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How PM Justin Trudeau can make Canada’s premiers more productive

by John Brian Shannon

Time

An hour wasted is an hour you never get back. And through no fault of their own, Canada’s premiers are wasting thousands of hours per year.

Canada’s premiers are important people. They hold the keys to multibillion dollar economies within Canada, are privy to some of Canada’s most secret security information, and they need to hopscotch around their region to hold meetings with CEO’s, other levels of government, attend events, sometimes need to get an overview of natural or man-made disasters, and to view proposed mega-projects like hydro-electric dams, major highway systems, pipelines, and railways, all over their particular province.

In the province of Alberta, premier Rachel Notley travels around the province in a convoy of Chevrolet Suburbans worth more than many Albertan homes. With weather-related travel issues, and the time it takes to get by car from the provincial capital of Edmonton to Alberta’s far-flung cities and mega-projects, you can be sure those Suburbans are getting ‘miled-out’ and replaced every 2-3 years.

It’s a ton of money invested in vehicles ($384,043.62 worth, plus annual maintenance and daily fuel) and it amounts to a lot of the premier’s time being wasted barrelling up and down highways.

We all know that much of Alberta’s business is conducted in Calgary and that the provincial capital is 281 kilometres away, in Edmonton.

It takes Rachel Notley and her convoy of Suburbans 3-hours to travel to Calgary (in good weather) sometimes 5-hours (in bad weather) And then there’s the trip home after the meetings, which of course, doubles the travel time. (Alberta premiers typically travel to Calgary about 3 times per week)

But not only that. During the Fort MacMurray fires the highways were closed. The roads were closed a few years ago in regards to the Calgary floods, and it occurs many times during the winter months along the Highway 2 corridor between Edmonton and Calgary that it gets closed due to icy conditions. Sometimes, quite suddenly — like when you’re halfway home from Calgary.

During busy months, half of premier Rachel Notley’s working hours (and whichever cabinet members are travelling with her) might be wasted sitting in the back of an SUV waiting to get to their destination.

It’s a colossal waste of time for every premier in Confederation. Time that could be better spent. Meaning more actual productivity per hour for all of Canada’s premiers. I’m pretty sure that Alberta’s premier spends 900 hours per year being transported by SUV, which is about average for Alberta premiers.

Imagine the wasted time for an Ontario premier — a province with a much higher population than Canada’s four Western provinces combined.

And I’m not ‘fobbed-off’ by claims that the time spent riding around in the back of a Suburban is productive time. If that were true, then why are premiers bothering to personally attend meetings in the first place? If phone calls and emails work so well, why leave the provincial capital? Ever?


“If I had asked people what they wanted, they would’ve said faster horses.” — Henry Ford


A Better and Faster way to Travel

politics - Canadian Army CH-146 Griffon. Photo courtesy of Canada's Department of National Defence

Canadian Army CH-146 Griffon. Photo courtesy of Department of National Defence – Canada.

Canada’s Griffon helicopters, which are underutilized by the Canadian Army are the perfect answer to efficiently move Canada’s premiers around their home provinces, while saving thousands of hours of time and improving the security of premiers and their staff.

It’s a light helicopter that can carry 10 people and their gear, and it can travel long distances (for a helicopter) at 250 kilometres per hour. There isn’t anywhere in Alberta that the Griffon CH-146 couldn’t fly on one tank of fuel.

But with all of that going for it, it’s still a ‘boy among men’ when compared to other military helicopters, which is the only reason why it’s seen limited military use.

Let’s face it, it was built for Army commanders to tour the battlefield in the interests of creating a better battle plan for the following day, and to quickly zip in and out of combat zones with ammo and food for soldiers. A Black Hawk S-70A or Sea Stallion CH-53E battlewagon it’s not.

But for ferrying premiers and other government officials travelling with the premier, it could very easily handle that role. And, as an added bonus for the Army, the Canadian Army crews that fly them would be better able to meet their (required) number of flight hours per month. That’s reason enough right there to detail one of them to each Canadian premier.

Note: Out of the original order of 100 Griffons, the Canadian military has 20 Griffon helicopters that are parked — and not for safety reasons. They just don’t have missions. The helicopters were already paid-for, years ago. They sit unused because they have no missions to fly. And pilot skills deteriorate without a minimum of 30-hours of flight time per month.

Productivity

Would Alberta taxpayers be getting better productivity out of their premier with 2-hours of travel time per day vs. the present 6-10 hours per day, on average? The answer seems blatantly obvious.

In short; Is it better for the premier of Alberta to sit in the back seat of a multi-vehicle motorcade of Suburbans for 900 hours per year, or to fly in helicopters for 300 hours per year? Thereby saving 600 hours per year for more productive use.

When Canada’s premiers are conducting business on behalf of the people where one deal could conceivably cost or save billions of dollars, isn’t it better to have premiers that arrive refreshed and ready to negotiate — rather than arriving frazzled, after a harrowing 5-hour drive on icy roads?


This is one case where the federal government should divert from its typical overly-cautious Canadian tendencies and actually make the arrangements to dramatically increase the productivity of every Canadian premier.

In this day and age, it’s great to ‘work hard’ but it’s more important to ‘work smart’. And working smart means adding 600-hours of productive time to each premier’s schedule annually.

Prime Minister Justin Trudeau, I urge you to direct the Canadian Army to park one Griffon helicopter and crew beside each provincial legislature for the official use of Canada’s premiers (and whichever officials are required to accompany them on provincial business) in the interests of increasing the productivity and personal security of all of Canada’s premiers.

This would be the low-hanging fruit, Mr. Prime Minister, on the path to making Canada all that it can and should be.

Are the Winds of Change Blowing Across Canada’s Pension Plan?

by John Brian Shannon | June 2, 2016

Canada Flag made with red maple leaves on snow1

Canada Flag made with red maple leaves on snow.

The Canada Pension Plan (CPP) is at a unique point in its history. Mandatory for all Canadians, the CPP allows working Canadians to retire with a minimum income in addition to their company pensions, life savings and real estate equity.

The plan itself is in good financial shape due to sound institutional investing over many decades and it presently earns 1.1% more than it needs in order to meet all foreseen liabilities.

But that could change.

A severe recession could drive the plan into negative territory, necessitating a rise in the premiums that workers and employers pay — without making any changes to the benefits that retirees receive from the Canadian Pension Plan.

Alternatively, during a severe recession the government could simply lower the monthly benefit payment by a fractional amount in order to keep the CPP fully-funded — without making any changes to the premiums that workers and employers pay to fund the Canadian Pension Plan.

So, with a bit of wind in the sails (but not that much) why are we looking at possible changes to the CPP?

1) There is a minor political suggestion to take advantage of the 1 percent profit the plan presently generates and lower CPP premiums by some fraction. It looks like honest stewardship of public accounts on the part of the government.

However, by reducing worker and employer contributions the plan could soon find itself in jeopardy during an economic downturn and at the worst possible moment for Canadian workers and business it would need to raise premiums to meet future liabilities.

It’s a nice idea and if the investment was generating 10 percent or 20 percent more than its expected future liabilities, it might be worth a look. But it’s not. So let’s file that suggestion until such times as the CPP investment pool is earning outrageous profit and workers demand lower premiums.

2) Another suggestion that has been floated, and that is to slightly increase CPP premiums in order to increase the monthly benefit (the payment) which is paid to Canada’s senior citizens. In such cases, the benefit would increase after a minimum 3-year delay in order to ‘build-up’ enough capital to cover the increased benefit amount.

Which is a tempting idea, actually. The costs of living anywhere, but especially in cities like Vancouver, Toronto and Montreal are skyrocketing, and senior citizens who live on a fixed income might find that an extra $100. per month (for example) can make the difference between eating well and paying for their herbal supplements, walkers, or other health-based assists that may be helping them, or not being able to afford them.

As the cost of living continues to rise over the decades, shouldn’t we at least think about increasing the CPP premiums by 1 percent that workers and employers pay? After all, eventually every one of us will retire and some or much of our retirement income may come from CPP.

Those retirees without company pensions, significant savings or real estate holdings, would really benefit from the extra monthly benefit amount, while those who are financially well-off may reject the idea that they should pay an extra 1 percent towards their CPP payroll deductions during their working years.

It’s an absolute no-brainer for those in the bottom two economic quintiles while those in the top three quintiles may scoff at the suggestion that a (for example) 1 percent premium increase which would result in higher monthly benefit amounts paid to them after their retirement, needs to be legislated into existence.

3) The third suggestion is for provincial pension plans that work in conjunction with CPP, the federal retirement plan. Quebec has its own plan, Ontario has just passed its own plan and other provinces are watching with interest.

Province Passes Ontario Retirement Pension Plan Act – June 1, 2016

Strengthening the retirement income system is critical to the future prosperity of the province. Studies show that many of today’s workers are not saving enough to maintain their standard of living in retirement. Pension coverage is also low for many Ontarians, with only one in four younger workers — aged 25 to 34 — participating in a workplace pension plan. — Province of Ontario | Newsroom

For retired people who have lived in the bottom 2 quintiles for most of their life and may not have a generous company pension, or do not have significant life savings, or do not have valuable real estate holdings that they can liquidate in order to live a fulfilling life, receiving a provincial monthly benefit in addition to Canada’s CPP benefit would dramatically improve their retirement.

It’s not such a big step as some may imagine. Provinces and the federal government charge and collect sales taxes, both levels of government have their own income tax system, and in many ways both the feds and the provinces work together to assure the health and safety of Canadians.

All that needs to be done is to write the necessary legislation (or simply photocopy Ontario’s system) and enact it in each province.

While retirees may not end up receiving two identical monthly benefit payments, even an extra (for example) $500. per month from a provincial pension plan, when coupled to their CPP pension monthly benefit payment, can make all the difference in the world to tomorrows retirees. Especially for seniors whose life partner (and co-payer) has passed away, an extra monthly payment can really make a difference in their lives.

4) Finally, no matter which way it goes with regards to the above points #1, #2, and #3, I hope federal government policymakers take this next suggestion seriously…

During retirement years it is expected that one spouse will pass away before the other — leaving the other to not only grieve, but to also suddenly face a major change in their monthly income.

I respectfully suggest that CPP legislation be changed to ease the suffering of suddenly widowed pensioners by allowing their (deceased) spouse’ normal monthly benefit payments to continue for a full 12 months following the death of their spouse.

That way, the remaining spouse won’t have to face both bereavement and a possible address change due to the sudden drop in income.

Canada could show that courtesy to recently bereaved pensioners now — and it wouldn’t even cost .1 percent — let alone a full 1 percent of the profit that the CPP investment pool presently generates.

We are indeed fortunate to live in this great country, and looking after our senior citizens — the very people who helped to build this great land into what it is today, should always be our first priority.

Let’s always treat our Canadian seniors with the kind consideration they deserve. They’ve earned it.

Recommended Reading:

Bonus Graphic:

Canada Pension Plan (CPP)

Canada Pension Plan (CPP) policymakers must factor-in global trends.

 

Energy East: Or Value-added Refineries?

by John Brian Shannon | April 9, 2016

The Energy East pipeline only makes sense if global oil prices rise past $80 per barrel and there’s no guarantee we’ll see anything like that before 2020.

Crude oil Forecast 2016-2020 by Trading Economics

Crude Oil forecast 2016-2020: Crude oil is expected to trade at $35.00 per barrel by the end of this quarter, according to Trading Economics global macro models, and analyst expectations. Looking forward, we estimate it at $29.50 in 12 months’ time.

Meanwhile, Iran is set to add 3.5 million barrels per day by 2020 to the global oil markets which will easily meet (practically) flat demand, keeping oil prices below $80/bbl.

Not only that, Iranian crude oil is either #2 (sweet) or #3 (sweet) while Alberta’s oil ranges from #4 (sour) to off-the-scale sour. Alberta’s crude is so sour that it must be blended with #3 (sweet) or better before refineries will accept it.

A typical Alberta oil rig. Image courtesy of MACLEAN'S.

A typical Alberta pumpjack. Image courtesy of MACLEAN’S

Why would any refinery want to buy Canadian sour crude when they can buy Saudi #3 (sweet) or Iran #3 (sweet) for the same, or lower price? Alberta’s crude sits at an average of #4.75 (sour) with two other negatives attached — much higher extraction costs (the average Alberta extraction cost is $56.20 per barrel) along with higher refining costs.

Investopedia primer on the petroleum industry

What would capture the interest of voters, would be the Alberta government guaranteeing the financing of oil refineries located within and sized to accommodate the needs of each Canadian province.

Each province could have it’s own refining capacity sufficient to meet 100% of annual provincial demand — plus 30% (for export) to bordering U.S. states.

Existing rail links can already get the crude oil to existing refineries and to the future refineries proposed in this blog post. For those worried about oil spills when shipping by rail, they are usually limited to a few rail tanker cars and are microscopic when compared to pipeline spills.

Instead of being ‘hewers of wood and drawers of water’ how about some value-added contributions to our economy by building our Canadian refining capacity, and doing some much needed value-adding to our petroleum exports?

It’s the next logical step for the Alberta government.


Bonus Graphic courtesy of MACLEAN’S

In 2005, the resource sector contributed 40% of Alberta government revenue. It has fallen to 6%.

Energy East pipeline: Good case, or lost cause? In 2006, the Alberta resource sector contributed 40% of provincial government revenue. It has fallen to 6% in one decade and is still falling. Image courtesy of MACLEAN’S.