Tory missteps crushing Manitoba’s finances

By Graham Lane
Published on May, 25, 2017 in the Winnipeg Sun

Last week Canadians were informed by federal climate change Minister Catherine McKenna that the Trudeau government would impose a federal carbon tax on them to fight “carbon pollution.” Higher taxes on energy are a good thing, she gushed, because they create jobs, spark innovation and meet Canada’s commitments in the United Nations Paris Treaty agreement to fight climate change.

Notwithstanding that carbon dioxide is not pollution and is pumped into greenhouses to promote plant growth, this rosy but economically illiterate higher taxes equal economic prosperity theme is mostly absent in Manitoba where Premier Pallister is making things up on the go.

Pallister’s “made in Manitoba” carbon tax may exempt farmers while delivering new revenue to partially offset the financial damage from the Keeyask/Bipole III debacle. Ironically, Pallister now shares the blame for this mess with the NDP for not halting the project as promised.

To top off Pallister’s mishmash energy policy, he creates a new crown corporation to promote energy efficiency and reduce electricity demand while Keeyask’s unneeded surpluses are to arrive. Manitoba Hydro will export this additional surplus energy, not needed domestically until at least 2039, if ever, at prices well below the cost of generation and transmission (with ratepayers to carry the full burden).

Across the country, it’s more of the same. Ill-informed starry-eyed politicians rolling out half-baked energy policies that unnecessarily raise costs in the economy while increasing energy poverty.

Meanwhile, just south of us, the Trump government promises to lower energy costs by slashing green regulatory over-reach and promoting pipelines, shale gas and coal. These efforts could divert billions of investment dollars that would otherwise go to Canada.

Canadian producers who can’t raise prices in the international marketplace to compensate for carbon taxes will see falling incomes: the new tax will come out of their bottom line.

Unsurprisingly, this attack on our living standards is led by the same people who devastated Ontario’s once reliable energy system under the McGuinty and Wynne governments, before moving to Ottawa upon Trudeau’s election. Their quixotic climate change obsession has brought coal bans, backdoor regulatory suffocation of shale gas development, blocks on new pipelines, and higher taxes on gasoline (to discourage the evil automobile).

This is especially damaging to Western Canada’s resource economy, particularly its hydrocarbon, agriculture, and commodity producing industries (which consume enormous amounts of energy). Actions supported by mostly the central Canada chattering classes harbouring an elite opinion that politicians can change the weather by raising fossil fuel taxes.

Saskatchewan’s Premier Brad Wall understands we compete with the U.S. not Germany, France, and other countries embracing the climate change religion while suffering from power costs two to three times higher than here. To knowledgeable approval, Wall plans to block Trudeau’s carbon tax policies in court, towards protecting Saskatchewan’s oil and energy intensive resource sectors like farming and mining.

This brings us to a heroic and lonely figure in Brian Pallister’s government.

MLA Steven Fletcher deserves many kudos for bravely filibustering his own government’s misguided efforts to set up an energy conservation crown corporation. Unfortunately for us, his efforts were to no avail. Likely, we will end up subsidizing solar for rich folk, just as Keeyask surpluses crushes Manitoba’s finances adding to the list of Pallister’s missteps.

— Graham Lane leads Manitoba Forward

Universities are failing our students

By: Graham Lane
Winnipeg Sun, May 19, 2017

A big scrap is coming between public service labour unions and Brian Pallister. The question behind the battle is: “Who has ultimate authority — unions or government?”

A related squabble is between the University of Manitoba’s faculty association and its administrators and board of governors.

Last fall the faculty union held a three-week strike. It ended it with a signed a one-year contract that now has expired — negotiations are already on-going. Faculty members are steaming mad, even those who didn’t follow union dictates in the past. While angry with university administrators, they also accuse the government of interfering in their collective bargaining.

Another strike is on the horizon. What will students — the pawns — do?

Some will take courses at other universities; some will not register for fall courses and get a job. Others will resign themselves to being treated badly by professors, who will claim they strike to ensure students get a proper education. This is true bunk, and students and their parents know it. So do professors, the government, and taxpayers.

Strike

The strike will probably begin in October, before it gets too cold for pampered professors to walk on cold picket lines. A strike only works when it does maximum damage to students — no use professors striking when students can still drop courses and get their tuition fees back. If they did, the University could cancel the term and leave the professors on the picket line till end of term.

If faculty members and administrators were serious about quality undergraduate teaching, they would jointly publish usable data so students, their parents, and indeed taxpayers, could make informed judgements about the quality of teaching taking place. Currently, between 20% and 30% of first-year undergraduates do not go on to second year; fewer than 60% graduate within six years.

Imagine a barber shop that didn’t produce decent haircuts for their customers. Their patrons would stop coming, refusing to pay for bad haircuts.

The government should stay tough, not only just with the U of M, but with all universities. Establish a common reporting form so comparisons can be made across faculties and universities. Make public funds dependent on universities satisfying student needs.

Shocked

For example, students, parents, and taxpayers should know the percentage of first-year students who progress to second year, the percentage who graduate within four, six, and eight years. Also publish the number of students taught by faculty and professor in a 12-month year. People would be shocked by the data.

Good published information could force universities to compete with each other in getting students through their programs. Professors would begin teaching beyond their normal work day: now at best 10:30 a.m. to 3:30 p.m., two or three days a week, 26 weeks a year. They should and would begin giving courses in the evenings and on weekends, serving the needs of some students.

Universities are masters at presenting glitzy documents praising their virtues. When students present glitz instead of substance, they usually receive failing grades, rightfully so.

The universities are failing at serving the needs of Manitoba. Pallister is in position to teach a lesson to pampered over-paid professors and administrators.

— Graham Lane leads Manitoba Forward, he is a former university administrator and board member.

Not too late for Hydro to change course

By: John Roschuk
Winnipeg Free Press, May 19, 201

Manitoba Hydro’s application to the utilities board for rate increases provides a golden opportunity for Premier Brian Pallister to do the right thing and save Manitoba Hydro and the Manitoba taxpayers by not allowing the rate increase and by keeping his election promise (Bipole III called ‘dumbest decision;’ Winnipeg Free Press, Oct. 25, 2014) to scrap the Bipole III project. It is not too late, and would curb the financial drain on Manitoba Hydro and the taxpayers.

The Bipole III capital cost represents a relatively small portion of the financial burden when all related costs are factored in. Bipole III will never generate positive revenue. It will be used to export electrical energy to “spot markets” at rates that generally are well below the cost of generation and transmission of the electrical energy.

Simply put, we will be selling at a loss. Rate increases will not salvage this mess. On the contrary, infusion of additional cash will simply increase the negative bottom line. The salvaged Bipole III infrastructure could be used to generate and transmit electrical power to Canadian markets at a profit.

It appears the only way Manitoba Hydro can survive is to transfer its financial burden to Manitoba taxpayers. Under the present structure, Manitoba Hydro will never be in a position to generate positive revenue from sales of electrical energy. It appears that all the Manitoba Hydro contracts are for sale of electrical energy to export spot markets. Spot markets were intended to provide utilities the ability to sell their surplus energy at substantially discounted rates, well below the cost of generation and transmission.

Manitoba Hydro’s financial predicament is a direct result of the NDP’s gross mismanagement. The decision to route the Bipole III line on the west side has cost Manitoba Hydro billions of dollars. It is intended to deliver electrical energy to the export market at a below-cost rate. Although Bipole III was intended to be a backup for Bipoles I and II, the west side Bipole III line is not compatible with Bipole I and II. The west-side route will have a severe negative impact on the west-side infrastructure, including subterranean, surface pipe lines, irrigation systems and public health and safety. Stray ground currents will accelerate corrosion of most conductive infrastructures. The negative impact of electric and magnetic fields have to be factored in to the overall cost. This has not been addressed in the public arena, although it is well documented globally by many highly credible research facilities.

If the premier allows the rate increases, he will be endorsing the NDP’s reign of terror that got us in this mess in the first place. If this ill-fated project is not “nixed”, Manitoba Hydro is doomed to extinction. The NDP has demonstrated time and time again that they are masters at mismanagement. Ontario Hydro is one example.

We challenge Premier Pallister to do the right thing. Stop this fiasco.

John Roschuk is a senior engineer technologist and a power quality consultant who has worked in the electrical field for 52 years, including 17 years with Winnipeg Hydro.

End traffic tax injustice

By Graham Lane
Published by the Winnipeg Sun on May 11, 2017

Manitoba isn’t a friendly place for automobile drivers. The ongoing shakedown of Manitoba drivers by Canada’s highest traffic fines and Winnipeg’s scandalously ravenous photo-radar system abuse all notions of fair play. Not surprisingly, this has energized a lobby group representing aggrieved drivers, Wise Up Winnipeg, while causing a flood of legal actions clogging up an increasingly swamped court system.

Winnipeg’s photo enforcement program vacuums $50 million dollars a year from the pockets of vehicle owners while increasing not decreasing collisions — a perversely opposite result to the touted objective of reducing accidents and injuries. Critics claim photo-enforcement programs are not effective at achieving safety goals. Governments love them. The programs are cash cows posturing as sound policy protecting the citizenry. Winnipeg’s program is exceptional: no other Canadian city, says Wise Up Winnipeg’s Chris Sweryda, deliberately raises vast revenues by taking advantage of unique traffic engineering deficiencies.

Winnipeg’s photo-radar and speed enforcement is a brazen cash cow: For three reasons.

First, Winnipeg employs much shorter amber times, four seconds, in higher speed intersections than other cities. The majority of red-light infractions occur within the first three-tenths of a second into a red light. In other cities the light would not be red for a further second or more. Worse, no other Canadian city sets a four second amber light-time at all intersections, regardless of the speed limit. Winnipeg nets 800% more of red-light “runners” from 80 km/h zones than at slower speed intersections (where four second amber lights allows drivers time to stop safely without skidding into the intersection).

MPI data shows that higher speed intersections dominate their collision list, particularly for rear-end crashes. Alarmingly, Winnipeg does not have Advanced Warning Flashers on most 80 km/h intersections as other cities do (including other Manitoba cities). This has been a recipe for avoidable accidents and injuries, as reflected in the insurer’s data for years.

Second, no other Canadian city ignores engineering standards. They recommend dual-signing (i.e. on both sides of divided roads) warning drivers of coming speed limit reductions. The police locate “lucrative” speed traps at these places.

Finally, Winnipeg’s photo-radar program and traditional traffic enforcement have been targeting specific stretches of roads, roads identified in the city’s own engineering studies allowing natural higher but safe speed experiences than the limits artificially set by city hall.

What should be done about this blatant revenue grab?

To begin with, the Pallister government should enforce the provincial “Condition of Authority” agreement that provincial document requires the city to submit evidence annually that its traffic safety program — now raking in the fines — has reduced collisions and injuries. The city has failed to meet this central requirement for 13 years.

The now-deposed NDP was the architect of what remains Canada’s most egregious traffic fine tax system — with average Manitoba traffic fines more than double the Canadian average. The PC government should start by rolling traffic fines back to the Canadian average, then not enable photo enforcement until the city adheres to traffic engineering standards. This, in the name of actual motoring safety rather than revenue generation.

As it exists, Winnipeg’s traffic program is a perverse system designed to bring in money, not bring about safety.

— Graham Lane chairs Manitoba Forward (manitobaforward.ca)

Tories should match private vision, planning

By: Graham Lane
Published: May 4, 2017, Winnipeg Sun

A few weeks ago Great West Life announced it would reduce its workforce by 13%. Facing a changing insurance market disrupted by technology and competition, one of Winnipeg’s largest private sector employers plans to cut its overall workforce by 1,500 positions. Its Winnipeg headquarters are to be reduced by 450 through attrition and buy-outs.

GWL is adjusting its business model to deal with new market realities — referred to in its media release as “changing technology and customer expectations”. Aside from a day or two of anxious headlines, the announcement brought forth little public concern. Nor should there be. It’s how the private sector works — never stand still, constantly innovate, improve customer service, reduce costs — or lose business to competitors who are striving to deliver a better product.

What about the 450 people in Winnipeg who will lose their jobs? Some will take early retirement; others will use severance packages as a temporary bridge to finding other work. Most will use the skills they have learned and land in a good place.

The economy is a dynamic place — new jobs are constantly being created, just as others are being lost. The famous economist Joseph Schumpeter called this “creative destruction.” We all benefit as the relentless, invisible churning of the marketplace generates new products, services and jobs — improving overall living standards amid advancing technological progress.

Ford’s automobile forced buggy-whip manufacturers out of business. Today, the smartphone and the internet disrupt entire economic sectors. Uber is upending the taxi business while AirBnB is doing much the same to hotels. Retail stores open and close as shopping shifts to online vendors. Soon there will be electric driverless cars and trucks disrupting the muffler shop business, reducing freight transport jobs and costs while making our costly, old style transit systems obsolete. Media is going digital, as is banking and financial services.

Going back to GWL, some younger tech-savvy consumers are declining to pay for human financial advisors when so-called robo-advisors and smart phone apps claim they can organize’ financial portfolios using computerized mathematical rules (algorithms) to automatically allocate and, hopefully, optimize clients’ assets.

Let’s contrast the dynamic hurly burly of the private sector economy with the relative moribund morass of our public sector. Welcome there to monopoly world — a comparatively customer unfriendly place. Producing unremarkable service, it is a technological laggard where costs only go up. Bloated top-heavy payrolls with layers and layers of slow-moving bureaucracy are the norm.

Our health monopoly has had patients dying on waiting lists. Our education monopoly is no better, big on social engineering and green indoctrination while too often producing students lacking basic math and literacy skills. The inadequate outputs of our public monopolies are paid for with constantly rising debt, taxes, fees, even exorbitant traffic fines — and, of course, billions from strings-free federal transfer payments.

Imagine, as part of a serious effort to control costs and improve services, a 13% staff cut throughout ‘monopoly world, done over two years a la GWL. It’s an action routinely common in the private sector. Not here in Manitoba’s public sector. Our government’s recent budget revealed little stomach, capacity or skill for real reform.

And that’s where we need to start. A vision. A Plan. Some Leadership.

— Graham Lane leads Manitoba Forward, manitobaforward.ca.