On the Conservatives’ so-called Choice in Child Care Allowance plan

Earlier today at a rally for Ottawa-South Conservative star candidate Allan Cutler (former mid-level bureaucrat-turned-whistleblower employed within the Sponsorship Program bowels of the federal Public Works and Government Services Canada), Conservative leader Stephen Harper announced his party’s new national child care plan. It is two-fold. One is the “Choice in Child Care Allowance” and the other is the “Community Childcare Investment Program”. The first would give all parents $1,200 per year in cash (before taxes, which Liberal candidate and Minister of Social Development Ken Dryden estimates would amount to a paltry sum of $1,000 per year after taxes) to use for child care purposes. For instance, a family whose parents both work could use it to put towards a space for their child at a daycare or share it with a grandparent who agrees to look after their kid while they work. Or, a stay-at-home mom could use it for food, clothing, and toys for the child that they look after twenty four hours per day, seven days per week.

My take: the only option where this after-tax amount of $84 per month would be beneficial for working parents is if they have a willing grandparent or other close family relative that is able to look after the child daily. Otherwise, with professional child care estimated to cost $25 per day ($175 per week, $700 per month, and $8,400 per year), $3 per day under the Conservative plan clearly will not be helpful – even when combined with the current National Child Tax Benefit and childcare expense income tax deductibility.

Further, it’s bad on three more fronts. Because the Choice in Child Care Allowance is not tied in any way to income, it amounts to a huge tax refund for high income families earning more than $70,000 per year. This takes away precious revenues away from government social programs that benefit lower-income families. Secondly, because the $1,200 is based on a per child basis, it could potentially encourage an explosion in pro-creation, causing families to pop babies out at a rate one per year until they have six or seven kids. And finally, it adds more government bureaucracy because of the need to hire more staff to administer yet-another-benefit program. Rather than simply increase the existing Canada Child Tax Benefit, this plan appears to be ideologically motivated as the CCTB was the brainchild of Finance Minister Paul Martin the mid-90s and the Conservatives want their own “give-money-back-to-the-people” program they can tag for themselves. It’s a publicity stunt at its worst.

The second plank of the Conservative child care strategy is its $250-million per year initiative (the “CCIP”) to create workplace child care programs partnering with not-for-profit child care providers by providing companies with a $10,000 tax credit per space. That will amount to 25,000 spaces per year, they claim.

My take: I don’t have statistics back this up or anything, but I know there are more than 25,000 children in need of child care in Canada presently so this program appears to be woefully underfunded before it even gets off the ground. Further to this, Trinity-Spadina NDP candidate Olivia Chow said it doesn’t create any net new child care spaces. Moreover, while workplace child care programs are good, I’m not sure giving a company a huge tax credit of $10,000 per space created is the best, most efficient use of tax revenue. Consider Minister Dryden’s earlier estimate on CBC Newsworld’s “Politics” broadcast that it costs about $8,000 per year to create and fully fund a child care space. It would be better if the federal Department of Social Development partnered directly with for-profit and not-for-profit child care providers and gave them this money directly. Do the quick and easy math and you’ll see this amounts to immediate savings of $50,000,000 annually under my child care idea versus the Conservative strategy.

Coming up soon: I’ll take my readers on a cross-country journey to what I expect to be intriguing ridings to watch on election night, what ones could be nail-bitingly close races, which ones have star candidates competing in them, and what ones could will get downright nasty. I’ll profile one riding per day until election day – broken up only in the event of a major breaking story on the campaign trail. Stay tuned.

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Thoughts on BC Teachers’ job action

For those Canadian readers of this blog, I’m sure by now you are well aware of the job action by the BC Teachers Federation, the union of which all public-school teachers in the province of B.C. are required to belong. For those unaware, forgive my lack of a preamble or backgrounder, if you will. I just wanted to share a few of my thoughts on the matter, spin and hype from both the government and the union excluded.

Say what you will about the BCTF, I do find them to be about as militant and confrontational as labour unions go in this country, and often, I believe their demands are too much. I believe that, perhaps, a 15% salary increase over three years when other unionized government employees had to endure 0% increases during the BC Liberals’ wrong-headed, abysmal first term in office is perhaps too much to ask. However, to require the teachers to essentially continue for another two years (retroactively to June 2004 and continuing until summer of 2006) for less money by paying nothing extra (not even to cover the average cost of living increase of between 2 and 3 percent per annum) is a terrible proposition and one with which I would be personally offended.

In addition, I believe the current system of collective bargaining in the public sector is broken. When your employer is the government, and by extension, the legislators that make up the government caucus, and your employer has the power to move the goal posts in negotiations and make up (or change an existing) “rule book”, the potential for abuse is real (as we’ve seen this year). By imposing a contract, and having the ability to impose contracts, is too much power. It offers no incentive to give the government’s bargaining agent, the B.C. Public School Employers Association, real power to negotiate over things like wages, class sizes, and class composition.

It’s true the B.C. PSEA and BCTF don’t like to negotiate and would rather bat around hot-aired rhetoric. It’s also no secret they dislike each other. However, I believe that the industrial inquiry commission the government struck (arguably the only decent thing they’ve done on this front) to look into a new collective bargaining regime should look into the possibility of forcing the government to pass a law prohibiting the legislating of labour contracts and requiring them to use binding arbitration when they’re at a stalemate.

As well, some say the B.C. PSEA should be eliminated. I think they are a good organization in place that simply has no mandate, no mission. Instead, they should be strengthened and given the ability to negotiate whatever options they choose and bring them on (or take them off) the table.

Finally, I read in The Daily Courier today that one teacher thought the government should get out of the education business. I’m not sure what she meant by this. Surely she doesn’t advocate turning it over to the private sector and having publicly-traded companies contracted to run certain schools, such as they do in parts of the U.S. I don’t believe she advocates this at all – she was referring to the fact that school curriculum and Education Ministry policies change at the drop of a hat, or the appointment of a new Minister of Education. She’s right – it’s got to stop and it must change. So, why not have the government ceasing designing the curriculum? Essentially, they should be responsible for forking over the funds for the education system and printing the educational materials (but not creating them). A provincial committee, made up of rotating representation of the various school districts, should be struck and would be responsible for designing the K-12 student curriculum.

Hello world!

I’ve installed the free, open-source WordPress blogging and Web publishing platform with which I’ll use to post on a variety of topics, which will be of a nature mentioned in the Categories to the side. Widespread roll-out and use of WP is contingent upon rigorous testing; however, it may replace my Blogger Blog*Spot blog, at dmehus.blogspot.com.

Thank you, readers!

Doug M.

Sullivan defeats Clark, for NPA mayoral nomination in Vancouver

‘A fighter, a survivor,’ Sullivan wins key battle: “Father really does know best. Sam Sullivan’s father, Lloyd, was calm in the nerve-wracking hours leading up to the announcement of Sullivan’s win over Christy Clark in the Non-Partisan Association mayoralty nomination yesterday.”

In a headline rivalling the New York Post’s famed “Dewey Defeats Truman” of the 1948 U.S. presidential election campaign climax, long-time and wheelchair-bound Vancouver city councillor Sam Sullivan pulled off the unfathomable and defeated former Minister of Education and Deputy Premier for the Province of B.C. Christy Clark to secure the mayoral nomination of the Non-Partisan Association. Only this time, the headline is true and Sullivan will go head-to-head in the November civic election against upstart electoral organization Vision Vancouver and its mayoral candidate, the left-leaning but popular Jim Green, who has been an advocate of affordable social housing and the renovation of the old Woodward’s commercial building into one such avenue of housing for the impoverished in the city of Vancouver. (Vision Vancouver’s slate includes current councillors Tim Stevenson and Raymond Louie, as well as several candidates to be named later and it does not intend to run school or parks board candidates. It is an offshoot electoral organization of the equally left-leaning Coalition of Progressive Electors (“COPE”), which is also running five council candidates, and formed from the Friends of Larry Campbell Society in recognition of popular one-term mayor and now The Honourable Senator Larry Campbell.)

It’s a shame Christy Clark did not secure the nomination, and although I would prefer to see Coun. Jim Green ultimately win the mayoral race November 19th, she would’ve put up one hell of a fight and made the race truly interesting. Sullivan’s views are too conservative and not so mainstream that he makes a very unappealing and unelectable candidate for mayor. I would certainly like to see Mrs. Clark run as an independent mayoral candidate to split the centre and right vote, allowing Mr. Green to coast to an easy victory. However, this is unlikely given she has pledged to work with Mr. Sullivan to get him elected. Nonetheless, Coun. Green will likely have to change his business cards to Mayor Jim Green come Nov. 20th – or whenever the City Clerk’s Office certifies and validates the election.

Footnote: Is it not very ironic that the civic electoral group, the Non-Partisan Association, uses the catchy “non-partisan” term as part of its very name yet the group’s very membership consists of federal Liberals and Conservatives, as well as old remaining B.C. Social Credit stalwarts, as a means of coming together under one banner to sling very pointed (and very partisan) attacks at both Vision Vancouver and COPE?

eBay to buy Skype?

“EBay Inc. is in talks to buy Web telephone phenomenon Skype Technologies SA, a source said on Thursday, prompting a 4 percent drop in shares of the online auctioneer amid concern Skype could crimp highly-profitable eBay’s growth.” (Justin Hyde and Eric Auchard, Reuters)

According to the named Reuters reporters, who cite Wall Street Journal and New York Post as sources, above, the purchase price eBay may be willing to pay is between $2 and $5 billion. That seems far too rich for a company with little, albeit growing, revenue and little or no profit. We definitely seem to be in another “dot-com mini-bubble” in the e-commerce and Internet services industries. And, although John Battelle thinks the deal makes sense for two reasons (the first being eBay would be acquiring 50 million new potential customers of its own in buying Skype’s user base and the second being having a powerful peer-to-peer VoIP technology with which its buyers and sellers could communicate), I’m quite negative on this deal. Many Skype users already have eBay accounts so they aren’t buying new customers, they are paying twice for their own customers. As for the smaller, secondary reason of buying a technology platform its members could use to communicate on with each other, this seems rather inconsequential. eBay sellers are already deluged with questions from buyers on instant messaging applications and e-mail that adding another communication platform (voice) may piss them off, rather than intrigue them.

Besides, if eBay was buying Skype for the technology, they could get the same thing for a lot cheaper, such as Yahoo!’s very minor purchase of Dialpad or Microsoft’s purchase of VoIP play Teleo, both of which were less than $50 million. No chump change for you and I, but definitely petty cash for Internet behemoths Microsoft and Yahoo!.

Now, if eBay were buying Skype as an entirely new vertical market and admitting its core online auction business was decelerating, then I could chew the deal and agree it might make sense. However, there are plenty of new online businesses to get into, why enter the low margin commodity, not to mention, crowded business that is VoIP-to-landline calling? Its purchase of Shopping.com, Ltd., earlier this year made sense for that reason. Comparison shopping online would be a new business for them, allow them to enter the sponsored search listings arena, and cross-promote it with eBay.com and Half.com. It was a stroke of pure brilliance. Skype, on the other hand, makes no sense.

Fraud and skullduggery at Norbourg Asset Management

IFIC chairman steps down while his company, Norbourg, investigated by RCMP: “MONTREAL (CP) – The chairman of the Investment Funds Institute of Canada stepped down Thursday after RCMP and other police officers swooped down on several offices in Montreal and Toronto as part of a major fraud investigation against his company, Norbourg Asset Management Inc.”

With the shocking news coming over the wire of another instance of financial skullduggery and possibly outright fraud occurring at the offices of Montreal-based Norbourg Asset Management Inc., one cannot help but be outraged and upset. In an extremely embarrassing side story for the whole Canadian mutual fund industry, Michel Fragasso, a senior vice-president at Norbourg, was forced to resign from the industry’s primary lobby group, the Investment Funds Institute of Canada. And, it gets better: he was Chair of the association’s board and acted as its principal spokesperson.

The exact details of the police and Autorité des marchés financiers, the Quebec financial sector regulatory agency, investigation are sketchy but essentially the joint-investigation is looking into a difference of $70.7 million between the company’s latest financial results and its assets under management. The mutual fund manager is also reported to have filed false annual financial reports, duping its investors whose monetary portfolios it manages. Some 5,000 clients are reported to have lost everything, or almost everything, with little chance of recouping it.

“Autorité president Jean Saint-Gelais said Norbourg has only $84 million left in its accounts – $70.7 million less than it has on its books.

“Authorities will also investigate the alleged misappropriation of $69.8 million belonging to Evolution and Norbourg funds and the alleged falsification of documents for Norbourg’s operations.”

The fact that the provincial regulatory agency has “ordered Norbourg to stop all activities and froze its assets and bank accounts” should come as little consolation to Norbourg’s duped (and not to mention financially bilked) customers.

This kind of corporate malfeasance should not, and most certainly will not, be tolerated by this blogger, in particular, and Canadians, in general. The executives must be held to account for pilfering the monies directly from its clients assets that it manages and depositing them into their personal bank accounts or other egregious purposes. Moreover, Norbourg’s founder and president Vincent Lacroix, a 38-year-old entrepreneur-turned-criminal con-artist who has apparently disappeared and may no longer be in the country, must be found and extradited back to Canada as expeditiously as humanly possible. I will settle for nothing less.

Rupert Murdoch’s son quits as a News Corp. exec

Rupert Murdoch’s son quits as a News Corp. exec: “LONDON (MarketWatch) — Lachlan Murdoch announced plans to leave the family business Friday, saying he’s quitting as deputy chief operating officer of News Corp. to return to his native Australia.”

My take: The position of “deputy chief operating officer” of the media conglomerate was specially created for the 33-year-old son of the famed, and staunchly conservative, media magnate, the 74-year-old Rupert Murdoch. It seemed to be a sort of “stepping stone” job (and a hugely lucrative one at that with a multi-million dollar compensation package) to prepare Lachlan for the eventual death or retirement of his father, in which case he would take over as President or CEO (or both) of the company.

Shareholder concerns are starting to bubble, according to London’s Guardian Unlimited newspaper. They are rightly concerned with what seems to be growing nepotism at the company and that will only increase as 32-year-old brother James Murdoch, with no real management experience of a major company, is seen as the likely successor to Murdoch now that Lachlan’s resigned effective Aug. 31.

Update: When I initially posted, it was noted James had no experience. This was in 2003 following his nepotistic-like appointment to head BSkyB, Britian’s largest privately-owned TV network owned by News Corp.