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CLEMENT: Ottawa is getting ready to meddle in your newsfeed and streaming services

David Clement writes about Ottawa’s plan for draconian new regulation of your newsfeed, social media, and even Netflix.

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Heritage Minister Steven Guilbeault announced last week the Trudeau government wants to enforce Canadian content regulations for platforms like Spotify and Netflix, and is looking at Australian-style regulations requiring platforms like Facebook to compensate news outlets whenever a news outlet’s link is shared there.

Both of these proposed regulations are silly.

For Canadian content, the Trudeau government seems hell-bent on applying outdated regulations to innovative tech platforms like Netflix and Spotify. These platforms are successful because they provide consumers what they want in terms of video and audio content. It seems quite paternalistic for the government to interfere, and require that these companies produce Canadian content, regardless of whether there is consumer demand for it.

This is problematic because CanCon regulations forcibly tell consumers that they want, or are required, to consume Canadian content, and then force companies to create content based on that false assumption. I, of course, want Canadian artists and content creators to do well and thrive, but I also know that the Canadian media/entertainment space is mature enough to stand on its own two feet. It would be better for Canadian success to be a result of meeting consumer demands and not the result of a government decree. 

Supporters of CanCon regulations say these regulations are required to “protect Canadian culture and the people who produce it”, but who exactly are we protecting Canadian culture and its producers from? If Canadian content isn’t successful in the domestic market, that is because it isn’t appealing to the demands and wants of Canadian consumers. It is backwards for the government to meddle to try and shield Canadian creators from the wants of domestic consumers.

If legislators want to actually listen to the demands of Canadian consumers, they’d know that Canadians like Netflix and Spotify just how they are, and that intervention isn’t needed. Plus, we already have a taxpayer funded outlet to protect Canadian culture and its creators: the CBC. Is the $1 billion the CBC receives not enough to provide a home for Canadian content? Do we really need to be forced to pay for Canadian content as both taxpayers, and in the private sector? I don’t think so.

Beyond content, the heritage minister’s comments regarding social media platforms having to pay news outlets to share web links are just as misguided. In an interview with Radio-Canada, Minister Guilbeault suggested that Canada is looking at following Australia’s lead, and creating regulations that would force a platform like Facebook to pay news outlets every time one of their web links is shared. That means that when you or I share an article, let’s say from the Toronto Star, Minister Guilbeault thinks that Facebook should be forced to compensate the Star, despite the fact that Facebook is acting as a free lead generator. This genuinely leaves me scratching my head as to why this is a good idea. Media outlets make their money in two ways: advertising dollars linked to views or through subscriptions. Being able to freely share a news story on social media drives traffic to these news outlets, which is exactly how they make their advertising money and solicit subscribers. 

It is bizarre for the federal government to mandate that Facebook compensate newspapers for driving web traffic to their website and sending them free leads. This desire to have the government further protect the media industry becomes even more strange when you consider that the industry is already subsidized by taxpayers at the tune of $600 million dollars.

And if Australia has shown us anything, following through with this type of legislation would be disastrous for consumers, for newspapers, and for society at large. In response to the regulations down under, Facebook stopped allowing for users to share news links on their platform. 

This hurts consumers because it means that news won’t be available on social media at all, where most of us consume it. This is a net negative for society because less news availability ultimately means poor media literacy, which certainly isn’t good. And lastly, this is terrible for newspapers because it eliminates their ability to reach online audiences via social media, which reduces traffic and their ability to generate subscribers.

Rather than enforce outdated regulations on Netflix and Spotify, legislators should listen to Canadian consumers. In regards to the offer of additional regulations, with all due respect Minister Guilbeault, thanks, but no thanks.

David Clement is a columnist for the Western Standard and the North American Affairs Manager with the Consumer Choice Center

David Clement is a Columnist for the Western Standard. He is also the North American Affairs Manager of the Consumer Choice Center.

Opinion

NICOLA: Investment outlook: It was the best of times, it was the worst of times — is the glass half-full or half-empty?

Let’s separate apply these perspectives of positive and negative and consider how they may apply to today’s investing environment. 

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By JOHN NICOLA

We’ve just emerged from a tumultuous and challenging 2021 which provided good results financially for many investors while being a significant emotional and psychological drain as the fourth COVID-19 wave became a reality. 

As I was thinking about how we as investors want to approach 2022 and beyond. I’m reminded of the first lines from Charles Dickens classic about the French Revolution, A Tale of Two Cities.  To me it begs the question, “is the glass half full or half empty?” And the answer seems to be both. Let’s separately apply these perspectives of positive and negative and consider how they may apply to today’s investing environment. 

It’s imperative to understand the current investment and economic environment and then assess how existing factors will impact major asset classes. 

Glass Half Full

There are a number of factors that create optimal investment opportunities and give us reason to view the new year and investments in a positive light. The public markets and residential real estate are at all-time highs in a number of markets in Canada and across North America. COVID-19 vaccines have been developed and deployed in record time. The “fourth wave”/Omicron appear to have significantly lower levels of serious illness or death. 

In light of major issues such as climate change, investment opportunities pertaining to environment, social, and governance (ESG) are accelerating rapidly. The cost and evolution of renewable energy is improving exponentially.  

On a global scale, we have seen notable drops in levels of poverty, hunger, and illiteracy (Marian Tupy – 10 Global Trends.) Further, global population increases are slowing and likely to peak within 30 years at about 8.9 billion. 

Finally, any rises in interest rates are likely to be measured and spread out over time. If that occurs, does that mean that any negative impact on asset prices would be modest?

Glass Half Empty

In the interest of seeing the whole (objective) picture, it’s important to observe and assess the other side of the coin. The new year does not come without challenges. 

We’ve seen massive increases in corporate and government debt to weather the pandemic and finance acquisition of assets (Evergrande as an example.) The end result is a combination of higher inflation and corporate defaults. 

Dysfunctional politics are a concern across the globe. We continue to witness geo-political tensions such as China/US and Russia/NATO, and the rise of populism in the US, in particular. 

Equity prices (primarily in the US) are at near record valuation levels which has many questioning their sustainability. Higher interest rates and inflation could create a significant impact on residential housing.

Finally, the pandemic rages on. Faster infectious rates for Omicron lead to increased and extended lockdowns, globally. 

Asset allocation is the key

Whether you are leaning to one perspective or another, or somewhere in the middle, how you invest and diversify your capital is going to play a vital role in helping you mitigate any volatility 2022 may bring. 

The asset allocation model that we recommend to most of our clients is roughly divided into three major classes: Public/Private Equities, Real Estate (income and development), and Fixed Income (private and public). 

Typically, we distribute 35% to fixed income assets (public and private), 35% to equity (public and private), and 30% to real estate (hard asset properties). Depending on views of both the opportunities and the valuation levels each of these asset weights could change plus or minus by 5%.

There have been a number of studies to support this type of asset allocation. Perhaps the strongest endorsement of this model is that the asset mix of some of the largest pension plans in Canada (considered by many to be amongst the best institutional investors in the world) which choose to allocate their capital in this way. If you look carefully you’ll see the pensions such as OMERS, CPP, BCIMC, AIMCO, and Ontario Teachers use some variation of the model above.

We subscribe to a similar approach. A chart on the Nicola Wealth site (Nicola Wealth vs. The Marketplace) demonstrates if you compare our average client returns since January 1, 2000 with other indices such as the S&P 500, TSE, and a compilation of balanced portfolios aggregated by Morningstar. In all cases our clients have had better results with less volatility (considerably less than any of the equity indices).  

The acid test for a good asset allocation model is how well it performs during bear markets for public equities (which themselves are usually connected to a crisis or a recession or both.) The last two bear markets were the Great Financial Crisis of 2008/2009 and, of course, the COVID-19 market meltdown in the spring of 2020. In both cases, stock prices dropped in most public markets by 35% or more from their prior peaks.

Employing the balanced model above meant the drop in value of our client portfolios was 7.5% in 2008 and about 5% in 2020. That reduction in volatility fosters for far better investor behavior (another great topic we will explore in a future column.)

Notwithstanding that the right asset allocation model can make a big difference in risk-adjusted returns, each of these asset classes will be impacted in some way in a rising inflation and interest rate environment. In our next column we will explore how we believe that might unfold.

John Nicola, CFP, CLU, CHFC is a financial columnist for the Western Standard and is the Chairman of Nicola Wealth

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Opinion

SLOBODIAN: Butts attempts to pit East vs West with anti-trucker tweet

He wrote what amounts to a hit job on Medicine Hat’s Lich, by listing her “association with radical groups” — the Maverick Party in Alberta and Wexit Alberta. Really.

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A fool pokes a stick into a hornet’s nest.

A bigger fool pokes at a massive convoy of truckers — hailed coast to coast as Canadian heroes — by levelling cheap shots and promoting unfounded accusations against the organizer of a fund supporting their Ottawa-bound protest of mandatory COVID-19 vaccines.

Gerald Butts, the acidic best buddy and former principal secretary of Prime Minister Justin Trudeau, took a run at Tamara Lich in an attempt to cast doubt on the integrity of Convoy For Freedom 2022.

“An Alberta separatist has collected almost a million bucks on a GoFundMe page to ‘support’ trucker protests. Where will the money go?” asked Butts in a tweet. 

Almost $2 million has been raised to date.

Convoys are starting to roll cross-country to protest Liberal government vaccine mandates, including one imposed on January 15 that threatens both the livelihoods of truckers and the supply chain.

Butts cited a nasty January 21 piece, The murky matter of protests and the donations that drive them on trucknews.com., by blogger James Menzies.

In doing so, did Butts label truckers as terrorists? Well, they took it personally. Social media lit on fire.

“You need to listen. You need to rise up. It turns out that Mr. Fancy Sox’ little best friend Gerald Butts put out a tweet calling us a bunch of terrorists. Now we’re terrorists… They’re trying to slander what we’re doing,” said The Real Pat King in a Facebook video.

In his blog, Menzies lamented a “disturbing trend” in reference to the amount of money being raised.

He wrote what amounts to a hit job on Medicine Hat’s Lich, by listing her “association with radical groups” — the Maverick Party in Alberta and Wexit Alberta. Really.

“She was also affiliated with the Yellow Vest movement, which was linked to death threats against our prime minister. Is that what we’ve become, Canada? To her credit, Lich attempted to distance her local chapter from those making the death threats … she was affiliated with an organization that threatened to kill our prime minister – and now has nearly $1 million of your money to distribute as she sees fit.”

He then crossed another serious line that a lawyer might want to peek at on Lich’s behalf.

“And where will that million or so bucks go? It will go into the organizer’s bank account, that we know… From there, who knows? Since the fundraiser is not an official charity or organization, there is no further accountability.

“The good news is funds will be dispersed via e-transfer “(preferred.)” Paper trail! Since GoFundMe wipes its hands of accountability once the dough is deposited into Lich’s account, we hope she will be forthcoming about how those funds are distributed.”

What evidence did he offer to indicate Lich wouldn’t be forthcoming? None.

Yet Butts endorsed this drivel, this character attack, this baseless accusation. 

By doing so, Butts was likely attempting to pit East against West, like the Liberals love to do. 

The problem is East and West, but for a few latte-swilling lefties, are united in support of the truckers.

One convoy leaves B.C. Sunday with truckers from other provinces joining in, including many from Manitoba who protested at the Canada-U.S. border Wednesday.

Two more convoys will set out January 27, one from Enfield, NS, another from Windsor, Ont. 

They will unite in Ottawa January 29.

Butts is likely less concerned about where the money will go than where it’s coming from — so many detestable (to him) Canadians rallying behind truckers standing up to the tyranny of the federal government.

To date, more than 25,000 Canadians have donated mostly small sums starting at $5. One donation of $10,000 was the exception.

Funds will help truckers pay for fuel, food, and lodging.

Unconfirmed reports claim any money left over will go to military veterans Trudeau abandoned, just like he abandoned our truckers.

The vaccine mandate could result in a loss of up to 26,000 cross-border commercial drivers, says the Canadian Trucking Alliance. 

Canadian truckers must now show proof of vaccination to avoid taking COVID-19 tests before reaching the border. They must also quarantine upon arrival from the U.S. 

Unvaccinated U.S. truckers are denied entry to Canada.

Menzies decided beforehand the convoy of trucks on the road will be “angering the motoring public.”

Maybe some. They’ll be a lot angrier when their fridges are empty because the Trudeau gang kept truckers from stocking grocery stores.

The likes of Butts will surely be gnashing their teeth when they see the anticipated huge welcoming committees greeting truckers rolling into towns and cities with cheers and bagged lunches gratefully prepared with love.

Our truckers have earned the kind of trust and admiration petty politicians will never, ever get.

Someone should tell Butts — who billed taxpayers $127,000 for a move — that not everybody squanders other people’s money.

Truckers have given hope and courage to Canadians crushed by pointless mandates, lost freedoms, and lost jobs. 

There’s excitement in the air, a strength-building momentum in hearts and minds across Canada.

“We are taking our fight to the doorsteps of our Federal Government and demanding they cease all mandates against its people,” wrote Lich on the GoFundMe site.

The anticipated arrival of all those great big loud trucks and determined drivers must terrify bully politicians and bureaucrats who have mercilessly beaten Canadians down with bad COVID-19 and other decisions. 

To our heroes in the convoy — drive safely and God speed. Know that countless Canadians are with you, proud to be the wind at your back.

Blare those horns. It’ll be the sweetest sound Canadians have heard in a long, long time. 

Slobodian is the Senior Manitoba Columnist for the Western Standard
lslobodian@westernstandardonline.com

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Opinion

MAKICHUK: China’s Liaoning carrier an unworthy flagship

After the collapse of the Soviet Union in 1991, construction was halted and the ship was put up for sale by Ukraine. The stripped hulk was purchased in 1998 and towed to the Dalian naval shipyard in northeast China.

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It’s the symbol of Chinese prestige and naval prowess.

It’s supposed to strike the fear of God into enemies — the US and its allies alike.

The flagship of the People’s Liberation Army’s Navy fleet. 

The mighty aircraft carrier Liaoning.

Oh my, have we ever heard a ton — actually, about 66,000 tons — of hype about this boat.

Originally laid down in 1985 for the Soviet Navy as the Kuznetsov-class aircraft cruiser Riga, she was launched on 4 December 1988 and renamed Varyag in 1990.

After the collapse of the Soviet Union in 1991, construction was halted and the ship was put up for sale by Ukraine. The stripped hulk was purchased in 1998 and towed to the Dalian naval shipyard in northeast China.

The ship was rebuilt and commissioned into the Liaoning on 25 September 2012, where it underwent major hull, radar and electronics upgrades.

Its Chinese ship class designation is Type 001. Then, on November 2016, the political commissar of Liaoning, Commodore Li Dongyou, stated Liaoning was combat-ready.

Indeed it was. But ready for what? Yet another stretch of the imagination from Beijing?

According to Medium.com, on at least one occasion during sea trials, Liaoning appeared to suffer a steam explosion that temporarily knocked out the carrier’s electrical power system. 

During the accident, hot water and steam began “spewing” out of the engine’s oven compartment, Sina.com reported. One cabin became “instantly submerged in water vapor,” the report added.

Much to the ongoing embarrassment of PLAN officials, last year the USS Mustin guided missile destroyer easily tailed the Liaoning, and was able to photograph and observe the carrier at length on China’s doorstep — the South China Sea.

While recounting the incident, Vice-Admiral Roy Kitchener, the commander of the US Naval Surface Forces, claimed the Chinese carrier was subject to “operating restrictions,” EurAsian Times reported.

A nice way of saying, PLAN readiness was one big joke.

Liaoning

Speaking at the annual Surface Navy Association conference, US crew members “realized that at some point all the Chinese escorts sort of backed off” because “there’s some operating restrictions that they had around the carrier,” said Kitchener.

“USS Mustin didn’t have those (restrictions),” he said. “They proceeded on in, found a good station, and sat alongside taking pictures and doing other things for quite a bit of time.”

The photo was extensively circulated throughout the world and it infuriated China.

Red-faced (pun not intended) Chinese authorities called the activities “very vile” and accused the US of threatening Chinese ships and troops. 

The PLAN had been caught with their naval pants down and, clearly, they didn’t much like it.

The ease with which US Navy personnel were able to photograph a Chinese aircraft carrier would become a key point of discussion. 

Lu Li-shih, a former instructor at Taiwan’s Naval Academy in Kaohsiung, was quoted by the South China Morning Post as saying, “The Liaoning may have been busy with a complicated drill, allowing US officers to take photos.”

Liaoning

Too busy to see a US Navy destroyer on its tail? One solitary missile could have sunk the Liaoning, and its crew of 1,960. Sent it to Davey Jones’ locker.

Song Zhongping, a former Chinese military instructor, argued that the PLAN followed pre-planned voyage routines, but the operational parameters of American crews were more flexible.

“It’s very common for warships to sail so close for parallel monitoring in unexpected encounters at high sea,” Lu said. 

“But it’s rare for the captain and his deputy to sit together, showing that the Liaoning gave the USS Mustin quite a lot of time to take the picture because of its operating restrictions.”

In an attempt to flip the propaganda coin, Beijing-based military expert/mouthpiece Zhou Chenming told the SCMP it highlighted America’s paranoia over a rising China.

Often called China’s “starter carrier,” the Liaoning does mark a substantial step forward in aerial capabilities for the PLAN, although it, like the carrier itself, has limitations.

The aircraft onboard the Liaoning are capable and modern, although they are limited largely by the ship’s aircraft-launching mechanism.

Liaoning

The carrier air wing includes 24 Shenyang J-15 fighters, six Changhe Z-18F anti-submarine warfare (ASW) helicopters, four Changhe Z-18J airborne early warning helicopters and two Harbin Z-9C rescue helicopters.

By the way, the PLAAF’s J-15s are considered far inferior to US Navy and Marine fighters such as the FA-18-F Super Hornet, which can carry more weapons and fuel, and more importantly, see much farther with an advanced avionics package.

The Liaonings size also falls well below the US Nimitz-class carrier USS Ronald Reagan currently stationed with the US Seventh Fleet, the latter being over 60% heavier and 30 meters longer. 

China’s second carrier, the Type 002, was essentially a copy of the Liaoning, though it did feature some incremental improvements including upgraded radar and increased fighter capacity. 

Like the Liaoning, the Shandong features a large ski jump above the bow that helps launch jet fighters into the air. 

The Type 003 will be larger than both the Type 002 and the Liaoning, and have a steam catapult launch assist system similar to what the US uses on aircraft carriers — and thus will likely dispense with the ski-jump launch assist platform. 

A fourth carrier is also being built, the Type 004 — the first Chinese carrier to reportedly feature nuclear marine propulsion.

According to the US Department of Defense, the proficiency of Liaoning’s pilots, commanders, and support staff remains unclear, ChinaPower reported. 

As we all know, conventional fixed-wing carrier aviation is risky and dangerous: reducing the accident rate of US Navy and Marine Corps jet aircraft to the same level as the land-based US Air Force took almost 40 years and cost some 12,000 aircraft and 8,500 lives.

Although the Chinese have the benefit of learning from the experience of other countries, how the Liaoning’s air wing would actually perform under operational conditions remains to be seen.

Meanwhile, the PLAN has something called the Ford-class carrier to deal with in the South China Sea. A carrier that so outclasses anything in China’s naval inventory, any resulting conflict would likely end badly for Xi Jinping and his comrades.

According to The National Interest, the Gerald R. Ford-class is the most advanced class of ships the US Navy has ever built and incorporates many new technologies. 

In addition to its more advanced weapons elevator — which are all now in working order — the Ford-class carrier is powered by a pair of smaller, more simple nuclear generators that provide approximately 25% more electrical power than previous designs.

The Ford also features a new electromagnetic airplane launch system that replaces the traditional steam-powered design and a new aircraft arresting system.

Years late, and costing billions more than anticipated, the 1,092-foot long and 252-foot wide carrier will do its job, and then some.

The most important metric of carrier lethality is how many sorties (flights) the carrier can generate each day. 

According to Forbes, the Navy’s goal is to achieve a 33% increase in sortie generation — 160 sorties per day under normal conditions, 270 during wartime surge operations. 

It will take time and practice to achieve those goals, but with each strike fighter carrying multiple smart bombs, it doesn’t require much imagination to see how lethal 200-plus sorties per day could be against most enemies.

So just how capable is China’s Liaoning

One expert actually labelled it a “boat-load of glaring weaknesses,” but let’s not subscribe to that. Surely, the PLAN has ironed out some of the ship’s problems — this is normal and par for the course for any vessel this size.

Chinese carriers are also believed to be slower and can only operate at sea for roughly six days before needing to refuel, whereas US nuclear-powered carriers can operate continuously for years, Task & Purpose reported.

However, it’s important to remember that China has a different mission in mind for its carriers.

“It has little to do with fighting Taiwan or even fighting in the East China Sea,” Timothy Heath, a senior defense researcher at the Rand Corporation, told Insider. “In both of those situations, carriers are probably not going to last very long.”

Rather, China is hoping to use its carriers to help secure the important Indian Ocean trade routes that are the maritime part of China’s Belt and Road Initiative.

“That’s the real value of these, and it’s worth bearing that in mind when we start to question why they are willing to spend so much money on building carriers with limited air capacity,” Heath said. “For that mission, it may be enough.”

Dave Makichuk is a Western Standard contributor
He has worked in the media for decades, including as an editor for the Calgary Herald. He is also the Calgary correspondent for ChinaFactor.news and has covered Asian military affairs for years
makichukd@gmail.com

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