Tuesday, July 31, 2007

Note from a former Tsawwassen Resident--and Longtime NDP Supporter

Before my family moved to Williams Lake in 1973, we lived in Tsawwassen, a beautiful rural community that was rapidly sub-urbanizing (my old home became a parking lot in the Reed Shopping Centre). As someone whose earliest childhood memories were of a cows' field in the back yard, and a chicken farm behind Boundary Bay Elementary School across the road, I viscerally support the view that Dave Barrett's Agricultural Land Reserve was one of the most far-sighted pieces of legislation ever passed in this province.

Now, the NDP , worried that the Liberal government of the day may appear to be more friendly to native interests than they are, have decided to go along with Tsawwassen treaty--even though the treaty is far from being supported by the whole band, and is really inimical to Delta's character as BC's prime agricultural community.

To be fair to the NDP, it is equally the father of both the ALR and the Treaty process--and it is understandable that it should be torn. But the message that should be broadcast in the media is that the Campbell government did not negotiate this particular deal because it cares more about native treaties than the NDP does. It did so because it cares LESS about the ALR than the NDP does. The government's actions around the deal in Burns Bog and in the Roberts Bank Deltaport Expansion--reflecting Campbell's longstanding preoccupation with property development--are at odds with the historic role of the ALR and indeed the historic role of the municipality of Delta.

I would have supported this deal too, but with the very big difference that I would have a large part of those 207 hectares remain in the ALR. (Yes, probably in exchange for more cash and/or other commercial opportunities.) The basic premise of the ALR is that the accumulation of alluvial soil over many thousands (millions?) of years to create one of the world's most fertile river valleys in a province that is 95% non-arable is a precious gift of nature and/or the Creator, and therefore should not simply be left to the vagaries of real-estate speculators and developers. Is that not congenial to the First Nations outlook? How could it not be? Is aboriginal title simply about the right of First Nations governments to let private actors speculate and develop as they wish? A small First Nation community ostensibly attuned to keeping the land in its pristine state could still own it and lease it for agricultural purposes. It could also participate in the management of nature preserves--whether in the ALR, provincial parks, the Forest Land Reserve, ecologically acceptable fish farms, or elsewhere. That would also be a sensible compromise for the party of Dave Barrett and Mike Harcourt--the party that created both the ALR and the Treaty Process in a province where the Socred/ Liberals would not have created either. It would also represent a sensible reconciliation of sovereignties--which is what the treaty process ultimately should be about.

I do not disagree with this statement by Doug McArthur in the Vancouver Sun:
"[T]he first nations were never consulted on the application of the ALR to lands to which they have aboriginal title. To avoid costly court-imposed settlements, compromises are needed where rights clash with public policy as in the case of the ALR, no matter how popular the policy."
Of course Dave Barrett didn't consult natives on the impact of the ALR on aboriginal title--at the time the ink was still drying on the Calder decision and the modern legal concept of aboriginal title was still in its infancy. But it is a pernicious mistake to see anything other than a fundamental underlying harmony and complementarity between Dave Barrett's vision of protecting the natural integrity of the land and Tom Berger's vision of protecting the aboriginal interest in the land. Both are opposed to a pure unbridled market as the solution to how land questions ought to be settled. That is why First Nations should be asked to become partners in the ALR, instead of simply partners in eroding the ALR. Yes, the Tsawwassen band should probably be paid a large amount of money to do so. And yes, there is a political risk that the Liberals could be seen as getting the upper hand politically in their commitment to the Treaty Process if the NDP insists on their own version of "win-win". But that is a communications challenge that could be met, especially in view of the fact that the Liberals didn't give a hoot about treaties until just 4-5 years ago. To repeat: this deal doesn't show that they care more about the Tsawwassen First Nation: it merely shows that they care less about the Agricultural Land Reserve. That is the message that should be made loudly and clearly to the people of British Columbia.

Saturday, July 07, 2007

What Will BC Liberals Mean by "Sustainability," When it Comes to Health Care?

With the Liberal Government's "Conversation on Health Care" wrapping up on July 7, and new legislation on healthcare reform being promised for the spring, recent articles by Dr. Irfan Dhalla on "Canada's health care system and the sustainability paradox" and by Dr. Francois Beland on the "myth of unsustainabilty" in the most recent Canadian Medical Association Journal (CMAJ) make timely reading.

Dr. Dhalla argues that to assess the sustainability of health care on the basis of health spending as a proportion as a share of government expenditures is highly problematic. In the first place, it depends on the assumption that that the percentage of government expenses devoted to health care depends primarily on how much governments spend on health. When measured by percentage of government expenses, health spending also depends on 2 other key factors: how much governments spend on non-health-related items (e.g., education, police services, social assistance) and how much governments collect in taxes. If a government reduces its spending on non-health-related items or cuts taxes, the percentage of expenditures devoted to health care will increase automatically. Dr. Dhalla gives as an example the province of Ontario, where the share of expenditures devoted to health care actually declined between 1988 and 1998 from 38% to 35%---and then shot up again, because of "reductions in spending on non-health-related items, tax cuts and reductions in transfers from the federal government."

British Columbia provides an even clearer example of this "sustainability paradox": remember how the Liberals maintained health care and education spending and then made across the board spending cuts of 24% in all those other ministries to pay for their stupid tax cuts? Well that was fine, except that it had the effect of greatly exaggerating the impression we had that health was displacing all other expenditures--instead of blaming their tax cuts and their consequent cutbacks, Campbell and Taylor started blaming growth in health care spending instead.

Furthermore, an assumption underlying the view that health care spending must be unsustainable is the view that tax rates must be fixed or gradually declining. In fact, taxes have risen from an average rate of 30% of GDP in OECD countries to 36% since 1985, while Canada's rate has remained relatively constant at about 33%, suggesting that some increase in tax rates would be consistent with international standards.

In terms of sustainability, spending on health care itself is unimportant; what matters is how much we have left to spend on our other needs and desires: "In other words, growth in health care spending is sustainable provided it does not reduce the average Canadian's ability to purchase non-health-related goods and services." On this view--assuming that real spending per capita on health care grows at 2.3% per year, while economic growth continues at 1.7%--Dr. Dhalla demonstrates that "the amount of money left for non-health-related spending would continue to increase for well over a century."

Dr. Beland describes the myth of unsustainability as a simple "arithmetic failure"--"medicare assessment requires medicare expenditure data in the numerator, and data on government total income from all sources in the denominator." The most alarming claims about unsustainability merely argue that the problem is in the numerator (i.e., in government health care expenditures).

All of this is very reassuring to the members of the BC Health Coalition and other public interest groups who have been vigorously arguing in favour of maintaining public health care during the past year. But does it really address what both Gordon Campbell and Carole Taylor have been hinting at all along, between the lines? Their consistent message has been that a system is "public" as long as there is a single public payer. By this definition, a health care voucher scheme would qualify as "public". (Remember BC Rail is still "public", because we own the rail bed!)

And that leaves a lot of room for privatization of health care delivery. The kind of reform of delivery options that Campbell and Taylor have in mind could entail the transformation of regional health authorities into primarily buyers of services. That is why my next blog entry about health care will concern the very important subjects of the "purchaser-provider split" and "contract management." They may be coming to a regional health authority in your neighbourhood--and sooner than you think.

Thursday, July 05, 2007

What Lessons Will BC Learn from Alberta's New P3 Schools?

"While*public-private*partnerships are often said to promise "thebest of both worlds," for taxpayers they have come to mean public risk for private profit." ---Andrew Coyne

When Alberta Education Minister Ron Liepert announced on June 14, 2007 that Calgary and Edmonton would be getting 18 new schools between now and 2010 through a public-private partnership (P3) model that will consolidate design, construction and contractors to save on money, he reportedly enthused that it was "like taking a trip to Costco and buying groceries in bulk" (Edmonton Metro News, June 15).

To be fair, there are undoubtedly cost efficiencies to be had from hiring a few architectural firms to come up with designs that can be replicated in a cookie-cutter manner, and the sheer scale of the project is bound to generate some competitive bidding from contractors. The government's model is based upon school projects designed in Australia and Scotland over the past decade , and not the highly criticized P3 schools in Nova Scotia. And not a few parents and school board officials are delighted to hear that badly-needed schools are now going to be built for Alberta's burgeoning cities and (comparatively) youthful population.

This will be a system in which public school boards will own the buildings but will contract with a private company or consortium to build and maintain the schools for an extended period of time (usually about 25 years). This would be congenial to BC Liberals, who have taken a broadly similar approach to the ("non") privatization of BC Rail and BC Hydro. How high will maintenance fees be, once anticipated inflation, supply costs, and profit margins have been factored in? And if the fees are too low, what will the implications be for the quality of the maintenance? On the financial side, higher borrowing costs for private firms will have to passed on in one way or another. One suspects that large savings may be realized in the public accounts up front and in the short term from "buying in bulk", but the potential always exists for those benefits to be outweighed in the longer term. The devil is indeed in the details.

This fits into the larger discussion about P3s. At the CPSA meetings in Saskatoon this past May, I attended a presentation by Dr. Christian Rouillard, the Canada Research Chair in Governance and Public Management at the University of Ottawa, which pointed out that P3s in Canada have all too often resulted in government playing a "risk underwriting" role, allowing private companies to plan, finance , build and/or operate public facilities, often with less transparency and democratic accountability than normally exists in the public sector. "It's public money that’s building it, and yet we can't analyze the contracts. It's a bit outrageous. If we can't get the details, how can we know if the public is getting a good deal?" This kind of research would appear to confirm social theorist Jane Jacobs's assessment that P3s are "monstrous hybrids".

On the other hand, P3s in British Columbia have been getting a good press lately and for a pretty good reason: at least 21 of 23 P3 projects sponsored by Partnerships BC are "on time and on budget", as finance minister Carole Taylor has said. And one reason construction on these projects is going well ( and conspicuously better that the Vancouver Convention Centre, for example) may be that contractors have a stake in them after they are finished. But such an apparent vindication of competition and the profit motive in the short run may simply be a reflection of that fact that P3s are designed to show that sort of success in the short run. The monopoly characteristics and attenuated public accountability don't typically manifest themselves as problems until years down the road. Premier Campbell's announcement in 2006 that all new projects worth over $20 million will be P3s "unless there is compelling reason to do otherwise" may appear to be a reasonable presumption, but actually carries considerable risk of policy failure.

A few concluding observations:

  • It is more than a little ironic that private sector involvement in K-12 education is almost always touted as a much-needed source of diversity in public schools--but here the P3 "cookie cutter" model serves as a potentially mind-numbing source of uniformity. Whatever one school lacks--in terms of materials, gym or library facilities, and so on--they will all lack. And the design and operation of these schools will not reflect the unique characteristics of the local communities in which they are built.

  • It is noteworthy that the BC Liberals stand formally and philosophically opposed to business subsidies, yet uncritically embrace P3s as a policy instrument. Is that a wholly consistent position? The P3 movement has been described as a "capital security" program, creating de facto maintenance monopolies for up to 30 years in exchange for lower short-term costs for government. Is that just business subsidization by another name?

  • A formal system of review and policy evaluation needs to be put in place that will fully take into account the hidden and long-term costs of P3s. Since I take the view that P3s are not essentially good or bad, but are presumptively prone to certain failings, I believe that mechanisms of review which are attentive to those concerns are crucial.

  • Such a sober and balanced review could lead to recommendations to ensure that true competition continues beyond the initial awarding of contracts--and possibly a movement towards a more standard choice between either public provision and/or "contracting out".

  • More hopefully, it could also lead to a redefinition of what genuine public-private partnership ought to mean: continuing openness, competition and public accountability for all facilities and services paid for substantially by the taxpayer.