Budget '04: All in all, I'd hoped for better
By Paul Willcocks
VICTORIA - Less than an hour to tell you something useful about the shopping bag full of binders I got in the budget lock-up.
First, despite some huge problems, I'd prefer this to the NDP budgets I covered. Ministries have come in on budget; the government is on plan. There is much to praise when people do what they said they would do.
Second, the budget is balanced. A lot can go wrong, and Finance Minister Gary Collins hasn't left his usual plump cushion. But it's a real and reasonable projection, without trickery.
And third, the LIberals deserve credit for having cut government spending in many areas wisely and without serious harm.
That's the good news.
The bad news is that the budget has been balanced by chopping spending, not improving the province's economy. The Liberal vision - clearly set out in the New Era platform - was that tax cuts would lead to increased economic activity which would allow government to provide needed services. The reality was that tax cuts knocked a huge whole in government revenues and didn't provide the promised economic growth. The march to a balanced budget was made to the tune of spending cuts, some damaging.
The Liberals previewed their election campaign with this budget. It talked a great deal about how much money would be flowing to health and education over the next three years. But a check of the fine print revealed the benefits wouldn't start to flow until the end of the three-year plan - after the next election.
Meanwhile, things will be very tight.
Health care spending across government is actually projected to go down slightly next year. Even in the direct health ministry patients will be squeezed by a budget that is currently virtually frozen. Within the next two months about $130 million in new federal money will be added, but that's still only a 1.5-per-cent increase. It would take at least three times that amount to keep pace with rising costs and population growth. The health authorities - already on the edge - are going to have a desperate struggle to maintain services.
The money available for education is increasing by less than one per cent next year, and while public school enrolments are falling, there's huge demand for post-secondary training. Costs and demand are going up, and the government isn't providing enough money to meet the need.
In fact the Liberals tightened the noose around post-secondary education. B.C. had provided about $30 million in grants to needy students. But the government killed the program Tuesday. Universities and colleges will get the money instead, with their existing budgets cut to offset the increase. Despite all the talk in the Throne Speech about increasing post-secondary places, the budget for the coming year has not been increased by one dollar.
The children and families Ministry also faces both a tough budget cut and major uncertainty. Another $70 million is to be lopped from spending this year, almost entirely from support for abused and neglected children. And the budget reveals that the shift to new regional authorities - which former minister Gordon Hogg thought could start in 2003 - may be delayed until 2007.
Finance Minister Gary Collins said the budget was "a turning point."
I don't buy that. The turning point will come when the B.C. economy becomes one of the strongest in Canada and throws off enough government revenue to allow creative investments in our long-term future. The problem with focus on cost-cutting - for government or business - is that you can cut your way to disaster. A company that doesn't invest in its new products, a province that doesn't invest in the next generation - both are foolish.
Politically, the challenge may be trust. Gordon Campbell has to go to the voters and convince them that he's ready to make their lives better when he gets the chance.
It's a tough sell.
Footnote: Sorry Heartlands, you're out of the picture. This budget offered little to indicate an awareness of the problems of the province's regions. A small amount for pine beetle and fire harvest, some money for offshore oil work, but much more for the Olympics and no time commitment on forest tenure reform.
Tuesday, February 17, 2004
Monday, February 16, 2004
Ottawa scandals stink, and smell's on Martin too
Ottawa scandals stink, and smell's on Martin too
By Paul Willcocks
VICTORIA - The federal government stole from you, just as surely as some petty criminal who breaks a window and takes your TV.
And Prime Minister Paul Martin's claim that he couldn't have known anything about all this is impossible to take seriously.
The scandal revealed by Auditor General Sheila Fraser was stunning, even if details have been trickling out for several years. The federal government shovelled out $250 million under a phony program aimed at promoting Canadian unity.
A huge amount of money -- perhaps $100 million -- went to Liberal friends and insiders, who were paid millions for doing no work, according to Fraser.
The RCMP, Canada Post, Via Rail, senior politicians and bureaucrats were all part of the rip-off. The scam continued over four years between 1997 and 2001, with every rule in the book broken, according to Fraser.
"Rules for selecting communications agencies, managing contracts and measuring and reporting results were broken or ignored," Fraser found.
"These violations were neither detected, prevented nor reported for over four years because of the almost total collapse of oversight mechanisms and essential controls."
Martin reacted with shock and horror. He fired former public works minister Alfonso Gagliano, linked to the scandal, from his post as ambassador to Denmark and announced a judicial inquiry.
And then he started to offer his defense. Martin claimed this was all the result of a conspiracy by rogue criminal bureaucrats who set out -- for reasons unknown -- to shovel millions out the door so cleverly that no one knew what was happening.
But Martin was the finance minister. He was vice-chair of Treasury Board, the powerful cabinet committee that approves all government spending.
He was a political force, and a Liberal main man in Quebec, where most of the money was flowing. He had a network of operatives across the country.
Far be it from me to challenge Martin's claim to ignorance. But if he didn't know what was going on, he should have.
This wasn't some incredibly complicated computer fraud, or "a very sophisticated cover-up," as Martin described it. It was people crudely ripping off the taxpayers, faking invoices or sending out cheques for millions of dollars with no approvals at all.
Liberal-friendly companies were paid millions in commissions for tasks such as cashing a cheque and forwarding the money on to some organization.
And remember, this is the man who claims a keen business mind and sharp eye for waste. That doesn't reconcile well with his apparent blindness to the scam while he was the man running the government's finances.
Even $250 million isn't a large amount given the size of the federal budget. (Though Martin was also at the table as the gun registry cost climbed over $1 billion.)
But it's not small change, either. And it's the kind of expense that should send off alarm bells for any competent manager or director, in government or the private sector.
I'm not alone in my doubts. A poll taken in Quebec last week found 75 per cent of those surveyed believe Martin knew of irregularities in the sponsorship program. Only 13 per cent believed him when he says he was in the dark.
The record indicates Martin has hardly been a champion of openness and honesty. He voted against reforming the Access to Information Act to improve accountability; he voted against an independent ethics counsellor; he voted against an independent inquiry into the Human Resources Development scandal.
The question isn't just what Martin did or didn't know. It's what he could be reasonably expected to know, or ask about, as an experienced senior cabinet minister with a vast political network and a strong party base.
Until those questions are answered, it's offensive to think that the Liberals would go ahead with plans for a spring election. The public needs the facts before they vote on who will run the country for the next five years.
Footnote: The best political news for the Liberals is that the opposition remains in its own state of disarray. The new Conservative party is tied up in a clunky leadership campaign, and the New Democrats are still struggling to make a national impact. The scandal has handed both parties a golden opportunity.
By Paul Willcocks
VICTORIA - The federal government stole from you, just as surely as some petty criminal who breaks a window and takes your TV.
And Prime Minister Paul Martin's claim that he couldn't have known anything about all this is impossible to take seriously.
The scandal revealed by Auditor General Sheila Fraser was stunning, even if details have been trickling out for several years. The federal government shovelled out $250 million under a phony program aimed at promoting Canadian unity.
A huge amount of money -- perhaps $100 million -- went to Liberal friends and insiders, who were paid millions for doing no work, according to Fraser.
The RCMP, Canada Post, Via Rail, senior politicians and bureaucrats were all part of the rip-off. The scam continued over four years between 1997 and 2001, with every rule in the book broken, according to Fraser.
"Rules for selecting communications agencies, managing contracts and measuring and reporting results were broken or ignored," Fraser found.
"These violations were neither detected, prevented nor reported for over four years because of the almost total collapse of oversight mechanisms and essential controls."
Martin reacted with shock and horror. He fired former public works minister Alfonso Gagliano, linked to the scandal, from his post as ambassador to Denmark and announced a judicial inquiry.
And then he started to offer his defense. Martin claimed this was all the result of a conspiracy by rogue criminal bureaucrats who set out -- for reasons unknown -- to shovel millions out the door so cleverly that no one knew what was happening.
But Martin was the finance minister. He was vice-chair of Treasury Board, the powerful cabinet committee that approves all government spending.
He was a political force, and a Liberal main man in Quebec, where most of the money was flowing. He had a network of operatives across the country.
Far be it from me to challenge Martin's claim to ignorance. But if he didn't know what was going on, he should have.
This wasn't some incredibly complicated computer fraud, or "a very sophisticated cover-up," as Martin described it. It was people crudely ripping off the taxpayers, faking invoices or sending out cheques for millions of dollars with no approvals at all.
Liberal-friendly companies were paid millions in commissions for tasks such as cashing a cheque and forwarding the money on to some organization.
And remember, this is the man who claims a keen business mind and sharp eye for waste. That doesn't reconcile well with his apparent blindness to the scam while he was the man running the government's finances.
Even $250 million isn't a large amount given the size of the federal budget. (Though Martin was also at the table as the gun registry cost climbed over $1 billion.)
But it's not small change, either. And it's the kind of expense that should send off alarm bells for any competent manager or director, in government or the private sector.
I'm not alone in my doubts. A poll taken in Quebec last week found 75 per cent of those surveyed believe Martin knew of irregularities in the sponsorship program. Only 13 per cent believed him when he says he was in the dark.
The record indicates Martin has hardly been a champion of openness and honesty. He voted against reforming the Access to Information Act to improve accountability; he voted against an independent ethics counsellor; he voted against an independent inquiry into the Human Resources Development scandal.
The question isn't just what Martin did or didn't know. It's what he could be reasonably expected to know, or ask about, as an experienced senior cabinet minister with a vast political network and a strong party base.
Until those questions are answered, it's offensive to think that the Liberals would go ahead with plans for a spring election. The public needs the facts before they vote on who will run the country for the next five years.
Footnote: The best political news for the Liberals is that the opposition remains in its own state of disarray. The new Conservative party is tied up in a clunky leadership campaign, and the New Democrats are still struggling to make a national impact. The scandal has handed both parties a golden opportunity.
Fish farm probe, forest deal new worries for Liberals
By Paul Willcocks
VICTORIA - Mark March 26 on your calendar as the next potentially bad day for the Liberal government, and remember that you heard about the Lannan Forest here first.
Not, of course, if you live in spectacular central Vancouver Island, where you've followed the saga of the sale of a lovely plot of forest, owned by the government, to a Courtenay golf course developer.
It's a long, tangled story. But on March 26 we find out how well the government's willingness to sell Crown land without any public notice or bidding serves the taxpayer.
Land and Water BC was ready last year to sell the Lannan Forest to Crown Isle Golf and Resort Community, the neighbouring development. The land wasn't advertised; no one else knew it was available; bids weren't sought. The government and the developer agreed on a price, which has so far remained secret. (The minister responsible then was Stan Hagen, also the MLA for the area.)
But the sale didn't play well in the Comox Valley. The Lannan Forest was lovely, criss-crossed with well-used hiking trails. Residents weren't ready to see it become private property.
They couldn't block the sale. But the deal was conditional on the land being annexed into the city of Courtenay. The council said OK, but community groups launched a petition drive that drew more than enough signatures to force a referendum. The annexation was off.
And that's when the government decided - belatedly - on a competitive bidding process.
That closed in February. Crown Isle won, offering $1.1 million. A group of local residents, along with the Comox-Strathcona Regional District, offered $621,000 to save the land for the community.
And most taxpayers will likely think that's OK. The area isn't starved for parkland, and if the land can be sold that may be more useful for people living in the rest of the province. It's a local issue, and the people who live there will decide how much they miss the forest.
What I want to know is how much Crown Isle would have paid for the property under the deal negotiated quietly before the public got involved.
Competitive bidding got us $1.1 million for our land. If the negotiated price was less than that - and published reports have suggested $300,000 to $400,000 - then we would have lost a lot of money.
Land and Water BC plans to sell $65 million worth of our land this year. A spokesman said about five per cent of sales have been through direct contact, like the first Crown Isle deal. The perception of unfairness led the Crown corporation to change its policy and virtually eliminate the direct sales, he said.
The new Lannan Forest deal closes March 26, which is when the government should release the transaction details.
We should expect the details of the original deal at the same time. Beyond potential embarrassment, there's no commercial reason to keep secret what is effectively the preliminary bid of the ultimate buyer.
Meanwhile, Land and Water BC faces some other problems.
Auditor General Wayne Strelioff has just decided to review a government decision forgiving $2.3 million in back rent and penalties levied on aquaculture companies that moved outside their tenures without approval. Land and Water BC cancelled the debts and returned some payments in 2001, months after the Liberals were elected.
Sierra Legal Defence Fund uncovered the deal through a freedom of information request.
Premier Gordon Campbell says the penalties were cancelled because the NDP government had allowed a big backlog of tenure applications. It's not that convincing, given the companies' own slowness in filing even basic reports a the same time.
Strelioff is going back through the paper trail, to find out why the companies got the money back and if the rules were followed.
Neither the fish farm fine review nor the Lannan Forest disclosures are likely to bring good news for the government.
Footnote: The week's most bizarre news was the revelation that the government is investigating allegations a senior health ministry bureaucrat choked a staffer in a workplace dispute. Charges have been filed; the health deputy minister is investigating; and the government has yet another problem to explain.
By Paul Willcocks
VICTORIA - Mark March 26 on your calendar as the next potentially bad day for the Liberal government, and remember that you heard about the Lannan Forest here first.
Not, of course, if you live in spectacular central Vancouver Island, where you've followed the saga of the sale of a lovely plot of forest, owned by the government, to a Courtenay golf course developer.
It's a long, tangled story. But on March 26 we find out how well the government's willingness to sell Crown land without any public notice or bidding serves the taxpayer.
Land and Water BC was ready last year to sell the Lannan Forest to Crown Isle Golf and Resort Community, the neighbouring development. The land wasn't advertised; no one else knew it was available; bids weren't sought. The government and the developer agreed on a price, which has so far remained secret. (The minister responsible then was Stan Hagen, also the MLA for the area.)
But the sale didn't play well in the Comox Valley. The Lannan Forest was lovely, criss-crossed with well-used hiking trails. Residents weren't ready to see it become private property.
They couldn't block the sale. But the deal was conditional on the land being annexed into the city of Courtenay. The council said OK, but community groups launched a petition drive that drew more than enough signatures to force a referendum. The annexation was off.
And that's when the government decided - belatedly - on a competitive bidding process.
That closed in February. Crown Isle won, offering $1.1 million. A group of local residents, along with the Comox-Strathcona Regional District, offered $621,000 to save the land for the community.
And most taxpayers will likely think that's OK. The area isn't starved for parkland, and if the land can be sold that may be more useful for people living in the rest of the province. It's a local issue, and the people who live there will decide how much they miss the forest.
What I want to know is how much Crown Isle would have paid for the property under the deal negotiated quietly before the public got involved.
Competitive bidding got us $1.1 million for our land. If the negotiated price was less than that - and published reports have suggested $300,000 to $400,000 - then we would have lost a lot of money.
Land and Water BC plans to sell $65 million worth of our land this year. A spokesman said about five per cent of sales have been through direct contact, like the first Crown Isle deal. The perception of unfairness led the Crown corporation to change its policy and virtually eliminate the direct sales, he said.
The new Lannan Forest deal closes March 26, which is when the government should release the transaction details.
We should expect the details of the original deal at the same time. Beyond potential embarrassment, there's no commercial reason to keep secret what is effectively the preliminary bid of the ultimate buyer.
Meanwhile, Land and Water BC faces some other problems.
Auditor General Wayne Strelioff has just decided to review a government decision forgiving $2.3 million in back rent and penalties levied on aquaculture companies that moved outside their tenures without approval. Land and Water BC cancelled the debts and returned some payments in 2001, months after the Liberals were elected.
Sierra Legal Defence Fund uncovered the deal through a freedom of information request.
Premier Gordon Campbell says the penalties were cancelled because the NDP government had allowed a big backlog of tenure applications. It's not that convincing, given the companies' own slowness in filing even basic reports a the same time.
Strelioff is going back through the paper trail, to find out why the companies got the money back and if the rules were followed.
Neither the fish farm fine review nor the Lannan Forest disclosures are likely to bring good news for the government.
Footnote: The week's most bizarre news was the revelation that the government is investigating allegations a senior health ministry bureaucrat choked a staffer in a workplace dispute. Charges have been filed; the health deputy minister is investigating; and the government has yet another problem to explain.
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