Neo-Cons Have No New Ideas

The neo-con federal government of Harper and Flaherty have no new ideas, just the same old ideology. After lambasing Harper for his flip flop on the deficit, and his denial that Canada is in a recession, Don Martin in his column today says;

"Be it campaign deception or denial, having tens of thousands suddenly face the loss of jobs, savings and perhaps their homes has twisted Harper's old beliefs into policy pretzels. For this Conservative government, the age of ideology is over -- technically and realistically."

Unfortunately Don the Conservative Government has not given up on its neo-con ideology as we witness in this announcement by Jim Flaherty.

Flaherty aims to boost economy with P3 projects
Ottawa wants to build billions of dollars of bridges, hospitals and other infrastructure as a way to lessen the blow from the financial crisis, finance minister Jim Flaherty said Monday.
Speaking at a conference in Toronto, Mr. Flaherty said investments in infrastructure will be "a key part" of the government's strategy to stimulate the economy.
But some observers say there's a problem with the plan. The government wants to deliver the projects through so-called public private partnerships (P3) where projects are built and financed by the private sector but according the government's requirements. But while the P3 model has gained acceptance in much of the world, there is rising concern that the credit crunch has made it almost impossible to finance new P3s.
Because of the financial crisis, finding willing lenders has become a lot more difficult and when they can be found the cost of capital for even triple-A borrowers is much higher than even a few months ago, said Alban de La Selle, a senior executive at Dexia Credit Local SA, a leading European bank.
"Lenders [on infrastructure projects] have become significantly more cautious," according to a recent report by PricewaterhouseCoopers. "... infrastructure finance raising is likely to be challenging for some time to come and the business risk of these transactions is certainly higher."
But the financial turmoil may have thrown a monkey wrench into the mechanics of P3s by making the financing so much more difficult.
Mr. de La Selle said one way to overcome the problem would be for the government to provide the financing itself. Since governments are among the few players that can get the benefit of lower borrowing costs, that advantage could be brought into play in doing P3s, he said. For their part, the private sector partners would guarantee to repay the debt.

So instead of the government funding infrastructure projects, the Harpocrites want to fund the private sector to do it for them. Ironically currently P3's in Canada are funded by public pension money, there are very few private P3's.

The Harpocrites had an opportunity to build a P3 project; the National Porttrait Gallery but they canceled it last week.

Earth to Flaherty,hello we are in a recession if not a depression and companies are hoarding capital not spending it. So instead of expanding the public sector the government will be choosing winners and losers in the private sector to build infrastructure. And these companies will promise to repay the debt, which will only happen if they survive this depression. Throwing good money after bad.

And he made his announcement at a conference on P3's sponsored by the right wing business lobby the Fraser Institiute.

So much for the Harpocrites abandoning their neo-con ideology, even in this recession they scramble to keep faith with the right wing ideology that got us in this mess in the first place.

Speaking to a Fraser Institute dinner, the finance minister committed to increased spending by Ottawa, if it is needed. Flaherty stressed at the luncheon the importance of infrastructure spending by the federal government, notably in partnership with the private sector. He announced $1.25 billion in startup funding for P3 Canada Inc., an entity that will work on public-private projects.
Thank goodness for this opportune recession, even if it is still "technical," as Finance Minister Jim Flaherty insisted at a downtown conference yesterday. If it weren't for whatever it is, nothing would get done.
The legacy of good times lasting more than a decade is a mountain of unfunded priorities for public spending. It took recession, or perhaps only the vivid perception of it, to focus government attention on what it should have undertaken years ago.
Focus is too soft a word to describe the sudden conversion of our former fiscal conservatives to counter-cyclical spending. Yesterday, a previously dismissive Mr. Flaherty let the world know he was jumping into the pothole business with both feet.
Infrastructure spending "will be a key component of our future success," he told a conference on public-private partnerships, and a "key component" of his government's planned economic stimulus. Although ideological conservatives may worry about burdening future generations with unsustainable debt, real Conservatives are now committed to spending their way out of recession.
And nobody is cheering louder than the crowd that brought us collateralized debt obligations and credit default swaps. With the market for such innovative products seized up worse than a rusty Ford, government has become the only source of cheap credit for anything. Ergo, everybody loves infrastructure. Well-dressed converts flocked to Mr. Flaherty's speech yesterday like contrite sinners to a revival meeting.
Instead, governments should activate construction projects that are already on the drawing-boards, and have been waiting for funding. Canada's infrastructure suffered much depreciation during the fiscal restraint of the 1990s, and did not catch up in the balanced-budget period. The wear and tear are showing.

SEE:
Your Pension Plan At Work
A Critique of P3's From The Right

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C.D. Howe Canada's Grand Poobah

There is great irony in the fact that one of Canada's foremost establishment right of centre think tanks the C.D. Howe Institute which often promotes a neo-con agenda is named after one of Canada's foremost Pooh-Bahs of State Capitalism.

Grand Poobah is a term derived from the name of the haughty character Pooh-Bah
in Gilbert and
Sullivan's The Mikado. In
this comic opera,
Pooh-Bah holds numerous exalted offices, including Lord Chief Justice,
Chancellor of the Exchequer, Master of the Buckhounds, Lord High Auditor, Groom
of the Back Stairs, and Lord High Everything Else. The name has come to be used
as a mocking title for someone self-important or high-ranking and who either
exhibits an inflated self-regard, who acts in several capacities at once, or who
has limited authority while taking impressive titles.

Enter Pooh-Bah.

NANK. Ko-Ko, the cheap tailor, Lord High Executioner ofTitipu! Why, that's the highest rank a citizen can attain!
POOH. It is. Our logical Mikado, seeing no moraldifference between the dignified judge who condemns a criminal todie, and the industrious mechanic who carries out the sentence,has rolled the two offices into one, and every judge is now hisown executioner.
NANK. But how good of you (for I see that you are anobleman of the highest rank) to condescend to tell all this tome, a mere strolling minstrel!
POOH. Don't mention it. I am, in point of fact, aparticularly haughty and exclusive person, of pre-Adamiteancestral descent. You will understand this when I tell you thatI can trace my ancestry back to a protoplasmal primordial atomicglobule. Consequently, my family pride is somethinginconceivable. I can't help it. I was born sneering. But Istruggle hard to overcome this defect. I mortify my pridecontinually. When all the great officers of State resigned in abody because they were too proud to serve under an ex-tailor, didI not unhesitatingly accept all their posts at once?
PISH. And the salaries attached to them? You did.
POOH. It is consequently my degrading duty to serve thisupstart as First Lord of the Treasury, Lord Chief Justice,Commander-in-Chief, Lord High Admiral, Master of the Buckhounds,Groom of the Back Stairs, Archbishop of Titipu, and Lord Mayor,both acting and elect, all rolled into one. And at a salary! APooh-Bah paid for his services! I a salaried minion! But I doit! It revolts me, but I do it!
NANK. And it does you credit.
POOH. But I don't stop at that. I go and dine withmiddle-class people on reasonable terms. I dance at cheapsuburban parties for a moderate fee. I accept refreshment at anyhands, however lowly. I also retail State secrets at a very lowfigure. For instance, any further information about Yum-Yumwould come under the head of a State secret. (Nanki-Poo takes hishint, and gives him money.) (Aside.) Another insult and, Ithink, a light one!

The C.D.Howe Institute flies in the face of the endeavours of Howe, who as Minister of Everything, oversaw the development of public and crown corporations in Canada. Federally funded, not joint private public partnerships, which of course would have demanded private capital to develop. With the victory of neo con agenda in the ninties promoting privatization of public and government infrastructure the C.D. Howe institute gave establishment legitimacy to the efforts of other right wing lobbyists and thnk tanks like the Fraser Institute and its east coast doppleganger; the Atlantic Institute of Market Studies , and the newly minted Frontier Centre for Public Policy.

The C.D. Howe Institute
(formerly the Howe Research Institute), is a nonprofit policy research
organization established in 1973 by a merger of the Private Planning Association
of Canada, formed in 1958, and the C.D. Howe Memorial Foundation. It is located
in Toronto. Its principal source of funding is the fees contributed by a
membership that includes corporations as well as individuals with a background
in business, the professions or academia. The institute's staff is responsible
for the preparation of the annual Policy Review and Outlook and various other
publications on topical issues. The institute also commissions leading
researchers (academics for the most part) to write papers and monographs on a
wide range of topics such as fiscal and monetary policy, trade policy, social
policy, the environment, federal-provincial relations and constitutional reform.
Although the main focus of the institute's research program is the economy, the
range of topics it has covered over the years is very wide and occasionally
extends to non-economic issues such as culture and ethnicity.

The right wing agenda saw public policy as moving from the State capitalizing public services and infrastructure and moving towards selling off those assets to deal with its debt and deficit crisis. Public good was now replaced with state funding for private profit. Howevere now that we face the economic melt down that this ideology resulted in we will see if this think tank of Canada's establishment changes it's tune. Why do I find that unlikely.

C.D. Howe Institute
Benefactors Lecture, 1997

D.G. McFetridge
Professor and Chair,
Department of Economics,
Carleton University
Toronto, October 22, 1997
Sponsored by Dofasco Inc.

The formation of public policy can be viewed from a number of perspectives.
Some see it largely as the outcome of tradeoffs between contending
interest groups; policy changes reflect nothing more than the ascendancy
of one interest group over another. To others, including the
C.D. Howe Institute, ideas matter. A good idea, well explained, can
overcome the power of even an entrenched interest group.
If ideas do matter, there is certainly merit in bringing the evidence
on the economic benefits of privatization to public attention. Privatization
is about more, much more, than selling off the bus company. It is
about institutional design, and in some countries (New Zealand, for
example) it has involved considerable reflection on just what should be
expected of government.
What we have come to call privatization is part of a larger process
of institutional change involving commercialization, contracting out,
and regulatory reform as well as the sale of state-owned enterprises to
the private sector. The literature on this process is vast but of uneven
quality.

The evidence on conventional contracting out, especially by municipal
governments, is unambiguously positive: it reduces the cost of
providing the services involved. There is more skepticism and less
evidence on the consequences of contracting for social services and for
the joint supply of infrastructure and services (public/private partnerships).
These instruments are likely to present serious—but not necessarily
insoluble — contract design problems. They may require the
government to be an active and strategic purchaser in ways not envisaged
by privatization zealots. Nevertheless, the potential economies,
especially in the accumulation and use of knowledge, make continued
experimentation worthwhile.
With respect to the entire process of commercialization, regulatory
reform, and the sale of state-owned enterprises to the private sector, the
weight of the evidence to date is that it has been beneficial. The precise
contribution of the change in ownership to the gains that have resulted
from the process as a whole is difficult to identify. One can argue,
however, that privatization is an essential part of the process in that it
provides the impetus for commercialization and makes regulatory reform,
especially regulatory forbearance, possible.
Whether or not privatization is a necessary part of the process, once
commercial objectives have been adopted and regulatory reform has
allowed competition or potential competition to exert its disciplining
force, there is little, if anything, to be gained from continued state
ownership — provided that the government sells its interest at a price
equal to the present value of the income it might expect to derive from
continued ownership.
Although the international experience with process ofcommercialization,
regulatory reform, and privatization has been favorable and
there are good conceptual arguments for privatization itself, the case for
individual privatizations must still be made on the merits. The body of
existing evidence is not so strong or so detailed that it can be taken to
imply that, say, the province of Saskatchewan would necessarily realize
significant economic benefits from privatizing its electric power or
telecommunications utilities.
The theoretical and empirical literature on privatization reminds
us to remain open to the potential benefits of employing decentralized
market or market-style incentives in place of hierarchy and command
and control. The ongoing international experimentation in institutional
design has been worthwhile and is clearly worth pursuing further.
The literature also teaches that privatization is frequently not about
pushing a button and getting less government. Unless the political
forces that brought about government intervention disappear (and they
may in some cases), privatization will be about getting different government,
rather than less government. It may involve catering to a different
set of interest groups or catering to the same interest groups in a
different way. It may involve the same or similar political activity
in different forums. It is often not simply a matter of opting for the
invisible hand.

C.D. Howe - "Minister of Everything" - Biography of C.D. Howe

C.D. Howe was a cabinet minister for 22 years, first in the government of Mackenzie King, and then in the government of Louis St. Laurent. Nicknamed the "Minister of Everything," C.D. Howe was forthright and forceful, and more interested in getting things done than in policy. He mobilized Canada for World War II, turning the Canadian economy from one based primarily on agriculture to one based on industry, and after the war turned it into a consumer economy spurred by veterans.

Career Highlights of C.D. Howe:
created a national air service, Trans-Canada Airlines (later Air Canada)
created the Canadian Broadcasting Corporation (CBC) as a Crown corporation
created the National Harbours Board
restructured the debt-ridden Canadian National Railway (CNR)
established the St. Lawrence Seaway
established Canada's nuclear industry
initiated the Trans-Canada Pipeline
Professional Career of CD Howe:
Engineer
Taught at Dalhousie University in Halifax
Businessman - designed and built grain elevators
Political Affiliation:
Liberal Party of Canada
Riding (Electoral District):
Port Arthur (Ontario)
Political Career of CD Howe:
C.D. Howe was first elected to the House of Commons in 1935.
He was appointed Minister of Railways and Canals and also Minister of Marine. The two departments were soon combined into the Ministry of Transport. C.D. Howe oversaw the reorganization of Canadian National Railways, and the creation of the National Harbours Board and Trans-Canada Airlines, the forerunner of Air Canada.
In 1940, C.D. Howe was appointed Minister of Munitions and Supply in charge of war production for Canada. As head of the War Supply Board, and with the authority of the War Measures Act, C.D. Howe created a huge rearmament program using "dollar-a-year men," business executives called to Ottawa to reorganize the economy. The British Commonwealth Air Training Plan, which created more than 100 aerodromes and landing fields and trained over 130,000 airmen, was one of the results.
In 1944, C.D. Howe was appointed Minister of Reconstruction, and then Minister of Reconstruction and Supply, and began turning the economy toward consumer needs.
C.D. Howe became Minister of Trade and Commerce in 1948.
In 1951, with the growth of the Cold War, C.D. Howe became Minister of Defence Production as well as Trade and Commerce and oversaw the growth of the Canadian aircraft industry.
In 1956, C.D. Howe forced the plan for the Trans-Canada Pipeline, a gas pipeline from Alberta to central Canada, through Parliament but paid heavily when the Liberal government lost the next election and he lost his seat.
C.D. Howe retired from politics in 1957 at the age of 70.

C. D. Howe
C. D. Howe was known for getting things done.
That made him exactly the type of leader Canadians needed to channel their domestic energies into military might during the Second World War.
Clarence Decatur Howe is best remembered as Prime Minister Mackenzie King's right-hand man. When King decided to meld responsibility for railways, marine transport and civil aviation into one powerful Ministry of Transport in 1936, the prime minister put Howe in charge.
Not only did Howe's achievements in transport help ready Canada's transportation systems for the massive load they would have to carry during the war, but the transportation policy expertise he acquired left him well-prepared to direct the all-important Ministry of Munitions and Supply during the war.
Howe was, as he put it, a "Canadian by choice." A carpenter's son, he was born in Waltham, Mass., in 1886, moving to Canada in 1908 to teach civil engineering at Dalhousie University in Halifax. He later established a consulting engineering firm that specialized in grain elevators.
King brought Howe into politics in 1935 and he immediately began to cut a swath through bureaucracy, refusing to be bound by tradition and red tape, seeing himself much more as an implementer than a policymaker.
Howe was particularly interested in establishing a strong Canadian presence in the growing field of civil aviation.
He was instrumental, before and after the war, in establishing or expanding Trans-Canada Air Lines, the National Harbours Board, Canadian National Railways, the St. Lawrence Seaway, the TransCanada Pipeline and even the CBC.
Canada's first Minister of Transport took over a Canadian transportation system that was fragmented and outdated.
He centralized the administration of ports and reformed the debt-laden CNR, increasing efficiency and accountability that would be so important during the war.
Unemployed workers of the "Dirty '30s" were mobilized to build airstrips across the country and Trans-Canada Air Lines, Air Canada's predecessor, was established as a Crown corporation.
All these measures helped to pull the country's transportation network out of the Depression, preparing it for the incredible challenge that it would face in 1939-45.
When Canada entered the war in September 1939, Howe retained the Transport portfolio but was also asked to take on Munitions and Supply.
One of Britain's first requests was that Canada play host to the British Commonwealth Air Training Plan, which would train nearly 50,000 pilots and groundcrew by war's end.
Howe left Transport to concentrate on Munitions and Supply in July 1940, but continued to prod the transportation sector for the extraordinary performances he was demanding of other Canadian industries.
Before the end of the war in 1945, railway traffic had tripled in Canada as food, munitions and other war supplies were rushed to Atlantic ports.
Howe was criticized for forging ahead with little regard for costs, but the results he engendered soon silenced his critics. Costs wouldn't matter if the war was lost, he told colleagues, and in victory, costs would be forgotten.
The war, of course, was won and the relentless energy of Canada's first Minister of Transport played a major role in the victory.
Canada's other wartime ministers were P. J. A. Cardin, 1940-42; J.-E. Michaud, 1942 - April 1945, and Lionel Chevrier, April 1945 - June 1954.

SEE:

Right Wing Environmentalists

The Real Story of Alberta's BSE Crisis

The End of Public ACCESS

CKUA History of a privatization putsch

Canada’s Billion Dollar P3 Boondoggle

Social Insecurity- The Phony Pension Crisis

Laundry Workers Fight Privatization

Legacy Of The Ralph Revolution

Private Vs. Public Monopoly

P3= Public Pension Partnerships

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Fraser-Institute, C.D.Howe, C.D.Howe Institute, Pooh-Bah, Mikado, Canada, right-wing-think-tanks,

Nova Scotia Imitates Alberta 2

In another example that the old neo-con ideal is not dead yet, Nova Scotia like Alberta is once again looking at P3's as a solution to long term funding of infrastructure. Despite its failure in that province previously. And like Alberta, which has a labour boom while Nova Scotia has a labour deficit, the costs will rise because of scarcity of labour. Those costs will be passed on to taxpayers if not now then over the life of the P3 agreement.

Once hailed as the new vision of the right, privatization, P3's and contracting out have proven to be a billion dollar boon-doogle and not a solution to rising costs. They are in fact simply taxpayers paying private companies to provide services that make them profit, by cutting wages and providing poorer quality, and they end up costing us more in the long run. It looked good on paper, but as with most of these ideas from the seventies they have proven their time has come and gone.

In fact in Canada it is your and my pension funds that paying for these P3's. So we get screwed twice as taxpayers.

Nova Scotia Throne Speech eyes privately funded roads, bridges

The Canadian Press

November 22, 2007 at 1:33 PM EST

HALIFAX — Nova Scotia's Conservative government has opened the fall session of the legislature with a Throne Speech promising a return to public-private partnerships in constructing roads, schools and other facilities.

In a document entitled “Throne Speech for the New Nova Scotia,” the government says it has learned from the mistakes made when a previous Liberal government introduced the P3 concept that built 30 schools in the 1990s.

The government says with a $12.4-billion debt, it has to find ways to reduce the costs of building and maintaining public roadways and buildings.

The speech estimates the province is facing a long-term bill of $8-billion to build and maintain infrastructure.

The document also says a new department will be created that is focused solely on the environment, along with a new Ministry of Labour and Workforce Development to help deal with a shortage of skilled labour.

The government is also promising new education standards with primary attention paid to mathematics and literacy and says it will continue a freeze on university tuition with more reductions planned.

SEE

Nova Scota Imitates Alberta

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P3 Myth Busting

Dismissing an independent study on P3's the Alberta Government says it has studied P3's and gives them the big thumbs up.

A landmark study of private-public partnerships around the globe concludes they don’t save taxpayers money, undermine democracy and hurt small business – even as Alberta is making P3s a key component of its long-term plans.

But the Alberta government’s public relations department says it’s confident its projects won’t follow that trend and called the study “a nice academic exercise.”

The study, released by the Federation of Canadian Municipalities – the group that represents most communities across Canada – looked at schools, hospitals, road systems, subways systems and waterworks.

It found no cost savings amongst any of the studied projects. Further, when overruns, changes to long-term contracts and shifting public priorities were considered, many cost more money than their publicly funded equivalent.

A key reason was borrowing powers, said researcher Pierre Hamel. All of the projects, whether public or private, were funded with long-term borrowing.

“Promoters of P3s typically answer that by saying that although the borrowing cost is higher, they’re much more efficient. But in fact they simply limit their upfront costs by paying staff less money. And they put that back into their profit margin, not into savings to the public.”

Hamel concluded most P3s end up costing about the same as the public equivalent.

But there are downsides: a lack of political accountability if a project goes awry, because the responsibility has been downloaded to a private company; ironclad contracts that cost a fortune to get out of if public priorities change; and project development plans so complex – and privately guarded by the companies – that future contracts can often only be bid on by the initial P3 operator.

“The biggest company cannot borrow at a cheaper rate than the smallest municipality,” he said.

“Promoters of P3s typically answer that by saying that although the borrowing cost is higher, they’re much more efficient. But in fact they simply limit their upfront costs by paying staff less money. And they put that back into their profit margin, not into savings to the public.”

Hamel concluded most P3s end up costing about the same as the public equivalent.

But there are downsides: a lack of political accountability if a project goes awry, because the responsibility has been downloaded to a private company; ironclad contracts that cost a fortune to get out of if public priorities change; and project development plans so complex – and privately guarded by the companies – that future contracts can often only be bid on by the initial P3 operator.

Alberta has its own research on P3s that supports them, said Jerry Bellikka, with Alberta Infrastructure and Transportation.

“That’s his clear opinion. We’ve been very clear on all of them that when we look at it, we do a complete business case analysis of every project, and in every example where we have gone to P3s we are confident that we are achieving major cost savings for the taxpayer.”

FCM RELEASES NEW REPORT ON PUBLIC-PRIVATE PARTNERSHIPS

OTTAWA, Aug. 31 – Can public-private partnerships (P3s) meet the infrastructure needs of cities and communities?

:: Report

:: Backgrounder

This question has assumed growing importance, with Canada facing a more than $60-billion municipal infrastructure deficit and the federal government increasingly favouring P3s for infrastructure projects.

A new report by Professor Pierre J. Hamel of Montreal’s INRS-Urbanization looks at specific examples of municipal P3s to determine how, and how well, these projects work. The new report, Public-Private Partnerships and Municipalities: Beyond Principles, a Brief Overview of Practices, presents his findings.

Ok let's see the Stelmach government studies. Opp's it appears we can't. It seems it's all anecdotal.

After all the Alberta Tories tried to build a hospital with a P3 back in 2004 and it failed.

In August, the Calgary Regional Health Authority – normally known for spearheading privatization - cancelled Calgary’s planned P3 hospital and replaced it with plans to build the hospital publicly.

And that is the last time anything was posted on Alberta Infrastructures P3 page.
Because 2004 was when Alberta Infrastructure started issuing P3 projects, like the Calgary Court House . Which like Calgary's hospital was another costly mistake.

The Calgary Courthouse P3 boondoggle in 2004 had cost overruns of 67% caused by private partners.

Since then they have been hell bent on doing P3's for three years. I would love to see their more recent study. But it is not posted on their website.

It appears there is no government study, unlike the one done by the FCM, rather it seems the Minister of Education simply read some briefs through partisan glasses.

March 14, 2007 Alberta Hansard

Private/Public Partnerships

The Speaker: The hon. member.

Mr. Chase: Thank you. Obviously, the minister is dealing with a 25-watt bulb. My last question is to the Minister of Education. Why is the minister suggesting that we saddle Alberta taxpayers with a 30-year debt to not only build P3 schools but maintain and operate them privately when we have the money to build them publicly and transparently now? Debt or no debt, Mr. Minister?

Mr. Liepert: Well, Mr. Speaker, first of all, as we discussed earlier, we need schools where kids live. Despite what this hon. member says, we do not have $7 billion laying around to spend on schools. There have been a number of P3 and alternative financing projects around the world that have been successful, and there have been a few that have been unsuccessful. The research I did was that every time a P3 was unsuccessful, it was commenced by a Liberal or a socialist government.

Aha! Of course! The FCM once had Jack Layton as its President, so of course it's nothing but a socialist, Liberal front.




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Infrastructure Collapse

When your infrastructure was built fifty years ago, and was expected to only last half that time, well this is what happens when you waste a decade fighting the deficit chimera of the nineties.

Tunnel ceiling cracks close Montreal streets

–A large section of downtown Montreal will remain closed for the weekend after two cracks were found in a tunnel that makes up part of the underground city.

Montreal police widened a safety perimeter last night to include a number of blocks in the city's downtown core after officials felt there was a real risk of a road collapse following the discovery of cracks in an underground tunnel.

Fire chief Serge Tremblay told reporters last night that a second fissure was also found, but experts haven't been able to conclude what caused the cracks or how long they had been there.

Bridge to Laval latest to undergo repairs

Since the collapse last year of the Laval overpass, Quebec's Transport Department has been conducting more thorough inspections of the province's infrastructure.

Last week, responding to fears a 69-year-old north-end Montreal overpass could collapse because its concrete has "weakened," the city barred all trucks from the heavily-used structure and announced plans to demolish and rebuild it next year.

This is the empirical result of the neo-conservative political agenda of reducing taxes and regulations,failing to fund infrastructure and public services, and promoting privatization.

Bridges in Canada have reached 49 per cent of their useful life, according to a 2006 Statistics Canada study, and experts warn our country's roads, wastewater plants and other infrastructure isn't in any better shape.

A Statistics Canada study examining the age of infrastructure in Canada cited wastewater treatment facilities as the oldest, with 63 per cent of their useful life behind them in 2003. Roads and highways had reached 59 per cent of their useful life, and sewer systems 52 per cent.

Of course it is not only occurring in Canada, but also in the U.S. which originated the daft ideology of the neo-cons.

Emergency personnel look over a truck that lies in a hole in the street after a steam explosion in midtown Manhattan, New York, Wednesday, July 18, 2007. (AP Photo/Seth Wenig)

Cataclysmic infrastructure collapse: Who pays?
A recent Minneapolis bridge collapse and New York steam pipe explosion, both of which collectively caused the deaths of at least six people and more than US$250 million in damages, has brought infrastructure liability to the fore, according to a report by KPMG.

At issue is whether insurers are on the hook for the cataclysmic failure of a decaying urban infrastructure.

KPMG Insurance Insider quotes Claire Wilkinson, the vice president for global issues at the Insurance Information Institute, on the issue of where liability falls in the event of a massive infrastructure failure.

She notes that, in the United States, federal and local authorities that administer bridges and road can claim "sovereign immunity" to avoid liability. But she adds the common-law defense may no longer apply if the infrastructure was under repair, opening the public entities and contractors to charges of negligence..
"A contractor employed by the state could cause damage where the state would be held liable," KPMG quotes Wilkinson as saying.

And even if a contractor has liability coverage, Wilkinson adds, in a world of multi-million construction projects, the limits would likely be quickly eclipsed. KPMG notes that in the event a state contractor exceeded liability limits, the pubic entity might be held responsible for project liability associated with the costs of reconstruction, casualty, property business interruption and/or workers compensation claims.

And so the result is the idea that P3's will solve the under investing done by Governments at all levels for the past two decades. Except the so called 'private' partner, ain't. It's your and my pension funds. In other words you and I pay twice, as taxpayers then as Pension Fund participants.

The bridge collapse in Minneapolis is giving rise to other concerns. Hundreds of billions is needed to rebuild the nation's infrastructure. It's not just roads and bridges. It's also generation and transmission.

Enter infrastructure investing: Public and private pension funds currently invest in varied assets that range from stocks to bonds to real estate. But some are now taking a look at vital infrastructure as a way to earn better-than-average returns as well as to guarantee the longevity of an area's economic growth. If such allocations could provide competitive returns, pension experts say that fiduciaries and trustees would not violate their obligation to act solely in the interest of plan participants.

See:

Minister of P3

Mr. P3

Super P3

Public Pensions Fund Private Partnerships

Pension Fraud Brings Down Japans Government

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Fire Sale

After costing taxpayers an extra $100 million dollars in construction costs due to being a Mulroney government P3 the Federal Building in Edmonton and eight others across Canada are being sold at fire sale prices.

The $400 million they make off this mistake will not cover the 25 year rental cost to taxpayers of $79 million a year. Instead it's going to cost us almost $2 billion to lease back.

So would you sell your house and then rent it back, and agree to invest in upgrades? This is another example of neo-con ideology trumping economic common sense.

The federal government is selling nine office complexes, including two in Ottawa, to a private Vancouver developer for $1.64 billion -- $400 million more than the appraised value for the properties.

At the same time, the union representing many of the federal workers in the buildings labelled the deal "a give-away of colossal proportions."

"In addition to ceding ownership of the nine premium properties, the federal government has, in effect, written a $630-million cheque signed by Canadian taxpayers," said Patty Ducharme, the union's national vice-president.

The union cited its own study, done by Informetric, an Ottawa economic consultant. It valued the nine properties at almost $2.3 billion, Ms. Ducharme said.

The deal involves the sale of government property to Larco Investments Ltd., but also requires the federal government to lease back the office space for 25 years. That substantially reduces the risk to the new private owner.

The lease-back agreement calls for the government to pay base rent of $79 million a year plus operating and maintenance costs, officials said. Rents will be set annually by Public Works and Government Services to cover agreed-upon services, including annual maintenance costs.

Of the $1.644-billion purchase price, $1.567-billion will go to the government. Of this, RBC and BMO will each receive commissions of $5.7-million, according to a government official. There will also be up to $500,000 in expenses for the sale.

The remaining $77-million of the sale price will be used to undertake a 10-year capital repair program, while the government will be responsible for other expenses, including maintenance, repairs and other building improvements.

The government has agreed to lease back the nine buildings for 25 years, with payment amounts rising in five-year increments. Lease payments will total $505.3-million over the 25 years, rising from $82.2-million in the first five years, to $122.1-million in years 20 to 25.

See:

Minister of P3

Mr. P3

Super P3

Public Pensions Fund Private Partnerships

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Dumb and Dumber

P3's don't save taxpayers money.

This was a costly dumb idea under the Mulroney Conservatives and the Harper Conservatives are going to repeat the same mistake.

The government has reportedly received advice that Edmonton's Canada Place is the most valuable of the nine buildings being considered for sale. It is worth $265 million if sold under a 25-year lease-back deal.

Canada Place was valued at $152 million when the Treasury Board approved its construction in 1984. But in 1988 Kenneth Dye, then the federal auditor general, reported that the new Edmonton home of 3,200 federal civil servants would end up costing taxpayers $100 million too much.

Part of the extra cost was the result of a decision to have Canada Place built privately under a lease-purchase deal instead of having the government build it.

And the irony in this is that it will be public sector workers pensions that will probably ending up owning it.

But Dawson wasn't sure how a benefit for business can work for the government.

"They're not in business and they're not necessarily going to re-employ that money at any kind of a return."

As for possible buyers for Canada Place, Dawson said large pension funds may be interested.

The Canadian Pension Plan Investment Board (CPPIB) now invests 45% of its assets outside Canada, up from 36% in 2005. Ontario Teachers' Pension Fund increased the percentage of non-Canadian assets in its equities portfolio from 56% in 2005 to 66% in 2006. OMERS has increased its foreign assets from 29% in 2000 to 39% in 2006.

With almost $500-billion in combined assets, the five top Canadian pension funds are getting a bigger piece of the global play book.

Not surprisingly, Canadian pension funds are now viewed as virtual private equity groups, says David Mongeau, of U.K.-based Avington International, a global mergers and acquisitions advisory firm that stickhandled a number of recent deals including the Legacy REIT sale with Caisse de depot, and the BCIMG purchase of the Canadian Hotel Income Properties Real Estate Investment Trust.

See:

Minister of P3

Mr. P3

Super P3

Public Pensions Fund Private Partnerships

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Alberta, Heritage Trust Fund, LAPP, Alberta Investment Management Corporation, Canada, Pensions, P3, public-private-partnerships, OMERS, CPP, Ontario-Teachers-Fund, OTF, Canada, investment, infrastructure, VenCap, shareholders, economics,
P3, privatization, public-private-partnerships, Canada, London, UK, Rotor, Tipple, Harper, Government, scandal, Ottawa

Minister of P3

Greg Weston of the Sun chain has an excellent piece exposing the insider deals in Public Works to sell off government buildings, which began under the Liberals, and then lease them back. Which makes about as much sense as selling your house and then paying rent.

It was only a matter of time.

The moment Stephen Harper appointed a corporate investment banker to be public works minister in charge of government contracting with thousands of Canadian corporations, political controversy was sure to follow.

The inevitable storm engulfed senator-minister Michael Fortier this past week after a company publicly complained about losing a $400-million contract bid to one of Fortier's former investment banking clients.

While there is no evidence of fiddling by Fortier or his team, the opposition parties are justifiably asking that the newly created Integrity Office review the contract award, if only to lift all suspicion from the minister and reassure the public.

For all the same reasons of probity and protecting reputations, maybe the ethics folks might also want to review what could be the largest government real estate deal in decades.

Fortier announced in March that public works is ready to sell $1.5 billion of federal office buildings that the government would then lease back for the next 25 years.

$6M IN COMMISSIONS

Last September, Fortier's department awarded the contract for the real estate sell-off to the investment banking arms of the Royal Bank (RBC) and the Bank of Montreal (BMO), a deal expected to generate at least $6 million in commissions.

The key player in BMO's winning bid, for instance, was Rick Byers, managing director of the firm's government investment banking group.

Byers is highly qualified for the job as an expert in government privatizations, having had lead roles in projects such as the $1.5-billion spinoff of the air traffic control services at Canadian airports.

But Byers also happens to have been a prominent Conservative party fundraiser and organizer who has twice run for a federal seat under the Tory banner in the Ontario riding of Oakville, and is a candidate for the Ontario PCs in the provincial election this fall.

Byers' political ties to the current public works minister go back to the 1998 Conservative leadership race when Fortier ran against Joe Clark and lost by a mile.

In 2003, the two investment bankers backed Scott Brison's bid for the PC leadership -- Byers was the campaign chairman for Ontario, Fortier assumed the same role for Quebec.

One of Brison's chief fundraisers was another highly respected investment banker named Michael Norris, then head of RBC's investment banking operations and now the firm's deputy chairman.

It all begins with the appointment of investment Banker Michael Fortier to the Senate as the unelected Minister of Public Works and goes downhill from there.

The Public Works changes now throw into disarray the procurement-reform process, which is intended to generate savings of $2.5-billion over five years. The savings have already been built into the government's books and Prime Minister Stephen Harper mandated Mr. Fortier to find the savings.

But before more reforms are made, the minister wants answers on two issues raised by The Globe and Mail this week, a senior Public Works official said: a trip to London by two high-ranking advisers that was marred by missed and cancelled meetings; and a consulting contract with A.T. Kearney Ltd. that was supposed to be worth $15-million over four years but has cost $24-million in only nine months.

“The minister has asked for a full report on the A.T. Kearney contract to see whether we obtained value for money,” the official said. “Why did we spend more in one year than what we had planned over four years? There was obviously a management problem.”

The contract was awarded in November by the previous Liberal government, but most of the cost increases occurred after the Conservatives came to power this year.

The Liberals began the overhaul at Public Works, an initiative known as The Way Forward, which is supposed to save $3.5 billion over five years. The Harper government endorsed the reforms, but Mr. Fortier took a different course from the Liberals, who considered selling much of the government's real estate holdings, and issued a tender call for advisers on how to manage the portfolio. That contract will be awarded soon.

The Tories continued the course started by the Liberals for procurement reform until Mr. Fortier faced a near revolt from small suppliers over a tender call for temporary help agencies that called for the use of reverse auctions.

It turns out that this is another case of the Government commissioning a study that it does not want to share. The study being done by party pals of the government,and Minister Fortier, who would benefit from the sale and leasing of these buildings. It replaces the previous Liberal contract with A.T. Kearny and the Tipple Rotor non report.

The two consultants hired by Fortier will profit from this for their employers, two of Canada's biggest banks, the lucrative fees they make kick backs to stalwart Conservative political operatives.

Public Works Minister Michael Fortier rejected demands from opposition members yesterday to refer a controversial plan to sell off nine federal buildings to the newly created Integrity Office.

Fortier also refused to release a report from two banks giving advice on the prospective sale and lease-back of the buildings, estimated to be worth $1.5 billion.

Those two banks would also earn a commission on the future sale of the federal buildings, Fortier confirmed to a Commons committee yesterday.

Officials would not disclose the details of that commission.

Like the guys who went to England to learn from New Labours P3 failures paid for secretly by the PMO, were hired as government consultants. And thanks to the power of the PMO, their report paid for by taxpayers also remains secret.

Hon. Michael Fortier: Let's deal with the gentlemen and the visit
to London. I had a report from the deputy on what the business trip
was about, and I'll let him talk about this in a second.
With respect to A.T. Kearney, there is no report. They were hired,
as you pointed out earlier, more than 18 months ago through a fair
RFP open process. Big numbers. I totally agree with you. Where I
come from, $19,000 is a lot of money. The original contract was for
$19 million with the ability to go to $24 million. The media reports
talk about the contract being seven or eight or nine or ten times what
it was supposed to be. The reality is it was signed by the former
minister, and the number that he authorized is the number that was
spent.

Ms. Peggy Nash: Excuse me, Mr. Minister, you say there was no
written report that came out of this $24 million contract. What did
come out of it?

Hon. Michael Fortier: They were advising the department in
three or four specific areas. One was to actually look at these savings
and see how they could be generated. They were looking at $20
billion of procurement through 50 to 60 departments, and they were
helping the department literally collect data and strategize on the
reform itself.

The reform is not just about saving money. We've talked about it.
It's about proceeding with procurement in a smarter and more
transparent fashion.

Ms. Peggy Nash: When there were reports of the two
representatives who spent a week in London and cancelled
meetings—I don't know if they actually succeeded in meeting with
anyone there—the media reported that you had asked for a report.
Did that happen?

Hon. Michael Fortier: I spoke with the deputy. The deputy
reported to me on what the situation was.

This is not "New", the Harper Government of Canada really is becoming all too tiresome in its predictability for autarchy and secrecy.

During an appearance before the Standing Committee on Government Operations and Estimates, the Minister refused repeated requests by opposition Members of Parliament for an investigation into this apparent conflict of interest. The review would be conducted by the Public Service Integrity Office, an office created by the minority Conservative government as one of its new "accountability" measures.

"This government talks a good game about accountability, but they apparently forgot to send the memo to their Senator-Minister, who apparently believes he is above oversight," said Mr. Rodriguez.

Public works minister says he had no role in handing out contract

Kathryn May, The Ottawa Citizen

Published: Wednesday, April 25, 2007

Public Works Minister Michael Fortier says he won't ask the integrity office to investigate complaints that he was in a conflict of interest over the awarding of a $400-million technology contract because he has never been involved in the selection of bidders since he took the job.

"I have not directly or indirectly been involved in the selection and awarding of any contract, not just this contract, since I was sworn in as minister of public works in February 2006," he told the Commons government operations committee yesterday.

Last week, Ottawa-based TPG Technology Consulting raised concerns that Mr. Fortier may be in a conflict of interest over a $400-million contract it lost to competing bidder CGI Group Inc., for which Mr. Fortier worked during his previous career as an investment banker. TPG alleges the bidding process was stacked in favour of CGI, even though it offered the lowest price.

TPG Concerned that Minister Fortier Doesn't Support an Investigation into Suspicious Contract

    OTTAWA, April 25 /CNW Telbec/ - TPG Technology Consulting Ltd.'s
president, Mr. Don Powell, is concerned that a number of recent statements
made by Mr. Michael Fortier, Minister of Public Works and Government Services
Canada (PWGSC), suggest the Minister is turning a blind eye to the
circumstances surrounding the pending award of a $400 million contract for
technical services. Otherwise, his department would be more willing to
investigate the potential conflicts of interests and possible breaches of
protocol surrounding this process.
"The Minister keeps stating that nothing went wrong and that he doesn't
want an inquiry into the process, but an inquiry would give other individuals
the opportunity to come forward and state once and for all what happened,"
said Mr. Powell.
"We thought this new government would welcome whistle-blowers and be
ready to investigate their claims to ensure the fairness and transparency of
the process, but the opposite seems to be happening!" Mr. Powell said.
"How can they say there's nothing wrong without even looking at what we
have? We thought the 'shoot, shovel and shut up policy' wouldn't be part of
the Conservative's agenda."
Mr. Powell said PWGSC has not seen the evidence obtained by TPG, but has
worked hard to discredit TPG's concerns.

Where is the accountability?

Mr. Powell states that he is ready to divulge information to an
independent body that will offer protection to involved individuals so that
they can feel safe in coming forward to share their concerns about this
process.
An independent inquiry is the only way to determine whether this contract
process was conducted in a fair, open and transparent manner.

See:

• Mr. P3

• Super P3

• State Capitalism By Any Other Name

Find blog posts, photos, events and more off-site about:
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