Obama to fill key posts in weeks, Hagel on Pentagon short list

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President Barack Obama is expected to announce his nominees for secretaries of state and defense in the next two weeks, with former Republican Senator Chuck Hagel on the short list of potential choices to head the Pentagon, senior administration officials said on Tuesday.

Hagel, whose appointment would give Obama’s reshuffled second-term Cabinet a bipartisan cast, met the Democratic president at the White House this week to discuss a post on his national security team. But there was no sign that Obama had decided on any of the key nominations he will put forth.

Obama is still deliberating whether to unveil his top national security appointments, likely to include a new CIA director, in a single high-profile package this month or to name them one-by-one, according to an administration official who spoke on condition of anonymity.

Other top contenders to replace Defense Secretary Leon Panetta are believed to include former senior Pentagon official Michele Flournoy, Deputy Defense Secretary Ashton Carter and Democratic Senator John Kerry.

Complicating matters, Obama is also deciding whether to nominate Kerry as secretary of state to replace Hillary Clinton, or to go with Susan Rice, embattled U.S. ambassador to the United Nations.

Rice is a long-time confidante of the president, but picking her would lead to a tough Senate confirmation battle over her comments in the wake of the killing of four Americans in Benghazi, Libya.

Kerry, chairman of the Senate Foreign Relations Committee, has coveted the job as America’s top diplomat and would face a much smoother confirmation process if nominated. It is unclear, however, whether he would accept the Pentagon post instead.

If Obama nominates Kerry for State, he could the risk opening up a safe Democratic Senate seat in Massachusetts, which Senator Scott Brown, the Republican who just lost his seat to Elizabeth Warren, could run for in a special election.

Obama, in an interview with Bloomberg TV on Tuesday, reiterated that Rice is “highly qualified” for the job, but said, “I haven’t made a decision about secretary of state.”

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Obama’s choices for State and Defense will essentially set the tone for his administration’s handling of a wide range of global issues in his second term, including Middle East upheaval, Iran’s nuclear standoff with the West and efforts to wind down the war in Afghanistan.

With candidates still going through the vetting process, Obama is not expected to unveil his choices before next week, but he has every intention of making his announcements before the end of the year, the administration official said.

The choice of Hagel, a moderate on foreign policy who currently co-chairs Obama’s Intelligence Advisory Board, would give the president a Republican in his Cabinet at a time when he is trying to win bipartisan cooperation from congressional Republicans on taxes and spending to avoid a looming “fiscal cliff.”

It is also possible that Hagel’s name was being floated to show Obama’s willingness to reach across the aisle, even if he ultimately does not nominate him.

A social conservative and strong internationalist who co-chaired John McCain’s failed Republican presidential campaign back in 2000, Hagel might seem an unlikely pick were it not for his dissent years ago on the Iraq war launched under former President George W. Bush, a Republican. That war was the issue on which Obama also rose to national prominence.

Hagel served two terms in the Senate, representing Nebraska, and left in 2008. He is a professor at Georgetown University.

Since he left the Senate, Hagel has been a big critic of his own party. He told the Financial Times newspaper in 2011 that he was “disgusted” by the “irresponsible actions” of Republicans during the debt ceiling debate.

Former President Bill Clinton chose former Republican Senator William Cohen to lead the Defense Department, and Obama kept Robert Gates, former President George W. Bush’s last defense secretary, on board for the first part of his term.

Hagel has also been seen as a contender to take over at the CIA, where retired general David Petraeus resigned last month amid a scandal over an extramarital affair. CIA Deputy Director Michael Morell, who took over as acting director, and White House counter-terrorism adviser John Brennan are also in the running.

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Calgary major not guilty of manslaughter in soldier’s death

Calgary Maj. Darryl Watts has been found not guilty of manslaughter in the death of another Canadian soldier in February 2010.

Watts, 44, was also found not guilty of two counts of breach of duty.

However, he was found guilty of two acts of negligent performance of duty and unlawfully causing bodily harm.

Watts was the commanding officer the day 24-year-old Cpl. Josh Baker died after a claymore explosive packed with 700 steel balls hit a Canadian Forces platoon at a training range north of Kandahar city.

Four other soldiers were wounded.

Videos of the accident show several soldiers, including Watts, standing around watching the tests. They were not inside armoured vehicles or standing behind them for cover, as set out in Canadian Forces safety guidelines.

A panel of five senior ranking military officers had been deliberating his fate since Saturday night.

The Crown had argued that Watts, as the platoon commander, turned a blind eye to safety standards and abdicated his duty as a leader during the exercise.

The defence countered that Watts had no training with claymore explosives, so he handed over safety responsibilities to his second-in-command, who was an expert on the weapon.

The maximum punishment for unlawfully causing bodily harm is 10 years in prison, and dismissal with disgrace for negligent performance of military duty.

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Canada ranks among world’s best places for corporate taxes

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Canada has moved up three places to eighth in a global comparison of the most advantageous place to pay corporate taxes, placing the country in the top 10 for the first time.

The annual study by PwC, in conjunction with the World Bank and the International Finance Corporation, shows Canada moving sharply up in a 185-country comparison.

Canada placed 28th as recently as 2010, but continuing reductions of the corporate rate both federally and provincially, as well as reduced red tap, has dramatically improved its standing.

The advance, from a business point of view, coincides with the federal government’s efforts to brand a 25% national corporate tax rate, harmonization of sales taxes in Ontario, and improvement in the easy of filing taxes.

“As far as most countries are concerned, we’re actually a pretty friendly jurisdiction,” said Jason Safar, a partner with PwC’s tax service in Toronto.

“Canada’s current tax laws have attractive tax regimes, which impact all companies — in particularly small-medium sized domestic companies.”

The new study, which is being issued early Monday, is not the only one to have judged Canada’s corporate tax regime favourably from a business viewpoint.

Last year, Forbes magazine ranked Canada the best country in the world to do business, citing its dropping tax rate, sound banks, investor protection and relative lack of red tape.

The PwC comparison looks at three specific metrics — tax rates, the average number of hours businesses devote to paying taxes each year, and how many times a year they must file. The latter two relate to the ease of operating in the country, and PwC says it is more important than many believe.

“The economic analysis to compare the paying taxes indicators with gross domestic product and foreign direct investment suggests that while higher business taxation can be linked to slower economic growth and international investment, reducing the administrative burden and complexity of the tax system can potentially be linked to a greater change in overall growth,” the report states.

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Potash, oil revenue down, but Saskatchewan still in black

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Potash, oil revenue down, but Saskatchewan still in black

The Saskatchewan government is taking in less money from potash and oil than it budgeted for, but says it’s still on track for a balanced budget.

According to the mid-year financial update released Tuesday by Finance Minister Ken Krawetz, income from resources is down by hundreds of millions of dollars, but money from taxes is up.

The result is that by the end of the fiscal year, there should be a $12.4 million surplus for the General Revenue Fund (GRF) and a surplus of $22.5 million for the Summary Financial Statements, up $7.7 million from budget.

That means Saskatchewan is on track to be the only province in Canada to finish the fiscal year in the black.

Potash revenue is down $239.8 million compared to what was budgeted in the spring, while oil revenue is down $164.6 million compared to the budget.

Offsetting that is higher-than-expected revenue from personal income tax and other taxes. Overall expenses are also higher than was budgeted — up about $31.6 million to $11.23 billion.

The government says that partly reflects the costs associated with major flooding in recent years.

Much of the increased spending has been offset by lower debt servicing costs and what the government calls “expense management”.

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Carney appointment provides fresh fodder for UK press!

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Britain on Tuesday was still digesting the fact that for the first time in its 318-year history, the Bank of England would be lead by a foreigner — and the man for the job came from Canada, a former colony.

Britain’s Finance Minister George Osborne stunned analysts and journalists alike on Monday by announcing that Bank of Canada Governor Mark Carney would head the Bank of England starting in July.

The Times of London was so confident the English central bank’s deputy governor Paul Tucker would be promoted to the top that it wrote an editorial on Monday praising him as the best man for the job.

“Well, oops,” the newspaper wrote in Tuesday’s lead editorial, saying Carney was in fact the best choice. “To be fair, we did not know he was a candidate.”

Most had taken Carney at his word when he told the BBC months ago that he had ruled himself out for the job. All except Osborne.

The Financial Times editorial cartoon depicted Carney in a parachute emblazoned with a red maple leaf landing at the Bank of England as startled staff looked up from their computer screens. Workers were still absorbing the news in the City of London, the square-mile financial district simply known as “the City” that is home to one of the world’s most important financial centres.

“Why do we have a Canadian? Weird,” a man in the street told Sky News.

“I think it would be better if we had a British guy,” a female City worker told the broadcaster.

The Times ran a photo spread with the headline “From wilderness to the City jungle.” The largest photo showed Carney on a dogsled at the 2010 G7 finance ministers meeting in Iqaluit, Nunavut. Another showed him in goalie pads and his Oxford hockey team uniform. And one showed the sun setting over a crystal clear lake with the caption: “the pristine Ottawa landscape he is leaving.”

Carney crashed into the news pages and dragging Canada with him.

The Guardian’s editorial began by repeating an old Fleet Street joke that “any story with ‘Canada’ in the first line is guaranteed not to get read,” but adding Carney’s appointment has proved an exception.

The Sun declared choosing a Canadian was “a devastating judgment on the City.”

The Times ran a list of other high achievers from Canada along with Bryan Adams, Celine Dion, Leonard Cohen and Margaret Atwood it also included James Gosling, father of Java programming language, John Peters Humphrey, author of Universal Declaration of Human Rights and James Till and Ernest McCulloch, the scientists who demonstrated stem cells’ existence.

To help establish Carney as the Patrick Roy of central banking, The Times led off a profile of Carney with his perfect record as a goalie for the Harvard Crimsons, for whom he stopped every shot he faced. It failed to mention, however, that he was the back-up goalie and his five saves were in the only game he played.

What was indisputable, The Financial Times wrote, was that Carney was the only central banker to emerge from the financial crisis with his reputation stronger than before.

“It is extraordinary and admirable — that a country should choose to give its most important official position to a foreigner such a Mr. Carney … yet it is also both a surprise and a gamble,” Martin Wolf, the Financial Times’ chief economics commentator wrote.

It was a surprise, he said, because Carney “did not apply for the job. It is a gamble because a foreign national will be assuming a job that is inescapably political and, in the current difficult economic and financial circumstances of the UK, even more political than usual.”

The job that Carney has accepted is much bigger than the role he has played in Ottawa because starting next year he will be tasked with supervising Britain’s banks.

“What’s exciting about Mark Carney is not so much that he is a Canadian or that he is a surprise, but that he’s got an almost unique depth of experience in capital markets for a central banker,” Rachel Lomax, a former deputy governor of the Bank of England, told BBC Radio.

Although he may not have as wide a range of options as he did in Ottawa, his 13 years with Goldman Sachs in London, Tokyo, New York and Toronto gives him credibility when dealing with financial markets, she said. “It would also affect the way he deals with players in financial markets,” Lomax said. “He won’t be over-awed by them but he will understand where they’re coming from. “

Although, Carney has said he will apply to become a British national when he takes the job, BBC business editor Robert Peston pointed out how unprecedented it would be for someone from Fort Smith in the Northwest Territories to be representing Britain in negotiations with other European central bankers.

“In the eyes of the rest of the world, this is quite a bold move, I can’t think of another developed economy that would appoint a foreigner to run their central bank,” Peston said.

“There will be some out there who will say the Bank of England must be in real trouble if they had to appoint a foreigner to run it. Now managing that when you’re having tough negotiations with the French, the Germans on the future of regulation,” Peston said, “that might be tricky.”

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MP Joyce Murray joins Liberal leadership race

Vancouver MP Joyce Murray is joining the federal Liberal leadership contest with a daring call for co-operation with other progressive parties in the next election to ensure defeat of Stephen Harper’s Conservatives.

Murray says she believes Liberals, New Democrats and Greens should have the option of conducting run-off nominations to choose a single candidate in tightly contested ridings where a united progressive front would guarantee defeat of the ruling Tories.

She is the first contender to broach the controversial idea, which is consistent with her broader pitch that she is a collaborative politician who brings unique perspectives and attributes to the race.

“One of the things that I bring is just the full spectrum of the Canadian experience,” the 58-year-old told The Canadian Press in an interview shortly before officially announcing her leadership campaign on Monday.

“I’m an immigrant (from South Africa), a woman, a mother who went back to school while building a business … and then I pull that together in a way that is typical of women, which is working with people, collaborating, co-operating, finding a way forward and then delivering.”

Murray noted she is also the only contender so far with any decision-making experience in government, having served as a cabinet minister in British Columbia.

She said her background leaves her uniquely positioned to balance environmental sustainability and economic growth. She’s a former environment minister, but also a successful businesswoman, who co-founded with her husband a reforestation company that now employs 600 full-time and 600 part-time employees in five countries and which planted its one billionth tree last year.

Murray said her company has done business for 35 years in Alberta, where the Liberal brand is almost non-existent and took another hit last week with anti-Alberta comments from Ottawa MP David McGuinty and leadership front-runner Justin Trudeau. She declined to wade into that furor, other than to note that she brings “a western perspective” to the race.

Still, Murray is decidedly to the left of most other leadership contenders, who’ve been positioning themselves as business-friendly, “blue” Liberals.

She’s an unapologetic advocate of legal marijuana and an ardent environmentalist who favours a carbon tax, although she’s open to suggestions of better ways to put a price on carbon.

But her proposal for co-operation with other parties is bound to be the most controversial.

Murray sees the idea as a way to get rid of the Tories and start serious reform of the first-past-the-post electoral system to ensure future elections more accurately reflect each party’s popular vote.

“Our electoral system is not very representative,” Murray said, pointing out that a party can win a majority of seats in the House of Commons with less than 40 per cent of the popular vote.

Worse, she said, the current system “rewards demonizing other parties, it rewards dirty tricks in elections, it rewards toxic, polarized, divisive behaviour in Parliament and it’s turning Canadians off.

“If our electoral system is broken, we need to have a conversation about what’s more suitable for Canada. But clearly, we are never going to have that conversation with Stephen Harper in the driver’s seat.”

To make sure Harper is ejected from that seat, she said riding associations need to be able to co-operate with rivals.

“There are some ridings where the vast majority of voters would like to have a progressive voice,” she said. “So, if a riding is willing to have a run-off (nomination) so that the progressive voice has a chance of becoming elected, then that’s something that I think is a good idea.”

Murray wouldn’t impose the idea; she’d ask Liberals to endorse it at their next convention, then leave it to local riding associations to decide whether to use it or not. It would be a one-time tactic only for the 2015 election.

She stressed she is not proposing a merger with the NDP or any other party.

Still, Murray’s openness to co-operation with other parties is risky. It’s bound to spark a backlash from some Liberals who believe it’s a defeatist admission that the party can’t beat the Tories on its own.

But it could also help set her apart from the pack chasing presumed front-runner Trudeau, who is widely thought to have a huge head start in the race.

Even if Liberals were to embrace the idea, however, there’s no guarantee the NDP and Greens would be willing to go along. NDP Leader Tom Mulcair has adamantly ruled out any co-operation with Liberals, although Green Leader Elizabeth May has been more open to the notion.

Murray joins a crowded field of contenders, including Trudeau, former Toronto MP Martha Hall Findlay, Toronto lawyer Deborah Coyne, Ottawa lawyer David Bertschi, Vancouver prosecutor Alex Burton and David Merner, former president of the party’s B.C. wing.

Montreal MP Marc Garneau, is set to join the contest on Wednesday, while Toronto lawyer George Takach is to follow on Thursday. Ontario government economist Jonathan Mousley is still hoping to enter if he can raise the stiff, $75,000 entry fee.

So far, only Trudeau and Coyne have officially registered as candidates, filed the required nomination papers and paid the first of three $25,000 instalments on the entry fee.

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