Alberta Budget 2010

[lubicon]

Originally Posted by mooky

I'd settle for a small (~5%) provincial sales tax. I don't like it, but at least it hurts consumers, people who spend money.

I agree. With the stipulation being that ALL resource revenue goes into an investment fund. Funds from the growth of this fund (adjusting for inflation) would flow back out to the various ministries. One of the things it should fund is a gradual reduction in income tax, hopefully to the point that it could be eliminated altogether. Over time the fund would grow to a size that is large enough to fund a significant portion of our budget. If this had been done years ago we would be in a great financial situation today.

Originally Posted by Doug

The question I'd like answered is why does Alberta outspend practically every government on Earth on virutally every category of social spending, yet its outcomes are mediocre at best? The solution is definately not to do the same thing again (throw more money at a problem) and expect a different outcome.

Couldn't agree with you more. And the thing that pisses me off the most in this country is our absolute refusal to even entertain the thought of changing our health care system. All we do is throw more and more money at it and hope things will improve. If we keep this up the health care budget will make up pretty much our entire budget. The one thing I would really like to see changes is for health care dollars to follow the patient, much like how our education system works. Forget funding each hospital etc. with a fixed amount of money every year. That is a waste of money. Each patient they treat is a cost that comes off their bottom line and there is no incentive to see more patients etc. Instead pay the hospital (clinic etc.) a fixed fee for every procedure they perform (fee depends on the procedure). The more people they treat the more money they get. They can then make hiring decisions, equipment purchases etc knowing they will be able to fund it provided they are performing a service. I believe several countries in Europe use this model with great success.

[korzym]

Originally Posted by Sir.Humphrey.Appleby

^ The most normal measure of quality used seemed to be life expectancy back in 'Health Care Economics' in University. Usually graphs would plot that vs expenditures as a % of GDP per capita.

If my memory serves me Alberta does really well on the life expectancy side, but has big problems on the cost side, compared to countries with comparable health outcomes like France.

Something like this:

The one thing that needs to change in Alberta and the US is for insurance companies to give money for medicine before its purchased. This enables consumers to shop around, and ultimately the one retailer that gains the most market share via lowest prices can demand lower prices from manufacturers, because then the retailer can pick and choose between manufacturers after building up a massive market share.

The price of contact lenses and laser eye surgery drastically went down because capitalism was able to be put to work. In select areas its ok to let the free market go to work. Just have to make some changes to the system

[MalcolmTucker]

^ The province does not have pharmacare except for seniors so I would think it ends up being a very small part of the government budget.

As an alternative to your proposal the government could also just create a regulated amount of profit and all stores would have the same price (or places with prices above the amount would not have the price difference covered by the province.)

Another interesting measure would be to create health care spending accounts instead of adopting a wider pharmacare and dental care plan. People could spend on what they want, while not avoiding preventative treatments that could save the government big bucks down the road.

[DizzyEdge]

Originally Posted by Sir.Humphrey.Appleby

^ The most normal measure of quality used seemed to be life expectancy back in 'Health Care Economics' in University. Usually graphs would plot that vs expenditures as a % of GDP per capita.

If my memory serves me Alberta does really well on the life expectancy side, but has big problems on the cost side, compared to countries with comparable health outcomes like France.

Something like this:

Is this graph per capita *health* spending or just per capita spending overall?

[DizzyEdge]

Originally Posted by mooky

I'd settle for a small (~5%) provincial sales tax. I don't like it, but at least it hurts consumers, people who spend money. The poor, not so much.

So much for politicians doing whats best for the province regardless of the consequences eh. It's all about power, not altruism.

F-it all, anarchy!

I'm sure I've missed something here, but why would we want to 'hurt consumers' ?

[MalcolmTucker]

Originally Posted by DizzyEdge

Is this graph per capita *health* spending or just per capita spending overall?

Health.

Originally Posted by DizzyEdge

I'm sure I've missed something here, but why would we want to 'hurt consumers' ?

Encourage savings. Canada's rate is too low. Increasing savings will increase productivity.

[You Need A Thneed]

Originally Posted by DizzyEdge

I'm sure I've missed something here, but why would we want to 'hurt consumers' ?

I think he meant to "hurt" those who have more discretionary income more.

[DizzyEdge]

I was just thinking 'hurting' them to encourage savings would be more something to do once we're out of the recession vs when we're trying to get out of it.

[mooky]

Originally Posted by You Need A Thneed

I think he meant to "hurt" those who have more discretionary income more.

Correct.

[Radley77]

I read over the agreement signed between the province and the city several times, and I don't see where it says that the provincial government can arbitrarily change the grant funding for MSI...

http://www.calgarymayor.ca/files/sus...pt_14_2008.pdf

I would like to know what the basis was for the province to change from the previously pledged funding and whether the cuts are actually legal.

[MalcolmTucker]

^ As the city is a creature of the province I don't think any agreements are really 'enforceable' per se. But yeah, the out is in 4 (i). The provincial budget is the final authority. Suing the province would cause a big political ruckus however, and that is what really matters (if they can find a judge to hear the case that is)

[kw5150]

BTW Ted morton (budget loser) and his mp buddies voted themselves a 20% raise last year despite a recession. Can I have one too?

[Radley77]

Originally Posted by Sir.Humphrey.Appleby

^ As the city is a creature of the province I don't think any agreements are really 'enforceable' per se. But yeah, the out is in 4 (i). The provincial budget is the final authority. Suing the province would cause a big political ruckus however, and that is what really matters (if they can find a judge to hear the case that is)

I am not a lawyer, but I would think if corporations are also creatures of the province, and if the Alberta government was to sign an agreement with a company for services rendered (like construction tender) than it would be legally binding... Or labour unions for that matter like the Alberta Teachers Association recent arbitration.

I agree that the out is in 4 (i) ("subject always to approved funding allocation by the Legislature"). However, it also mentions that "parties agree to give this Agreement a fair and reasonable interpretation." And it also outlines various measures to deal with equity ("changes in population, education tax requisitions, equalized assessment and/or kilometers of local roads relative to other municipalities") and revenue drops ("if provincial revenues decrease below 2010 — 2011 levels the Minister, in his sole discretion, may decrease the grant funding in proportion to the decrease in provincial revenues"). It also specifies that agreement is "binding upon the parties and their successors."

So, I don't quite understand how a 38% drop in grants, in only the first 3 years is a reasonable interpretation of the intent of the agreement.

Just doing the math on the risk/reward of bringing this to a court. There is a potential $2 million say in lawyers fees against the possible $153 million in increased revenues. If Dave thinks there is a greater than 2% chance of the law suit being successful, then there is value in fighting this in court. Smaller municipalities may be less willing to champion this issue simply because the balance of risk and reward would be shifted, or do not have a signed agreement in place.

Not to mention, that how does that leave the initial agreement stand on a go forward basis for future years?

If I were a provincial politician, I think it would be smarter to promise money grants on a "proved" basis. The difference between proved and probable could be used to top up funding as a bonus, but at least it provides better baseline guidance to municipalities on how it will fund infrastructure growth.

[Bassic Lab]

Originally Posted by Radley77

I am not a lawyer, but I would think if corporations are also creatures of the province, and if the Alberta government was to sign an agreement with a company for services rendered (like construction tender) than it would be legally binding... Or labour unions for that matter like the Alberta Teachers Association recent arbitration.

I agree that the out is in 4 (i) ("subject always to approved funding allocation by the Legislature"). However, it also mentions that "parties agree to give this Agreement a fair and reasonable interpretation." And it also outlines various measures to deal with equity ("changes in population, education tax requisitions, equalized assessment and/or kilometers of local roads relative to other municipalities") and revenue drops ("if provincial revenues decrease below 2010 — 2011 levels the Minister, in his sole discretion, may decrease the grant funding in proportion to the decrease in provincial revenues"). It also specifies that agreement is "binding upon the parties and their successors."

So, I don't quite understand how a 38% drop in grants, in only the first 3 years is a reasonable interpretation of the intent of the agreement.

Just doing the math on the risk/reward of bringing this to a court. There is a potential $2 million say in lawyers fees against the possible $153 million in increased revenues. If Dave thinks there is a greater than 2% chance of the law suit being successful, then there is value in fighting this in court. Smaller municipalities may be less willing to champion this issue simply because the balance of risk and reward would be shifted, or do not have a signed agreement in place.

Not to mention, that how does that leave the initial agreement stand on a go forward basis for future years?

If I were a provincial politician, I think it would be smarter to promise money grants on a "proved" basis. The difference between proved and probable could be used to top up funding as a bonus, but at least it provides better baseline guidance to municipalities on how it will fund infrastructure growth.

Corporations and organized labour groups are not creatures of the province. Cities in Canada literally exist only through acts of their province's legislature. The analogy you draw would be correct if the company in question was a Crown Corporation that was wholly owned by the province. Then the province could tear up a contract because in essence they represent both actors in the agreement.

[MalcolmTucker]

^ I never said it wouldn't be a good idea to sue the province (if you could get a judge to hear it), only that your gain would happen much more in the political sphere not in the legal one.

As for the agreement, "subject always to approved funding allocation by the Legislature" supersedes the rest of the agreement. With that bit in there, the rest of 'funding amount' part of the agreement may as well not exist.

The 2010-11 part talks about the Minister, that within a budget year if revenues drop in a way that is not expected in the budget, that the taps can be turned off at any time, not just at budget time. At least in my interpretation. That is why the clause makes a distinction between the Minister and the Legislature even though they both operate under the authority of the crown.

[Doug]

Originally Posted by Radley77

So, I don't quite understand how a 38% drop in grants, in only the first 3 years is a reasonable interpretation of the intent of the agreement.

It is very reasonable as construction costs have dropped by around that amount meaning that the City's plan of record could probably be built for 38% less than it could at the time this agreement was signed.

[Riise]

There is an article in today's Herald where they talked to lawyers about the City's legal position. One of them mentioned the section of the agreement that Sir. A pointed out.

------------------------------

Contract With Province May Not Help Calgary With Cuts: Lawyers
Legal Experts Say Infrastructure Deal Leaves Door Open To Cuts

February 12, 2010
Calgary Herald
Jason Markusoff

CALGARY - The same contract Mayor Dave Bronconnier is using to argue the provincial government can't unilaterally shortchange the city actually seems to indicate it can, according to lawyers who have reviewed the agreement.

Upon release of a 2010 Alberta budget that offered Calgary only $254 million for infrastructure -- much less than city officials expected -- Bronconnier said the city's Municipal Sustainability Initiative contract spells out payment terms the province can't change without negotiating in good faith.

"I think that most Calgarians have an expectation that when their governments sign contracts, that they expect their governments to live up to them," he said earlier this week.

Premier Ed Stelmach and ministers have argued the province could always adjust numbers and stretch out its 10-year funding plan if money was tight.

Bronconnier has suggested matters could wind up in court and demanded a meeting with the premier to resolve the issue.

The Herald showed the city-province memorandum of agreement to some local lawyers and the University of Calgary's associate dean of law, and they largely sided with the province.

"There is no doubt that in form, this appears to be a contract. However, in my view, it does not represent a binding legal commitment on the part of the province to provide precise sums of money in precise time frames," Chris Levy, the university professor, said in an e-mail.

He pointed to section 4(i) of the contract, which begins: "Subject always to approved funding allocation by the legislature, the minister shall maintain the funding approved herein." In other words, it's up to MLAs to set rates.

The mayor -- who could not be reached for comment Thursday -- has stressed another part of the clause, which notes that the minister can reduce grants proportionately to revenue losses.

Kent Hehr, a Calgary Liberal MLA who previously practised civil and contract law, also seized on that phrase.

"No matter what this agreement says, it looks like the province has kept the hammer on this," he said.

"Full stop. There's no wiggle room for the city. . . . It looks like the province has written a contract that although it looks nice for the city on a piece of paper and you can wave it around, I'm not sure if it does much good."

But the opposition critic noted that Stelmach did score political points among Calgarians by pledging a certain amount of money, and should listen to the city's needs for funding for its LRT expansion, rec centres and other already-planned projects.

One lawyer said it's less clear-cut, since it refers to the legislature's approval, not the government's.

"Does government have an obligation to put forth the proposal to the legislature that is in accordance with this agreement?" asked Chima Nkemdirim, a corporate lawyer with Fraser Milner Casgrain, and chairman of the Better Calgary Campaign.

"The question is whether or not the outs in the contract are applicable."

Paul Tolley, the city's solicitor, said council has not yet asked his legal opinion on the agreement, and would do so confidentially. "All I can say is we're assessing our legal position."

© Copyright The Calgary Herald

[freeweed]

Semi-OT, but in the same vein as this...

What projects in Calgary have gone ahead as a result of the Federal stimulus spending last year? The whole "shovel-ready" concept?

I'm having a hard time recalling anything, but billions were doled out. You'd think I could at least remember one high profile item.

[MalcolmTucker]

^ Station platform extensions, traction power improvements, the 11th St LRT station, a couple small road projects, the advanced fare system project, real time bus and train tracking, the COGEN plant at the U of C, and a bit for the new Library at U of C.

Worked out to ~$300 million or so I think.

[lubicon]

Originally Posted by Sir.Humphrey.Appleby

^ Station platform extensions, traction power improvements, the 11th St LRT station, a couple small road projects, the advanced fare system project, real time bus and train tracking, the COGEN plant at the U of C, and a bit for the new Library at U of C.

Worked out to ~$300 million or so I think.

Which is why we haven't really noticed anything. I'm not sure if ANY of those projects have actually started and even if they did they won't have much of a visible impact.