Where Has the Week Gone

We have had a number of e-mails since the election a week ago. Most of it expressed satisfaction in Albertans electing a much stronger opposition to our legislature. We completely agree.

When we started this weblog three months ago it was to start a discussion of issues that needed to be addressed before the election. Now that the election is over, we are trying to decide what direction we should take. Should we shut things down and go back to our knitting or should we try and keep things going.

The first thing we are going to do however is take some time to think about it. There won’t be too much action at Martha and Henry’s place for the next few weeks as we catch up on things. We would love to hear from you about how we might make this place more effective, more interesting, more fun, more whatever.

Please post your comments or send us along an e-mail with your ideas. We are open to all suggestions.

Finally, thanks to everyone that did contribute to the discussion before the election. We made some new friends and you can be sure we’ll stay in touch.

Until next time.

Why Henry is Going to Vote for Mr. Taft

Well, it’s mostly about hockey rinks.

When I said why I wouldn’t be voting for Mr. Klein, I said it all comes down to a question of character and who you can trust. There are just too many issues for us to get our arms around. We have to rely on our instincts about a leader’s honesty and dedication to the job when we finally cast our vote.

Kevin Taft has never run a government before. His party has put forth an ambitious set of policies which will take years to implement. They will likely stumble along the way just as all governing parties do. What makes me think that Mr. Taft is right for the job?

Well, he is probably as well educated as he could be for the leadership of this province. He has his PhD in Business from the University of Warwick in England. But I’ve known lots of people with good education that I wouldn’t want as a leader. No - the thing that impresses me most about Kevin Taft, and the reason I will vote Liberal in this election, is that he knows how to make hockey rinks.

The Taft family live across the road from their neighbourhood rink at the local community league. For more than five years, Mr. Taft was the volunteer rink manager. That meant that during our long winter months he and his crew got the boards up, took care of the flooding, and made sure the rink got shoveled when it snowed. Something volunteers do all over this fair province of ours. They do it in freezing temperatures, in the dark, and often wondering why they are not at home watching TV. They know that someone has to do it, and they do it for the good of the community.

Now being a good community league rink manager doesn’t make a provincial leader. But it sure tells me a lot about a man’s character. In my mind the Liberals have put forth a viable, community minded set of policies and I know they have a community minded leader with the business smarts to implement them.

That’s why Henry will be voting for Mr. Taft and his Liberal party in this election.

Questions for Minister Smith before he leaves us

Something is fishy in Murray Smith's Department of Energy

We received an article with that interesting intoduction. The article analyzes the relationship between the enormous cost overruns in the contruction of oil sands plants and the Oil Sands Royalty Regime - that legislation which determines how much the oil sands companies have to pay the government in royalties on oil sands crude. You can read that article on line by clicking here. It is called "Oil sands, OSR 97, and Overruns". It's not too long. We suggest you read it. It's too bad the Alberta media didn't report on this before the election.

Here are the key points in the article along with the questions it poses to Premier Klein and Energy Minister Murray Smith.

Main Points

• Massive cost overruns have occurred in the construction of oil sands plants. On just three projects alone, original cost estimates of $9.6B have soared to $16.9B which is a cost overrun of $7.3B. Why have oil sands companies, which have been in the business for years, completely lost their ability to estimate project costs?
  


• Because of the structure of the governments Oil Sands Royalty Regime legislation, there appears to be tremendous financial incentive for oil sands companies to keep their construction estimates low when they seek approval from the Department of Energy to build their plants. The Department of Energy is not supposed to approve them if costs are so high that the Alberta government will not realize substantial royalty benefits. However, there doesn't appear to be any penalty if cost overruns occur. The cost overruns are basically funded by the Alberta taxpayer by royalties they don't collect.
  


• The Auditor General in his 2003-2004 Annual Report pointed out that Department of Energy did not do its job in a couple of key areas. First, they did not properly assess whether the projects submitted for approval would benefit Alberta. When asked to produce documentation for why they approved projects, spreadsheets and supporting documentation could not be found. Second, as companies submitted their actual project expenses for review, the Department did not properly check to see if the expenses were valid. A number of common accounting tricks were not checked for.
  

The combination of a generous royalty regime, coupled with very lax enforcement of the rules by the Department of Energy, will apparently cost the Alberta treasury, that's you and me, over $1.7 billion for three projects alone because of cost overruns. To quote from the article "It seems to me that in most free enterprise jurisdictions the companies themselves pay for their planning mistakes, not the taxpayer. Not so apparently in Alberta." Martha and Henry agree.

So here are the questions for Premier Klein and Murray Smith. We sincerely hope they can shed some light on this before before Murrray Smith heads for his $450,000 a year Alberta Government job in Washington D.C.

1. Will you please provide to the Alberta taxpayer a clear picture of the lost royalties which the government has not and will not collect due to the cost overruns of the oil sands projects operating under OSR97? This clear picture should include the dollar amounts lost as well as an explanation of the calculations used to arrive at those amounts.
   


2. Will the government, with industry and public input, consider modifying OSR97 so that the incentive to lowball project estimates is removed. For example, the royalty holiday could end once projected costs were recovered rather than total costs. Another approach would be for the government – i.e. the taxpayer – to be given an equity position in these companies proportional to the amount of extra money we have to put in when cost overruns occur. When the Alberta taxpayer helps pay to build the plant, why should we not have some of the ownership? Billions of dollars of lost royalty revenue are in question.
   


3. Will the government authorize and fund the Auditor General to perform complete audits on all projects that were and are currently being implemented under OSR97. The purpose of these audits would be to determine if monies lost by the Alberta taxpayer due to the Department of Energy’s lax enforcement of the rules can be recovered from those who benefited and returned to the government treasury. Considering the magnitude of the dollars in question, it is not enough to simply ask the Department of Energy to try and do better.

Why Mr. Klein Will Not Get Martha's Vote

As this election gets closer and the nights get longer Martha and Henry have has been spending a little time going through the Auditor General’s Report. This is not how we spent our long nights together a few years ago but – well; - you know. The report is over 300 pages so it is not exactly light reading. But little by little Martha has been getting through it. There are about 30 reasons not to vote PC. I’m just going to tell you about a few that stuck out in my mind.

This election has been pretty short on policy talk and issue talk. Not that the opposition parties haven’t tried to engage Mr. Klein in a little discussion of such matters. But Mr. Klein is just not interested. One thing he did say, early in the campaign, was that he would get all the AISH abusers. Click here to review Albertan’s thoughts on that issue. Funny that the Auditor General didn’t pick up on this. His concern was that the private companies providing help to AISH recipients might be cheating, not the AISH recipients themselves. Perhaps Mr. Klein got them mixed up.

The Auditor General also pointed out that $82 million in royalties was refunded to oil companies based on incomplete and inaccurate data from the oil companies. This was on top of $517 million of “exempted, reduced or waived Crown royalties” which he questioned the necessity of. He had pointed out the same problems the year before but they were not fixed.

Seems to me, and the Auditor General, that the government would be more productive trying to stop giveaways in the Department of Energy rather than trying to nap the odd AISH felon.

In order to fund these “mistakes” we have to charge Albertans health care premiums which amount to $964M a year. Only Alberta and B.C. have this tax. Add in $40M a year to prop up the horse racing industry and a few other government pet projects and you pretty well have our health care premiums spent. So when a government runs on a slogan of “Proud to be Albertan” and asks us to look at their record and not talk about issues, then they better be ready to account for that record. And their record, of providing corporate welfare at the expense of welfare to people, does not make me a proud Albertan. In fact, it makes me a very discouraged Albertan.

I have no problem paying taxes when I know that the poor, homeless, and the disabled are getting some of my tax dollar. I have a huge problem with paying taxes when oil companies get refunds and royalty exemptions because the Department of Energy cannot do their job properly. It is time for some enlightened leadership and it is time to put a little money into the hands of Albertans who are struggling, instead of a lot of money into the hands of foreign owned oil companies.

The PC government has been in power for 33 years. They replaced an old and tired Social Credit government that really just cared about looking after themselves and their friends rather then helping people out. Seems to me that pretty well describes the PC government today.

That is why Mr. Klein and the PC's won't be getting Martha's vote this year.

Why Henry Won’t Be Voting for Mr. Klein and the PC’s

Figuring out who to vote for is not easy. It takes time to try and understand the issues that are important to us; to figure out what politicians are being straight with us and which aren’t. It’s time most of us don’t have. So we read what we can in the papers, talk to our friends whose opinions we respect, watch the leaders debate on TV, and do the best we can in sorting through the conflicting information. Eventually we have to make a decision. Because there is so much we don’t know we inevitably make that decision based on our perception of a politician’s character, motivation, and past performance. Can we trust this person to have our best interests at heart and to be honest with us?

Now I have never met Mr. Klein. I’m told he can be quite charming and make a perfect stranger feel important. I also realize that governing is not easy. You actually have to make policy and do things. A party in opposition doesn’t. And in politics, whenever you do something, there will be someone who objects and make a stink about it. However, there are some questions I have about his character and motivation that bother me and his past performance unfortunately reinforces my concerns.

One incident that doesn’t particularly bother me was his infamous inebriated visit to an Edmonton homeless shelter a few years back. While that would have toppled a political leader anywhere else in Canada it didn’t here in Alberta, perhaps due to our forgiving nature. Mr. Klein admitted he had a drinking problem and said he would get it under control. To the best of my knowledge he has. Whether it showed his true colours about how he felt about homeless people I’m not sure. I do know I have said some pretty stupid things under the influence of the grape that people have forgiven me for (I think).

That said, I do have a real concern about Mr. Klein’s character based on his involvement in the Multi-Corp affair. For those of you who want a refresher on this incident, you can click here to read a 1996 Edmonton Journal Editorial entitled The public will judge the Kleins - Was Multi-Corp just a little mistake? At issue was the basic question: - did the Premier use his position for personal gain? My judgment is that he probably did, got caught, but got let off the hook by his Ethics Commissioner at the time, Bob Clark. You may say that happened ages ago and he learned his lesson. Maybe - maybe not. But in my view, that incident and the way he manipulated it said something pretty fundamental about the man. Since then several incidents have come to light that re-enforce my gut feeling. Expense account items unexplained, flight logs of the premier’s trips on government aircraft hidden from view, consultants on six figure contracts with no work description, and an extreme sensitivity on the part of the Premier when questioned on any of these issues. I’m sorry. I simply don’t trust Mr. Klein.

Many of you may feel that other parties are not ready to lead this province, that they are too green. Remember that Peter Lougheed was green once too.

When it comes to my vote I’ll take an inexperienced honest man any day.

Health Care – Who Pays?

Martha and Henry have been reading through a paper called “Political Wolves and Economic Sheep – The Sustainability of Public Health Insurance in Canada” It is a companion document to the recently released “Public Remedies, Not Private Payments – Quality Health Care in Alberta”. Both of these are available on line by clicking on the links.

Both these papers point out the need to answer the fundamental question in Health Care; Who Pays? Parties of all political stripes agree that the system should be the most effective and cost efficient it can be. Sure there are important debates over Private vs. Public delivery but regardless of how health care is delivered it has to be paid for. The issues around this question are summed up in this quote from “Political Wolves and Economic Sheep”.

The Canadian universal tax-financed system requires higher-income people to contribute more to supporting the health care system, without offering them preferred access or a higher standard of care. Any shift toward proportionately more private financing, through user charges with or without private insurance, would reduce the relative burden on people with higher incomes. Insofar as private payments also limit access by people with lower incomes, they also open better access for those willing/able to pay. Relative to universal, fully tax financed public insurance, an expansion of private payment would thus enable the wealthy to pay less (in charges, private premiums and taxes) and get more (in volume, quality, and/or timeliness). And conversely for those with lower incomes. This conflict of economic interest is real, unavoidable, and permanent in all systems, which is why the “public/private” debate is never resolved (and why it is typically so occluded with “econofog”)

After Martha looked up “occluded” in the dictionary (it means obscured), we felt this pretty much covered the issue. Today in all provinces except Alberta and BC, public health care is funded by the tax system. In Alberta and BC, individual health care premiums are also charged. Alberta increased their user fees back in 2001 to help finance the Alberta “flat tax” tax cut.

Who pays is basically a question of political philosophy. Right wing philosophy says we should all pay our own way either through user fees or through the ability to purchase private health insurance. This would allow government to reduce their public health care costs and pass these savings on to the citizens in the form of tax cuts. The winners are the higher-income people whose tax savings are large enough to finances their private health insurance and user fees and the losers the lower-income people who cannot afford to do the same. The same process is at work as we described in our article “Some Questions About Money “.

Supporters of the right wing, user pay approach would say this breeds a responsible, independent and maverick Albertan. Those more to the left favour a system where those with a greater ability to pay take on a greater share of the costs. They feel that Albertans are basically compassionate people and willing to help others even at some cost to themselves. That’s the $64 question fellow Albertans. Which are we?

Premier Klein is reluctant to discuss his solution for health care in Alberta before the election. He says it’s too complex for ordinary Albertans to grasp. However, as leader of the right wing cause in Alberta, we feel he should be able to defend his right wing philosophy.

So. Here is our simple question for the Premier.

Mr. Klein. As leader of the right in Alberta, do you believe individual users should pay a larger proportion of the health care services they receive so that the amount the government pays for health care can be reduced? Please feel free to elaborate.

Electricity Deregulation - A Possible Solution

The two gentlemen you see here have written a couple of reports on electricity deregulation in Alberta. The Edmonton Journal did a story on those reports yesterday. Click here to have a look.

Don Peterson, left, and Keith Provost, both members of the deregulation committee of the Canadian Society of Senior Engineers, are calling Alberta's power deregulation program a colossal error.

It is hard for the Klein government to dismiss these guys as left wing nuts or communists - the usual treatment for those who critisize the Tory regime. Provost was chairman of the Alberta Electric Utilities Planning Council before he retired as vice-president of Atco Power after 35 years. Peterson, also an ex-Atco manager, leads the deregulation committee of the Society and does consulting work with an Edmonton engineering firm. These guys are credible and have no vested interests to support. They just want all Albertans, industry and individuals, to get the best deal when it comes to electricity.

Here are some quotes from the article.

Power deregulation cost Alberta $7.7 billion and killed its advantage in attracting energy-consuming industry -- and the penalty is still growing.

Virtually overnight Alberta's electricity service went from the most reliable, lowest-cost service in Canada to the most expensive and complicated energy-manipulation system imaginable.

It's a manipulated market. It's not a competitive market.

While deregulated power market operations are complex, its effects are simple -- price increases, Provost said. "Suppliers are well off. Users are paying," Peterson said.

As you might expect, the suppliers disagree. "Their scheme is a central planning system that would create "a massive conundrum," said Evan Bahry, executive director of the Independent Power Producers Society of Alberta referring to the solution proposed by Mr. Provost and Mr. Peterson.

Martha and Henry think we have one of those "massive conundrum" things operating right now that shovels money from the pockets of ordinary Albertan consumers into the hands of the power producers. We would like to see that stopped and Mr. Provost and Mr. Peterson have a credible plan to make that happen.

So. Our question for Premier Klein is:

Mr. Premier. You keep telling us that electricity deregulation is working. We all know it isn't every time we open our monthly power bill. According to the deregulation committee of the Canadian Society of Senior Engineers it has cost Albertans $7.7 billion so far. Albertans simply cannot afford this.

Should your government be re-elected, will you agree to implement a public consultation with power producers, distributors, retailers and consumers. The purpose would be to evaluate solutions to our electricity deregulation "conundrum" so that Alberta consumers can once again have reliable supplies of electricity at the lowest possible prices.

Campbell and Klein and Health Care

Remember Kim Campbell? We were discussing the other day of the similarities between her and Premier Klein. They both were leaders of Progressive Conservative Parties that had been in power for eons. They both had similar views as to the intelligence of the electorate. Ms. Campbell said "elections are the worst time to talk about the future of our social programs". At his provincial election kick-off a couple of weeks ago Mr. Klein stated that his health care reform plans are "too complicated to discuss during the campaign". Pretty much the same attitude.

The Canadian Public rose to the occasion and let Kim Campbell know what they thought of politicians who treated them like sheep. They threw her and her PC colleagues out of office. We will see on November 22nd if Albertans have enough maverick in them to do the same.

Perhaps Premier Klein feels that an election loss for his party is impossible and silence is the best approach to avoid having the electorate think too much. Martha and Henry do not agree. We would sincerely appreciate an answer to the following question before Election day.

Mr. Klein. You have stated that health care is too complicated to discuss during the election campaign. We agree that health care is complicated but we don't agree that Albertans are too stupid to understand. Will you please present your government's policy regarding user fees, healthcare accounts, delisting of services, and privatization of health care. If you do your best to explain, we'll do our best to try and understand.

Political Party Participation - An Update

A month ago, October 4th to be exact, we asked all the political parties if they would participate in our website. Here are their responses to date.

• Alberta Liberal Party - Will participate. They have already started and we thank them.
• Alberta Alliance - Will not participate due to lack of resources. We understand and thank them for getting back to us.
• Alberta NDP - Will participate if they can find the time to do it.
• Alberta Social Credit Party - They are still considering.
• Alberta Greens - Will participate if they can find the time to do it.
• Alberta Progressive Conservative Party - they have not got back to us yet.

We'll keep you posted.

Public Interest Alberta Website Announced

We received an e-mail about a new organization called Public Interest Alberta. You can look at their website by clicking here. In a nutshell, here is how they describe themselves.

Public Interest Alberta is a new provincial advocacy organization for public interest issues. It was founded in June 2004 to serve as a vehicle through which to foster in Albertans an understanding of and commitment to the importance of public services, institutions and spaces.

They have quite a bit of election related material that might be of interest to you.

Some Questions about Money

We have received a number of suggested questions about cost increases in health care premiums, electricity, natural gas, and auto insurance. Henry likes to busy his head with numbers so he has put together the following - Martha

Mr Klein, perhaps you can help me with this.

Back in 2001 you introduced the flat tax. Martha and I have an average income and your flat tax saved between us about $840 a year which works out to $70 a month. Since then my health care premiums, my car insurance, my electricity and my natural gas have gone up. I did the math and we’re $33 a month in the hole.

My high school buddy Ed makes way way more than I do. He didn’t tell me how much but he did say the flat tax saved him about $9600 a year or $800 a month. He’s suffered similar increases in health care premiums, insurance and utilities as we did but he comes out $697 a month to the good. Here’s is a table to illustrate my problem.

Amount/month	Me	Ed
Tax saving from flat tax	$70.00	$800.00
Health Care increase	-$10.00	-$10.00
Natural gas increase	-$28.00	-$28.00
Electricity increase	-$31.00	-$31.00
Car Insurance increase	-$34.00	-$34.00
Result/month	$33.00 down	$697.00 up

Your flat tax costs the Alberta treasury about $1.5 billion a year in tax revenue. This is made possible by our God-given energy resource revenue of about $7 billion a year. It seems to us that resource revenues should be shared equally among Albertans rather than those with the highest incomes getting the most and those with the lowest the least. In other words, how come Ed and I don’t get the same?

Mr. Premier, I understand why Ed is getting your vote. I’m sure you understand why Martha and I are less enthusiastic. You could help by answering the following questions.

1. Does your Progressive Conservative party believe that revenue from resource royalties should be shared equally by all Albertans? If yes, what steps will you take to remedy the inequities caused by your flat tax implementation? If no, could you please explain why?



2. The increases in Health Care were due to an additional tax you placed on Albertans when you increased the health care premiums. If you will not eliminate healthcare premiums for Albertans will you at least roll back the increase?



3. The increases in natural gas and electricity are due in a small way to increases in natural gas costs but due mostly to your government’s policy of deregulation which allows the energy providers unrestricted profits. We realize that you do this in the interest of free enterprise but it is not working. The small business and residential consumer is at the mercy usually of a single provider who gives us a choice of either an overpriced variable price agreement or an overpriced fixed price agreement. Will your party, if elected, restore regulation at least for the small residential and business consumers?



4. Auto insurance in Alberta is substantially higher than our neighbouring provinces of Saskatchewan and B.C. which have public auto insurance. Mr. Klein, you promised that our rates would be comparable with these provinces. Surely you did not mean that our rates would be way higher compared to theirs? Will you please commit to implementing a public insurance scheme so that our auto insurance rates can once again be affordable?

We look forward to your response.