Brian Abroad

Last month I was in New Zealand hiking the Tiki Trail located near Queenstown.  It was a climb of just over 450 vertical feel and about 2.5 miles long.  I enjoyed the hike even though it was brutal.  I was the oldest on the trail by about 30 years.  After recovering for a day or two, I then went to Auckland.

For the next four years Auckland will be a horrible place to visit.  With help from the Federal government, the city is rebuilding the whole downtown. They have just finished renovating the main train station.  Now three subway lines will be built from the station over the next four years.  The road along the harbour, plus a couple of streets, will be converted into walking malls. While accumulating massive debt to construct, these projects will create high paying jobs for a few years.

During my visit they announced that a new port will be built immediately to replace the existing one because there is no more room to expand.  To go along with this, there is a steady stream of new construction for high rises and businesses.  Unfortunately, these new buildings are destroying the view.  Like most Canadian cities, there is an acute shortage of affordable rentals downtown.  It is normal to have more than two people share a one-bedroom apartment.  I saw one listed at $450 a week.  New hotels are going up to meet the ever-growing tourist demand.

These government projects will cost hundreds of millions of dollars, most of which will have to be borrowed.  This will probably cause their currency to fall between 2 to 5 cents versus the U.S. dollar temporarily, however it should recover quickly.

Trudeau and the Prime Minister Ardern of New Zealand have one thing in common; both are dedicated Greens and hate the energy sector.  New Zealand today imports almost all the fossil fuels it needs.  There is a small field off the coast with about 7 years worth of natural gas.  For the second time this year, at least, Prime Minister Ardern announced she will never issue permits to develop this field.  She, like Trudeau, believe in transferring money and jobs to foreigners by purchasing their oil.  For some reason they believe this lowers greenhouse gases.  After this, Ms. Ardern is different.  She is a doer while Trudeau talks the talk and usually does nothing. 

Trudeau’s only claim to fame is legalizing marijuana, of which he has made a complete mess of. Almost every pot company is losing money and will continue to do so.  Why you ask? Because Ottawa sets the marijuana price, which is substantially higher than what the native bands and the black market sell for.  These two groups are making money and paying no taxes.  Ottawa has yet to charge one illegal dealer - such kind souls they are are in Ottawa.

We suggested not to invest in this market when it became legal.  We continue to hold that recommendation as many are now going bankrupt.  Plus, sales are much lower than what was anticipated.  For the year ending in October, sales came in at $908m, rather than the forecasts that ranged between $2b and $5b.  This sector will continue to be a poor investment for the foreseeable future.    

Prime Minister Ardern is moving forward creating wealth for her country, while Trudeau will spend the next four years accomplishing very little or nothing. Trudeau can learn lots from other politicians such as New Zealand’s. Unfortunately, he does not care to. He knows he is safe being Prime Minister for the next 24 months when all re-elected politicians will get one of the worlds best pension plan after just 6 years of work.  So, he can coast until then.  This carefree attitude will continue to make Canada an unattractive place for foreigners to invest.

A few notes on my visit: 

• This is one of the few times over the past 20 year of visiting New Zealand that Greenpeace was nowhere to be found.  They have always been trying to raise money for themselves by telling the world such things as Canada is evil for destroying the planet with the tar sands.  Not once did they ever blame China, Russia, India and the U.S., who each create15% of the worlds GHG, versus Canada’s which is just under 2%.  Only Canada is the devil in their eyes. Plus, they were always telling how we are killing off all the polar bears, even though scientists have noted a year ago their population is growing. 

• Ending on a positive note, the main department store on Queen Street has all its show windows full of Christmas themes exactly like Eaton’s and Simpson’s used to have every year that I and many other kids use to enjoy in the 1950 and 60s.

We wish you all a happy holidays.