The Alberta Sovereignty Act - First Thoughts

 Yesterday, Danielle Smith tabled the “Alberta Sovereignty Act”.  

I haven’t read through it all yet, but like the rest of you, I’ve seen the commentary in the news, and to be kind, it’s terrifying. 

In essence, it pushes the processes of legislating laws into the hands of the Governor in Council (AKA Cabinet).  Smith is granting herself the powers that a monarch used to hold - back before the Magna Carta was a thing.  

If that doesn’t terrify you, perhaps it should. This isn’t a bill designed to “fight back against overreach from Ottawa”, it’s a bill designed to strip the citizens of Alberta of a democratic system of government. At first glance, there is very little in the form of checks and balances once the legislature “passes a motion” putting a particular issue in the hands of cabinet.  Cabinet can then go off and change laws as it sees fit, and there’s no visibility, no accountability, not even so much as a pro forma vote in the legislature afterwards. 

The ability to change legislation from within cabinet expands the powers held under “Order in Council (OIC)” enormously. Nominally, OIC is reserved so that cabinet can make spending decisions, or respond to emergencies without recalling the legislature. Now Smith is granting herself the power to change laws outside of the legislature. 

Even if I were to make the naive assumption that Smith is a “good faith actor” in this case, that level of power with no effective check on it remains intrinsically dangerous. It is far too easy to sway one or two people - or even a group the size of our current cabinet that a particular change is needed to a law.  I’ve sat in enough boardroom meetings to understand how one manipulative person with a nasty agenda can turn a room to exactly the wrong decision. 

How long do you think it will be before the various factions that make up the UCP start pushing for motions to forward their various agendas.  For example,  they could decide that legalizing gay marriage was an “infringement” on Alberta somehow, and then demanding that the cabinet amend Alberta laws to prevent the issuance of marriage licenses to LGBTQ+ couples.  

Or perhaps, someone decides that it’s a “bridge too far” that S15 of the Charter guarantees equality for women, and convinces cabinet that women’s rights should be restricted - and only women who are married should be allowed to vote. I wish I was just kidding, but I’ve actually seen arguments from some corners for exactly this.  

Any and all manner of legislative chicanery can be done when you turn the legislative process into something that only takes place behind closed doors.  

If you’re not scared yet, let me draw your attention to legislation that the UCP has already passed, or tried to pass, and let you sit with that: 

1. The Administrative Penalties Act - basically this law strips you of recourse to the courts if you get a ticket for something you think is unjust. It makes police, peace officers, and other officials who can issue tickets “judge, jury, and executioner” - this law is problematic enough on its own. 

2. Conscience Rights - Although this one was eventually defeated, it was designed in such a way as to make it much harder for women and LGBTQ+ people to access healthcare - especially in rural centres where options are already limited. 

Sit with that and consider just how much more dangerous things could become when the Governor in Council can legislate without any kind of discussion in the Legislative Assembly. 

WhereIn Andrew Coyne MisCharacterizes Re-Shoring

I have always had an on-again/off-again relationship with Mr. Coyne’s writings. When he sits down and thinks an issue through its logical consequences, he can be incredibly insightful and make some really good points. Then there are the times when he misses the point of what something is because it conflicts with either his suppositions or personal interests. 

His recent commentary on “Re-Shoring” over at The Hub is an example of the latter. Largely, he’s arguing that “Re-Shoring” runs contrary to the principles of “Free Trade”, and the market fundamentalism that says money flows to where it’s cheapest to do certain things. He blithely dismisses the concerns around how countries like China have weaponized their control over certain areas of manufacturing against geopolitical rivals - saying that perhaps we should have “stockpiled more”.

The problem with Mr. Coyne’s arguments is that he is ignoring that modern manufacturing has become increasingly siloed, and runs very much on a “zero inventory” approach to parts.  Part of this is the adoption of so-called “just-in-time” models, where factories order just enough of a sub component for a given day’s production so they don’t have to allocate storage space for spares. (Remember that making its way into automotive manufacturing back in the 1980s?). Further, it’s very rare for any one product to be made solely by one manufacturing facility. The creation of an IOT device like a Raspberry Pi depends on bringing together the output from multiple factories for final assembly in another.  

Advocates of Re-Shoring aren’t saying “we need to make things at home so they are made at home” - far from it. What they are really advocating for is a system where the production of goods and provision of services does not become concentrated in the hands of one or two nations whose geopolitical interests may not align well with our own. Chrystia Freeland has referred to this concept as “Friend Shoring”. 

There are other reasons that having a reasonable base of manufacturing and services provision “at home” makes good sense.  As we have seen in the wake of Putin’s invasion of Ukraine, unbalanced trading dependencies (e.g. Europe’s dependency on Russian natural gas) can quickly become weapons in times of conflict.  If Europe had a more diversified approach to energy over the last 40 years, the odds of Putin being able to weaponize its energy trade with Europe are considerably reduced. Likewise, when we look to China, their chokehold on the production of a lot of computer products creates an enormous danger for both businesses and society elsewhere in the world, and makes it much more difficult to address an increasingly bullish government in Beijing.  

Offshoring took hold in a big way in the 1990s, with so-called “free trade deals” being negotiated all over the place, often between parties who have significant ideological differences. The results of that experiment are clear today, with Russia’s invasion of Ukraine, and China once again actively threatening invasion to annex Taiwan.  

These are not coincidental, or incidental to the doctrine of Free Trade.  They are in fact the logical consequences of assuming that deep trade ties would be a moderating influence on the behaviour of all parties.  This is seldom the case.  Even in the world of North America, where “Free Trade” took hold with agreements struck by Reagan and Mulroney, it is hard to argue that Free Trade agreements have stayed the hand of American politicians when it comes to disputes with Canada or Mexico.  Instead, old “grievances” keep being brought up and punitive actions are taken by the larger partner against the smaller (economically speaking) partner.

We also need to acknowledge that allowing goods and services to arbitrarily be “off-shored” also results in a class of workers who are left behind.  The experience of the so-called “Rust Belt” shows us that we have thought very little about how the movement of manufacturing and services affects real people. It’s easy for a business to look and say “well, your job is redundant now, good luck to you”.  Governments need to look at the societal impact of those decisions.  This isn’t to say that occupations don’t come and go, but rather that when we allow wholesale off-shoring of entire industries, we also do our own citizenry a disservice.  Not everybody is suited to the kinds of jobs that remain, nor are they necessarily given access to the kind of counselling and retraining opportunities that will help make a successful career change. As it stands today, the rise of demagoguery and fringe politics is an indicator of how many people feel abandoned by the shifts going on around them.  The rise of those people in our politics is also a very real threat to the stability of democratic government, as Canada learned with the Convoy protests of 2022. 

The point that Mr. Coyne’s argument misses is that recent events have shown quite clearly that Free Trade as it has been practiced to date results not in a moderation of all parties, but rather a concentration of trade (and thus geopolitical power) in the hands of those willing to take advantage of the assumptions of Free Trade.  Re-Shoring, or even Friend-Shoring, seeks to address the geopolitical imbalances that have been created. In essence it is a move towards a sense of justice in our economies and geopolitical realities. 

On The Public Order Emergency Commission

Public testimony of the commission initiated in the wake of the February 2022 invocation of the Emergencies Act (EA) has concluded this week.

Frankly, there were few surprises in the course of testimony. Members of the Convoy swore up and down that they were just peaceful protestors, policing agencies demonstrated that they were woefully unprepared and ill-equipped to deal with the situation, the conservative-led provincial governments failed entirely to actively engage until forced, and eventually the Federal Government decided that the overall impact required direct action. 

Perhaps the most interesting little piece of testimony came from the head of CSIS who stated that both that he had advised the government to use the EA, and that the situation did not fulfil the requirements of an emergency under the CSIS Act. I thought that was a particularly interesting, and important, piece of information. It reveals that the legislation we have today is a few years out of date in terms of identifying the potential threats.  

However, while the EA and CSIS legislation share the same wording, we can’t say that the threshold is “the same” in part because the “who” of decision making is quite different. The leadership of CSIS is part of the bureaucracy, and makes decisions based on the legislation that guides it, but there are additional safeguards through the political offices that oversee CSIS.  The Emergencies Act empowers the Governor in Council (Cabinet) to make the decisions, with the subtle little clause in it of “on reasonable grounds”.  

You can quibble over whether or not CSIS thought it met their definition of “Public Order Emergency” or not, but we have to recognize that the decision making of the bureaucracy is not the same as that of the elected politicians, and the authority vested in politicians is much different than that of the bureaucrats.

I also think that the testimony at the commission focused solely on the immediate events of the occupation of Ottawa and the various border blockades to the detriment of understanding root causes. This is reasonable given the mandate of the commission as set out in the EA. 

I think there’s a second level of investigation needed regarding these demonstrations. In particular the unwillingness of Premier Ford to testify is profoundly telling. Just as we have Candice Bergen’s desire to make the convoy “Trudeau’s Problem”,  Ford’s unwillingness to testify, combined with his inaction on the Ambassador Bridge blockade indicates to me that there was more going on at the political level that warrants investigation. I suspect that this will be that much clearer when some of the criminal proceedings start to unfold in court. Nobody wants to be hung with the full responsibility when they are facing prison time. 

I fully expect that when we get to the level of following email trails, text messages, and so on, the picture is going to start unfolding that the Convoy protest itself was nurtured and fed from within conservative political organizing circles. If it was “just” about vaccine mandates or masks, I would not have expected the focused anger directed at Trudeau. 

Yet, the protests themselves were covered with anti-Trudeau slogans. Hating Trudeau is an old sacred cow in conservative circles dating back to the 1980s. In today’s conservative circles, you aren’t even seen as conservative unless you become irrationally a angry about Trudeau.  

The protests likely as not are a case of using propaganda to “whip up a mob”, and the real goal was to undermine the elected government to such a degree that it would make it easy for the opposition to vote against a minority government in the wake of what was obviously going to be Poilievre’s coronation after O’Toole’s ouster. Yes, I know full well that O’Toole was still leader at the time, but it would be naive to think that the knives weren’t already out for him after the election.

Crashing Crypto

The latest crash in the crypto markets has unveiled yet another multi-billion dollar scam, and another overnight billionaire has just taken investors for literally billions in now stranded / lost assets. 

 Now, I’m not writing this as a “see I told you so” piece. I’ve already documented my reasons for being skeptical of cryptocurrency. It’s trivial, almost lazy to write an “I told you so” every time Crypto takes another nosedive. Over the last year, BitCoin has shed 75% of its market price. Any company that sheds 75% of its market value is already at death’s door.  

No, today we’re going to talk about something a little different. There’s a reason Crypto keeps crashing, and it’s really little different than what happened in the lead-up to what came to be known as “Black Thursday”.

Markets have “ups and downs” all the time.  These massive swings are not “ups and downs” - these are the result of “markets” which don’t have meaningful boundaries. The so-called “free market” that capitalism relies on actually exists within the greater context of society, or as Rousseau would have referred to it, “The Social Contract”.

Cryptocurrency, in particular, is alienated from the social contract. Aside from its proponents - who are largely strongly libertarian, and inclined toward some fairly radical interpretations of how the world should work - few people understand cryptocurrencies well enough to even begin to consider how those currencies play in society and what boundaries need to exist on that market. 

Think about it for a minute.  Back in the early days of “Town Markets”, there were boundaries. Merchants would hawk their wares in the town square, and people would buy them after haggling over the price, quality, etc.  Back then, what we would call a scammer today, would have to “get out of town in the dead of night” if they were selling dodgy product, or risk facing the wrath of the people or the town watch. 

Cryptocurrency exchanges, hedge funds, etc. are all operating in the relative shadows. There are no real boundaries on what they do once you turn some cash over to them in exchange for a few cryptocurrency bits. In theory, you should be able to reverse the transaction later, but the blunt reality is that these exchanges frequently haven’t got the “cash on hand” to enable you to exchange bits for actual currency you can use. 

The collapse of FTX is very revealing. Cash goes in via FTX, and your account is “credited” with however many units of cryptocurrency you bought.  BUT … after that, it disappears into a labyrinthine maze of “in-house” cryptocurrency tokens, and other holdings that are held by a hedge fund.  In short, the exchange itself is barely a shell - a front if you will. 

Most of us are basically honest people, and will be shocked by that. We think - quite rightly - that the exchange should have bought BitCoin, Ethereum, or whatever else we wanted on our behalf and be holding it in reserve for us.  Or, perhaps operating a bit like banks do, and investing it while holding enough “cash on hand” to deal with normal cash transactions.

Clearly that isn’t what’s going on. 

For years, we’ve heard from the so-called “Free Market Fundamentalists” that less regulation of markets will allow for greater growth, and will be a “good thing” for everybody. The cryptocurrency markets are about as utterly “free” as you can get. You are literally buying and selling “bits”  awarded from solving mathematical puzzles. They are not connected to any real world entity, and the value is utterly arbitrary (like seriously, how is 1 bitcoin worth $16,000USD???)

Herein lies the problem. Cryptocurrency markets are fundamentally not bounded. There is limited transparency at best, and it is rife with “fly by night” scammers as a result. Overnight billionaires spring up, and in the warped bubble of Silicon Valley think, they’re amazingly successful geniuses … at least until the bubble pops and their scam is revealed for what it is. Don’t feel too bad for Sam Bankman-Fried - I’m quite sure that he’s skimmed off enough to live comfortably for the rest of his life, even if he has to spend some of it fending off civil and criminal actions. 

We’ve been down this path before.  Whether it was with the development of currency, or the evolution of the stock markets, or more recently junk bonds and derivatives.  In every single case, they have been incredibly volatile until the government steps in and starts to impose some degree of regulation on the “market”. Usually that is in the form of laws requiring a certain level of transparency and disclosure, limits on the creation and trading of the “security” - be that cash or other forms of, and a number of other things ultimately designed to ensure that dubious schemes don’t get too far. 

Markets have limits, and they work best when they are bounded - and the boundaries have to be established collectively by people. Money and automation are intrinsically divorced from the concepts of morality and ethics - those are human constructs that we must impose on our use of them.