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John Carpay | Barrister and Solicitor

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Tories hide cost of pre-election advertising campaign

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Will Alberta taxpayers find out - before they vote on Monday - how much of their money was spent to sell them on the government's new car insurance system 

This past September and October - just before the election was called - the Alberta government spent hundreds of thousands of tax dollars to buy radio ads and large newspaper ads to promote its new car insurance system. The government also printed and mailed out brochures across Alberta.

On October 4 the Canadian Taxpayers Federation (CTF) asked Alberta Finance how much taxpayers' money was being spent to promote this new car insurance system. Alberta Finance refused to provide this information, saying the CTF might "use it against the government." The same request was made again on November 9, but the costs of this campaign - estimated to exceed $300,000 - remain hidden from taxpayers.

The government promises this new car insurance system will save Albertans $200 million per year in premiums. But the government collects $191 million per year from Albertans through a 3% hidden sales tax on insurance. Why not just scrap the 3% hidden sales tax, and save taxpayers the cost of a whole new bureaucracy to implement and administer this new system The new system promises a 5% reduction in premiums for most drivers. But that 5% reduction applies only to mandatory insurance coverage for third party liability - not to other kinds of insurance like collision, glass, replacement use, etc. Many Alberta drivers would save more money if the government scrapped its 3% hidden sales tax on insurance premiums.

Some people criticize the new system as unworkable and impractical. Others point to the fact that dozens of companies compete for Albertans' insurance business, and say that the market will correct itself and insurance costs will come down on their own. Some have said that the new system reduces the incentive to improve one's driving, because it lowers premiums for bad and inexperienced drivers. Others say it's unfair to limit damages for pain and suffering to $4,000 for injuries deemed "minor." Some say we should impose a government monopoly on car insurance, as other provinces have done. Others say the new system is wonderful and fair.

There are many opinions about this new system. Our democracy allows for free and vigourous debate on this election issue. But our democracy is distorted when tax dollars are spent to promote one particular viewpoint: the Tory viewpoint that the new system is fair.

The government's promotion campaign states that "your insurance company will automatically amend your policy if you are entitled to a premium reduction under the new system." If this is the case, why spend thousands on radio and newspaper ads claiming that the new system is fair 

The CTF submitted a formal Freedom of Information request about the costs of this promotion campaign on October 5, and was promised it would get the information by November 5. But on November 8, the CTF received a letter from the Alberta Finance Freedom of Information office stating that the advertising costs would not be made available until December 6 - after the provincial election. That smells like political interference.

Taxpayers have every right to know how much of their money was spent to promote the government's new car insurance system. Whether or not we find out before November 22 remains to be seen.

Last Updated on Monday, 18 April 2011 20:13

Helping the handicapped help themselves

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Last week Ralph Klein missed a golden opportunity to discuss ways to improve AISH - Assured Income for the Severely Handicapped.

This past September his government launched a review of the AISH program, and produced a 20-page information booklet with questions for discussion. Instead of making questionable remarks about AISH, Klein should have tried to answer the questions in his government's discussion book. 

For example, should AISH recipients, 13% of whom are employed, be allowed to keep more of their own earnings Right now, a single person on AISH, receiving $850 per month plus medical benefits, can keep only the first $200 of her monthly earnings. The government takes away 75% of her monthly earnings in excess of $200, by deducting those earnings from the $850 AISH payment. Once a person's retained earnings reach $482, 100% of any additional earnings are deducted from the $850, dollar-for-dollar. 

In other words, an AISH recipient who is able to work can never keep more than $482 of his own monthly earnings. Here is how "AISH math" works: earn $500 and keep $275; earn $1,000 and keep $400; earn $1,350 and keep $482; earn $2,000 and keep $482.

Allowing AISH recipients to keep more of their own earnings would provide them with a higher standard of living. Further, work is a fundamental component of human dignity, providing people with higher levels of self-confidence and self-respect. Work provides opportunities to meet and interact with other people, to belong to a team, to develop one's skills, to use one's talents, and to diminish isolation and loneliness.

Allowing AISH recipients to keep more of their own earnings costs taxpayers nothing. In fact, more participation in the work force is likely to reduce mental and physical problems, resulting in lower health care costs. The opportunity to work more could help some people - depending on the nature of their handicap - to transition off of AISH entirely. But the current policy encourages people to stay on AISH by capping monthly earnings at $482. 

Further, in light of the labour shortage which exists in many sectors and industries, Alberta's employers would benefit from having more people available to work.

This maximum income cap of $1,332 ($850 + $482) should be abolished. Further, AISH recipients should be able to keep 50% of their earnings in addition to AISH benefits, not just 25% or 0% as is now the case. As a person's earned income rose from $200 per month to $1,900 per month, the $850 AISH benefit would be gradually phased out.

The federal government must also do its part, by stopping its cruel practice of taxing income away from people who don't even earn enough to pay for their basic needs. Canada's basic personal exemption - the earnings on which no income tax is payable - is a paltry $8,021 per year. The basic personal exemption - as well as the spousal exemption - should be increased to $15,000 each. That would allow every family to keep $2,500 per month to pay for food, clothing, rent or mortgage, transportation, utilities, and other basic needs.

This is one answer to one of the questions about AISH. Perhaps Mr. Klein will see fit to participate in this discussion too. That would be of more help to AISH recipients - and to all Alberta taxpayers - than the comments he made last week.

Last Updated on Monday, 18 April 2011 20:14

Time for Albertans to practice what we preach

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The sad truth is that we Albertans are hypocrites. On the federal scene we have been the powerhouse of democratic reform since the late 1980s. We champion fixed dates for elections; the right of citizens to initiate and vote in referendums on issues of their choice; the right of constituents to recall their elected representative under certain circumstances; free votes in the legislature on every bill except the budget; no new taxes or tax increases without the consent of voters in a referendum. We've often said that MPs should vote the wishes of their constituents - even if that goes against the party and its leader. We also preach smaller government and less federal spending.

But what have we done provincially about democratic reform and smaller government 

Unlike Ontario and B.C., which have legislated fixed dates for their provincial elections, we allow our provincial election to be called at the whim of the Premier, to suit his personal ambitions and partisan advantage. In this regard, Premier Klein is little different from Jean Chretien and Paul Martin.

In the past ten years, four MLAs have brought forward bills to give Albertans the right to initiate and vote in referendums on issues which they consider important. Jon Havelock, Lorne Taylor, Denis Ducharme and then Tony Abbott introduced citizens' initiative legislation in 1994, 1996, 1998 and 2001. Premier Klein did not support any of these bills, nor did he introduce meaningful democratic reforms of his own.

Most Albertans feel that constituents should be able to recall their MP under certain circumstances. Nobody should be completely immune from the possibility of getting fired. Recall is like a bumper on your car: you hope you will never have to use it, but you want it there in place just the same. But there is no recall legislation in Alberta.

There is no meaningful debate in Alberta's legislature, as all major decisions are made behind the closed doors of the premier's office or a party caucus. There have been no free votes in the Legislature about car insurance or health care or electricity deregulation or fiscal policy. Almost everything is decided in secret, then presented to the public as a done deal, and then pushed through the Legislature in record time. For example, you will never know whether your MLA voted for or against placing a cap on personal injury damages.

As for referendums, Albertans haven't voted in a provincial one since 1971, when the majority supported switching to daylight savings time. In Alberta - like in Ottawa - every issue is artfully managed and tightly controlled by politicians, with the assistance of dozens of well-paid communications professionals.

We don't have taxpayer protection legislation in Alberta. Just like federal politicians, our MLAs can raise any tax at any time for any reason, without having to make their case to taxpayers directly.

As for smaller government, you won't find it in Alberta. Since 1996 Alberta's population has grown 17% but spending on government programs grew by 86% - far faster than growth in federal spending.

This provincial election gives Albertans an opportunity to stop being hypocrites. We can ask candidates whether they support taxpayer protection legislation, citizens' initiative legislation, and other democratic reforms, and cast our ballots accordingly. It's time to start practicing provincially what we preach federally.

Last Updated on Monday, 18 April 2011 20:17

Why Alberta needs a better voting system

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The Citizens' Assembly on Electoral Reform is on the verge of recommending a new voting system for B.C., after having studied different models used around the world. B.C. voters will have a chance to accept or reject a new voting system in a referendum next year.

Albertans, too, need a non-partisan citizens' assembly to examine better ways of electing our representatives. Doing so will help to restore the Legislature's true role: holding the premier and cabinet accountable to taxpayers.

In Alberta today, all major decisions are made behind the closed doors of the premier's office or government caucus, without meaningful debate in the Legislature. Whether it's car insurance or health care or the annual budget or electricity deregulation, everything is presented to voters as a done deal, neatly packaged by dozens of well-paid communications professionals. For example, you will never know whether your MLA voted for or against placing a cap on personal injury damages. So much for accountability.

The standing policy committees on finance, health, education and other taxpayer concerns do not have any Opposition MLAs on them. This is a slap in the face to the two fifths of Albertans who did not vote for the PCs in the last election. Even Ottawa - arrogant, bloated, wasteful Ottawa - has Opposition members on its committees.

The Legislature merely confers legal legitimacy on what has already been decided by the premier's office or by a secret vote of the Tory caucus. Bills are rapidly pushed through the Legislature, and the outcome of every vote is a foregone conclusion. Shrill rhetoric and partisan posturing have taken the place of real debate on public policy issues.

Power is concentrated in the premier's office, such that the Legislature no longer provides a parliamentary check on the Government. Ironically, the very reason why Parliament arose in Britain centuries ago was to limit the power of the King - especially his spending powers.

The extreme dominance of the premier and cabinet over the Legislature has blurred the distinction between the Alberta government and the Progressive Conservative Party, which is harmful to democracy.

Alberta's Legislature does not reflect the diverse viewpoints of Albertans. The full range of Albertans' opinions - including greens and libertarians and separatists and conservatives - is not mirrored by our MLAs. The two fifths of Albertans who voted against the government party are completely excluded from meaningful representation - even on standing policy committees whose decisions affect our daily lives.

Our first-past-the-post (FPP) voting system contributes to this sad state of democracy in Alberta, by shutting diverse views out of the Legislature and by concentrating power in the premier's office. A voting system which better reflects the broad spectrum of Albertans' opinions would restore meaningful debate to the Legislature, and would empower MLAs to hold the government accountable to taxpayers.

No voting system is perfect. A proportional representation (PR) system distributes seats to parties on the basis of their share of the popular vote, but takes away electoral districts and the direct link between voters and their local MLA. The single transferable vote, which was used to elect the MLAs for Edmonton and Calgary from the 1920s to the 1950s, is another option.

A citizens' assembly on electoral reform for Alberta would be a first step towards a better voting system, creating more choice and more accountability for taxpayers.

Last Updated on Monday, 18 April 2011 20:18

Practical ways to lower our property tax burden

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Property taxes have more than doubled in the past 40 years, and that's after taking inflation into account.

According to "Straight Talk," a recent study by the Canada West Foundation, Canadians paid a total of $1.5 billion in property taxes in 1961. In 2000, Canadians paid $33.3 billion in property taxes. A large jump should not be surprising, when you consider both Canada's population growth and inflation from 1961 to 2000. But has our property tax burden grown in real terms, after taking Canada's inflation and population growth into account Yes, unfortunately. In 2000, Canadians' property tax burden averaged $1,082 for every man, woman and child. But in 1961 the property tax burden was $482 per person, in year-2000 constant dollars and adjusted for population.

Some municipal politicians whine about insufficient revenues, and suggest cities should get more taxing powers. But first they should explain why it costs more than twice as much to deliver municipal services today than it did in 1961.

Rather than looking for ways to extract even more tax revenues from citizens, our municipal politicians should focus on reducing costs and increasing accountability.

Services like water, sewage and garbage collection should be paid for by user fees rather than out of property taxes. Why should the property taxes collected from one home with only two residents have to subsidize another home, in which six residents use three times as much in services but pay the same amount of property tax User fees create more transparency and accountability than property taxes, which disappear into general revenues. But new user fees should never be imposed unless property taxes are cut by an equal amount.

Cities should spend 100% of their budgets on core services which are not delivered by the provincial and federal governments: policing, firefighting, roads, snow removal, garbage collection, a sewage system, and the like. There is no reason why government should be in the business of funding arts and entertainment. Doing so takes choice away from citizens as to which forms of art and entertainment they wish to pay for themselves with their own hard-earned money. It takes choice away from citizens and hands it over to politicians and bureaucrats.

Another way to find annual savings is for local governments to harness the dynamism of the private sector in delivering services. Opting to privatize local government owned businesses is one quick rout to reducing the size and liabilities of local government. Alternative Service Delivery (ASD) and Public Private Partnerships (3Ps) can be used to replace current government owned services and agencies.

Taxation on a particular property should not be allowed to rise any faster than the rate of inflation, as a maximum. If city council wants a larger increase, it should have to ask taxpayers for permission in a referendum. And taxpayers should have the right to place tax reduction proposals on the ballot for consideration by their fellow citizens.

Last but not least, the federal government should start sharing some - if not all - of its 10-cents-per-litre fuel tax revenues with municipalities to pay for infrastructure. Recent announcements of a multi-billion federal surplus, which is over-taxation, again reveal that Ottawa can easily afford to do this.

Those elected on October 18 can choose to lower property taxes by limiting municipal spending to core local services, paying for more services through user fees rather than property taxes, and more privatization. Where there is a will, there's a way.

Last Updated on Monday, 18 April 2011 20:19

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