Consider, Federal

Ethics, Libya and Mr Harper

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In sending Canadian war planes to Libya Steven Harper is at least being ethically consistent. Of course consistency is not really a good thing for Canada or Canadians when it is UNethical behaviour that is the constant.

From the Conservatives ‘moral superiority’ on MP’s golden pensions (which quickly disappeared when it was time to put their money where their ‘moral superiority’ was as all the Conservative MPs bellied up to the trough to pig out on taxpayer funded golden pensions) to Mr. Harper’s promises and ‘moral superiority’ on appointments to the Senate (until it was convenient to Mr. Harper to appoint Conservative Senators and control the Senate) to International Cooperation Minister Bev Oda’s changing a document and then lying about it to a parliamentary committee and the in-and-out illegal election spending (done to get around the law on election spending limits) both of which Mr. Harper has indicated he sees no problem with – Mr. Harper and the Conservatives have been consistent in not letting ethics interfere with how they behave.

There was no reason for Canadians to expect Mr. Harper to let questions of ethics interfere with an opportunity to curry favour with the Americans by sending warplanes off to join in another war.

And Mr. Harper did not disappoint – rushing to get his increasingly brown nose firmly and deeply affixed betwixt the checks of the American heinie.

Yes I know that those who are engaged in blowing the *bleep* out of Libya have laid claim to ‘moral superiority’ (why is it that those who claim ‘moral superiority’ so often behave without ethics?) citing Mr. Gaddafi for shooting civilians.

Of course these civilians were armed, attacking and capturing cities. Which sounds remarkably like a rebellion and civil war, not peaceful demonstrations…….as long as you are a friend of the USA. If you are someone the USA would like to see gone…….well the armed rebels are freedom fighters and must be protected.

Ethically based behaviour has a consistency that behaviour based on self interest lacks.

If the actions against Libya had been a matter of ethics……

At the time the aggressor nations began blowing the *bleep* out of Libya, in Bahrain Saudi Arabian troops were shooting unarmed demonstrators. Where is the outrage for those actions, the military action to protect unarmed civilians who were peacefully demonstrating? Of course Bahrain is considered a friend of the US and the Saudis have lobbyists and over the years have spent billions buying the US government.

At the same time the Iranian government was cracking down and killing its own unarmed demonstrators. Where is the outrage for those actions, the military action to protect unarmed civilians who were peacefully demonstrating? Nowhere – the Iranians, as much as the US would no doubt like to be bombing the *bleep* out of Iran, can shoot back.

Even if you overlooked the evidence that that what is occurring in Libya is a matter of convenience rather than ethics and believed that enforcing a no-fly zone was the right thing to do….

Shouldn’t Libya have been violating the no-fly zone before the invading force attacked? Instead the attackers pounded Libya with cruise missiles and followed that up with attacks using aircraft.

News reports were full of the film as Canadian jets hit munitions stores. Hopefully none of the Canadians in Libya become ‘collateral damage’ of the Canadian planes.

What the news didn’t have is any report of the no fly zone being violated. Yet the pounding of the portions of people of Libya loyal to Gaddafi continues unabated.

Among the targets hit in ‘enforcing the no-fly zone’ were tanks. I know the modern tank is a piece of advanced technology but I hadn’t realized they could fly.

The actions in Libya are not about enforcing a no-fly zone. If one wants to know what it is all about one merely needs to read reports of what is taking place in Libya:

“Libyan rebels backed by allied air raids say they have seized control of the frontline oil town of Ajdabiya from Colonel Muammar Gaddafi’s forces.”

We are pounding Libya with ordinance and supporting rebel attacks on Libyan cities. Actions that kill civilians. It seems that Mr. Harper is going to protect Libyan civilians from Mr. Gaddafi – even if he has to kill them to ‘save’ them from Mr. Gaddafi.

Canada and Canadians were once respect and listened to by the world community because we were a voice of reason and balance.

Now we behave just like any other bullying warmonger. Not surprising since Canada has a head of state who has repeatedly demonstrated his disdain for letting ethics interfere in any way with his or the party’s behaviour.

Mr Harper has tarnished Canada to the point where we should be ashamed. Not of being Canadian or of Canada but that Mr. Harper was not been handed his walking papers.

Consider, Federal, Municipal, Provincial

The Fault Lies Not in Our Stars but in Ourselves

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” What’s the matter with all of our elected officials? Obviously, health care is not your top priority. Taxing us to death seems to be at the top of your list.”

What is the matter with our elected officials Ms Whiteford? You and the majority of other citizens, along with reporters, pundits, the media and opposition politicians.

Where do you suggest the government get the funds to build more hospitals or pay more medical staff? Perhaps capture Rumplestiltskin, imprison him in the basement of the Legislature and have him spin straw into the tons of gold required to pay for the multi-billion dollar demands of yourself and others?

Billions of dollars in demands for new infrastructure and services that everybody demands and refuses to pay for – ” Taxing us to death…” Citizens behave as if the provincial government did have Rumplestiltskin in the Legislature basement generating an unending supply of gold from straw.

That may seem, may well be, a little snarky but – people demand to keep underutilized schools open, build new schools, smaller class sizes, more hospitals and hospital beds, more medical staff, more expensive medical treatments and drugs, they want to spend billions more to build and staff prisons to lock more people up for longer periods of time, they want……they want……they want……..

They want everything NOW and they want it for FREE – or at least they don’t want it to cost them any money or to raise their taxes.

You want more schools and hospital beds? Then that is what you should have been demanding the government spend its money on rather than spending billions on the two week blowout that was the Winter Olympics. The money being spent on replacing the stadium roof in Vancouver would pay for St. Paul’s hospital to be renovated.

We want it all without having to pay for it; the size of government debt bears witness that for years we have been consuming more government services that we were paying for – whipping out the credit card and running up a huge debt to pay for our lavish lifestyle; we don’t want to set priorities and make the tough choices; we behave like two year olds with no acknowledgment of reality, no economic sense or view for anything beyond the now, certainly no thought to the future.

And as happens in the real world our spendthrift ways are catching up to us. The cost of the services government provides are climbing – medical costs are increasing exponentially. Without an increase in revenue to offset these spiking costs we are going to be getting less services across the board – forget about more services.

Will we have a discussion about our priorities, about the costs of programs, about what we can afford and what we cannot, about what is – rather than what we believe or want to be, acknowledge we cannot have everything we want and discuss what we are willing to pay and what services the dollars we are willing to pay will purchase?

No, people will support the party that tells them what they want to hear – that there is no problem and to party on.

Then people will complain that the politicians lied to them. Ignoring the fact that lying to them is what voters reward politicians for doing.

Could the government be run in a more cost effective manner – yes;, could the money be spent more wisely – yes; could the future financial health of the province be much improved – yes. Will it? Well…..

Should anyone make the mistake of talking about acting in a fiscally responsible manner, of paying for what services we use rather than saddling our children and their children and their children with debt because we ‘put it on the provincial (or federal) credit card’, of setting priorities……

They will be sent home with their tails between their legs for not telling the people the lies they want to hear.

Pointing fingers at others, blaming others will not improve the financial reality of provincial (federal, municipal) finances. If people want to see the root cause – and where the solution lies – to our current (and increasing) political, social and economic woes they need only look in a mirror.

Municipal

P3 – Public Pocketbook Pauperization

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Reading that Abbotsford City Council is working on a P3 my first thought was ‘Hasn’t council done enough financial damage to the city and to taxpayers pocketbooks’?

My second thought was to be glad I was not a homeowner.

??? – The taxes and costs imposed by Abbotsford council have raised the cost of owning a home in Abbotsford. These costs show no sign of stopping or slowing under the current city council and staff’s demonstrated unwillingness and/or inability to get the city’s finances under control. The proposed P3 will significantly increase the yearly cost of city taxes/fees/levies when taxpayers begin paying for the P3 in a few years.

The concern is that the cost of the P3 will push the level of city taxes/fees/levies to the point where the cost will make owning property in Abbotsford unaffordable to many potential new taxpayers as well as some current taxpayers. This will have a negative effect on the real estate market; on both price and the time it takes to sell.

Knowing that the P3 is coming, that it will impose significantly higher cost and hit the real estate market – are you going to be able to afford the additional carrying costs of owning property in Abbotsford or should you be selling and getting out of town while the getting is good?

My next thought was that this time I hoped council and staff would cross all their t’s and dot all their i’s so that taxpayers would not find themselves once again, ala Plan A, promised millions of dollars in senior government funding that never materializes. Hoping that some taxpayer would not be asking Ed Fast why he did not get Abbotsford federal funds only to have him reply, as he did when asked that question about Plan A, “I was never asked.”

Finally I thought to myself ‘nice try George but no cigar’ for the mayor’s seeming attempt to suggest going with a P3 would make the project eligible for up to $50 million in federal funds. Let’s be clear that the federal funding is due to the nature of the project and has nothing to do with how the project (P3 or otherwise) is paid for.

P3’s are loved by politicians for a number of reasons, foremost among them being a total lack of accountability to the public or evaluation by the public.

Politicians can operate behind closed doors and keep the details, and thus the costs, totally secret because citizens lose their right to freedom of information about the details of an agreement when private business interests are involved. By definition a P3 has to have private business interests which means P3s are cloaked in secrecy leaving taxpayers questions unanswered.

Being veiled in secrecy as P3 agreements are, strips away taxpayers right and ability to evaluate and judge how detrimental the P3 will be to the public’s pocketbooks.

The second reason politicians have for loving P3 agreements is that spreading costs over time – a decade’s long period of time – ensures the public is unable to know what a P3 project actually cost them out of pocket until decades after the project begins at the time the project is finally fully paid out. How could politicians not love a plan that, no matter how bad the agreement is and how many millions or hundreds of millions or even a billion extra dollars it will cost taxpayers the veil of secrecy hides the details of the P3 from the public, ensuring that the public cannot know how many millions or hundreds of millions extra dollars they paid until long after the politicians are gone, retired on their golden government pensions.

Mayor Peary, following Abbotsford Council policy when someone fails to cheer council’s plans, or worse raises questions as to the wisdom of council’s plan, played the naysayer card.

“Some people have a political and philosophical objection to P3s,” he [Mayor Peary] said.

I had no political or philosophical objections to Plan A – I had financial objections and objections based on the infrastructure needs of the city. I have no political or philosophical objections to P3’s – I have financial objections.

The question is not whether a P3 will cost the public more money, extra cost to the public purse is inherent in the nature of a P3. There has to be a profit for the private partner, a profit that must be guaranteed and substantial enough to make the headaches and risks of a ‘partnership’ with the government/public worthwhile.

P3 projects also have longer time lines to ensure the private partner has no difficulty in meeting the completion date. The fact that Abbotsford’s new regional hospital was completed 108 days early is not an indication of how efficient the builder was but how effective the builder was at bargaining an overly generous completion schedule.

However, the factor that adds the millions or hundreds of millions of dollars of extra cost to the projects and to taxpayer out of pocket cost is the financing costs. Financing costs are a significant portion of the costs of any long term project (look at the financing costs of Plan A for an example of the high cost of financing).

Because the financing for P3s is provided by the private partner and interest rates for private borrowers are higher than for governments, the financing (interest) costs of P3 projects are higher than they would be for a public financed project.

These increased interest/financing costs add millions or hundreds of millions of dollars to the interest costs of P3 projects.

I would love to be able to discuss specifics of the increased costs involved in P3 projects but I can’t, no citizen can. The details of the BC governments P3s are hidden from the public until everything has been paid out decades from now.

Over his term in office Mayor Peary has made many statements that made many an accountant or manager’s blood run cold because of the negative impact these statements would have on the city’s finances and on taxpayer’s pocket books.

But “He [Mayor Peary] pointed to the Abbotsford Regional Hospital and Cancer Centre as an example of success, calling it the “poster child” for P3s” dwarfs any of those statements in its promise to deny taxpayers any ability to evaluate the agreement and in the millions of extra dollars it will cost Abbotsford’s battered and impoverished taxpayers.

Taxpayers need to keep in mind that the Abbotsford Regional Hospital and Cancer Centre P3 that mayor Peary calls a “’poster child’ for P3s” was so generous and profitable for the private sector that the agreement became a financial instrument bought and sold among international banks.

While that level of profitability undoubtedly makes the Abbotsford Regional Hospital and Cancer Centre P3 a ‘poster child’ from the viewpoint of the private sector, it makes it a pricey cautionary tale for taxpayers when politicians try to sell them more snake oil.

By the very nature of a P3, using a P3 to build the needed water system improvements will cost taxpayers millions of dollars extra in interest charges alone. How many more millions it will cost depend on negotiation ability – or lack thereof of staff and council.

The staff and council who built the Reach for $10 million; a structure that any farmer in the valley who has built a barn could have managed and built for a fraction of the cost. The staff and council who built the AESC with a promised, a sworn to $55 million cost for only $110 million – double the guaranteed ‘contracted price’.

As to Abbotsford city staff and council and P3s:

The deal between the City of Abbotsford and the Abbotsford Heat is, for all intents and purposes, a P3. So since Mayor Peary, staff and council are speaking about using a P3 – let us take a look at the deal between the Heat and the City.

Abbotsford’s taxpayers have no idea what the Abbotsford Heat are in fact costing them. Taxpayers have no facts as to the number of taxpayer’s dollars being poured directly, or indirectly (staff time spent on the Heat but paid by the city – for example. ARC where space and staff promote the Heat and provide box office services) into the Heat. Taxpayers have only rumours about the ownership of the Heat and cannot determine if the city is directly involved in/with Heat ownership. A recent Freedom of Information request to provide clarity on these questions was refused because of the involvement of private interests.

Why would local politicians not embrace a P3 to bail themselves out of the mess they have made of managing the city’s infrastructure and finances; of their inability to prioritize projects that address needs (water, road maintenance) over council and councillor’s ego projects (million dollar, unused garden; a professional hockey team and a building for them to play in); a P3 that will hide all the details of the agreement from the public.

A P3 will deny taxpayers their right to know the total out of pocket costs to taxpayers of the project – an out of pocket cost that a P3 will add millions of dollars to.

Why would Abbotsford’s and Mission’s politicians worry about the fact that a P3 will add millions of dollars to the cost to taxpayers? After all the politicians will be long, decades long, gone before the final payment is made and taxpayers can determine just how many more millions of dollars Abbotsford’s council poor financial decision making cost them.

Clearly a P3 is not a decision to be rushed into; particularly not rushed into merely so Abbotsford city council can say (during the upcoming municipal elections?) “no need for taxpayers to worry their little heads – we have taken care of the water matter” (now where have I heard that kind of line in a municipal election before?); not a decision to be made behind closed doors.

A P3 will impose not only substantial costs for decades, but the costs imposed on the taxpayers of Abbotsford (and Mission) will be significantly higher than the costs of a well managed municipal project (the most important factor affecting the cost of a public project being the level of management skill available to bring to the project).

Indeed, considering the secrecy involved, the inability of taxpayers to evaluate the P3 as a result of being denied the details by that secrecy and the millions of dollars that a P3 will cost the taxpayers of Abbotsford and Mission……

……if Abbotsford council and staff are determined to forge ahead with a P3 it is a decision that should be deferred to give the taxpayers, who will be paying for the P3, a chance to have their say on whether to use a P3 in November’s upcoming municipal election.

Consider, Provincial

HST – the cost of repealing

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I do not know if Mr. Vander Zalm is feeble minded or so focused on beating and/or beating up on the BC Liberals that he does not care what the consequences for the province and citizens of BC are. But at this point in time arguing the question of whether Vander Zalm is a lackwit or a scoundrel is as trivial and wasteful as arguing 2 months or closer to 18 months to discontinue the HST and bring back the PST + GST tax systems.

The referendum on the HST is June 24, 2011. This means that should British Columbians vote to repeal the HST the province will not receive the final $475 million payment for becoming a HST province that is due from the federal government on July 1, 2011.

Now, to Mr. Vander Zalm the loss of $475 million of revenue may be inconsequential or nothing for the taxpayers of BC to be concerned about. However I consider this first consequence of repealing the HST and the cuts that will have to be made to health care and education to offset this loss a significant and major consequence.

The next consequence, should Mr. Vander Zalm actually prove to have a magic wand that would enable the federal and provincial governments to end the single tax HST and bring back the dual taxes of the PST + GST in one or two months time, is the loss of the $300 million extra dollars the HST would put in provincial coffers this year and the addition of the $50 million cost of collecting and administering the PST (a cost that under the HST is currently borne by the federal government).

Meaning an additional $350 million will have to be cut out of health care and education. Or the entire $825 (475 + 350) million could be offset by closing down the provincial court and prison systems.

Now, Mr. Vander Zalm may not consider a loss of revenue that would require shutting down the provincial court and jail system to offset to be a significant enough consequence to be concerned about in repealing the HST – personally I do.

In all honesty (I know, a novel concept in a political fight) I do not expect the $350 million per year loss of revenue + increased cost to have an effect before next year’s (2012 – 2013) budget. The need to replace the single HST form with two new (old) GST and PST forms, to procure and distribute the forms to all businesses in the province and to hire the staff to collect and administer the PST (remember the federal government is responsible for collecting the HST and remitting to BC their portion) plus the need of businesses to reprogram their cash registers/computers, to change accounting systems back to two separate taxes, to get the new forms….. There was good reason that the HST took all those months to implement.

Whether Mr. Vander Zalm is simply clueless, hasn’t bothered to give this matter any thought or would rather befuddle and distract the voters by arguing 2 versus 18 months to get rid of the HST and reinstate the PST + GST rather than face the multi-billion dollar effect repealing the HST will have on BC is a matter the reader will have to judge for themselves.

Although BC, should the result of the referendum be a HST repeal, will not receive the final payment of $475 million and thus not be liable for repayment of that amount BC will be liable for repaying the $1.1 Billion already received (and spent) for becoming a HST province.

Despite Mr. Vander Zalm’s airy dismissal of this debt the fact is that these funds were paid to BC as part of the HST agreement and that in reneging on the HST agreement the federal government is due repayment in full. Forget claims of ‘negotiation’.

The federal government is not about to set an unwelcome precedent for provinces taking their (the feds) money and reneging on agreements. The federal government will want repayment in full and since they can get their money back by simply reducing federal transfer payments to BC by $1.1 Billion Mr. Vander Zalm’s spurious claims of ‘negotiating’ or not having to repay the full $1.1 Billion are just so much Politician’s BS. The Province of BC will have to cut the $1.1 Billion out of budget spending because the feds will get their money back and there is nothing the province can do to prevent that.

Repealing the HST will impose a major financial indirect cost on the province of BC in the form of an increase in borrowing costs. Potentially a rather significant cost given the budget deficits BC is running and the increasing debt levels of the province of BC.

Repeal of the HST is a taxpayers revolt, a rollback of the tax increase effected by the switch to the HST and the fact that the provincial portion of the HST applies to more items than under the PST.

How are those who lend to the province repaid? Out of tax revenues.

BC is running large billion dollar deficits and taxpayers are refusing even a modest $300 million dollar tax rise to pay for provincial spending. Indeed, at the same time taxpayers are refusing to pay this modest tax increase they are demanding more healthcare and education spending.

Factor in the budget and financial chaos and damage the immediate loss of $475 million, the $300 million yearly reduction of revenue, the $50 million dollar cost of administering the PST and the $1.1 Billion dollar repayment to the federal government……and from the view of those with funds to loan, loaning BC money involves increased risk.

The perception of increased risk means an increased cost of borrowing. That the HST referendum is being held will increase BC’s cost of borrowing. Should the HST be repealed, a further premium will be added to the cost for BC to borrow.

Part of that premium will result from the perception that the BC government can no longer be counted on keep their agreements. And what that perception will cost businesses in BC, the government of BC and ultimately the taxpayers of BC only time will tell.

As I said, whether Bill Vander Zalm is a lackwit or a scoundrel is a rather trivial consideration at this moment, considering the devastation Vandr Zalm will have inflicted on the government and citizens of BC should he succeed in repealing the HST – once the consequences of repealing the HST come home to roost.

While there may be an element of truth to accusations that Premier-designate Christy Clark and Finance Minister Colin Hansen are fear-mongering (fear-mongering being a favourite tool of politicians) I have no doubt that Clark and Hansen are themselves (as is any British Columbian who understands the consequences of a HST repeal) afraid of the consequences of an HST repeal. Especially as they are the people who will be faced with dealing with the financial mess a repeal will bring about.

One final comment on this matter – Mr. Vander Zalm’s partners in crime. It does not matter whether the NDP’s support of repealing the HST signifies an abysmal lack of any comprehension of financial realities or a desperation to win the next election at any cost, no matter how devastating to the province and taxpayers. Either possibility disqualifies the NDP (without major changes in candidates and leadership) from being entrusted with