Who can we trust with public money?

Recently, a woman on Facebook asked: “Who can we trust with public money?”

She’d just learned that Brian Jean is responsible for a $322,000 deficit in the Wildrose caucus budget. She’d also learned that prior to the disclosure, Wildrose MLAs had sought clarification and information about that budget, only to be rebuffed or stonewalled.

Many people don’t seem to understand the difference between the Wildrose party budget and the Wildrose caucusbudget. The party budget consists of voluntary memberships and donations, and is the responsibility of the partypresident. The caucus budget is funded by taxpayers, and is the responsibility of the legislative caucus leader—in this case, Brian Jean.

Not a dime of caucus money is supposed to be spent on partisan political activities. Its sole purpose is to support the work of the men and women who’ve been elected, paying for their support staff and affiliated work as “legislators.” If a caucus leader did hire workers for party business or to campaign for someone’s leadership bid, it’d be an infraction of the rules.

Yet bumping against the rules is exactly what many have accused Jean of doing. Leading up to the unity vote, Jean increased caucus staffing levels and spending by 30%. Jason Kenney is quoted as referring to the overspending as Jean’s “shadow leadership campaign at taxpayers’ expense.”

Former Wildrose MLA Scott Cyr—an accountant before his election—was so concerned about Jean’s management of caucus funds that he earlier sent a formal inquiry asking for an explanation. The Edmonton Sun reports that even then, Cyr was never allowed open access to caucus budget documents.

Rick Strankman, MLA for Drumheller-Stettler, made repeated requests for a written flowchart explaining exactly who all the new people were, what they did, and to whom they reported. Partial information was presented, yet Strankman never received a comprehensive explanation—neither was the requested written flowchart provided.

Edmonton Sun columnist Lorne Gunter said that given the size of Jean’s caucus budget—paid for by taxpayers—his deficit is 21% of the total. Rachel Notley’s deficit is 19% of Alberta’s budget. “Jean simply looks like any other loose-with-a-buck politician,” Gunter concluded.

Jean and his defenders insist that if Jean had been allowed to manage the budget over a full one-year period, it would have ended in balance. Yet there is no next year or six months from now for the Wildrose caucus. It’s done. Jean deliberately boosted spending, carried a huge deficit to the finish line, and dropped it there.

Now that the two parties have merged, and MLAs Fildebrandt and Starke are independents, the United Conservative Party (UCP) caucus budget for the rest of the year is about $1.9 million. Jean’s deficit must be taken from that, or gotten from constituency budgets held by individual MLAs.

Four candidates are seeking leadership of the UCP: Brian Jean; Jeff Callaway, a former Wildrose president; Doug Schweitzer, past CEO of Manitoba’s PC Party and campaign manager for short-term Premier Jim Prentice; and Jason Kenney, a former leader of the Canadian Taxpayers Federation who held four federal cabinet positions. In Ottawa, Kenney managed huge portfolios, coming in under budget every single year, even posting surpluses up to 25%.

So which of these individuals do you think we should—or should not—trust with public money?

There is no such thing as an unbiased opinion

 Stuart Taylor is a friend of mine. He’s a member of Hinton’s town council and a former Wildrose electoral candidate. He’s been a constant advocate of tax restraint and full transparency in the affairs of government. I would like to share his latest commentary with you. 

Not long ago, Hinton’s administration, backed by a majority vote of the council, refused to disclose the terms of the town’s signed contract with an engineering firm, even to elected council members like Taylor. Taylor cried foul. He immediately filed a petition with the provincial Access to Information Office and fired off letters to newspapers explaining that Hinton’s town council was engaged in unnecessary government secrecy.

Hinton’s council responded in anger. Using taxpayer dollars, they hired a lawyer to determine if they could sue Taylor, possibly getting him kicked off council. Taylor wasn’t intimidated and stuck to his guns. He won a decision with the provincial FOIP office. Then not long afterward, those angry council members who had wanted to end his civic career publicly backtracked and disclosed the document to the duly elected Taylor.

With this type of candid determination and deliberate focus, Taylor recently found himself accused of lacking impartiality and of holding biased opinions. He responded by sending this note to the local newspaper:

“Recently, someone accused me of having biased opinions. It made me scratch my head because as best I know, there is no such thing as an unbiased opinion. When I go online to search for an oxymoron list, ‘unbiased opinion’ is on every list. It’s right alongside other oxymoronic terms like old news, open secret, plastic glasses, larger half, and thunderous silence. None of these things are real.

“Regardless of how fair-minded a person might wish to be, and despite their age, sex, ethnic background, etc., everybody has a personal perspective—an angle from which they see. And every person’s perspective is shaped by experience, culture, philosophic ideas, upbringing, education, legitimate self-interest, and a lot of other things.

“An opinion, by definition, is a conclusion based on a person’s perspective and experience. If any of us quizzes a doctor, newspaper reporter, elected council member, or MLA, the best we’re going to get back is an opinion, which has been shaped by that person’s life experience. Even newspaper reporters and journalists are not exempt from this type of inherent bias.

“If you ask a dairy farmer about the most desirable price of milk, you’ll likely get a different answer than you would from a mother of five living on a restricted income. It isn’t that either one of these people are dishonest or calculatedly malicious. They simply hold different perspectives, each shaped by their life experiences.

“Likewise, if you question an elected individual about a project, who by nature is anxious to launch new and expensive taxpayer-funded programs, you’ll likely get a different response than if you quizzed a different elected official who is oriented toward lower taxes and financial restraint. Different life experiences equal different opinions.

“Even if two people argue over whether the earth is round or flat, the opinion each person expresses has been shaped by life experience, education, personal background, etc. That one person is in error won’t change the fact that it was the conditioning, education, and life experiences that led each person to their conclusion. There is no such thing as an unbiased opinion.”

 

 

Stubbornness can be a good thing

One thing I’ve learned over the years is that sometimes it’s good to be stubborn. Many of us know (or are) parents who’ve loved a child with a stubborn love, even when they rebelled and made it difficult. Parental stubborn love has saved more than a few rebellious young people.

There are other things we should be stubborn about—telling the truth; being faithful to family and friends; facing setbacks, disappointment, and failure. Many people fail repeatedly only to succeed in the end because they’re too stubborn to roll over and die.

One of the highlights of my life was getting to know and work with a group of Alberta farmers who are among the most stubborn men I’ve encountered. I’m not talking about people who are rude or hard to get along with. I‘m referring to a group of wheat and barley farmers—gracious and thoughtful men who just happened to be stubborn about their freedom and the right every person must have to choose what to do with their own property.

From 1943 until 2012, wheat and barley farmers in western Canada never really owned their own crops. If the grain was to be exported or consumed domestically (made into beer, bread, pasta, etc.), it had to be delivered to the Canadian Wheat Board (CWB) monopoly—an arm of the federal government. The monopoly was established in 1943 to provide cheap bread during the war, and to allow Ottawa to sell wheat to Britain at lower-than-market prices.

After the war, the CWB was maintained because Ottawa signed contracts with western European countries to supply cheap wheat as part of the reconstruction process. They were thus able to artificially hold down prices. In the first few years of the CWB’s operations, individual growers lost more than half a billion dollars.

This multi-decade intrusion into the affairs of western wheat and barley growers reached a crisis when 13 Alberta farmers decided to challenge the law. They wanted to force Ottawa to arrest them and throw them in jail, thereby publicly demonstrating that the CWB was a bully.

Driving assorted vehicles, the 13 growers crossed into the U.S. carrying wheat and barley they’d grown on their farms. All were charged. All were sent to jail at the Lethbridge Correctional Centre. I was one of the thirteen. My cellmate was Jim Ness, a New Brigden farmer whose crime was taking a 50-pound sack of barley across the border and donating it to the 4H kids in Sunburst, Montana.

A few years ago, I received a letter saying that the government wanted to acknowledge the wrong it had done to the thirteen of us. We were told that the Prime Minister would be issuing each of us a pardon, clearing us of criminal conviction.

This summer marks the fifth anniversary of the passing of the CWB. Even so, as I reflect on its demise and the effort it took to finally see that freedom of choice occur; I’m reminded of the necessity that we as Albertans have to be appropriately stubborn about other things.

For example, no Albertan should tolerate runaway provincial government spending and massive provincial debts that will affect our province for decades. About these things, we need to consistently be stubborn.

It’s not a zero-sum game 

Imagine that six people sit down to eat a twelve-slice pizza. If two people grab four slices each, four people and four slices remain. If one person grabs two slices and two others take one each, the last man standing gets nothing.

Dividing a pizza between six people is an example of what’s called a zero-sum game. In every zero-sum game, one person’s gain is always equal to another person’s loss. Poker is a zero-sum game. If somebody wins $10, somebody loses $10.

Thankfully, not everything in life is a zero-sum game. If grandma is head-over-heels in love with her newest grandchild, it doesn’t mean she can’t love every other grandchild with equal intensity. Grandma’s love is boundless. It’s not a zero-sum game.

Neither are inventions. If the engineers at Ford invent some new-fangled gadget, it doesn’t mean Chrysler and Toyota have to shorten their list of possible new inventions. Anybody can still invent dozens, hundreds, or even thousands of new and better products. There’s no limit to how many new things people can develop because inventing technology is not a zero-sum game.

Contrary to what some people believe, the economy isn’t a zero-sum game either. When a person or corporation grows wealthy, it doesn’t mean someone else grows poor. Human beings all over the world can use labour, investment capital (saved-up labour), and good management to add value to things, thereby prospering.

In the 19th century, Karl Marx developed a political philosophy based on the assumption that wealth is a zero-sum game. It’s called socialism. Marx believed that business owners and other capitalists grew wealthy by exploiting the labour of ordinary workers.

Marx’s mythological balloon got popped in the 20th century as the world watched “exploited” workers in capitalist countries grow increasingly prosperous, enjoying luxuries and advantages beyond the reach of history’s most famous kings.

So a new fallacy—an updated version of the economic zero-sum game—was hatched. “Yes,” the naysayers said, “workers in capitalist countries are growing wealthy, but only because rich countries are exploiting poor countries.”

In the 1950s and 1960s, victims of this supposed exploitation included South Korea, Singapore, Japan, and Hong Kong. Yet in short order, even the most stubborn proponents of the economic zero-sum game had to admit that ordinary people in these supposedly exploited countries were growing wealthy. Some of these nations had started by manufacturing trinkets or transistor radios, and ended up exporting things like high-tech computers and luxury automobiles.

Many politicians embrace the zero-sum game fallacy. Others don’t. Saskatchewan Premier Brad Wall has clearly stated that creating wealth is a higher priority for his province than accelerating government spending, piling on debt, or passing laws that hinder investment. He knows that the amount of wealth available to his province is not fixed, and he is working diligently to see that wealth expand and grow.

Alberta is headed in the opposite and even confusing direction. Rather than solidly committing itself to policies that facilitate wealth creation, Alberta has escalated corporate taxes, instituted carbon taxes, vilified industrial development, and dedicated itself to higher spending and staggering amounts of public debt.

This is unfortunate, because any government that deliberately puts itself deeply into debt while placing a low priority on industrial development, either doesn’t understand the creation of wealth, or completely ignores the fact that the economy is not a zero-sum game.

The soil from which wealth grows

In South Korea and Nigeria, per-capita GDP appears to have been somewhat similar in the 1950s. Both countries were incredibly poor. Today, according to the World Bank, South Korea has the 11th largest economy in the world (Canada is 10th), while the majority of Nigerians live on less than $2 a day.

Why? What happened? How can one country have created so much wealth and become so rich, while the other remains so poor?

South Korea’s newfound wealth is not attributable to resources. The nation is relatively resource poor. Nigeria, by contrast, is resource rich. In addition to being one of the world’s top oil countries, Nigeria has natural gas, tin, iron ore, coal, and more. Yet the World Bank says that South Korea’s GDP per capita stood at C$34,500 in 2016, while Nigeria’s was about C$2,729.

The widely different financial outcomes in these two countries are the result of economic policies and political decisions. Think of it this way: If you want to grow mushrooms, you don’t focus on the actual mushrooms. Instead, like the Edmonton-area farmer who grows vast quantities of the tasty delights, you create an environment that mushrooms like, and they grow as a natural consequence.

Similarly, a key responsibility for any government, regardless of political stripe, is to cultivate policies that facilitate the creation of wealth. It’s the only way to better provide individuals with an enhanced economic capacity, thereby caring for themselves, their families, and others.

Good economic policy requires a genuine understanding of the wealth creation process and a willingness on the part of government to uphold the rule of law, respect people’s property (including personal income and private finances), and permit individuals, families, and businesses to pursue their own economic self-interest. In simple terms, it means low taxes, security of property, minimal interference from governments (including the wage scale), and trusted laws that apply equally to everyone—no cronyism or favours for the government’s friends.

In a supply-driven recession such as we have, where the oil industry and others are struggling to find a way to invest capital profitably, our province needs a more deliberate focus on creating a better investment climate. This includes a fiscally responsible and disciplined government that balances its budget and restrains its desire for higher taxes and more regulation. Such a climate not only attracts investment, it encourages investors to stay. Governments seen as intrusive—raising taxes, hiking regulations, and needlessly interfering—create disincentives and encourage people to invest elsewhere or move away.

Historically, Alberta governments have done well at attracting investors, which have employed vast numbers of Albertans. Some years, provincial resource royalties have been three to fourteen times what our neighbouring provinces collected in sales tax. These previous Alberta governments knew how to create the right investment climate. The problem was that the ensuing funds could be mismanaged. (One newly-elected premier increased government spending in a single year by more than 20%.)

Today, the current Alberta government is failing on both these counts. It has spoken out against our resource sector and appointed individuals who’ve done the same to key positions, thereby denigrating the investment climate. At the same time, it has knowingly set the province on a more reckless and dangerous fiscal path than any previous administration ever considered, steering us toward a $70-$80 billion debt by 2020.

Shaping the future

Lloyd was a small businessman. As he approached fifty, he decided to reshape his future. He enrolled in university to obtain a law degree, completed the articling process, was admitted to the bar, and then opened a one-man law office in his hometown. He worked as a lawyer for more than twenty years, loving every minute of it.

“The future doesn’t just happen,” Lloyd often said. To young people, he talked about shaping the future. To older people, he talked about reshaping it.

Lloyd was active in politics. He said that whether we like it or not, politics is the vehicle that shapes a country or province. “No province has a future apart from politics,” he’d say, adding that elected officials are like legislative traffic cops who point the way.

Regardless of the political party we choose to shape our future, there are a number of things common-sense Albertans can agree on. The first is debt. Every adult with a credit card, mortgage, or car loan understands debt. We also know the difference between debt from an appreciating asset (like a house or farm), and debt from a credit card bill after a month of too much beer and pizza.

Most Albertans likely agree that wealth never mysteriously shows up on its own. It must be created before it can be consumed or redistributed. Despite what some people believe, even oil in the ground isn’t wealth. Only after investment, transportation, labour, and processing are completed and essentially paid for does it become wealth. Someone must invest their own money (risk capital) and then add good management and effective labour to the process—extracting, transporting, and processing the oil. This is what gives it value.

All wealth is created in much the same way—whether it’s growing a new crop of calves, a field of canola, or manufacturing a useful gizmo people can buy at a local hardware. Someone invests their savings (essentially their saved-up labour) and then adds creative labour that increases the value of the resource or product.

It’s important to note the crucial distinction between economic activity and wealth creation. The two are not the same. Using a credit card to buy something you don’t need is economic activity. Adding value to something and increasing its worth is wealth creation.

When a government borrows, overspends, or uses money in a cavalier fashion, it engages in economic activity, but it’s not creating wealth. Governments that overtax, borrow, and run deficits actually hinder wealth creation.

Think of it this way: Contrary to what the prime minister says, budgets don’t balance themselves. Albertans will owe $70-$80 billion by 2020. The yearly interest (and repayment of the principal) is money that will be funnelled away from Alberta’s own wealth creation process—sent to moneylenders on Bay Street or elsewhere. Every dollar will come from the pockets of Albertans, who will be unable to use that money for personal savings, investing, creating new wealth, or financing schools and hospitals.

As Lloyd said: “The future is shaped. It doesn’t just happen.” To be sure, there will always be immediate problems that the government and legislature must address. Yet at the same time, what Alberta will be ten, fifteen, and twenty years from now will be shaped by government policies that we establish today.

 

 

Alberta’s Legacy

A legacy is something we leave after we’re gone. Some families leave financial legacies. For others, a legacy can be good character passed from grandparents to children to grandchildren.

Farm and ranch families leave legacies that involve turning over the work of earlier generations to a new one, positioning them to begin their journey from a more advantageous starting point. They recognize that younger family members are able to build upon the labour and efforts of those who’ve gone before.

Governments also leave a legacy—a set of lasting circumstances that will influence people’s lives. One of Canada’s more unfortunate political legacies can be seen today in Ontario. The province has shed more than 300,000 manufacturing jobs due to a number of factors, including unrestrained government spending and runaway electrical rates (among the highest in North America).

Ontario is now the world’s largest sub-sovereign (non-national government) borrower. According to Ontario’s Consolidated Debt Portfolio, its outstanding debt is $332 billion. In the past, the province has paid as much as 15.5% of its revenues on interest. Any rise in interest could easily create serious problems for legislators and taxpayers, because every dollar spent on interest is a dollar that can’t be used for education, health, or seniors.

For many years, Alberta’s political legacy was the envy of the nation. It is said that Premier Ernest Manning’s home number was in the public phone book. Anybody could call him. Premier Peter Lougheed left Albertans with the Heritage Trust Fund and a legacy of economic development.

Ralph Klein’s legacy was fiscal restraint and his genuine love for Alberta. Klein became premier at a time when the province was wallowing in red ink. Back then, interest on debt consumed nearly 10% of provincial revenue—equal to 32% of health spending, 36% of education spending, and 75% of social services spending.

As premier, Klein knew that if Alberta didn’t get a handle on its debt, the province’s legacy would be one of financial bondage instead of financial freedom. He stopped the drain. Though some people later vilified him, the truth is that by eliminating the debt, Klein saved health and education. As premier, he even protected these two portfolios from the deep spending cuts applied elsewhere.

Alberta’s present political legacy is now being carved out by the New Democratic government. Unfortunately, it doesn’t look good. Rather than maintaining a legacy of fiscal freedom and responsibility, our current government is creating a long-term financial dilemma—a mountain of debt that will hang like an albatross around the necks of Albertans for decades to come—sharply influencing the way citizens and future governments will be forced to budget and spend.

Our premier says that Alberta taxpayers will owe $70-$80 billion by 2019-20. Her fiscal planning thus far has resulted in multiple credit downgrades, which in the end, drive up interest costs paid by taxpayers.

In the past, Albertans have always risen to the need of the hour, making the decisions necessary to ensure a legacy of financial freedom and opportunity. Now, to maintain and renew this proud legacy will require growing numbers of men and women, elected and otherwise, who will insist upon fiscal responsibility from the capitol.

Only by protecting our financial legacy can we protect our future, and the important role that our province plays in Canada.

 

So God made a farmer

For many rural people the name Paul Harvey brings back memories of a story-teller like no other. His famous tag line of “and now the rest of the story” is still recognizable to millions of people throughout North America. Mr. Harvey, who captivated millions of listeners for nearly six decades with his homespun radio news reports and conservative commentaries, passed away in 2009 at the age of 90 but his words will live on forever. It’s clear that the inspiration for Paul Harvey’s timeless commentary came from being raised in Tulsa, Oklahoma in the heart of the American agriculture.

In what is considered his most inspirational address, he reminded us of the enormous commitment farmers make to our society. In 1978, Paul Harvey recorded his “So God made a farmer”¹ address, which was about the sacrifice, hard work and compassion it takes to be part of agriculture. He opens the commentary by saying “And on the 8th day, God looked down on his planned paradise and said, “I need a caretaker. So God made a farmer.”

As you drive through rural Alberta at this time of year you can’t help but notice how the fields that line the highways come to life with the activity of the caretakers who grow the food we eat. This activity is not only important to our food supply, it is also very important to the economic and social well-being of Alberta.

As Alberta’s largest and most dynamic renewable resource, agriculture has become even more important as demand for our food products increases. Alberta farmers have the expertise to supply a range of safe, high-quality food products into domestic and world markets at competitive prices. Those markets are expanding as the world population increases and as more countries develop the ability to improve their standard of living, which includes safe and reliable food products.

In order to have a competitive agricultural sector it must be built around the actions of individual producers left free to decide what they produce and where and when they want to sell it, free of arbitrary social licensing. Government’s role should be to provide a positive business environment, to remove artificial barriers, and to administer proper regulations in a fair and equitable manner.

The role agriculture plays, even in a modern society, is as much about culture as it is about producing the food on our tables. It’s about the rural values that have been carried on for generations throughout farming communities around the world. But mostly, it’s about an honourable and necessary profession that people commit their lives to; that’s what Paul Harvey saw in the many farmers that were such an essential part of the community he grew up in.

As Alberta farmers tend to the laundry list of duties and responsibilities that we rely on for our health and well being in Alberta, we need to be grateful that God made a farmer. And that’s the rest of the story!

 

Strong and free for 150 years

From coast to coast, in hamlets, town and cities, Canadians celebrated the 150th birthday of our nation. Canada is considered a proud nation that has one of the highest qualities of life anywhere in the world by most accounts. That reputation has as much to do with the people that reside here as it does the opportunities and resources that enrich this country.

Canada Day 2017 in Alberta was highlighted by parades and festivals that included recognitions of our countries original inhabitants, the people of the first nations and our latest inhabitants, immigrants who have recently landed on this country’s shores. The cross section of Canadians came together on a day that we can show off to visitors and the rest of the world why Canada has one of the world’s highest qualities of life.

The Canadian quality of life is appropriately referred to in our countries national anthem “the true north strong and free.” Canada’s strength is in its people, people who came to this country with hopes and dreams of a better life. They come, they work hard and they contribute to the strength and freedom we all have the privilege of benefiting from.

Of all the people who came and sought their dreams, none are more deserving of our thanks than our Canadian Veterans who stand on guard for thee! The military in this country have played a large part in battles that shaped the world we live in today. The sacrifices and contributions made by those Canadians on foreign soil have allowed us to live with the freedom we benefit from and enjoy every day.

Canada’s 150th birthday celebration is special and something we should all be proud of as a nation but it’s as important to remember our past as it is to look towards our future. Parade routes around Alberta were lined with people who served in defense of our country’s freedom that ask for nothing special in return.

Whether it’s Canada’s 150th or 151st anniversary as a free country there’s a debt of gratitude that is owed to those who made it all possible, our veterans and service men and women. While we’re celebrating, while we’re going about our daily lives, while we’re safe in our homes, they’re standing on guard for that freedom we prosper under.

Canada Day is special for this country and it would serve us all well to remember that without our brave men and women that have served in our military there would be no true north strong and free.

Thank you to all of our veterans for keeping this country strong and free for 150 years and counting.