Saturday, March 24, 2007

Oliver Twist In Alberta


This is what happens when you ban smoking in the bars and resteraunts to protect children from second hand smoke while simultaneously changing the laws in Alberta to allow child labour in those same bars and restaurants.


What was the Alberta Gaming and Liquor Commission's (AGLC) vision when it agreed to allow kids as young as 12 to work in nightclubs and bars? Never mind that the province has since scotched -- no pun intended -- the idea. How would it have worked?


Oh yeah and you plan to do it through secretive back room cabal like meetings between the government and its business pals, with no plan to announce it to the public until it was fait accompli.

NO WORKING (OR ROCKING) IN BARS FOR MINORS IN ALBERTA
On Thu, Mar 15, Alberta Gaming and Liquor Commission (AGLC) officials responded to an inquiry from the Canadian Restaurant and Foodservices Association (CRFA) about the possibility of allowing bars and pubs to hire underage staff to work in kitchens or other non-drinking areas of licensed establishments by indicating that it would consider such requests on a case-by-case basis.

A long-standing AGLC policy has allowed minors to enter licensed establishments under special circumstances—in many cases, as musicians or some other kinds of performers—with parental consent and the approval of the AGLC. The commission advised the CRFA that bars wishing to hire a minor could apply to do so under the same provision.

The next day, an email from CRFA’s Vice President for Western Canada, Mark von Schellwitz, was sent to the association’s members advising them of the new policy. The email was leaked to the Alberta Federation of Labour (AFL), who alerted the media that the Alberta Government was effectively opening the door for children as young as 12 to work in licensed establishments. Sensational editorials followed (the Calgary Sun, for example, asked “You have to wonder, if not for [the AFL], when would we have heard about the new rules? Maybe the first time a teenage dishwasher ran into a drunk in the bar washroom.”) and public outcry quickly forced the government to reverse its policy.
Perhaps this is another reason to allow for smoking in designated well ventilated areas of bars and resteraunts, to avoid having children exposed to the dangers of smoke since the government considers that far more important than protecting children from the usual dangers in the work place, hence all the recent deaths of teen agers on construction sites.


See

Temp Workers For Timmies


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P3 Failure In Alberta

What raving leftist said this?

"Although it appears that ideology has ruled over common sense. Monopolies have to be rigorously regulated. When they aren’t – the Edmonton Regional Airports Authority and CLS being two obvious examples – they get out of hand. Having the private sector market alcohol has led to competitive pricing, extended business hours and a huge ramp up in selection. It hasn’t been all bad. Even though the trend recently has seen the mom-and-pops being squeezed out by the big chains."

Neil Waugh in the Edmonton Sun on the failure of the current privatization monopoly in liquor distribution in Alberta.

You see when the government privatized its liquor business it sold off its buildings at fire sale prices, and sold the rights to its lucrative government run distribution business, warehousing and trucks included, to a private company. But that company also maintained the State's monopoly. And as a P3 it is not subject to the usual checks and balances that even the promoters of P3's say need to be in place.

The Alberta Liquor Association called it the “disastrous warehouse mess.” The Alberta Hotel and Lodging Association said it’s had a “serious and negative impact” on its members.

Meanwhile, the Canadian Restaurant and Foodservices Association notes that the outfit running the province’s liquor distribution monopoly “enjoys” a deal where there is “no risk of losing market share due to poor service.”

But more to the point, the new Alberta Tories’ first dive into the P3 shark tank appears to have popped its top.

All this and a whole lot more was revealed in a damning report by Pricewaterhouse Coopers into what’s wrong with the province’s liquor distribution system released by the government yesterday. The very first line of the report warned that “a simple, expedient solution to Alberta’s current liquor supply chain challenges does not exist.”

But at least we may now get a liquor warehouse and distribution operator, that has a contract with Alberta taxpayers with performance measures and penalties. Because right now Connect Logistics Services has a sweet deal where “no incentives or disincentives exist for good/poor performance,” the report determined.

But the Pricewaterhouse report is a clear warning that public/private partnerships aren’t the dream team that the PCs would have us believe. Especially if no one is willing to keep a firm hand on the private partner.

But now the Stelmach government is determined to charge ahead. Ring roads are going to be run as P3s under long-term contracts. There’s talk of “bundles” of schools turned over to the private sector. The new Calgary hospital was originally shopped around as a P3. There were no takers. The liquor warehouse report may have just told us why.
See

Privatization



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Mike Lake No Kilgour

Mike Lake the Conservative MP who took over David Kilgour's Edmonton Beaumont riding shows he is no Kilgour.

Mike Lake, the Conservative MP and father of an autistic child, who opposed the Shawn Murphy attempt to ensure autism coverage in the Canada Health Act, has not offered any public comment on the failure to provide a single penny for autism in his party's budget. Emails sent to his office are responded to by a staffer who informs that Mr. Lake has received too many emails on the subject of autism to respond personally.


Obviously Mike Lake has less pull in caucus than Jim Flaherty who has a disabled child and got money in the budget for families with disabled children. Or perhaps Mike is embarrassed; Genetic link to autism identified


See:

Disassociative Humour



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AIM High

Having been burned with government bureaucrats running the Alberta Government Venture Capital fund (VenCap) it was sold off by the Ralph regime to Onex corporation in 1995.
It had potential, and even with a deficit its shares were worth $8 on the TSX. Which was not bad for the time. But the debt and defict hysteria led the government to sell off this potential golden goose.

In terms of publicly-funded venture capital funds, Alberta’s experience has not been positive. Vencap was established by the Alberta government with funding of $240 million and the objective of investing in venture capital. Vencap experienced many of the same problems as LSVCCs – a lack of good investments and a reluctance to take risks. As a result, a relatively small percentage of Vencap’s equity ended up in new Alberta ventures. The Alberta Opportunity Company faced similar problems in operating a program to support investments in start-up knowledge-based industries.


Yet its deficit was still underwritten by the Heritage Trust fund five years later, the Ralph regime was panic driven, selling off all government services it could at fire sale prices..

December 2000: All of the loans made to provinces from 1977 to 1982 have been paid back on time and without any missed payments. The only project loans left on the Heritage Fund books are Vencap and Ridley Grain Ltd. for a total of $98.8 million, which represents 0.8% percent of the Heritage Fund's total portfolio.



The Government is
a risk averse regime that would rather underwrite private capitalists than use it's own capital.

Institutional investors key to growth of city's tech sector

Unlike other provinces and public pension funds, including the federal CPP, Alberta was more interested in selling off government assets and services to the private sector, than developing its capital base with the Heritage Trust fund and its other investment funds.

Risk adverse, wanting to divest itself of any economic responsibility, "we are not in the business of business", the government finally has realized it is a capitalist state and should be investing its social capital. However its social capital is not just the Heritage Trust fund, but public sector pension funds as well.



In a move predicted to earn up to an extra $500 million a year, the Stelmach government plans to create a new provincial Crown corporation to oversee $70 billion worth of financial assets.

The Edmonton-based investment powerhouse will be the fifth-largest pool of managed capital in Canada.

It would be exceeded in size only by the Caisse de depot et placement du Quebec ($143.5 billion), the Canada Pension Plan Investment Board ($111 billion), the Ontario Teachers' Pension Plan ($96.1 billion), and the B.C. Investment Management Corp. ($76.3 billion).

AIM Corp. would assume responsibility for managing the $16.3-billion Alberta Heritage Savings Trust Fund, several public endowment funds -- including the Alberta Heritage Foundation for Medical Research -- and a basket of public-sector pension funds.

The latter includes the $13.5-billion Local Authorities Pension Plan (LAPP), the province's largest public pension fund, and the $5.7 billion Public Service Pension Plan, among several others.

A recent study for the government concluded a stand-alone organization would be the best way "to achieve investment excellence," Alberta Finance said in a brief news release.

"The proposal follows best practices for top public sector investment funds such as the Canada Pension Plan, the B.C. Investment Management Corporation and the Ontario Teachers' Pension Plan."


During the Ralph regime everything not making money was sloughed off and contracted out or privatized. In order balance out the reduction in royalties and taxes coming in from the Oil industry, in the nineties the PC's found that like many governments they were carrying pension debt. As the third party to the Local Authorities Pension Plan(LAPP) which covers all MUSH employees and management in Alberta, they never contributed to the plan, rather like other governments they put all pension earnings into general revenues.

In the late nineties with a deficit and debt crisis, they looked at the debt they owed the LAPP and hived it off in plans to allow the contributors, employees and management as well as MUSH employers, to run it. Without of course the governments missing contribution. This left the LAPP in a deficit situation, causing its members to have to pay for the governments debt owed them.

In return for paying down the governments debt to the LAPP the members of the plan were offered investment autonomy, with moves to privatize the plan under membership control. Which was not a bad thing. It removed statist bureaucracy and red tape at a time when the market was booming, and as a fund managed by employee representatives from unions, management and professional associations, and employers. The board was in place, and hired its own CEO,and investment managers, as well as holding a series of input meetings with the membership, both for feedback and for an explanation as to how the funds would be managed.

In a short five years the LAPP was out of debt and the members actually paid less then was expected and in fact got a payback for overpayment's of the government debt. The reason? Bre-X. While the Bre-X swindle saw many make fortunes on the largest run of a penny stock to a $200 share in the shortest period in Canadian mining history, even for the mining scandals of the sixties, many also lost fortunes as the shares collapsed under the salting scandal that ensued. But not the LAPP they made money off Bre-X, and other investments. Because they were autonomous and now were no longer risk adverse, that is they were investing to make up the deficit, while maintaining the capital for their fiduciary responsibility to their retirees.

Once out of debt and making money, as they have for a decade, the government realized it was selling the golden goose if it allowed full autonomy, it reigned in its plans to privatize the LAPP. It remained under autonomous management but was still a subject to regulation by the Finance Department.

Had it been allowed full autonomy it would have made even more money. As it was with partial autonomy, and its own investment policies and managers it went from a deficit to $13. 5 Billion in assets.

Seeing it had a golden goose again, the Government has refused out right autonomy and has moved away from privatization of LAPP. Which may be the reason for it not wanting to talk about how it is looting public pension funds to underwrite its new investment corporation.

I almost missed it, but there it was, posted on the Alberta finance department's website.

The cryptic, one-page news release outlined a bill, introduced in the legislature Tuesday, to create a new provincial Crown corporation called Alberta Investment Management Corporation, or AIM Corp.

It will boast roughly $70 billion in assets.

That was it. There was no fanfare. No press conference. No grandiose quotes about the cosmic significance of this bold initiative from Alberta Premier Ed Stelmach, or Finance Minister Lyle Oberg. In fact, the latter didn't even respond to my followup call Wednesday. A department flack did.

The release itself was so blandly written it appeared designed to put reporters to sleep.

There is an irony here in that the ultimate capital partner in government P3 projects is not private hedge funds, nor private industry, but public pension funds. The Alberta government will find itself funding its own P3 projects with its new AIM Corporation. Just as governments world wide are being funded by Canadian institutional pension funds. And these same pension funds are crying about not having more government real estate and infrastructure projects in Canada to invest in.


See

P3

Your Pension Dollars At Work

P3= Public Pension Partnerships



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