Well this has a familiar sound.

[photofly]

Correct, but aren't you just going against your own point.

I don't think so.

You've agreed that shareholders are not there for the good of the employees, so I think it would be fair to say that their interest doesn't lie in the well being of the average citizens of Canada as well. The shareholders have control over the company via the CEO, whose main purpose is to provide profit to the shareholders. Case and point, neither of these parties have any interest in the well being of the average citizen. The move by this mining company further emphasizes this point.

Would you not agree then that this company is not working in the interest of the average citizen?

I don't know the mining industry in enough detail to comment specifically on what they're doing. But it's certainly true that a company need have no interest in the well being of the average citizen. Unless the average citizen happens to be a shareholder. Maybe we should find out who the shareholders are; I suspect assets are much more widely owned than you might think.

Does this citizen have the right to be represented in another form (ie democratic process)? Is the government doing its job towards these employees?

That's a different, but good question. What do you see the government's job towards the employees to be?

Rants about evil CEOs and politicians as individuals are "straw-man". If there are problems with "the way things are" then the problems aren't the fault of a few well-off people, and won't be fixed by putting that same few people up against the wall. That's too easy.


If you want a socialist system where the government feels it has a free hand to intervene in the interests of the proletariat, then you're free to vote for one. It didn't work in the UK in the 1970s, where the goverment spent most of its time and energy fighting the unions. I'm not sure that it's working in France or many other European countries now, either.

[fingersmac]

Photofly wrote:

I don't know the mining industry in enough detail to comment specifically on what they're doing. But it's certainly true that a company need have no interest in the well being of the average citizen. Unless the average citizen happens to be a shareholder. Maybe we should find out who the shareholders are; I suspect assets are much more widely owned than you might think.

From the Globe & Mail:

"HD Mining says its biggest shareholder is Huiyong Holdings B.C., which is owned by Huiyong Holdings China. The Chinese parent is described as a private company that runs mines in China. HD Mining says the workers it planned to hire are employed at Huiyong operations in China."

http://www.theglobeandmail.com/news/bri ... le8285663/

[photofly]

OK. Noting that the "biggest" shareholder is not necessarily a majority shareholder - let's suppose for the sake of argument it's now entirely Chinese owned.

In which case China paid CDN$2bn (or whatever) to own the company.

The Canadian economy sold its future rights to benefit from the mining operation in fair exchange for a one-time lump sum.

We should take (or should have taken) that lump sum and started new enterprises with it - or built roads, or bridges or whatever - it doesn't matter. That's our responsibility - and the other side of the equation that never gets mentioned when people complain about selling companies into foreign ownership - they never mention all that lovely cash coming into Canada.

If we sell our toys we have no right to complain when the new owners won't let us play with them. We gave up those rights for cash.

[fingersmac]

Huiyong Holdings B.C. is the majority shareholder at 55%. Canadian Dehua Lvliang International Mines controls 40% and an unnamed party controls the last 5%.

Bottom line, if a company wants to setup shop in Canada then they have to employ Canadian workers. As far as I'm concerned, it's pretty simple really.

Photofly wrote:

We should take (or should have taken) that lump sum and started new enterprises with it - or built roads, or bridges or whatever - it doesn't matter. That's our responsibility - and the other side of the equation that never gets mentioned when people complain about selling companies into foreign ownership - they never mention all that lovely cash coming into Canada.

If we sell our toys we have no right to complain when the new owners won't let us play with them.

Not entirely sure what you're going on about. Nothing was sold here. This is a essentially a foreign-owned mining company that decided to setup shop in Canada and was caught abusing the Foreign Temporary Workers Program.

[Rockie]

Huiyong Holdings B.C. is the majority shareholder at 55%. Canadian Dehua Lvliang International Mines controls 40% and an unnamed party controls the last 5%.

So, a Chinese company employing Chinese nationals is removing Canadian resources from Canadian territory.

Can someone please explain to me again what Canadians get out of this deal?

[photofly]

This is a essentially a foreign-owned mining company that decided to setup shop in Canada

Yes, they should obey the law.

But the argument had moved on to evil CEOs, and evil shareholders. Along with a lot of stuff about globalization, and foreign exploitation, and not contributing to the Canadian economy. Some Chinese dudes didn't just pitch up one day with shovels and start digging. You don't get to extract minerals from Canadian soil without paying for those rights. That contributes to the Canadian economy.

So, a Chinese company employing Chinese nationals is removing Canadian resources from Canadian territory.

Can someone please explain to me again what Canadians get out of this deal?

Yes! The money we got for selling the mineral rights!

I'm not saying your basic point of view is wrong; but the really obvious arguments that people give don't stand up to scrutiny. The truth is a bit more subtle and nuanced.

[Rockie]

You don't get to extract minerals from Canadian soil without paying for those rights. That contributes to the Canadian economy.

Not nearly as much as it should. Canadian jobs contribute much more which is a pretty obvious nuance.

[BTyyj]

If you want a socialist system where the government feels it has a free hand to intervene in the interests of the proletariat

The democratic system which our society currently utilizes suits me fine. The issues I have are with the current Conservative government, which doesn't seem to mind too much when foreign labor is brought in by a foreign company to exploit our resources, but if a labor union wants to utilize its right to collective bargaining, watch out.

I don't know the mining industry in enough detail

I won't pretend to know any more than you about the mining industry, however, based on previous poster's comments, a foreign company operating in Canada using foreign workers doesn't seem very beneficial to the average citizen.

[photofly]

I won't pretend to know any more than you about the mining industry, however, based on previous poster's comments, a foreign company operating in Canada using foreign workers doesn't seem very beneficial to the average citizen.

Economics would suggest it should be exactly as beneficial as if a Canadian company was mining.

If a Chinese company can do it cheaper than a Canadian company it means they will be prepared to pay more for the mining rights. when a natural resource fetches a higher price, that's a boost to the economy.

If you're a Canadian miner then it's a huge disadvantage to you personally for the Chinese to do it cheaper. But the Government's responsibility is to all Canadians not just to Canadian miners; if the Chinese put in the highest bid it means they value the mineral rights more, and the benefit to Canada is maximized by accepting the highest bid.

Also you have to take into account that setting up a mine takes resources. If a Chinese company does that it benefits Canada for that investment to come from abroad.

I'm not saying that it's good policy for Chinese mining companies to operate in Canada, or bad. Merely that for all the headlines about foreign exploitation we don't see the other side of the transaction; a small number of very fat cheques drawn on Chinese banks and payable to the Receiver General of Canada isn't "bad news" with media appeal.

[NeverBlue]

NeverBlue, you are talking about globalization in terms of global trade, which isn't the issue being discussed on this thread.

my post was in response to the quote...they are one in the same frosty

[Rockie]

Economics would suggest it should be exactly as beneficial as if a Canadian company was mining.

Well, except for the fact profits leave the country and Canadians aren't employed. I guess in your world those things don't count as economic benefits.

Your baseless assumption that foreign companies pay more for the non-renewable mineral rights simply because they have cheaper labour is ridiculous as well. I'm glad you're not in charge of the economy, but then again I'm not too encouraged the Conservatives are either.

[photofly]

Economics would suggest it should be exactly as beneficial as if a Canadian company was mining.

Well, except for the fact profits leave the country and Canadians aren't employed. I guess in your world those things don't count as economic benefits.

The profits are the return on the capital investment by the Chinese company. That's how capitalism works (it's all in the name). For Canada to keep the profits a Canadian company would have had to invest. Instead they were able to invest in something else. And profit from that, instead. Do you see how it works?

Your baseless assumption that foreign companies pay more for the non-renewable mineral rights simply because they have cheaper labour is ridiculous as well.

Why is it ridiculous? If you bid on my mining rights, your lower costs increase the price you're prepared to bid, and the price I expect you to pay. Otherwise I'm not going to sell them to you.

You think that anyone involved in government is an idiot, unable to see simple truths that are self-evident to you. I understand that frustrates you. If you think you can do better, perhaps you should run for office?

[photofly]

Let me ask you this: how do you think the Government of Canada sets the price for a licence to mine a non-renewable resource?

[Rockie]

Let me ask you this: how do you think the Government of Canada sets the price for a licence to mine a non-renewable resource?

By the strength of the mining company's lobby firm and the size of the bribe. I'm only half joking.

How much of the profits and salaries paid to foreign workers ends up back in the Canadian economy?

[photofly]

I don't know if there's corruption or not. Morality aside, the reason corruption is bad is it distorts the market.

Eventually, all of the money paid to foreign workers (in CDN$) comes back to Canada. We need to send CDN$ abroad (foreign workers, or foreign imports, which is another way overseas companies profit from Canada) so that Canada can have an export industry. The two go hand in hand, as I explained earlier.

Things like foreign worker programmes are essentially quibbling about the details of how that necessary exchange of trade happens. Of vital importance to those involved in that particular industry but not of any benefit to the Canadian economy as a whole.

The difficult part of economics is that outcomes that are good for economies can be awfully cruel to individuals, areas, and communities. Who all have votes. So politicians step in with laws to protect citizens. (I'm not saying whether they should, or shouldn't). But those measures don't make any economic sense.

It sounds like you want more protective measures - which is a legitimate political goal and one for which I have no disrespect. But it's going to be at the expense of economic development overall. You need to know the costs of what you're asking - the costs to the whole economy - and be prepared to ask everyone else to help pay them.

[Rockie]

Eventually, all of the money paid to foreign workers (in CDN$) comes back to Canada.

Flat out wrong. Sorry, but there's no other way to say it.

Plus even if it were true that's no comfort to the hundreds of Canadians who applied for those jobs and couldn't get them because they were reserved for foreign nationals.

That's not being protectionist, it's being balanced.

[BTyyj]

Instead they were able to invest in something else.

Invest in what else? These are mining companies we are talking about it.

The profits are the return on the capital investment by the Chinese company.

Yes, but generally profits have to be greater than capital investment for it to be worthwhile. This should be considered a loss by Canada, as we are not only losing potential income via profits, but also losing local citizens having jobs.

[photofly]

You could try explaining why you think I'm wrong. If the money doesn't come back to Canada, do you think there's a big box of CDN$ that people dump their currency into, and say goodbye to it, for ever? Is the rest of the world so enamoured of the CDN$ that they want to stockpile it ad infinitum?

Here: http://www.avcanada.ca/forums2/viewtopi ... 95#p802395

I've given you an explanation of how and why the money needs to flow out - so it can flow back. Can you find a flaw in the reasoning? Just saying "Flat wrong" isn't very interesting.

[photofly]

Invest in what else? These are mining companies we are talking about it.

It doesn't matter. If the Canadian mining company can't think of anything to do with the money they can return it to their shareholders who can invest it elsewhere, or they can put it in the bank and the bank can lend it to other non-mining companies. As far as the Canadian economy is concerned It doesn't matter who uses the capital for a profitable activity - as long as someone does.

Yes, but generally profits have to be greater than capital investment for it to be worthwhile. This should be considered a loss by Canada, as we are not only losing potential income via profits, but also losing local citizens having jobs.

There's no guarantee of a profit in any industry. If there's a sudden collapse in the international price for coal then the Chinese company isn't going to make a profit, it's going to make a loss. A loss that was avoided by Canada - which we can consider as a boost to our economy.

Meanwhile the industries that Canadian companies chose to develop with the money they saved from letting the Chinese set up the mining operation can continue to profit, even while the coal industry collapses. At that time you can sing and dance that all the former Canadian miners still have solid jobs in the booming semiconductor fabrication industry (funded by the sale of mineral rights to the Chinese) while the poor foreign Chinese miners go home because their Chinese mining company went out of business.

Like I keep saying, you can invent outcomes that, looking back, make it appear that Canada got screwed ("Record profits for Chinese mines!"). But you can also invent outcomes that looking back, make it appear that we got the deal of a century ("Coal price collapse leads to layoff of Chinese workers as mine closes!"). Looking forward you don't know what's going to happen. That's why, for instance, the price for mineral rights allows the purchaser the opportunity to profit. Whoever that purchaser is.

[Rockie]

If the money doesn't come back to Canada, do you think there's a big box of CDN$ that people dump their currency into, and say goodbye to it, for ever?

Have you ever heard of currency exchanges? It's when say a Chinese national has $10,000 Canadian that doesn't do him any good in Beijing, so he goes to a bank and exchanges it for an equivalent amount of yuan minus a fee. The Chinese person then spends that money in Beijing, not Tumbler Ridge.

[photofly]

Have you ever heard of currency exchanges? It's when say a Chinese national has $10,000 Canadian that doesn't do him any good in Beijing, so he goes to a bank and exchanges it for an equivalent amount of yuan minus a fee. The Chinese person then spends that money in Beijing, not Tumbler Ridge.

Keep going - what does the Chinese bank do with the CDN$?

[snowball]

Manufacturing is on a steady decline in North America, its happening overseas. Why? Because we the consumer won't pay the prices needed by the company making the goods when they are produced here. Wages drive the production costs beyond what the market will pay. Solution? Outsource... In the BC situation the workers are living in the community. Does some of the wage go overseas, no doubt but it also goes back into the economy via the grocery store, restaurants and local businesses. If your ideology is followed and we bar the door and toss out all the immigrants and force homegrown upon business be prepared to pay to for that entitlement. You say our jobs... I say my jobs, I own the company, it's my investment thats on the line, therefore I should have the right to decide who is going to be offered my jobs.

Totally disagree. Ping golf clubs that USDD to be manufactured in the USA = $2000. Ping golf clubs that are now manufactured in Asia = $2000. The only difference is the cost to produce has dropped (as well as quality) but profits soar. Consumer still pay the same. Corporate GREED flourishes. As a consumer we should have never agreed to pay for the shi*ty quality products that are produced in asia. We should have never agreed to pay no more than 300 bucks for those clubs. We got suckered.

[photofly]

Totally disagree. Ping golf clubs that USDD to be manufactured in the USA = $2000. Ping golf clubs that are now manufactured in Asia = $2000. The only difference is the cost to produce has dropped (as well as quality) but profits soar. Consumer still pay the same. Corporate GREED flourishes. As a consumer we should have never agreed to pay for the shi*ty quality products that are produced in asia. We should have never agreed to pay no more than 300 bucks for those clubs. We got suckered.

This is economic nonsense on so many levels I don't know where to start.

Ping is a US company. Every extra dollar of profit is a dollar that goes to the US shareholders, contributing to the US economy. The more profit they make, the better for the US economy.

If consumers don't like the quality of asian-produced golf clubs they don't have to buy them. If they continue to buy them then the quality is fine. Nobody buys Ping golf clubs at gunpoint. So that argument is out of the window.

You also don't understand where value is created in the economic chain. You think that paying a worker a salary is economic development. It's not. Any kind of open bargain involves no economic boost. The economic benefit of making golf clubs is situated between making them at one price and selling them for more. If Ping can reduce its cost of labour that INCREASES the economic activity of the firm - which, being US owned, increases the size of the US economy.

[Rockie]

Keep going - what does the Chinese bank do with the CDN$?

Lend it back to Canada for huge interest rates. Or exchange it for Euro's and lend it to Portugal. Or exchange it for US dollars and lend it to the United States.

What do you think happens to it? Do you think just because they're Canadian dollars they have to spend it in Canada? For that matter do you think we're even talking about actual physical money here?

[snowball]

Totally disagree. Ping golf clubs that USDD to be manufactured in the USA = $2000. Ping golf clubs that are now manufactured in Asia = $2000. The only difference is the cost to produce has dropped (as well as quality) but profits soar. Consumer still pay the same. Corporate GREED flourishes. As a consumer we should have never agreed to pay for the shi*ty quality products that are produced in asia. We should have never agreed to pay no more than 300 bucks for those clubs. We got suckered.

This is economic nonsense on so many levels I don't know where to start.

Pink is a US company. Every extra dollar of profit is a dollar that goes to the US shareholders, contributing to the US economy. The more profit they make, the better for the US economy.

If consumers don't like the quality of asian-produced golf clubs they don't have to buy them. If they continue to buy them then the quality is fine. Nobody buys Ping golf clubs at gunpoint. So that argument is out of the window.

You also don't understand where value is created in the economic chain. You think that paying a worker a salary is economic development. It's not. Any kind of open bargain involves no economic boost. The economic benefit of making golf clubs is situated between making them at one price and selling them for more. If Ping can reduce its cost of labour that INCREASES the economic activity of the firm - which, being US owned, increases the size of the US economy.

Ping is just one example. As for having the choice to buy the clubs because the are manufactured in Asia? Many consumers are unaware of the shift of manufactucting the of some products. Heck even I was unaware of the Ping clubs and I own ping clubs. You seemed to be focused on the manufacturing side of things and tend to forget that if we North Americans dont have jobs, we dont have disposable income. Not good for the big corporations now is it. I think your idea of value is a bit skewed too. Sorry but I would rather 300 bucks for a product that is made in the US that will last a lifetime rather than buy a similar product for 30% the price but have to purchase a new one every year or two. Most Asian manufactured/assembled products are throw away items.