The 2015 Alberta Budget Disadvantage.

After a hiatus of close to one year to write my latest book Conservatives: Dead or Alive? (Amazon.com) I will start blogging again on a regular basis. On every second Sunday of the month I will be blogging about politics and economics. I would like to invite you to follow me and write your comments, and share with your friends. It is the only way to share ideas given the bias that exists in the main stream media today.

It is said that charity begins at home. So for my first comeback contribution I will share with you my views on the 2015 Alberta Budget Disadvantage. Premier Prentice promised change from his predecessor Allison Redford, however his first budget produced the same ‘progressive’ agenda that believes in tax and spend Albertans hard earned money.

It is obvious that Alberta has been affected by the massive drop in oil prices. But in reality the province’s problems are not just revenue based but solidly anchored in a culture of spending and mounting debt due to ill-conceived promises and bad fiscal management.

The 2015 budget should have been an opportunity to make bold decisions and instead the Prentice government cowardly used the pretext of Alberta having the lowest taxes in the country to include 59 new or increase taxes and fees. In light of increasing costs and dwindling service delivery, they offered no cuts to bloated administrations in both education and healthcare. The healthcare premium will go to general revenue – we know where that will end up. The unions got out scot free and will only have their benefits and agreements considered after the next elections. The result is a proposed budget cut of just   0.7 %, resulting in the largest deficit in the province’s history - $5 billion.

Having masterfully got rid of the official opposition through betrayals and capitulation, the government could have done a better job. Knowing that there would be no chance of losing a majority at the next election, the government could have introduced a 5% sales tax, as well as increasing the minimum taxable income to balance the impact of its introduction. Taxes did not have to be increased, but massive cuts, as well as toll roads and other user fees could have been implemented. Restructuring of government departments and introducing managed competition and  private/public partnerships could have helped the financial situation today and for future years.

To present a ten year plan is a joke, given that this government and the Premier may not even be there in ten years’ time. This budget was nothing more than a campaign manifesto. The biggest problem is Albertans believed that Prentice would be a change from Redford. This budget proves that nothing has changed, but more importantly that the establishment ‘progressives’ are now in full control of the Party.

Please also find a link to my latest speech. A New Direction for Alberta

http://youtu.be/fkVHe0iapjE

Conservatives :Dead or Alive?

Summary

Amazon, Kindle

Price $24.95

The eighties were the golden age of conservatism. With leaders like Ronald Reagan, Margaret Thatcher and Brian Mulroney in power in their respective countries, it was a time when the values and principles of conservatism were at their apogee.

After a significant downturn under the weak leadership of then President Jimmy Carter, we saw an upturn in free trade and economic growth. America came back as a proud country after the Iran debacle. Communism was being challenged and was on its death bed. We saw the fall of apartheid, and South Africa was finally moving towards a true democracy. During George H. W Bush tenure as president we witnessed unprecedented events; as The Soviet Union lost its hold, the Cold War ended and the Berlin Wall fell

Upon Bill Clinton’s arrival things changed rapidly as America became increasingly progressive in its policies. The left had been growing in stature in the free world, despite the 8 years of George W. Bush. President Obama’s promise of ‘hope and change’ brought more leftist policies which gradually morphed into socialism.

The U.S and Canada shared border, close geographical and cultural proximity has a major effect on our political landscape. In the US and Canada you have a celebrity cultural norm backing leftist candidates via social media.   The electoral process has turned into something of a media circus. Canada needs to keep close tabs on its media to ensure unbiased reporting that influences election results. The US media has s significant influence on how Canadians think and vote...

The twice elected Obama certainly gave hope to the left, but we rarely see a true evaluation of his policies by the Canadian media. Since generally we have been a more ‘progressive’ nation, any perceived Obama success emboldens Canada left. It is important to expose his blunders, to show how socialist/liberal ideas and policies not only fail but also endanger the security and economic liberty of us all.

“Conservatives: Dead or Alive?”  analyses the differing positions and paradigms facing both the left and the right today. We tackle how both the left vs the right ideology ideas attempt to remedy the major issues, including education, healthcare, climate change, national divides, immigration, and cultural/social values facing the next generation and generations to come.

Some very important elections will be faced by both Canada and the US in the coming 2014, 2015 and 2016 years.  Like all previous elections they will have consequences of its past to bear.  In the U.S the failed policies of Obama may give rise the Republicans. In Canada despite a Canadian Conservative government for the past eight years, we are not guaranteed the progressives have disappeared.

 This book is meant to be provocative, to elicit a discussion about the values of conservatism ^v/_s liberalism. Today’s small ‘c’ conservatives seem to have disappeared as progressivism has made large inroads, especially in Canada. Too often we are seeing many conservatives fighting among each other in their search for power. These actions have known and well documented reactions, contributing to the erosion of conservative values and principles.. In order for conservatism to survive this book will act as a sounding to conservatives everywhere, as a call to put social issues on the back burner, and concentrate on true conservative principles in order to survive and flourish in the future.

 

Remembrance Day; but politicians forget

On this day of remembrance, it is unconceivable that Canadians do not take some time to examine the financial plight of our veterans. Over the years governments of every stripe have been responsible and responded to the call to arms with when required. Our young men have been thrown into the battlefield on several occasions to respond to attacks by our enemies. World War One and Two come to kind but we must not forget the other campaigns of Korea, and more recently the two wars in Iraq, and the continuing one in Afghanistan.

Despite President Obama’s stupid declaration that “the war on terror is over”, we shall continue to have skirmishes and perhaps even greater conflicts in the future.  The bigger issue that we should consider, on this day, is not only how we honour the heroes of the past but how we treat the survivors of all these wars. It is apparent that once these heroes return home they are quickly ignored and left to their own devices to survive in a world which they sometimes feel they do not belong due to mental and physical illnesses suffered on the battlefield.

Today with advances in medicine there are more survivors, but alas many of them survive without limbs and mental problems. Today we acknowledge ‘Post Traumatic Stress Disorder’ which once was diagnosed as ‘shell shocked’. Yet we still do not do enough to re-integrate these great men into normal life.

In addition, governments try to ignore the financial plight of these men. We talk a lot about their bravery but we do little to compensate them adequately for their service. This is not a partisan issue as governments on different political spectrum treat these men with the same disregard. The Conservative government in Canada and the Democrat and Republican leadership in the U.S share the same blame.

We remember these men’s and women’s sacrifices, but we do not compensate them appropriately. Yet governments get bigger and salaries and union wages keep growing and increase the taxpayers’ burden. But we do not find enough funds to make sure that these heroes have a future life devoid of the financial loads they face.

For the past couple of months we have seen the Senate travesty of politicians defending the alleged misuse of taxpayers’ money by three Senators. We debate whether they should retain their health benefits and pensions, and yet we do not debate how we can better look after our soldiers.  Mental health is difficult enough to treat, but financial help should be easier. It takes only a change in Legislature and Congress to remedy the situation.

On November 11 of each year we have ceremonies around the world to honour the fallen, but the following day we do not discuss how to look after the survivors. New generations are reminded:  “Lest we forget’, but it seems that politicians of all stripes do forget what we owe the fallen and the survivors. Politicians should cut the rhetoric and provide the survivors of all wars with adequate support.

Marcel Latouche

Kabuki, or dance of the seven veils?

The senate debacle is bad, not only for the Conservative Party but for the country. For too long this establishment has taken Canadians for granted. As appointed members of the Upper House they not only enjoy many perks but  it seems that some of them may also enjoy a different form of justice.

The case of Mike Duffy, Pamela Wallin and Patrick Brazeau has shed a light on how  brazen these people can be in their use of public funds. It seems that the rules can be interpreted in many ways so as to extort as much as possible from  the public purse.

The rules which has sunk these three senators is about the expenses claimed, among other things,  for the use of an address used to claim their main place of residence. It appears that on top of some other expenses which have been deemed to be out of line, the main problem is that these senators claimed that their place of residence was in the constituency they represent. That is P.E.I, Quebec and Saskatchewan. But it seems that all three of them rarely spent any time in these abodes and more importantly were rarely seen to be in the residences.

The more important question is why the delay and high drama theatre being used to deal with this matter. In the private sector people who are found to have breached rules of employment are summarily dismissed. They are also allowed due process if they so wish and address their grievances in court, post dismissal. Here what is interesting is that these people get the opportunity to waste time in the senate to argue their case in front of their peers. Who in many cases may be suffering from ‘cold feet’ because they may be found to have perhaps broken some of the rules themselves.

As a result all three senators are using their membership in the senate to release information about their treatment at the hands of the PM and the Senate majority. These bits and pieces of troubling information may or may not be true. The result of the RCMP investigation is yet to be released. At this time it seems that it may well be a case of ‘he said and I said’. The somewhat daily revelations are like the ‘dance of the seven veils’. While Mr. Duffy’s performance may not be erotic it is certainly very revealing on how the system works and how entitled the performer feels.

The Prime Minister who appointed these senators finds himself in a very precarious situation, since he did not take immediate action when these troubling facts were first released. The role of the PM’s staff is even more troubling. Did they or did they not inform the PM when the $ 90,000 and legal expense fees transactions were taking place? If not what else do they not divulge to the PM? Or is it that the PM is so embarrassed by his decision to appoint three persons that I would never consider as true conservatives to the Senate.. Or is fighting an internal move by the Progressive Conservative members in his caucus to assert themselves before any change in future leadership? Because it seems to me that the reluctance to punish these alleged culprits is coming from senators from the East rather than those from the West,who express their opinion, may be not publicly, but want to deal with this issue as soon as possible.                                                                                             

 Furthermore it is clear that the public is taking a very dim look at the PM’s performance as is reflected in the latest polls, which now places him behind the two other leaders of the opposition. There are far more important issues to discuss and this is a distraction of enormous proportion that may lead to the demise of the government, which as a result may derail the economic gains that Canada has enjoyed over many of its competitors. Politics continues to be a theatre, that citizens do not want to pay for with their hard earned money.                                                                                                        

Get rid of the three senators, and let them fight it in court if they so wish, but get rid of them now. May be this incident may give rise to stopping the ‘Kabuki’ and the dance of the seven veils’ by abolishing the Senate . Canadians have had enough.

Marcel Latouche

Ignorance is no excuse; or is it bliss?

Political scientists and economists, often discuss Agency Theory which is the relationship between a principal and an agent. In this relationship the principal (Council) delegates (the Administration) to perform work. The theory deals with two problems:  the first is that the goals of both the principal and the agent are in conflict, and it can be difficult for the principal to verify the agent’s work. The second is the risk sharing issue, because the principal and the agent have different risk tolerances.

In light of several recent reports from Council dealing with costs overruns, it may be time for Calgarians to take a good look at the Agency Theory to explain the reasons for some if not all the costs overruns of Calgary's capital projects.

The latest of these audit reports address the costs of the West Leg LRT. While the line is in operation we still have additional costs not yet accounted for. In 2007, Council approved $700 for vehicles, construction design and land purchase. In 2008, due to several revisions to the original plan, Council approves and additional $121.4 million. Between 2009 and the 2012 opening of service Council adds an additional $389.7 million, including $142m for land. In 2010 the budget is reduced by $5 million but the cost of landscaping is yet to be included in 2013.

As you can see, it seems that this project never had a full analysis before approval. Council seemed to be eager to move on with the project despite the fact that there were many unknowns. One fact that is not very well known is that the former Mayor owned two properties on the proposed line.  Of course after the audit, Management accepts all the recommendations made to improve the Corporate Project Management Framework. What else could administration do, say No to the recommendations? Unfortunately for the taxpayers , as usual the horse had already bolted.

This is not the first time that projects at City Hall have suffered the same results and audit scolding. We had the debacle of the East Village, the widening of 16^th Avenue, the Crowchild bike path, the problems with the Centre Street Bridge, the lack of a budget for a kitchen in the Telus Convention Centre, and of course the yet to be resolved costs of the Peace Bridge among other projects.

If it is not coincidence it must be a clear pattern of the agency theory problems; one either Council does not have a grasp of what administration is doing, or that the risk taking differences are so large that they cannot be reconciled. Either way, the costs of the consequences of bad management falls directly on the taxpayer who in the end always pays for the mistakes.

It seems that Council has the problem of fulfilling its promises to the electorate without looking clearly at the risks of undertaking such promises. The other issue is that administration is willing to low ball the costs, and minimize the risks to please their masters and get the project going, despite the fact that the full extent of the project costs may not be known at the time of approval. It may be in the interest of administration to do so because it seems that the high ranked executives may have their bonuses attached to performance and the completion of these projects.

More importantly for Ald. Pincott, a Chair of the audit committee, and some of his colleagues to claim ignorance or lack of information is inexcusable. Clearly due diligence and oversight were missing. Given these past problems and the often un-scrutinized bonuses at City Hall, Calgarians should demand that we move away from the current practices of project analysis, budget management and lack of proper accountability. Although P3s may not be the panacea for better management, it seems that it could well be time to consider more private/public partnerships with strong and verifiable contract caveats, including penalties for non-compliance and late delivery.

A departure from current practices is more imperative now than ever due to the amount of reconstruction that will be required as a result of the 2013 Flood. Calgarians cannot afford anymore blunders, or bad budgeting for future projects, notwithstanding whether they are essential or nice to have. The latter of course should be completely discarded and ignored.

Marcel Latouche