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John Carpay | Barrister and Solicitor

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No regrets over Alberta's bloated budget

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"Oops, I blew the budget. Again. But no matter, I've done a great job spending the money. So don't hold your breath for an apology."
In the business world, would an employee or department manager ever get away with that comment Or a C.E.O. reporting to the board of directors How about trying it on your spouse 

Only in the unreal world of politics, where governments get their money regardless of performance, can you get away with a comment like that.

While these were not the exact words of Alberta Finance Minister Shirley McClellan, they pretty much sum up the attitude of Alberta's governing "Conservatives" when they released the Annual Report on Budget 2004-05 at the end of June. Unfortunately for taxpayers, "I blew the budget again" has become normal and natural in Alberta.

In 2002, Pat Nelson introduced a budget with $18.5 billion of spending on government programs, including a $541 million tax increase. By the end of the year, spending was higher by $1.6 billion - over $500 for every man, woman and child in Alberta. And Pat Nelson's $541 million tax increase remains in place today, three years later.

In 2004, the budget listed $22.3 billion in spending on government programs. But the Annual Report reveals spending of $23.9 billion - a difference of $1.6 billion. That's an extra $1,900 that could have been left in the pockets of a family of four.

In days gone by, the Tories believed that money is better spent by the people who earn it, not by politicians and bureaucrats. There was a time when they recognized that nobody spends someone else's money as wisely as he spends his own.

But today's Tories want to make those decisions on our behalf. They collect the highest revenues (per person) of any government in Canada, and spend more on government programs (per person) than any government in Canada. Spending is up 100% in just nine years, rising from $12.7 billion in 1996 to $25.5 billion in 2005. During the same nine-year period, Alberta's population grew 17%, and inflation was 27%.

Individuals and families are forced to live within their budgets. So are companies and employees. But Alberta has no spending control law to limit how much politicians and bureaucrats spend. Unlike individuals, who continually need to make hard choices about priorities, governments can say "yes" to special interest groups because nameless, faceless taxpayers pick up the tab.

What if Alberta had a spending control law like the state of Washington, and other jurisdictions If spending on government programs had risen only to keep pace with Alberta's population growth and inflation, it would have grown from $12.7 billion in 1996 to $18.9 billion today - leaving an extra $6.6 billion in the pockets of those who earned it.

What would a $6.6 billion tax cut look like Klein's Tories could leave $6.6 billion in our pockets by scrapping the health care premium tax, the school property tax, and the fuel tax, plus reducing our 10% provincial income tax down to 3%.
Perhaps a $6.6 billion tax cut is too radical, unrealistic or extreme. But surely abolishing the health care premium tax - which makes up only 3% of the government's revenues - is fair and reasonable. How about it, Premier Klein

Last Updated on Monday, 11 April 2011 21:08

Private health care is no threat to public system

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The Supreme Court of Canada has ruled that suffering - and dying - while waiting for "non-urgent" medical care violates our right to "life, liberty and security of the person."

Based on the evidence, the court ruled that delays for surgery cause irreparable physical injury, and can even result in death. Further, living in pain for months - or years - while waiting for surgery interferes with the quality and enjoyment of life, not to mention a person's ability to earn a living.

Unfortunately for Canadians it is against the law for us to spend our own after-tax dollars to provide for our own health care. Quebec, Alberta, B.C. and P.E.I. all have laws preventing citizens from spending their own money on the health care insurance of their choice. Medical insurance can only be bought for medical services that are not available in the government-run monopoly. Practically speaking, this means that Albertans are required to suffer - and sometimes die - on waiting lists for so-called "non-urgent" surgeries. In other words, Albertans are allowed to spend their own money on alcohol, tobacco, fancy vacations, jewelry, VLTs, fast food . . . but not on better health care or faster health care. Alberta's law allows you to spend as much as you want on the health of your dog or cat, but not on the health of your child. With our current two-tier system, only the very wealthy can jet off to the U.S., while the rest of us are forced to wait for government care.

In court, the Quebec government argued that allowing people to spend their own money on private medical insurance would destroy the public health care system, or at least weaken it. But based on the evidence presented, the court ruled that "many western democracies that do not impose a monopoly on the delivery of health care have successfully delivered to their citizens medical services that are superior to and more affordable than the services that are presently available in Canada." In other words, a government monopoly is not necessary to the provision of quality public health care.

Private health care and private insurance in Germany, Australia, Sweden, the United Kingdom, the Netherlands, New Zealand, Austria and other countries do not harm their public systems. The court ruled that "when we look to the evidence rather than to assumptions, the connection between prohibiting private insurance and maintaining quality public health care vanishes." 

Canada, North Korea and Cuba are the only countries in the world which outlaw the freedom to spend one's own after-tax income on one's own health. Alberta Health Minister Iris Evans should take the initiative to get rid of Alberta's current ban on buying private insurance, by amending the Alberta Health Care Insurance Act.

Premier Klein's government should ignore the emotional rhetoric about stopping "two-tier" health care by throwing ever more tax dollars at the government's Soviet-era health care monopoly. Two-tier health care is already here: the very rich can secure timely, quality care for themselves by going to the U.S. or other countries; professional athletes never have to wait for surgery; and politicians don't wait in line either when they get sick.

Premier Klein has said much about the need to reform health care, but has done very little. Here is an opportunity for his government to act in the interests of patients and taxpayers.

Last Updated on Sunday, 17 April 2011 20:04

Bureaucrats' pay must be linked to performance

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Should Alberta's top bureaucrats get a raise from $161,000 to $200,000 per year Should the current bonus, which ranges from $28,000 to $32,000 for all deputy ministers, be replaced with a new bonus plan that ranges from $0 to $60,000 

There is nothing wrong with deputy ministers earning between $200,000 and $260,000 per year, provided there are clear criteria to ensure they actually deserve it. 

Measuring competence and performance in the artificial world of government is no easy task. I call this world "artificial" because it has no bottom line. Government gets its money from taxpayers regardless of its performance.

Contrast this artificial world of government with the reality faced each day by Albertans in the private and non-profit sectors. We must perform well to please our clients, customers and donors, or face the prospect of going out of business. For most goods and services, consumers have the option of taking their business elsewhere. But taxes have to be paid whether the government does a good job or not.

Pay increases for deputy ministers and other senior officials should be tied to measurable performance standards, and taxpayers have a right to know, specifically, what those standards are.

Paying deputy ministers in the $200,000 to $260,000 range is fine if they produce good results, find efficiencies, and reduce costs. For example, if eliminating waste and reducing bureaucracy saves taxpayers $100 million per year, then paying an additional $10 million in salaries and bonuses to senior officials is a good deal for taxpayers.

Alberta's government has become a lot bigger in the past nine years, but has it become any better 

Spending on government programs is up by 100% in just nine years, rising from $12.7 billion in 1996 to $25.5 billion today. This 100% spending increase is far, far bigger than Alberta's population growth (17%) and cumulative inflation (27%) during the same period. Alberta's government now employs 26,811 bureaucrats. That excludes nurses, teachers, doctors, policemen, firefighters and other public sector workers. The health ministry alone employs 1,378 bureaucrats - an eleven per cent increase over last year - and the Ministry of Restructuring and Government Efficiency employs 1,272.

Alberta's cabinet has grown from 17 ministers in 1992, to 24 ministers today. Taxpayers would be far better off paying 17 deputy ministers $200,000 each, rather than paying 24 deputy ministers $161,000 each.

Compensation for deputy ministers should be linked to clear and specific performance criteria, including the criterion of saving taxpayers money by finding efficiencies and reducing the size of government. Paying senior officials competitive salaries is good for taxpayers only if these people are required to make government better rather than bigger.

Senior officials should receive these proposed pay increases only after the government has established criteria that are both specific and measurable, including a criterion to reduce the size of Alberta's growing bureaucracy. And these raises should go to 17 deputy ministers, not 24.

Last Updated on Sunday, 17 April 2011 20:06

Canadians want health care reform, but politicians don't

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Most politicians support the government's monopoly on health care, and will tell you that people should not have any right to spend their own money for health care. But a new national opinion poll by Montreal-based Leger Marketing shows that politicians are out of touch with Canadians on this issue.

Leger found that 52 per cent of Canadians are in favour of allowing "those who wish to pay for health care in the private sector to have speedier access to this type of care while still maintaining the current free and universal health care system." Forty-two per cent were opposed and 5 per cent had no opinion. 

Supporters of the state monopoly on health care - most of whom are bankrolled by powerful unions - are able to scream the loudest, while the majority is without a voice. 

Alberta's spending on the government's health care monopoly works out to almost $3,000 for every man, woman and child in the province. But many among the silent majority realize that our health care system is not meeting our basic needs. They have seen elderly loved ones sent home in taxis to die because of a lack of hospital beds. They have waited in pain for 18 months for a hip replacement, knowing full well that in most European countries the wait is just a few weeks. They know about the horror stories of people waiting for cancer treatment while their tumour grows and their government denies them the right to pay to treat themselves.

Recognizing the futility of our current health system forces us to look abroad to find alternatives. The Friends of Medicare and other supporters of the status quo like to focus on the American system, which includes private, voluntary insurance.

But there are 29 countries in the world with better health systems than Canada's, according the most recent study by the World Health Organization. Australia, New Zealand, Germany, Singapore, Sweden, Switzerland, and the United Kingdom have universal access to health care. All of these countries have shorter wait times, better access to technology and better health outcomes than Canada. All of them spend less on health care than we do. These countries allow a parallel private system to co-exist alongside the public system. A public system is available to everyone regardless of income, yet citizens also enjoy the freedom to spend their own money on the health care - and health care insurance - of their own choice. The status quo crowd pretends our only choices are our current failing system or the American one. The fact is we can learn from many countries how to build a better system at a lower cost.

The time has come for politicians to do some serious soul-searching on health care. As they dither and grand stand, our lack of access to quality health care becomes less of a taxpayer issue, and more of a civil liberties issue. If you feel you should have the right to spend your own money on more, better or faster health care, tell your MLA and your MP. If they don't hear from you, the only voice they hear will be in support of the status quo.

Last Updated on Sunday, 17 April 2011 20:08

Calgary aldermen make the case for a taxpayer protection law

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An attitude of "we know best" struck Calgary this week, as the majority of aldermen voted to raise municipal taxes again. Monday's sudden vote erased the tiny provincial tax cut announced in the provincial budget two weeks ago. This five percent reduction to the provincial property tax rate would have saved Calgarians over $20 million per year. But not anymore, now that city council has increased municipal taxes by the same amount as the provincial tax cut.

The majority of politicians are firmly persuaded that they can spend other people's earnings with more care and greater wisdom than the people themselves. Has it occurred to them that Canadians already lose 49% of their earnings to support three levels of government Have they noticed that taxes are the largest item in a family's budget, costing more than what families pay each month for the mortgage or rent Have they thought about a family's desire to save for their children's education, or put money towards a nice holiday, or give more to charity, or pay off some personal debt Do they understand the economic benefits of allowing people to spend and invest more money in the local economy 

"But we need that extra tax revenue to fix sidewalks," Calgarians were told. 

Baloney. City council already takes in $1.7 billion tax dollars from Calgarians each year - over $1,700 for every man, woman and child in the city, or $6,800 for a family of four.

If city councilors can't put together a budget which includes adequate money for sidewalk repair, they are incompetent and should resign.

Rather than raising taxes, municipal politicians should get more value for the money they already receive from Joe Taxpayer. When was the last time that city council looked at contracting out more municipal services to save taxpayers money When was the last serious review of the size of City Hall bureaucracy Are municipal employees rewarded for finding savings and efficiencies, or is it in their best interest not to rock the boat What incentives can be introduced to reward city workers who find ways to save taxpayers money 

Perhaps the worst aspect of this tax increase was the sneaky way in which it was rushed through, without any public input. But politicians who think they know best don't want to bother with annoying things like debate, accountability and democracy.

By rapidly sneaking through a tax increase, Calgary's aldermen have made a strong case for taxpayer protection laws. The idea is simple and effective: no new taxes and no tax increases without the consent, in a referendum, of those who pay the bills. Taxpayer protection legislation forces politicians to explain and justify a tax increase. Without a law of this kind, politicians can raise any tax at any time for any reason, as Calgary aldermen did this past Monday.

School boards can't raise property taxes without taxpayers' consent. But our federal, provincial and municipal politicians have the power to raise any tax at any time for any reason, without the approval of those who must pay the bills.

Premier Klein promised Albertans taxpayer protection legislation in 1997. He still hasn't delivered. But if he does keep his promise, he should put taxpayer protection into place both provincially and municipally.

Last Updated on Sunday, 17 April 2011 20:10

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