Richard Neufeld appointed to Senate

Posted December 22, 2008 by Sacha Peter
Category: News

Prime Minister Stephen Harper appointed 18 people to the Senate; one of which is the minister of Energy, Mines and Petroleum Resources, who is Richard Neufeld, MLA of Peace River North.

It is assumed that Neufeld will resign from the legislature shortly and will not be running in the 2009 election.

Peace River North voted 59% BC Liberal in the last election, while the NDP obtained 27% of the vote.  One can assume this seat will be safe for the BC Liberals, unless if there is some other party that will be splitting the vote (Neufeld was originally elected as a Social Credit MLA in 1991 and BC Reform in 1996 before he crossed the floor to the BC Liberals).

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BC Auditor General doing the job of the opposition

Posted December 15, 2008 by Sacha Peter
Category: Analysis, Olympics

Auditors are a critical function of any organization – they provide a third party control, one in theory that should not be subject to manipulation.

In practice, however, things are a little different. In the corporate world, auditors are typically reliant on consulting revenues from the very same companies they are trying to audit. The prototypical case of this was Arthur Andersen with respect to Enron, Worldcom, etc. There are other examples which are less extreme, but the very relationship that auditors have with their clients (mainly that the auditors are being paid by the clients they serve) lead to an inherent conflict of interest – if the auditor delivers a report too damaging, the company will simply dismiss the auditor due to a “difference of opinion”.

This is why when companies change auditors in the three month period following the end of the fiscal year, it is always a “red flag” for an investor since it is virtually guaranteed there is more dirt that is not being made public.

In government, the role of the auditor general is defined by Section 11 of the Auditor General Act. Generally, the Auditor General is to provide assurance that the financial statements produced by the government are correct, and to audit grants, and performance guarantees, and items of that nature. Also in the act, contains Section 11(8), which provides for the following broad mandate:

(8) The Auditor General must report to the Legislative Assembly one or more times each fiscal year of the government and call attention to anything resulting from the work undertaken to exercise the powers and perform the duties of the Auditor General that the Auditor General considers should be brought to the attention of the Legislative Assembly, including any assessments concerning whether

(a) financial and administrative provisions of Acts and regulations under those Acts have been complied with,

(b) the government, a government organization or a trust fund is operating economically, efficiently and effectively,

(c) the procedures established by the government, government organizations or trust funds to measure and report on the effectiveness of their programs are adequate and complied with,

(d) the accountability information provided to the Legislative Assembly by the government, government organizations and trust funds with respect to the results of their programs is adequate,

(e) the terms and conditions applied in respect of a grant, a transfer under an agreement, an advance of money, a loan, a guarantee for the performance of an obligation, or an indemnity given by the government, a government organization or a trust fund to any individual or another organization have been complied with, and

(f) the terms and conditions applied in respect of a collection of money on behalf of the government, a government organization or by or on behalf of a trust fund have been complied with.

I earlier covered the item with respect to the Rich Coleman tree farm license land removal issue – one that he was later exonerated from the conflict of interest commissioner. However, the underlying argument of the Auditor General was that there was sloppy internal controls with respect to process, and this apparently has not been corrected (or at least if it has, it hasn’t been made public).

The NDP pushed the conflict of interest angle (until it was cleared up), but they never pushed the process/internal control issue – which inherently is the more important of the two with respect to public interest.

Recently, the Auditor General made note in a December 11, 2008 statement about the reporting of the 2010 Olympic budget. It is only a three page report, so one can read the whole thing. Inside this statement includes the following paragraph:

The second piece of work relates to costs and risks to the Province associated with the 2010 Olympic and Paralympic Winter Games (the Games). My Office’s two previous reports, issued in 2003 and 2006, conclude that British Columbia’s share of the full cost of the Games is considerably higher than the $600 million figure that has often been quoted. Further, in the absence of full disclosure by the Province, each report highlights significant risks that could result in even higher costs to the Province by the time the Games are finished.

Later is a recommendation that the revised budget coming next year by VanOC “will present an ideal opportunity to update this disclosure.”

Obviously the current government is not happy with such a report. But the Auditor General is doing exactly the job that the role was created for – to highlight weaknesses in government reporting and internal controls. It is typically a political move to reduce funding and staffing to the office of the Auditor General if he/she is being diligent with his/her portfolio, and it will be interesting to see if this happens.

Normally this should be the job of the official opposition – but since they are chasing issues of little concern to the operations of government, Auditor General John Doyle is clearly doing a better job at presenting real issues to the people of BC.

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Political Christmas season feels early

Posted December 12, 2008 by Sacha Peter
Category: News

There isn’t too much going on, and it doesn’t look like there will be much going on provincially for the rest of the year. Most of the spotlight is on the federal scene.

The outcome of the proposed lower mainland rapid transit projects will have an impact on the election – apparently the Evergreen Line (connecting Lougheed Hall Mall to Port Coquitlam) is massively underfunded and will likely have to be deferred past the original 2013 2014 completion target. This may affect voter sentiment in that area.

There is another vague press release about a consultation that will happen with respect to the Millennium line expansion and the Expo Line expansion. Not sure this will have much impact before election day.

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Another test for Angus Reid

Posted December 7, 2008 by Sacha Peter
Category: Polls

Some people on this site have commented as to the accuracy of the surveying by Angus Reid Strategies.

For the December 8, 2008 Quebec Election, Angus Reid predicted the following:

Liberals 42%
Parti Quebecois 36%
Action Democratique 13%

914 Quebecers were surveyed, on December 5, 2008. The survey results undoubtedly are affected by the events in the federal jurisdiction.

We will find out in 24 hours whether Angus Reid is close or not (define this as plus or minus 3%).

(Update: Actual results, based on preliminary count on election day, are Liberals 42%, PQ 35%, ADQ 16%)

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Gas prices and the NDP’s campaign chances

Posted December 6, 2008 by Sacha Peter
Category: NDP

When gasoline was at 1.50 a litre, and topping the opinion polls as the issue of highest concern for the province, the NDP was gleefully pointing out that the government was levying an extra 2.34 cents per litre at the pumps in the form of the carbon tax.

The government’s response was that it was such a tiny fraction of the overall cost of fuel that it was insignificant. People generally didn’t listen to this. The NDP received flack from their own party about being against an “environmentally friendly tax”, so they reformed their campaign to say “Axe the gas tax” instead of “Axe the carbon tax”.

Something funny was that the BC Liberals’ stopping using the words “Carbon Tax” in isolation – you will always hear “Carbon Tax on pollution” or something to that tune. Even the phrase “revenue-neutral carbon tax” has been reduced from use since almost everybody knows that it is not revenue neutral.

Now that retail gasoline prices have dropped by a factor of half, this issue has dropped entirely off the map. For example, when the NDP announced the revamp of their website, this issue has mysteriously disappeared.

This is likely because of two reasons – one is that the political opportunity on the issue of gasoline prices has evaporated with falling oil prices, but secondly, it was a tax that was internally disruptive to the NDP to begin with – the NDP is a party that generally doesn’t argue for tax cuts, so this was inconsistent with their overall messaging. So the NDP are likely to drop this fight, which likely will compromise their chances for winning more rural seats in BC.

It was a tactical blunder on the NDP’s part – if they played it better, they could have gotten a lot more “mileage” on it, pun intended.

The ultimate irony is that lower gasoline prices mean that consumers are actually being taxed more as a percentage of the price they pay at the pumps. When you add federal and provincial taxes at the pumps, people paying 80 cents a litre for gasoline in Vancouver will be paying 37 cents, or 46% of the total amount in the form of taxes. When gasoline was 1.50/litre, they would have paid 40 cents, or 27% of the cost for taxes.

The only tax that increases with the increase in gasoline prices is the GST component in gasoline. All other taxes currently levied on gasoline are fixed costs per litre.

This leads to the rather counter-intuitive conclusion that one should be advocating for gasoline tax decreases when retail gas prices are lower, and gasoline tax increases when gas prices are higher.

So the next time you fill up your car at 80 cents a litre, realize that nearly half the money that you spend at the gas station goes to taxes.

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Friday afternoon news – the economy is slowing

Posted December 5, 2008 by Sacha Peter
Category: Economy, News

In what is the least surprising news possible, the government announces that growth is slowing down in the province. It should surprise nobody that their 2009 estimates were high.

The spin job you will be hearing is “But we’re better than the rest of the country”. The non-spin version would be “None of this is really in our control”, but this would be implicitly admitting in an election campaign that your economic platform is mostly meaningless.

There was a press release that the mining flow through credits would be extended another year, until the end of 2009. The government needs to legislate this rule, but since the Legislature will not be open until February, they made a press release saying they will do it and make it retroactive.

The Federal government allows a 15% credit, while the BC government allows a 20% credit on eligible mining exploration expenses. So if you invest in a company that has the proper type of mining, you would receive a credit for the amount in question of up to 35%. If you structured the investment inside a registered account, you could reduce the cost further.

Personally, even with the subsidy, I wouldn’t since there is an incredible amount of risk associated with mining ventures, but the discount may make it lucrative for some people out there.

The whole reason for this credit is to encourage exploration for minerals at times where commodity prices do not justify exploration. The program was initially started up in the early 2000’s on both the federal and provincial side, but was continuously renewed despite the increase in commodity prices. Now that commodity prices have crashed, one would hope the program has been renewed, and it has been on the provincial side.

Since the federal government is in limbo, their program will expire in March 31, unless if the federal budget announces otherwise.

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Last week in the Legislature – November 24-27, 2008

Posted December 4, 2008 by Sacha Peter
Category: Legislature

This post is a little late, but the development in Ottawa has been more captivating than I originally anticipated.

The first-asked topics in question period included:

Government action on forest industry
Long-term care beds at Zion Park Manor
Implementation of child protection report recommendations
Lobbyists registration legislation

The questions were rather stale, but the most prominent quotation would come from Wally Oppal, who said the following about the Lobbyist Registration Act:

C. James: …from the Attorney General: “We’re getting around to it. We’ll think about it. We’re going to study it some more.”

Well, my question, again, is to the Attorney General. Does the Attorney General not believe that the act needs fixing, or will the Premier refuse to let the Attorney General fix this act?

Hon. W. Oppal: The short answer is that I do believe the act needs to be fixed.

The last line is what gives politicians credibility – if something is broken, fix it. There isn’t enough of that in party politics.

During the short legislative session, both bills introduced passed (the economic bill, and the Vancouver Foundation Bill) and the NDP did not have a division (i.e. a vote) on the matter, so they consented to the bills.

The next opening of the Legislature is scheduled to be on February 10, 2009, in what will be an election session.

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Child Death Review Report

Posted December 2, 2008 by Sacha Peter
Category: Transportation

The child death review unit released their report and 17 recommendations. The report can be found here, with a direct link to the 1.7 MB report here (PDF).

Most of what has received media attention was recommendation 10, which is the following:

Means restriction

Restricting access to lethal means of self-injury can make the difference between a death and an opportunity to help a distressed individual, and is considered one of the most effective universal approaches to suicide prevention (Kirmayer et al., 2007). Evidence indicates that physical safety barriers or safety nets on bridges significantly reduce suicide by jumping from those locations (Beautrais, 2007) as well as from surrounding locations (Bennewith, Nowers & Gunnell, 2007).

Recommendation 10

Ministry of Transportation and Infrastructure

Improve means restriction efforts in B.C. by:
• retrofitting the five bridges in B.C. that are responsible for over 50 per cent of suicide deaths by jumping from 1991 to 2007 (Burrard Street Bridge, Granville Street Bridge, Iron Workers Memorial Bridge, Lions Gate Bridge, Pattullo Bridge) with barriers to prevent future suicide deaths by jumping.
• developing policy that establishes criteria for determining when bridges should be outfitted with barriers to prevent suicide by jumping, and enforcing this policy in the construction of all new bridges in B.C.

I will not discuss further about social policy relating to this issue, nor any electoral impact (if any).

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