I have been thinking and worrying about the danger of a higher deficit in BC, Sean Holman has something on this today.
I am not happy that the government is headed towards what looks like a larger deficit. As revenues fall and costs go up, it is inevitable that there would be increased deficit problems. I am glad that BC did not massively buy into the crazy 'fiscal stimulus' thing that is going around the world at the moment.
Sudden large increases in government spending on projects normally leads to wasteful spending due to the lack of good business cases for the work being done. Ultimately we have to pay not only the inflated projects costs of badly thought out and managed projects, we have to pay a lot of interest on this money as well.
Here in BC the government has retained some sense of economic sanity. This will serve us well over the next decade as we will be ahead of the various jurisdictions that are running up debts.
I hope the government will take some very serious efforts to reduce the costs of the government over the next year two. For a political perspective now is a good time to do another core services review and look to reduce the general scope and size of the provincial government. The time till the next election is still far enough away that bold actions can be taken.
The government also needs to look at possible sources for one time revenue sources to make up the public sector borrowing requirement for the next couple of years. There is one big asset the province has that could sold - BC Hydro. The odds of any government of having the courage to make that decision is basically zero.
We have lived with private power in the south eastern part of BC since the start of electrical power and it has not been a problem for people. Why not do it all over BC?
BC Hydro has created by the Socreds so they could use it as a tool for large scale industrial development in BC. The government has used BC Hydro to subsidize large scale industrial operations through artificially cheap electrical power. The government also used ownership of BC Hydro to expand the grid.
So why do we retain ownership of BC Hydro now? We are not expanding the grid unless there is a profitable business case for it. We still provide cheap power to industry, but really should be we be doing this at all?
The sale of BC Hydro would deliver BC the money needed to avoid more debt at the moment. It would also increase government revenues through more tax dollars flowing to government from the private company. It would also mean that market rates for power would prevail in BC. Higher power rates would reduce demand for power.
But no one would have the guts to do this.
I also assume that significant reductions in government will also not occur.
So we will be looking at increased provincial debt and long term additional debt charges. Each billion now will eventually cost us about $1.3 billion extra over the next 25 years in interest costs. $7 billion over three years will cost us about $365 000 000 a year for each of the next 25 years in debt charges.
$365 000 000 is more than BC spends on public transit each year. This is bigger than the annual budget of UVic. The debt charges will cost about the same as the amount of money the government gets from BC Hydro each year. We are defacto deciding to use all the income from BC Hydro to finance the extra debt costs for the next generation.
The debt charges will cost BC about 3500 long term fulltime jobs because the money will be going to the banks and not to people actually doing something relevant for the province over the next 25 years. The annual interest costs of $350 000 000 is lost money to the BC economy.
We are making a choice to avoid a few years of some belt tightening now in return for reducing what we we will be able to do in the future. We are telling we want services now and that our kids should have fewer government services. This is just wrong.
Thursday, August 20, 2009
Ekos Tracking Poll
Ekos have been doing a weekly federal tracking poll all summer with 1800 to 3000 responses per week. Erik of threehundredeight.com does a good job at looking at what all the polls mean for a potential election result. I am only going to offer a few observations I have made from looking at the run of polls for the summer.
1) The results are very consistent over the summer, the only changes are a mild rise for the NDP and the Conservatives and some loss for the Liberals.
2) Among voters under the age of 25 there is really no party leading with the four national parties all within about 10%. The big news out of this is how badly both the Liberals and the Conservatives are doing with the youth vote. The up side for them is that the youth will not be voting in the next election.
3) Among seniors it is a two party race. All summer the Conservatives and Liberals have held about 4/5s of the seniors vote. This is the demographic most likely to vote and these results are not good for the NDP, Greens or Bloc.
4) There is a shortage of competitive areas in the country for an election. The polls show over and over again that in the majority of the ridings in the country, there is not any question of the incumbent party losing the seat.
5) Ontario is a two party race, the NDP is only marginally ahead of the Greens. This is not good at all for the NDP and places half their seats in the province in jeopardy. Meanwhile even though the Greens are up in support in Ontario but nearly enough in any sort of concentration to allow them to win any seats. It seems their best bet is in south western Ontario, but they remain a long shot there to even come second.
At this time the polling does not indicate that there is any benefit to anyone to take the country to the polls. The consistency of the results also indicates there has not been any movement that might give anyone any hope of a good election result. Until there is some dramatic political event to change the current status quo, there is no reason to expect an election anytime soon.
The party that seems to be most ready for any election are the Conservatives as they have more money in the bank than the rest and they have 159 candidates nominated for the next election. In total 260 candidates have been nominated for the 41st Federal Election. Admittedly this is because the Conservatives have re-nominated all the sitting MPs that plan on running in the next election.
1) The results are very consistent over the summer, the only changes are a mild rise for the NDP and the Conservatives and some loss for the Liberals.
2) Among voters under the age of 25 there is really no party leading with the four national parties all within about 10%. The big news out of this is how badly both the Liberals and the Conservatives are doing with the youth vote. The up side for them is that the youth will not be voting in the next election.
3) Among seniors it is a two party race. All summer the Conservatives and Liberals have held about 4/5s of the seniors vote. This is the demographic most likely to vote and these results are not good for the NDP, Greens or Bloc.
4) There is a shortage of competitive areas in the country for an election. The polls show over and over again that in the majority of the ridings in the country, there is not any question of the incumbent party losing the seat.
5) Ontario is a two party race, the NDP is only marginally ahead of the Greens. This is not good at all for the NDP and places half their seats in the province in jeopardy. Meanwhile even though the Greens are up in support in Ontario but nearly enough in any sort of concentration to allow them to win any seats. It seems their best bet is in south western Ontario, but they remain a long shot there to even come second.
At this time the polling does not indicate that there is any benefit to anyone to take the country to the polls. The consistency of the results also indicates there has not been any movement that might give anyone any hope of a good election result. Until there is some dramatic political event to change the current status quo, there is no reason to expect an election anytime soon.
The party that seems to be most ready for any election are the Conservatives as they have more money in the bank than the rest and they have 159 candidates nominated for the next election. In total 260 candidates have been nominated for the 41st Federal Election. Admittedly this is because the Conservatives have re-nominated all the sitting MPs that plan on running in the next election.
Wednesday, August 19, 2009
Canada Line is open
The Canada Line has opened several months early and on budget, another success in BC for a P3. The only issue that could be a problem is if the ridership numbers are not as high as forecast, if it is not there some liability on Translink's end to make up the shortfall, but having seen the numbers suggested, I do not think that this will be an issue.
As of yesterday, Metro Vancouver has the longest light rail transit system in Canada and the longest automated light rail system in the world.
In the next five years Edmonton and Calgary will both expand their networks, but so will Vancouver with the opening of the Evergreen line in 2014. Toronto has many plans, but few of them actually underway. Should Toronto go ahead with some of their plans, their network will be larger than Vancouver's, but Toronto has had many plans over the last thirty years and they have acted on almost none of them. Montreal is still in the pie in the sky stage.
No city in Canada has built as good an LRT system as Vancouver or as quickly. At the start of January 1986 Vancouver had nothing while Edmonton, Montreal and Toronto had more less what they have today. In the last 23 years 2/3s of the LRT built in Canada has been in Metro Vancouver. Over the next ten years we will see about another 30 kilometres of line built, once again most of the building in Canada unless the TTC's plans actually happen.
What has been nice about rapid transit in Metro Vancouver is that it has been politically non-partisan on the provincial level. The Expo line was built under the Socreds, the Millenium line under the NDP and the Canada line under the Liberals.
As of yesterday, Metro Vancouver has the longest light rail transit system in Canada and the longest automated light rail system in the world.
- Vancouver 68.7 km
- Toronto 68.3 km
- Montreal 65.3 km
- Calgary 48.8 km
- Edmonton 15.2 km
- Ottawa 8.0 km
In the next five years Edmonton and Calgary will both expand their networks, but so will Vancouver with the opening of the Evergreen line in 2014. Toronto has many plans, but few of them actually underway. Should Toronto go ahead with some of their plans, their network will be larger than Vancouver's, but Toronto has had many plans over the last thirty years and they have acted on almost none of them. Montreal is still in the pie in the sky stage.
No city in Canada has built as good an LRT system as Vancouver or as quickly. At the start of January 1986 Vancouver had nothing while Edmonton, Montreal and Toronto had more less what they have today. In the last 23 years 2/3s of the LRT built in Canada has been in Metro Vancouver. Over the next ten years we will see about another 30 kilometres of line built, once again most of the building in Canada unless the TTC's plans actually happen.
What has been nice about rapid transit in Metro Vancouver is that it has been politically non-partisan on the provincial level. The Expo line was built under the Socreds, the Millenium line under the NDP and the Canada line under the Liberals.
Tourism BC
I am glad the BC government has decided to ax Tourism BC. I have never liked the fact that there was a government ministry dealing with tourism and then a government sponsored industry group as well and then a federal tourism agency as well. The tourism industry needs to get off of the government tit and figure out how to pay for its own promotion most of the time.
I do not like how much subsidy the tourism business is always looking for from government. The industry should be able to stand on its own as most other industries are expected to do.
It is not the government's job to sell any businesses products.
I do not like how much subsidy the tourism business is always looking for from government. The industry should be able to stand on its own as most other industries are expected to do.
It is not the government's job to sell any businesses products.
Subscribe to:
Posts (Atom)