Hands in our pockets

Translink. What are the first three words which come to mind when I say this? If you're anything like me, you probably thought of inefficient, mismanaged, and secretive.

Or you're probably a normal person, and thought slow, tardy, and under-serviced. Either way, you're probably fed up like me, and their latest proposal, backed by a majority of their Mayors' Council (made up of Metro Vancouver mayors), is the straw that breaks the camel's back. I am livid, and when I tell you why, you probably will be too.

Back in June, the Mayors' Council decided (with Burnaby, West Van, and Maple Ridge opposing) that in order to fund all their pet projects, Translink would need $7.5B over the next 10 years. This would require Translink's operating budget to be increased from $1.4B to $2.2B per annum, a massive increase of over 50% to maintain and expand bus service, build a light rail to Surrey and a subway extension to UBC, replace the Patullo Bridge, and other odds and ends.

What wasn't clear was how they planned to fund this, since the province steadfastly refused to reallocate tax dollars. None of these are bad ideas, but this is the very epitome of spending money you don't have, which we can all agree is not a very smart thing to do.

Last month, the Council announced that they had found a solution. They would put it up to the good people of BC, in a referendum this spring, to decide whether or not to approve a 0.5 percentage point hike in the PST, which would then go toward their plans. By their calculations, that would add about $250M each year into the provincial coffers.

Herein lies the problem. Ten years multiplied by $250M/year is not $7.5B. It is not even close to $7.5B. It is so far off that even the pollsters who said the NDP would win a majority in 2013 are looking great. Translink and the mayors apparently operate in a fantastical land of pixies and stardust where $250M over 10 years magically turns into $7.5B.

Do you know what you get in the real world when you are 200% off, to the tune of 5 billion dollars? As Donald Trump would say, "YOU'RE FIRED!"

Undoubtedly, Vancouver mayor Gregor Robertson, the biggest backer of this plan, is trying to use this to fulfill a campaign promise for a subway line down the Broadway corridor to UBC. In the council's own report, this would take $2B, never mind Translink's history of projects going over-budget. By my calculations, the proposed PST hike would leave the city barely enough money to extend the existing line a couple of stations to join up with the Canada Line at Cambie St.

Burnaby mayor Derek Corrigan is right when he says this leaves more questions than answers. Questions like "[how] are we going to decide which line goes first? Will it be Vancouver with the new tunnel down Broadway or will it be a light rail line into Surrey?" West Vancouver mayor Mike Smith told reporters that if his municipality kept the money they gave to Translink, he could provide free bus service for his constituents.

Translink has long been known to be one of the most wasteful organisations in the province. The Independent Transit Commissioner describes Translink's funding formula as the best in the country, yet year after year Translink complains that they don't have enough money to support their operations. Why? Because they misallocate millions of dollars, not least of which goes toward 6-figure salaries for over 400 employees, including an extremely bloated board of directors, not including benefits. And that's only the beginning...

Constant harsh criticism has prompted Translink to respond, saying “[we] do not have the resources to investigate each one of [the] claims, nor is the public purse well served by going down such dirt trails when we have important operations and communications matters to pursue.”

Well, other people have now been so kind as to do it for you. The lack of any sort of responsible governing of Translink is appalling, and the provincial government is to blame as well. Translink operates with all the benefits of a public corporation, complete with tax funding, and none of the accountability. If these reports surfaced about any government department, heads would have rolled. Instead, it's business as usual for Translink, after which the directors vote themselves great whacking bonuses.

If you look at Translink's 2014 budget, you'll find to no surprise that despite the best funding formula in the country, they have a $52M deficit. The Golden Gate Bridge is losing money, and there's not a single word about the Port Mann. When we take away everything that could fall under the purview of the provincial government (i.e. only looking at Translink and transit costs vs. revenue from transit operations), that shortfall grows nearly tenfold.

The province obviously can't be trusted to fix this; they're they ones who let it degenerate to this state in the first place. It's high time to privatise Translink and leave them to the mercy of private citizens, and force them to streamline.

In the meantime, when that referendum comes out, BC voters need to say "NO!" No to flowery promises of unlikely new transit lines, no to the continued smoke and mirrors finances of Translink, and no to another hand in our pockets. If they do get the money, it won't be long until they tell us that it wasn't enough (as if we didn't already know that). Then, they'll tell us that since they started already, it's too late to stop, so could we very kindly, pretty please, with a cherry on top let them stick another hand or three in?

Apparently, Translink thinks we're all idiots. If we let them have their way, this just might be the one thing they've ever gotten right.

Liberal momentum builds ahead of debate

Two new polls (CROP & Ipsos) agree: Most Quebecers do not want another sovereignty referendum, but believe the PQ would hold one if they win a majority, therefore, they are moving to the Liberals. Couillard has, so far, successfully managed to frame the PQ as focused on another referendum. He has picked up support from the nervous voters previously in the CAQ camp, because they see the Liberals as the best shot at stopping the PQ. Of course, PQ candidates attacking kosher or halal foods and comparing circumcision and baptism to rape didn't really help Marois.

To that end, the recruitment of PKP as a candidate has come back to bite Marois in the rear. The move was hailed as a game changer; and it may yet be, just not in the way Marois envisioned. She's trying to reframe her party's message around the controversial secular charter. That was evident when she sent minister Drainville out to talk exclusively about it. That will, no doubt, be part of her game plan in tomorrow's debate, on top of attacking the PLQ as the party of backroom deals and stuffed envelopes (a la Charest). Although, since this is the Couillard era, and not Charest, one wonders how effective that line of attack will be.

Look also for Francois Legault to attack Couillard more than Marois. He pretty much knows he's in no position to form government, and will now be simply trying to re-attract support. Given that a lot of that is moving to the Liberals, Legault will be swinging hard at Couillard.

This election looks increasingly likely to be determined by who sets the agenda, and not by the actual policy. If Couillard can keep the focus on the PQ's separatist roots, he will have the upper hand. The same can be said for Marois if she manages to redirect the message to secularism. Should Legault manage to worm himself in and talk about the economy, he may be able to prevent anybody from winning a majority and salvage a few seats.

For now, though:
PQ     33-38% [median 35.7] (1.7) 49-66 seats [median 58] (5)
PLQ    37-42% [median 39.3] (1.9) 52-70 seats [median 61] (5)
CAQ    12-15% [median 13.5] (0.8)  2- 5 seats [median  4] (=)
QS      7-10% [median  8.7] (0.7)  2- 3 seats [median  2] (=)
ON      0- 2% [median  1.1] (0.2)  0- 0 seats [median  0] (=)
PVQ     0- 2% [median  0.8] (0.1)  0- 0 seats [median  0] (=)
Other   0- 2% [median  0.9] (0.1)  0- 1 seats [median  0] (=)

Politically Uncorrect now projects a LIBERAL MINORITY (short 2).

Was PKP a bit of an own goal by the PQ?

Bob Rae had the line of the day Friday when he said that a Quebec civil servant or a trade unionist voting for Pierre-Karl Peladeau (nicknamed PKP) would be "like a chicken voting for Colonel Sanders." Witty soundbite regardless, he has a point. The PQ has sold itself out by courting a corporate media czar in an attempt to shore up their own economic credentials.

A star candidate and a former president and CEO such as Peladeau will not be content to sit as a mere backbencher. If the PQ is re-elected, he will almost certainly feature in the cabinet. But, attempting to forge a cabinet out of social democrats and economic conservatives is like adding oil to water. The two will not mix well.

So what is Pauline Marois counting on, then? What would be the proverbial glue on which she is depending to hold a team together? As expounded on in the last post, traditional left-right politics plays second fiddle to sovereigntist-federalist politics in Quebec. Marois is likely hoping that the common goal of an independent Quebec will be enough to keep her future cabinet on the straight and narrow.

That much was evident when, during Peladeau's announcement on Monday, he proudly declared, "I am a sovereigntist!" This was followed by Marois' very public musings on the workings of an independent Quebec. However, Thursday morning came along, and with polls showing sovereignty working against the PQ, Marois and Peladeau quickly changed their tune.

During Thursday's press conference, Peladeau refused to answer any questions about sovereignty, and at one point even appeared frustrated and tried to redirect the questions toward the economy. Marois abruptly stopped mentioning Quebec as a nation. Such is the power of public opinion.

However, if sovereignty as a focusing point is wrenched away from the PQ, we return to the original question: what, exactly, does the PQ now stand for? With the entry of Peladeau, the waters are muddied. The whole point of bringing him on board was to show that the PQ isn't only a party of trade unionists and social democrats.

But is that really such a good idea, or has Marois only found a wedge to drive within her own party? If she wins this election, will she have only given herself future headaches trying to head a fractious cabinet? And if she fails, or even wins just a minority, will inviting PKP only have served to open the door to a leadership challenge, painful both personally and to the party?

Clearly, Bob Rae hit a sensitive spot Friday morning. Otherwise, Marois would not have taken exception to his quip, and told him to "mind [his] own business."

Why I'll be voting to keep the HST

Since the federal campaign has yet to really heat up, I thought I'd take the time to once again talk about something I feel strongly about - the HST. It's probably going to be the next major vote after the federal election.

On July 1, 2010, BC introduced the Harmonized Sales Tax (HST) along with Ontario, joining three eastern provinces, New Brunswick, Newfoundland and Labrador, and Nova Scotia, in implementing the HST. Simply put, the HST is the harmonization (hence the name) of the provincial sales tax (PST) and the federal goods and services tax (GST) (Canada Revenue Agency). The BC HST rate is 12%, composed of a 5% federal portion and a 7% provincial portion (Ibid.).

The implementation of the HST in BC set off a political firestorm, since, during the 2009 campaign, Premier Gordon Campbell effectively promised not to implement it. Indeed, an Ipsos Reid/Global News poll conducted shortly after the BC government’s apparent about-face found that fully 85% of British Columbians opposed the HST. This initial opposition led former premier Bill Vander Zalm to organize the Fight HST group, whose most prominent action was a petition against the HST, which garnered over 700,000 signatures, and forced the provincial government to submit the HST to a referendum, scheduled for September 24, 2011. Since then, opposition has steadily fallen, with the most recent Angus Reid poll indicating 54% of British Columbians oppose the HST.

On November 3, 2010, Premier Campbell announced his intentions to resign as premier and leader of the BC Liberal Party. His successor, Christy Clark, was chosen at the BC Liberal leadership convention on February 26, 2011, and officially sworn in on March 14, 2011. One of Clark’s first moves was to move the HST referendum up 3 months to June 24, 2011.

The first and foremost concern for those against the HST is the potential rise in costs for individuals. Those opposed to the HST claim that prices have gone up even beyond the additional 7% on goods and services previously exempt from the PST (Fight HST 3). They say that it is just a massive tax grab to increase the tax burden on the average British Columbian (Fraser Institute). However, the HST is actually revenue-neutral for the government, and with accompanying income tax cuts and a rebate cheque for low income citizens, “the HST essentially will have no impact on the total tax bill paid by the average family” (Ibid.). Furthermore, a report put out by the TD Economics states that the “majority of goods purchased by households…will not cost a penny more, and some may cost less” (1). TD concedes that overall consumer prices are expected to rise initially, but will within three years be offset by lower costs being passed on to the consumer (Ibid. 2). Indeed, this is demonstrated in the latest BC Stats report on the CPI, which shows that the CPI for BC did spike relative to the national average in July 2010, but within the next few months returned to levels very similar to the national average (1). This would appear to show that Fight HST’s claims about rising costs are unfounded.

Of course, with the HST being an economic issue, a major concern is its impact on the economy, and of particular importance is unemployment, which affects citizens that most. The Fight HST campaign claims that “implementing the HST in BC would…create job losses for a minimum of 5 years” (3). On the other hand, the BC Government’s HST in BC website claims that the HST is expected to create 113,000 new jobs by 2020. The latest BC Stats report on unemployment gives a clear picture – the graph indicates that unemployment in BC declined steadily from the recession peak in mid-2009, regardless of the HST, and only spiked in early 2011 due to a large increase in participation in the labour force (1). Also, employment in BC in February 2011 was up from both a month ago and a year ago (Ibid. 2), seemingly disproving the Fight HST claim that the HST would induce job losses.

Another notable macroeconomic indicator is the GDP, from which we can measure economic growth. The Fight HST group claims that the implementation of the HST would be bad for the economy (3). However, the Fraser Institute claims that the “HST will help BC recover from recession more quickly.” Also, the Government HST in BC site claims that the HST would help to “generate economic growth.” The BC Government hasn’t posted GDP data after the HST, but “since [BC and Ontario] make up 50% of overall Canadian economic activity, any impact harmonization may have on their performance will ripple through to the national headline economic figures” (TD Bank Financial Group 1). That means we can use national GDP figures to see the impact of the HST on economic growth. Data from Statistics Canada’s latest quarterly release on economic accounts indicates that real GDP has risen steadily since the depths of the recession in 2009. Even though there was a slight slowdown in the middle of 2010, the economy picked up again towards the end of the year (Ibid.). Once again, Fight HST’s claims seem to be disproven by economic indicators.

Another concern opponents of the HST have is that rising costs will deter consumers and lower consumer confidence. Fight HST claims that ever since the HST was implanted in BC, “consumer confidence…has dropped significantly” (2). TD agrees, saying that strength in consumption before the HST might be due to anticipation of higher taxes and that there could be a corrective period, but only for a few months, stressing that in the long run “consumer spending is not expected to be greatly affected” (1). Consumer confidence figures from the Conference Board of Canada do substantiate the concerns, with the Vancouver Sun reporting a huge slide of 12.5 points to 78.9 for BC in July 2010. However, as CKNW reports, BC’s consumer confidence bounced back within months, just as TD predicted, to stand at 102.2 by January 2011, well above the national average of 88.1. Fight HST’s claims also seem to fall short on this measure.

From the economic analysis of the HST, I can see no good reason for the opposition of the tax. Prices have stayed with the national average, jobs have been created, the economy has grown, and consumption has not been affected much with the implementation of the HST. Indeed, with the facts that the HST simplifies taxation and saves the BC government millions (Fraser Institute), the HST is a more progressive tax scheme which taxes the rich more (Ibid.), and that repealing the HST will lose the province $1.6 billion of federal transfers (Vancouver Observer), I have decided that I will vote to keep the HST in the June 24 referendum.

Sources

“Harmonized sales tax (HST).” www.cra-arc.gc.ca. Canada Revenue Agency, 2010.

“Ipsos Reid/Global News HST Poll.” Global BC. CW Media Inc., 5 Aug. 2009.

Canseco, Mark. “Governing BC Liberals Extend Lead as Clark Becomes Premier.” Vision Critical. Vision Critical, 22 Mar. 2011.

“Top 18 Liberal Myths about the HST – Part II.” Fight HST. Fight HST, n.d.

Lammam, Charles, and Niels Veldhuis. “HST fears unfounded; new study clarifies myths about BC’s harmonized sales tax and explains problems with the PST it replaces.” Fraser Institute. Fraser Institute, 29 Jun. 2010.

“The Economic Impact of HST Reform.” TD Economic. TD Bank Financial Group, 6 Jul. 2010.

“Consumer Price Index – January 2011.” BC Stats. BC Stats, 18 Feb. 2011.

“Building the Economy.” www.hstinbc.ca. British Columbia, n.d.

“Labour Force Statistics – February 2011.” BC Stats. BC Stats, 11 Mar. 2011.

“Canadian economic accounts.” www.statcan.gc.ca. Statistics Canada, 2011.

“BC consumers’ confidence hits the skids.” Vancouver Sun. Postmedia News, 27 Jul. 2010.

“BC consumer confidence soars despite HST.” CKNW. CKNW, 25 Jan. 2011.

Posyniak, Thomas. “The unhappy reality of revoking the HST.” Vancouver Observer. Can Do Media Inc., 23 Jun. 2010.