Friday, September 15, 2006

Bigger surplus good news, but not for you

VICTORIA - It should be good news for British Columbians. The government looked at the books after the fiscal year’s first three months and found the surpluse will be $600 million more than expected.
That’s thanks to a good economy and you. Income taxes and sales taxes will bring in $542 million more than budgeted. BC Hydro’s rate increase will mean an extra $377 million in profits. The good news is more than enough to offset a $775-million shortfall because natural gas prices are lower than expected.
So instead of a $600-million surplus for this year, Finance Minister Carole Taylor says B.C. is on track to finish at least $1.2 billion in the black.
When most families get good news like that, they think about what to do with the extra money. They consider paying down debt. But they also look at what they need today. Maybe some money should pay for tutoring for a child having trouble in school, or extra help for an aged parent. It’s a question of smart choices.
But not for the government. I asked Taylor if this was a chance for ministries to make another pitch for programs that didn’t make the cut at budget time.
No, said Taylor. There’s a contingency fund for emergency expense requirements, but no plan to look at what could be done with the unexpected surplus.
That’s a shame. And it’s a position that ignores the advice British Columbians have offered the government in prebudget consultations.
You can’t be reckless with this kind of windfall. It would be irresponsible to start some multi-year program only to find there wasn’t enough money to keep it going.
But there are many opportunities for one-off improvements. Maybe health authorities could buy time in private MRI clinics and reduce the long wait for needed tests. Tourism BC could get extra money to launch a pre-Olympic ad marketing campaign. The government could offer tax cuts - perhaps an extra deduction for any company’s research spending that could lead to economic diversification in the province’s struggling northwest.
But those options aren’t on the table.
Paying down debt is important. But the province is already committed to devoting 100 per cent of its budgeted surplus to debt repayment. That, remember, is $600 million this year.
The other $600 million, which was not included in the budget, should be available to meet the public’s needs and expectations.
As Taylor was releasing the quarterly report, she also unveiled the budget consultation flyer that’s to be mailed to every home in the province. It’s a slight document - half the front and back pages are taken up with two big pictures. But it does seek input on budget priorities.
Based on Taylor’s comments on the use of this surplus, there’s not much point in filling it out.
After all, two years ago the budget consultation process produced clear results. British Columbians believed about 15 per cent of any surplus should go to debt repayment. The priority should be improving services, especially health and education.
Last year, the budget consultation committee report was muddled, but the results were much the same. The public wanted a balanced approach to using surpluses, with improved services a priority.
British Columbians recognize the cost of debt. But they also know from their own experience the importance of balance. The mortgage has to be paid down, but the family’s needs today have to be looked after too.
And they know that B.C. does not have a debt problem. The province has the second lowest debt burden in Canada, after Alberta, which no longer has any real debt to repay.
The public’s view so far hasn’t much mattered. The government’s choice is to use all of the surplus to pay down debt, no matter what British Columbians say.
Which leads to obvious questions about how seriously British Columbians should take the coming “conversations” on health care Premier Gordon Campbell has promised. A conversation requires people listening, as well as talking.
For now, British Columbians should be wondering about the point of a budget consultation, given the government’s demonstrated willingness to ignore their clearly expressed views.
Footnote: Fill out the budget consultation flyer, by all means, when it hits your mailbox. But be aware that two years ago - before the election - the government mailed a similar piece to every home. About 26,000 people filled it out. But 23,500 of those forms never really got looked at. Time was tight, so the finance ministry picked a regionally representative 2,550 and tallied the results. The rest were dumped, unread. It was an awfully expensive way to conduct a very rough opinion poll.

Thursday, September 14, 2006

Auditor sounds alarm about Olympic costs, stumbles

VICTORIA - It's time to get worried about the 2010 Olympics.
Not just about what the Games are going to cost you, although that's a big concern in the light of three sharply critical reports released this week.
But also about whether the government is fumbling the chance to ensure that B.C. gets some lasting benefits from the two-week event.
Acting auditor general Arn van Iersel released the office's second review of the province's Olympic activities this week. It was alarming reading.
A lot of the talk was around what the Olympics are really costing British Columbians. Premier Gordon Campbell insists the tab is just $600 million - the direct cost of narrowly defined Games spending.
But the auditor general, like almost everyone else, has again dismissed that claim. he Sea-to-Sky Highway improvements were part of the bid and should be included, he found. And it's foolish to claim that the government's Olympic Secretariat isn't part of the Games cost.
All in, the auditor general says, and provincial taxpayers are on the hook for at least $1.5 billion.
Municipalities are putting up another $400 million and the federal government $607 million.
The total tab from taxpayers will be at least $2.5 billion.
The government can stick to its story; the public will decide whether they believe the politicians or the auditor general.
But by not including all the costs, van Iersel says, the government is making it difficult to properly manage the programs. The budget for the Olympic Secretariat, for example, has increased from $24 million to $41million.
"For the province to manage its costs for the Games, the costs must first be defined and measured," he says. "The province, however, has not yet developed a comprehensive definition of Olympic costs."
The report raises bigger questions about what lies ahead.
The province has only $76 million left in its contingency fund for Games overruns, having already handed the Vancouver Olympic Organizing Committee $55 million to cover rising venue costs.
That's not likely going to be enough, says van Iersel.
For starters, there could be more cost overruns on Games construction. (A federal report released at the same time offers the same warning.)
And three years after B.C. was awarded the Games, organizers still don't have a handle on the costs of security or medical care. Ottawa and the province have agreed to split security costs, but they are still using the bid book estimate of $175 million in 2002 dollars. Inflation, increased security threats and other issues could easily double or triple that cost.
The problems aren't just on the cost side. If the Games are going to be more than an expensive party, the auditor general warned in 2003, the province needed a well-funded, well-planned marketing plan to seize the benefits. A government report in 2002 urged an immediate start on marketing efforts to ensure potential indirect economic benefits of $4 billion.
It hasn't happened. "The marketing effort to date has been delayed and unco-ordinated, with no central agency taking the lead," the new report found.
And the province apparently didn't realize that the International Olympic Committee restricts international marketing until the previous Games have concluded. B.C.'s hands are largely tied until after the Beijing Games, leaving just 18 months to woo the world.
That should be a special concern for communities outside the Vancouver-Whistler corridor. People who live in the rest of the B.C. are paying for the Games, but are at risk of seeing few benefits.
Finally, the report raises concerns about the secrecy around Games spending and plans.
"We are also concerned that the province has not done more to make the Games budget a public document," the auditor general's office says. The province has agreed to cover all cost overruns, he report notes, and the public is entitled to better information.
The alarm bells are sounding. It's far from clear that Campbell and company are listening.
Footnote: The province's marketing plan is also being hobbled by VANOC, the auditor general reports. Even though the province is by far the largest contributor, the Games organizers want to keep the best marketing tools for corporate donors. It won't even let the government use the Olympic rings or the word Olympic in ads.

Tuesday, September 12, 2006

MRI queue-jumping symptom of sick health care

VICTORIA - The controversy about patients paying $1,400 to jump the waiting lists for MRIs - and having the tests done in a public hospital - shows how far B.C. has allowed the basic principle of public health care to be eroded.
At the heart of our system is a commitment that health care will be provided based on need. That’s why the Canada Health Act bars extra billing for any medically necessary treatment covered under the public plan.
The MRI scandal shows that principle was abandoned.
St. Paul’s Hospital allowed a private broker, Timely Medical Alternatives, to buy time on its machine and use its technicians to help people jump the waiting list. For $1,400 you could buy your way to speedier, better treatment than your neighbour. Two children might be diagnosed with an illness that required an MRI and placed on a waiting list together. A family with money could buy an immediate MRI scan, while the other child waited and perhaps suffered.
Canadians have so far decided that’s wrong. It is, in fact, illegal.
But B.C. governments, NDP and Liberal, have allowed the expansion of private clinics and companies that facilitate queue-jumping for people who can pay. There are about two dozen clinics in the province that offer faster treatment for people with money. They can operate mainly because the government chooses to turn a blind eye to the Canada Health Act violations.
The Liberal government can’t claim ignorance. Less than three years ago former health minister Colin Hansen introduced a bill aimed at upholding the Canada Health Act and ending two-tier care in the province. It was important to plug the loopholes and make it clear that B.C. wouldn’t tolerate extra-billing, Hansen said.
The bill was debated and passed by the legislature. MLAs decided it was necessary to protect medicare.
But then Premier Gordon Campbell said the government wouldn’t put the law into effect. It remains in limbo; Campbell has never explained why the government passed a bill to protect medicare one month and abandoned the next.
The government has known two-tier health care was increasing, but chose not to act.
That’s allowed companies like Timely Medical Alternatives to expand. The business started in 2003 to sell better health care to people who could pay for it. Some activities are clearly within the Canada Health Act. The company arranges surgery in Washington State, for example, for people who don’t want to wait for a knee replacement.
Others, like the MRI deal with St. Paul’s Hospital, aren’t.
Timely Medical Alternatives gives the B.C. government great marks for its “acceptance of private alternatives.” The business rates provinces based on their willingness to tolerate deals like the MRI arrangement. B.C. gets a six out of 10; Alberta gets three. The rest of the provinces get a one rating.
And the company is unabashed in crediting government for its success.
People are driven outside the public health-care system because it is performing poorly, the company says. ”Many Canadians wait unreasonably long for treatment of life-threatening conditions,” the company says. “Every year, scores of Canadians die while on long waiting lists for needed surgery.”
Timely Medical Alternatives is brutal in assessing government’s failure to pay for needed MRI scans. The real purpose is to make surgical wait times appear shorter than they are, the company says on its website. Patients aren’t added to surgical waiting lists until after they have the necessary MRI scans. If government provided the test promptly, then there would be more people “officially” waiting and wait lists would look worse.
Patient care is sacrificed so the truth about wait times can be concealed, the company explains.
Health Minister George Abbott says he’s investigating the queue-jumping at St. Paul’s.
But based on past practice, don’t hold you breath waiting for any real action. If the Campbell government was concerned about two-tier care, it would have acted long ago.
Footnote: NDP health critic Adrian Dix effectively raised the issue, producing a patient who has paid $1,400 and walked into St. Paul’s for an almost immediate MRI, while people in the public system were waiting for months for access to the same machine.

'Rest of B.C.' faces electoral squeeze play

VICTORIA - Get ready for some anguished howls from rural B.C. as the Electoral Boundaries Commission starts overhauling the province's ridings.
The commission is heading out on the road this month, the first steps towards an overhaul of riding boundaries for the 2009 election. It's going to be a painful process for people in much of the province.
We're supposed to have a fair system of electing MLAs, with all voters having roughly equal influence and representation.
But we don't. The three ridings in the northwest - North Coast, Skeena, Bulkley Valley-Stikine - have 92,000 people and send three MLAs to Victoria.
In Vancouver, three ridings - Burrard, Hastings and Point Grey - have twice as many people, but also send three MLAs to Victoria. The votes of people in those ridings are worth half as much - at least in terms of electing a government - as people in the northwest.
There are reasons for the inequity. Liberal Lorne Mayencourt represents some 75,000 people in his Vancouver-Burrard riding; New Democrat Gary Coons about 28,000 in the North Coast riding.
But Mayencourt's riding is nine square kilometres; he can cover it with a $7 cab ride. North Coast is 66,000 square kilometres. It's hard to represent people spread out over such an area.
There's an argument for slacking off on the principle of rep by pop. The question is how far do you go? In a close election, should voters in the north have twice as much weight in deciding which party forms government?
Those are the questions the boundaries commission will struggle with over the next 18 months. The commission - Supreme Court Justice Bruce Cohen, chief electoral officer Harry Neufeld and retired school administrator Stewart Ladyman of Penticton - has to come up with recommended changes to the current electoral boundaries.
They have a big task. In an attempt to head off legal challenges, the province has established principles. True representation by population would mean all ridings would have the same population. The legislature has decided that it will allow riding size to vary by plus or minus 25 per cent. The commission can recommend ridings larger or smaller than those guidelines "In very special circumstances."
The last commission, which reported in 1999, recommended six ridings be granted special consideration. That was mostly based on the vast geographic distances in remote ridings, but also on the effect of stripping representation away from northern voters.
Since then the population shift has continued. My count indicates three Lower Mainland ridings are too large, given the 25-per--cent rule. Ten ridings have too few people.
Fortunately, the commission isn't forced to cut the number of ridings in the North and Interior to add MLAs in the Lower Mainland. It's mandate includes the right to propose adding up to six seats, taking the legislature from 79 to 85 MLAs. That provides the opportunity to reduce the size of some of the Lower Mainland ridings without cutting back on representation from the rest of the province.
There will still be power shift. The regions' influence will be reduced by the new urban seats. (What ever happened to all that Heartland talk, anyway?)
But the principle of representation by population will be preserved.
This particular commission has another huge challenge. It has been asked to come up with proposed electoral boundaries that could be used if British Columbians decide they would prefer proportional representation to the current system. Another referendum on the single-transferable-vote system will be held along with the provincial election in 2009.
It's a wise move by Premier Gordon Campbell. The change was approved by 58 per cent of voters in 2005, just short of the required 60-per-cent. Campbell decided to put the question to the people again, this time with more information.
But it means much more work for the commission.
The commission is on its way to communities around the province over the next two months. It's well worth paying attention to its work.
Footnote: Questions around representation quickly become complex. A political party in B.C., once this redistribution is complete, may be able to form government without a single seat outside the Lower Mainland and Victoria. But party which has its support concentrated in the rest of the province will be doomed to outsider status. That's a profound change in the political landscape over the course of a few decades.

Sunday, September 10, 2006

Five years of errors since 9/11

VICTORIA - Five years on from the World Trade Centre, and it looks we have got it mostly wrong since then, starting with the fiction that as a result of the 9/11 terror attacks "everything had changed."
That just wasn't true. Terror had taken a shocking new form, deadly on a mass scale and symbolically powerful.
But the world hadn't changed. People still worried about their jobs and their children. Countries still struggled with a host of problems. Bad states still oppressed their people and threatened their neighbours. None of that was different.
That was the terrorists' big victory. A relatively small gang of them staged one spectacular attack and convinced us that we had to change everything. We let them decide our future.
We could have said no. That would not have meant ignoring the attacks. We could have gone after the terrorists who were responsible and looked at what we needed to do improve basic security. Modest, pragmatic responses.
Instead, we accepted the fiction that everything had changed.
In the last five years, that belief has been expensive. Thousands of people have died as a result, and hundreds of thousands have suffered terribly. Canadians have accepted the loss of some basic civil liberties through anti-terror legislation. America has sacrificed its position as champion of democracy and the rule of law, joining those states which sanction kidnapping and secret prisons.
We've spent billions on security and made travelling and trade much more difficult.
We - that is Canada and the rest of the West - have spent something like $1 trillion in total in responding to the 9/11 attacks. That's an astonishing amount of money that could have done quite a lot of good.
And we've gone to war in Iraq and Afghanistan.
You could make an argument that those things were all necessary for our safety.
Except for a large problem. They haven't worked. The aim of all these efforts - the laws that eroded our rights, the airport security, the wars - was to make us safer by punishing the bad guys, deterring other terrorists and reducing the risk of attack.
At best, they have been unsuccessful. They may have made things worse.
The U.S. State Department reports there were 11,111 terror attacks in 2005, up from 3,192 the year before. The increase may be misleading, it warns, because it's tough to count accurately. But the trend since 2001 and has been steadily upward. The greater our efforts to increase safety, the more terror attacks.
New terrorists have emerged, organized in autonomous cells, like the people who blew up bombs in London's subway. Perhaps that would have happened anyway. But perhaps the response has fuelled the fire.
Everyone in the world must have expected the West to hunt attack Osama bin Laden and the people responsible for the attacks. The 2001 Afghanistan campaign, which saw the Taliban removed and some 3,000 Al Qaeda operatives killed or captured, was even quietly welcomed by some in the Muslim world.
But the war in Iraq, the confrontation with Iran and the rest have left too many people convinced this a war with Islam.
It's time to rethink our assumptions, in light of the failure so far. You can speculate that things might be worse if we had not responded as we did, but the evidence indicates our efforts have been ineffective.
We can't turn back the clock. We can take a different approach going forward. Canada's commitment to fighting in Afghanistan, for example, rests on the belief that the war reduces the risk of a terror attack in our country. (Humanitarian work and regime stabilization are part of the mission, but no one could seriously argue that Canadians would be fighting based on those issues alone.)
If that belief is wrong and if we are not reducing the terror threat, then we need to rethink the mission.
We've given up a lot in the last five years, for too little.
Footnote: Canadians have given up more than the right to take toothpaste on airplanes. Anti-terror laws passed after 9/11 allow people to be held indefinitely without a charges, a trial or appeal if they are deemed a threat. Police can arrest people who have broken no laws on the suspicion that they are involved in terrorist activities. The prime minister can outlaw groups based on secret evidence. You can be jailed for refusing to answer police questions.