Mexico could ease Canada’s cannabis problem

The plan to drive illegal cannabis growers out of business is going slowly.

The problem is supplying enough legal cannabis to lower retail prices. Eventually illegal sellers will be a quaint memory, something like the bootleggers of alcohol of the past. For that to happen, a plentiful supply of cannabis has to be available and it’s going to take years for that to happen with Canadian growers only.

image: Greenhouse Canada

The cost of legal cannabis remains nearly 50 per cent higher than potleggers according to crowd-sourced data obtained by Statistics Canada. The cannabis store Kamloops seems to fairly well-stocked but in some parts of Canada like Quebec, stores have had to close on some days of the week due to lack of supply.

One way to lower retail prices immediately is to reduce taxes; a solution favoured by the cannabis industry. In addition to provincial sales taxes, the federal government charges one dollar per gram excise tax and an annual cultivation fee of 2.3 per cent of revenue.

Some jurisdictions in the U.S. with legal cannabis markets, such as California, are considering such temporary tax reductions to lure customers away from the illegal market after disappointing early sales.

I don’t think lower taxes are the solution. The whole idea of legalization of cannabis is generate revenue so that other taxes could be reduced. Like other “sin taxes” on recreational drugs such as tobacco and booze, taxes on cannabis provide revenue on a product not currently taxed.

Regardless, Canada has no intention of following the U.S. lead. A Canadian Finance Department spokesperson said: “There are no planned changes to the existing duties at this time (Globe and Mail, February 4, 2018).”

Another way to reduce legal cannabis prices is to increase supply.

Mexico plans to legalize cannabis. The new interior minister of the Obrador government has introduced draft legislation to regulate cannabis. Mexico has been studying Canada’s model of issuing licences for the cultivation, processing, packaging, sale and possession of cannabis.

Mexico has something going for it that Canada doesn’t -climate.  Cannabis doesn’t need to be grown in greenhouses there. The president of Mexico’s National Association of Cannabis Industries says:

“We’re going to be able to create a new industry based on new regulations, to produce cannabis for the rest of the world – our geographic situation and our labour [pool] gives us a major advantage (Globe and Mail, November 8, 2019)”

Enthusiasm is mutual on this side of the border. Canada’s Canopy Growth Corp. is looking at investing in Mexico. Their co-CEO said:

“We think [Mexico] is a real opportunity. When you’re on both sides of America with really well-positioned products, this could be a very good platform to reflect both sides of the border with the U.S. and enter an economy that is substantial.”

However, Mexico faces hurdles. Much of Mexico is controlled by drug cartels who oversee the growth of illegal marijuana. Seizing control of agricultural land will be a challenge. Also, Columbia is also poised to compete in the legal cannabis market and have a workforce experienced in its growth.

Of course, Canada’s fledgling cannabis industry needs to be protected but controlled importation could help our supply problem.

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Blueberries without borders

Blueberries have arrived from Peru in my local store. Next they’ll be coming from Chile, then Mexico. As spring moves north, they will arrive from Florida.  Then in late spring they’ll be ripening in Georgia, after that California and Oregon. Washington will start shipping in early July.

image: Investment Agriculture Foundation of British Columbia

The northward march of the blueberries ends in British Columbia, where the largest crops in Canada are grown and the season is long says Corey Mintz:

“Because of the warm, sunny weather blueberries need to thrive; many regions have a growing season of only four to six weeks. But the climate of BC allows for a longer season: nearly three months, from early July to late September (Walrus magazine October, 2018).”

B.C. returns the blueberry favour by sending them south -all over North America. Blueberry production in BC has grown from 4.3 million kilograms in 1980 to 61 million kilograms in 2017.

The fact Canada exports any produce at all may come as a surprise. We can’t compete with American growers for many other crops says James Vercammen, professor of food and resource economics at the University of British Columbia. Economies of scale, higher labour and land costs, give U.S. producers an edge.

But as the sun lingers over Canada in the summer, we have an advantage that Americans lack. Vercammen says that British Columbia is “now growing raspberries and blueberries like crazy.”

Things didn’t look so good at the start of the 2018 growing season. Blueberries, like one-third of the foods we eat, depend on pollination by bees.

Bees prefer a balanced diet. In recent years, honey producers have expressed concerns over the nutritional value of a blueberry diet alone. “It’s a single fruit,” said Kerry Clark, president of the B.C. Honey Producers’ Association, “It’s like going to a buffet and the only thing there is salsa. It doesn’t give you a balanced diet.”

Monoculture crops that cover vast areas aren’t very nutritious for bees. Weakened bees are more susceptible to disease and the wet spring this year meant that growers were applying more fungicides –also not good for bees.

That meant that owners were reluctant to send their colonies to blueberry fields. “It’s become less and less attractive, to the point where the beekeepers have decided not to bring thousands of colonies into the blueberries this year,” said Clark.

While blueberry production has increased, the number of bee hives has not kept up. One beekeeper predicted a loss because he couldn’t supply enough hives:

“There’s definitely going to be a shortage of bees in blueberries this year. It will be worse this year. The plants will be there, but the bees won’t be there to pollinate them, so they won’t get the berries.”

But all the worry turned out to be for nothing. As the damp spring turned into a sunny summer, blueberries thrived and by the end of the year there was a glut of the crop. The lower prices were good news for berry lovers but disastrous for farmers.

John Gibeau of the Honeybee Centre in Surrey was philosophical: “If it’s nice weather we do well. If it’s poor weather we do poorly. That’s farming.

TPP rises from the ashes

Rumours of the death of the TPP are greatly exaggerated. After President Trump announced U.S. withdrawal from the Trans-Pacific Partnership, I congratulated him: “Thank you, Mr. Trump, for killing the TPP.”

 image: WMAL radio

I now realize that Trump’s withdrawal from the TPP was not an indicator of leadership, but a sign of retreat from the international community. It’s just another indication of the degree of U.S. marginalization. Trump’s withdrawal from the Paris Agreement is yet another indicator that we must carry on without him.

Where the original TPP had a number of flaws, the new TPP can be negotiated to Canada’s advantage. Canada was disadvantaged in the first round because we were latecomers: we had to accept what had already been negotiated.

Canada is a trading nation and as such, we depend on fair trade agreements. As politicians like to do, I’ll list my five conditions for acceptance of the new TPP -dubbed TPP11 after the number of countries left to pick up the pieces.

Investor-state dispute settlement provisions (ISDS) should not be part of TPP11. This allows companies to seek damages from governments when local regulations interfere with profit-making.

When disputes arise, as they are bound to do, they should be settled in a transparent manner by judges, similar to the International Court, not in private between arbitrators as is now done with NAFTA.

Environmental standards should not be part of TPP11. Environmental damage is seen by industry as a cost of doing business -a price which indigenous peoples and future generations will pay. Environmental standards need to be negotiated by separate accords like the Paris Agreement.

Intellectual property and should be excluded as well. Artists and small software companies need protection, but too often concern for intellectual property masks large corporate interests such as Disney.

Exclude health regulations as well. They are an excuse for Big Pharma to extend the patent life of drugs that could be made cheaper with generics.

TPP11 will be a meeting of middle powers now that the U.S. is out, and China and Europe were never in. Canada can then negotiate from a position of strength when it comes to superpowers. Trump favours individual bilateral deals because he imagines an advantage over smaller countries. But if those smaller countries can form a block where there is an alternative to the bully-tactics of Trump.

The TTP11 would give Canada access to markets not previously available, says Hugh Stephens of the Canadian Global Affairs Institute. It will jump-start bilateral talks that were going nowhere, like those between Japan and Canada. With Japan in the TTP11, negotiations can proceed. And trade agreements under the umbrella of TPP11 can take place with other countries where Canada has no bilateral agreements such as Australia, New Zealand, Malaysia and Vietnam and Malaysia.

And in countries where Canada does have bilateral agreements, such as Mexico, Chile and Peru, the TTP11 can tie up loose ends.

Whereas Canada was a follower in the original TTP, we can be a leader in fair trade under TTP11. With the U.S. retreating into a fog of befuddlement, Canada needs to step up on the world stage.

 

 

Pro-cavity groups proven wrong

Tooth cavities have increased in Calgary since the city stopped adding fluorides to its water in 2011 according to a study published in the journal Community Dentistry and Oral Epidemiology. Researchers from the University of Calgary compared the number of cavities in children for Edmonton, where water is still fluoridated, with Calgary where it is not.

The lead author of the study is candid: “This study points to the conclusion that tooth decay has worsened following removal of fluoride from drinking water, especially in primary teeth, and it will be important to continue monitoring these trends.”

The pro-cavity groups –let’s call the anti-fluoridation groups what they are – ran a scare campaign against the fluoridation of Kamloops’ water supply in 2001 and won.

Like good scare campaigns, theirs contained an element of truth. Yes, fluorides are produced by chemical companies but to claim that they were dumping their toxic byproducts into our water was misleading. Yes, too much fluoride can lead to fluorosis but that would take much more than what was added to Kamloops’ water.

Let’s get the facts straight; ones that I challenge the pro-cavity groups to deny. All water is naturally fluoridated. As I said in my column of 2001 “All river water, well water, filtered water, reverse osmosis water, bottled water, and tap water is fluoridated.  The only water that isn’t is rain water collected in sterile containers, and distilled water.”

No wonder: Fluorine is the 13^th most abundant terrestrial element. The concentration of natural fluorides depends on the acidity of the water and length of time in contact with rocks and soil. River water is less fluoridated than well water. Kamloops’ water is naturally fluoridated with more than one-half the concentration necessary to prevent tooth decay.

Fluoridation is nature’s way of reducing cavities. The benefits of fluoridation weren’t discovered by some mad scientist who experimented on his tortured patients by pouring fluorine down their throats. The benefits were discovered incidentally in the early 1900s by a Colorado Springs dentist, Frederick S. McKay, who noticed that many of his patients had brown stains on their teeth and reduced cavities. The brown stains were caused by too much fluoride (fluorosis). When the fluorides were reduced, the stains went away and the benefits remained.

If our water is already fluoridated, you might reasonably ask, why add more? At about 0.5 parts per million, Kamloops’ water doesn’t have quite enough. When I wrote my column in 2001, the recommended amount was 1 part per million but according the Calgary study, 0.7 parts will do.

Some countries act responsibly. I just returned from Mexico where I noticed that fluorine are added to salt, much in the way that iodine (another halogen) is added to ours to prevent of intellectual and developmental disabilities, and thyroid gland problems. Children in Mexico are protected from the pro-cavity groups.

I take the issue personally. While researching Kamloops before moving here, one of the appealing features was the city’s fluoridated water supply. My son grew up with flawless teeth due to fluoridation, dental hygiene, and heredity. I don’t know of any studies in Kamloops but my dentist tells me that he sees more cavities now, especially in low income families.

The dental health of Kamloops’ most vulnerable have been put at risk because of a misguided lobby.

Even without the details, one thing about the TPP remains constant

We don’t know much about the Trans-Pacific Partnership that the Conservatives recently signed except that it will replace North American Free Trade Agreement.

As a trading nation, Canadians generally favour trade agreements. Last year, an Angus Reid poll showed 68 per cent in favour of a trade deal with Europe.

We favour of trade deals while being woefully ignorant of the details; sometimes in the dark about their very existence. In the case of the TPP, Environics showed that 75 per cent didn’t even know what the TPP was; let alone that the Conservatives were negotiating it on our behalf.

This blind faith in the concept of trade agreements often leads us into a blissful unawareness. One principle about the TPP will likely remain constant: private tribunals will replace our courts when it comes to disagreements.

That’s what the Investor–State Dispute Settlement provision does under NAFTA. I would hazard a guess that few Canadians are even aware of the ISDS provision under Chapter 11.

ISDS allows foreign investors to settle disputes with governments through binding private arbitration instead of Canadian courts. Yes, governments can be dictated to by arbitrators. Why would governments give up such a mandate of their power? The Monitor magazine explains:

“The dubious rationale for granting this extraordinarily sweeping right to foreign investors was that the Mexican courts of the day were prone to corruption and political interference.”

If that were a valid justification, Mexico should be on the receiving end of corporate claims. In fact, Mexico has only had a few while Canada has had the most.

“Canada has faced 36 ISDS claims, more than any other developed country in the world, and since 2005 we’ve been hit by 70% of all NAFTA investor lawsuits.”

One of those claims against Canada came in March this year after ExxonMobil’s Canadian subsidiary won $17.3 million in damages after challenging requirements that they dedicate a tiny percentage (0.33%) of their revenues to research and development, education and training in Newfoundland and Labrador.

“But what is especially galling about this case is that Exxon, along with every other company active in the offshore oil sector, had explicitly agreed to abide by provincial R&D commitments.”

In 2010, the federal government had to pay AbitibiBowater $130-million to settle an ISDS complaint after former premier Danny Williams’ expropriation of the company’s mill. Williams said that the owners had broken the lease agreement by walking away from mill, leaving 800 unemployed.

The Harper government tried to weasel out of paying the settlement claiming that the province had caused the problem. More likely, it was an attempt to punish William’s for his lack of Tory support. The last time I looked, Newfoundland is still part of Canada and since NAFTA applies to Canada, it applies to Newfoundland. If the offending province were Alberta, Harper probably would not have complained.

Most of the talk around the TPP has been whether car parts will hurt and beef parts will prosper. Don’t hold your breath waiting to hear how Canada will be dictated to by corporations through private tribunals held in secret.