Tuesday, June 29, 2010

Wildrose AGM review Part 3 - Walter Wakula defeated

Before I launch into a review of the policy, which will be part 4 of my review, I'll make another comment about the executive election and, before that, try and revisit the point I was trying to make about the income trust taxation decision by asking readers to consider another possible example, which is to consider the case of the Harmonized Sales Tax reform being adopted by BC and Ontario.

Where is the argument in favour of the HST coming from? Not only are the governments of BC and Ontario in favour, but so are the feds (both the Conservatives AND the Liberals). If the "people" are so overwhelmingly opposed, how can it be that there is even any debate about implementing the HST? You may currently be convinced that the HST move (which primarily shifts taxation from corporations, which invest, to consumers) would be as dumb an idea to you if you were Alberta's Minister of Finance as it is to you now as a member of an opposition party. But we have two provincial parties (and two federal ones as well, really) who seemed to have taken a more favourable view once in government. Whatever one's opinion on the matter, surely it would useful to try and find out just why this is.

Before jumping to any simple conclusions, I would note that the NDP is opposed to the HST both provincially and federally. In March of 2008, Ontario Premier McGuinty said,
What the Conservatives are asking us to do is to cut corporate income taxes – those are taxes on profitable corporations – by $2.3 billion… That definitely means closing hospitals, firing nurses, cutting education.
and in September of 2008 McGuinty's Finance Minister Dwight Duncan declared that
We don't agree with Mr. Mintz…Our taxes were the ones that were recommended to us by Ontario businesses, not by Alberta academics. That old neo-conservative attitude didn't work.

One could believe that McGuinty and Duncan flip-flopped after making these remarks because they have weak moral characters. But is it not also possible that Professor Mintz's argument for the HST was fundamentally sound such that this argument eventually came to prevail with reasonably-minded statesmen?

What we should all be able to agree on is that both the BC and Ontario governments should have been more upfront about the HST earlier. Perhaps Wildrose could end up in the same position of misleading voters if its policy decisions are too summary?

I'll now make one more follow-up to my last blogpost, and that's to note with some regret that Al Napier defeated Walter Wakula for southern director. Walter has more than 25 years of senior executive and corporate directorship experience and has served on the Senate of the University of Calgary. He also contested that Calgary West federal Conservative nomination against Rob Anders, whose resume prior to being elected as MP primarily consisted of acting as a professional heckler on behalf of the Oklahoma Republican Party. Anders' most recent claim to fame is to instruct our Canadian troops, "when in doubt, pull the trigger." According to the CBC, "Anders' message did not sit well with his constituents in Calgary West." Of course, the constituents of Calgary West could have had Walter Wakula as their MP, but it is not particularly easy to present that choice to the electorate when the federal Conservative party rigs the process. The Wildrose party had an opportunity here to put Walter on our provincial executive, and unfortunately the membership declined (I should note there that members from Edmonton could not vote for southern directors, just as Calgarians could not vote for northern directors). Although Walter was among the very first to get involved with the Reform Party, and has developed solid conservative credentials by dedicating years of service to both Reform and its successor parties, he had the good sense to call for a very well-worded "anti-poverty policy" in the Wildrose platform, a "moderate" policy to be sure that could even be called left wing but a far more defensible "moderation" of the platform than just watering down to platitudes the policies that happen to offend left wing insiders and their well-heeled special interests (yes, I am talking about unions). The truly poor are not an influential lobby in Alberta's legislature or really any legislature, and sadly Walter's anti-poverty plank did not come up for a vote.

Calgary Wildrosers still have a chance, however, to ensure that Walter Wakula is nominated as a Wildrose candidate in the next election. For anyone thinking that Walter isn't a true conservative because he has tangled with the "Conservative" establishment, I would suggest that that very fact may argue in favour of Walter being a true conservative:
ask Calgary West's veteran Reform, Canadian Alliance and Conservative activists and they will say they did not toil in the political wilderness all those years just to put another top-down organization in power. "They've lost their way," one frustrated long-time Reformer said. "This isn't the party we built."
- the National Post

Monday, June 28, 2010

Wildrose AGM review Part 2 - exec elections: hopes raised for operations, concerns raised for policy

On Saturday the AGM got underway with short speeches by the candidates for positions on the party executive. Barry Croucher announced that he was stepping down as a Northern Director, and although the 3 northern directors are not formally assigned to the province's northeast, northwest, and Edmonton, that's the de facto practice and Barry's departure paved the way for Chris Jones to become the director with primary responsibility for the party's development in the capital city. Chris brings a lot of energy to his new role and although I overheard one of the party's full-time employees with responsibility for operations express the opinion that Chris may be too controlling, someone inclined to take charge and advocate for Edmonton on the provincial executive is exactly what is needed in my view. Among the many lessons I've learned is that power vacuums do not remain unfilled for long when it comes to internal party politics, and if the director is not reasonably assertive, someone else, probably a candidate or supporters of a candidate hailing from a suburban constituency where the amount of common party resources diverted to his or her campaign could make the difference between victory and defeat, would take effective control. I am not at all concerned that Chris, who is a Strathcona resident, is going to be preoccupied with the needs of Wildrose in his constituency to the exclusion of the rest of the city. Although Chris has been an industrious servant of the party on the south side, going forward he should be a valuable aide to Wildrosers north of the river as well.

As I recall the only other position besides the regional directorships that was contested was that of VP Policy and I am not entirely sure what the ultimate verdict there is going to mean for the party going forward. I'm going to break from focusing on the AGM here and make the rest of this particular post an opinion piece on the party's policy process.

I've had my differences with John Hilton O'Brien over the past couple years, but I ultimately ended up voting for John HOB because John has been interested in complementing grassroots policy generation with "professional" input. My primary issue with John or, more precisely, the policy process in general was, in fact, that the moves in this direction did not go far enough.

John, whose distinguished history with the Wildrose Alliance and its predecessors goes back many years, was in any case defeated by a recent convert to the party from the PCs who unfortunately does not seem to envision a role for public policy professionals to inform and supplement member created policy.

I realize that Wildrosers reading this blog are going to be more than a little uneasy with my apparent readiness to raise doubts about our party's policy process going forward. Has this not been coming down the pipe for a while now such that it ultimately just suggests a character which doesn't value the concept of team loyalty high enough to be cut out for politics, perhaps? Can one reason with a blogger for whom dissent appears to be a point of pride? Doesn't my criticism just serve the interests of the other parties? This is, in fact, an excellent point and I fully acknowledge it. On this particular issue, however, which is getting more input from public policy experts, I am concerned that if there is no action taken it will not only up-end the basic reason I got involved in the first place (which implementing growth-friendly, fiscally conservative policy) but a reason many others got involved, which is ensuring that government takes its cue from the people as opposed to lobbyists, elites, and assorted insiders.

I was one of the few Canadians working on the taxation of income trusts between 2002 and 2006. The Department of Finance researched the issue carefully and advised both Ralph Goodale and Jim Flaherty that (unless all corporate taxation was eliminated) businesses that did not reorganize as trusts would become increasingly uncompetitive relative to their trust brethren unless the playing field was leveled and the Department could not discern a policy rationale for perserving the tax favourability extended to trusts. Interestingly, while I was working on the 20th floor as a civil servant, another current Wildroser was working with Flaherty's political advisors, whom we associated with the Minister's office on the 21st floor, and this group was urging the Minister to reject the Department's advice. I got into something of an argument with this person several months ago about the income trust decision and he eventually said that, whatever the merits of the move on policy grounds, the decision was badly made, not least because it was a decision that, never mind it not being made because of the grassroots, was made in spite of the grassroots.

On that much we could agree: the federal income trust move WAS undemocratic: the party made popular promises, of which not taxing trusts was one (albeit a minor, low profile assurance at most peripheral to the party platform), got into power and then was advised by an "elite" that a serious problem with the country's capital stock would emerge if the party, now as government, did not unwind a tax preference against the traditional form of business organization. Where the Goodale Liberals feared to tread, Flaherty moved boldly and went with the expert advice (the investment banking industry, which was making a fine living converting corporations into trusts, had expertise as well and opposed the move, but the finance industry's advice here was highly self-serving).

There is a lesson to be learned from the income trust decision, and that is that the Reform Party culture that prioritized grassroots policy formulation ironically exacerbated an anti-democratic, "elitist" policy move that occurred after the party formed government as the Conservative Party. I fear the Wildrose Alliance is going to end up in the same position, because if the policy process is entirely membership driven prior to forming government, after forming government the party is going to be in the difficult position of either dismissing the input that the ministries provide to the new ministers and the input of the various "expert"-staffed commissions and inquiries OR ending up in the situation Stelmach found himself when he refused to consider industry's input concerning royalties: a crisis of investor confidence and lost jobs. This scenario could be avoided if Wildrose considers the advice of the policy wonks now, despite the suspicions of the grassroots of these types.

Why am I talking about this in a post titled "Wildrose AGM review"? Because when I review Saturday policy session, it will be necessary for me to acknowledge the role that the caucus played in the debates and the possibility that the caucus was trying to bridge the gap between what the grassroots perceives the issues to be and what the reality is going to be for the party's elected members and ministers. As readers will soon discover, my position is that if the "reality" is that there are powerful lobbies and special interests lurking in the halls of the Legislature that can only be perceived from inside, the grassroots is entirely right to demand that the caucus simply find its backbone such that if tangling with these shadowy forces costs them their seats, at least they've gone down with integrity. But if the "reality" is rather that the grassroots-formulated policy is simply naive and/or incompletely informed, then the grassroots has to either trust its caucus / ministers who are in touch with the public policy specialists OR, far more preferably, demand a policy formulation process that gets the expert/informed opinion injected early so that the membership is not surprised with contrary decisions once the party forms government.

Some Wildrosers reading this may feel that I am creating a false alternative between broken promises and economic management by, as something of an elitist-sympathizer, inflating the danger of the latter. I would ask these readers to think about whether all the promises in the party's policy book to advance the interest of some group, be it taxpayers or the beneficiaries of government spending, are balanced by corresponding statements addressed to the group(s) on the other side that they can expect to do less well under a Wildrose government. This is the real issue here: even if a policy creates more winners than losers, there will inevitably be at least some losers and it is the identification of and advance communication with these losers that reduces the possibility that a Wildrose government would be perceived as undemocratically selling out to some elite or special interest. There is a great deal of rhetoric in the party's communications about fiscal conservatism, but when the concrete promises, especially on the tax cut front, inevitably don't add up to a budget surplus, something is going to have to give and the non-concrete, non-specific, purely rhetorical commitments to limiting spending are the most likely to become the hole in the dike. It is thus not an "elite" versus "grassroots" issue so much as a sum versus the parts issue: it requires taking up an elevated position that can see the whole lie of the land, not necessarily an "elite" position.

Sunday, June 27, 2010

Wildrose AGM review Part 1 - setting the tone

The 2010 Wildrose Alliance Annual General Meeting kicked off in Red Deer last Friday evening with an impressive rally that in terms of size, scope, and sheer spectacle suggested a party that had to be taken very seriously as a political contender. An example of the differences from previous AGMs was that not only did many candidates for positions on the party executive distribute full colour professionally printed brochures instead of a paragraph or two of text written up on a word processor at home, but later in the evening they hosted well-stocked hospitality suites where attendees could schmooze.

The keynote address on Friday was, of course, delivered by the leader, and the Edmonton Journal's Capital Clicks blog provides a copy of the speech. Just reading the text, however, doesn't tell you how well the speech was delivered, and on that front Danielle Smith nailed the timing, tone, and body language. There were some word choices that I thought were rather too populist, like working "big corporations" into the speech in an disapproving context and mentioning "Stephen Harper" in an approving one, but Calgary Herald columnist Don Braid had it exactly right when he contrasted her speech with the one she delivered at last year's AGM, and described the Danielle of 2010 as "confident, self-possessed and very quick on her feet." A good politician has taken significant strides towards becoming a great one. Now it could be said that what the people really need is non-politicians, indeed, advocating for that will be the theme of this blogpost, but it is worth keeping in mind that if the people really wanted persons in office who are not good politicians, they have had many opportunities to vote for those meritorious people but, in their infinite wisdom, have generally declined to do so!

If I had a substantive general reservation about a speech that had me up on my feet with hundreds of others, cheering, clapping, and waving signs, it was that it was very tough on the governing party and while entirely appropriate for an opposition leader (I don't believe one should apply the "how statesmanlike was the tone?" question to speakers not currently in power) I wondered if the intensity of the political salvoes signaled a narrowing of the policy chasm. The belligerence exhibited by Preston Manning's Reform, for example, rarely approached the levels of hostility for the federal Liberals routinely exhibited by today's Harper Conservatives, and the economic policy of the current Tory government is scarcely more fiscally conservative than that of the Liberals, especially the Chretien/Martin Liberals circa 1996. The more that mountains of policy differences are reduced to mole hills, the greater the effort in terms of optics that is required to inflate them back up into mountains, perhaps.

On this particular point, which is to raise the issue of how much political partisanship is necessary or desirable, I would not take principle issue with Danielle, since she's just not an attack dog in terms of personality, or at least she wasn't. I'd rather take issue with long-time PC strategist and current acting Wildrose party president Hal Walker's apparent choking up as he introduced Guy Boutilier, who in turn introduced Danielle. Now I understand that when introducing a speaker, it is advisable to invite the audience to applaud the speaker, and never so much so as in the context of a political rally. But I couldn't help but wonder if Mr Boutilier would be seen as a hero to the point of getting emotional about it if he were still part of Team Stelmach. The suggestion of (excessive) partisanship is arguably the flattering interpretation, since the alternative interpretation is that the sentiment is affected. As followers of the blog would know, I had reservations about the floor crossings that occurred earlier this year, not because I am necessarily opposed to them in principle, but because person(s) whom I assumed were instrumental to the negotiations about what terms (if any) would be applied to the crossings were the same people who had been mightily indignant when Belinda Stronach crossed over from the federal Conservatives to the federal Liberals. The argument for taking a nuanced, practical view would be easier to support if that view won out over the view that leads to expressions of outrage rather less selectively.

I suspect that cynicism about politics is one of the biggest drivers of falling voting participation rates. How is that cynicism being countered when political group B denounces group A as a gang of cowards and sinners, and then honors some of those same group A people as heroes and saints after they've adopted the colours of group B? Now maybe there truly is ennobling, redemptive power in the Wildrose jersey, but in at least my own case when I bought a membership I still had all the many character faults that I had before!

Having said all that I should make it clear that this is not an entirely fair criticism given the context. Waving the flag too much at a rally? That's the whole point of a rally! Let me be clear that I consider Hal Walker to be an excellent party president. The night really was an overwhelming success, and I quite enjoyed both it and the hospitality suites, which included a stetson-clad David Gray refining the art of political entertainment (photo below). My purpose here with respect to the opinion element of my review is primarily to further advise readers ahead of my reviewing the Saturday policy sessions in my next post that your blogger has a background working on policy issues in a non-partisan federal Finance Department, where he settled upon the conclusion that political parties are ideally just a means for clarifying the level of democratic support for certain policy philosophies as opposed to a means for dividing ordinary citizens into warring, grasping camps.

Tuesday, June 22, 2010

Wildrose AGM begins Friday

I've returned to Alberta, having failed to blog for so long that the vast majority of bdell.ca readers have undoubtedly moved on to writers who don't disappear for months at a time... but if you have stumbled on this page and it is not yet June 25, be advised that if you are a Wildrose member, the party's Annual General Meeting will kick off shortly before 6 PM at the Capri Hotel in Red Deer on Friday. Give my mobile a call at (780) 497-2740 if you are Edmonton-based and interested in sharing a ride or accommodation.

In anticipation of the AGM, I'll make a few comments here about what we'll be voting on.

With respect to the policy resolutions and amendments, when I first saw them at the beginning of May, the proposal sponsors were identified and a "policy committee recommendation" was sometimes provided. This policy committee recommendation could potentially be very useful, but unfortunately is of limited utility this time around, primarily because there is little or no transparency with respect to who is serving on this committee, why they are on the committee, etc. Ideally, the membership would be fully informed on that count, and even then rather than just rely on an appeal to its own authority the committee would provide additional information that would help inform the membership, like identifying a specific statute that could conflict with a proposal, noting think tank studies or reports that are relevant, etc. One of the proposals that appeared several weeks ago (but appears unlikely to come to a vote this weekend) called on the party to support charging a user fee of $25 for emergency room visits in excess of six per year. The policy committee was simply "opposed" to this. From a policy perspective, I don't see what the problem is, and the committee doesn't help me see what the problem is when no explanation is provided for the recommendation. In fact, I would also oppose the proposal, but that's because whatever the merits of the proposal on policy grounds, it is terrible politics. Were I on the policy committee, I would advise expressing no opinion on the policy proposal despite the fact adopting it would hurt the party, simply because if we are serious about direct democracy, then we ought to leave to the membership matters which they can judge as readily and competently as any expert. The mandate of the policy gurus should be limited to weighing in on questions of policy, in other words. If there is an optics issue as opposed to an economic or legal issue, anyone's opinion is presumably as good as anyone else's.

So much for a general observation. What of the specific proposals? There are several which I would be inclined to vote against simply because they don't say anything substantive, and if we mean to avoid politics as usual, we would avoid statements on the order of "the party will be all things to all people." An example of this would be "the Wildrose Alliance supports making improvements to the Securities Act to increase transparency and to provide greater protection for issuers, intermediaries, and investors." Do I think that the party needs to spell out the exact improvements it has in mind? No, but a philosophy needs to be articulated. The interests of issuers and the interests of investors are fundamentally opposed such that it is the regulator's job to strike the appropriate balance. By calling for increased "transparency", the party seems to be taking the side of investors, such that the "Public Company Accounting Reform and Investor Protection Act of 2002", better known as Sarbanes-Oxley or SOX, would be the sort of thing the party would presumably support, since, after all, SOX mandated increased disclosure. But the statements that have been issued by the party suggest that the exact opposite conclusion should be drawn, since they have called for issuers to have the right to opt-out of regulatory regimes they don't like. The bottom line in my view is that the party should

1) remain silent on the issue and just let the caucus/leadership articulate the party's position (as is currently the case)
2) attack the proposed Canadian Securities Act specifically
3) support a national securities regular

Readers of this blog know where I stand on this particular issue. I believe a national regulator would be business-friendly in the same way free trade is business-friendly. If you poll businesses about free trade, obviously some domestic producers will be opposed because they will not want foreign competitors entering the domestic market. A refusal to accommodate those protected domestic producers would not mean taking an anti-business approach; it would rather mean that the tax and regulatory environment would be more competitive - giving the "losers" the right to "opt out" would be to dress up a reversal of economic liberalisation in the language of liberalisation. Ultimately, the ideological confusion arises from a focus on "freedom" when the focus should be on "competitiveness", but that's a matter for another post.

There is, in any case, a policy proposal that is substantive and, in my view, mistaken. It calls for the repeal of the plank

A Wildrose Government will restore education as an essential service under the Labour Code ensuring that no child’s right to an education is denied by school strikes or lockouts.
and replacing it with
A Wildrose Government will examine what services should be categorized as “essential services” and implement reforms that will ensure those employed in “essential services” are treated fairly

This particular proposal reportedly originated from "caucus", and all else equal I would normally defer to caucus because the caucus has more experience with respect to electibility issues than the rest of us. I thought Paul Hinman played a very useful role at the last AGM, for example, when he spoke out on environmental issues. Hinman had actually been elected, and knew that a dismissive view of environmental concerns would be a very difficult sell in a general election. I would fully acknowledge here that this particular plank is one of the very few that has been specifically attacked by the opposition. The Premier called it "draconian", if I recall correctly. But I have to ask since when is it draconian to say the party supports the interests of consumers, in particular when those consumers are children in need of an education? The proposal at hand here does not just say that the interests of "those employed" by the government will also be considered, by calling for the deletion of the reference to service consumers it suggests by implication that "those employed" are the only group whose interests will be considered.

The reality is that the denial of the right to strike is simply the denial of the right to exercise monopoly power over the supply of labour. We don't tolerate monopoly behaviour with respect to the supply of other inputs, but because "labour" has more sympathy than the interests of capital generally, the same economic phenomenon is often given a pass in most democracies. Economically, a monopoly over the supply of labour is just as inefficient. There is nothing stopping a teacher from resigning and going to work for someone else if he or she is not receiving a competitive package of wages and benefits. "Fair" is the word choice of leftists everywhere who do not support free markets, so it is less than comforting to see such phrasing spread into Wildrose policy documents.

Alberta has enough leftist political alternatives without Wildrose going down that path. If it were a matter of just being "moderate", that would be one thing. But if the party folds like Superman on laundry day as soon as a civil service union protests it seems to me the party has crossed over from "moderation" into being just a more populist version of the PCs. When I was a candidate for the party in 2008, a key plank was a reduction in the corporate income tax rate. Since that time, nothing at all has emerged from the party with respect to corporate taxation. In my view, the party needs to take a stand for fiscal prudence, and that means something substantive as opposed to rhetorical. Why is this issue so substantive? Because it goes to the heart of the fiscal crisis governments are facing. Heard about the gold plated pensions some California public servants collect and the connection to that state's fiscal woes? In fact, Illinois has overtaken California as the worst credit risk among American states. Is it just coincidence that "in 2008, Illinois had the country's lowest level of voluntary turnover in state employment, under 2% per year"?

A policy plank calling for limited spending is not going to amount to anything if the party cannot say "no" to anyone when actually in government. Denying a right to strike does not deny anyone a dime in competitively determined compensation, it is rather just a denial of the "right" to the profits of a cartel.