Prime Minister Paul Martin [. . . .] He should fire its president, Michel Vennat, over this and the two other scandals in which he was involved. Then he should order a thorough, independent investigation of the financial institution's management, expenses and loans, followed by an immediate privatization.
The bank (BDC) has been a sewer for years and has been used as a piggy bank and patronage haven for Liberals dating back to the mid-1990s. New revelations just underscore suspicions that billions in loans over the years have been handed out for political, not financial, reasons.

The bank should have been privatized ages ago.

[. . . .] That's because there's probably much, much more to the Business Development Bank of Canada story, which is why it should be turned upside down to find answers to obvious questions: How many loans from this bank have been given to important Liberals, their relatives, friends, constituents? How many loans have been on sweetheart terms and why? What proportion of loans have gone to Quebec or certain Cabinet minister's ridings compared to the rest of the country? How many bad loans have been quickly forgiven and why? What have the patronage appointees done to justify their salaries and expenses?

These questions and others should be addressed by a special investigator using the services of real bankers who can truly evaluate the wisdom, and value, of what the BDC has done during the Chretien era.

TORONTO — Hydro One gave $5.6-million in untendered contracts to four of the top Progressive Conservatives in Ontario, including some of the closest personal advisers to former premiers Mike Harris and Ernie Eves.

But the utility is refusing to reveal details about most of the work that the individuals or their companies did for the money, saying this would divulge commercial secrets or sensitive advice given to the government.

The contracts, obtained by The Globe and Mail through the Freedom of Information Act, went to Leslie Noble, the co-chair of the Conservative election campaign; Paul Rhodes, communications director of the election campaign; Michael Gourley, a close adviser to Mr. Eves; and Tom Long, a senior Conservative strategist.

They included monthly payments of up to $40,000 for corporate entities associated with Mr. Gourley, $15,000 to Mr. Rhodes, and $13,000 for Ms. Noble.
Mr. Rhodes collected $335,237 for 18 months' work, but also included was a lump sum of $56,000 for what the utility said was "strategic communications advice." Ms. Noble's firm, StrategyCorp. Inc., received $250,980.

[. . . . ] The Conservative government had exempted the utilities from the freedom of information law, arguing that they would face competitive disadvantages if their records became public. The Liberals overturned this policy, saying the companies would be more accountable if their records were open to scrutiny.

[. . . . ] The contracts and computer printouts of the payments the utility made to the individuals' companies were obtained by The Globe, but the utility refused to release the records the Conservatives produced while working.

[. . . . ] Several of the contracts said the Conservatives were working on what was termed the "Market 2000 Project," the code name within the utility for the government's plan to privatize the electric-grid operator.

Hydro One has recently reviewed its executive recruitment contracts and no longer uses Egon Zehnder, according to Mr. McKay.

[. . . . Note the buzz words that follow:] executive training . . . transformation through leadership [. . . .]

Hydro One also hired Mr. Gourley as its primary Pricewaterhouse consultant to advise on its privatization.[. . . . ]

THE CONTRACTS
Gourley: $3.7 million for two firms he is part of to provide advice on privatization
Long: $1.3 million for two of his firms to do head hunting and consulting
Noble: $250,000 to assess and build support for investing in Hydro One.
Rhodes: $335,237 to develop PR and communications strategies

[. . . .] While Paul Martin sets about cleaning up the scandal left behind by his predecessor, Ralph Goodale has a similar problem . . . . And let's see, who were the scoundrels who drove those unacceptable rates of growth? First to blow the roof off spending was Mr. Martin, finance minister when Ottawa boosted spending 8.3% in 2000-1, after forecasting an increase of 2% in his budget for the year. As the graphs show, Mr. Martin was followed by Mr. Manley, who continued a major spending binge. They also initiated a new round of civil service expansion. Soon, Ottawa will be back up to peak staff levels of more than 400,000.

[. . . .] There's no magic formula that says Ottawa, the provinces and local governments are entitled to a fixed share of every $1 gain in economic growth. They now, as a group, collect about 42% of every dollar of growth, through a marauding national tax machine that imposes distortions all over the economy.

[. . . .] Economists cite studies by the IMF and other groups to prove that high levels of government involvement reduce incentives to work and invest, impair growth, and hamper productivity.

[. . . .] How much of Canada's dismal productivity performance can be pinned on a tax regime that punishes investment and growth? I can't pretend to answer that and other questions about the destructive impact of high taxes and high levels of government involvement in the economy. Logic leads to the conclusion that taxation corrodes the economy. The article by Finn Poschmann and John Richards tells a tiny story of how perverse tax rules, that create 60% marginal tax traps, discourage the lowest paid Canadians from improving their economic fortunes.

[. . . . Few] know how severely the national tax regime undermines the economy, mainly because there are few official attempts to examine how these high tax levels undermine the economy. High tax levels, while distortionary in themselves, are a function of big government, an even bigger cause of unproductive activity and lower growth. The taxes mess up decision making as they are collected by government, then governments distort the economy again as they spend the money they've collected.

Where's the Bank of Canada on this? [. . . .]

Of all the institutions in Ottawa, the Bank of Canada should be the first to tackle the role of government and taxation in the economy.

Ottawa — The federal government's plan to decriminalize pot possession would free up millions of dollars and thousands of police hours, the latest statistics suggest.

Police laid a record number of drug-related charges in 2002 and most offences involved marijuana, Statistics Canada reported Monday.

Seventy-five per cent of 93,000 drug-related incidents in 2002 involved pot. Almost three-quarters of those were possession offences, and more than half of those convicted were fined.

"The police-reported drug-crime rate has risen an estimated 42 per cent since the early 1990s and now stands at a 20-year high," the agency said.

The numbers highlight a rift between police, who support tight enforcement of pot laws, and more tolerant attitudes by the public, politicians and the courts.

The statistics were released as MPs on Parliament Hill began to debate a bill to decriminalize possession of less than 15 grams of pot — about 15 to 20 joints.
Instead of a criminal record, the bill proposes fines of between $100 to $400.

[. . . .] The decriminalization bill is needed to level the pot enforcement field across Canada, Liberal MP Wayne Easter argued Monday in the Commons.

"In some areas you get a slap on the wrist, in other areas you get a criminal record."
The Statistics Canada report also found that, between 1992 and 2002, about one in 10 homicides involved trafficking or the settling of drug-related accounts. Sixty per cent of those killings involved cocaine, 20 per cent were linked to pot, 5 per cent to heroin and 15 per cent to other unspecified drugs.

The rate of drug-related incidents was highest in B.C., followed by Saskatchewan and New Brunswick.

Among metropolitan areas in 2002, the highest rates of police-reported drug offences were in Thunder Bay, Ont., Vancouver, and Victoria.

Most charges involved young adults aged 18 to 24 followed by youths aged 12 to 17.

London — Lawyers working for seven men who were kept in a Saudi jail for 2½ years, including Canadian Bill Sampson, have begun legal proceedings in an attempt to sue Saudi officials they say were responsible for their torture.

Arguments in the lawsuit will be heard May 7 in Britain's High Court as the men try to establish that they have the right to sue Saudi Arabia's Interior Minister, the deputy governor of the jail in which they were imprisoned and their two torturers.

At the hearing in May, lawyers for the men will try to establish that they should be able to sue the four Saudi men because it is not clear whether British law allows lawsuits against foreign nationals.

[. . . .] In a separate lawsuit, British businessman Ron Jones was denied permission last year in the High Court to sue the Saudi government for damages.

Canada's army, navy and air force are facing a funding shortfall of up to half a billion dollars, defence sources told the National Post, and the military is recommending drastic measures to make up the difference, including closing some of the largest bases in the country.

[. . . .] Unless additional funding is awarded by the government, the air force is suggesting closing bases at Goose Bay, Nfld., Bagotville, Que., North Bay and Winnipeg, the sources said.

[. . . .] Col. Marsh said the military is saddled with ageing bases and increasingly dilapidated buildings that are fast reaching the point of collapse. "What they've been doing, year in and year out ... is not replace or repair those buildings, or buy new equipment," he said.

"The average age of the equipment in the Canadian Forces is over 20 years and it hasn't been well-maintained."

The Liberal government reduced defence spending by 23% and cut the number of regular military personnel to approximately 60,000 from 80,000 between 1993 and 2000. There were 120,000 people in the Canadian military in 1958.

In 2003, the defence budget was increased $800-million to $12.7-billion, the single largest increase since the Liberals came to power. But that still left the total below that of 1991, when the Mulroney Conservatives committed troops to the Gulf War and the defence budget stood at $12.8-billion.

Jay Hill, the Conservative defence critic, said the reports outline the result of more than a decade of Liberal cuts to the Canadian Forces.

[. . . .] They were the basis for a story last year in Jane's Defence Weekly, the prestigious London-based magazine, which caused a furor in Canadian and NATO defence circles. Under the headline "Running on Empty," the story said the army, navy and air force did not receive the money they needed.

The Arabic version of Big Brother came to the Middle East on Saturday night, and already it has caused a scandal.

Bahrain's Information Minister has been called before parliament to explain why contestants on the reality TV show greeted each other with a kiss in its opening episode. Angry lawmakers claim the producers are flouting Islamic values.

[. . . . ] Twelve strangers -- six men and six women -- are isolated in a house with cameras capturing their every move. Typically, sexual sparks fly and under-the-cover romps are captured through night-vision lenses in bedrooms.

The producers of the Arab spinoff, Al Rais (The Boss), have introduced many concessions to local standards. Their version of the show keeps the men and women largely segregated; the bedrooms are strictly unisex; there are separate men's and women's prayer rooms, bathrooms and lounges.

Male and female contestants mingle in only four areas of the specially constructed house on Bahrain's Amwaj Island: the dining room, the garden, the kitchen and the living room.

THE HAGUE - Canada has a big stake in what happens in The Hague
As a middle power dedicated to multilateralism, Canada agreed to join and be part of international organizations to protect our interests and values when they are focused beyond our borders. The integrity of these organizations is therefore paramount.

Yesterday, the International Court of Justice (ICJ) in The Hague began its hearings on Israel's security fence. Canadians should be very concerned that the reputation of the court might be seriously compromised if it allows itself to be drawn into what is fundamentally a political dispute.

[. . . .] The question asked for an advisory opinion on the "legal consequences arising from the construction of the wall being built by Israel, the Occupying Power, in the Occupied Palestinian Territory." The question is biased and one-sided, and contributes nothing positive to the cause of peace

[. . . .] The case raises serious problems. There are significant jurisdictional issues between the Security Council and the General Assembly, and the court lacks an institutionalized fact-finding process. But the real problem is that this case could lead to the manipulation of an important judicial institution for purely political purposes.

[. . . .] Outside the atmosphere was almost carnival-like. The Palestinians and their supporters were demonstrating. They were joined by anti-globalization advocates and those accusing the United States of causing international terrorism. Signs and banners called for the dismantling of the "apartheid wall," the end to "concentration camps" in the West Bank, and the boycotting of Israeli products. Everyone was playing to the television cameras. The court proceedings seemed incidental. Again, this was pure politics -- just another occasion to take to the streets and capture some media attention.

[. . . .] The international roadmap demands an end to terror as the essential condition for the resumption of direct negotiations between Israel and the Palestinians. Until that happens, Israel has no choice but to defend its citizens by building a security fence. The attempt to substitute the proceedings of the International Court of Justice for the obligation to halt terror does a disservice both to the court and to the cause of peace.

[. . . .] Ottawa's focus has tended to deliver ever more progressivity in the tax burden. Not necessarily a bad thing for those of us who think only positively about things labelled progressive, but it has been bad in general for tax policy. We have arrived at a taxable-income definition that does not properly reflect different families' abilities to pay tax.

As far as the tax system is concerned, the costs of raising children among middle-income families like Ujjal's are no different from the non-deductible mooring costs of some other family that decides to buy a large yacht and forgo kids. Most other countries consider that, regardless of income, the tax base should at least partly recognize the nondiscretionary costs of raising children by means of tax credits or deductions not available to childless couples with more discretionary income.

In principle, there are two solutions. We can reduce the income-tested transfers for low-income families: Lower benefits can mean lower clawbacks. Or, we can target tax support less aggressively: A combination of a child or dependant deduction from net income and reduced benefit clawback rates produce more sizeable benefits for Ujjal's family. We favour the second approach.

This approach is, in effect, a tax reduction targeted at middle-income families with children. To do something meaningful to reduce very high clawbacks, Finance Minister Ralph Goodale needs to commit significant resources to tax reform.

Expensive? Yes, to the federal treasury, but with the benefit of more money in the hands of workers. Is it worth forgoing other attractive items on Goodale's pre-election shopping list to start the project? Yes. When the baker takes home less of her incremental pay than the banker, we have run far awry -- and we can do better.

An Egyptian-born Canadian believed to have connections to al-Qaeda ally Ahmed Khadr is being detained by authorities in Egypt after he was taken into custody on his way home from a religious pilgrimage.

Foreign Affairs officials in Ottawa say they heard almost immediately that Helmy Elsherief, a 63-year-old Toronto man, had been taken into custody two weeks ago, but have so far received no information from Egyptian authorities about the reasons behind the detention or where he is being held.

[. . . .] Mr. Elsherief, who runs a bookstore at a mosque in Scarborough and was the former principal of the Salaheddin Islamic School in the Toronto suburb, is the third administrator from the school to be held and questioned for suspected terrorist links.
Ahmed Khadr, the Egyptian-born Canadian with suspected ties to Osama bin Laden and the Taliban, worshipped at the Salaheddin mosque when his family lived in Toronto.

[. . . .] Mahmoud Jaballah, who took over as the principal of the Islamic school when Mr. Elsherief moved to the bookshop, has been held in a Toronto prison for more than two years on a national security certificate.

Muayyed Nureddin, an Iraqi-born Canadian who took over as principal after Mr. Jaballah was detained, was held in custody in Syria for about a month after he was detained on his way home from visiting relatives.

Mr. Elsherief was abroad on a hajj pilgrimage in Saudi Arabia with other Canadians on a trip organized by the imam of the Scarborough mosque, Aly Hindy.

OTTAWA - Some U.S. groups suggest Canada will see a new Vietnam generation after a U.S. soldier refusing to fight in Iraq claimed refugee status in Canada.

Jeremy Hinzman, a private in the 504th Parachute Infantry Regiment, fled Fort Bragg in North Carolina in January, taking his wife and 18-month-old son, Liam, with him to Toronto only days before his regiment was to leave for Iraq. On Thursday, he filed a personal information form with the refugee board, outlining his reasons for claiming refugee status.

While Mr. Hinzman is believed to be the only U.S. soldier to be seeking refugee status, organizations in the United States say numbers of conscientious objectors in the ranks of the U.S. military are growing -- and some are looking to Canada.

Some believe the war in Iraq has touched a nerve in the military. But others add this has been compounded by resentment over the army's "stop-loss" orders, which have extended the service of some troops and reservists. The extension has angered some troops.

"Canada was attractive during the Vietnam War. Americans are seeing it again as a reasonable community of people willing to provide sanctuary," said Marti Hiken, head of the Military Law Task Force of the National Lawyers Guild.

KIRKUK, Iraq [. . . .] U.S. officials have said foreign Islamic militants may be behind the bloody series of bombings, pointing to an intercepted letter believed to be from a Jordanian militant in Iraq, Abu Musab al-Zarqawi, to al-Qaida leaders in Pakistan or Afghanistan.

The letter, made public by the military this month, outlined a strategy of attacks aimed at derailing U.S. plans to hand over power to Iraqis on June 30. It said insurgents would target Iraqi "collaborators," as well as Iraq's Shiite Muslim majority in an attempt to spark a Sunni-Shiite civil war.

Some military officials, however, have pointed to Iraqis loyal to the ousted regime of Saddam Hussein as possibly behind the attacks. Guerrillas have been waging a campaign of shootings and roadside bombings against U.S, troops, particularly in the so-called Sunni Triangle in central Iraq where Saddam had strong support.

OTTAWA - The Liberal government was warned as early as 1996 of serious ethical and management abuses in the awarding of advertising contracts at Public Works and an independent internal audit in June, 1997, drew similar conclusions that were ignored at the highest levels, senior officials say.

A senior Public Works official rang the alarm bells in 1996 that Liberal-friendly advertising firms in Quebec were billing for work that was not done and had won lucrative contracts without competition and that documents were backdated to hide the abuses.

The Chretien government did commission an internal audit, but its findings were largely disregarded and the official who complained about the abuses was later threatened and almost fired, senior government sources say.

The Ernst & Young audit -- completed in 1997 -- exposed a trail of administrative and ethical wrongdoing in the awarding of ad contracts, although it "found no instances where non-compliance might have led to situations of personal gain or benefit" within the public service. The audit was turned over to the Privy Council Office , as is the normal practice, and the Prime Minister's Office was alerted, senior officials say.

The official in charge of the advertising program at the time was Chuck Guite, who was promoted to run the $250-million sponsorship program that Auditor General Sheila Fraser condemned in her scathing report and is now the subject of 18 RCMP investigations.

[. . . .] "I am very surprised that Public Works says that this [sponsorship scandal] started in 1997 because they knew it started in Dec. 4, 1994, when Mr. Guite was given the procurement authority as well as the decision-making as to who the firms were," the official said.

Alastair Ralston-Saul has resigned as chief executive and director of Gulf International Minerals Ltd. after admitting he misappropriated company funds, the company said in a press release issued late yesterday.Mr. Ralston Saul, who is the older brother of noted Canadian author John Ralston-Saul and brother-in-law of Governor General Adrienne Clarkson, stepped down after admitting that he misappropriated about US$30,000 from Gulf International, the company said in its release.

[. . . .] Mr. Ralston-Saul, 59, grew up in Kingston and Toronto and after high school moved to Britain to attend military college. Following graduation he joined Britain's elite Parachute Regiment and saw combat in the Aden War in the 1960s. He remained in England after his military service, eventually working in civil engineering.

He joined Gulf in 1996, but soon came into conflict with the company's previous management. In November, 1998, he successfully overthrew the company's former executive team in a proxy battle.

[. . . .] John Ralston Saul joined Gulf International's board after his brother cleaned house in 1998. He resigned the following year when his wife took up duties at Rideau Hall.