Friday, February 27, 2009

Uranium Development Partnership: Gov’t refusing to disclose panel’s work plan; won’t reveal objective, intent or deliverables for consultant support

It was only a matter of time before the Saskatchewan Party government started refusing access to crucial Uranium Development Partnership (UDP) records.

On Oct. 20, 2008, the Saskatchewan Party government announced the establishment of the UDP, a 12 person panel mandated to identify, evaluate and make recommendations on Saskatchewan-based, value added opportunities in the uranium industry. Since then the government has released very little information on the panel’s deliberations.

An access to information request was submitted to the Crown Investments Corporation of Saskatchewan (CIC) for copies of the panel’s work plan and the agendas and minutes for any meetings conducted between Oct. 20 and Dec. 30, 2008. The request was granted in part.

The information released by CIC on Feb. 15 shows that the UDP met just once prior to the end of 2008, and that was on Oct. 20 when the government made the announcement.

The meeting was conducted at the University of Saskatchewan in Room 238 of the College Building from 1:15 p.m. to 3:30 p.m. All members were present with the exception of Jim Hallick (SARM), Armand Laferrere (Areva Canada) and Alex Pourbaix (TransCanada Corp.). Ray Ahenakew (SIIT) participated via conference call.

The records reveal that the government has created a secretariat to work with the partnership. According to a request for proposals (RFP) issued in October by CIC for consultant support the secretariat will be “co-led by Dale Botting, Deputy Minister of Enterprise and Innovation and Iain Harry, Vice-President, Crown Sector Initiatives, CIC, with support staff from both Enterprise and Innovation and CIC to work with the partnership and the consulting team to organize and facilitate meetings, support the drafting and publishing of a final report, and provide any other support or administrative functions that may be required.”

Botting and Harry were present at the UDP meeting and should have no problem supporting the Saskatchewan Party government’s quest for nuclear power.

On Sept. 11, Botting gave a presentation on uranium issues to the North Saskatoon Business Association. The StarPhoenix quoted Botting saying afterwards that, “We feel it’s time, just like the 1970s when Alberta added value to the energy industry by developing refinery row and the petrochemical sector and so on. We would like to find ways to add value similarly to our raw resources so we’re not just shipping out drums of yellowcake.”

“The premier has made this point before that he sees this opportunity (with uranium). We are in the business now of trying to decide how, exactly, we’re going to approach it, but Enterprise Saskatchewan will be clearly involved in those discussions,” Botting said. [New team explores uranium potential (StarPhoenix, Sept. 12, 2008)]

Botting is the former president and CEO of the Saskatchewan Trade and Export Partnership (STEP). For 11 years he served with the Canadian Federation of Independent Business leaving the CFIB as vice president of Western Canada.

Botting was appointed by the Saskatchewan Party government in Nov. 2007. Saskatchewan Party financial statements filed with Elections Saskatchewan show that he has contributed to the party.

In the article Link turns up the heat on the Wall gov’t (Leader-Post, Feb. 13, 2009) Leader-Post political columnist Murray Mandryk referred to Iain Harry as “one of Brad Wall’s closest advisers and friends” and the “former Saskatchewan Party communications director and past political operative in Stephen Harper’s PMO.”

At its Oct 20 meeting the UDP received a letter of welcome signed by Ministers Lyle Stewart and Ken Cheveldayoff.

“The work of the UDP will provide an invaluable resource to the Government of Saskatchewan as we consider how to add further value to our province’s significant uranium resources,” the letter said.

The majority of the next two paragraphs, however, are blacked out: “As you know, the UDP’s final report…….” and then nothing.

“As such, the work you will be doing over the next five months will help build the foundation for a new era of uranium industry development in Saskatchewan,” the letter continues.

It would seem there is something about the panel’s final report that the government does not want the public to know.

A copy of the Minister’s Order appointing the UDP was distributed at the meeting. This record describes the group’s mandate and how it will function. The language used in the order differs somewhat from the news release and backgrounder that was released to the public on Oct. 20.

The backgrounder states: “Finally, the Partnership will make specific recommendations on value added opportunities best suited to Saskatchewan.”

The Minister’s Order states: “The UDP shall: e) Provide a report to Cabinet by March 31, 2009 that includes specific recommendations on value added opportunities best suited to the growth and expansion of the nuclear industry in western Canada from a base in Saskatchewan.”

The Minister’s Order leaves virtually no wiggle room for the UDP. The government has clearly ordered, and expects, the panel to provide recommendations for “the growth and expansion of the nuclear industry” in Saskatchewan.

The backgrounder notes that while the partnership’s work plan “does not include submissions from the public” its full report “will be released as part of a full public consultation process.”

The Minister’s Order does not mention public consultation and states that the UDP members’ term will not exceed March 31, 2009. It appears that the government’s intention from the outset was to completely insulate the panel from the public and not allow the two to interact – even after the group releases its final report. According to the Oct. 20 news release the UDP “will receive up to $3 million in funding” from CIC, which is public money, and for this the people of Saskatchewan get shoved aside.

The Minister’s Order indicates that the UDP and CIC “shall engage the services of a major consulting firm with direct experience in the nuclear industry in order to assist the UDP in preparing its report to Cabinet.” The news release and backgrounder gave no indication that a third party would be commissioned to help write the final report.

Finally, the Minister’s Order shows that a per diem of $600 per day will be provided to the chairperson (Richard Florizone) “while engaged in the work of the UDP.” The other members will receive $500 per day for their services.

The agenda and minutes for the Oct. 20 meeting indicate that the UDP reviewed a proposed work plan and timeline, but the CIC refused to disclose these. The work plan would likely detail the group’s tasks, or methodology, necessary to complete its work and is arguably the most important item that the panel discussed at the meeting.

The reasons given by CIC for denying access to the record, and portions of others, is itself revealing. The Feb. 15 letter from CIC vice president and general counsel, Doug Kosloski, cites the following reasons for refusal:

1) The record “Could reasonably be expected to disclose advice, proposals, analyses or policy options developed for a government institution…”

2) The record “Could reasonably be expected to disclose consultations involving officers or employees of a government institution…”

3) Disclosure of the record “could be reasonably expected to result in disclosure of a pending policy decision or budgetary item…”

4) The record could “Contain information about an identifiable individual…”

The third reason is perhaps the most intriguing and begs the question, ‘Does the government already have policy and/or budgetary decisions lined up and ready to go as soon as the UDP’s final report and the sham of a public consultation process are complete?’ It stands to reason that it must, otherwise why would it cite this section?

At its Oct. 20 meeting the UDP reviewed the RFP for consultant support. This portion of the meeting in the minutes has been blacked-out. More disturbing is the fact that CIC has severed significant portions of the RFP relating to UDP objectives, statement of intent, proposed deliverables and project timeline. The government obviously has something to hide here as well.

The RFP states: “UDP will require the support of a world-class consulting firm to assist with data gathering, analysis, interpretation and drafting of the Report. The chosen firm must have Canadian and global expertise in uranium and related industries; the ability to collect and synthesize large amounts of data; a proven track record in the development of international business strategy and the development of public policy; a collaborative approach whereby the work will be completed by the consultant with technical support from industry and government representatives; and an ability to complete the work in a timely and effective manner. A subcommittee of the UDP will be struck to recommend a consultant who will then be awarded a contract by CIC.”

According to a related agenda item (the striking of the consultant selection committee) CIC sent the RFP to a short list of consultants. These appear to be: The Boston Consulting Group (BCG); McKinsey and Company (M&C); The Canadian Energy Research Institute (CERI); and, Cambridge Energy Research Associates (CERA).

The deadline for responses to the RFP was Oct. 31, 2008.

The minutes of the UDP meeting show that the following members were appointed to the consultant selection sub-committee: Richard Florizone (U of S), Jerry Grandey (Cameco), Duncan Hawthorne (Bruce Power), Jim Hallick (SARM) and Patrick Moore (Greenspirit Strategies).

It should be noted that CIC is a member of the Calgary-based CERI and UDP members Cameco Corporation and TransCanada Corporation are listed on the CERI website as private sector sponsors of the think tank. The two companies share ownership of Bruce Power. Also listed is consulting engineering firm Golder Associates Ltd. who, according to its 2006 annual report, have Bruce Power as a client.

“Golder Associates has a long-standing consulting relationship with Bruce Power, having conducted three environmental assessments on the eight reactors, which together have 6,200 megawatts of annual generating capacity,” the report states. Bruce Power CEO Duncan Hawthorne is a member of the UDP.

It seems odd that UDP members with ties, either directly or indirectly, to one of the consultant’s under consideration would be permitted to take part in the RFP evaluation process. In the end the point is moot because in an email on Feb. 27 Mr. Kosloski advised that McKinsey and Company was the consultant that was selected.

In May 2007, the Government of Ontario hired McKinsey and Company to assess nuclear technology options available to Ontario. The firm’s final report, entitled A strategic assessment of Ontario’s economic and technology options in the growing nuclear market, shows the company to be a big booster of nuclear power which, of course, bodes well for CIC and the UDP.

“With the increasing cost of alternative fuel sources, the growing focus on and concern about carbon emissions, and an increasing number of countries seeking energy self-sufficiency, nuclear energy is making a comeback as a preferred source of baseload power. Nuclear energy offers a non-carbon-emitting, cost-competitive, safe generation alternative. Many governments and stakeholder groups worldwide are reconsidering their historical anti-nuclear stance, and momentum is increasing for nuclear technology in a number of major markets,” the report’s executive summary states.

The final item on the UDP’s Oct. 20 agenda pertained to UDP members’ orientation to the uranium industry. The minutes indicate that Cameco and Bruce Power offered to provide plant tours for interested members of the panel. It was resolved that, “The Secretariat will contact Cameco and Bruce Power and all of the members for logistical information for a tour of Cameco’s facilities in Port Hope and Northern Saskatchewan and a tour of the Bruce Power nuclear power station in Ontario.”

As part of the same agenda item it was also decided that UDP members should be provided with copies of the book Power to Save the World: The Truth About Nuclear Energy by pro-nuclear author Gwyneth Cravens. The minutes don’t indicate whose idea this was, but its alarming nonetheless that only side of the nuclear issue is being considered. Then again, at least 10 of the 12 UDP members or the organizations they represent appear to be pro-nuclear themselves. It’s one big happy family.

Thursday, February 26, 2009

Advanced Education, Employment and Labour refusing access to Trade Union Act and Labour Standards Act records; 7th denial since May 2008

“Integrity and accountability will be at the forefront of our dealings as a government, and in your work as a Minister of the Crown.”
– Premier Brad Wall’s mandate letter to the Hon. Rob Norris, Minister of Advanced Education, Employment and Labour, November 7, 2007

Saskatchewan people expect their government to be open, honest and accountable. A Saskatchewan Party Government will provide Saskatchewan people with more transparency and accountability than any previous government…”
Saskatchewan Party 2007 Election Platform
The above words appear to mean little to the Saskatchewan Party government. For the seventh time since May 2008 the Ministry of Advanced Education, Employment and Labour (AEEL) has denied access to records under The Freedom of Information and Protection of Privacy Act in their entirety.

An access to information request dated Jan. 22, 2009, was submitted to AEEL for “copies of any reviews or analyses that have been conducted by or for the Government of Saskatchewan since Nov.1, 2008 of The Trade Union Act and The Labour Standards Act; and also copies of any briefing notes and memorandums from May 1, 2008 to Jan. 22, 2009 regarding The Trade Union Act and The Labour Standards Act.”

According to the Feb. 23 letter signed by AEEL associate deputy minister Mike Carr (a Saskatchewan Party supporter and contributor) access to the records requested was denied pursuant to the following sections of the Act:

Section 16 – Cabinet documents;
Section 17 – Advice from officials (a discretionary exemption); and,
Section 22 – Solicitor-client privilege (a discretionary exemption).

Norris’s ministry appears to have violated the Act by failing to apply section 8 to the application. This part of the legislation is mandatory and requires: “Where a record contains information to which an applicant is refused access, the head shall give access to as much of the record as can reasonably be severed without disclosing the information to which the applicant is refused access.” AEEL neglected to do this.

This latest refusal continues a disturbing trend of blanket denials for access to any records related to provincial labour legislation. The Wall government obviously has some secrets to keep.

Below is a list of the other six access to information requests that have been denied:

Jan. 20, 2009: Access denied to any briefing notes and memorandums, including any attachments, from Feb. 1, 2008 to Nov. 30, 2008 regarding the essential services legislation.

Jan. 20, 2009: Access denied to any memorandums, including any attachments from Nov. 7, 2007 to Dec. 31, 2007 regarding or relating to essential services legislation.

Jan. 20, 2009: Access denied to any briefing notes, letters and memorandums, including attachments, from Oct. 1, 2008 to Dec. 23, 2008 regarding or relating to the minimum wage regulations and the amendment to allow workers age 15 and older to obtain employment in hotels, restaurants, educational institutions, hospitals and nursing homes.

Jan. 19, 2009: Access denied to any reviews or analyses that have been conducted by or for the Government of Saskatchewan since May 1, 2008 of The Trade Union Act and The Labour Standards Act.

May 22, 2008: Access denied to the daily appointment and meeting schedules for Minister Rob Norris and Deputy Minister Wynne Young from Dec. 1, 2008 to Mar. 14, 2008.

May 13, 2008: Access was denied to the contract and any correspondence between the Government of Saskatchewan and management lawyer Kevin Wilson from Nov. 8, 2007 to Feb. 29, 2008. Wilson was hired to provide advice on the government’s essential services legislation.

In addition to these is a Dec. 17, 2008, request to the Ministry of Justice and Attorney General for “copies of the first, second and third drafts of the essential services legislation, including attachments; and also copies of any briefing notes and memorandums, including attachments, from Nov. 7, 2007, to Dec. 31, 2007, inclusive, regarding the essential services legislation.”

The ministry subsequently refused to disclose the draft legislation and released only a handful of memorandum cover pages. Aside from providing a bit of a timeline these records hold little value. The ministry’s Jan. 15 letter cites the following sections of the Act as the reason for denial to certain records:

Section 17 – Advice from officials (a discretionary exemption); and,
Section 22 – Solicitor-client privilege (a discretionary exemption).

The ministry’s decision has been appealed to the Saskatchewan Information and Privacy Commissioner in Regina.

Tuesday, February 24, 2009

Fraser Institute: Crown analysis “lacks credibility”; Estey’s TILMA concerns ignored; case for more tax cuts and labour reform weak

Cheap labour and the Fraser Institute’s Niels Veldhuis

‘More needs to be done.’

When you think about it that’s all you ever really hear from right-wing think tanks like The Fraser Institute. No matter how much a government gives in to their demands it’ll never be enough. The goal posts will always get moved out a little bit further.

Niels Veldhuis, the Fraser’s director of fiscal studies, was in Saskatoon on Feb. 19 to flog the institute’s latest study Saskatchewan Prosperity: Building on Success.

Velduis’s presentation at the Sheraton Cavalier Hotel was sponsored by another right-wing think tank: the Saskatoon-based Prairie Policy Centre. For $40.00 you could sit and listen to Veldhuis, the primary author of the report, rail against unions, Crown corporations, taxes and phantom interprovincial trade barriers.

In a nutshell the report says Saskatchewan has suffered from “a lack of economic opportunities” and “a dearth of investment and business development.”

“This dearth of opportunities is largely premised on the lack of investment in the province and the accordant economic implications of a lack of investment,” the report notes.

The “two key measures of investment that best highlight” this is: “net business investment per worker, and net business investment in machinery and equipment per worker.”

According to the institute “the province ranks 9th in accumulated total net business investment and last in accumulated net business investment in machinery and equipment.”

“In other words, Saskatchewan attracted the least amount of net business investment broadly defined and, more narrowly defined, in terms of machinery and equipment between 1978 and 2007 amongst all the provinces. It is this dearth of investment that formed the basis for a lackluster opportunities economy in the province.”

The “main reasons” for this lack of investment are the province’s tax policies, labour market regulations, Crown corporations, and barriers to interprovincial trade.

The Fraser’s solution is to cut taxes, slash labour laws, privatize the Crowns and sign the BC-Alberta Trade, Investment and Labour Mobility Agreement (TILMA). Where things start to get a little fuzzy, though, is how will doing some of these things result in companies buying more machinery and equipment. In several instances the institute offers no proof or examples to support its recommendations.

It’s important to know what The Fraser Institute is and where it gets its money from in order to operate. The organization was founded in 1974 and is non-profit. Its vision, according to its website, “is a free and prosperous world where individuals benefit from greater choice, competitive markets, and personal responsibility.” Its mission “is to measure, study, and communicate the impact of competitive markets and government interventions on the welfare of individuals.”

The institute’s reach is considerable. Its “list of researchers has grown to include more than 350 authors in 22 countries… comprising more than 600 Institute publications and thousands of articles.”

The Fraser states that it depends “entirely on donations from people who understand the importance of impartial research and who support greater choice, less government intervention, and more personal responsibility.”

The organization’s financial records show that in 1998 it brought in $3,425,771 through donations, sales of publications, interest and other income. In 2007, the figure had risen to $12,730,493.

The Fraser’s 2007 annual report shows the following breakdown for the dollar contributions it received: 34% Organizations and Corporations; 53% Foundations; 13% Individuals.

So just who are these contributors? Who knows, the Fraser won’t disclose the names.

The institute says it is “Beholden to no one, our conclusions and recommendations may be different from reports produced by organizations who receive government funding. We also do not accept any contracts for research.”

They may not be beholden to government, but they certainly are beholden to their donors. You can bet those contributions would dry up if the organization began straying from its deeply held conservative vision and mission.

The Fraser’s Saskatchewan report blames tax policies, labour laws, Crown corporations and interprovincial trade for the “dearth of investment” in machinery and equipment.

However, reports published in 2007 by the Bank of Canada and TD Bank Financial Group that examines the lack of capital investment in Canada appears to have reached different conclusions. In their reports, the Bank of Canada’s Richard Dion and TD Bank economists Don Drummond and Ritu Sapra concur that higher taxes are a problem but don’t mention interprovincial trade barriers, labour laws or government competition (i.e. Crown corporations) as reasons for Canada’s low numbers. The authors have at least two reasons in common, though: size and aversion to risk.

“Companies are smaller, on average, in Canada than the United States,” Drummond and Sapra said.

“Small firms conduct less research and development than their big business peers. This lower [research and development] expertise may reduce the willingness and/ or ability of some firms to implement new technologies developed outside the firm. They often lack knowledge about using the latest [machinery and equipment] to optimize business. Second, smaller-scale firms could be less inclined to acquire new [machinery and equipment] due to differences in the cost of capital. Cost of fixed investment is, generally, higher for smaller firms. In particular, the level of investment risk that might be acceptable to a larger firm because it has substantial resource reserves might not be acceptable to a smaller one. Moreover, small firms tend to be disadvantaged relative to their larger counterparts in terms of access to finance. The third factor that causes differences in fixed investment and use might be the differing benefits by firm size. Smaller firms are less likely to benefit from economies of scale and the cost savings to be had from larger production runs facilitated by greater use of [machinery and equipment]. A word of caution though – the smaller-scale of firms in Canada in all probability has a greater impact on investment levels rather than growth rates.”

Dion says in his report that one reason “for the more sluggish demand for innovation in Canada” may be that there are “fewer rewards and more aversion to risk taking. For Canadian firms, the smaller size of local markets in non-tradable product sectors would limit the returns to innovation and inhibit innovative activity. It could explain in part why [research and development] intensity in the services sector is lower in Canada than in the United States, which in turn contributes to the weaker aggregate [research and development] intensity in Canada. Fewer rewards for the relatively high risks associated with innovation might also result from higher marginal tax rates on personal income, lower compensation for high-level managers, and larger bankruptcy costs or stigma facing Canadian entrepreneurs.”

The Fraser’s report doesn’t appear to discuss these subjects at all. Its report also seems to stop at 2007, which means it does not take into account the incredible gains made in the last 14 months under the policies it despises. Examples of this can be found in provincial news releases over that time:

February 27, 2008 – A Statistics Canada survey estimates that Saskatchewan will top the $12 billion mark in capital investment for the first time ever. The report pegs capital spending intentions at $12.3 billion in 2008, an 18 per cent increase from that of 2007. That’s the second highest percentage increase among the provinces, just slightly behind Manitoba at 18.8 per cent, and more than three times the national average of 5.2 per cent.

May 6, 2008 – The value of building permits in Saskatchewan for March 2008 recorded the second highest percentage increase in the nation according to Statistics Canada. The March 2008 building permit values totalled $146 million, up 32 per cent from the $110 million recorded last March (seasonally adjusted). Newfoundland and Labrador had a slightly higher increase than Saskatchewan, up 34.9 per cent over last March.

January 9, 2009Saskatchewan building permits show an 8.8 per cent increase totalling $150 million for November 2008 up from October 2008 on a seasonally adjusted basis. When compared to November 2007, the November 2008 seasonally adjusted figure is a 26.6 per cent increase, the highest among the provinces. Meanwhile, non-residential permits in Saskatchewan increased by 59.9 per cent for a total of $80 million seasonally adjusted, which was the highest among the provinces. Compared to other western provinces Saskatchewan’s overall increase of 26.6 per cent was far ahead of decreases in Manitoba (-5.9 per cent), Alberta (-14.5 per cent) and BC (-32.6 per cent).

January 20, 2009Saskatoon led the nation in GDP growth among Canadian cities in 2008 with a 5.4 per cent increase according to the Conference Board of Canada metropolitan outlook report. Regina had the second highest increase at 4.9 per cent. In 2009, the Conference Board predicts both Saskatoon and Regina will continue to see momentum with projected population increases and major economic activity.

February 5, 2009 – Building permits in the province totalled $2.2 billion in 2008, up 32.8 per cent when compared with the totals for 2007 (seasonally unadjusted). This beats the former record of $1.6 billion set in 2007. Saskatchewan had the largest percentage increase amongst the provinces in 2008, well ahead of the 5.3 per cent decline on the national front for the same period.

February 6, 2009 – There were 16,600 more people working in Saskatchewan in January compared to the same month a year ago - an increase of 3.3 per cent. That’s by far the strongest rate of employment growth in the country and a sharp contrast to the rest of Canada, which lost more than 126,000 jobs during that same period.

In Saskatoon, according to the city’s development services branch, there were 8,455 licensed businesses in Saskatoon in 2008. The city issued 1,172 new business licenses last year. In 2007, there were 7,930 licensed businesses in the city and 961 new business licenses were issued. It would seem that current policies aren’t hindering investment in the province’s largest city.

Despite the good news the Fraser says ‘more needs to be done.’ This always seems to be the organization’s justification to demand more tax cuts, attack labour laws and cut back social programs.

Tax Policy

The Fraser examined four areas of tax policy: personal income tax, sales tax, corporate income tax, and corporate capital tax.

The institute acknowledges that since 2000 the provincial government has “made major strides in improving the province’s personal income taxes by implementing most of the main recommendations offered by the Personal Income Tax Review Committee.” (The Vicq report.)

“However, more needs to be done not only to retain the province’s best and brightest but also to attract back those who have left. Saskatchewan still maintains a far too high top marginal personal income tax rate (15.0%) when compared to Alberta (10.0%).”

Saskatchewan’s rate is lower than Ontario, New Brunswick, Nova Scotia, Manitoba, Prince Edward Island, Newfound & Labrador and Quebec. To suggest it’s “far too high” seems a little over the top.

The Fraser says “Saskatchewan should initiate a three-to-five-year plan to eliminate the middle- (13.0%) and upper-income (15.0%) personal income tax rates in their entirety. This would result in Saskatchewan being the only province other than Alberta to maintain a single tax rate for personal income taxes. Saskatchewan must also reduce the remaining personal income tax rate to at least 9.0% over the period in order to gain an advantage over Alberta’s single rate tax.” The institute doesn’t explain how this will result in more machinery and equipment being purchased.

At 12% Saskatchewan’s corporate income tax (CIT) is lower than New Brunswick, Manitoba, Newfoundland & Labrador, Ontario, Prince Edward Island and Nova Scotia, but the Fraser wants it slashed to 9% to make it the lowest in the country.

The institute notes that the corporate capital tax was set to be eliminated on July 1, 2008, but “there is still room for improvement.” The organization wants the Saskatchewan government to eliminate the capital tax to financial institutions as well.

“The long-term advantages of the tax include more economic activity, more investment, and more employment opportunities,” the report states. How this will result in more machinery and equipment being purchased isn’t explained.

Lastly, the Fraser wants the province to harmonize the provincial sales tax (PST) with the federal goods and services tax (GST) in a revenue-neutral manner.

And how does the Fraser Institute intend the province to pay for these tax cuts? Well, page 30 has this to say: “Such a plan will require restraint and, if necessary, reductions in provincial spending.”

“At a minimum, greater restraint by the provincial government is required for the tax plan outlined previously to be implemented over the next three to five years. In addition, much of the burden of spending restraint or reductions could be mitigated by reforming the way in which services are delivered,” the report states on page 34. The footnote for this item adds the telling statement: “For discussions on reforming service delivery in sectors such as health care, education, and welfare, please see Irvine et al. (2002), Coulson (2001), and Richards (1997).”

The 2002 book in question is called Better Medicine: Reforming Canadian Health Care edited by Toronto’s Dr. David Gratzer. According to the write-up the book is a “collection of twelve essays on health care reform in Canada, advocating an open-minded approach to such concepts as privatization, two-tier health care, and user fees.”

The second book, entitled Toward Market Education: Are Vouchers or Tax Credits the Better Path? by Andrew J. Coulson, was published in 2001 by the American libertarian think tank Cato Institute. It compares education tax credits and vouchers.

The third book is Retooling the Welfare State: What’s Right, What’s Wrong, What’s to be Done by John Richards and published by the C.D. Howe Institute in 1997. According to a review of the book in the Jan. 1999 Fraser Forum, Richards “has five proposals for retooling the welfare state: clarify and balance budgets (citizens begin to understand program benefits and their costs in terms of taxes); maintain accountability (one level of government should be responsible for social policy); respect comparative advantage (the decentralization of jurisdiction between Ottawa and the provinces in terms of social programs); encourage two-parent families (where one parent is a mother and the other a father); and emphasize workfare.”

Clearly, the Fraser Institute’s master plan for Saskatchewan goes far beyond simply privatizing the Crown corporations.

Labour Laws

It should be noted at the outset that the Fraser’s previous provincial study, Saskatchewan Prosperity: Taking the Next Step (May 2002), contained no discussion or policy recommendations regarding unions or labour laws.

The institute states in its current report that Saskatchewan’s labour market regulations “must be drastically altered if the province is to capitalize on its current opportunity.” To get there it recommends:

– prohibiting mandatory union membership and dues-payment clauses in collective bargaining agreements;

– removing successor rights, technological change laws, and forced arbitration; and,

– freezing the minimum wage.

The Fraser states that union security laws – that is, the rules governing union dues and membership, are perhaps “the most important aspect of what went overlooked” in the Saskatchewan Party government’s 2008 labour reforms.

Saskatchewan allows both union membership and full union-dues payment (i.e., representation- and non-representation-related costs) to be included in a collective agreement as a condition of employment,” the report notes. Buried in the footnotes, however, is this tidbit: “These laws are not a phenomenon limited to Saskatchewan; all other Canadian provinces also have such laws.” Obviously, this isn’t a burning issue.

The Fraser states that, “Economic research has shown that allowing mandatory union membership as a condition of employment results in higher rates of unionization,” but provides no examples of where this has happened in Saskatchewan. In fact, according to the institutes own research, the rate of unionization in the province has actually decreased over the last decade.

The Fraser’s Measuring Labour Markets in Canada and the United States, 2003, report shows that between 1998 and 2002 unionization as a percent of total employment in Saskatchewan was 35.6%.

The organization’s Measuring Labour Markets in Canada and the United States: 2008 Report shows that between 2003 and 2007 the average rate of unionization in the province was 35.4%. The Fraser’s latest study says the rate in 2007 was 34.8%.

The Fraser is opposed to successor rights. It says that these “rights are important to investment because they may deter potential investors from purchasing a business if an existing collective agreement which they had no part in negotiating prevents them from reorganizing the business to improve its performance.” The operative word here is ‘may’ and, again, the institute fails to provide examples of where this has happened in Saskatchewan.

Additionally, it’s only in the footnotes that the institute bothers to tell readers that every province in Canada has successor rights legislation.

The Fraser is opposed to technological change provisions in labour relations laws that “require employers to send affected unions a notice of technological investment and change.” The institute says that such “provisions impede investment because they limit the ability of unionized firms to adapt to changing conditions.” Four other provinces (B.C., Manitoba, Quebec and New Brunswick) have this provision so it doesn’t appear that onerous. And once again, the institute fails to provide examples of where this has occurred in Saskatchewan, and to the extent that it is causing so much harm that it requires immediate attention.

The Fraser is opposed to what it calls “forced arbitration.”

Saskatchewan’s Trade Union Act provides ample opportunity for parties to settle a grievance through mediation before it gets to arbitration. Section 25 of the Act states that all differences between parties to a collective bargaining agreement are to be settled by arbitration “after exhausting any grievance procedure established by the collective bargaining agreement.” Section 26.4 allows for parties to resolve a grievance by referring it “to a grievance mediator for the purpose of resolving the grievances in an expeditious and informal manner.” According to the provincial government’s labour website grievance mediators are “assigned without cost for their services.”

In its report the Fraser states: “Proceeding immediately to binding arbitration without taking prior steps may not only result in increased costs for both parties but it may also create hostility between the parties.” The institute then suggests that it would be better “if parties are free to prolong the dispute until it’s in the best interests of all parties to voluntarily enter a process of final and binding resolution (i.e., arbitration).”

It’s been established that the Act provides for mediation before a grievance gets to arbitration. Furthermore, it seems absurd the Fraser would suggest that letting a problem fester indefinitely until the parties decide to end the dispute voluntarily is a viable option. Would allowing a problem to drag on for weeks, or even months, not result in increased costs and create hostility – not to mention the risk of poisoning the atmosphere in the rest of the workplace?

The Fraser claims that “members of provincial labour relations boards… have the potential to exert great influence over the resolution of industrial disputes” but fail to mention that the board is composed equally of business and labour representatives, with an independent chair. How is this unfair?

Finally, the Fraser is calling for the minimum wage to be frozen. In an editorial following Velduis’s visit to Saskatoon, The StarPhoenix noted that “in a province whose employment numbers are growing and where labour is in short supply, the Fraser economist’s call for a freeze on the minimum wage seems oddly out of touch the reality that most employers are offering well above the legislated $8.60 an hour.” [Fraser’s analysis of Sask. Crowns lacks credibility (StarPhoenix, Feb. 21, 2009)]

Crown Corporations

The Fraser does not support Crown corporations. It says they have a “tendency to underinvest in capital” and recommends “policy makers in Saskatchewan to commit to transferring ownership of these businesses to private interests.”

In the same editorial The StarPhoenix blasted the Fraser saying that Veldhuis’s “ideologically-driven analysis… does a disservice to informed to informed public debate” and “lacks credibility.”

“It also does the institute and Mr. Veldhuis no favours that his presentation in Saskatoon coincided with news out of Alberta that the once-mighty giant of the Canadian economy is slated to go into the hole to the tune of $1 billion this year, a shocking turnaround from the surplus of $8.5 billion projected just six months ago. So it turns out that the “Alberta advantage” had mostly to do with what it was being dug and piped out of the ground than almost anything else, including its tax policy,” the StarPhoenix said.

The newspaper also said the Fraser’s report offered little evidence “that relates directly to Saskatchewan enterprises being less efficient or uncompetitive.” [Fraser’s analysis of Sask. Crowns lacks credibility (StarPhoenix, Feb. 21, 2009)]


This is a bad deal that just won’t go away. Naturally, the Fraser supports it recommending that “Saskatchewan should immediately reconsider joining TILMA to eliminate the remaining restrictions and impediments to trade and investment.”

Like most pro-TILMA studies, the Fraser makes no attempt to list the trade barriers between provinces. And, like labour reform, interprovincial trade barriers are not mentioned as being impediments to greater prosperity in the institutes May 2002 report on Saskatchewan.

The Fraser’s report relies heavily on a recent study conducted by trade consultant and TILMA supporter Robert Knox and the institute’s associate director of globalization studies Amela Karabegović and completely ignores a Jan. 2008 report that was done for Saskatchewan cities by the Estey Centre for Law and Economics in International Trade. While the Estey study does not cover every aspect of TILMA’s reach, it does raise enough red flags and compliments research done by others (Steven Shrybman and Marc Lee and Erin Weir in particular) to warrant rejecting the deal.

The Estey findings include:

– “Normally, trade agreements specify those aspects of international commerce to which its principles will apply, with exceptions applying in all other sectors – this is known as a positive list approach. The TILMA, on the other hand, takes a less common negative list approach whereby the agreement’s principles apply to all aspects of inter-provincial commerce unless they are specified in the exceptions included in the agreement. If nothing else, this approach suggests that the signatories to the agreement have a high degree of confidence in their ability to predict the future – the signatory provinces cannot envision a situation in the future where they would like to create a new exception.” [p. 4]

– “A dispute system need not have been included in the TILMA because Canada has a well-functioning system of national courts. Trade agreements normally restrict standing – the ability to bring cases – to the contracting governments. The TILMA extends standing to individuals which greatly increases the complexity (and likely the cost) of settling disputes.” [p. 5]

– “City activities considered as ‘Essential Jurisdiction’ are potentially faced with greater challenges in a negative list type internal trade agreement, than a positive list agreement. As the negative list agreement encompasses all matters, including unpredicted future issues, unless it is specifically exempted, the broad and general powers undertaken as part of Essential Jurisdiction are more likely to contravene provisions of a TILMA-style agreement.” [p. 11]

– “While cities have little jurisdiction over trade in goods and labour mobility, the investment related provisions of a TILMA-style agreement have the potential to impact the activities of cities to a considerable degree. A significant portion of what cities do is to manage what businesses do in their community in accordance with their unique set of values and preferences. Given the ambiguous definition of ‘restrict or impair’ as discussed below, and the provided definition of ‘investment’, much of this municipal activity could be considered restricting or impairing of investment, particularly if cities in other provinces do not share similar regulations, standards or bylaws.” [p. 12]

– “The most effective means to completely protect cities’ Essential Jurisdiction is to negotiate the complete exclusion of cities from a negative-list style internal trade agreement.” [p. 16]

– “Once cities are included in a negative-list style agreement, they are subject to challenge on what is and what is not included in the specific exemptions. For example, even were a city’s essential jurisdiction exempted, the city would be subject to challenge on every bylaw or policy as to whether it was or was not included in “essential jurisdiction”. Also, if in the future a Province wishes to change or expand a city’s essential jurisdiction, as the role of cities change, that different essential jurisdiction would not be exempt from TILMA.” [p. 16]

– “Other minor changes that may assist in protecting cities’ interests include requesting less ambiguous definitions or more inclusive definitions of terms used in the agreement. Specifically in the TILMA, a more definitive description of ‘restrict or impair’ in Articles 3 and 5 would improve clarity and reduce uncertainty. Similarly, TILMA Article 6 (Legitimate Objectives) could have a specific clause for cities that defines a wider list of legitimate objectives that better reflects municipal goals (i.e. the unique character/democracy/socio-community clause). While many activities of cities might well be upheld if a challenge were made in the disputes system, the ambiguity leaves open the opportunity for a challenge and, hence, the cost and effort of mounting a defence.” [p. 17]

– “The low threshold values for Article 14 expose cities to potential procurement challenges for purchases that are less economically significant but highly costly. The low thresholds add a significant burden to cities’ procurement activities. More contracts that are worth less must be publicly tendered. Doing so requires cities to expend significant resources, which can easily outweigh the value of the goods or services being procured. Such activities also are a larger relative burden for smaller centres that have fewer resources to expend. Consider that Saskatoon requires publicly advertised tenders for contracts over $100,000. This is a significantly higher threshold than the $10,000 listed in the TILMA.” [p. 18]

– “Even if cities were given standing so that they could defend themselves directly, given the negative list approach taken in TILMA, there may be numerous cases in the investment area until the panels have a record upon which some precedents can be established. These cases can be costly to defend against and may represent a large burden on the taxpayers of smaller cities. The negative list approach combined with a failure to directly deal with the appropriate exemptions for cities in the TILMA means that panels are not obliged to take account of the need of cities to have policy space to foster their global competitiveness.” [p. 29]

Unfortunately, it appears The StarPhoenix has flip-flopped on TILMA – again.

In an editorial on May 15, 2007 the newspaper endorsed the trade deal without reservation urging then NDP Premier Lorne Calvert “to push for Saskatchewan’s inclusion as soon as possible.”

“TILMA’s success is based on the notion of including everything unless there’s a darn good reason to leave out a sector,” the StarPhoenix said. [TILMA gives clout to Sask. (StarPhoenix, May 15, 2007)]

Then when the Estey report was released the newspaper backtracked stating that, “With cities lacking the legal standing the deal accords to individuals and companies to seek redress when they feel their economic interests are stymied by TILMA, it’s only sensible that they strive to seek total exemption from such agreements… and to have the well-established court system to resolve disputes rather than rely on some newly created trade panel to do the job.” [TILMA analysis wise approach by Sask. cities (StarPhoenix, Mar. 17, 2008)]

A year later The StarPhoenix is now saying that Veldhuis’s call for Saskatchewan “to join TILMA” makes “good sense.” [Fraser’s analysis of Sask. Crowns lacks credibility (StarPhoenix, Feb. 21, 2009)]

Good grief. At least The StarPhoenix got one thing right and that is the Fraser Institute’s report on Saskatchewan lacks credibility.

Monday, February 16, 2009

Air Ambulance hangar could be Sask.’s first P3 project; D’Autremont lauds B.C. Sea-to-Sky Highway that reportedly cost taxpayers an extra $220 million

Determined to emulate its Western neighbours in every way the Saskatchewan Party government is following in Alberta and British Columbia’s footsteps by embracing public private partnerships (P3) to build large-scale infrastructure projects.

The news came on Jan. 2 when The StarPhoenix reported the Wall government is setting up a secretariat to explore the possibility of private sector companies being involved in infrastructure projects such as roads, schools and health-care facilities.

Government Services (GS) Minister Dan D’Autremont said the province will proceed slowly when it comes to the public-private partnerships dubbed P3s.

“All of the advice we have received is, ‘do not rush,’ that you need to have a very clear understanding of what you’re looking for and what it is that’s being offered and not to be precipitous,” the minister said in an interview on Jan. 1.

D’Autremont said the government has set $25 million as the minimum cost of projects for which private sector involvement will be considered. [Gov’t explores public-private partnerships (StarPhoenix, Jan. 2, 2009)]

In mid-December cabinet shuffled associate deputy minister Mike Shaw from health to government services as the head and first employee of the new P3 secretariat. The order in council (OC 863/2008) states that Shaw’s appointment is effective Jan. 1, 2009, at a salary of $175,656 per year.

The provincial government has identified at least one potential P3 project.

According to an Oct. 15, 2008, briefing note obtained under freedom of information legislation the Government Services Ministry’s first project could be a new hangar for the province’s Air Ambulance program.

“Government Services is identifying necessary legislative changes if any, and potential staffing options for the P3 secretariat. It is expected that the Secretariat will be operational by December 31, 2008,” the report states. “Currently GS is preparing a Request for Qualifications for a new facility (a hangar) for the Air Ambulance program. While this project is expected to be well under the $25 million benchmark, it may be a good first project as risks may be reduced for a project of this size.”

The briefing note makes it clear that everything is open for discussion: “Any and all areas of traditional P3s (design, build, finance, own, and operate) will be considered for projects over $25 million with a term of at least 20 years that do not fit well within the traditional procurement approach. It is anticipated that Government will own the facilities, or have ownership transferred at the pre-determined time in the contract, that are procured using P3s.”

The report goes on the say that, “Extensive due diligence will be required prior to undertaking a P3 project” and that the “process must be, and be seen to be, fair, consistent, transparent and accountable.”

In the briefing note the government states the following rationale for using P3s:

– Accelerated construction;
– On-time and on-budget delivery;
– Shifting risk to the private-sector;
– Potential cost savings;
– Customer service improvements;
– Allowing the public sector to focus on outcomes and core business; and,
– Fostering additional skill sets/capacity within Saskatchewan.

During his interview with StarPhoenix reporter James Wood, D’Autremont said P3s have a mixed record. British Columbia, which has been in the lead when it comes to such projects in Canada, has seen long-term savings and quality from the public-private Sea-to-Sky Highway, while a P3 school in Nova Scotia, however, failed to meet expectations.

D’Autremont’s use of the Sea-to-Sky Highway Improvement Project in B.C. as an example of a P3 success story is disturbing given that a recent forensic analysis of the project seems to suggest otherwise.

Partnerships British Columbia Inc. is a wholly owned company of the B.C. government. It was established in May 2002 to pursue public-private partnerships in the delivery of public infrastructure. Its work involves preparing Value for Money reports for each P3 project undertaken. The Sea-to-Sky Highway Improvement is one of those projects.

According to a Jan. 29 backgrounder, the B.C. division of the Canadian Union of Public Employees retained forensic accountants Ron Parks and Rosanne Terhart of the firm Blair Mackay Mynett Valuations Inc. to review and comment on costing and evaluation methodology used for P3 projects in B.C. The review focused on four projects: Abbotsford Regional Hospital and Cancer Centre, Sea-to-Sky Highway Improvement, Academic Ambulatory Care Centre (Diamond Centre) and Canada Line Final Project.

In their report, Evaluation of Public Private Partnerships: Costing and Evaluation Methodology (Jan. 2009), Parks-Terhart said that, based on available evidence, “all the projects we reviewed, the nominal costs of the P3 substantially exceeded the nominal costs of the Public Sector Comparator.

“Nominal costs are the actual number of dollars spent over the life of the contract. The difference in the cost between a publicly delivered project and a P3 can be substantial. For example, the Diamond Centre will cost $203 million over the life of the contract as compared to a cost of $89 million had the project been publicly delivered – a difference of nearly 130 percent.”

Other findings include:

– “[B]ased on available evidence and the application of more appropriate discount rates, the cost of P3s exceeds traditional procurement methodology for the projects reviewed.”

– “[T]he methodology used by Partnerships BC to compare the P3 projects to the public sector comparator is biased in favour of the P3 projects.”

– Parks-Terhart could not determine “whether the citizens of British Columbia are at risk of losing opportunities and money because of private equity refinancing arrangements that may occur following completion of the construction stage of the project; however, the private partners are most certainly in business to make a profit while the government is not. The profit made by the private partners, by definition of the term “private”, would not be shared by the public.”

– “[C]ritical information and documentation in support of the Value for Money reports was for the most part denied in response to Freedom of Information requests. In our view this suggests a general lack of transparency and public accountability.”

Specific to the Sea-to-Sky Highway project Parks-Terhart note:

– “[T]he total nominal costs reported in the BC Fiscal Plan were less that the total costs reported in the Value for Money report. We do not know the reason for the difference.”

– “Although the Value for Money report did not disclose a favourable cost savings in the net present value terms, a risk factor of $42.9 million was added to the net present value of the Public Sector Comparator to account for additional risk of public procurement. This added risk is in addition to the risk factor inherently included in the discount rate of 7.5 percent used to calculate the net present value of the project. We find this methodology faulty as it double counts the risk in this project.”

– Parks-Terhart was not provided with annual cash flows for the P3 and the Public Sector Comparator regarding the Sea-to-Sky project.

– Dr. Marvin Shaffer, an adjunct professor in the Simon Fraser University Public Policy Program, in his article titled The Real Cost of the Sea-to-Sky P3, “recommended that the P3 and the Public Sector Comparator be discounted at the government’s cost of borrowing to reflect the money that taxpayers would have to set aside today in order to meet the lease or debt service obligations in the future. Dr. Shaffer applied a 5 percent discount rate to the Sea-to-Sky cash flows (to better reflect the government’s cost of borrowing) instead of a 7.5 percent discount rate used by Partnerships BC. He concluded that the P3 project would cost the taxpayers over $220 million more than the public procurement project using the lower rate.” Parks-Terhart said they agree with Dr. Shaffer’s comments.

In a Feb. 4 editorial, the Vancouver Sun dismissed the Parks-Terhart report for the simple reason that Parks “has been the leading critic [of P3’s] for several years” and that the report “was commissioned by the Canadian Union of Public Employees and the Hospital Employees Union and, to the surprise of no one, lent support to their ideological opposition to P3s.”

The near 600 word editorial defended P3’s and made no attempt whatsoever to discuss or analyze the report’s findings or recommendations to back its position that the document was not worthy of attention. The Sun editorial board instead tossed the report outright based on the sole fact there was union involvement.

(It should be noted that on May 14, 2005, the Sun endorsed Premier Gordon Campbell and the B.C. Liberals for a second term in the general election that was held May 17, 2005.)

The Sun failed to acknowledge that the Parks-Terhart report included details of a scathing report released on Dec. 8 by Ontario Auditor General Jim McCarter on the Brampton Civic Hospital P3 project debacle.

McCarter, who appears to have no connection to CUPE or Blair Mackay Mynett Valuations Inc., found that by going the P3 route cost Ontario taxpayers $194 million more than had the government went with the traditional procurement method of a publicly built and run facility. McCarter also found that taxpayers would have saved $200 million in interest charges because of the government’s ability to borrow money at a lower rate than the private sector.

In their report, Parks-Terhart noted a number of McCarter’s comments that “appear to parallel our view that the methodology used to procure, evaluate and report the benefit of the P3 project was biased in favour of the P3 project.” Apparently Ontario’s experience with P3’s doesn’t interest the Sun.

It’s interesting to note that on Jan. 26 the Ottawa Citizen published a list of other Ontario P3 hospitals with cost overruns:

Hospital Original price / Final price

– North Bay $551 million / $1 billion
Sarnia $140 million / $320 million
– Royal Ottawa $100 million / $146 million

Following the release of the Parks-Terhart report Partnerships BC CEO Larry Blain dismissed the findings telling the Vancouver Sun on Jan. 29 that, “The auditor-general has concluded that our methodology is fairly and reasonably presented.” [Partnership projects pricier, study finds (Vancouver Sun, Jan. 30, 2009)]

In June 2006, however, CUPE and the Hospital Employees’ Union (HEU) released a report, also by Parks, that reviewed the role of the Office of the Auditor General of B.C. in reporting on public-private partnerships and indentified a number of significant problems.

The report, entitled Reporting on Public Private Partnership Projects in British Columbia: The Role of the Auditor General (May 2006), was summarized in a backgrounder issued by CUPE and the HEU on June 7, 2006:

Parks’ findings in brief

• The Auditor General’s process for reviewing third-party P3 reports provide “no positive assurance…as to whether value for money is demonstrable”, “does not provide assurances that there are going to be real cost savings for the public”, and “is appropriate only from the standpoint of dealing with forward-looking information, which cannot be audited.”

• The BC government, provincial ministries and legislators “should exercise restraint in adopting conclusions that the Auditor General has not reached or set out in his reports.”

• “The preferred process is for the Auditor General to prepare a direct report.” Due to underfunding, the Auditor General opted for a review of project reports authored by third parties with a vested interest in their success – Partnerships BC and Canada Line Rapid Transit Inc.

Parks’ recommendations in brief

• “Funding for the Office of the Auditor General should be increased significantly” to enable the Auditor General to prepare independent reports on P3 projects.

• “The Auditor General’s work on P3 projects should be funded out of his general budget” rather than on a fee-for-service basis.

• “The Auditor General should adopt a greater degree of skepticism in regard to P3 projects, and take more of an investigative approach that is apparent to the public.”

• “The Auditor General should address the criteria for successful P3 projects and determine whether the projects he is examining meet those criteria.”

• “The Auditor General’s involvement in P3 projects should be in real time”, in order to influence decisions that will impact the value for money question.

• “The Auditor General should prepare his own independent report on P3 projects…in order to clearly establish what information and conclusions can be relied upon by the public and legislators.” And Parks comments further: “In this manner he can distinguish his information and conclusions from those who have a vested interest in demonstrating the value for money of the P3 model.”

• The AG should conclude if a project demonstrates value for money whenever possible.

To date it appears that Gordon Campbell’s BC Liberal government has not acted on any of the recommendations.

Contacted by email on Feb. 14, Parks said in his view “nothing has improved” in the two and half years since his report was released. As far as he knows “the Auditor General has not changed his approach.”

“The problem may lie in the AG’s budget, or in the reluctance of Partnership BC to open things up to close scrutiny. Certainly nothing is being examined in “real time”, which was one of our recommendations, nor has the AG undertaken an independent examination or review,” Parks said.

“I am not opposed to the concept of P3s as long as they provide value for money for taxpayers. I do question however, the methodology by which they are evaluated,” he later added.

“The BC government says the Sea to Sky Highway is on time and on budget, and I don’t disagree. The problem is that the budget is too high to begin with.”

The Vancouver Sun editorial board doesn’t bother to tell its readers these things.

And if the records recently disclosed by Government Services are any indication the Saskatchewan Party government’s new P3 Secretariat might share some similarities with Partnerships BC in the way it will operate.

According to an undated document outlining the government’s key messages, the secretariat “will manage the resources necessary to fulfill the due diligence requirements of entering into long-term P3 contracts” and “P3 contracts will be considered when it can be demonstrated that a P3 can be cost effective as compared to traditional construction.”

Translated it could mean that the Wall government intends on using the same flawed, potentially biased Value for Money process that is employed in B.C. but only on a smaller scale. There is no mention of an independent body such as the Provincial Auditor of Saskatchewan being involved. The true test will be when the freedom of information requests begins to arrive and what the government’s response will be.

Sunday, February 08, 2009

Emergency Medical Services: Review examining “all aspects” of pre-hospital & inter-hospital EMS; SEMSA in lead role, health care council left out

At a news conference in Regina on Dec. 11, 2008, Health Minister Don McMorris announced the launch of a province-wide review of emergency medical services (EMS) in Saskatchewan.

A health ministry news release said the review will be conducted in consultation with the ambulance industry and regional health authorities. Its recommendations will focus on pre-hospital and inter-hospital transfers, and will form the basis for a long-term plan to improve the province’s road ambulance services.

Don Cummings, an Edmonton-based consultant, has been appointed chair of the EMS review committee.

McMorris was reported in The Leader-Post as saying the review may also look at the delivery model of emergency medical services. Road ambulance services are provided through the health regions, but about 40 operations are privately owned. Another 56 of the ambulance services are publicly owned, while 13 are non-profit. [EMS to get a checkup (Leader-Post, Dec. 12, 2008)]

Records obtained from the health ministry under freedom of information legislation, however, suggest that everything will be examined.

The scope of the terms of reference for the review committee states in part: “The review and recommendations will…Include all aspects of pre-hospital and inter-hospital EMS (EMS dispatch, First Responder groups, and road ambulance).”

The review committee will “provide recommendations for a strategic vision” and “will consider patient concerns with EMS and stakeholder views about the tools required to meet the strategic visions, including:

– patient access to service, cost to patients;

– human, capital/infrastructure and financial resources; and

– regulatory environment for EMS.”

The review will be completed by March 31, 2009.

As for consultation the terms of reference state the review committee “may consult patients and/or families, stakeholders such as, but not limited to, the Saskatchewan Emergency Medical Services Association [SEMSA], Saskatchewan Association of Rural Municipalities, Saskatchewan Urban Municipalities Association, Saskatchewan Association of Health-Care Organizations, Saskatchewan Medical Association, Saskatchewan College of Paramedics, College of Physicians and Surgeons of Saskatchewan, the Saskatchewan Institute of Applied Sciences and Technology.

“The Committee will determine the means such consultation will take – focus groups, written submissions, etc. – but in so doing will not duplicate work that is already included in or underway through the Patient First Review.”

To date there don’t appear to be any labour groups involved in the discussions.

Contacted on Feb. 4, 2009, CUPE Health Care Council President Gordon Campbell said his organization had not received an invitation to participate.

The Health Care Council represents 12,500 health care providers. They include: special care aides, licensed practical nurses, food services workers, laundry, housekeeping and activity personnel, maintenance, clerical, medical diagnostic, therapeutic and recreational workers and medical technologists and technicians.

In 2000, the Council submitted a report to the Commission on Medicare headed by health consultant Ken Fyke called A Vision for Health Care: Building a Responsive Health Care System. One of the report’s recommendations was that “The government should create a provincially-coordinated and publicly-delivered ambulance emergency service.”

The Fyke commission report, released on Apr. 11, 2001, adopted several key recommendations from an EMS review, commissioned by the provincial Health Department and released in December 2000.

Although the union urged the government to implement the Fyke report, it was disappointed the commission didn’t call for a publicly owned and administered EMS system.

“We shouldn’t allow private businesses to profit from medical emergencies,” said Steve Foley, the then president of the Health Care Council. “Private ambulance companies have no place in our public health system.” [EMS union seeks end to for-profit ambulance service: Group frustrated report didn’t recommend publicly-funded EMS system (StarPhoenix, Apr 14, 2001)]

The Saskatchewan Party government, on the other hand, seems eager to pursue more private involvement in the health system.

Last summer Health Minister Don McMorris confirmed that the government is open to looking at an increased private role in health care as part of its “patient-first review” of the health system. [McMorris looks at more private care (Leader-Post, July 26, 2008)]

In a June 27, 2008, letter to Saskatchewan Chamber of Commerce president Dale Lemke, McMorris said: “The private sector can and does deliver health services effectively within a publicly funded system. This is clearly the case with respect to ambulance and medical laboratory services. We will continue to examine whether there are benefits to further private delivery in publicly funded, publicly administered health services.”

McMorris was responding to a number of health care related policy resolutions that were passed at the Chamber’s annual general meeting in May 2008 and forwarded to him for consideration. One called on the government to “promote the establishment of a competitive environment for the provision of health care in Saskatchewan.”

One thing the health minister neglected to mention at the Dec. 11 news conference was that the EMS review committee had already been up and running for nearly two weeks before the announcement was made.

According to a Dec. 2, 2008 briefing note prepared by the health ministry’s acute and emergency services branch, the inaugural meeting of the committee took place on Friday, Nov. 28, 2008 in Saskatoon.

The document went on to say that, “Future meetings of the Committee are scheduled to take place bi-weekly from January to March with the location alternating between Saskatoon and Regina.”

Additional work of the committee detailed in the briefing note includes:

– Two key stakeholders of the review, SEMSA and the EMS Working Group, are planning separate meetings with the Committee Chair without the presence of other stakeholders including the ministry.

– During the afternoon of December 11, 2008, members of the SEMSA board will have a separate, private session with Mr. Cummings to highlight their viewpoints regarding the development of a strategic vision and prioritized recommendations within the Review.

– Members of the provincial EMS Working Group (consisting of senior-most managers from health regions that are responsible for EMS) have elected to schedule their private session with Mr. Cummings in January 2009.

Finally, the document lists the seven members of the review committee that were appointed by the deputy minister of health (in consultation with stakeholders):

– Committee Chair (based of recommendation of SEMSA) – Don Cummings, Sierra Systems, Edmonton (based on recommendation from SEMSA);

– Health Region Representatives (based on recommendation from health region CEOs) – Mike Redenbach, vice president of primary health care with the Regina Qu’Appelle Health Region, and Rod MacKenzie, manager of pre-hospital emergency medical services with the Saskatoon Health Region.

– Ministry of Health Representatives (selected by Deputy Minister) – Duncan Fisher, special advisor to the deputy minister of Saskatchewan Health, and Patrick O’Byrne, director of community hospitals and emergency services, acute and emergency services branch with Saskatchewan Health; and,

– SEMSA Representatives (selected by SEMSA Board) – Ron Dufresne, president of SEMSA, from Moose Jaw, and Trevor Dutchak, vice president of SEMSA, from Prince Albert.

The recommendation to appoint Cummings as the review committee chair is outlined in a short briefing note dated Oct. 28, 2008: “Mr. Cummings is well known in both the Health and EMS community and was instrumental in the development of the Emergency Services Chiefs of Canada [EMSCC] report The Future of EMS in Canada: Defining the New Road Ahead and the Provincial Ambulance Strategy report for Alberta Health and Wellness and the Provincial Health Services Plan for the Health Boards of Alberta.”

The Future of EMS in Canada (Sept. 2006) report is a strategic policy framework. It describes six strategic directions and provides 11 recommendations that the EMSCC say will help enhance community-based EMS across Canada.

The EMSCC envisions EMS “as a mobile health care service” and believes “that the future of EMS in Canada is at the centre of the community, providing primary health care in a mobile setting.” It feels EMS’ role must be broadened beyond the traditional model of providing pre-hospital emergency care.

Page eight of the report explains some of this stating: “EMS has the potential to increase the level of care it provides through greater training and enhanced technology. In addition, EMS has significant resources and knowledge that should contribute more to health care reform by easing staffing and emergency department space shortages. Expanding EMS’ scope of practice, using its reserve capacities, and increasing the amount of mobile health services such as augmenting home care and other primary care areas are part of this contribution.”

One of the report’s six key strategic directions is that, “A more comprehensive and inclusive approach, focused on mobilized health care in addition to traditional emergency services, is required.”

Saskatchewan residents likely don’t realize it, but the Brad Wall government got a head-start on this last summer when it implemented a six month pilot project in Saskatoon.

On Aug. 28, 2008, Health Minister Don McMorris announced the launch of a mobile health unit, or “health bus,” to provide primary care to residents in Saskatoon’s core neighbourhoods. The service features a paramedic, a Registered Nurse (Nurse Practitioner) and an exam room and will be in service 7 days a week, 8 hours a day.

According to a Dec. 18, 2008, email from the communications and media relations branch of Saskatchewan Health, between Aug. 29 and Nov. 19 the health bus served 794 clients.

The health bus project is a partnership between the Ministry of Health, Saskatoon Health Region and M.D. Ambulance, a private company.

It should be noted that M.D. Ambulance president and CEO Dave Dutchak is the Saskatchewan Chamber of Commerce’s immediate past-president and a contributor to the Saskatchewan Party. Dutchak also serves on the SEMSA and EMSCC boards and was one of nineteen individuals interviewed for The Future of EMS in Canada report.

EMS Review Committee member Trevor Dutchak is the CEO of Parkland Ambulance Care Ltd. in Prince Albert (also a private company) and is Dave Dutchak’s nephew.

At a news conference in Saskatoon on Oct. 23, 2003, during the provincial election campaign, Saskatchewan Party Leader Edwin Hermanson and health critic Rod Gantefoer refused to rule out the privatization of many health-care services.

Hermanson said a Saskatchewan Party government would not rule out private MRI clinics and would review support services.

Dave Dutchak, the then president of SEMSA, said he was glad to hear emergency services will be a priority for the Saskatchewan Party. [Sask. Party’s health platform worries union (StarPhoenix, Oct. 24, 2003)]

A few days later on Oct. 29, 2003, SEMSA held a news conference in Saskatoon to express frustration with the provincial government, saying the NDP has not met with the association to discuss the association’s concerns with the state of EMS in the province.

“We are facing serious issues that require government leadership and participation to solve,” Dutchak said.

Following the press conference SEMSA delivered a two-page document entitled Proposal for Partnership to the Saskatoon cabinet office.

“We’ve been successful in having the Saskatchewan Party sign this document. It just provides a framework for how we’re going to work together to reconcile issues,” SEMSA executive director Shirley Antonini said. [EMS facing ‘crisis’: group (StarPhoenix, Oct. 30, 2003)]

The close working relationship between all those involved still seems strong today.

A Sept. 9, 2008, briefing note estimated the cost of the EMS review at approximately $100,000, which the ministry “will attempt to absorb” within the current 2008-09 budget allocation.

The document also indicates that: “There is a consensus among the Ministry, the RHA’s and Saskatchewan Emergency Medical Services Association on a number of EMS issues. Budget proposals are therefore under development in the Ministry to address three of these issues in the 2009-10 budget.”

Exactly what these issues are is unclear because the ministry severed that section of the report.

However, the record does say that the ministry “continues to work with SEMSA and health regions in pursuit of change to the regulatory environment affecting EMS including development of a template service contract for EMS.”

Today SEMSA represents 83 out of 109 ambulance services within the province of Saskatchewan. The organization recently announced on its website that EMS review stakeholder meetings for all members would take place at the Travelodge Hotel in Regina on Feb. 13, 2009 and in Saskatoon on Feb. 27, 2009.

“The SEMSA Board has requested the provincial govenrment [sic] to agree to an EMS Review for some time and the opportuity [sic] is now upon us. Now, it’s time to hear directly from the membership,” a posting on the SEMSA website states.

If anything is certain about the EMS review, it’s that SEMSA appears to have a central role, one that will no doubt influence the outcome.


UPDATE: On Dec. 12, 2008, a request was made to Saskatchewan Health for a list of stakeholders that the EMS Review Committee would be consulting with as part of the review process. The ministry responded that the list was “under development” and would “be available at a later time.” Subsequent requests for the information were made on Jan. 31 and Feb. 2, 2009.

On Feb. 17, the ministry advised that “the EMS Review Committee has corresponded with the following stakeholders” to date:

Federation of Saskatchewan Indian Nations
Saskatchewan College of Paramedics
Saskatchewan Institute of Applied Sciences and Technology
College of Physicians and Surgeons of Saskatchewan
Saskatchewan Registered Nurses Association
Saskatchewan Association of Licensed Practical Nurses
Saskatchewan Association of Rural Municipalities
Saskatchewan Urban Municipalities Association
Saskatchewan Office of the Fire Commissioner
Saskatchewan Association of Fire Chiefs
Saskatchewan Professional Fire Fighters Association
Health Sciences Association of Saskatchewan
Canadian Union of Public Employees (Saskatchewan)
Service Employees International Union
Saskatchewan Government Employees Union
Saskatchewan Police Commission

The ministry also said, “In addition to the health regions and members of SEMSA, there will also be an invitation to members of the public and other interested organizations for submissions as part of the consultation process.”

It remains unclear which organizations, if any, have had face-to-face meetings with the review committee.