011-04-29 the Federation of Canadian Municipalities (FCM) calls for all parties in the House of Commons to turn campaign promises to cities and communities into action. “Forty per cent of federal investments in municipalities will expire in the next 36 months (FCM 2011-04-06),” including investments in front-line policing, infrastructure, public transit and affordable housing.

2011 Alberta > Provincial-Territorial Program Delivery> Under Canada’s Economic Plan > Alberta. “More than $1.3 billion over two years will be delivered by and cost-shared with provinces and territories on a 50/50 basis. As a result of this joint investment, more than 9,200 construction and renovation projects are underway or have been completed across the country including 467 projects for low-income seniors and persons with disabilities, and the renovation and retrofit of existing social housing projects in Alberta. An additional $200 million is being invested to address housing needs in the North, resulting in 213 projects underway or completed. Canada Mortgage and Housing Corporation (CMHC) & Indian and Northern Affairs Canada (INAC) Projects: Renovation and Retrofit of Existing Social Housing: $150 million will be delivered directly by CMHC to renovate and retrofit existing federally-administered social housing. To date 1,310 projects are underway or completed, including the renovation and retrofit of 122 existing social housing projects in Alberta. Addressing First Nations Housing Needs: A total of $400 million over two years will be delivered through CMHC and INAC to create new, federally-assisted on-reserve housing and to renovate and retrofit existing social housing. To date, CMHC has invested in the construction of 275 new social housing projects and the renovation and retrofit of existing social housing projects in Alberta. Municipal Infrastructure Lending Program: Up to $2 billion is available over two years in direct, low-cost loans to municipalities for municipal housing-related infrastructure. To date, 273 low-cost loans totalling more than $2 billion have been approved, including 2 low-cost loans approved for a total of $ 5.68 million in Alberta.” It is interesting to examine more closely the interactive map showing federal partnerships in Calgary. I found only one small affordable housing project, numerous recreation facilities upgrades, etc.

2011-03 Under the “Supporting Vibrant Communities” in the 2011 Federal Budget, the Next Phase of Canada’s Economic Action Plan announced additional support for culture and communities with new budget measures, including support for Aboriginal people, such as: Marking the 100th anniversary of the Grey Cup and the Calgary Stampede with $5 million toward each of the anniversary celebrations. “The Next Phase of Canada’s Economic Action Plan: A Low-Tax Plan for Jobs and Growth.”

2011-03-18 “The 14th Street N.W. Brenda Strafford Foundation Affordable Housing Initiative. The complex will feature 85 two bedroom apartments of which 33 units are targeted to support women and families leaving domestic violence. The Calgary Housing Company currently provides 24 units of housing to Foundation clients. Funding for the program included an additional from the $14 million Brenda Strafford Foundation and $7.9 million in capital funding from the federal and provincial governments under the Canada-Alberta Affordable Housing Partnership Initiative. (Calgary Herald 2008-06-27) .” The Canada-Alberta Affordable Housing Agreement is comprised of a commitment of $98.62 million from each of the two senior levels of government. In total, the federal and provincial governments have invested more than $197 million in the program, which provided over 3,600 affordable housing units in Alberta. (more)

2011-02 Of the 506,607 mortgages in 2011-02 in Alberta, 4,212 or 0.83% are in arrears compared to a national average of 0.45%. according to the latest data from the Canadian Bankers Association (2011-02). “Homeowners in Alberta this year reached a record high for percentage of mortgages in arrears in any month since statistics were kept by the association in the province starting in 1990, reaching 0.84% of total mortgages in January. The statistic shows Albertans are about twice as likely to fall behind as the national average of 0.45%. Manitoba had the lowest percentage, at 0.29% in arrears this year thus far. The national high was in January 1997, when 0.65% of mortgages were in arrears (CBC 2011-05-05).”

2011 Alberta government committed to a 10-year plan to end homelessness.

“There continues to be too much reliance on the for-profit sector in addressing affordable housing needs and too little investment in this issue. The waiting lists for low-income affordable rental housing are years long in the major cities of this province. Meanwhile some of our most vulnerable citizens, including children, people with mental illnesses, and seniors, are left in housing that is either far too expensive or far too poor in quality, and they all pay the price in their health and in their safety.This government eliminated funding of important social housing years ago, and a huge homelessness and housing problem soon developed in our province. With the return of a stronger economy under way and more people coming to Alberta’s labour market, we will see more difficulties (Brian Mason 2011).”

2011 Canada’s Economic Action Plan provides a meagre “$850 million to provinces and territories, over two years, for the renovation and retrofit of existing provincially/territorially administered social housing. Overall, the Economic Action Plan includes $2 billion for the construction of new and the renovation of existing social housing, plus up to $2 billion in low-cost loans to municipalities for housing-related infrastructure. Canada’s Economic Action Plan builds on the Government of Canada’s commitment in 2008 of more than $1.9 billion, over five years, to improve and build new affordable housing and help the homeless.”

2010-11-04 Ivy Zhang, Ivy; Walters, Patrick. “Why does the City of Calgary experience financial stress in providing services to Calgarians, even in good economic times?” A short answer is that, Calgary over-contributes to the balance sheets of the federal and provincial governments, leaving the local government with less than adequate revenue to fund its spending responsibilities.. . . [S]trong labour market conditions in Calgary have acted as a magnet for workers from outside the region. This has created an equally high demand for shelter and support services to address issues such as homelessness and affordable housing – issues that need all orders of government to address. Downloading of many government housing and support programs.”

2010- In Edmonton After the 2009 downturn, it was single-family subdivisions that came back quicker and stronger, representing the bulk of the 34 per cent increase in residential construction permits last year.

2010 In Calgary nearly 6,000 single-family detached houses were built in Calgary (most in the NESW suburbs). There were only 3,000 new multiple-family units under construction.

2010 Attainable Homes Calgary Corporation (AHCC) is a non-profit organization and wholly owned subsidiary of The City of Calgary. The goal of AHCC’s Attainable Home Ownership Program is to develop 1,000 well-appointed, entry-level homes at a price attainable for individuals and families earning $53,000 – $80,000 in household income annually. Attainable Homes partnered with Intergulf-Sidex developers to build the Beacon Heights multi-family complex.

2009 “Canada is one of the few countries in the world without a national housing strategy (United Nations, 2009). Many of the federal governments’ expenditures are cost-sharing, one-time only funding initiatives that lack long-term leadership on homelessness ( United Nations (2009). Report of the Special Rapporteur on adequate housing as a component of the right to an adequate standard of living, and on the right to non-discrimination in this context, Miloon Kothari. Based on Mission to Canada 9–22 October 2007.”

2009 “The highest average monthly rents for two-bedroom apartments in new and existing structures were in Vancouver ($1,169), Calgary ($1,099), Toronto ($1,096), and Ottawa ($1,028). The apartment vacancy rate in the Calgary CMA rose 3.2 percentage points from 2.1 per cent in October 2008 to 5.3 per cent in October 2009. Average rent for a two-bedroom unit was $1,099 per month in October 2009, down from $1,148 in October 2008. The vacancy rate for row (townhouse) rentals was 4.7 per cent in 2009, representing an increase of two percentage points from the previous year. Calgary’s 2009 purpose built rental stock had 684 fewer apartments and nine more row units than in 2008 (more).”

2008-09 The Government of Canada announced $1.9 billion, over five years, for housing and homelessness programs for low-income Canadians. As part of this investment, the Affordable Housing Initiative (AHI) was extended until March 31, 2011. CMHC. Affordable Housing Initiative

2007 http://www.calgary.ca/docgallery/bu/olsh/louisedocs/LAS2007-111.doc.pdf

2007 “Since 2000, Supporting Communities Partnership Initiative (SCPI) provided approximately $850 million in funding for strategic investments that address homelessness (Falvo 2007).”

2007 Nick Falvo (2007) presented various models for expenditure of a $100 million annual input to affordable housing. “Model 1: $125,000 of equity (i.e., up-front cash) provided at the development stage would be sufficient to create a 450-square-foot bachelor unit of non-profit housing in Toronto that would ultimately require monthly rent equivalent to a single welfare recipient’s (no dependents) shelter allowance from Ontario Works (c.$342/month). This model estimates a $25,000 cost for land, $70,000 for construction and “hard costs,” and $30,000 for soft costs. It also estimates that the units last only 30 years and then lose all of their value. $100,000,000.00 / $125,000 = 800 x 30 = 24,000 household years. $100 million spent on building non-profit housing provides sufficient equity to build roughly 800 bachelor units for 800 core-need individuals. Model 2: Provide an average monthly rent supplement c. government $500 or $6,000 per person per year. $100 million spent on rent supplements provides annual, one-time funding to take roughly 16,667 core-need individuals (most of whom are single) off the street, into shelter. Model 3: $166,000 of equity to create a 2-bedroom unit. The Math: $100,000,000.00 / $166,000 = 602 x 30 = 18,060 household years. $100 million foregone on tax credits awarded to individuals or corporations could provide sufficient equity to build roughly 602 bachelor units for 602 core-need households. $100 million in foregone tax revenue offered through a basic refundable tax credit program provides annual, one-time funding to 55, 556 welfarerecipient households (Falvo 2007).””

2007 “The persistence of poverty, especially in a wealthy and industrialized nation like Canada, is clearly regarded by the treaty bodies as a human rights failure. http://www2.ohchr.org/english/bodies/cedaw/docs/ngos/PHRC_Canada42.pdf” (See “The Consensus on Canada.” The treaty bodies have repeatedly expressed grave concern, particularly about disastrous levels of homelessness (CESCR 2006, paras. 28, 62; CESCR 1998, paras. 24, 34, 35, 46) and resulting damaging effects, including damage to health (CESCR 2006, para. 57; CCPR 1999, para. 12), lack of adequate housing, especially for children and youth (CESCR 1998, para. 35, CRC 1995, para. 17), Aboriginal peoples (CESCR 2006, para. 24; CRC 1995, para. 17), and women (CESCR 2006, para. 26; CEDAW 2003, paras. 383, 384). http://www2.ohchr.org/english/bodies/cedaw/docs/ngos/PHRC_Canada42.pdf

2005 “Armine Yalnizyan pointed out – Canada had a population of 31 million. 1.7 million Canadians of a total population of 31 million were underhoused or non-housed (Canadian Housing and Renewal Association). That’s 5.5% of the Canadian population without safe, decent and affordable housing (Crowe, Cathy. 2005-01http://tdrc.net/resources/public/Crowe-Newsletter_01-05.htm).”

2006-06 “Municipalities have been under-investing in infrastructure because of fiscal constraints. A number of cities have attempted to measure the magnitude of this infrastructure gap or deficit. The City of Calgary currently has a shortfall, or infrastructure gap, of $5.4 billion over the next ten years (FCM. 2006-06.“Our Cities Our Future Addressing the fiscal imbalance in Canada’s citie today”).”

2006 Edmonton and Calgary combined account for 64.5% of Alberta’s GDP (Conference Board of Canada).

2006-06-22  “While the City of Calgary encourages builders and developers to create affordable housing options (the Planning and Regulation section of the city’s affordable housing strategy states that a primary goal is to “encourage competition and choice in the housing marketplace”) it has yet to implement any firm legislation or policies in this regard. The Municipal Government Act of Alberta prevented cities within the province from dictating affordable housing policies to any private builder or developer. The Act was due for review in November 2006, leaving the door on affordable housing legislation wide open (Evdokimoff 2006-06-22.”

Pomeroy, Steve. 2005-03. “The Cost of Homelessness: Analysis of Alternate Responses in Four Canadian Cities.” Prepared for National Secretariat on Homelessness.

2005Looking Ahead, Moving Forwardhttp://www.calgary.ca/DocGallery/BU/mayor/councils_priorities.pdf

2005 Calgary’s “homeless population grew by 49 per cent between 2002 and 2004; in 2003, two-thirds of Calgary’s poor were ‘working poor’ who received no income support; and close to ?ve per cent of Calgarians went to the Inter-Faith Food Bank for help “Looking Ahead, Moving Forward 2005“.

2004 There were 2,600 homeless people in Calgary (more).

2004-05 “Societal Costs of Homelessness.” Prepared for the Edmonton Joint Planning Committee of Housing and the Calgary Homeless Foundation, by IBI Group.

2005 “Outside the framework of the AHI, $1.6 billion over two years was pledged in the 2005 NDP/Liberal budget (a.k.a., Bill C-48). Most of this money was allocated into three housing trust funds by the Harper government in the 2006 federal budget. While not part of the AHI, this has added momentum on the affordable housing front. (2007). The leader of Canada’s NDP agreed to support the federal budget in 2005 if an additional $1.6 billion was allocated for affordable housing.”

2005 Social Researchers Sawatsky and Stroick (2005) presented their report entitled Thresholds for Locating Affordable Housing: Applying the Literature to the Local Context. City of Calgary.

“Canada stands out as one of the few Western nations that rely almost completely on the market mechanism to supply, allocate, and maintain its housing stock (Scanlon and Whitehead, 2004). The market is the mechanism by which about 95% of Canadian households obtain their housing (Hulchanski 2005).holds for Locating Affordable Housing: Applying the Literature to the Local Context (Hulchanski, David J. 2005-01. “Rethinking Canada’s Housing Affordability Challenge.” Discussion paper. For the Government of Canada’s Canadian Housing Framework Initiative. p. 1).”

2005 Ecological Footprint study found that Calgary residents have the highest Ecological Footprint of any Canadian city at 9.9 global hectares per person – a lifestyle that, if everyone lived that way, would require five Earths to support. 2004

2005Straight talk about affordable housing.”

2005-07-04 “Acquisition of Affordable Housing Lands for Municipal Purposes.” Policy Number: AMCW001; Report Number: LASC2005-123; Approved by:Business Unit: Corporate Properties & Building.

2004-2005 Affordable Housing Initiative (AHI) Phase II introduced new programs in the areas of home ownership programs, targeting of AHI-funded programs, cost-sharing arrangements and provision of rent supplements.

2004 Affordable Housing is a Council priority as identified in Looking Ahead, Moving Forward 2002-2004

2004-06-07, in response to the lack of new units, Council directed Administration to develop a short term affordable housing development strategy as phase 1 of a larger five year Sustainable Resource Management Plan (LASC2004-155). http://www.calgary.ca/docgallery/bu/cityclerks/council_policies/amcw001.pdf

2004 CPS99-39 & CPS2002-57 directed Administration to identify and set aside City owned sites for future affordable housing initiatives. http://www.calgary.ca/docgallery/bu/cityclerks/council_policies/amcw001.pdf

2004-07-24 The City of Calgary Council approved a short-term affordable housing development strategy, LAS2004-178 “Calgary’s Affordable Housing Sustainable Resource Management Plan.”as the first phase of a five-year Affordable Housing Sustainable Resource Management Plan. Council directed City administration to: (1) take a leadership role in the development of non-market housing; (2) solicit development proposals from the private sector to create new non-market housing units; and (3) identify City owned surplus sites to support the development of City led social housing initiatives (Sawatsky and Stroick 2005).”

2004-07-24 The City of Calgary Council approved LAS2004-178 Affordable Housing Sustainable Resource Management Plan – Phase 2: Short Term Development Strategy 2004. Council directed Administration to “take a leadership role in the development of 200 units of affordable housing annually to maximize the Affordable Housing Partnership Initiative funding”.

2003 “Cities experienced significant cuts to the social assistance systems in the mid 1990s. The reduction of income supports is universally seen as one of the main reasons for high poverty rates and the growing income gap. (ARUNDEL, ET AL, 2003) (more).”

2003-06-17 TD Economics. “Affordable Housing in Canada: in Search of a New Paradigm.” Urban areas comprised a staggering 80 per cent of Canadian economic activity and employment. Working to find solutions to the problem of
affordable housing is a smart economic policy. An inadequate supply of housing can be a major impediment to business investment and growth, and can influence immigrants’ choices of where to locate. Implementing solutions to resolve this issue ties in well with the TD goal of raising Canada’s living standards and overall quality of life.”

2003 Affordable Housing Initiative (AHI) Phase II began with a meagre federal commitment of $320 million nationwide to provide additional funding for housing targeted to low-income households in communities where there is a significant need for affordable housing. Under Phase II the maximum federal funding is 50 per cent of capital costs to a maximum of $75,000 per housing unit to reduce rents to levels affordable to low -income households. (CMHC)

2003-02-27 Alberta announced $8.5 million in new provincial funding which will be matched by a $8.5 million federal contribution under the Canada-Alberta Affordable Housing Agreement. This brings total funding for the initiatives to $17 million for the fiscal year ending March 31, 2003. This amount will also be enhanced through contributions from other partners including municipalities, local community housing authorities, non-profit organizations and private sector companies.” It should be noted that if one unit costs c. 90,000 to build. it costs c.

2002-07 City of Calgary submitted Corporate Affordable Housing Strategy “Implementing a vision for the future… “A range of housing options exist for all ages, income groups, family type.

2002-06-24 The Governments of Canada and Alberta announced the Affordable Housing Program Agreement which provided funding (2002-2007?) to help increase the supply of affordable housing in the province. Federal funding of $67.12 million will be matched by an equal contribution from the province and other partners to facilitate the development of affordable housing in high need areas of the province. It was the sixth affordable housing agreement signed in the past six months and confirmed the Government of Canada’s commitment to housing as a means to support strong and safe communities. “(more) NB. The total cost of one 100-unit apartment complex project was over $4 million.

2002 The citizens of Calgary sent $4.6 billion more in taxes and other payments to Ottawa than they received in various benefits from the federal government (K & L Spatial Economics).

2002 Annual spending on homelessness initiatives in Calgary were c. $72.4 million.

1996-2001 “Provincial/territorial and federal governments have enjoyed an average 25 per cent increase in their revenues from 1996 to 2001. Municipalities have experienced only an average 14 per cent increase in revenues during that period (FCM, 2005).”

2001-11 “Federal, provincial and territorial housing Ministers outlined broad parameters for bilateral Affordable Housing Program Agreements. Federal funding was limited to a maximum of $25,000 per housing unit, to a total nationwide of only $680 million in funding in Phase I for the creation of new rental housing, major renovation and conversion (CMHC).”

2001 “The federal government agreed to a framework agreement with the provinces and territories wherein it would eventually commit $1 billion towards affordable housing over a five-year span. There was no stipulation in the framework agreement around core need. The federal government’s agreement with each province and territory was different, with each province/territory having to commit matching funds of different types (a great deal of the “matching funds” were not cash and did not come directly from the province/territory in question). The entire process is called the Affordable Housing Initiative (AHI). The AHI represented a very different way of financing affordable housing. The minimum affordability stipulation was that each unit had to be at or below average to 20 years). Funded programs under the AHI included home ownership, rental housing, new construction, renovation, urban revitalization,” conversion, new rent supplements, and supportive housing programs(Falvo 2007).”

2001 The provincial and municipal social housing agencies (Calgary Housing Authority and Calhome Properties) merged created the municipally owned and operated Calgary Housing Company (CHC). CHC administers social housing programs (non-seniors) in Calgary through the ownership or management of approximately 7500 housing units. Calgary Housing Company (CHC) is a City of Calgary owned corporation providing safe and affordable housing solutions to citizens of Calgary. CHC operates and manages over 10,000 subsidized and affordable housing units and has a variety of housing options for low-income households including duplexes, townhouses and high-rise apartments. CHC has a reporting relationship to Corporate Properties & Buildings, but functions under its own independent Board of Directors with a mandate to provide affordable housing solutions to Calgarians.

2001 “The Government of Canada provides financial assistance for the supply of new affordable rental housing under the Affordable Housing Program. Then, in November 2001, after almost a decade of withdrawal from assistance for affordable housing, the federal government committed $680 million towards rental housing (to be spent over five years) (Falvo 2007). By the end of 2007-2008, the Federal Government’s investment in this program will total CAD$1 billion, an amount that will be matched by provincial and territorial governments.”

2001 Canada “is one of the one of the more inegalitarian Western nations (that is, there is a wide gap between rich and poor) and ranks near the bottom of the list in an eighteen-country comparison of net social expenditure by the OECD (Adema, 2001, Table 7 cited in (Hulchanski 2005). Hulchanski, David J. 2005-01. “Rethinking Canada’s Housing Affordability Challenge.” Discussion paper. For the Government of Canada’s Canadian Housing Framework Initiative. p. 1

1999 “One of the first signs that the federal government was interested in getting back into affordable housing was the 1999 announcement of the Supporting Communities Partnership Initiative (SCPI) (Falvo 2007).”

1998-11 Mayors of Canada’s largest cities at the caucus of the Federation of Canadian Municipalities (FCM) passed a resolution declaring homelessness a national disaster.

1998 Canada alone “holds the dubious distinction of having received the strongest rebuke ever delivered by the United Nations for inactivity on homelessness and other poverty issues. In 1998, the UN Committee on Economic, Social and Cultural Rights maintained that Canada’s failure to implement policies for the poorest members of the population in the previous 5 years had “exacerbated homelessness among vulnerable groups during a time of strong economic growth and increasing affluence” (p.15). The irony was that this rebuke was given in the midst of Canada having been named for several years in a row as the best country in the world in which to live. Thus, what we are seeing is a disturbing situation where a steadily increasing level of homelessness exists in the very heartland of prosperity and comfort. (Pohl, Rudy. 2001-11. “Homelessness in Canada.)”

The United Nations Committee on Economic, Social and Cultural Rights issued a highly critical and detailed report on the Canada’s social policies in its 1998 review of Canada’s compliance with these rights (United Nations, 1998) particularly about disastrous levels of homelessness (CESCR 1998, paras. 24, 34, 35, 46) and resulting damaging effects, including damage to health (CESCR 1998, paras. 24, 34, 35, 46) and resulting damaging effects, including damage to health (CCPR 1999, para. 12), lack of adequate housing, especially for children and youth (CESCR 1998, para. 35, CRC 1995, para. 17), Aboriginal peoples (CRC 1995, para. 17).

1996 The Calgary economy generated 24% of all new jobs in Canada, even though the city contained less than 3% of the population (k & l consulting, 2003).

1996 CMHC deemed that 20% of Canadian households (1.7 million households) were in core housing need. These households could not
find adequate and suitable housing without spending 30% or more of their pre-tax income. CMHC found that a disturbing 656,000 households (7%) spent at least half of their before-tax income on shelter in 1996, up from 422,000 households, or 5%, in 1991. While accounting for only 35% of all households, almost 70% of those in core need were renters. Much of the analysis, advocacy and action on affordable housing suffers from three flaws, in our view:
• Income levels are taken as given. Too little thought is given to ameliorating the root cause of the affordable housing problem – that there are simply too many low income households in Canada. The focus has primarily been on measures to boost supply, with an emphasis on incentives to increase the overall rental supply – which has only a limited impact at the affordable end of the scale. Many of the measures that have been recommended
as a means of stimulating this new supply (whether expenditure-based or tax-based) are inefficient, which is to say that they entail a high public cost per unit of affordable housing created. TD recommended that governments adjust the design of federal and provincial benefit and tax systems to “make work pay” by reducing the clawback rate for benefits for low-income households. Programs such as the federal-provincial National Child Benefit (NCB) initiative have dealt with the poverty trap to some extent by effectively combining income support with social services. However, the high taxback issue remains. Provincial governments need to step up their efforts and become a leading contributor within the Affordable Housing Framework agreement. There also needs to be more recognition of the fact that municipal governments are currently in no position to live up to their side of the bargain. New responsibilities have been laid at their doorstep in recent years, as a result of provincial and federal downloading and offloading of services. Yet, municipalities have few revenue tools to draw on beyond the slow-growing (and flawed) property tax. As we have stated in all of our reports on Canada’s cities over the past year, municipalities need a more sustainable funding arrangement, which arms them with increased flexibility (TD 2003).

1996 In the city of Calgary, with one of the most acute housing shortages, only 16 new units of rental housing were built in 1996 (more).

1996“The federal government further removed itself from low-income housing supply by transferring responsibility for most existing federal social housing to the provinces (Hulchanski, J. David. 2009. “Homelessness in Canada: Past, Present, Future.”).

1996 “A survey in Calgary found that of the 615 homeless people surveyed on 26 May 1996, 20% were Aboriginals, 3% Asiatics and 3% Blacks (City of Calgary 1996 cited in Library of Parliament 1999).”(17) City of Calgary, Homeless Count in Downtown Calgary, Alberta, Canada, 1996, City of Calgary Community and Social Development Department of Social Research Unit, 1996.

1993 All funds for social housing were cut from the federal budget (Hulchanski, 2002: 8-15; Chisholm, 2003: 5-11). Most provinces, including Alberta, followed suit.

1992 Canada introduced the Home Buyers’ Plan which was the only form of federal assistance for home-buyers. Canadians who meet certain eligibility conditions can withdraw up to C$20,000 tax-free from their Registered Retirement Saving Plans (RRSPs) for house purchase. The money remains tax-exempt if it is repaid within 15 years. Since its inception in 1992, some 1.2 million people have participated in the programme, channelling C$12.0 billion to the housing market.

1984 – 1993 The Canadian Federal Government withdrew from providing housing assistance for low-income Canadians (Sawatsky and Stroick 2005).” This is not surprising given the general trend away from collective state solutions to a social and economic model that relies solely on the “the market” for services including shelter. It also represents a shift away from seeing housing as a home, to seeing housing as an investment. The problem with this approach is that the market will only provide housing to those who can pay for it – in other words, lower- and moderate income people who cannot afford market price for homeownership or, increasingly, for rental housing are priced out of the market. If the gap between the rich and the poor continues to increase as it has since 1980, housing issues will continue to be a concern (2011).” “The co-op and non-profit programs (with their novel “income mix” approach) introduced in 1970s were terminated in 1984 (Falvo 2007).”.

1986 Ottawa Charter for Health Promotion. WHO, Geneva.

1964-1984 The Canadian Federal Government “built 200,000 public housing units and established a variety of housing initiatives, including non-profit and co-op housing programs, as well as a native housing program. This period can be characterized as one with an ‘inclusionary philosophy’ in which the social need for affordable housing in Canada was being addressed (Sawatsky and Stroick 2005).”

1977 Canada did not have a homelessness issue (Hulchanski 2009-02-18).

1949 – 1963 The Canadian Federal Government was not significantly involved in the provision of affordable housing under PM Louis St. Laurent (1948-1957) and PM John Diefenbaker (1957 – 1963). Even with public concern for more social housing, only 12,000 units were built for low-income Canadians (Sawatsky and Stroick 2005).

1949 The Canadian National Housing Act was implemented with amendments.

1945- “After the Second World War, improvements in housing finance, residential land servicing and building techniques, materials, and regulations produced high-quality housing for the vast majority of Canadian households (Hulchanski, Davis J. 2005-01. “Rethinking Canada’s Housing Affordability Challenge.” Discussion paper. For the Government of Canada’s Canadian Housing Framework Initiative. p. 1)”

1938 The Canadian National Housing Act was established but it was not implemented pending amendments.

2011-06-09“Canada’s cities Poor relations: Mayors need more money and more powers.” The Economist. Vancouver.

Selected Webliography and Bibliography

The Economist. 2011-06-09. “Canada’s cities Poor relations: Mayors need more money and more powers.” Vancouver.

Calgary Herald. 2008-06-27. “New project will shelter abused women.”

Evdokimoff, Natasha. 2006-06-22. “Is the Sky the Limit? Finding solutions to Calgary’s affordable housing problem.” Condo Living.

Falvo, Nick. 2007-12. “Alternate Approaches to Addressing the Lack of Affordable Housing in Canada.” Paper presented to Professor George Fallis. Policy Alternatives to Reduce Core Housing Need AS SOSC 4099 3.00 A Directed Reading

Falvo, Nick. 2007-12. “Alternate Approaches to Addressing the Lack of Affordable Housing in Canada.” Presentation for PEF Panel: “Interdisciplinary Approaches to Economic Issues” Canadian Economics Association. Annual Meetings
Dalhousie University. Halifax, Nova Scotia. June 1-3, 2007

The Economist. 2011-06-09. “Canada’s cities Poor relations: Mayors need more money and more powers.” Vancouver.”Downtown Eastside, a ghetto of crime, poverty and drug addiction that is the country’s sickest urban area. Soaring house prices intermingle with homelessness. The middle class is being squeezed out to the suburbs.” “Provincial governments have neglected their responsibility for such matters as social housing, welfare, mental illness, drug addiction and policing. All told, Canada’s big cities need at least C$238 billion ($243 billion) to repair and expand infrastructure, according to the Federation of Canadian Municipalities. But municipal governments lack both money and powers. They get only eight cents out of every tax dollar. Their revenues come mainly from property taxes.” “They have lobbied the federal government to make permanent C$2 billion in annual funding programmes for roads, housing and police set to expire in 2014.” “[R]ural areas continue to be over-represented in the House of Commons. But four out of every five Canadians now live in a city,

Hulchanski, David. J. 2002-12. “Housing Policy for Tomorrow’s Cities.” Discussion Paper F|27. Family Network.

Hulchanski, David J. 2005-01. “Rethinking Canada’s Housing Affordability Challenge.” Discussion paper. For the Government of Canada’s Canadian Housing Framework Initiative. p. 1

Hulchanski, J.D. 2009-02-18. Conference keynote address, “Growing Home: Housing and Homelessness in Canada: Past, Present, Future.” University of Calgary.

Pohl, Rudy. 2001-11. (“Homelessness in Canada.)”

Sawatsky, Janet; Stroick, Sharon M. 2005. “Thresholds for Locating Affordable Housing: Applying the Literature to the Local Context.” City of Calgary.

Vrbanovic, Berry. 2011-06-06. StatementFederation of Canadian Municipalities (FCM).

FCM. 2011-04-06. “FCM Releases Federal Election PLatform: Parties need plan as 40% of municipal funding expires.” Date accessed: June 05, 2012.

Library of Parliament. 1999-01-18. Homelessness.

http://www.fcm.ca/english/View.asp?mp=1&x=1796

http://thechronicleherald.ca/NovaScotia/1246833.html
http://www.cmhc-schl.gc.ca/en/inpr/afhoce/fias/fias_015.cfm
http://www.canada.com/calgaryherald/news/city/story.html?id=b8011963-62c7-4188-af96-5a3394771297
http://www.td.com/economics/special/house03.pdf
http://www.economist.com/node/18805931?story_id=18805931
http://www.condolivingonline.com/calgary/articles/2199/is-the-sky-the-limit
http://www.urbancenter.utoronto.ca/pdfs/elibrary/CPRNHousingPolicy.pdf
http://www.alberta.ca/acn/201105/30331BBB2AC11-97BA-E4A5-8A2958658E2B2395.html
http://www.parl.gc.ca/Content/LOP/ResearchPublications/prb991-e.pdf
http://www.streetlevelconsulting.ca/homepage/homelessnessInCanada_Part1.htm

already pinged
http://www.urbancenter.utoronto.ca/pdfs/elibrary/Hulchanski-Housing-Affd-pap.pdf
http://www.calgary.ca/docgallery/BU/corporateproperties/affordable_housing_strategy.pdf
http://www.calgary.ca/docgallery/bu/cityclerks/council_policies/amcw001.pdf
http://www.calgary.ca/DocGallery/BU/mayor/councils_priorities.pdf
http://www.calgary.ca/docgallery/bu/cns/homelessness/thresholds_locating_affordable_housing.pdf
http://www.calgary.ca/portal/server.pt/gateway/PTARGS_0_0_780_237_0_43/http%3B/content.calgary.ca/CCA/City+Hall/Business+Units/Office+of+Land+Servicing+and+Housing/Affordable+Housing/Affordable+Housing.htm
http://www.fcm.ca/english/View.asp?mp=813&x=814
http://www2.ohchr.org/english/bodies/cedaw/docs/ngos/PHRC_Canada42.pdf
http://snipurl.com/27wya9
http://www.fcm.ca/CMFiles/bcmcfinal1LND-3282008-4938.pdf
http://www.fcm.ca/english/View.asp?mp=1590&x=1719
http://www.fcm.ca/english/View.asp?mp=1590&x=1748
http://www.policyalternatives.ca/publications/commentary/fast-facts-electing-house-canadians-or-not
http://www.socialeconomyhub.ca/sites/default/files/2009_Hulchanski%20_Homelessness%20Past-Present-Future_Conf-%20Keynote-address.pdf
http://www.assembly.ab.ca/ISYS/LADDAR_files%5Cdocs%5Chansards%5Chan%5Clegislature_27%5Csession_4%5C20110511_1330_01_han.pdf
http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf
http://whqlibdoc.who.int/hq/1998/WHO_HPR_HEP_98.1.pdf
http://www.cprn.org/documents/50550_EN.pdf
http://www.calgaryhomeless.com/users/folderdata/%7B0AB0E6A0-E12C-46D9-9518-E09324EAD190%7D/Cost_of_Homelessness_-_Four_Cities_March_2005_FINAL.pdf
http://www.westerninvestor.com/index.php/news/55-features/340-sprawl-brawl
http://www.cmhc-schl.gc.ca/odpub/pdf/63390.pdf?lang=en
http://www.budget.gc.ca/2011/glance-apercu/brief-bref-eng.pdf
http://www40.statcan.gc.ca/l01/cst01/gdps02a-eng.htm
http://www.fcm.ca/english/View.asp?mp=1&x=1796
http://www.calgary.ca/docgallery/bu/finance/economics/policy_analysis/fiscal_imbalance_calgary_experience.pdf
http://thechronicleherald.ca/NovaScotia/1246833.html
http://www.condolivingonline.com/calgary/articles/2199/is-the-sky-the-limit
http://www.economist.com/node/18805931?story_id=18805931
http://www.alberta.ca/acn/201103/30091C979B907-A8EA-93E5-957DAB2CC29BF080.html
http://www.td.com/economics/special/house03.pdf
http://www.streethealth.ca/Downloads/NickCEA-0507.pdf

Potentially Useful Links on Affordable Housing

Composition of Homeless Population
HOMELESSNESS IN CANADA
www.calgary.ca/_layouts/cocis/DirectDownload.aspx?target=http%3A%2F%2Fwww.calgary.ca%2FCSPS%2FCNS%2FDocuments%2Fhomelessness%2Fthresholds_locating_affordable_housing.pdf&noredirect=1&sf=1
www.progressive-economics.ca/wp-content/uploads/2007/07/Falvo.pdf
May 2007: Canada’s Lack of Affordable Housing | Canadian Centre for Policy Alternatives
www.urbancenter.utoronto.ca/pdfs/elibrary/CPRNHousingPolicy.pdf
New project will shelter abused women

secondarysuitesSES2007
Calgary Looks Toward Lower-Footprint Future

dt http://www.calgary.ca/docgallery/bu/environmental_management/ecological_footprint/towards_preferred_future.pdf
dt Streetside Development Corporation : Past Projects
dt http://www.colliers-international.com/Calgary/Castleview/Castleview-Park-Apartments.pdfdt karoleena.com/wp-content/uploads/2010/12/graycie_spec_sheets.pdf
dt http://www.griffith.edu.au/__data/assets/pdf_file/0004/81184/city-structures-02-bamford.pdf
dt Jan Gehl lecture on ‘Cities for People’ – Great Public Spaces (Calgary, AB) – Meetup
dt Archived – Budget 2011 (March 22, 2011) – Chapter 4: Supporting Job Creation
dt canada budget 2011 – Google Search
dt http://www.canurb.org/sites/default/files/reports/2010/PUB-2010-RenewCanada-GMiller-PHorgan-05.2010.pdf
dt FFWD – Calgary News & Views – News – Forecast? Cloudy with a chance of lawsuits
dt ginsler.com/sites/ginsler/files/socio047.pdf
dt Affordable Housing Techniques Publication
dt City N. Van – Housing – Affordable Housing Policies
dt ginsler.com/sites/ginsler/files/socio003.pdf
dt IZ Builder Conine
dt remaxottawa.com/dn/LinkClick.aspx?fileticket=DvovulEIwZg%3D&tabid=57&mid=673
dt http://www.oecd-ilibrary.org/docserver/download/fulltext/191100041e1t002.pdf?expires=1306513133&id=id&accname=freeContent&checksum=38E17C457B04B7F4838B0EAEFC3C461D
dt http://www.budget.gc.ca/2011/glance-apercu/brief-bref-eng.pdf
dt 6566024-How-Should-Housing-Densities-Be-Determined-a-Comparative-Analysis-of-Brisbane-and-en
dt Cities for People – Google Booksdt Projects Map – Canada’s Economic Action Plan
dt Affordable Housing Money Counts – Google Docsdt
“calgary homeless foundation” “societal costs of homelessness” 2004 – Google Search
dt $140 square foot to build a housing unit calgary? – Google Searchdt 2011 November 21 « Decisions, Decisions, Decisionsdt 4 million to build 36 unit multi-family complex? – Google Searchdt A leg up for Britain’s generation rent – World – Macleans.cadt A practical framework for expanding affordable housing services in Australia: learning from experience | Australian Policy Onlinedt A Tale of Two Town Houses – Magazine – The Atlanticdt Affordable Housing – CPD – HUDdt affordable housing – Google Scholardt affordable housing – Google Searchdt Affordable Housing | CMHCdt Affordable Housing and Homelessnessdt Affordable housing debate heats up amid cutbacks – The Whig Standard – Ontario, CAdt Affordable Housing Initiative | CMHCdt Affordable Housing Institutedt Affordable Housing Institutedt Africa’s infrastructure: A road to somewhere | The Economistdt AHI: United States » OECD bubbles? LMNO bubbles! OSAR GSE M? Part 5, regulate rents, but not too muchdt Alberta budget promises record $33B in spending – Business – CBC Newsdt Amazon.com: Affordable Housing and Public Policy: Strategies for Metropolitan Chicago (A Chicago Assembly Book) (9780962675522): Lawrence B. Joseph: Booksdt Analysis of Urban Growth and Sprawl … – Basudeb Bhatta – Google Booksdt Analysis of Urban Growth and Sprawl … – Basudeb Bhatta – Google Booksdt Analysis of Urban Growth and Sprawl from Remote Sensing Datadt Australia’s affordable housing crisis: the price of poor public policy – On Line Opinion – 20/10/2003dt Backgrounder: 2010/2011 Housing Capital Initiatives Projects – Canada’s Economic Action Plandt BBC News – ‘Housing shortage crisis’ predicted in IPPR reportdt BBC News – Housing: David Cameron vows to ‘get Britain building’dt BBC News – Ken Livingstone pledges ‘London Living Rent’ systemdt Big cities back a pennydt Bronconnier floats idea of legalizing basement suites – Calgary – CBC Newsdt Building and Construction Canada – Spring 2010 [20 – 21]dt calgary multi-family 3 storey complex 36 units construction costs? – Google Searchdt Calgary Philharmonic Orchestra singing Tweets goes viraldt canada cost of homelessness – Google Scholardt canada’s economic action plan social housing – Google Searchdt Canadian Homelessness Research Networkdt Canadian Political and Economic Newsdt CARH – 2012 Mid-Year Meeting Brochure/Agendadt CBC: The fifth estate – No Way Home, The Cost of Homelessnessdt CBI: CBI comments on prime minister’s speech to CBI Annual Conferencedt Chartered Institute of Housing – Search Resultsdt Chris Tilly’s Research : Center for Industrial Competitiveness : UMass Lowelldt City Mayors: Affordable housing – USAdt CMHC :: INSURED FINANCINGdt Concerns raised with Calgary alderman over Eau Claire condo land dealdt Congress for the New Urbanismdt CUCS – David Hulchanski – Housing Policy for Tomorrow’s Cities (Report)
dt CUCS – J. David Hulchanskidt Dab_solver – affordable housing
dt Definition of general housing terms – Housing – Department for Communities and Local Government
dt Delivering Affordable Housing – Housing – Department for Communities and Local Government
dt Divided We Stand – Books – OECD iLibrary
dt Divided We Stand | OECD Free Preview | Powered by Keepeek Digital Asset Management | http://www.keepeek.comdt Divided we Stand: Why Inequality Keeps Rising
dt Do Rising Tides Lift All Prices? Income Inequality and Housing Affordability
dt Does Affordable Housing Detrimentally Affect Property Values? A Review of the Literature
dt Downtown land deal to go under microscope – Calgary – CBC Newsdt Economic inequality – Wikipedia, the free encyclopedia
dt Economics focus: House of horrors, part 2 | The Economist
dt FAST FACTS: “housing” that will lead to a need for more social housing | Canadian Centre for Policy Alternativesdt FCM – Housing
dt Five economic tests for the majority government | Canadian Centre for Policy Alternativesdt From Need to Affordability: An Analysis of UK Housing Objectives
dt From Need to Affordability: An Analysis of UK Housing Objectivesdt From Need to Affordability: An Analysis of UK Housing Objectives
dt Global house prices: Castles made of sand | The Economistdt Government program boosts Brazil housing market | Reuters
dt health and homelessness (PRB99-1E)
dt Help:Footnotes – Wikipedia, the free encyclopediadt Home – gltn
dt Homelessness
dt Homelessness | Here to Help, A BC Information Resource for Individuals and Families Managing Mental Health or Substance Use Problemsdt Homelessness in Canada – Wikipedia, the free encyclopediadt Homelessness: Past, Present, Future – Hulchanski – 2009dt House building scheme designed to kickstart market unveiled | Money | The Guardiandt Housing – Housing Need / Indicators of Well-being in Canadadt Housing Affordability and Needs Studies Based on Census Data | CMHCdt Housing Affordability Index – Wikipedia, the free encyclopediadt Housing and Urban Policydt Housing policy matters: a global … – Shlomo Angel – Google Books
dt Housing supply and demand – UK Parliamentdt Housing Unaffordability as Public Policy: The New Demographia International Housing Affordability Survey | Newgeography.comdt how much does it costs to build 1 family unit in a multi-family complex? – Google Searchdt Hulchanski 2008-2009 Homeless Families into and Out of Homelessness.dt ibi group. (2003). societal cost of homelessness. calgary: author. – Google Search
dt Initiative for Affordable Housing – Glossary
dt International perspectives on factors contibuting to homelessness (PRB99-1E)dt International perspectives on factors contibuting to homelessness (PRB99-1E)
dt International Standards – Adequate Housingdt intraspec.ca/2000_Hulchanski_Counting-Homeless-People.pdf
dt intraspec.ca/HART-Tool_December112009FINAL(2)%5B1%5D.pdf
dt intraspec.ca/HOMELESSNESS_in_Toronto.pdfdt Is Housing Unaffordable? Why Isn’t It More Affordable?dt ITC – News
dt JACKY Q. ZHANG–MMP Engineering – Providing quality structural engineering since 1978.
dt Joint government funding increases affordable housing across Alberta – Canada’s Economic Action Plan
dt Keeping to the Marketplace
dt Knowing when it’s green: A Citizen’s Guide to (LEED for) Neighborhood Development | Kaid Benfield’s Blog | Switchboard, from NRDC
dt Land Economy Staff – Ms Sarah MONK
dt Land Economy Staff – Professor Christine WHITEHEAD
dt Laying the Foundations: A Housing Strategy for England – Housing – Department for Communities and Local Government
dt Lessons from the History of Affordable Housing Cooperatives in the United States: A Case Study in American Affordable Housing Policy – page 12 | American Journal of Economics and Sociology, The
dt Lessons from the History of Affordable Housing Cooperatives in the United States: A Case Study in American Affordable Housing Policy – page 16 | American Journal of Economics and Sociology, The
dt Lessons from the History of Affordable Housing Cooperatives in the United States: A Case Study in American Affordable Housing Policy | American Journal of Economics and Sociology, The | Find Articles
dt Life of luxury
dt Manitoba Local Government | Province of Manitoba
dt Mayoral candidates split over housing – Calgary – CBC News
dt Mayoral hopefuls demand probe of land deal
dt Mayoral hopefuls demand probe of land deal
dt Mayors want $2.5B break; Big cities demand GST rebate, plus fuel, income, sales taxes Ambitious agenda draws cautious nod from Martin envoydt Measuring Housing Affordability: Looking Beyond the Mediandt Methodology for the Housing Affordability Indexdt mhupa.gov.in/w_new/AffordableHousing.pdfdt MIT CRE : Measuring Housing Affordability – The HAI Affordable Housing Index
dt New April 19, 2010 CMHC Canadian Mortgage Rules Summarydt Next federal budget must put rental housing market on solid ground – thestar.comdt Notes and definitions for affordable housing supply – Housing – Department for Communities and Local Governmentdt NRDC: LEED for Neighborhood Developmentdt Perspectives on Labour and Income – Measuring housing affordabilitydt PolicyOptions Wiki / Affordable Housing
dt Progress being made in Attawapiskat: Red Cross | CTV News
dt Public housing – Wikipedia, the free encyclopediadt Public Policy in Municipalities – Publicationsdt Publications and Reports | CMHCdt publications.gc.ca/collections/Collection/NH18-23-55-4E.pdfdt QAHC – About Affordable Housing
dt Rebuilding an affordable, sustainable community in Galveston | Kaid Benfield’s Blog | Switchboard, from NRDC
dt Relationship between Housing Affordability and Economic Development in Mainland China—Case of Shanghai | Browse – Journal of Urban Planning and Development
dt rental market data canada – Google Search
dt Restructuring housing systems : from social to affordable housing? – LSE Research Online
dt Rich-poor divide widens in advanced economies – FT.com
dt Scientific Commons: A practical framework for expanding affordable housing services in Australia: learning from experience (2004), 2004 [Vivienne Milligan, Peter Phibbs, Kate Fagan, Nicole Gurran]dt Search Results | CMHCdt Shelter poverty : new ideas on housing affordability / by Michael E. Stone | Miami University Libraries
dt siteresources.worldbank.org/FINANCIALSECTOR/Resources/Affordable_rental_housing_schemes_USA_France.pdf
dt Sloan: Municipalities are seeking more stable fundingdt Social housing being renovated in London – Canada’s Economic Action Plan
dt Sprawl brawl
dt stratongina.net/files/ShelterintheStorm.pdf
dt Talk:Affordable housing – Wikipedia, the free encyclopedia
dt Taylor & Francis Online :: An affordability crisis in British housing: Dimensions, causes and policy impact – Housing Studies – Volume 9, Issue 1dt The affordability of homeownership to middle-income Americans
dt The Case for Congestion – Neighborhoods – The Atlantic Cities
dt The City of Calgary – Research on homelessness
dt The City of Calgary: Older Adult Housingdt The Federal Reserve Bank of San Francisco: Economic Research, Educational Resources, Community Development, Consumer and Banking Informationdt The good, the bad and the ugly: Housing demand 2025 > Publication :: IPPRdt The Homeless Hub – Resource Precarious Housing and Hidden Homelessness Among Refugees, Asylum Seekers, and Immigrants in the Toronto Metropolitan Area
dt The LaCaille Group – Building and Construction Canada Magazine
dt The New Blackwell Companion to the City – Gary Bridge, Sophie Watson – Google Booksdt The New Blackwell Companion to the City – Gary Bridge, Sophie Watson – Google Books
dt U.K. fares worst on income inequality among advanced economies: OECD – The Globe and Mail
dt UN-HABITAT.:. Housing rights
dt UN-HABITAT.:. Land and Housing | Events | International Housing Summitdt Urban and Regional Planning – The Canadian Encyclopedia
dt vbn.aau.dk/files/13671493/SocialHousingInEurope.pdf
dt web.mit.edu/cre/research/hai/pdf/FPZ_021207.pdf
dt What does the literature tell us about the social and economic impact of housing? Report to the Scottish Government: Communities Analytical Servicesdt Wikipedia:Cheatsheet – Wikipedia, the free encyclopedia
dt Will Housing Projects Boost GDP? – Economic Observer News- China business, politics, law, and social issues
dt http://www.actu.org.au/Images/Dynamic/attachments/5552/ACTU-Housing-Options-jul07.pdf
dt http://www.affordablehousinginstitute.org/resources/library/DS_saopaulo_best_practices_2008.pdfdt http://www.ahuri.edu.au/downloads/NRV3/NRV3_Research_Paper_1.pdf
dt http://www.aiecon.org/advanced/suggestedreadings/PDF/sug71.pdf
dt http://www.bov.com/filebank/documents/25-34 Joseph Darmanin.pdf
dt http://www.cahhalifax.org/DOCS/costofhomelessnessjune06report.pdf
dt http://www.calgary.ca/CS/OLSH/Documents/Affordable-housing/Louise-Station-Project-Profile.pdf
dt http://www.calgary.ca/CSPS/CNS/Documents/homelessness/ff-01_definition_affordable_housing.pdf
dt http://www.calgary.ca/CSPS/CNS/Documents/Social-research-policy-and-resources/Affordable-housing-and-homelessness/ff-04_affordable_housing_homelessness.pdf
dt http://www.calgary.ca/docgallery/BU/planning/pdf/older_adult_housing/shifting_horizons.pdf
dt http://www.calgaryhomeless.com/users/folderdata/{0AB0E6A0-E12C-46D9-9518-E09324EAD190}/Cost_of_Homelessness_-_Four_Cities_March_2005_FINAL.pdf
dt http://www.citiescentre.utoronto.ca/Assets/Cities+Centre+Digital+Assets/pdfs/publications/Three+Cities+Within+Toronto+Hulchanski+2010.pdf
dt http://www.cmhc-schl.gc.ca/en/corp/about/anrecopl/upload/Glossary-2010.pdf
dt http://www.cmhc-schl.gc.ca/odpub/pdf/63057.pdfdt http://www.cmhc-schl.gc.ca/odpub/pdf/63390.pdf?lang=en
dt http://www.cnhed.org/download/123321_U127242__746634/Continuum of Housing Report.pdf
dt http://www.communities.gov.uk/documents/housing/pdf/141134.pdf
dt http://www.communities.gov.uk/documents/housing/pdf/152897.pdf
dt http://www.communities.gov.uk/documents/housing/pdf/2033676.pdf
dt http://www.cprn.org/documents/17350_en.pdf
dt http://www.cprn.org/documents/50550_EN.pdf
dt http://www.cprn.org/documents/51110_EN.pdf
dt http://www.demographia.com/dhi.pdf
dt http://www.demographia.com/dmg-oecd.pdf
dt http://www.fcm.ca/Documents/reports/The_Housing_Market_and_Canadas_Economic_Recovery_EN.pdfdt http://www.fig.net/pub/figpub/pub48/figpub48.pdf
dt http://www.freethechildren.com/getinvolved/youth/campaigns/onenightout/docs/One Night Out Fact Book.pdf
dt http://www.getbritainbuilding.org/assets/uploaded/docs/1.pdf
dt http://www.gltn.net/images/stories/gltn_capacity_development_strategy_-_overview.pdfdt http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CDQQFjAD&url=http%3A%2F%2Fwww.communityhousing.com.au%2Fresources%2FBP3%2520-%2520Objectives%2520and%2520Targets.doc&ei=DknlTsKFMOft0gGumI2ABg&usg=AFQjCNHxOdRH1-NTyfPPuTI6axmEXXEFkg
dt http://www.halifax.ca/planning/Homelessness/HomelessnessInHRM-Portrait.pdf
dt http://www.homelesshub.ca/ResourceFiles/Documents/6.2 Menzies – Homeless Aboriginal Men.pdfdt http://www.huduser.org/periodicals/cityscpe/vol1num3/winnick.pdf
dt http://www.ibwe.at/pdf/fk0509/IBWE-FK0509-ws_2-1_1.pdf
dt http://www.imf.org/external/pubs/ft/gfsr/2011/01/pdf/summary.pdf
dt http://www.imf.org/external/pubs/ft/gfsr/2011/01/pdf/text.pdf
dt http://www.imf.org/external/pubs/ft/scr/2006/cr06210.pdf
dt http://www.imf.org/external/pubs/ft/weo/2004/02/pdf/chapter2.pdf
dt http://www.imf.org/external/pubs/ft/weo/2008/01/pdf/c3.pdf
dt http://www.ippr.org/images/media/files/publication/2011/05/Good bad and ugly – Housing demand 2025_1829.pdf
dt http://www.knowledgeplex.org/kp/text_document_summary/scholarly_article/relfiles/hpd_0401_whitehead.pdf
dt http://www.nationalhousingconference.org.au/downloads/1999/DayOne/judy_yates_paper.pdfdt http://www.ncsu.edu/ncsu/design/cud/pubs_p/docs/UDinHousing.pdf
dt http://www.oecd.org/dataoecd/0/48/46901936.pdf
dt http://www.oecd.org/dataoecd/32/20/47723414.pdf
dt http://www.oecd.org/dataoecd/41/56/35756053.pdf
dt http://www.oecd.org/dataoecd/42/11/46917384.pdf
dt http://www.parliament.uk/documents/commons/lib/research/key_issues/Key-Issues-Housing-supply-and-demand.pdf
dt http://www.policyalternatives.ca/sites/default/files/uploads/publications/Manitoba Office/2011/04/housing and elections April 2011.pdf
dt http://www.policyalternatives.ca/sites/default/files/uploads/publications/National_Office_Pubs/socialwatch2004.pdfdt http://www.ppm-ppm.ca/SOTFS/Hulchanski.pdf
dt http://www.qahc.asn.au/images2/website/affordabilitychart.pdf
dt http://www.queensu.ca/iigr/conf/Arch/03/03-2/Hulchanski.pdf
dt http://www.rbc.com/canada/brochures/First_Home_English.pdf
dt http://www.rbc.com/economics/market/pdf/house.pdfdt http://www.rbc.com/newsroom/pdf/HA-1125-2011.pdf
dt http://www.rideforhome.com.au/files/pdf/HousingAffordability.pdf
dt http://www.rurdev.usda.gov/Publications/CA-OverviewMFH.pdf
dt http://www.shelter.org.au/archive/mr1008nationalaffordablehousing.pdf
dt http://www.toronto.ca/pdf/homeless_action.pdf
dt http://www.ucalgary.ca/cities/research_series/AffordableHousingInternationalExperiences.pdfdt http://www.umac.mo/fba/irer/papers/past/Vol7_pdf/1-30.pdf
dt http://www.uml.edu/centers/cic/Research/Tilly_Research/Housing-Tilly chapter-GRBT106-2299G-01-020-037.pdf
dt http://www.un.org/ga/econcrisissummit/docs/affordable_housing.pdf
dt http://www.unhabitat.org/downloads/docs/3680_5167_1.pdf
dt http://www.unhabitat.org/downloads/docs/6235_57828_K0950559_HSP_GC_22_4.pdf
dt http://www.unhabitat.org/downloads/docs/acp_english.pdf
dt http://www.urbancenter.utoronto.ca/pdfs/elibrary/Hulchanski-Housing-Affd-pap.pdf
dt http://www.urbancenter.utoronto.ca/pdfs/home/debates/TDAffdHousing.pdf
dt http://www.urbancenter.utoronto.ca/pdfs/researchassociates/2005_Hulchanski_Conference.pdfdt http://www.urbancenter.utoronto.ca/pdfs/researchassociates/Hulchanski_Concept-H-Affd_H.pdf
dt http://www.va-rems.org/connecting_home_and_work.pdf
dt http://www.vchr.vt.edu/pdfreports/Richmond_Affordable Housing Demand.pdf
dt http://www.vibrantcalgary.com/uploads/pdfs/VCC_Cost_of_Living_Fact_Sheet_August_2009.pdfdt YFile – York MES student coordinates first heat registry program


There is a strong relationship between housing, healthy cities, healthy neighbourhoods and healthy individuals (Sawatsky and Stroick 2005).” Access to shelter is listed among the pre-requisites for health in the Ottawa Charter. Along with peace, adequate economic resources, food, a stable eco-system and sustainable resource use. These pre-requisites highlight “the inextricable links between social and economic conditions, the physical environment, individual lifestyles and health. These links provide the key to an holistic understanding of health which is central to the definition of health promotion (Ottawa Charter).”

affordable housing project, Ogden Road SE

Canada’s Gross National Product in 2010 was $1.600 trillion based on Statistics Canada data.

Calgary needs to control its urban sprawl which is among the worst in Canada. Higher density to limit the sprawl is crucial as Calgary anticipates to double its population over the next 50 years. Mayor Nenshi on Twitter argues that we need government housing for the really tough cases, nonprofit for some, and private sector for most. He is really promoting the concept of allowing secondary suites in Calgary neighbourhoods. It seems to me that the Attainable Housing initiatives are the only one on the block. What about economic diversity in every neighbourhood through a number of different initiatives not just secondary suites which are not ideal living situations? Calgary does not respond well enough to the need for rental housing for those earning less than the attainable homes initiatives target.

In some markets, the secondary market – the universe of basement apartments, apartments over storefronts, flats in single-and semi-detached homes and row houses, and rented condominiums – has acted as an important safety valve. But, it is a less stable source of supply, and so by itself cannot provide a long-term solution to the affordable housing shortage. (TD 2003).
Why is affordable housing located under Corporate Properties in the City of Calgary? When was it moved there?

Fact Sheet on Affordable Housing

    1. The federal government estimates that the cost of homelessness by 2007 had reached c. $4.5 – $6 billion annually. This includes costs of health care, crime and other social services (Laird, 2007: 5). Yet Canada’s Economic Action Plan for all kinds of affordable housing options only provides c. $500 million annually leaving most of the costs to the municipal level residential tax base. Canada’s Economic Action Plan provides $475 million, over two years; to build new rental housing for low-income seniors and persons with disabilities, and $850 million to provinces and territories over two years for the renovation and retrofit of existing provincially/territorially administered social housing. Overall, the Economic Action Plan includes $2 billion for the construction of new and the renovation of existing social housing, plus up to $2 billion in low-cost loans to municipalities for housing-related infrastructure. Canada’s Economic Action Plan builds on the Government of Canada’s commitment in 2008 of more than $1.9 billion, over five years, to improve and build new affordable housing and help the homeless. As part of this commitment the Affordable Housing Initiative (AHI) was extended for two years, bringing the total federal investment in housing under the AHI to $1.25 billion since its inception.
    2. Across Canada emergency shelter use is on the rise particularly in urban centers. By 2007 40,000 people every night including children used emergency temporary shelters (Federation of Canadian Municipalities 2007).
    3. Research suggests that on average moving a homeless person from an emergency shelter to stable housing saves taxpayers $9,000 a year (FCM 2011-04).
    4. On an annualized basis costs in existing responses, averaged across four cities (Vancouver, Toronto, Montreal and Halifax) in 2005 were: Institutional responses (prison/detention and psychiatric hospitals: $66,000 to $120,000; Emergency shelters (cross section of youth, men’s women’s, family and victims of violence): $13,000 to $42,000; Supportive and transitional housing: $13,000 to $18,000; Affordable housing without supports (singles and family): $5,000 to $8,000 (Pomeroy 2005). In terms of public policy then “Where the cost advantage of the supportive and affordable housing options become meaningful is in addressing future demand, which will inevitably increase as populations continue to expand. Directing new investment to the lower cost (and arguably more effective) supportive option is likely to be more cost efficient than investing in new prisons, psychiatric hospitals and
      emergency shelters (Pomeroy 2005).”
    5. “Approximately 35,000 Calgary families are having difficulty affording adequate housing. Over the past ten years [2000-2010?], housing prices have increased 156 per cent, yet incomes have increased only 34 per cent over that same time (OLSH).”
    6. “There is currently a waiting list of more than 4,200 individuals and families with the Calgary Housing Company (CHC), Calgary’s leading affordable housing provider  (OLSH).”
    7. In 2004 the estimated cost of building was c. $1,890/m2 ($175/sq. ft) for concrete and $1,512/m2 ($140/ sq. ft) for wood. In 2011 the average cost per sq. ft is $125 – 155 sq ft. Unit sizes affordable housing: one-bedroom units from 500 sq. ft, two-bedroom units 700-800 sq. ft [800 sq. ft. @ $150 = $120, 000 x 36 units = $4 320 000] and three-bedroom units up to 1,000 sq. ft.
    8. Since 1993, the Provincial and Federal governments substantially reduced the capital funding of new affordable housing. This was part of a widespread decentralization, devolution and deregulation process intended to make housing markets more fairly competitive by eliminating state involvement at the same time cutting public costs. This did not work to advantage on a number of social issues such as affordable housing which has resulted in unintended and very costly consequences.
    9. There is a fiscal imbalance between municipal, provincial and the federal governments that jeopardizes the municipalities ability to respond to affordable housing issues. Cities like Calgary are highly and almost singularly dependent on property taxes (92.7%) as the primary source of funding (along with user fees and intergovernmental grants) to finance service provisions (T.D. ECONOMICS, 2004) such as affordable housing and social services. This is inherently flawed. There are many reasons why property tax revenues are inherently flawed as a source of funding for cities’growing needs and are a poor match for funding in the area of income redistribution services (more).
From Land Use Amendment Proposal
  1. The market is unable to deliver new rental stock. An astonishing 95% of the housing starts in the most recent five-year period have been in the ownership market, with rental construction accounting for only 5% of the market. Just 15 years ago, the proportion was 75% ownership and 25% rental.
  2. “A1996 Cambridge University study  that compared the housing systems and housing policies of 12 Western  nations found that, compared to all other countries, “Canada has an essentially free market approach to housing finance.  Owneroccupation has the advantage of not paying capital gains tax, whilst there is very little support for investment in the private rental sector, and tenants receive very little support in paying rents” (Hulchanski, 2002: 7, citing Freeman, Holmans, and Whitehead, 1996: n.p. cited in (Sawatsky and Stroick 2005).”
  3. Existing formal rental stock has been demolished or converted to condos.
  4. A buoyant economy in Calkgary bolstered in-migration causing a higher demand for rental housing.
  5. Alberta’s minimum wage is the second-lowest in Canada (BC has the lowest). Alberta’s minimum wage is $8.80 per hour. A total of 11 Canadian provinces or territories have a minimum wage rate higher then Alberta. Full time hourly minimum wage workers in Alberta earn a total of $352.00 per week and approximately $18,304.00 per year (based on a 8 hour days and a 260-day work year).
  6. Social Assistance rates did not increase between1993 and 2002
  7. In 2008, “as the nation headed into a brutal recession, there were just over 3 million Canadians living in poverty using the standard measure, Statistic Canada’s after-tax low-income cut-off (LICO) (more).”
  8. Approximately 1.27 million households (or 12.4 percent of Canadian households) live in housing that requires major repairs, is overcrowded, and/or costs more than 30 percent of household income (more).
  9. One in five Calgarians lived in poverty in 2002.
  10. Minimal new social housing was built for people who cannot afford market rents. 2002
  11. In Canada the federal, provincial and municipal governments have roles and responsibilities to address housing issues. But most of the responsibility has fallen to municipal governments to find and fund solutions.
  12. According to a 2003 KPMG study of corporations in the United States, quality of life indicators were important key business environment factors. It was also important that a city had low crime, good access to health facilities, access to affordable housing and educational facilities (more).

References

Further Reading

External Links
Federation of Canadian Municipalities http://www.fcm.ca/CMFiles/bcmcfinal1LND-3282008-4938.pdf
Policy Alternatives http://www.policyalternatives.ca/publications/commentary/fast-facts-electing-house-canadians-or-not
http://www.policyalternatives.ca/publications/commentary/canadas-poverty-hole
http://www.calgary.ca/docgallery/bu/cns/homelessness/thresholds_locating_affordable_housing.pdf
(OLSH

Sawatsky and Stroick 2005
Ottawa Charter

Death of paradox

April 30, 2011


James Arthur Baldwin (August 2, 1924 – December 1, 1987) was an American novelist, writer, playwright, poet, essayist and civil rights activist. Baldwin described the ambiguous situation of black Americans in the 1950s as Kafkaesque. He predicted that American nation will be put to death by paradox, itself a paradox since Americans seemed intent on putting paradox to death. He then situates American author Richard Wright fictional character Bigger Thomas in Native Son (1940) as a character controlled, defined by hatred and fear as a descendant of Uncle Tom. Bigger Tom’s hatred and fear later drive him to murder and rape. Baldwin saw Richard Wright as the 1940s Negro novelist locked with the 19th century New England author in a deadly timeless battle. He decries the fact that Bigger Tom’s tragedy is that he has accepted a theology that situates him as subhuman eternally constrained to fight for his humanity. Baldwin then summarizes, “But our humanity is our burden, our life, we need not battle for it; we need only do what is infinitely more difficult, that is accept it. The failure of the protest novel lies in its rejection of life, the human being, the denial of beauty, dread, power, in its insistence that it is his categorization alone which is real and which cannot be transcended (Baldwin “Everybody’s Protest Novel” in Zero 1955: 58).”

1852 American author Harriet Beecher Stowe published her anti-slavery novel entitled Uncle Tom’s Cabin; or, Life Among the Lowly. Although some argued that the novel “helped lay the groundwork for the Civil War” (Will Kaufman) James Baldwin claimed that is reeked of self-righteousness and virtuous sentimentality. Baldwin argued that sentimentality is the mark of dishonesty which betray the sentamentalist’s aversion of experience, fear of life and an arid heart. Baldwin states that sentimentalism is a signal of secret and violent inhumanity, a mask for cruelty. Uncle Tom’s Cabin is a “catalogue of violence”. He described Harriet Beecher Stowe as an impassioned pampheteer not a novelist who wrote solely to reveal the immorality of slavery (Baldwin “Everybody’s Protest Novel” Zero 1955: 57).

1924 James Baldwin was born

1938 Shoghi Effendi (1938:36) Guardian of the Bahá’í Faith, wrote that racial prejudice was the most vital and challenging issue confronting the Americas.

“Freedom from racial prejudice, in any of its forms, should, at such a time as this when an increasingly large section of the human race is falling a victim to its devastating ferocity, be adopted as the watchword of the entire body of the…believers, in whichever state they reside, in whatever circles they move, whatever their age, traditions, tastes, and habits (1938:36).”

“The ceaseless exertions which this issue of paramount importance calls for, the sacrifices it must impose, the care and vigilance it demands, the moral courage and fortitude it requires, the tact and sympathy it necessitates, invest this problem…with an urgency and importance that cannot be overestimated (1938:34).”

” [Freedom from racial prejudice] should be deliberately cultivated through the various and everyday opportunities, no matter how insignificant, that present themselves, whether in their homes, their business offices, their schools and colleges, their social parties and recreation grounds, their Bahá’í meetings, conferences, conventions, summer schools and Assemblies (1938:36).”

1940 American author Richard Wright published Native Son. James Baldwin in his essay entitled “Everybody’s Protest Novel” (c. 1950s?: 54-59) published in Zero situated American author Richard Wright fictional character Bigger Thomas in Native Son (1940) as a character controlled, defined by hatred and fear as a descendant of Uncle Tom. Bigger Tom’s hatred and fear later drive him to murder and rape. Baldwin saw Richard Wright as the 1940s Negro novelist locked with the 19th century New England author in a deadly timeless battle. He decries the fact that Bigger Tom’s tragedy is that he has accepted a theology that situates him as subhuman eternally constrained to fight for his humanity. Native Son is number 71 on the American Library Association’s list of the 100 Most Frequently Challenged Books of 1990-2000. The Modern Library placed it number 20 on its list of the 100 best novels of the 20th Century. Time Magazine also included the novel in its TIME 100 Best English-language Novels from 1923 to 2005.

1941 Seventeen-year-old James Baldwin studied at The New School, Greenwich Village, New York City.

1948 James Baldwin lived in Paris, France and became involved in the cultural radicalism of the Left Bank. His work started to be published in literary anthologies, notably Zero.

1949-1956 Albert Benveniste and Themistocles and Hoetis were editors of Zero, Gotham Book Mart Selection. James Baldwin’s essay entitled “Everybody’s Protest Novel” (pp 54-59) was published in Zero. http://books.google.com/books?id=9wdVDKAZZFoC&pg=PP5&lpg=PP5&dq=New+York+Times+’Zero’+Themistocles+Hoetis&q=New+York+Times+’Zero’+Themistocles+Hoetis&hl=en#v=snippet&q=New%20York%20Times%20’Zero’%20Themistocles%20Hoetis&f=false

“It is the peculiar triumph of society – and its loss – that it is able to convince those people to whom it has given inferior status of the reality of this decree; it has the force and the weapons to translate its dictum into fact, so that the allegedly inferior are actually made so, insofar as the societal realities are concerned. This is a hidden phenomenon now than it was in the days of serfdom, but it is no less implacable. Now, as then, we find ourselves bound, first without, then within, by the nature of categorization. And escape is not effected through a bitter railing against this trap upon us. We take our shape, it is true, within and against that cage of reality bequeathed us at our birth; and yet it is precisely betrayed. Society is held together by our need; we bind it together with legend, myth, coercion, fearing that without it we will be hurled into that void, within which, like the earth before the Word was spoken, the foundations of society are hidden. From this void – ourselves – it is the function of society to protect us; but it is only this void, our unknown selves, demanding forever, a new act of creation, which can save us – “from the evil that is in the world.” With the same motion, at the same time, it is this toward which we endlessly struggle and from which, endlessly, we struggle to escape(Baldwin “Everybody’s Protest Novel” Zero 1955: 57).”

“It must be remembered that the oppressed and oppressor are bound within the same society; they accept the same criteria, they share the same beliefs, they both alike depend on the same reality. Within this cage it is (Baldwin “Everybody’s Protest Novel” Zero 1955: 57) romantic, more, meaningless, to speak of a “new” society as the desire of the oppressed, for that shivering independence on the props of reality wyhich he shares with the herrenvolk makes a truly “new” society impossible to conceive. What vengeance will be exacted; either there will be no oppressed at all or the oppressed and the oppressor will change places (Baldwin “Everybody’s Protest Novel” Zero 1955: 58).”

1955 James Baldwin published Notes of a Native Son. The title refers to Richard Wright’s 1940 protest novel entitled Native Son.

1963 James Baldwin’s book entitled The Fire Next Time was considered to be one of the most influential books about race relations. In it Baldwin predicted, “The Negroes of this country may never be able to rise to power, but they are very well placed indeed to precipitate chaos and ring down the curtain on the American dream.” Could he have imagined President Obama?

“James Baldwin’s collection of essays, The Fire Next Time, is considered one of the most influential books on race relations published during the 1960s. Divided into two sections, the book urges the politicization of both African Americans and European Americans on the issue of racism. Baldwin explains that the radicalism and militancy of many prominent African Americans is a reaction to feelings of alienation inspired by traditional American society. Originally published as two separate works – “Letter from a Region in My Mind” in The New Yorker and “A Letter to My Nephew” in the Progressive – the essays were retitled “Down at the Cross” and “My Dungeon Shook: Letter to My Nephew on the One Hundredth Anniversary of the Emancipation Proclamation” for their appearance in book form. Using rhetorical devices learned in his youth as a Pentecostal preacher and examples from his own life, Baldwin argues for an end to racism (Gale Free Resources).”

“In order to survive as a human, moving, moral weight in the world, America and all the Western nations will be forced to reexamine themselves and release themselves from many things that are now taken to be sacred, and to discard nearly all the assumptions that have been used to justify their lives and their anguish and their crimes so long (Baldwin).”

1979-1981 Atlanta Child Murders were a series of murders committed in Atlanta, Georgia, United States in which a minimum of twenty-eight African-American children, adolescents and adults were killed creating an atmosphere of panic and paranoia. James Baldwin documented these murders in his nonfiction book entitled The Evidence of Things Not Seen. Although Atlanta African American Wayne Williams was convicted of two murders and suspected to be guilty of more Baldwin criticized the “untidy” criminal investigation process and felt it was incomplete.

1987 James Baldwin died.

Who’s Who

James Arthur Baldwin (August 2, 1924 – December 1, 1987) was an American novelist, writer, playwright, poet, essayist and civil rights activist.

Webliography and Bibliography

Baldwin, James. 1962-11-17. “Letter From a Region of My Mind.The New Yorker. “Letter from a Region in My Mind.” p. 59.

Baldwin, James. 1963. “Down At the Cross; Letter From a Region of My Mind.” The Fire Next Time. Dial Press. USA.
Baldwin, James. 1963. The Fire Next Time. Dial Press. USA.
Baldwin, James. 1964. The Fire Next Time. Penguin Books. UK.