The taxpayers’ defender that got away

By: Graham Lane
Published by the Winnipeg Sun on Friday, September 29, 2017

Ontario’s taxpayers have a staunch defender in Bonnie Lysk. Ontario’s Auditor General should have been Manitoba’s, but she ruffled Manitoba’s then-politicians who preferred a weaker provincial auditor. Lysk, once Manitoba’s Deputy Auditor General, was expected to take over as top auditor when then-AG Jon Singleton retired. But when Singleton was not renewed for a second term, the appointment went to Carol Bellringer, a former AG and (then) Hydro board member.

Singleton’s audit (assisted by Lysk) of Crocus Investments did not please the government. The audit criticized questionable actions by Crocus and poor oversight from the-then NDP government. As for Bellringer, she resigned before her first term was up.

Unlike Manitoba’s current Auditor General who, also lacking a mandate to criticize government policies, seldom digs into the results, Ms. Lysk focuses on the outcomes of policies and digs deep. For example, her blasting of the Ontario government over its mismanagement of their electricity file and other finance and accounting practices.

In 2015, Lysk conducted a review of Ontario’s electricity debacle, concluding Ontario ratepayers paid $37 billion more than was “necessary” between 2006-2014 and forecasting $132 billion in excess billings through to 2032. Recently, she noted that Ontario’s cap and trade deal with Quebec and California would cost Ontario’s economy $466 million over three years. Lysk also revealed that Ontario’s government understated its 2016-17 budget by $1.444 billion and its net debt by $12.429 billion (a pension issue), while advising of her intent to review (ahead of the next provincial election) a 25% unfunded electricity bill reduction.

Contrast Lysk’s fearless performance with Manitoba’s Auditor General. While he has the scope to perform value for money audits, the results of major government policy actions are rarely publicly analyzed. Manitoba’s Auditor General operates more like an internal auditor, unlike Lysk’s aggressive stance.

Politicians prefer to have control over regulatory bodies supposedly independent and quasi-judicial. Accordingly, Manitoba regulatory bodies have restricted mandates reducing their independence and potential effectiveness. With few exceptions, appointments are made without external advertised competitions or true all-party involvement.

Consider just some of the outcomes of questionable decisions taken by Manitoba’s regulatory bodies. The Clean Environment Commission green-lighted Hydro’s massively over-budget Wuskwatim dam. PUB, in a mandate-restricted review of the $25 billion expansion, green-lighted the Keeyask dam, now expected to drive up rates as costs soar. Carol Bellringer, when Auditor General, declared a Hydro board conflict and didn’t investigate serious claims of a whistleblower concerning Hydro’s ill-fated expansion. And, Hydro’s new government-appointed board engaged Boston Consulting to review the massive expansion, over-relying on information provided by the crown corporation itself. Without speaking to knowledgeable critics, the board green-lighted continuing the financially disastrous expansion.

Ahead of elections political parties ooze ideals such as transparency and openness while pledging efficiency, acting differently once in office. Contract details relevant to taxes and rising utility bills are held secret, not revealed even in public hearings.

All quasi-judicial administrative tribunals and bodies should be populated through open competitions and all-party appointment approvals. Mandates should be loosened. Openness and transparency should reign.

The Pallister government would deserve high praise if it gave regulatory bodies true independence and practiced real openness and transparency.

— Graham Lane leads Manitoba Forward.

Pallister’s Hail Mary pass

Brian Pallister has given up on ending annual government deficits and reducing the PST (from 8% to 7%) by slimming down Manitoba’s notoriously low-performing public sector. The sector, paradoxically, delivers the worst services for about the highest costs. Pallister prefers, NDP-style, to keep pushing up taxes and fees — a pathetic failure for already over-taxed Manitobans.

Lately, he offered a Hobson’s choice to taxpayers – accept either a new health tax or endure reduced services. Neither is acceptable. He should live up to his pre-election pledge to find economies in a bloated public service while improving outcomes.

Pallister’s campaign featured a promise to reverse the 1% PST jump that was foisted on an unsuspecting electorate by an ‘out of gas’ NDP regime. Pallister’s promise came coupled with absolute determination to eliminate the annual deficit (over a decidedly low bar of two terms in office), without increasing or adding new taxes to the litany of taxes and fees already pummelling taxpayers.

Brian Pallister ignores his pre-election promises. He changes the lyrics of an old saying in his sales pitch to taxpayers: when the going gets tough, throw in the towel and raise taxes.

Consider just some of the promises broken:

1. Instead of halting Hydro’s expansion misadventure and holding an independent review of the NDP-driven boondoggle, he left the spending spigots on, full bore.

2. Rather than ending the NDP’s closed shop provisions funnelling government construction contracts to unionized firms (bringing higher costs), he has let the practice continue.

3. Instead of no new taxes without a referendum, Pallister now prepares to reach deeply into our pockets with a crushing carbon tax and a surprise health tax.

By not halting the Hydro expansion immediately after coming into power, he was suckered by Hydro to continue to spend on the projects without a pause, making it impossible to stop the misadventure. As for Pallister’s recent musings about a carbon tax, he looks to book $300 million a year in new annual revenue. Who knows what to expect from a new health levy?

Pallister got into office because of the mess the NDP made of the Province’s finances. His commitment to eliminate the deficit, address the Hydro debacle, and work towards lessening the burden of taxes and fees on taxpayers was expected to be realized by smarter spending and efficiency. We expected effective changes, not penalizing taxpayers more by diminished services and new taxes. His promises were once enough for an electorate crying ‘uncle’ under the weight of the NDP’s union feather-bedding and fiscal incompetence.

Now, instead of pushing more taxes at us, he should be firmly aiming at reducing the levers of pain left by the NDP: income taxes, PST, land transfer taxes, payroll tax, gasoline tax, etc. etc.. He should also bring spending under control by school divisions and the City of Winnipeg. Municipal governments are subjects of the Province, so Pallister should force a repeal of Winnipeg’s new development ‘impact’ tax, stop the City from raiding water bills to hide property tax rises, and remove the shameless traffic fine and photo radar tax grabs.

Pallister is not living up to his promises, so he should step aside. We deserve much better. Another NDP or NDP-lite government could well finish Manitoba.

Graham Lane chairs Manitoba Forward.

Graham Lane: NDP-Lite Pallister government wants to impose a new health tax

Manitoba Forward released a video this morning, Sept. 20th, in which Graham Lane expresses the organization’s opposition to the new healthcare tax that Premier Brian Pallister plans to impose on Manitobans. 

“We’ve got too many politicians that come in saying one thing and doing the other,” begins Mr. Lane. “Presumably this health tax levy will be significant. […] If we’re quiet, they’ll bring it in because it’s easy.”

 View the 2-minute video in its entirety:

Manitoba Forward has also launched a petition against the new health tax on their website, here.

For more info, please contact Graham Lane via info@manitobaforward.ca

Restricted labour bids costing taxpayers

By: Graham Lane
Published by the Winnipeg Sun on September 14, 2017

Investment in public assets requires billions from taxpayers. World-wide, the construction trade exceeds Cdn$12 trillion, representing about 13% of annual world output. Much of annual expenditures are for public works. Yet, while the public interest seeks value for money spent, too rarely it occurs.

Too often, public works are undertaken without sufficient research to ensure they are needed now, as opposed to another project, and affordable. Too often, final costs exceed the estimated cost by a ‘country-mile’ — Winnipeg’s new police headquarters, Hydro’s palatial headquarters, Keeyask dam, etc.

Government, which includes Crown corporations, regularly use restrictive tendering practices, driving up costs. According to Beacon Hill Institute, restricting tendering practices by requiring unionized workers pushes costs up 12-18%, Other studies suggest requiring only union workers drive up costs 20-30% (Montreal, Ontario). One thing is clear, by not allowing all qualified bidders quality goes down and costs go up.

Consider Hydro’s massive once-in-a-lifetime expansion. Only members of building trade unions can work on most of it. As an example, Bipole III transmission projects require not only that project workers are union members paying union dues, but their hourly rates are set for each worker classification (with built-in yearly increases). Challenged in court as unconstitutional — Hydro requiring workers be in a union in order to work on the project — the Bipole contracts have survived, without the basic merits of the situation even being adjudicated.

During the 2016 provincial election, Brian Pallister promised to open up contract tendering by allowing non-unionized firms to bid on all provincial contracts. In his Alternative Throne Speech of November 13, 2015, Pallister promised to bring about “modernizing government tendering procedures by reducing barriers to participation such as forced unionization for government contracts which is unfair and hurts small business and taxpayers.”

Yet, at last look, open-shop construction firms and firms whose workers are not represented by a designated building trade union are still not able to bid on many major public-sector projects. In Manitoba, approximately 70% of the construction industry is “open shop.” By shutting out the majority of the construction industry from bidding, the public interest, and value for money, can’t be secured.

It is not only non-union firms and their workers that are damaged and disappointed, but, largely, and sometimes without realizing it, taxpayers and utility ratepayers. The restrictive procurement practices of the former NDP government — coming into, tightening, and staying in force during the party’s 17 years in power — should have disappeared under the new PC government. Also, there remains conjecture about bush clearing and other nontechnical contract work in northern Manitoba, where, allegedly, single-sourced contracts were prevalent, unfair and resulting in very high costs.

A January 2016 poll (NRG research group) revealed that a solid majority of Manitobans oppose open-shop construction firms being shut out of bidding for public works. Brian Pallister should listen and break the monopoly union-shop contractors have, and then move on to reconsider long-standing but questionable practices such as having government setting wage levels for the construction industry.

Current government-set construction regulations and practices push costs unnecessarily high. What is now and has been for some time is far from being taxpayer-friendly and “free enterprise.”

— Graham Lane leads Manitoba Forward, manitobaforward.ca.

Dorothy Dobbie: We need a public inquiry into the NDP-Manitoba Hydro Mess

By: Dorothy Dobbie
Originally published by Lifestyles55 on September 7, 2017, here.

Over the past decade and a half, Manitobans have been witness to one of the most cynical, self-serving manipulations of a crown property in our almost-150-year history. Manitoba Hydro, its scandalous mismanagement and callous disregard for rational analyses, has put our province and its people at risk, due to the NDP government’s stubborn insistence on following an ill-advised path of expansion even in the face of well-founded, sensible advice to the contrary.

It is not good enough to lie down quietly and accept that we and our kids and our kids’ kids and their kids after that are going to have to pay for the NDP debacle that is Hydro for the next century. Manitobans deserve to know what happened and why, and then we need to create a strategy so that such abuse of a public utility can never happen again.

To get to the bottom of this scandal and ensure that it can never happen again, we need the province to call a public enquiry into the mistakes and misjudgments by the then-NDP government and its politically appointed board and management that have led to a debt of over $6 billion and a resulting call for rate increases that will severely damage our people and our economy.

Here are some of the questions that need to be asked:

  • Why did the NDP government ignore advice to postpone expansion at a time when hydro power was under challenge from the discovery of how to source cheap natural gas from shale?
  • Why did the NDP government refuse to accept advice to build a natural gas plant in Brandon, close to our provincial supply, when the cost would have been only five per cent of the at-the-time projected cost of dam expansion?
  • Why did the NDP government stubbornly insist that Hydro go ahead with building dams such as Keeyask when its production will not be needed until the 2040s, if ever? And why did they proceed with Wuskwatim, which was built to supply American markets, when the best that plant will be able to recoup in revenue is only about one quarter of its cost per kWh? And, critically, how did the costs escalate to over $2.2 billion from the initial estimate of $900 million?
  • How did Manitoba Hydro end up paying 60 per cent of the costs for building the Manitoba-Minnesota line, when the original deal anticipated that it would be paid for by United States utilities?
  • How did they plan to deal with the fact that our firm power contracts with Americans end only 12 years from now, when the dams are amortized over 100 years? Why would they fund the development with loans that have much shorter terms and will have to be renegotiated several times as interest rates rise?
  • And, of course, the never ending question as to why Greg Selinger arbitrarily changed the eastern route of BiPole III to the west side of the province, when it would severely exacerbate the costs while reducing the amount of power that would reach the end user?

And finally, what are the details of the ‘partnerships’ concluded with First Nations as their consolation prize for not getting the opportunities that would have come their way with an east-side line construction?

These are just a few of the unanswered questions that a public enquiry needs to uncover. And while they are at it, the enquiry should also look into the details and rationale surrounding the decision to fund health care vesting for people who suffer a catastrophic health episode, disrupting their ability to earn a living and therefore making them unable to afford the first $1,500 or so of pharmaceutical costs? Why would funds from a utility be used for such a purpose? And how many more of these side deals were in play where Hydro has been used as a piggy bank for the NDP government?

These are very serious issues. If allowed to go through, the proposed rate increases will have a devastating impact on many of Manitoba’s most vulnerable citizens, especially those in rural Manitoba and the north, where some Hydro bills are already stretching past $600 a month. A doubling or even tripling of rates will also have a negative impact on our attractiveness to industry and other businesses.

A public enquiry will turn the spotlight on how this mess came to be and give the new government the ammunition it needs to ensure that such events never happen again.

The new Hydro board and government continue to look for creative answers to clean up the mess. Seeing into all the nasty, murky little dealings of the 17-year NDP-Hydro partnership can only help in discovering the solution.

An honest auditor general

“I have issued a qualified audit opinion because the statements were not prepared following Canadian Public Sector Accounting Standards,” Auditor General Bonnie Lysyk said today after the Government issued the Public Accounts of Ontario.

Click here for the press release.

“The deficit is understated by $1.444 billion for 2016/17 ($1.831 billion in 2015/16) and the net debt is understated by $12.429 billion for 2016/17 ($10.985 billion in 2015/16).”

Auditor General for Ontario, Bonnie Lysk, is honest and has courage.

She rocked Ontario last year with her report on Ontario Hydro; and now, before the next provincial election, she is at it again – doing the right thing and blowing the whistle the Wynne government.

Congratulations for her independence in issuing her qualified audit opinion so that citizens can know the facts.

MLA discloses shocking PC practices

By: Graham Lane
Published by the Winnipeg Sun on September 8, 2017

The saga involving MLA Steven Fletcher has its origins in 2006. The then-NDP Doer government drove an anti-democratic bill through, preventing MLAs from changing political party allegiance without resigning their seat and financing and surviving a by-election. Both then-opposition parties — PC and Liberal — went along, seemingly not troubled about reducing freedom of association. While the restriction is most likely unconstitutional, it requires a court case, time, and money to dispose of it. Fletcher has taken the first step, taking his case to court.

Fletcher, freed — but not of his choosing — of party confidentiality restraints, disclosed in his court filings very poor practices and actions of the PC caucus. No doubt, the Premier would prefer that what goes on inside the PC caucus room stays there. If Fletcher, with his lengthy and loyal political experience (significant stints in student, provincial and federal governments), had not been kicked out, and for very questionable reasons, no doubt the embarrassing details of PC caucus going-ons would have remained secret.

By unceremoniously dumping him from the government and caucus, Pallister created the circumstances requiring Fletcher to ‘free his tongue’. Supposedly tossed for criticizing a bill incorporating a new Crown corporation, then-being pushed through the legislature, Fletcher had earlier disquieted the PC caucus by seeking improvements in conflict of interest laws and opposing a carbon tax. And, having had no discussions on the ‘Efficiency’ bill within the PC caucus, he had to ‘go public’ with his opposition of yet another bureaucracy.

Now, kicked out of the PC caucus and party, he is a conservative-minded independent in a difficult position to best serve his constituency and Manitoba. That 2006 suppression of freedom of association bill leaves an independent MLA without adequate research resources and limited speaking opportunities in the legislature. Being a conscientious politician — the author of many draft bills, including one to upgrade the legislature’s dealing with conflicts of interest (left on the order table by a lack of interest by the Premier, or worse) — with the court’s help he could join another party (current or new) to gain the resources he needs to be an effective MLA.

But, for now, the highly-questionable 2006 “no switch” law prevents him from performing effectively in the Legislature. Fletcher was left with only one sensible option: seek a Manitoba Court of Appeal quashing of the anti-democratic law. His court filings necessarily required providing his reasons why MLAs should be allowed to switch parties without resigning their seat.

His Court filing reveals a dysfunctional and self-interested PC caucus. Dysfunctional in that bills proceed through the legislative regimen without even having been properly discussed in the government party’s caucus. It appears laws are proposed and enacted without having been challenged and scrutinized by the ruling government’s own caucus. Incredible!

Self-interested, in that lengthy caucus discussions occurred about how to recoup money MLAs lost by their decision to freeze their own salaries. Days of caucus time resulting in political tax receipts — calling a refund a political donation.

No wonder Fletcher publicly opposes a carbon tax and new Crown bureaucracy. No wonder some PC back benchers are considering joining Fletcher. Expect defections providing real conservative company for Fletcher outside the PC party.

Graham Lane leads Manitoba Forward (manitobaforward.ca).

 

Hydro’s try to avoid a federal review

By: Graham Lane
Published by the Winnipeg Sun, August 31, 2017

Manitoba Hydro has asked the federal government to squelch a critical public and fulsome review of the troubled utility’s Manitoba-Minnesota Transmission Project (MMTP). In a letter dated Aug. 23, 2017, Hydro President Kelvin Shepherd asks federal Minister of Natural Resources Jim Carr to accept Manitoba’s provincial review and not launch a full-fledged National Energy Board one.

Hydro claims processes within the Manitoba government provide the degree of assurance needed that the project would be in the public interest. What Shepherd doesn’t relay to Minister Carr is that those Manitoba processes are marked by conflict of interest.

Firstly, Manitoba Hydro is a very troubled Crown corporation, with its expansion plans, including the MMTP, way over budget. And, the MMTP is being strenuously contested from both knowledgeable critics and affected landowners. Hydro’s sole “shareholder,” the government of Manitoba, not only appoints the members of Hydro’s board of directors but also the members of the provincial regulatory bodies that oversee Hydro (Clean Environment Commission, Public Utilities Board, and the provincial government itself). All of these related bodies support the project: Mr. Shepherd wants the feds to give it a quick pass.

The federal government has the authority and responsibility to approve, or disapprove, the export of Hydro’s electricity. Manitoba Hydro sells surplus power to the U.S. Leaving aside the shaky economics of actual and proposed export contracts, subsidizing exports through higher Manitoba rates, opportunities to sell to Ontario and Saskatchewan need to and should be thoroughly examined. Also needing a review is the affects, effects and problems related to pushing an oversized new transmission line through farmland.

As it is, the proposed MMTP is over-engineered and far too costly. Hydro already has a 230 kV 400 MW interconnection to Minnesota Power, so with the proposed new line Hydro would have an export capacity of 1,900 MW on top of the 2,000 MW export capacity Hydro already has with the U.S., mostly to Minnesota. With Hydro’s once-planned Conawapa dam mothballed and likely “dead” (with $400 million spent and needing to be written off), the scale of the MMTP is simply wrong. The potential for Conawapa being eventually built is low, the trend being towards smaller and closer projects (distributed generation, solar, wind).

A current federally funded study — Regional Electricity Cooperation and Strategic Infrastructure Initiative — is evaluating Western Canada electricity infrastructure projects with the potential of additional east-west transmission (Manitoba to Saskatchewan is part of the study). Committing Hydro’s Keeyask export potential to the U.S. may not be in the interest of Canada, let alone Manitoba’s suffering ratepayers.

Carr should not agree to have the National Energy Board do a “quick and dirty” federal review as sought by Mr. Shepherd. One requirement for an approval by the National Energy Board is that there is no market within Canada for the surplus energy being contracted for export to the US. As well, studies within Manitoba have revealed that a reduced project would save farmland and avoid cutting down large numbers of trees.

Manitoba Hydro has wasted too much of ratepayers’ money already. It’s effort to rush a federal review of an unnecessarily large and expensive project, one that could curtail future Canadian opportunities, should be rebuffed by Minister Carr.

— Graham Lane leads Manitoba Forward (manitobaforward.ca)