Reduce, Reuse, Recycle?

As we have heard often lately from the Graham Liberals New Brunswick is in an economic crunch. We are experiencing a monster of a deficit this year ($750 million) and the future is not looking much brighter.

That's why, when TJ Burke announced he was stepping down from Cabinet last week, the Premier's reaction seemed so out of place.

With 21 Ministers the Graham Liberals already have one of the largest Cabinets in New Brunswick's history, and certainly a lot bigger than similar sized provinces. Saskatchewan has 18, Manitoba has 18, Newfoundland has 18, and the new NDP (!) government in Nova Scotia only has 12.

We at the NB Conservative think that Burke's resignation as Environment Minister would have been an excellent opportunity to reduce the size of cabinet down to a more modest level.

Think of it this way - every Minister gets an extra $40,000 in salary, gets a special housing allowance in Fredericton, gets a vehicle allowance of about $500 per month, has to have an Executive Assistant and a Secretary hired to help them out, and so on and so forth. Maybe it all only adds up to an extra quarter of a million dollars a year - but shouldn't the Premier be leading the way when money is so tight?

License Plates

The Shawn Graham Liberals have recently rediscovered the economy is an issue. Several news releases and public statements over the past month have referred to their so-called 5-point plan to rescue New Brunswick.

So just out of curiosity - which one of the 5 points is the one that says now would be a good time to change the slogan on our license plates, thereby costing every person in New Brunswick an extra $25 bucks when they renew their vehicle registration?

And by the way - aren't these license plates made in Nova Scotia?

UPDATE: Yes, all our license plates are made by Waldale Manufacturing in Amherst Nova Scotia. Maybe helping their economy is the sixth point in the plan?

Is NB Power for Sale?

Selling NB Power to Quebec

If you blinked you might have missed. Right around the time kids were getting out of school and many New Brunswickers were thinking about summer vacation, the Liberals announced they are in talks with Hydro-Quebec to take over NB Power.

On the surface this does appear to be a good match. Both companies are owned by their respective provincial governments. NB Power is 100% owned by the people of New Brunswick and Hydro-Quebec is 100% owned by the citizens of that province. Also, both corporations are broken into logical components with divisions for generation, transmission, distribution and shared corporate services. Both NB Power and Hydro-Quebec operate a nuclear power plant.

But while they appear to be mirror images of each other in terms of organization, there is one major difference that puts NB Power is a very weak position at the Liberal bargaining table. And it's not just a size issue because Hydro-Quebec is about 10 times bigger than NB Power.

The real weakness of NB Power is that it is so unprofitable. And because it makes no money it has accumulated a monstrous amount of debt. Just to compare, Hydro-Quebec last year had accumulated over $22 billion in shareholders equity and they have paid down a lot of their debts. NB Power on the other hand has only accumulated $351 million in shareholders equity versus 4.7 billion in debts. In fact, NB Power probably owes a lot more than it is worth. Ouch.

This is the equivalent situation to going to the car dealership because you know that it's time to get a vehicle that is more fuel efficient, better technology, safer, etc. However, all you have to trade in is an old clunker with more than 200,000 km on it, rust spots everywhere, leaking oil and bald tires. Guess how much the dealer is going to give you for a trade-in credit. You will be lucky if they offer to take it off your hands for you for free.

Now to give them credit, the Shawn Graham Liberals are slick operators and smooth talkers, so maybe they will be able to get something out of those negotiations with the Province of Quebec. But that certainly has not been proven by history, if Quebec's negotiations with Newfoundland over Churchill Falls are any guide.

The Optics of Fibre

Just like your phone bill, the Devil is in the details.

Everyone knows when you get your phone or cable bill, it's worth it to double check all the details, because there are sometimes hidden costs and mistakes.

Recently Bell Aliant announced that they were going to roll out high-speed fibre optic connections to every house and business in Fredericton and Saint John. Good news, right? Yes, if you live in one of those areas it is good news, because competition (in this case versus Rogers) is always a good thing.

However, some of the fine print is a little troubling. Even more troubling are the details that we don't know.

Bell Aliant is a large national company that operates in several provinces including Ontario, Quebec, and the Atlantic Region. It is not to be confused with its predecessor Aliant that used to only cover the Atlantic provinces. That company was bought by Bell Canada and became Bell Aliant (clever!). And it is certainly not to be confused with NBTel which used to be a New Brunswick owned and operated business.

Bell Aliant is regulated by the CRTC. They have to spend certain amounts of money every year on capital expenditures and they are choosing to spend $60 million rolling out fibre optic lines in two NB cities between now and mid-2010.

To do this they are getting $1 million from us taxpayers, which was why we originally thought Premier Graham was invited to the announcement and included in the press release. But buried in the details was a little blurb that part of the deal included an agreement from the Government of New Brunswick to give Bell a 3 year contract worth (coincidentally) $60 million.

Now the press release does not specify what the 3 year agreement covers. Presumably it means that the government will use Bell Aliant exclusively for all its phone lines, cell phones, internet, and other related services for the next three years. But again - no details were given.

A news story on the announcement indicated that the government was skirting around public procurement rules to give Bell Aliant this special treatment. The news article also suggested that this contract was richer than it could have been with a public tender, and so it was going to cost us taxpayers an extra $7 million for the same service - but again no details.

Most curious was the missing information on speeds and pricing, usually the two most important considerations in any phone or cable equation. In the USA, a similar service called FIOS which is offered by Verizon costs between $50 and $150 per month. How much more will it cost in New Brunswick?

It's always great to see New Brunswick become more competitive with greater options for consumers and businesses to access internet and phone services. However, why is our government eliminating competition with a sole-source contract that will cost us an extra $7 million? Worse, they are eliminating competition province-wide, and taking money from all New Brunswickers, in order to support a service that covers about 25% of the population.

And why can't a big national company like Bell afford to pay for this without all the tricks and gimmicks from the Liberals anyway?

When the bills start rolling in on this project, it will be worth the time for New Brunswickers to check the fine print. There may be some hidden costs and surprises.

Spot the Mistakes

A fun game for kids are those "Spot the mistakes" pictures where you can find places where the artist has drawn people doing things incorrectly and kids get to pick up on others' mistakes.

A less fun pastime for adults is the "Spot the mistakes" game that comes with every Liberal press release.

Recently the acting Liberal Finance Minister decided to write a six paragraph letter to the editor in defense of the Grit tax plan. Unfortunately he left out about 10 more paragraphs (if he really wanted people to have the whole story).

Some of the gems in his letter include:

"It is true that we modestly increased taxes in our first budget" - well modesty is in the eye of the beholder I guess.

"When we took office, independent auditors showed us ... we were facing a potential deficit of $400 million". Yes, the Grits did hire the accounting firm of Grant Thornton to tell them, based on a worst case scenario, how bad could the province's books get? And they did say, if the Liberals were to completely fail as a government the deficit could reach $400 million.

But what actually happened is that because of the good financial management New Brunswick had over 7 years with Bernard Lord the year end budget was more than balanced. In fact when the Liberals announced their first budget (the one with all the tax hikes) they said there would be about a $35 million surplus for the year before instead of a $400 deficit. But as if their credibility wasn't already in doubt, when the actual Auditor General got finished with the books, it turned out that the last Bernard Lord budget resulted in a $237 million surplus. Whoops. Better not talk about reality when we have a report we paid $400,000 for that talks about fantasy numbers instead.

(Interestingly, the Liberals have never released the full Grant Thornton Report to the public, only the Executive Summary)

Acting Minister Keir's tall tale in the TJ keeps on delivering however, when he writes "In 2007 we increased personal income taxes by approximately $50 million. This year we have lowered them by $118 million...". Did you miss it? That's right - there was a whole year that took place between 2007 and this year which is 2009. How much was collected by the government in personal income taxes in 2008? We don't know because Mr. Keir conveniently leaves that page off his calendar.

But not to be a total Scrooge, Minister Keir does give some credit to the PC Opposition for being right about the highest earning 1,300 New Brunswickers getting the most tax cuts. But in an effort to downplay the amounts he says those 1,300 richest New Brunswickers "will still pay 5.2% of total all income tax in the province" down from paying 6%.

Gee, only a 0.8% reduction makes it sound like a pretty small tax cut, eh? Well consider that this year NB will collect more than $1.2 Billion in personal taxes. If the richest 1,300 contribute 6% of that that means they pay $72 million of the total. Thanks to the Liberal tax plan those same wealthy few will get $8 million in Liberal tax reductions to split between them, or about $6,000 per individual.

I wonder why Keir did not compare that to Premier Graham's recent visit to Dieppe where he was bragging about his great tax plan that is going to save a family there about $10 a week...