Are we about to repeat the mistakes of Monarch Place?

Does anyone in Red Deer remember Monarch Place? I'll bet there are plenty of people in City Hall who do.

Not so much the Alberta Legislature, where learning from one's mistakes is not established practice. And therefor, it is entirely possible Red Deer or some other Alberta municipality will see history repeat itself.

To refresh: Ten years ago, Monarch Place opened on the city's north side, with 65 assisted living housing units, most of which were to be subsidized for people with low incomes and physical disabilities, for people needing transitional housing, or who were escaping abuse in their homes.

The project, run by Innovative Housing Society of Canada, received a lot of taxpayer assistance: a $1.3 million Canada-Alberta Affordable Housing grant, $500,000 from the city of Red Deer, plus significant local contributions of both free building materials and labour from local businesses and groups.

In all, the society got a $6 million asset for a lot less than $6 million.

It took years to get this much out of them, but it appears their business plan was flawed from the start. They did not anticipate the costs of live-in care for their residents; they did not plan for less than full continuous occupancy; there were the usual cost over-runs. They did not even plan for having to pay municipal taxes.

In short, even with all this taxpayer help, they said they were losing money from Day One.

So they took advantage of a legal loophole, and sold the units as rental condos to absentee landlords — list price: $7 million. Those landlords formed a condo association and promptly doubled the rents, making them unaffordable for their residents. Some residents even had their showers closed off.

The loophole said if the original deal with the granting bodies was broken before 15 years, some of the money would have to be paid back. In 2008, the city finaly got $244,000 back of its half-million gift. At the time, the society still owed the province $1.17 million.

Ten years is a long time in the life of a government, time enough to forget who screwed up by providing taxpayers' money to groups with bad business plans.

So the province is ready to do it again. This time with seniors care.

Presumably, the new business plan has been given a little more thought. After all, Christenson Communities and Points West Living have calculated their annual profits per-bed, per year.

The Monarch Place contract was for 15 years. These new contracts are for 30, renewable every five years.

The Christenson project got $4.7 million in provincial money, for 60 continuing care beds (at government-established rates), out of 122 units in Timberstone Mews.

Points West got $5.5 million from the province for 60 beds with the same deal, in a 139-unit project along Taylor Drive.

The group Public Interest Alberta paid the fees for a freedom of information search on the projects and found the Christenson project plans for a 29 per cent annual rate of return on their 60 government-subsidized beds, while Points West expects a 25 per cent annual return on theirs.

Do you have a business idea that would qualify for four or five million in taxpayer grants, where, right in the application, you specify your expected rates of return — in this case between 25 and 29 per cent per year? Didn't think so.

Bill Moore Kilgannon, executive director of Public Interest Alberta doesn't question public spending on seniors care. He questions why Alberta is allowing these kinds of profit returns. Ontario doesn't, for instance, he says.

If something over $5,500 a year per bed is the going rate for a successful grant application, and the province has already funded 3,780 spaces — that's over $20 million a year going into corporate profits, which taxpayers were told would be earmarked for seniors care.

Nor has Kilgannon forgotten the lessons of Monarch Place. What these companies are really getting is a big real estate asset, for far less than cost. When their mortgages are paid, they will hold something worth far more than they paid for it.

What happens, say, on some five-year anniversary on this 30 year contract, when the government has had its memory wiped clean by elections past and is concerned only with the next election? Can the owners then say, well, let's just sell this asset and walk away laughing?

Irene Martin-Lindsay, executive director of the Alberta Senior Citizens Housing Association paints a pretty altruistic picture of the arrangements.

She says projects like this are mixtures of government-subsidized (and price-capped) beds and free market units, because the more expensive private beds help subsidize the costs. And really, the companies are just doing this because providing care for seniors is the right thing to do.

Who are we to question that? Are we taxpayers, voters, potential residents, or something?

Ten years is a long time to remember, never mind 30. But I seem to recall the people at Monarch Place saying pretty much the same thing, when they took the taxpayers money — and ran.

Follow Greg Neiman's blog at Readersadvocate.blogspot.ca

Face it Alberta, we've given away the store

A pair of well-travelled news stories Monday shine a better light on Alberta's current fiscal mess than the government would have us realize.

Folks, it's not the civil service that's causing our province's budget problems. In fact, of all provinces, Alberta spends the least of total budget spending on public services. That's according to an information sheet mailed out by the province's public service labour unions. You probably got one in the mail yourself.

Rather, it's the way the province has virtually given away our share of the wealth from our energy resources (mostly to foreign-owned companies), and the way the government refused to save its windfall earnings.

One story, which was repeated on a variety of news clipping services, originated with the CBC. Titled Norway's sovereign fund holds lessons for Canada, the story contrasts how Norway is coping with the downturn in oil prices, versus the Alberta experience.

Norway and Alberta have roughly the same population. Both have energy resources located in the far north that are expensive, even dangerous to produce. Both have the same international exploration and development companies working their oilfields.

Both are suffering massive job layoffs since the oil price plunge.

But if you read the front page of the Advocate on Monday, Alberta sits under a dark cloud of gloom and projected debt. How can that be, when business and public confidence in Norway's economy remains so high?

That's because Norway's people paid their own way as they went. Norway saved 100 per cent of its royalties in a fund that now tops a trillion dollars. It's spinning its mandated maximum of four per cent interest yearly into the country's general income account.

What's four per cent of a trillion? It's $40 billion, last time I counted that many zeroes. Every year, and rising.

Norway's royalty rate is 78 per cent of net profits.

At today's prices, what's Alberta's royalty rate? A provincial chart on oilsands royalties (which produce two-thirds of all our royalty payments) is — wait for it —one big fat per cent of the daily bitumen price.

The province also takes 25 per cent of net profits. At $48 oil, what are the net profits? Roughly zero, if you believe the producers.

A provincial graph also says Alberta produces about 8,600 barrels a day of conventional oil. At that rate of production, what's the royalty? At today's prices, it's about 10 per cent.

In other words, Albertans pretty well settled for squat for our resources. The bitumen keeps flowing from under our feet, low price be damned, and we get almost nothing for it.

How much royalty money has Alberta saved in the Heritage Fund in the last 20 years? Roughly bugger all.

When times are good, Alberta gets a semblance of prosperity in the form of high-paid exploration and development jobs. But it only lasts during the building phase. Once the plants are built and flowing, most of the high-paid jobs will end, and the workers will take their wages back to their homes out of province. Locally, a lot of big trucks will get repossessed.

We won't even have gotten the benefit of a sales tax on the wages they spent here, while they were here. That's all gone.

As will be the profits as the bitumen is piped or sent by train out of province— gone.

Executives from Texas who work here will tell you they would not be here except for Alberta's low tax and royalty regime.

But a Texas farmer is guaranteed an average of 20 per cent of the value of everything that comes out from under his ranch.

What does an Alberta farmer get? Most only get surface disturbance money. And provincial law actually makes it illegal for a farmer to hire a lawyer to negotiate for anything more.

This situation will be extremely difficult to reverse. How do you tell Norway's Statoil — which has investments in around 200 Canadian companies — that the rules are changing on its multi-billion-dollar investments?

So Albertans will be tarred as producers of “dirty oil” while the state-owned oil companies of socialist countries continue to make more money from our oilsands than we do.

Albertans do need to look in the mirror. They need to ask themselves why they were so stupid as to shout down anyone who said we were getting a raw deal here. Albertans need to ask why the the province did not save royalties in a wealth fund on our behalf. They need to ask why we did not pay for public services the same way everyone else does.

Premier Jim Prentice wants to blame anyone but his 40-year-old government for our current situation. I say greater shame on him for knowing past Tory governments — from Ralph Klein on down — gave away the store, but that he will do nothing to change that.

Follow Greg Neiman's blog at Readersadvocate.blogspot.ca

Take the time to get these developments right

For a number of years now, my wife and a group of her female friends have allowed me to tag along on their weekly walking date on Thursdays. We generally gather at the parking lot of the Michener Centre curling rink, and set off from there.

When it's too cold or too icy to walk around McKenzie Trails and back, we take the simpler street route around the far end of the north campus of Michener. Over the years, we've been able to observe the “lights going out” on that section of the once-thriving campus.

The last of the 60 buildings on the north site will be emptied this summer, when an addictions and mental health project using one of them is vacated. After that, we will walk, watch and wonder at what is to become of this huge swatch of beautiful real estate, all within a five-minute bike ride from downtown.

As all Red Deer will also be watching and wondering what is to become of a total of seven acres of land, plus the buildings that have sat empty for about five years now, at the former Red Deer Nursing Home site and the Valley Park Manor.

Alberta Social Housing Corp. is a crown corporation that uses public money to amass land and buildings for public housing. They are reported to be looking at acquiring the sites. By doing this, the government ensures that cities have the social housing assets that modern cities need — low-cost housing, assisted living units for seniors — developments that do not generally attract the attention of residential land developers.

For a city growing as fast as ours is, the former nursing homes, Michener north, plus the renovations at Riverlands adjacent to downtown, represent opportunities to completely remake the culture and feel of our city.

I'm guessing here, but I see potential to add perhaps 20 cent to our total population, without growing our borders at all, without sacrificing one farmer's field to urban growth.

Catch the right angles on these opportunities, and Red Deer could accommodate years of infill growth, while adding the amenities we need to support low-income families, the elderly and disabled who cannot afford for-profit care centres. Plus a new generation of urban residents who have money, but don't want to live in the suburbs.

Do this right, and Red Deer is poised for a golden era of growth and development.

That's why it has been best not to rush things.

Despite our much-lamented shortage of long-term care or assisted living suites for seniors, Red Deer is a youthful city, albeit one that holds a well-defined aging demographic.

Our median age is reported at around 32 years. Alberta is distinctly the youngest of the provinces, with a median age of about 37. Only the Northwest Territories and Nunavut are more youthful.

In Newfoundland and Labrador, for instance, you'll find half the province is over 44 years old. In 1982, that province was the youngest in Canada with a median age just over 25 years. Now it's the oldest. Where did the young adults all go? Welcome to Alberta.

So in Canadian terms, we are generally a young city, in a young province.

One Stats Canada chart I was able to find, though, showed an alarming shift in demographics. Between 1982 and 2012, Canada's median age had shifted upwards by a full decade, as did Alberta's. That is just the beginning of the rush into senior citizenship of the boomers.

Not all of them will be hale, hearty, wealthy and able to take care of themselves as they age.

So city planners need to plan. That is also why provinces need to provide some resources to cities like ours, so we are not caught short of either affordable housing for young families, or care centres for seniors.

One one hand, failing to do provide a good supply of basic housing for families on the low-income end will hurt employment prospects for Red Deer businesses. Failing to supply long-term care centres for seniors — in crudest terms — means seniors will take their money some place else.

And that's overlooking all the social and ethical considerations that go into city planning.

So if it's taken five years now for Alberta Social Housing to act on notice there are at least two excellent locations for either low-cost housing or seniors projects, at least we're moving when there's still time to get things right, in advance of a crisis.

Assuming our Alberta “down” cycle will end in due time, the city centre we have today will be vastly different — and improved — in 10 years time.

Assuming the province will not be letting the low-cost, low-profit housing supply to to filled and managed by charities and non-profits who operate on shoestrings helter-skelter, Red Deer really does look poised for a golden age.

Crime rates, education, public health and social services are all directly affected by the supply of appropriate housing for all strata of society.

We're looking at a chance to plan for this, on large, park-like properties close to the city centre. Hardly any other city gets a chance to do this.

The future is taking its time to get here, but I feel us on the cusp of watching something wonderful happen.

I can't be trusted around a seniors discount

It had to happen; just as I am passing into the demographic that seems to get a discount on almost everything, a think tank releases a report suggesting I shouldn't.

The Institute for Research on Public Policy spent a year pondering the economics and ethics of governments giving seniors discounts on taxes, transit, recreation fees, library cards . . . pretty well everything that comes with a fee.

Economist Harry Kitchen is the lead author a report titled No Seniors Specials: Financing Municipal Services in Aging Communities. The report is primarily Ontario-based, and it reveals a definite skewing of fee structures based on age in that province.

For instance, a monthly bus pass in Toronto is $100.75, but a senior can get such a pass for $40.75. Now that's a discount.

In Red Deer, a Go Pass is regular $66, and $58 for a senior — a break, but not a huge break. The city also has a link helping seniors claim a federal GIS subsidy on that pass, effectively bringing it down to $33. That GIS supplement is income-tested, so only the lowest-income seniors get it all.

Kitchen's report sparked only the briefest of news-chat interest. It doesn't seem people want to talk about cutting subsidies for the demographic with the highest voting percentages.

The economist does raise some important points that people often get wrong when they talk about our society's obligations toward our senior citizens.

Kitchen rightly points out that the conditions that created the need for seniors discounts no longer exist in the same way as in the past. Back in the 60s and 70s “poor” and “old” could almost be considered synonymous.

Not today. Are there low-income seniors around today? There sure are — I'm one of them.

But there are far more children in Red Deer living below the official poverty line than seniors. We haven't had a Vital Signs report in Red Deer for a few years, but the most recent one (2010) had 17 per cent of families with children living below low-income cutoffs. That's 17 per cent of 19 per cent of total population

And their parents pay full fare.

Seniors represented only 9.8 of the population in 2010, and of them, less than 10 per cent lived under low-income cutoff standards.

So Kitchen the economist looks forward to the fast changing Canadian demographic situation, as a tidal wave of wealthy boomers starts to qualify for seniors discounts.

How will cities create a stable communities when a large portion of wealthy citizens gets services subsidized by younger families who are just struggling to get by?

His argument is that we can't afford to wait until we reach a funding crisis for transit, recreation and other services in cities, based on demographics. The longer we wait, he says, the harder it will be to act.

My response would be to meet him halfway on some of this. Guess what? Rich seniors don't buy that many monthly bus passes, not at the same rate as low-income seniors. So transit — a service of major importance to those seniors who use it — is already pretty much self-income-tested.

Another argument that rankles Kitchen is the concept that seniors have “earned” their discounts. How does one deserve a discount on consumed services, simply because they paid for their services in the past?

You pay your taxes this year, for garbage pickup this year. It's not a savings account to get you free years of garbage pickup down the road.

Report critics argue back, saying the seniors discounts on some recreation services are actually a good investment. If an economic barrier is removed for older people to get out, be active, join groups and interact with others, that's a cheap and effective way to ward off the much higher social costs of depression, poor diet and declining health.

I'm going to say I'm a little insulted by this. If it's so good for seniors, why not make it good for everyone? Why should a depressed, lonely and low income person 40 years old have to pay full price to join a fitness group at the Collicutt Centre at $8.50 a session, when a senior with six figures in the bank pays $7.50?

The discussion we need to engage is about how to build a healthy stable community, where everyone can participate and pay their share.

Just this week, I got a seniors discount on a haircut. When my barber handed me my change, I thought there was some mistake. But I shoved it in my pocket and skipped all the way home.

Not a good start to ethical seniorhood, but I'm old, and I'm weak. That's perhaps why municipal authorities need an early start on what is worth an age-based discount, and what might be better off means-tested.

I just can't trust myself around a five-dollar bill.

Albertans all need to pull together — to bail out the rich and the corporations

Premier Jim Prentice has a few things right when he assesses Alberta's budget problems. Yes, we are all in this together, and yes, it will take some patience and sacrifice from all of us to move forward from here.

But he gets things infuriatingly wrong when he exempts the largest and richest portions of “all of us” from doing any heavy lifting to return our finances to good order.

The exemptions are so obvious, that minds disposed to see them can see a plot arising.

I have such a mind, and this is what I see: Prentice does not see the period of low energy revenues lasting very long. In the meantime, he's not going to let a perfectly good crisis go to waste, so he is using it to break the power of the public service unions.

Prentice intends to roll back the salaries and numbers of the public service. Even though he's already said publicly that doing so is not the answer to solving Alberta's budget problems, this will be the cornerstone of his next budget.

These salaries are indeed the highest in the nation — and it is never good to be on the top end or bottom end of any list of this type. But the government he now leads agreed to the current wage structure to buy labour peace in times of great good fortune.

It was expedient then to settle high. It is expedient now to settle low. So be it; that is the nature of labour negotiations in a democracy.

But scapegoating teachers, nurses and provincial road crews and office staff will never solve the basic problems of our provincial economy.

I believe Prentice is well aware of this. So I also suspect he's not giving us the total picture here.

All of his media pronouncements are geared to sound incredibly dire, but analyzing them leads one to think they may not be as bad as he wants us to believe.

Consider this picture: Prentice — with the blessing of all of us — presents a budget containing significant cuts in government services and staff spending. As well, there will be service fees for health care and severe hikes in university and college tuition fees.

This all gets passed, and then oil prices miraculously recover. Presto! See, we don't need no stinkin' sales tax. Look how our corporations are back at work creating wealth in our low-tax environment! Look how we all succeeded together!

Except, there will be a lot fewer social workers to go around tending the broken families in low-income groups. If you are low-wage and get sick, you will be double-damned — not only are you paying a high portion of income for health fees, health care is not improved, and poor people do not have the same pay protection in the event of sickness that rich people have.

We will still have the most polarized income strata in Canada, with the rich getting even richer, while the poor must dig deeper for fees for every assistance they receive from a dwindling list of services.

Please, tell me I'm wrong. Show me what I'm missing here.

If we're all in this together, a sales tax is the fairest way to see we all sacrifice together, to stabilize the ups and downs of energy revenues. Consumption taxes, blended with income taxes are the best possible way for governments to gain income, while spreading the load as evenly as possible. In a 10-per-cent flat tax environment, it's the only tax the rich would really pay.

I'm willing to accept that having the lowest corporate taxes in the industrialized world is an advantage — except for the studies showing that tax rates are not a significant factor in decisions businesses make in their growth plans. Businesses go where there's a profit, and taxes are only a small consideration in that.

I'm willing to accept that energy royalty rates must remain a sacred cow, especially recalling the nastiness that happened the last time the government sought to move them upward. OK, but does that have to mean that our finite and cyclical resource revenues absolutely should not be put into savings for the future?

Aren't our children and grandchildren part of “all of us?”

I have howled before that previous Alberta governments had sold us out. This looks like it's going to be just more of the same — only worse for public servants and worse for anyone on low incomes.

But if Prentice is right, and energy cycles back up again, well, that will be situation normal, won't it? And a large, rich and capable portion of “all of us” didn't have to do much at all to help in the downturn.

That's called making the most of a crisis.

Do you have to believe in evolution to run for office?

Conservative MP for Nanaimo-Alberni — James Lunney — does not believe in evolution. In fact, he says any scientist who does “has already abandoned the foundation of science.”

Evolution is a theory, he says. Just like . . . I don't know . . . gravity. We can prove objectively through experimentation that they work, but we only observe their effects, not their inner workings or origins.

So until we solve Einstein's quest and complete the Grand Unification Theory of Everything, well, everything's still fundamentally unproven.

So just don't call evolution fact, Lunney says. And the same goes for what we know about climate change and the link between vaccines and autism, he says.

So how do you argue with a guy with his BSc and Doctor of Chiropractic about what really constitutes the fundamentals of science? Answer: you don't.

At least I won't. I belonged for years to a church whose pastor taught that the world was created in six 24-hour days, complete with the fossil record and the carbon-dating record already installed. We had a member who said you could count the days since creation in scripture, and find the date when the sun stood still for one day so the children of Israel could win an important battle.

You don't argue with them, either. In this world, there are no such arguments that can be less relevant.

My question is: does holding these beliefs disqualify anyone from holding public office in a secular society whose understanding of the “fundamentals of science” is so fundamentally different from what I've just described?

Not in parts of Alberta, nor in B.C.s Bible Belt. But I do suggest getting elected publicly proclaiming these beliefs on Twitter should disqualify a representative from ever holding decision-making power in education, health care or the environment.

All the party leaders know this. So why even bother to drag these questions back into the public sphere? Because they have.

In Ontario, the Liberal government is moving forward a new public education curriculum, which includes a new take on sex ed. The Conservative opposition, obviously, must oppose this. Things get uncharitable.

The Liberal education minister Liz Sandals gets prodded to respond to something, and uses a well-worn arguing technique — that of taking the other person's viewpoint to some illogical extreme.

If parental or local board opting out of the new sex ed program was to be allowed, she said, well, maybe some future PC government might opt out of teaching evolution.

“Not a bad idea,” retorted her heckler, Tory MPP Rick Nicholls, thereby ensuring that almost nothing to be said thereafter could ever be constructive.

His remarks were quickly disowned by interim party leader Jim Wilson, who added this kind of stuff “obviously didn't help our position.”

Nicholls found himself retreating from a media lake of fire, taking the usual refuge in saying his views on the reality evolution are purely a personal stance, not party policy. Stories don't record whether anyone asked if he thinks he'd been elected to take stands on public policy based on personal views, the views of his electorate, or party policy.

But clearly, Nicholls needed a friend — and apparently wasn't finding too many among his Ontario colleagues in the middle of a tense debate on sex ed curriculum.

So, from way out in B.C. (or maybe even Ottawa), Lunney steps up in his Twitter account. And the Twitter posts reveal someone who's been near this lake before, and did not flinch.

You can research the back-and-forth of it yourself. Again, I assert the argument is not relevant in any way to who we are and how we should live and treat other people.

What's relevant is our belief as Canadians regarding how our elected representatives should represent us.

We can have elected reps of every stripe — a Catholic prime minister ready to risk excommunication for legalizing same-sex marriage; a Muslim mayor in a cowboy hat, serving food at the Calgary Stampede I'm not sure a lot of Muslims would want to touch; a devoutly conservative protestant prime minister who will not allow same-sex marriage or abortion law back into the public debate.

This is behaviour that makes me proud to be Canadian. We have seen leaders who act like their neighbours' beliefs or sensitivities outrank their own.

Holding “lake of fire” views in any direction does not disqualify you to run for office. But Canada does hew to the centre. The centre has shifted in our history, but it has always held.

By the way, Lunney says he's not running again in this fall's election. That might explain the Twitter campaign that will distract us all from Ontario MPP Rick Nicholls's little problem.