Canada’s unfriendly skies: Why our airlines need competition

The Globe and Mail/ GRANT BISHOP

At this time of the year, almost everyone has a travel story. Mine involved nearly missing a connecting flight to Victoria after being forced to check carry-on luggage that was standard size and well-under the weight limit. Seeking help from an airline employee, I was curtly refused and accused of having an overweight bag.

Canada’s airlines, it seems, are the inevitable punching bag for most tales of holiday woe.

Why do airlines get away with poor customer service? There are two problems. Both are issues of competition.

The first problem is the lack of foreign entry into domestic carriage. The current rules on foreign ownership deprive Canadians of choice. For example, Australia has allowed a right of establishment for foreign carriers, resulting in lower fares and expanded routes. My friends actually enjoy their air travel experiences in Europe where airlines compete for their business. In Canada, we remain beholden to Canadian-owned carriers if we want to fly between two Canadian cities. The result is an oligopoly that gouges travellers and takes their business for granted.

Ambarish Chandra of the University of Toronto found that, relative to Americans, we often pay between 50 and 100 per cent more for comparable travel between Canadian cities. Statistics Canada research shows that productivity growth in Canada’s airline sector is abysmal, markedly outpaced by U.S. airlines. Various expert reviews of the airline industry – including by the Competition Bureau and the 2002 independent observer on airline restructuring – have recommended allowing a right of establishment for foreign carriers on domestic routes to put pressure on our laggard airlines to improve.

The airlines argue that foreign carriers would only operate on lucrative routes. However, Canadian carriers are under no obligation to fly to money-losing destinations and there is scant proof that the airlines presently cross-subsidize to operate otherwise unprofitable routes. Look at prices to fly to Sydney, Nova Scotia or Medicine Hat, Alberta. It certainly seems like airlines are recovering their costs on these routes.

The 2008 Competition Policy Review Panel recognized that a moribund air travel sector is a drain on the national economy. People depend on air travel to conduct business face-to-face. The panel recommended significant liberalization of air travel. We are still waiting.

The second problem is the bargaining power of unions in this oligopoly context.

The freedom of association guaranteed in Canada’s Charter of Rights and Freedoms means that employees have a right to bargain collectively . Unions play a key role in protecting workers against exploitation.

However, Canadian labour law has not paid much attention to the ability of unions in protected sectors to squeeze consumers. In most industries, if unions demand too much from employers, some other competitor in that industry will trounce them. Market competition disciplines what unions can demand.

Not so for Canada’s airlines. These unions can demand much more. Not fearing a more efficient competitor who would undercut its prices, the airline can simply charge higher fares. If unions don’t get what they want, they can grind travel to a halt and hold customers ransom.

At any workplace that I have worked, an employee who treated a client as dismissively as I was would have been given notice the next day. But, under coverage of collective agreements, the process to get rid of such an employee can be lengthy and onerous. This is unfortunate. Officious employees give the rest of their bargaining unit a bad name, feeding our stereotypes about airline staff. I will have less sympathy when a striking airline union is ordered back to work.

We need more competition to discipline our airlines and their unions. Canadians should reflect on their experiences on our airlines whenever we hear our politicians argue that we need to protect our “national champions”. The shakedown that Canadian travellers face today is too high a price for maple leaves on tailfins.

The Power of Forgiveness - Restorative Justice

GlobalToronto

Holding on to resentment, anger and bitterness can be crippling. But letting go is just as difficult. We explore the possibility of accepting an apology from someone who has inflicted unimaginable harm. Here's Jill Croteau, with the story of a Calgary woman, who has experienced the power of forgiveness.

Canada in 2013: It’s all about the oil

By Jonathan Kay, Special to CNN

thetruthaboutcars.com

Editor’s note: Jonathan Kay is the Managing Editor for Comment at Canada’s National Post newspaper and a fellow at the Washington, D.C.-based Foundation for Defense of Democracies. Follow him @jonkay. The views expressed are his own.

Canada is in a fortunate position relative to other developed Western nations. Our government is stable. Our budget deficit is small. Our real estate market is healthy (if somewhat overheated). And unemployment is relatively low. Only the occasional flourish of Quebec separatism keeps things lively in the Great White North. The biggest challenge my country will face in 2013 – and for many years after that – will be the problem of plenty. Specifically, how will Canada manage its large and growing oil wealth?

Canada currently produces just over 3 million barrels of oil per day (b/d), making us the world’s 7^th largest producer, and the single largest supplier of oil imports to the U.S. market. Thanks to the ongoing expansion of Alberta's oil sands, production is expected to more than double by 2030, to 6.2-million b/d, transforming Canadian into an energy superpower.

But there is a problem: The vast majority of the country’s oil wealth is landlocked in northern Alberta. And the existing pipeline network, which connects the large Canadian hubs at Edmonton and Hardisty, Alberta to the main American terminals in Oklahoma and Illinois, is inadequate. Half of America’s 18 million b/d refining capacity sits on or near the Gulf Coast. But barely any Canadian oil gets there (in part because of America's own oil pipeline bottleneck at Cushing, Oklahoma).

For this reason, in 2013, Canada’s government and oil producers will be making a big push for U.S. President Barack Obama to reconsider the Keystone XL pipeline project, which could bring 830,000 b/d from Hardisty, Alberta to Steele City, Nebraska.

Perhaps more important for Canadian producers, in the long run, is the massive and growing Asian market.

China’s net oil imports are projected to double between now and 2030, from 5.7 million to more than 12 million b/d. India's net imports, likewise, will grow from about 3 million to about 6 million b/d. Yet despite the spider web of pipelines that cover the North American Midwest, there is just a single oil route to the west coast from Alberta – the 300,000 b/d Kinder Morgan Trans Mountain Pipeline, leading to Vancouver and Puget Sound.

And so an important challenge for Canada in 2013 and beyond will be to move forward on pipeline projects that expand our access to Asian markets, including both a possible expansion of the Trans Mountain pipeline (bringing capacity up to 750,000 b/d), and a completely new 36" diameter, 730-mile pipeline called the Enbridge Northern Gateway, which eventually could transport as much as 850,000 b/d of diluted Alberta bitumen to a new marine terminal near Kitimat, British Columbia, for sale to Asian markets.

Construction of the Northern Gateway pipeline would provide a huge boost to the Canadian oil industry. But its chances of going ahead in its currently planned form in 2013 are very slim, for a variety of very all-too Canadian reasons – including bickering involving the federal and British Columbia government over revenues, massive opposition from aboriginal bands, and an extremely effective anti-pipeline campaign mounted by British Columbia's powerful environmental lobby. In fact, many analysts believe the pipeline will never get built, leaving Canadian oil producers largely hostage to the American energy market.

Stresses are appearing in Canadian public life not only over the question of what to do with our oil, but also over what to do with the money we earn from it.

Thanks to Canada’s “equalization” policy, billions of dollars are shuttled (indirectly) from the country’s richest provinces to its poorest on an annual basis. In recent years, this has meant that oil-rich Alberta (per capita GDP = about $78,000) generously subsidizes the welfare-state policies of an out-at-the-elbows Quebec (per capita GDP = about $43,000). This has created no small measure of rancor in the country, especially because Quebec's left-wing, environmentalist politicians have made a habit of attacking Alberta’s oil industry for its pollution and contribution to global warming, essentially biting the hand that feeds them.

At one point in 2012, Canada’s leading opposition politician, Thomas Mulcair (who is from Quebec), even declared that the oil sands were giving Canada a case of what economists call “Dutch Disease,” whereby high priced commodity exports cause the Canadian dollar to appreciate, thereby rendering our manufacturing industries uncompetitive in global markets. The remark was front page news for days, and continues to stick in the craw of many Albertans.

All in all, managing the oil file will be Canada's biggest challenge in 2013. Like a family that has won the lottery, we Canadians are delighted by our newfound wealth. But turning it into useful income has become unexpectedly problematic, due to our geography, fractured political landscape, troubled historical relationship with First Nations, and environmental focus. The fight between our squabbling regions and constituencies over the best way to proceed has only just begun.

Shipping containers transformed into affordable homes

GlobalToronto

Recycled shipping containers are being turned into affordable homes for homeless women in Vancouver's notorious Downtown Eastside. Robin Gill reports.

Can Trudeau Jr. live up to Trudeau dad?

How Canadians find a terrorist?

mikizzlefoshizzle

How to become a Canadian Citizen

denusurat1

Russell Peters=The Canadian Accent

myfunarchive

Ottawa approves foreign takeover bids for Nexen and Progress

Both companies are owned by Chinese and Malaysian governments respectively.

Nexen's Long Lake Tank Farm in north eastern Alberta (Photo: Dave Olecko/Nexen)

Canadianbusiness.com

The Canadian government has approved two major energy takeover deals by state-owned Asian corporations, giving the greenlight to CNOOC's $15.1-billion bid for Calgary's Nexen Inc. and Petronas's $5.23-billion deal for Progress Energy Resources Corp.

Also CNOOC's bid for Nexen a sign of China's future >>

Canada's House of Commons confrontation

GlobalToronto Wed, Dec 5: Government House Leader Peter Van Loan crossed the floor to physically confront the opposition, so other MPs stepped in to calm things down. Shirlee Engel reports.

Canadians unhappy with democracy according to poll

GlobalToronto Mon, Dec 3: A new survey finds satisfaction with Canada's democratic process is at an all-time low. Shirlee Engel explains. 

What Canadians want more than a pay raise

Jennifer Kwan | Insight

Who wouldn't want more vacation time? Quality of life is important to over-worked Canadians and that may be why Canada is the only country in a global study that prefers extra paid time off over salary hikes.

In a survey of more than 10,000 workers in 10 markets, including the United States and United Kingdom, Canada was the only country that chose an extra week of paid time off as a preferred benefit. All other countries selected a salary increase as the top benefit. Canadians picked pay hikes as second best.

The survey titled "Making Smart Benefit Choices" by consultancy Mercer was conducted in July and August and sought to measure the perceived value employees place on various employer and employee paid benefits. Mercer also surveyed workers in Brazil, China, France, Hong Kong, Ireland, Italy and Spain.

"Canadian employees have shown that they value more time off and increased pay in the current stress-filled economic environment," Brian Lindenberg, senior partner at Mercer's health and benefits business, said in a statement.

Perhaps the need for more time off is due to Canada's lack of statutory and public holidays compared to other developed nations? According to a separate Mercer analysis, Canada ranked dead last for work-free days, offering only 19 for the average Canadian employee with 10 years of service. In comparison, Malta offers 38, Venezuela 36, the U.K. 36, South Korea 34 and Pakistan 25.

It's no surprise time off is important as Canadians are apparently pretty stressed out. The Mercer study follows a recent nationwide work-life balance study that shows stress levels among Canadians have risen -- with nearly 60 per cent of people surveyed reporting they were highly  stressed -- while work satisfaction has dropped.

That study by professors at Carleton University and Western University examined work-life experiences of 25,000 Canadians. Those surveyed worked full time with an annual income of $60,000 or more in a range of professions including public, private and not-for-profit organizations across all provinces and territories. Two-thirds were parents.

It found work demands have risen, flexible work arrangements are increasingly rare and career advancement has gotten harder in recent years. All these pressures in the workplace lead to absenteeism and mental health issues among employees, the study suggests.

The Mercer survey also asked employees to rank the kind of benefits they are willing to pay for themselves, often referred to as voluntary or flexible benefits.

Responses reflected a broad split between markets, Mercer says. In Canada, where a wider range of health benefits are provided publicly, benefits that provide additional insurance are the most popular. Those include auto, home and critical illness insurance.

Whereas in countries such as Brazil and China, where health benefits are not as accessible, additional retirement or savings benefits ranked high. In some countries such as Ireland and Italy, where the state is the primary provider of health care, supplemental private medical insurance is popular as a voluntary or flexible benefit.

Avoiding a Debt Crisis, Eh? Lessons From Canada

The Foundry

Paul Bremmer 

Congressional lawmakers met last week to try to hammer out a deal to avert the fiscal cliff. Democrats insist on revenue increases as part of such a deal, saying new revenue is the only way to significantly reduce the national debt. However, it is not a lack of revenue that is driving U.S. debt; it is unrestrained federal spending. American lawmakers looking to solve America’s looming fiscal crisis need not look further than Canada.

Highlighted at a recent Cato Institute conference, our neighbor—and competitor—to the north serves as a good example of what it takes to return to a strong economy. The Great White North has turned around its fiscal situation and is now experiencing financial stability and economic growth.

In Canada, federal spending has been trending downward since 1993, according to Cato’s Chris Edwards. Canadians have cut spending in virtually every area except health care. The federal government now accounts for only 38 percent of total government spending. In the U.S., by contrast, the federal government accounts for 71 percent of total government spending.

The Canadian government, among other changes, altered benefit schedules for the Canadian Pension Plan to reduce the total amount of benefits paid.

In a similar vein, The Heritage Foundation suggests a variety of benefit changes to Social Security that would strengthen the program’s finances, for example, by raising the eligibility age slightly and replacing cost of living adjustments with the Chained Consumer Price Index for a more targeted measure of inflation in consumer goods. Bolder changes include gradually introducing a flat benefit that targets scarce resources to those seniors who need them the most and provides all seniors with protection from poverty in retirement.

Canada also cut corporate income tax rates. The U.S. has the highest rate among its competitors in the industrialized world. The combined federal and state corporate rate in the U.S. is over 39 percent. Canada now has a combined rate of only 25 percent.

Contrary to popular expectations, lower corporate tax rates have not resulted in significantly reduced corporate tax revenue in Canada. Instead, corporations based in Canada have reported more income since lower tax rates went into place. And Canada is experiencing low unemployment and a strong Canadian dollar.

The Heritage Foundation’s New Flat Tax would replace today’s complex tax system for individuals and business with a simple, neutral, and transparent tax system that would allow America to achieve its full economic potential.

Europe has not followed Canada’s example, and the resulting severe debt crises are sending people to the streets in an outbreak of violent protests. Out-of-control government spending and deficits have resulted in massive borrowing, which has led to bailouts for many European countries.

High levels of spending on social welfare programs are at the heart of the problem. Greece, for example, spent 42 percent of its federal budget on social benefits in 2009, according to Aristides Hatzis from the University of Athens. Spain is slated to spend 63 percent of its budget on social expenditures in fiscal year 2013, according to Pedro Schwartz from Universidad San Pablo CEU.

Here in the United States, we have all the ingredients necessary to create a similar debt crisis in the not-so-distant future. Over the past four decades, federal spending has increased 288 percent, nearly quadrupling in real terms. Thirty-two cents out of every dollar spent was borrowed in 2012. Debt held by the public is a staggering 73 percent of GDP, and our government has run trillion-dollar budget deficits four years in a row.

In less than 10 years, the U.S.’s publicly held debt will surpass the size of the entire U.S. economy and is projected to continue skyrocketing from there. (continues below chart)

To make matters worse, there is a dark demographic cloud on the horizon. In all Western nations, the proportion of older people as a share of the population is increasing. In the U.S., baby boomers are increasingly reaching retirement age, and in Europe, fertility rates are well below replacement level. As the populations of these countries age, entitlements will eat up an ever-increasing share of federal spending and place a greater strain on a smaller share of working-age taxpayers.

Solving America’s spending and debt challenges is possible. Canada’s example illustrates some of the steps this will take—including major cuts to federal spending, tax reform, and entitlement reform. If our leaders can find the courage to pursue this path, we can avoid an economic collapse and Save the American Dream. 

---------------------------
Paul Bremmer is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm.

Stephen Colbert on Windsor-Canada: ‘Earth’s rectum’

If it turned out that Stephen Colbert was raised in Windsor, Ont., and was bullied on the playground by toddler-sized figures who grew up to be among the border city's political and business elite, would anyone be surprised?

Colbert, the tongue-in-cheek political commentator, has made his opinion of Windsor well known, taking a jab or two and the city, most recently calling it "Earth's rectum."

A quick reminder that five years ago, Colbert called Windsor "the worst place on earth" on his television show The Colbert Report. At least he's getting more specific.

Colbert's bittersweet infatuation with the city, which borders Detroit, returned to the spotlight with the recent release of his book America Again: Re-becoming the Greatness We Never Weren't.

CBC reports that while discussing the harnessing of geothermal energy, the author explains that we must first take the earth's temperature with a geothermometer.

"And I have no idea where the Earth's rectum is," Colbert writes. A footnote helpfully explains that earth's rectum is in fact Windsor, Canada.

If Windsor is the rectum, the question remains what Detroit would be — which sits directly north of the Ontario city? The Cadillac Tower just got a whole lot more interesting.

The Cadillac Tower, for those who don't know, is a skyscraper in Detroit — a city that, it turns out, has a distinct lack of notable tall buildings (to be fair, it is cold in Michigan so there may be some shrinkage).

Windsor Mayor Eddie Francis told the Windor Star that Colbert could have been talking about one of the other Canadian cities named Windsor, which can be found in Newfoundland, New Brunswick, Nova Scotia and Quebec.

Francis told the Star:

Windsor, Canada that's generic . . . he must be talking about the other Windsors. I'll be sure to call the other mayors to let them know they were mentioned by him.
He wasn't talking about us this time, that's nice to know.

The comedian (whose television persona bleeds the colours of the American flag) could have been taking a poke at somewhere else in Canada. He has done it in the past, mocking the noble beaver, our currency and the Vancouver Olympics.

He has called us "syrup suckers," "ice holes" and has referred to our country as a scourge of "fiscal sanity." And, frankly, most of Canada has embraced the comments for what they are: satirical and humourous jabs.

Toronto war memorial defaced in ‘hate crime’

Jenny Yuen ,Toronto Sun

TORONTO - Toronto Police are calling the vandalism of a west-end war memorial “a hate crime.”

A woman walking Sunday night by the sculpture in Coronation Park — at the foot of Strachan Ave. and Lakeshore Blvd. W. — called police after noticing someone had taken a black marker and written “Canada will burn; Praise Allah” on the memorial.

“This is an identifiable group,” Det. Anthony Williams told reporters at the scene Monday. “The veterans should be respected. That’s a total disrespect for our sworn members and military members who have made the ultimate sacrifice.”

At the Remembrance Day ceremony at Old City Hall Sunday morning, anti-war protesters were heard chanting during the two minutes of silence.

Williams said he couldn’t speculate whether the vandalism was protest-related.

“I can’t speculate as to what their motivation is, but if they did this on Nov. 10 or 11 … someone is looking for an opportunity to draw attention to themselves,” he said.

City cleaners scrubbed the black letters off the memorial.

George Murphy, 72, whose father fought in the Battle of Monte Cassino and in Normandy during the Second World War, teared up looking at the monument.

“I think it’s terrible to see them destroy what these veterans have done for us,” he said. “It’s like stepping on them. These people wanted to protect our lives. My father would be very upset over this.”

John McEwen, 67, who built the memorial in 1995, said the monument symbolizes the range of languages in Canada and recognizes the 50th anniversary of the Second World War and the military contributions of Canadians.

“Do I take it personally? No, and I don’t think the veterans should take it personally,” he said. “Stupidity isn’t even politics. Stupidity is ignorance and ignorance is an indulgence in a place where you don’t know what’s going on.

“If you had any political agenda you were trying to serve, it’s just wasted.”

Mayor Rob Ford said he was sickened by the news of the war memorial being defaced.

“It really, really bothers me,” Ford said at City Hall on Monday.

“For someone to stoop to that level … people have sacrificed their lives for us to be here. It makes me absolutely sick.”

Mischief and vandalism charges could be likely, Williams said, but there “are provisions for higher penalties when they are designated as a hate crime.”

Officers were also investigating a sign at a lifeguard’s post near the memorial, which had “Holy Jihad” written in black marker, to determine if there was any connection with the vandalism found on the memorial.

Police urge anyone with information to call 416-808-1400 or Crime Stoppers at 416-222-TIPS.

Libya claims stake in Saadi Gaddafi’s $1.6M Toronto condo

Tyler Anderson/ The condo building at 10 Navy Wharf Cr. that houses the condo owned by Saadi Gaddafi.

National Post

Saadi Gadhafi speaks during a press conference in Tripoli, 2010. The Libyan government has set its eyes on a deluxe apartment in the Toronto skyline.

A lavish lakefront condo owned by the son of toppled despot Muammar Gadhafi has been claimed by Lybian authorities that assumed control of the North African nation following an uprising that deposed the government last year.

The National Post reports the Libyan government has filed an application with Ontario's land registry office claiming ownership of the condo owned by Saadi Gadhafi.

With the help of the United Nations, Lybia has been moving to reclaim the Gadhafi family's billions of dollars worth of international assets, claiming they are the rightful property of the Libyan people.

Tim Wimborne-Reuters/Saadi Gaddafi, the third son of Muammar Gaddafi, in 2005.

Saadi's Toronto condo had apparently went unnoticed until the National Post's Stewart Bell reported on it in December.

Saadi, the former leader of Libya's Special Forces and once-footballer, has already been ordered to turn over the keys of an eight-bedroom British mansion reportedly purchased with Libyan oil funds.

According to BBC, Saadi, considered the playboy and black sheep of the Gadhafi clan, was granted asylum in Niger after his family's government was toppled last year. An effort to smuggle him into Mexico was stopped by that government in December.

Michael Lamb, a real estate law professor at the University of Western Ontario, told the Post that Gadhafi cannot sell the Toronto condo until the Libyan government's claim has been dealt with in court.

He was probably waiting for the housing market to turn around, anyway.

Polish Plane Crash, GeoUNgineering, Internet Surveillance

corbettreport Welcome to http://NewWorldNextWeek.com - the video series from Corbett Report and Media Monarchy that covers some of the most important developments in open source intelligence news. This week:

Story #1: Poland Denies Explosives Found on Wreck of Crashed Jet
http://ur1.ca/aqx1z
'Key Witness' In Polish Presidential Plane Crash Dies, Suicide Suspected
http://ur1.ca/aqx27
Plane Crash Timeline
http://ur1.ca/ar0zk
Flashback: Polish President Dies in Jet Crash in Russia
http://ur1.ca/aqx2c

Story #2: Ocean Fertilization Experiment to Make Waves at UN Meeting
http://ur1.ca/aqx2j
Harper Government Talks Tough on Haida's 'Rogue Science' Experiment
http://ur1.ca/aqx2q
Ocean-Fertilization Project Off Canada Sparks Furore
http://ur1.ca/aqx2w

Story #3: Police Need 'New' Internet Surveillance Tools, Say Chiefs
http://ur1.ca/aqx31
Canadian Police Urge Parliament to Pass Domestic Spying Bill
http://ur1.ca/aqx37
Wikipedia: Protecting Children from Internet Predators Act
http://ur1.ca/aqx3e

Videos Show 'Dehumanizing' Treatment Of Teen Ashley Smith

Videos of teenager Ashley Smith taken in the months before she died in a prison cell show the teen was subjected to “degrading and dehumanizing” treatment, her family’s lawyer told a coroner’s hearing in Toronto Wednesday.

Julian Falconer led the hearing through the video clips shot prior to Oct. 19, 2007, the day the New Brunswick teen died from strangulation after tying ligatures to her neck in her cell at Grand Valley Institution for Women in Kitchener, Ont.

Corrections Canada had gone to court to try to block the videos from being made public, but lost the case. Falconer is now fighting to have the videos played in front of a coroner's jury.

"To people who think this can't happen in Canada to a mentally ill 19-year-old, you know a picture speaks a thousand words. I'm embarrassed to be Canadian when I look at that video," the lawyer said outside the hearing.

In one of the videos, the 19-year-old is seen on an RCMP plane being transferred from a correctional service psychiatric facility in Saskatchewan to one in Quebec.

Smith is wearing two mesh hoods to stop her from spitting.

The RCMP co-pilot can be seen duct-taping her hands together and then to her seat. He then threatens to duct-tape Smith’s face if she does not behave.

“This is how the [correctional service] does business in transferring a victim,” Falconer said.  Read more on  CBC.ca >>

'Frankenstorm' headed to Canada

Toronto Sun

The northeastern U.S. will feel the brunt of Hurricane Sandy as it churns north this weekend, but huge chunks of Canada are expected to take a hit as well.

"As many as 23 million Canadians stand to be affected by this storm," said meteorologist Mark Robinson at the The Weather Network. "That's 70% of the country.

Tropical cyclone Sandy revved back up to hurricane strength on Saturday as it churned toward the U.S. northeast coast where it threatens to become one of the worst storms in decades.

The late-season storm has been dubbed "Frankenstorm" by some weather watchers because it will combine elements of a tropical cyclone and a winter storm and is expected to reach the U.S. coast close to Halloween.

On Saturday , Environment Canada said southern and eastern Ontario and western Quebec will be hit by the heaviest rainfall, possibly reaching between 50 to 100 mm by Tuesday.

The agency said heavy rain could also affect parts of the Maritimes and possibly turn into snow over parts of south-central Ontario and western Quebec as temperatures near the freezing mark north and west of the storm.

Normally, large hurricanes like Sandy hit Canada's east coast the hardest, clipping the Maritimes and Newfoundland.

But meteorologists say a high-pressure system over the Maritimes will likely block Sandy's advance and push it into the mid-Atlantic states on late Monday or Tuesday.

"One of the reasons Sandy is making news is because it could be hitting some of the most heavily populated areas in Canada and the U.S.," said Robinson.

South of the border, the storm threatens torrential rains, high winds, major flooding and power outages a week before U.S. presidential and congressional elections.

Republican presidential candidate Mitt Romney cancelled a rally scheduled for Sunday evening in Virginia Beach, Virginia, while Barack Obama's re-election campaign announced that Vice-President Joe Biden had also cancelled a Saturday trip to that city.

"Sandy has the potential to bring significant storm surge into major cities, like Manhattan. In a worst case scenario, New York City could be inundated with up to three metres of storm surge water. That would put some of the most valuable real estate on the planet under water."

Environment Canada said powerful winds will also affect central and western Quebec and gusty winds can also be expected in the Maritimes.

On its current projected track, Sandy could make U.S. landfall on Monday night or Tuesday somewhere between North Carolina and southern New England, forecasters said.

The storm has the potential to cause widespread power outages and to unleash flooding and even dump snow as far inland as Ohio. It also threatens to disrupt air travel along the U.S. east coast.

Sandy has been blamed for 41 deaths in several Caribbean countries, including 11 in Cuba. Most were killed by falling trees and building collapses.

IMF chief hails Canada as economic model for the world

Financial Post

TORONTO — The head of the International Monetary Fund says measures taken to protect Canada’s economy should be a model for countries trying to fix their financial systems.

Christine Lagarde said Thursday that Canada has been a leader in creating policies intended to rein in the build-up of household debt.

“Abroad, Canada is identified by its values of co-ordination and consensus building, which have given your country influence beyond its years,” she said. 

“Building a safe and stable financial system is in the best interests of the global community, but it also serves the self-interest of nations,” she added.

Lagarde made the comments at a dinner held in Toronto by the Canada International Council — an organization created to promote Canada’s position on the world market.

She pointed to the decision by Finance Minister Jim Flaherty to boost down payments on new mortgages for homebuyers as an example of restraint that others should follow.

“All of these new reforms comprise the tools so far that will help us shape the future financial system,” she said.

“We must shape the system so it cannot again hold us ransom to the consequences of its failings.”

Lagarde’s speech focused on global financial reforms that while “heading in the right direction,” still haven’t delivered the safer financial system they were designed to create.

“Some financial systems are still under distress and crisis-fighting efforts are inadvertently impeding reforms,” Legarde said.

She singled out Basel III requirements as one of the financial reforms that had “generous implementation timetables,” that have been in development since 2010.

Under the proposed Basel III rules, a bank’s required capital levels must meet certain requirements, amongst other standards. The intention of the rules is to set a standard on key measures of a bank’s health and its ability to endure future economic downturns.

“There are many vested interests working against change and pushback is intensifying,” Legarde said.

“It is interesting how some banks say the new regulations will be too burdensome, but then spend hundreds of millions of dollars lobbying to kill them.”

Canadian banks have been proactive in reinforcing their balance sheets to meet the Basel III requirements ahead of schedule, and are widely considered a model for international banks because they weathered the global recession better than others.

“Most countries have committed to adopt some or all of the new regulations, and some have moved further ahead with their own national policies,” Lagarde said.

“The challenge now is to proceed to the end of the reform path all together.” More >>