Hurricane of Events

Lots has been unfolding lately, in the political world and in my personal life. On Monday, my wife and I ecstatically welcomed our fourth child, third boy, Noah into the world, unconventionally, but everyone is healthy and happy so all is well!

I know it might not be to Bev Oda’s taste, but I thought it was interesting that an upgrade to a Private room from the OHIP covered ward would run about $200/night. As the name suggests, a private room allows for only 1 bed and 1 patient, with a private bathroom and shower.  Any medical care needed would continue to be provided to my wife and she would still receive three meals daily, with Orange Juice (sometimes Apple Juice too). Noah would also be given medical care, formula and diapers as needed. An additional built-in cot is provided in the private rooms as well for partners. Parking is not included, but cost is a maximum of $14 per day and taxi’s are estimated at about $10 per 2 km trip.

My point is that even when you’re in the hospital, more luxurious accommodations are available for more affordable costs than what was billed to taxpayers by Oda. Even long term care in a manor with a similar private room is under $5000 per month in most cases. A month stay at the Savoy would be about $20’000. Bev Oda wanted the most expensive hotel, just so she could brag about staying at the most expensive hotel.

Clearly she is suffering from a sense of entitlement beyond what her position as a minister warrants. A position in government is supposed to be about serving the public interest, not one’s selfish interest.

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GST, Deficit and Revenue

Stephen Harper has always been a man of strategy. In an attempt to further the conservative agenda, and to make the case for austerity, part of this strategy seems to have been to rob the government of revenue (through tax reductions), so that new spending promises will require tax increases or deficit spending. One of the least beneficial tax reductions was the lowering of the GST rate from 7% to 5%.

Canadian’s aren’t stupid. Let’s make the case to them.

Returning the GST rate to 7% would result in about $11 billion in additional tax revenue, without discouraging business because GST is paid by the end user, not business. It is true that business is responsible for the collection and reporting of GST, but a change in the rate makes little difference to them. The administration involved is the same regardless of the rate.

Liberals have previously argued the case for increased taxes on corporations, but this is ultimately paid by consumers too, and can actually have detrimental effects on the economy and revenue, more than a GST hike would. We do want to convince multinational corporations to report their profits in Canada, not overseas.

Think about it though: If corporations are paying tax on profits, and those profits are earned by selling consumers goods and services, then it is really consumers that are paying the tax at the end of the day, not the corporation. It is just diverted away from the consumers immediate attention. If the corporation feels that it isn’t making the profit it should because of the corporate taxes it pays, then the corporate may increase prices for consumers, and how would that increase  be any different than a GST hike?

Luckily, with GST, we have credits already available for lower income families that can offset the costs of an increased GST rate so that it doesn’t hurt those already struggling to make ends meet. If we increase corporate taxes, however, and corporations raise costs on consumers, then we are limited in what we can do. The increase in corporate tax rates could actually hurt those that need our help.

Consumption taxes end up being a tax on the rich because those that spend more will pay more. It is also something that isn’t forced as a consumer can choose to spend less in order to pay less. The $11 billion or so in revenue that we could gain from an increase could help slashing our deficit, and could be applied to our debt so that the nation is in a more secure financial position. Once the fundamentals are solid, we will be in a better position to expand our social programs.

Unite The Left & Polarize Politics- Liberals Have A Place

After a crushing defeat for we Liberals in 2011, and unprecedented gains for the New Democrats, many party members became more open to the idea of uniting the left. I think that this would be a mistake. Harper’s stated mission has been to destroy the Liberal party, and in turn, polarize Canadian politics, resulting in ideological battles of closer resemblance to American politics than the more mature debates we have had in Canada, until recently.

If all that matters is winning, the chance of success looks good. In 2011, the popular vote of the NDP was about 31%. Add that to the popular vote of Liberals and we have a popular vote of about 49.5%. That is almost a clean, honest majority. But, as conservatives learned when the right was united, one plus one doesn’t always make two.

Blue Liberals that lean to the right on economic issues won’t be comfortable in the same camp as the dippers. They are likely to hop onto the conservative bus, or just refrain from voting all together. The far left of the NDP will be in a similar position. They won’t be comfortable in the same boat as the Liberals, so they may refrain from voting all together or change allegiance to the Green Party (if they are further left on the environment, but less left on other issues) or another.  The possibility that the far left NDPers will remain with a merged party appears to be slightly higher, since there is not yet an electable party that is further left than the NDP, but it is hard to say what they will do. If the further left does remain with the party, the chances that Blue Liberals will leave only goes up.

In the end, a merger on the left will polarize Canadian politics. Instead of having a party that straddles the centre and can change positions based on evidence, we will end up with two parties that are driven more by ideology than good ideas. It will be a battle of the left versus the right, similar to the two party system in America.  There won’t be a party that can tie together the better ideas of the right with the better ideas of the left. The best we can hope for by a merger is a NDP-lite party against a Conservative party that may take a step to the left.

The concept that Canada would become essentially a two party system, where both parties always travel in opposite directions, ignoring what route is best is a concept that fails to give the electorate fair alternatives.

There will always be a raison d’etre for Liberals, because we are the party of the people, the party of evidence and the party that can do what is best without being limited by ideological constraints.  I believe that Liberal values are the values of the majority because I think that most voters want politicians to do what’s best based on the facts, not some rigid belief system.

The way forward for Liberals isn’t by being consumed by the NDP. The problem isn’t that liberalism is dead or even dying.  The problem is that we haven’t been good at connecting with voters. We need to become the best party at communicating our message and our values.

That is the way forward for Liberals.


Developing Good Green Energy

It is part of our responsibility to protect the environment but there is a limit to what we can do in a country that is so cold in the winter, and as hot and humid in the Summer, as Canada. To make it easier on consumers, we need to develop green energy that is effective and cost efficient. The problem with solar and wind energy when everything is taken into account is that it costs so much to produce per kwh compared to nuclear. This raises costs for consumers. This is sometimes offset by the government, but we are still the taxpayers. Regardless, the end result is still the same… Higher energy prices. This hurts consumers, and discourages business.

One of the problems that I observe when government funds green energy, is that it gives incentives to continue production of current technologies, but gives little incentive to innovate and produce new and better technologies. If the government is willing to buy solar panels, then it’s a pretty safe bet that we will get more solar panels and not Easter eggs. A new, better, cost effective and efficient technology would be of the most benefit but this is unlikely to be developed if we keep buying things that already exist. If enough people were working on developing something better, I don’t think it would take long to achieve the goal if we didn’t unwittingly discourage it.

Should we be funding research and development then? The short answer is, no. This is because that through funding research, there is significant financial interest in researching and studying, but little in developing.  Through achievement, the researchers will expect funding to be cut, so they may delay development in an attempt to prolong funding.

So what is needed? I think that the best approach would be private sector involvement with limited government funding. Have a criteria set out for what is needed (Green Energy that is similar to solar and wind energy that costs $? per kwh to produce), then guarantee a market and purchaser for those that develop the new technology (. Think about it. All the risk will be on the private sector, and government will only pay for results. I think if the private sector could foresee a market, they would work to produce the technology, provided that they didn’t feel like they were in competition with publicly funded researchers.

The environment is a priority, and green energy is important, but our focus should be on developing the best  green  technology possible that can also be cost effective.

What kind of mess could we be in?

Think about it: Canada is already in deficit, and cost over runs on the F-35s now total $10 billion more than the Conservatives originally told us.  The figure on the F-35s has gone up from $16 billion to $25 billion, an increase of 62.5%. They cite accounting differences, but what kind of accountant would be off by 62.5%? Personally, I would be pretty mad if my accountant told me that my tax bill was only $1600, then I got a bill from the feds for $2500.

But seriously, a 62.5% “accounting error” could mean some serious problems for Canada:

  • If the same type of error is applied to the deficit, the deficit in 2012 could total: $34.2875 billion instead of the projected $21.1 billion.
  • If the error applies to revenue, it could mean that we are only taking in $159.375 billion in revenue this year instead of the projected $255 billion. This would mean (provided expenses remain unchanged) a deficit of $116.825 billion.
  • If the error applies to expenditures, it means we could be spending $448.66 billion instead of the projected $276.1. Provided projected revenues are accurate, this would mean a deficit of $193.66 billion.
  • BUT IF BOTH REVENUE AND EXPENDITURES WERE OFF BY 62.5%, THIS WOULD MEAN A BUDGET DEFICIT OF  $289.285 BILLION
I’m not saying that the budget is off anywhere by 62.5%, but if they’re off in one department, the likelihood that they could be off somewhere else is heightened.My point is that no matter how they try to dress it up, any kind of accounting error is unacceptable, especially one that increases costs by 62.5%. Depending on where the error is, it can lead to quite a different financial picture.

The Time for Progress: Dentacare, Pharmacare

Let us assume that we have created an economic climate of growth and employment, where there are more people working than ever before. Deficits have been eliminated, and we have a plan to eliminate the debt (which is also important. All it takes is a few economic downturns before the debt burden becomes too great on the nation. This in turn will discourage business and the country will end up digging a deeper and deeper hole trying to stimulate the economy with little success. We need to make sure we have the room to endure downturns.) Things are looking good, and current expenditures are sustainable. It is time for progress.

I know a lot of Liberals and NDPers would like to progress faster than this, but I believe that progress at too fast of rate is self-defeating. Everything ultimately ties back to GDP and the economy. Progress too fast, and the programs will be unsustainable and the case for cuts will be made. To progress without careful consideration of the economy is like borrowing money to buy a new vehicle without having any job security. The case for certain programs (especially those that better help people provide for themselves, or help those that are unable to) can be made all the time, but the “nice to haves” need to wait until we can afford it.

The first “nice to haves” I would like to see implemented are Dentacare and Pharmacare. These types of programs would benefit almost everyone, and not just a select few. It would be nice to know that getting sick and needing prescriptions, or needing to fix aching teeth, wouldn’t mean less disposable income. This could also give Canada an additional competitive edge to employers.

Progress is good, but we have to make sure that it can be sustained. Otherwise we become our own worst enemy.

Empowering workers: Unemployment and Jobs

The best social policy is one that helps someone provide for themselves through employment. People need jobs, but they need good paying jobs. Trying to convince private sector employers to pay good wages if they don’t feel the need to is almost impossible, but there is a way to do it.

We need to strive to obtain a low unemployment rate by creating private sector jobs. To create these jobs, the private sector needs the confidence to invest in Canada. When big businesses are making decisions, the accountant takes all costs into account (except, of course, Conservative accountants) before they determine where they intend to set up shop.  Hydro rates, taxes, labour prices, social programs (as benefits that they might have to provide employees otherwise, such as healthcare), and the job market all come into play. Businesses that are already set up  in Canada (factories for instance) might be willing to absorb higher costs to avoid start up costs elsewhere, but those that are planning their start up aren’t going to invest in Canada if they see it as being more affordable somewhere else. This is an undeniable fact in the way many businesses make decisions. Everything is a number. To attract more employers to Canada, there has to be some kind of competitive advantage. Right now, some of Canada’s advantage is the fact that our banks are solid, but working to foster job creation to reduce unemployment will best empower workers.

By fostering job creation, unemployment rates drop. As there are more employers looking to hire than there are people looking for work, employers will have to pay higher wages and more benefits to attract employees. It makes sense though, doesn’t it? If you really need milk but there’s only one store that sells it, they could charge you more because the market would favour the retailer. We want to create a job market that favours workers.

The second component to this is to anticipate for skill shortages and take measures to accommodate for that, at least to a degree. An inefficient job market will have more positions to fill than there are people to fill them, but the skills of the unemployed won’t match the jobs that are available. Liberals can help by supporting training programs that will help meet demand. In many respects, lower unemployment will make it so more employers will be willing to (or forced to) advance and train employees because it will be harder to find people to hire with the skills needed.

Taking measures to support job creation and reduce unemployment is the best way to guarantee prosperity. With new business in Canada and more people employed, government revenues will go up, deficits will go down. Once we have finances in order, we will be able to implement social programs  and won’t face as much criticism in doing so.

 

A Party for Canadians: From the ground up

We know that the NDP and the Conservatives are the parties of extremes. The Liberals have historically occupied the middle. Canadian’s, by and large, occupy the middle too. Liberals haven’t been successful in selling a vision to Canadian’s because for one reason or another, there has been a problem with that vision. It stands to reason that Harper seized his majority by attracting Liberal voters, not NDP voters. If a more socialist, NDP style vision is what was desired, Canada would have an NDP government today, but we don’t.

To be Canada’s party, we need to reflect the views of the majority of Canadian’s. Most Canadian’s, I think, want to help their neighbor, but they also don’t want to be taken advantage of. They also want government services to work.

The Liberal Party needs more non-ideological Canadian’s to share their views with the party. This is why the supporter category is such a good idea. We have extended our invitation to a larger group, and hopefully by doing this we will attract more Canadians. Those that have not previously been a member of a political party, hopefully will realize that if they want politician’s to talk about the issues that matter to them, if they want politics to be different, if they want government to be better, sometimes they have to join a party to make that difference.

The Liberal party needs hijacked by more Canadians that want to make a difference. Here’s how they can do it. 

Ed Broadbent’s study and a new question

The recent study by the Broadbent Institute shows that Canadian’s are willing to pay slightly higher taxes if that’s what it would take to save social programs. If that’s what it would take, sure, no problem, but maybe we don’t all think that’s what it would take. Maybe cuts to middle management are what it would take. Maybe cutting spending from a low priority area and shuffling the savings to a higher priority area is what it would take. Maybe higher taxes would make the problem worse by decreasing revenues.

Personally, I think a tax bracket for higher income earners may be needed, and government priorities should be better set. We can’t be everything to everyone. Corporate taxes are tricky, because businesses might make choices that we don’t want if we raise their taxes too much. This could lead to greater unemployment, higher prices or decreased corporate tax revenue. Hard to say.

So what do people think? If social programs were being threatened, what should government do to save them?

Liberalism Reinvented

Liberalism is capable of change over time, because situations change over time. Ideologically driven parties aren’t as capable of these changes because they refuse to consider ideas that don’t fit the program, even if they make sense.

The Liberal Party is a party where centrists of all types can feel comfortable expressing their opinions, whether they lean to the right or the left. Every idea can be valid and ideas aren’t shut down just because they don’t fit the ideology. Some people claim that this means we have no principles. It really means that we aren’t going to hold the belief that the world is flat then refuse to listen to someone that calls it round. Liberalism is about keeping an open mind.

Bringing the fiscal conservatism of the right (as it pertains to growing the economy and maintaining balanced budgets) together with the social conscience of the left is challenging, but is the balanced approach needed to achieve the best results. It also reflects the views of the majority of Canadians.

It appears there are more that share these views:

What would a truly liberal, Liberal party look like? by Michael Den Tandt

In defence of liberalism by Marlene Jennings and Thomas Touchie