The Round-Up: October 29th 2006

Warming climate opens late-season Arctic routes

Arctic straits that are typically choked solid with ice this time of year remain completely open to shipping traffic late in October, raising profound issues for Canada as it struggles to maintain its grasp on the Arctic.

For the past week, the Canadian Coast Guard scientific icebreaker Amundsen has sailed east from the Nunavut hamlet of Kugluktuk, encountering virtually no resistance through straits that have for centuries been nearly impossible to traverse, even in summer.

"We actually went through Bellot Strait and Fury and Hecla Strait, which nobody has ever done this time of year," said Fisheries and Oceans researcher Gary Stern, who is serving as chief scientist aboard the Amundsen. "There was absolutely no ice."

Natives file suit against pipeline

A legal storm rocked a $4-billion plan to put oilsands production on global markets by building a pipeline from Edmonton across British Columbia to a new supertanker terminal at Kitimat.

Carrier Sekani Tribal Council, a Prince George coalition of eight B.C. First Nations along the proposed Gateway Pipeline route, launched a protest lawsuit today in the Federal Court of Canada.

The legal broadside alleges federal Environment Minister Rona Ambrose failed to consult aboriginal communities properly before setting up a "joint review panel" of the Canadian Environmental Assessment Agency and the National Energy Board to consider the project.

The lawsuit demands a halt to the regulatory process until Ambrose co-operates with the natives, saying her decision fails to comply with years of aboriginal rights rulings by the Supreme Court of Canada.

The B.C. natives want a decision-maker role as judges of the project comparable to aboriginal seats on an environmental joint review panel currently holding hearings on the $7.5-billion Mackenzie Gas Project, Carrier Sekane Chief David Luggi said in an interview.

The Gateway proposal poses risks to natural resources such as water and salmon on territory claimed by the tribes in decades of B.C. negotiations still underway, Luggi said.

Discussions with Enbridge have fallen short of convincing the communities the project will do no harm, he said. The history of pipelines show they are always environmental risks and oil spills are inevitable, Luggi added.

"It's just a matter of time," the chief predicted.

More than four years of talks by Enbridge with about 40 aboriginal communities along the Gateway route will continue to identify their concerns and strive to find ways of responding, company spokesman Glenn Herchak said.

The project remains on schedule for completion in 2010 or 2011 at the latest and Enbridge does not interfere in aboriginal rights disputes between Ottawa and natives, Herchak said.

It is too soon even to speculate on effects of the court case, said Robert Deslauriers, environmental agency communications director Robert Deslauriers said.

Natural Resources Canada has been assigned responsibility for aboriginal rights issues associated with the Gateway project and is setting up a process to consult all the B.C. native communities affected, Deslaurieirs said.

Luggi said he accepted an invitation to meet Natural Resources Minister Gary Lunn in Ottawa Dec. 7. Ambrose should also attend, the B.C. native chief added.

EU set to meet gas emission targets

The European Union is on track to meet its collective target for cutting greenhouse gas emissions, Brussels said on Friday. However, the European Commission warned against complacency as it revealed that seven member states were running behind. "These projections show there is no room for complacency or error," environment commissioner Stavros Dimas said.

BAPE rejects Skypower's Quebec wind farm plan

The Quebec Environmental Public Hearing Board has rejected a $350-million wind power proposal from a Toronto company that wanted to build an expansive farm in the province's northeastern region.

The board, known by its French acronym, BAPE, gave the thumbs down to Skypower's plans, which would include the construction of 114 windmills in four communities bordering the St Lawrence seaway, near Rivière-du-Loup.

Clearing the air on Clean Air Act

The introduction of the federal government's Clean Air Act last week, rather than clarifying public understanding about air pollutants and other emissions, seems to have exacerbated the confusion.

Principal in that confusion is a misunderstanding of the fact that all emissions are not the same.

Statistics pertaining to smog-forming gases have routinely been misapplied to carbon-dioxide output and vice versa, and the roles of both have been comprehensively confused. It is no wonder the subject seems unfathomable.

So let's clear the air.

I'll post this hilarious piece from the National Post in its entirety here, they manage to conclude that a collapsing economy is great. They touch on Canada a bit, evidently it's not good for us, but right after that take off into dreamland.

As we say in Québec: "N'importe quoi."

Fed very pleased with housing slump

U.S. housing prices fell the most in three decades last month. Economists blame that for falling growth.

WASHINGTON - The slumping U.S. housing market is sending a chill through the entire economy as new data yesterday showed growth slilpped to 1.6% during the last quarter, the slowest in three years.

The U.S. Commerce Department said growth in the world's largest economy fell a full percentage point between July and September from 2.6% in the second quarter.

Economists blamed the slump in housing sales -- with prices falling the most in more than three decades last month -- for slowing growth.

"We are feeling the effects of the housing bubble bursting and, while the ill wind is not pleasant, it is not likely to be long-lasting," said Joel Naroff, president of Naroff Economic Advisors in Holland, Pa. "Businesses and households did their part to keep the economy going."

Residential housing construction fell at an annual rate of 17.4% in the latest quarter, the largest decline since the first quarter of 1991, after shrinking at 11.1% in the previous three months. The decline subtracted 1.12 percentage points from growth, the most in almost a quarter-century.

Stock markets slipped yesterday after the disappointing gross domestic product report, with shares of homebuilding companies falling the most in 15 years.

And the fallout is not likely to be limited to the United States, said Sherry Cooper, chief economist at BMO Nesbitt Burns in Toronto.

"For Canada, this is not good news," she said. "The housing downturn has reduced the demand for materials such as gypsum, copper electrical wire and lumber, and prices for those products have fallen, on balance, this year."

There have been widespread expectations the economy would slow after the housing boom of the past several years was slowed largely due to a relentless series of interest rate hikes by the U.S. Federal Reserve up until August.

"The Fed is going to be pleased with the fact that their tightening efforts are bearing fruit with slower growth," said Richard DeKaser, chief economist at National City Corp. in Cleveland. "It's not yet providing the comfort level on inflation that the Fed would like to see, but it's on the right track."

The Fed does not meet again until December and is not expected to adjust rates before the key Christmas holiday shopping season.

The increase in GDP was less than the median 2% predicted by economists, although it is to be revised twice more by the Commerce Department in coming weeks as more accurate economic data come in.

Despite the slump in housing, consumers are surprisingly upbeat.

A key gauge of consumer confidence from the University of Michigan rose to a 15-month high of 93.6 in October from 85.4 in September, thanks largely to a sharp drop in oil and gasoline prices.

That optimism, however, might not be shared by Republicans, who are facing an increasing struggle to maintain control of both the House of Representatives and the Senate at the Nov. 7 mid-term elections.

Besides the war in Iraq, the uncertainty in the U.S. economy is at the top of worries of voters who have largely forgotten about the US$2-trillion in tax cuts brought in by George W. Bush, the President, during the past six years.

Among highlights in the third quarter was a 3.1% increase in consumer spending, which represents 70% of total economic activity, likely driven by a sharp drop in gasoline prices, now hovering around US$2.25 a gallon, compared with more than US$3 in July. Spending rose at 2.6% during the previous quarter.

More importantly for the Fed, however, is a drop in the personal consumption expenditures price index, another measure of inflation. It rose just 2.5% during the quarter, compared with 4% during the previous quarter.

"I suspect the Fed is very pleased," said John Silvia, chief economist at Wachovia Corp. in Charlotte, N.C. "It gives them more time to be patient. Inflation is topping out and is likely to come down over the next two to three quarters, and that is consistent with the Fed keeping its current position."