Hydro’s the elephant in the room

By: Graham Lane
Posted 02/19/2016

 

Neither the Liberals nor the Progressive Conservatives have seriously addressed the elephant in the room as we approach the provincial election.

That “elephant” is the actions and plans of Manitoba Hydro, now engaged in implementing a mammoth expansion and refurbishment plan that will cost households and businesses big time, while risking the future stability of Manitoba’s economy.

Under the NDP government’s direction, Hydro has already spent about $7 billion towards a plan that could end up costing $40 billion, all guaranteed by Manitoba taxpayers.

It includes the construction of three northern generating stations, the wrong-routed Bipole III transmission line, a new Manitoba-Minnesota transmission line and the refurbishment of existing assets. The plan is based on shaky forecasts of construction costs, market demand and pricing.


Graham Lane chairs Manitoba Forward (www.manitobaforward.ca), focused on sound public policy. 
Republished from the Winnipeg Sun online edition February 19, 2016.

Seek a balanced view on climate change

By: Graham Lane
Posted 09/10/2015

American columnist Paul Driessen wisely recommends not throwing out the baby with the bath water (the economy) in a pell-mell rush to address supposed climate change. His advice follows weeks of market volatility that has tested the confidence of investors that their savings will last through their retirement years. Much of that volatility involves angst over the value of oil.

Increasingly employer-sponsored pension plans are slowly going the way of the dodo bird. Excepting for public sector employees, employer defined contribution plans and individual RRSPs have become the predominant retirement savings vehicles for an increasingly mobile and vulnerable workforce. Over-heated environmentalists would deprive private sector earners from enjoying returns generated by Canada’s resources by restricting drilling and mining and not building needed pipelines.

Julian Baggini, author of The Pig That Wants to be Eaten, argues that while we should pay attention to the environment we shouldn’t make things worse for our population in doing so. Ruining an economy that has prospered from natural resources by adopting the gospel of the hard-core environmental lobby is doing worse.

American federal regulations already cost their economy $1.9 trillion annually — a sum equivalent to Canada’s total economy. While the environmental lobby works lock-step with climate-obsessed interest groups in the U.S. to throttle the energy sector, our Conservative government is, justifiably, more cautious. All elements of our society, including provincial governments and First Nations, should focus on developing the resource trove Canada has been blessed with and bringing it to global markets. Our ability to support the ill and the poor depend on government revenues supported by what we have in abundance.

Does anyone seriously believe that fossil fuels will disappear as a needed energy source? What are the candidates to make such an illusory future a reality? Nuclear has its own risks, waste having half-lives of millions of years. Wind, massive turbines blighting our environment killing birds in the millions. Solar, promising, but the sun doesn’t shine every day. And, oil’s use isn’t limited to energy but also as feedstock for plastics and the pharmaceuticals that extend our lives.

Obama’s regulatory minions are moving to eliminate coal mining and power plants while restricting the use of natural gas. If their views prevail, now opposed by 15 state governments and miner unions, natural gas-fueled electricity-generation will replace coal plants without even being counted towards his carbon dioxide reduction mandates. As for economic shock, coal companies have declared bankruptcy and thousands of jobs are being lost.

The Keystone pipeline remains blocked, and so are needed pipelines west to east and west to the coast for oversea markets. Does anyone believe pipelines are more risky than railway cars?

Anti-energy, anti-growth policies hurt the economy, the poor, and the middle class politicians tend to focus on. Driessen condemns soaring electricity costs increasing unemployment, pushing families onto government assistance, and diminishing opportunities for both health and welfare.

The world’s climate continues to change within historical natural patterns. The environment is benefitting from improved forestry practices, reduced birth-rates, and successful efforts to reduce emissions of real pollutants.

Canadians should recognize that our natural resources are the treasure trove that has brought wealth to our sparsely populated northern realm.


Graham Lane chairs Manitoba Forward (www.manitobaforward.ca), focused on sound public policy. 
Republished from the Winnipeg Sun online edition September 10, 2015.

Four decades later, settlements outstanding

By: Graham Lane
Posted 09/03/2015

The Northern Flood Agreement was entered to into in 1977. Manitoba Hydro and the federal and provincial governments agreed to compensate members of five First Nations for the negative effects of Hydro’s pre-1980 northern developments.

The consortium committed to provide four acres of new land for every acre flooded, expand and protect indigenous wildlife harvesting rights, pay $5-million for economic development projects for those five communities and provide aboriginal employment opportunities. The agreement, strengthened in 1996 with respect to compensating individual claimants, deals with “any adverse effects to the lands, pursuits, activities and lifestyles of reserve residents.”

Was a cost for fulfilling the commitments ever forecast?

Hydro’s 2015-16 annual report indicates that the Utility has so far recorded costs of $1.06 billion for mitigating the effects of it’s northern developments. Despite seemingly ever-growing costs and the passage of almost 40 years, negotiations still continue with about 320 remaining individual claimants. Claims were required to be filed by 2001.

Six Manitoba legal firms represent the remaining claimants. Hydro is represented by Thompson Dorfman Sweatman, a major Winnipeg legal firm. Michael Werier, “go to” lawyer for the NDP government, acts as arbitrator of disputed claims.

Despite the passage of 38-years since the signing of the Northern Flood Agreement, an office is still maintained at 363 Broadway.

How can it be that despite the passage of almost four decades since the projects related to the NFA were completed and 14-years after the last date for filing claims that more than 300 individual claims remain outstanding? While the lawyers for the remaining claimants received partial compensation for their work until 2011, nothing since. Contrarily, Hydro’s lawyer and the government-appointed arbitrator is regularly paid by Hydro.

Meters running, lawyers are slowly winnowing down the claims and some were found to be without merit. It remains unclear how many of the remaining claims will survive the ongoing testing process. Once this process has been concluded, settlement processes will take place with arbitrator Werier making the final decisions. Approved claims are to paid with interest.

Incredibly, a decision has yet to be made as to whether claims survive the death of claimants. Of the individual claims. many claimants are elderly and some have already died.

How is it possible that almost 40 years after the reputed damages individual claims remain outstanding? And, where exactly went the $1 billion plus Hydro indicates already either paid or provided for to mitigate damages due to flooding reserve lands for its dams? Will Wuskwatim, finished, and Keeyask, under construction, bring forth new obligations?

Has any external audit of the expenditures made to-date ever been undertaken? Shouldn’t a review of more than a billion dollars of costs factoring into rates be required? Has the federal and provincial governments contributed anything towards Hydro’s costs?

Does the laggard settlement process now underway represent justice for the aging claimants?

The Aboriginal Justice Inquiry reported as to the NFA: “… the reaction from Aboriginal people has been far from positive “¦ Metis and off-reserve Indians “¦ still complain bitterly”.


Graham Lane chairs Manitoba Forward (www.manitobaforward.ca), focused on sound public policy. 
Republished from the Winnipeg Sun online edition September 03, 2015.

Rethink Manitoba’s Crown Corporations

By: Graham Lane
Posted 02/11/2016

Manitoba is dominated by government monopolies throughout all aspects of the economy. Beyond the massive health care and education monopolies, we have other monopolies structured as crown corporations. These corporations provide many services, including electricity, natural gas distribution, mandatory auto insurance, mandatory workers’ compensation, and even liquor retailing.

There were solid historical reasons for government ownership. For example, governments invested in capital-intensive industries like power and telephones in sparsely populated provinces like Manitoba because the private sector wouldn’t. Technology of the day was simple, leading to so-called economies of scale where it appeared to make sense to have only one monopoly provider. For example, why have duplicate sets of telephone and power lines?

But, circumstances have changed. For example, the Internet and mobile phone revolution enabled the rise of vigorous competing alternatives and ended the business case for government ownership of MTS. In 1996 the Filmon government wisely sold a rapidly depreciating asset for a substantial sum of money — exiting a fast-changing business where unpredictable and clumsy government ownership was clearly a liability. Ignore the NDP’s old-time privatization bogeyman hysterics — Manitobans today enjoy a much wider selection of modern inexpensive telecom, Internet and TV services from an unsubsidized MTS.

With similar forces operating in the power industry, Ontario is moving to privatize its Hydro One. Driven by a transformational move towards newer types of power generation, here we see “green” renewables (wind and solar) undermining the traditional centralized model of producing electricity from just a few large power plants. While a case remains for a transmission monopoly (operated separately as a co-op or community-owned company in many countries), power generation by multiple competing suppliers is clearly the wave of the future.

Ironically, the Selinger government is doing its best to discredit its own monopoly crown corporation in electricity. At its behest, and with mandate-directed compliant regulators, Hydro is pursuing a misadventure of colossal proportions. It is spending and borrowing billions for unneeded dams and transmission, which will probably double or triple your power bills while jeopardizing the province’s ability to borrow.

Unfortunately, Manitoba’s monopolies and regulatory bodies — all loaded with NDP appointees — have lost their independence and now just cover for government rather than protect the public. The mandates, missions and value for money of government-controlled monopolies and watchdog agencies need to be seriously reviewed, without delay.

If we keep the regulatory bodies and leave the crown corporations with their monopolies, they must be run efficiently and not be political playthings. Their operations should be subject to scrutiny, transparency and accountability. Board members of crowns and regulators should be appointed following open competitions, have the right expertise and be totally independent of government.

To begin, we need “score card” comparisons of crown operations against similar operations elsewhere. In the end, the monopolies should only remain if those monopolies truly do serve the public interest. Also, obvious candidates for privatization, like liquor retailing (Liberal policy), should just go ahead.

The huge hidden liabilities of the crowns, and their loss of innovation, low productivity and rampant cronyism involving the NDP, cry out for more transparency, more citizen-taxpayer friendly models and full accountability, as soon as possible.


Graham Lane chairs Manitoba Forward (www.manitobaforward.ca), focused on sound public policy. 
Republished from the Winnipeg Sun online edition February 11, 2016.

Restoring civil service a monumental task

By: Graham Lane
Posted 02/04/2016

When the NDP returned to power in 1999, they promised not to establish a centralized economic development agency. Yet, within months, they not only established one but actually moved into the same offices that previously housed the Tories’ Economic Development Board. The NDP created the Community Economic Development Committee of Cabinet (CEDC), led by Eugene Kostyra, a former senior Trade Unionist and NDP Cabinet Minister.

CEDC reviewed all of the NDP government’s important policy and economic decisions, towards ensuring they met with the party’s political world view before being approved for implementation by Treasury Board. Although the committee’s facade was economic development, it had two other purposes. First, it provided an NDP filter on all decisions. Second, CEDC functioned as a training ground for dozens of NDP members before their moving into senior government positions.

It was here that junior staff proved their NDP loyalty, before being promoted to directors, assistant deputy ministers, and even deputy minister posts. Others went on to lead outside funded agencies or were parachuted into senior positions inside Crown Corporations (Workers Compensation, Manitoba Hydro, MPI, etc). These people are now “buried.” Many now appear like they obtained their jobs through ordinary competitions when, in fact, were either direct appointments or the beneficiaries of rigged competitions.

CEDC was only one of many training grounds the NDP used to infiltrate the public service and crown corporations with folks parachuted in from minister’s offices, riding associations and labour union offices.

We are now left with a civil service whose middle and senior management is largely made up of political appointments. This has devastated the province’s professional civil service, who have had to decide either to “sell their soul” (visually support the NDP) or realize they would never obtain a senior position despite their talent and years of experience.

Instead of buying an NDP membership to “qualify” for an executive director job or higher placement, many simply quietly put in their years of service, hoping beyond hope they might eventually get an opportunity. Others, in frustration, simply quit or retired.

Picture a civil service environment where your new boss is unqualified, if not incompetent. You and your colleagues have professional experience and more knowledge but the job was won through political connections. Your boss is young and politically correct, but professionally immature too often with an irrelevant soft degree such as political or gender studies.

Whichever party forms the next government, they will have to face several challenges within the civil service, most importantly changing it from a political animal back again into a professional organization.

This will be a huge challenge. Getting to know the players will be difficult. Those now “buried” do not have signs on their back saying “NDP Political Appointee.” It will take time to know who they are, and if they were appointed inappropriately or promoted over more skilled apolitical professionals.

Make no mistake, a monumental task lies ahead, one which needs to be carried out with care. The new government should not simply replace NDPers with people from their own party. They should re-build professionalism in the civil service.

Let us hope our provincial civil service will be re-built into the professional body it once was.

 

Graham Lane chairs Manitoba Forward (www.manitobaforward.ca), focused on sound public policy. Republished from the Winnipeg Sun online edition February 4, 2016.

Manitoba mired in 50-year-old policy

By: Graham Lane
Posted 01/21/2016

Manitoba’s private sector is increasingly being overwhelmed by an ever larger and costly public sector. The private sector pays for a troubling disconnect between constantly rising public sector costs and worsening government services’ outcomes with ever-increasing taxes, utility bills, insurance premiums and other fees.

Manitoba needs a reboot. Once upon a time, under Premier Douglas Campbell’s Liberal government, Manitoba had both the most frugal public sector in western Canada and a vigorous and entrepreneurial economy. Today it is the reverse.

More than half our provincial economy is now dominated by government spending for mammoth, and frequently hide-bound, public services. Throw in nontransparent and highly politicized Crown corporations like Manitoba Hydro — borrowing with wild abandon to build unneeded transmission lines and dams, topped off with the NDP’s current desperate spending frenzy, and one wonders when voters will finally say “enough!”

The NDP’s government dominated economy and its unnecessary high costs are avoidable impediments to growth, particularly when the private sector everywhere is coping with the ongoing challenges of globalization, technological advances and mergers.

Consider recent major blows to Manitoba’s private economy. Pine Falls lost its pulp and paper mill, Flin Flon’s HudBay smelter closed, and Vale’s Thompson smelter and refinery are to close, Low resource prices are not helping our mining sector and the once-thriving garment and meat packing industries have shrunk.

Technology-driven firms and software startups would offer promise but are disadvantaged by the tax burden, particularly the relatively punitive taxes that hit owners and senior employees. And, broader success is penalized because growing revenue and payrolls trigger payroll tax, which most provinces don’t have. Finally, many of Manitoba’s bigger companies are now subsidiaries of firms headquartered elsewhere — they have the ability to move operations to more attractive locations anytime.

The public sector is paid in the end by private sector activities. Manitoba’s income tax system subjects anyone with a taxable income in excess of $67,000 to the highest rate. The highest federal tax bracket for 2015 comes into play only when the taxpayer exceeds $138,000 of taxable income. The NDP, ignorant to the fact that entrepreneurs and wealth creators may simply move away, now seeks an even higher rate. Everyone, except for the on-reserve indigenous population, is also hammered by a PST of 8% on a now wider range of purchases and services, along with high taxes on gasoline and alcohol. Now, even the once advantageous electricity rates are at risk.

On top of that, provincial government enterprises — Manitoba Hydro, MPI, WCB — levy bills that include payments made to the provincial treasury, transforming service bills into a form of hidden taxation.

Yet, Manitoba’s exhausted Selinger government remains enthralled with what once was seen as progressive policy thinking in the academic lounges of the 1970s, now nearing 50 years ago. The NDP is the poster boy for mediocre government — huge costs, failing outcomes — built upon an increasingly shaky foundation of increasing spending, borrowing and taxing. Eventually, the bills with interest will need to be paid.

It is long past time to recognize that It’s a much different and challenging world now. The need for restoring a more relevant, balanced and sustainable private-public balance has never been greater.

Graham Lane chairs Manitoba Forward (www.manitobaforward.ca), focused on sound public policy. Republished from the Winnipeg Sun online edition January 21, 2016.

Good policy needed, not more NDP spin

By: Graham Lane
Posted 01/14/2016

All last week Selinger’s spin machine cranked out new spending announcements.

Desperately behind in the polls, the NDP continued its spendthrift ways by hiking education spending by 2.55% above the inflation rate and among the largest such increase of its 16 long years in office.

With only months to go to the next election, the latest spending bump was announced by the Premier directly, not the Minister of Education. It came amid predictable applause from the direct beneficiaries of his generosity — the representatives of school boards, trustees, and teacher unions.

Expect more occasions like this: spendthrift politicians shovelling money into low-performing public services to the praise of richly-funded service providers. In simple terms, the NDP is all about pouring new money into old systems, even when those systems are mediocre if not demonstrably broken. In public policy jargon, the NDP’s default-thinking focuses on simple-mindedly increasing resources without regard to results.

Part of their obsession with constantly increasing spending reflects the fact that the NDP is, essentially, dominated and run by the public sector unions. Its power-base is built on costly plodding public sector monopolies that dominate our health, education and public service delivery systems.

First, these systems provide above-market salary and benefit packages while maximizing staff count. This generates a great wealth of union dues for the union leadership. Second, we find layers and layers of management and bureaucratic overheads caused by the old-style civil service focus on excessive internal regulation, red tape and process. Third, and most insidiously, these non-results oriented systems are the foundation for rampant political cronyism, where the NDP has aggressively inserted party faithful and other non-meritocratic hires into critical management positions.

Back to Selinger’s education announcement. The harsh reality is that while Manitoba’s education system is Canada’s most expensive it also produces the lowest student test results in Canada. This, according to international comparisons conducted by the OECD, a prestigious international research organization. So, despite ever more inputs, Manitoba’s education system keeps delivering worst outcomes.

Let’s ask the obvious question — how would pouring more money into a low-performing model make this dismal situation any better? Why should ever more money produce better results? These questions are the desperately-needed starting point for a more intelligent public policy discussion in Manitoba and Canada.

Instead of miring our broader economy down with ever-increasing debt and taxes to fund low-performing models, we need political vision and leadership that confidently seeks best practice as it creates efficiently-delivered high-quality public services.

First, government spending should focus on delivering the best possible outcomes for the consumers of public service, not on maximizing the comfort and benefits of the providers. This means rethinking systems to cut and eliminate waiting times in our hospitals, basing future funding increases and rewards on improving test scores and student performance in our schools, etc.

It also means working in a win-win manner with the abundance of talent that lies within Manitoba’s public sector. This to spend smarter by adopting results-focused and measurement-based delivery systems, cutting out brainless red tape, hiring based on merit not party connections, and relying on attrition and early retirements to achieve lower national staffing benchmarks.

The opportunity is enormous.

Graham Lane chairs Manitoba Forward (www.manitobaforward.ca), focused on sound public policy.Republished from the Winnipeg Sun online edition January 14, 2016.

Grim story tells of needed change

By: Graham Lane
Posted 01/07/2016

Another year of NDP mismanagement is done, another begins. Predictably, after missing its deficit target again by a country mile, Premier Greg Selinger muses about even more taxes — this time, a surtax on the rich.

There is no talk of smarter policy or even a token stab at government efficiency. Efficiency does not exist in his NDP’s dictionary. As the NDP runs again its outrageously dishonest “running with scissors” TV commercials against Brian Pallister, it continues to operate Canada’s most expensive and worst-performing health-care and education systems.

Add, in its mega-fiasco Manitoba Hydro — borrowing tens of billions to build dams without markets, doubling the province’s gross debt in the process, they lead Manitoba towards fiscal disaster. Yet, despite this tax-and-spend gong show, I am oppressed by a terrible sense of foreboding that Selinger’s clueless lot could win again.

By Election Day, the NDP will have held power for almost 17 years. During that time, they, according to 2013 Statistics Canada numbers, aggressively grew Manitoba’s public sector. Now, Manitoba’s ratio of government jobs to total population (excluding the federal government) is 36% larger than the Canadian average.

This spending spree is but one reason the NDP failed to balance the provincial budget, even though it has sharply increased taxes while benefitting fortuitously from federal transfer payment increases and record low interest rates, holding down, for now, borrowing costs.

While the government tries to hold our focus on so-called “net debt,” loans made for core operations, the truth is, through Manitoba Hydro and other government-controlled or funded agencies, total provincial supported debt is now $60,000 a family, heading for $100,000.

As for the government’s annual deficit, forecast to reach $550 million including its agencies, it is understated, ignoring advances to agencies (to be paid off through future taxation), costs kept out of the counted deficit and deferred for decades, and currency losses of about $500 million for Hydro alone. If the NDP scrapes through the 2016 election, we will end 2016 headed for doubling again the province’s per capita debt within 15 years. No surprise that Moody’s, a bond rating agency, downgraded Manitoba’s credit rating.

What did we get for the NDP’s profligate public sector spending spree, record taxation and borrowing? Not much.

Not surprisingly, high taxes and spending have depressed private investment and given Manitoba the lowest average wages in western Canada. But the big spending model has also produced mediocre results across the public policy board: 30% of children and families living in poverty; 11,000 children in foster care; robberies and break-ins, up (a crime rate second only to the territories); the highest emergency waiting times in Canada; clogged courts; youth gangs; food banks; rising Hydro rates; four remote northern First Nations still left relying on diesel for electricity; Canada’s worst international education testing results; poor conversion of immigrant investors to active businesses; no new major industry in 15 years; and, still, crumbling roads throughout Winnipeg. Even the poor get whacked by income taxes — Manitoba starts charging income tax at $9,134, compared to $15,639 in Saskatchewan.

It’s a grim story, no matter how you cut it, and one that desperately screams out the case for change in the upcoming election.

Graham Lane chairs Manitoba Forward (www.manitobaforward.ca),  focused on sound public policy. Republished from the Winnipeg Sun online edition January 7, 2016.

For safety or greed?

By: Graham Lane
Posted 12/17/2015

Traffic enforcement in manitoba is now just another tax.

Despite a huge increase in vehicles and travel, our roads have become less dangerous. This, thanks to better driver training, improved technology, road design and signage as well as traffic enforcement. Canadian road fatalities declined 58% between 1970 and 2009.

At an increasing speed, Manitoba’s NDP government has made driving outside of its rapidly expanding body of traffic law much more expensive. In doing so, the government has some societal support, rarely found when it jacks up its revenue haul with higher taxes or price hikes for monopoly government services such as Hydro and MPI.

The assumption has been that government’s motivation for adding new driving infractions and aggressively upping the cost of traffic fines is to reduce road accidents and save lives. But, as the overall bill for Manitoba’s motorists soar, citizens now have good reason to suspect that Manitoba’s NDP fiscally-challenged government has a more practical and hidden motive, that being trying to satisfy its seemingly endless need for more and more money.

Despite the NDP’s frenetic road and traffic law changes, including the aggressive rise in traffic fine levels, road accidents are still common. In fact, MPI recently reported that road deaths have spiked this year.

One of the technological mechanisms now increasingly relied on to reduce accidents is automated traffic enforcement — red light cameras, photo radar, and the like. For some, the more the better, the assumption being that these mechanisms reduce accidents, deaths and injuries. While they certainly bring in millions of dollars annually to government, do they reduce accidents, deaths and injuries? To date, neither the City of Winnipeg, the Selinger provincial government, nor MPI have proved they do.

Two Frontier Centre for Public Policy researchers, Hiroko Shimizu and Pierre Desrochers, have studied the use of automatic traffic enforcement devices. In their lengthy report, “Speed or Greed, Does Automated Traffic Enforcement Improve Safety or Generate Revenue”, they find “little credible evidence that “¦ artificially low speed limits, increased fines and rigorous enforcement can deter dangerous driving behaviours and improve public safety.”

On the contrary, they discovered that improved road design and signs, along with speed limits more in line with normal driving practices and slightly longer yellow caution lights, would be more effective approaches to reduce collisions.

As to government’s true motivation for establishing unaffordable traffic tickets, the researchers conclude that fine revenue has become a means of dealing with growing municipal and police budgets. They question the ethics of “budgeting fines and penalties as regular revenue sources when (the fines) are often imposed for very minor offences and justified as public safety measures.”

As to Manitoba, the researchers found “fines are so large as to be unaffordable,” and representing “a regressive form of covert taxation “¦ disproportionally affecting people of lesser means.” Manitoba traffic fines are, shockingly, about 2 to 3 times higher than those of neighbouring Ontario. Their conclusion asserts that Manitoba’s traffic campaign and laws target more the majority of careful drivers, rather than the dangerous ones. They forecast that the NDP’s approach will end up resulting in a growing distrust of government, rather than reducing accidents — which should be the goal of road design and traffic enforcement.

In other words, higher and higher fines are another NDP tax grab.

Graham Lane chairs Manitoba Forward (www.manitobaforward.ca) dedicated to sensible public policy. Republished from the Winnipeg Sun online edition December 17, 2015.

Win big? Plan to keep it

By: Graham Lane
Posted 12/18/2013

Every Year, hundred of Canadians win $1 million or more in a lottery. Occasionally, their price is so large it changes their lives.

We gamble in the hope that one day we will be able to live the big life. The common mistake is that we are bound to be happier if we are better of. But while we fantasize about winning big, few of us are prepared for the consequences. Government feeds our fantasies through advertisements displaying happy people wearing big smiles.

leaving aside tales of misery of those who can’t control their compulsion to play till they are broke, let’s consider the lot of the lucky few. Most of the big winners are not ready for their good fortune and the pressures of being a winner. The first reaction upon winning is to tell others, but doing so magnifies the excitement and complicates the situation. Be to first tell only close family and ask them to keep the good news to themselves. Until you have the cheque in your hands, contain your excitement and keep your win a happy secret. Provide yourself some time to prepare for your new life.

Before turning in the ticket, seek out the advice of a trusted investment professional and, as well, get tips on personal safety. While Canada is relatively a safe place, there a re bad people everywhere; taking steps to protect your family is wise. As for getting financial advice, if you already have a trusted lawyer or accountant, start there. Avoid rushing into major investments. It’s likely best to keep a small percentage of the winnings in your chequing account to pay off debts, live and celebrate a bit. Purchase a six-month Canada treasury bill with the rest. This will allow you time before you make any significant decisions. Whatever you do, get a new will, one that reflects your new station.

Thirty years ago, I was involved in a review of the workers compensation program. We commissioned a study on whether the program should continue providing lifetime pensions for the disabled or, in the case of a fatality, the survivors of workers killed in a workplace accident. The shocking conclusion was more than 80 percent of recipients of large lump-sum payments (lottery winnings, inheritances, injury awards) lose it all within five years.

Amazing sums can dwindle quickly through wild personal spending, overly generous gifts and poor investment decisions. If you gambled and won with your lotto ticket, you shouldn’t gamble with your winnings. A competent investment adviser, one who works for you, not the companies or funds you invest in, is a must.

While you may have enjoyed playing the stock market before your big win, you now need an adviser who, directly or indirectly, will watch your investments 365 days a year. Even when deciding the mix between stocks, bonds and cash in your portfolio, have your investment adviser help you — let the adviser earn his or her pay.

Prepare for dealing with the expectations of others. Always keep in mind you won, not them. If you have adult children, assess their needs and provide only what is needed and fair, ensuring first that they are equipped to deal with their changed circumstances. For younger children, you could rely on your new will for now and reassess when they are adults, or set up trusts. In ay case, you want to be assured your careful approach to investing and spending is not cancelled out by the careless actions of your kids spending what was your money. Remember, the change in circumstances will put pressure on them as well.

As for you extended family, be careful. Gifts to them should be reasonable and fair. Expect jealousy and envy — It’s human nature. Friends could be worse — some may expect you to pick up the bill every time you go out with them. More than likely, you will mostly end up with the friends you had before you won, and only some of them.

As for charities, get ready for an onslaught of asks. Hopefully, you will live a long time and remain rich, so no need to rush into anything. Investment opportunities will abound, so get a new telephone number and have your investment adviser vet the opportunities. Don’t rush into anything. Likely you weren’t an entrepreneur before you won, so no need to start now unless it is something you always wanted to get into and the investment won’t risk your new situation.

after the initial excitement and tasks are done, go on a long holiday. Enjoy yourself away from the crowd. During your time away, discuss where you are going to live and what you want to do with your time. More than likely particularly with a big win, you will leave your job behind.

If you do win big, congratulations. Ready yourself for a future full of not just fun but also anxiety, difficult choice-making, occasional guilt pangs and the loss of what was your former life.

Graham Lane is a retired chartered accountant and former chair of the Public Utilities Board.
Republished from the Winnipeg Free Press print edition December 18, 2013 A9