Saturday, September 14, 2013

Saturday Afternoon Links

This and that for your weekend reading.

- Toby Sanger asks who really bears the risk when governments agree to hand over billions to the private sector through P3 arrangements:
While Canada may be one of the leaders in the market for P3s, we’re far from a leader when it comes to transparency, assessment and accounting for P3s.   P3s are already a murky business when it comes to financial transparency—and we’re close to the bottom of that pool.  The value for money assessments used to justify P3s in Canada are simply not credible for a number of reasons...

All the Canadian P3s I’ve seen in the past decade or so have been justified on the basis that they transfer large amounts of risk to the private sector.   This is also what U of T professor Matti Siemiatycki and Naeem Farooqi found when they analyzed all the P3s conducted by Infrastructure Ontario for an article published in the prestigious Journal of the American Planning Association last year.  Every single P3 project was justified on the basis of Value for Money assessments that claimed P3s transferred large amounts of risk from the public to the private sector.

The average amount of risk calculated for these projects was almost half (49%) the base project costs.   For some projects, the value of the “risk” calculated amounted to over 80% of the base project cost, averaged over $100 million for each of the 28 projects and over $3 billion in total.  That’s a lot of money, no matter how you count it.   Just to be clear: not one of these P3s would be justified on the basis of the central Value for Money assessments without this assumption that large amounts of risk were transferred to the private sector.  And Ontario isn’t unique: P3s in other provinces are also justified on the basis they transfer large amounts of risk to the private sector. (see note #2 below).

But how is this risk calculated?   They don’t say.   The value for money risk assessment templates Infrastructure Ontario provides are frankly embarrassing from a public policy perspective, especially for decisions that have involved billions of dollars of the public’s money.  There’s no evidence provided for any of the numbers proposed in their risk matrix—and other provinces are no better.  The value for money assessments release for each P3 project are superficial window dressing that provide none of the details necessary for an independent assessment.    And in the instances where auditors have reviewed the actual finances of P3s, they’ve generally always found that the project would have cost less if it were publicly financed and not run as a P3.
But no matter how complicated—and secret—these key calculations of risk transfer for P3s are, none I’ve seen acknowledge a crucial fact: the real risk the private sector assumes through a P3 is limited by the net amount of unsecured money they have put into the project.  This amount is represented by the equity they provide and any net cash they have committed, less funds received. The initial equity share of the cost of P3s is usually no more than 10-15% and sometimes as low as 8% or less.   Since P3s are invariably set up as “special purpose vehicles” (SPVs), the big companies behind them can simply walk away if they aren’t making enough profit or if things go wrong, thanks to limited liability laws for corporations.  The maximum they lose is any equity and any net cash they’ve put in, less what they’ve been paid.   And a number of P3 companies have abandoned their projects, or used the threat of doing so to get more money out of the government.
 - Scott Stelmaschuk highlights how inequality undercuts the foundation of any meaningful concept of self-determination - while being readily reduced if we make a collective determination to do something about it. And Rick Smith notes that we have no reason to be satisfied with the structural disparities as matters stand now.

- Josh Wingrove reports on the latest abuses of the temporary foreign worker program - featuring the Harper Cons arguing that they're helpless to so much as inform provinces of TFWs working in their jurisdiction based on the belief that workers should be free to be exploited by their employers in total secrecy:
However, provinces say the federal government isn’t sharing detailed information about the workers. It means that provincial workplace safety inspectors can’t proactively enforce labour laws, because they don’t know who the workers are or where they’re working.

“It’s for us to know where these workers are, so that we can make sure their rights are being protected,” Ontario Labour Minister Yasir Naqvi said, adding the province had been pushing for more information for four years.
It was a request echoed by several ministers, and Dr. Leitch said she would push to improve information sharing, saying privacy issues are among the barriers.
 - Finally, Marc Mayrand shares his take on how to get younger citizens more involved in our political system.

Saturday Morning 'Rider Blogging

Needless to say, last weekend's result against Winnipeg was far from what 'Rider fans would have hoped for to start the second half of the 2013 season. And it's particularly worth noting how a few strengths seem to have been lost just when they were needed most.

In last week's post, I noted that Saskatchewan's success in the Labour Day Classic was based largely on its ability to finish off drives. Unfortunately, that pattern didn't play out again against the same defence. While the 'Riders still managed slightly better offensive numbers than the Bombers, they didn't find the end zone once - with two solid drives and two turnovers in Winnipeg territory in the first half leading only to three field goals and an interception.

That left the 'Riders with a precarious halftime lead. But unlike in many games this year, the 'Riders didn't figure out how to exploit an opposing defence after the break. Instead, they had more trouble dealing with the Bombers' relentless pass rush as the game went on, as Darian Durant took hit after hit without managing to find any weak spots behind that first wave of pressure.

Nor did the special teams provide much help. The most obvious play of concern was Will Ford's return touchdown - which can perhaps be written off as a single breakdown. But in the weeks to come, I'll be most interested to see what becomes of the 'Riders' own uninspiring return game: Tristan Jackson's usual unreliable hands no longer seem to be paired with his trademark breakaway speed, which may leave Saskatchewan with a need to audition other returners until Jock Sanders is ready again. 

As a result, the 'Riders' defence was pretty much left on its own to try to salvage the game. And it came remarkably close, breaking down on only a couple of second-half drives (with undisciplined penalties and low-probability catches as the key plays) and producing multiple turnovers. But it fell just short of putting points on the board - which the 'Riders needed on a day when the offence couldn't produce a single touchdown or big play.

We'll start to find out today whether the 'Riders' struggles against Winnipeg were simply a matter of a bottom-tier team taking (and succeeding in) a few more risks than most opponents will dare, or whether it offered hints that other CFL teams will also be able to exploit. But there doesn't seem to be much doubt that the 'Riders have room for improvement as their schedule gets tougher down the stretch.

Friday, September 13, 2013

Musical interlude

Arcade Fire - Reflektor

Friday Morning Links

Assorted content to end your week.

- There was never much doubt that the Cons' demolition of Canada's long-form census was intended to ensure that we lack data needed to develop evidence-based policies - and that the effects would be most significant among the most marginalized (or exclusive) groups. And Toby Sanger, pogge and the Globe and Mail editorial board all lament the result, while Sara Mayo observes the suspicion that the data trashed by the National Household Survey includes information about the ultra-wealthy.

- Meanwhile, Frances Russell highlights how the Cons are creating an expectation of falling standards of living and deteriorating social supports. And Jack Monroe speaks from experience about the devastating impact of poverty and inequality in the UK.

- The Globe and Mail identifies another serious regulatory breakdown which may have contributed to the Lac-Mégantic rail disaster, as highly flammable cargo was improperly labelled (without apparently attracting any attention until it exploded). Which naturally means that it's time for the Cons to head out to evangelize for more oil transportation - be it by rail, pipeline or tanker.

- The Ottawa Citizen takes aim at the Cons' pattern of constant and gratuitous cover-ups. 

- Finally, for those under the impression that there's no political choice but to accept and propose perpetual tax slashing, Jon Eligon writes about Missouri governor Jay Nixon - who has managed to put his state's Republicans on the defensive by showing people what they stand to lose if the anti-taxers get their way.

On middle ground

Tim Harper's column today is certainly worth a read in exposing the implausibility of the Cons' "economic stability" theme. But I'll point out that he completely buys the Cons' equally flawed spin as to who stands to benefit from the major planks they've hinted at in their 2015 platform:
The Conservatives under Harper have introduced a child-care benefit and a Working Income Tax Benefit to boost the working poor, but they are eager to put other measures aimed at the middle class in the window in 2015.

If the budget is balanced by then, the Conservatives are committed to doubling a children’s fitness tax credit, allowing income-splitting on family tax returns, introducing an adult fitness tax credit and doubling the limit on its Tax Free Savings Accounts to $10,000 annually.
Now, it may be true that the messages about income-splitting and TFSAs are intended to appeal to middle-class voters. But when it comes to the effects of those promises, there's little reason to think the middle class stands to benefit in the slightest.

Once again, here are David MacDonald's calculations on the distributional impact of income splitting:
Table 1 shows the distributional impact of Harper’s “Family Tax Cut.”  What is immediately clear is that this tax cut is anything but fair.  In fact, no family making under $41,000 gets any benefits whatsoever from the “Family Tax Cut,” no matter how they split their income up.  The poorest quarter of all Canadian families, which make $50,000 a year or less, share 0% of the total benefit and will see an average benefit of $20 a year.  Put another way, those half a million Canadian families that are stretched the most would see essentially no benefit from this proposal.

It isn’t only the poorest Canadians who get a bad deal out of the “Family Tax Cut”, middle class Canadians don’t fare well either. The middle 44% of Canadian families with children, those that make between $50,000 and $100,000, only get 39% of the benefit.  In essence, the “Family Tax Cut” steals from the poor and middle class to give to the rich.

At the very least, one would expect that something that is “fair” provides the same amount to all families with children, rich, poor or in the  middle.  However, the “Family Tax Cut” would provide 61% of the benefits to the richest third (32%) of Canadian families who make over $100,000 a year.   The very top 10% of families that make over $150,000 capture almost a third (28%) of this tax cut.
And similarly, Andrew Jackson summarizes the results of research into the impact of tax-free savings accounts:
Maureen Donnelly and Allister Young look at the slightly-longer UK experience with Individual Savings Accounts (ISAs), a plan similar to TFSAs. They find that beneficiaries of TFSAs are likely to be predominantly older, wealthier taxpayers, with relatively little benefit for low-income individuals. Rhys Kesselman argues that without a series of reforms, expanding the TFSA contribution limit would aggravate the TFSA’s existing deficiencies and result in a windfall for high income earners, allowing high earners to shelter additional wealth from income tax, and leading to higher GIS payments/lower OAS recovery tax.
Which is to say that the Cons' supposed "measures aimed at the middle class" serve only to exacerbate the across-the-spectrum inequality that's been stoked by the Libs and Cons alike over the past few decades - with the middle class once again losing ground compared to the wealthy. And while we might expect political spinmeisters to pretend otherwise, commentators like Harper should be smart enough to challenge the Cons' message rather than echoing it.

Thursday, September 12, 2013

Thursday Morning Links

This and that for your Thursday reading.

- Annie Lowrey reports on the still-spreading blight of income inequality in the U.S.:
An updated study by the prominent economists Emmanuel Saez and Thomas Piketty shows that the top 1 percent of earners took more than one-fifth of the country’s total income in 2012, one of the highest levels recorded in the century that the government has collected the relevant data.

The top 10 percent of earners took more than half of all income. That is the highest recorded level ever.

The figures underscore that even after the recession the country remains in a kind of new Gilded Age, with income as concentrated as it was in the years that preceded the Great Depression, if not more so.

High stock prices, rising home values and surging corporate profits have buoyed the recovery-era incomes of the rich, with the incomes of the rest still weighed down by high unemployment and stagnant wages for many blue- and white-collar workers.
 - And Alan Pyke discusses how austerity policies are about as defensible (and as effective) as blood-letting:
Economists have been underestimating the harm caused by pulling back on government spending, according to new work from economists Òscar Jordà and Alan Taylor.

The new work, published in September by the National Bureau of Economic Research, confirms what austerity opponents have long argued: “expansionary austerity” is a myth, and while cutting spending hurts weak economies far more than strong ones its effect on growth is negative in all circumstances.
- But not surprisingly, Stephen Harper is among the loudest voices around the world demanding that we replace effective and evidence-based care with leeches - as Duncan Cameron rightly notes.

- Meanwhile, Niki Ashton calls out the Fraser Institute for knowing precisely nothing about child care (based on its sad excuse for a review of parenting costs).

- Finally, Steve Burgess suggests that Canada's big telecoms try treating customers fairly to reduce the possibility of foreign competitors cutting into their market share - rather than counting on driving competitors away with astroturf campaigns.

New column day

Here, on how the U.S.' movement for fair fast food wages might be explained in part by greater recognition that many workers will be in the service sector for the long haul - while any Canadian equivalent may be suppressed by the use of temporary foreign workers.

For further reading...
- The best reporting on the U.S. movement is again that of Josh Eidelson - including this piece about the start of the movement, and this one about its current status.
- CBC reported on the use of temporary foreign workers in Saskatchewan - while the Saskatchewan Chamber of Commerce has helpfully responded by chewing out anybody who would even consider questioning the widespread use of TFWs in the name of corporate profits.
- Finally, the TFW-per-workplace numbers in my column are drawn from the second of the CBC's HRSDC documents. And for those interested in seeing which employers seem to be using the most temporary foreign workers in Saskatchewan, here's a quick chart of the employers with 10 or more TFWs:
TFWs    Employer
150   University of Saskatchewan*
85    Brandt Industries Ltd.
53    El-Rancho Food & Hospitality Partnership o/a KFC
40    Taylor Food Services Ltd. dba McDonald's Restaurant*
39    BHP Billiton Canada Inc.
36    Champion Canada International ULC o/a SRI Homes*
30    Spring Valley Farms Ltd. o/a McDonalds Restaurant
27    Kramer Ltd.
26    R & D Drywall Inc.
25    AMEC Americas Ltd. (Mining & Metals)
25    Regina Qu'Appelle Health Region
25    Supreme Steel LP
25    Wilco Contractors Southest Inc.
24    Cypress Health Region
21    Mac's Up Enterprises Inc. o/a McDonald's Restaurant
19    Cameco Corporation
19    JTK Food Services o/a McDonalds
16    Saskatoon Regional Health Authority
15    5904660 Alberta Ltd. o/a Skylark Stucco
14    Clean Harbors Energy & Industrial Services Corp
13    P&C Canada Ltd.
10    100065909 Saskatchewan Ltd. o/a Houston Pizza
10    7714571 Canada Inc. o/a Husky Travel Centre
10    Advance Engineered Products Ltd.
10    Associated Mining Construction Inc.
The chart is put together based on the "Number of TFW Employed" column of the HRSDC chart, taking the highest number for each employer listed - as several employers made multiple applications with different numbers of current TFWs. An asterisk (*) in the above chart means that I've omitted a second employer which appears to be the same as the one listed.

I'll note that the above chart will only include employers who made applications for additional TFWs after April 25, 2012. There may thus be others who would make the list based on TFW counts before that date.

Tuesday, September 10, 2013

Tuesday Night Cat Blogging

Covered cats.

Tuesday Morning Links

This and that for your Tuesday reading.

- Tavia Grant reports on the most recent world happiness report from the UN Sustainable Development Solutions Network. And David Doorey points out a rather striking similarity among the countries at the top of the list, while Dan Gardner highlights Stephen Harper's longstanding goal of removing Canada from the group.

- CBC reveals that thousands of Saskatchewan employers - including hundreds of restaurants - have received permission to use temporary foreign workers rather than paying a fair wage to attract local workers.

- David Climenhaga reveals which public servants are next on the hit list of the Manning Centre and its corporate backers:
Getting back to the original point of all this, right there on the list for consideration were "the problem with municipal public consultations" and "confronting overbearing urban planners."

Given the well-known habit of right-wing think tanks and their ilk to respond compliantly to the wishes of their funders, plus the Calgary development industry's extremely generous contributions revealed by Wenzel, what do you want to bet that we can count on the next MNC to devote considerable attention to these matters?

And what, do you think, will they find to be the problem with municipal public consultations? That they're too democratic? A cynic might wonder, but it's important to remember that the people who finance and staff the Manning Centre, and indeed Preston Manning himself, don't necessarily define democracy the same way you and I do.

They are big on "economic democracy" -- which might cynically be described as the right to get rich as stink any way you please and not pay taxes while you’re about it. They are not so enthusiastic about your right to decide your fate through the ballot box without interference or deception, especially if your preferred representatives are not of a mind to "swing their way."
- And sadly, the attack on public involvement in policy decisions sounds all too familiar to those who read Bruce Johnstone's weekend tirade against Regina's wastewater referendum. Meanwhile, Paul Dechene interviews Michael Fougere (or possibly a random corporate buzzword generator) in an effort to get some explanation for Fougere's position - with predictable results.

- Finally, Aaron Wherry recognizes that the disclosure of relatively small office expenses on the part of elected officials makes for just a tiny (if perhaps necessary) part of a transparent picture of our political scene:
It is, for sure, for our MPs to explain and justify how they spend the public’s money. But we should always be careful to avoid lazy outrage. Or at least we should be mindful to focus on the real enemy—flagrant abuses of the public trust that lack justification. Perspective is also important. Parliament’s ability to scrutinize the billions in spending that it approves each year should, I will earnestly suggest, generally be of greater concern than however much parliamentarians spend on coffee-makers.

Of course, the possibility that we might be distracted by coffee-maker purchases is no excuse to avoid detailing the exact cost, shape and usefulness of every coffee-maker purchased with public funds. I suspect that after some fussing over coffee-makers, we’d all adjust to a world in which we understood our MPs to sometimes both consume coffee themselves and provide it for their staff and guests. Or so I dare to dream.

Monday, September 09, 2013

Monday Morning Links

Miscellaneous material to start your week.

- Jordon Cooper writes about the dangers of growing income inequality in Saskatchewan and around the world:
Income inequality is driven largely by market forces. Technology has changed the job market, and globalization has moved markets overseas or driven down wages.

It's also driven by actions of governments. They have tried to weaken organized labour for decades, which hurts the workers unions represent. Other institutional factors include stagnating minimum wage rates that hurt those at the bottom, while decreasing marginal tax rates are credited for the increases of top wage earners.

The problems are well known, but politicians struggle with the solutions. Whenever I ask an elected official what can be done, I get a couple of moments of awkward conversation about education being a big part of the solution to market problems (and something we have to improve in Saskatchewan), but that is it. No one wants to mention the institutional solution, which is to transfer money from the rich to the poor through personal income taxes and social programs.

Countries who have closed the gap on income inequality, such as the Nordic nations, have more generous social safety nets. By distributing the money over a wider population, the economy does better and those at the bottom have better options to be upwardly mobile.
- But while Cooper also worries that any interest in addressing inequality might be seen as a negative in a political party, Murray Dobbin writes that a strong push by the labour movement may help to change that assumption at the federal level. And Paul Adams suggests that we should be looking for our federal opposition parties to find common ground on progressive policy issues - contrary to Michael den Tandt's demand that Thomas Mulcair sing from the oil baron hymn book in order to gain admittance to the Very Serious Persons Society.

- Meanwhile, Richard Blackwell interviews Canada Without Poverty's Leilani Farha about the role employers should play in ensuring a living wage:
Is there a role for the business community in decreasing poverty in Canada?
Business has a very important role to play. On a practical level, employers need to pay their employees a living wage, and they need to do this without waiting for provincial governments to increase minimum wages. The bottom line is that it is not cheap to live. Employers need to take that into consideration.

Why do employers have that responsibility?
When I ask the business community to pay a living wage, I am actually asking them to stand in the shoes of their employees. What are their employees’ daycare costs? What are they paying for a loaf of bread? What are they paying in rent or what do their mortgage payments look like? What is the cost of Internet, cable TV, or whatever?

Are there economic benefits from reducing poverty?

It makes good business sense. If people have money, they will spend money. That will benefit employers and business, ultimately. It is expensive to run homeless shelters. [And poverty is a] huge tax on our health-care system.
- Finally, Susan Delacourt rightly suggests that Stephen Harper's legacy as Prime Minister has already taken shape - and that it consists mostly of social destruction.

Sunday, September 08, 2013

Sunday Morning Links

This and that for your Sunday reading.

- Blacklocks reports (PDF) on the abuse of a corporate tax credit which served as an "open bar" allowing businesses to have the public fund their basic operations. And it's surely worth noting that after that abuse was identified, the Cons' reaction was to cover up the resulting report in order to keep the bar open (with slightly watered-down drinks).

- Meanwhile, David Martin highlights the Cons' attempts to break longstanding promises to public employees by slashing pension benefits after they've long since retired.

- And the Star's editorial board laments the Cons' destruction of the Centre of the Universe as part of their attacks on science.

- Finally, Alison discusses the backdoors built into all kinds of familiar encryption and security software to facilitate NSA access. And Camille Crowther offers a primer on CSEC's surveillance within Canada:
Supposedly, CSEC is only permitted to monitor communications in foreign countries - however, according to CSEC expert Bill Robinson, this rule no longer applies when CSEC conducts work in support of other agencies such as the RCMP or CSIS. Furthermore, by being able to gather the personal information of online users, this government agency can, as Deibert points out, “pinpoint not only who you are, but with whom you meet, with what frequency and duration, and at which locations”.

The secrecy that surrounds CSEC means that it is not yet possible to truly know just how much online spying is being done within this country. Even the government’s own Privacy Commissioner’s Office has ominously stated that they have “very little specific information at this point, but we want to find out more”.