Wednesday, December 12, 2012

Pay packets: federal public servants leaving rest of us behind

The Parliamentary Budget Officer, Kevin Page, has published a report showing that our 375,000 federal public servants have left the rest of us behind over the past decade or so when it comes to total compensation.

Most of us, I believe, will not be surprised to hear this. For, while many have struggled financially during the past decade, we have been aware that public servants, at all levels, have been receiving regular upgrades to their wages and enjoy some of the most generous sick-leave and pension benefits in North America. For the most part, sick-leave and pension benefits in the private sector pale by comparison.

Page’s report, though, puts some figures against what our guts were telling us: namely that the average federal public servant costs us $114,100 a year, a figure that Page expects to balloon to a whopping $129,800 in the next three years.

From 1999 and 2012, salary and benefit costs per public servant rose by a stunning 5.1 per cent annually—this is more than twice the 2.1 per cent average annual inflation rate over the same period. This is a growth rate well above the 3.3 per cent increase enjoyed by workers in the private sector, and even exceeds the 3.8 per cent gain for employees of provincial and territorial governments.

As an aside: last evening I watched Evan Solomon, host of CBC’s Power & Politics TV show try to deal with this report. Whether he deliberately wanted to play down the Budget Officer’s comparison between the public sector’s compensation increase and that in the business sector, I could not tell. But Solomon went off on a weird sort of tangent, suggesting the public servant’s compensation figure could somehow be compared to what it costs to keep a convict in federal penitentiary for a year.

Solomon lost me entirely. I would have liked to see him compare the figure to the pay a private in our army receives to put his life on the line for Canada in far off places, though.

But I digress.

Kevin Page’s report also helps explain why public servants’ compensation continues to grow even during periods of restraint, such as we had in the mid-1990s and in which we are now supposed to be. Apparently, many federal government employees receive pay adjustments over and above their annual pay increases by moving up to a higher pay scale from year to year.

I suppose this is similar to the “grid” system Ontario’s teachers enjoy and which has allowed them to receive salary increases well above those stated in most media reports—and well above the rate of inflation. A sort of built-in annual windfall most in the private sector can only dream about.

A really depressing take-away from the report is a projection that the average annual compensation will rise from the reported $114,100 to $129,800 by 2014-15. This despite the Tory government’s promises of restraint.

Yup! Every year we borrow billions of dollars just so fat-cat public sector unions and their members can be kept in the lifestyle to which they have become accustomed—and, apparently, to heck with the rest of us.

Tuesday, December 11, 2012

UN set stage for war in Palestine Territories

The united Nations, with its ill-conceived Nov. 29 decision to grant the Palestinians the status of non-member observer state, has probably set the stage for all-out war between the Hamas/Fatah-led Palestinians and Israel.

It certainly seems—based on celebrations in Gaza and the West Bank—that the Palestinian leadership believes it has earned the UN’s approval as an independent entity with the right to access the International Criminal Court.

Moreover, Palestinian expectations seem high enough to encourage the political leader of Hamas, Khaled Meshaal, to visit Gaza for the first time ever to preach his hatred and contempt for Israel, telling university students on Sunday:

God willing, we shall liberate Palestine together, inch by inch. We started this path and we are going to continue until we achieve what God has promised.”

At an earlier rally, the Hamas leader promised to liberate the entire land of Palestine, and said, “We will never recognize the legitimacy of the Israeli occupation.”

Strong words indeed from a man who, less than a month ago, told CNN’s Christiane Amanpour in Cairo  he was “ready to resort to a peaceful way, truly peaceful way, without blood and weapon.” He also said Hamas had accepted a two-state solution based on the borders of 1967.

Flushed with self-declared victory in their recent conflict with Israel, Khaled Meshaal’s Gaza-based terrorist organization seems to be positioning itself to capitalize on its popularity with the Palestinian public and become the senior partner in a renewed working relationship with Mahmoud Abbas’s Fatah political party that governs the West Bank.

Should reconciliation occur between Hamas and Fatah, it would end the uneasy alliance between Abbas and Israel, which exists only because both sides are united in their opposition to Hamas. And, should Hamas gain the upper hand in any new partnership with Fatah and become the central player in Palestinian politics, forget about a peace agreement with Israel any time soon.

I just don’t see a current Israeli leader negotiating with Hamas, an organization whose leaders time and again kill Israeli civilians while repeatedly stating their refusal to recognize the Jewish state.

With no prospect for a peaceful solution and with Hamas calling the shots for the Palestinians, the situation on the ground will likely deteriorate, leading inevitably to a Third Intifada, this one almost certainly more terrible than the last.

As one of Israel’s staunchest allies, Canada’s resolve to stand by the Jewish state will be severely tested should my prediction prove accurate. Hopefully, PM Stephen Harper will be up to the test.

Monday, December 10, 2012

United Nations vote to recognize Palestinian state premature

Back on Nov. 29, the General Assembly of the United Nations voted by a huge majority to recognize Palestine within the 1967 borders as a non-member state with observer status. That vote occurred exactly 65 years after the UN passed the Partition Plan for Palestine, which provided the legal basis for the formation of the State of Israel.

Nine countries voted against the resolution: Canada, Czech Republic, Israel, U.S., Panama, The Marshall Islands, Palau, Nauru, and Micronesia, while 138 countries voted for it and 41 abstained.

That’s a sad reflection of how few friends Israel has in the international community. And what’s with 41 abstentions? Does this mean that 41 countries don’t care which way the vote turned out, or didn’t have the guts to go on record with an opinion? Probably the latter.

I’m pleased to see that PM Stephen Harper’s government stood by Israel and cast Canada’s vote against what can best be described as a premature resolution. I say premature because Palestinians have not shown they are capable of governing anything.

Once ever few (very few in fact) years Palestinians hold an election, and between times they live in a state of turmoil and undemocratic rule, depending on the international community for handouts. Gaza, a part of the proposed state of Palestine, even has a terrorist organization as its government!

Have Palestinians ever ruled themselves? The geographic regions typically called Palestine have been for centuries under the rule of other countries including the Ottoman Empire and, following the First World War, the British who ruled under Mandate from the League of Nations.

The U.K. terminated their Mandate in 1947, and the UN adopted a resolution to partition Palestine between an Arab state, a Jewish state and the Special International Regime for the City of Jerusalem. The Jews of the Mandate area accepted the proposal, but the Arabs rejected it. A civil war followed and the establishment of the State of Israel was declared in 1948.

The part of Palestine designated for the Arabs was taken over by Egypt (Gaza), Jordon (West Bank and East Jerusalem) and the remainder (26% of the Mandate territory) by the new Jewish state. Israel did no seek or start this war—the Arab states surrounding it did!

After enduring the stress of living surrounded by belligerent neighbouring Arab states, and being constantly under threat of invasion and annihilation, Israel initiated the 1967 Six-Day War and captured neighbouring territories, some of which are part of what the Palestinians now claim as their state—the so-called Israeli-occupied territories.

Since the Arab Palestinians refused to accept their portion of the partitioned British Mandate and stood by while Egypt and Jordon gobbled it up, there never was a Palestine state.

Following the end of the 1967 war, the Israelis offered to return the Golan Heights to Syria, the Sinai to Egypt and most of the West Bank to Jordan in exchange for peace. Unfortunately, Arab participants refused the generous offer, declaring “no peace with Israel, no recognition of Israel and no negotiations with Israel.”

As far as I’m concerned, Arab refusal to take back the West Bank makes that territory Israel’s to do with as it pleases. Because Israel—unlike its Arab neighbours—is a democracy, it has been trying to negotiate a way to provide the Palestinians with a state of their own.

For the most part, those Palestinians have repaid Israel with years of savage attacks on its civilian population and have been doing everything they can to isolate Israel from the international community. Hatred of Jews seems to be a defining characteristic of most of the Arab world and especially of most of the Palestinians.

Palestinians gave up their lands to Jordon and Egypt and could not win them back through military means, including, for a time, international terrorism. Jordon and Egypt relinquished those lands to Israel, not to some Palestinian state which did not exist. Only peaceful negotiation with Israel will see those lands returned to an Arab state.

Sunday, December 9, 2012

Privatize liquor sales and gambling a Tory bait and switch?

Tim Hudak, the leader of the Ontario Progressive Conservatives, suggests we take a look at privatizing liquor sales and gambling in Ontario. So, is this just another political bait and switch scheme or does he really intend to follow through and incorporate this into a future Tory election platform?

Readers, if you’re waiting for privatization, don’t hold your breath.

The last time a PC government sold off a key government asset was the sale of Highway 407, which was sold in 1999 in what I’d categorize as more of a give-away—I bet my 15-year-old granddaughter could have cut a better deal.

Furthermore, we’ve had other politicians promise privatisation of our “sin” industries, but never carried through with the measure. It seems to me, also, that Tim Hudak has been opposed to privatizing the LCBO in the past. And remember that the Dalton McGuinty Liberals ran against privatization in the 2003 and 2007 elections, yet reversed themselves and were ready to do just that in 2010, before changing their minds once more.

The way I see it, offering to privatize liquor sales and gambling is one of those bright shiny objects politicians hold up to catch the attention of the media and grab some space in the day’s headlines. It’s one of those cynical games politicians never seem to tire of playing.

Mind you, I believe it would be a good thing to privatize liquor sales and gambling. For one thing, governments should never be engaged in commerce, especially in mature industries where there is every expectation that private operators could do as good or better job. Moreover, the so-called “sin industries” are the very last ones in which I want my government involved, let alone monopolizing.

The LCBO and our “gaming” corporation exist primarily as feather beds for public-sector and other union workers and little more. Just another way to help keep the labour unions on-side for the next election campaign.

Income received from these government agencies could just as well be approximated from taxes on privately operated, government regulated enterprises.

The fact that the Ontario Lottery and Gaming Corp. (OLG) is government owned did not stop corrupt practices, nor should we have expected that it would.

Both the OLG and the current Grit government understand the private sector can do a better job. Recently Finance Minister Dwight Duncan was quoted as saying that the Liberal government is “already privatizing the OLG”. And OLG spokesman Tony Bitonti said recently:

OLG is expanding the engagement of the private sector to build and run day-to-day operations of existing and new sites, as well as develop new technology and games for lottery terminals.”

I say get out of gambling and booze altogether. And not because of ideology or money but because of principle—it is, after all, the right thing to do. Remember, monopolies are the enemies of private enterprise and consumers, no matter who owns them.

By the way, Alberta successfully privatized liquor retailing, warehousing and distribution in 1993. Here’s a current quote from an Alberta government Web site:

…private liquor retailing has been remarkably well received by consumers and everyone involved in the liquor industry and continues to meet the original objectives set out by the government.”

Those who claim the LCBO being in government hands, of itself, helps prevent alcohol abuse or use by minors are misguided or are being disingenuous. Spend a Friday or Saturday evening in any urban centre in Ontario without wilful blindness, and that myth will soon be dispelled.

Privatize, regulate and tax, that’s the ticket.


Saturday, December 8, 2012

KPMG report on F-35 costs expected next week

An awful lot of fuss is being made over the soon to be released KPMG report commissioned by the Harper government on the projected life cycle cost of the F-35 program. Apparently, the National Post has seen sections of the report and has a piece by John Ivison in today’s paper giving some of the details.

One of the main takeaways for me is that, according to Ivison:

The report validates much of the costing done by National Defence. The acquisition costs are identical at $8.9-billion. DND calculates sustainment costs will be $7.3-billion, while KPMG says $15.2-billion. On operating costs, DND estimates $9-billion, whereas the accountancy firm calculates $19.9-billion.”

The biggest difference in cost estimates is in the length of time over which the costs are estimated: Department of National Defence used a 20-year period; KPMG used a 42-year lifespan. So—surprise!—the new study shows an enormously higher total cost—nearly $46-billion, in fact.

This is indeed a staggering amount for taxpayers to fund, but, in isolation, it is almost meaningless. In the absence of an alternative to which it can be compared, how can anyone make a valid value judgement? Is there really an option to not buy a replacement for our aging fleet of CF18s? I don’t believe there is.

Not that the Harper government should not be in for a full share of criticism over this file. From the beginning, this procurement issue has been handled in an unnecessarily ham-handed manner. And I’d say Defence Minister Peter MacKay could, justifiably, be shuffled out of his important portfolio over bungling his attempt to manage the process.

It seems pretty clear to me that our government has already made a “moral” commitment to the Americans that we’ll purchase F-35s, making it all the harder to pull out of the program. Moreover, DND, according to Ivison, “remains a staunch advocate of the F-35.” Consequently, the government will need all its persuasive powers to convince taxpayers that this hugely expense fighter is the “right” one for us.

The Conservative government is apparently asking other manufacturers for estimates and information on availability and capabilities of other planes. I’m happy to hear this. With this information in hand, we’ll all be able to better judge whether to side with the government or with the opposition on this issue.

Our politicians too often treat these things as political footballs and Canada loses out as a result. Ivison reminds us of the financial and military disaster former Liberal Leader Jean Chrétien made of the Mulroney government’s plan to replace the Canadian Forces’ aging fleet of Sea King maritime helicopters.

Jean Chrétien cancelled the AgustaWestland EH101 helicopters purchase made by Brian Mulroney’s Conservatives, paid a $500-million termination fee and rigged the subsequent contest to prevent AgustaWestland from winning.”

That was back in the early 1990s, but the Sea King fiasco was still playing out in late November of this year when DND reported that one of those old Sea King helicopters was forced to make an emergency landing in a vacant lot in Halifax after experiencing mechanical problems.

So let’s hope the Harper government can get back on track with the CF18s’ replacement and make a decision that’s right for Canada and to heck with the politics.