Sunday, December 15, 2019

And The War For Control Over The CPC Begins

With Andrew Scheer announcing his resignation as CPC party leader this week, the war for control over the party begins in earnest.  Make no mistake, this is not a fight between individual candidates espousing different visions for the party.  This is about the factions within the party trying to gain (or maintain) control.

In particular, the Social Conservatives (SoCons) have their eye on "the big prize" - reinforcing the base of control and power that they asserted when they pushed Andrew Scheer up the middle as their second choice behind Brad Trost.  You would think that a group whose beliefs and policies have cost conservatives elections - even in Fortress Alberta - would find themselves on the outside by now.  But, we have to remember that this isn't how SoCons operate - they operate from a well of deep, uncompromising belief that they have the solution, and they are willing to spend a very long time organizing to achieve that goal.

The first volley in that war was published in the National Post yesterday.  Titled "How Social Conservatism Done Right Can Actually Help The Tories Win Again", it is an intriguing view into some of the key mistakes that SoCons have been making for years.  Let's take a closer look.

Monday, December 02, 2019

Fraser Institute Claims That Alberta Public Sector Employees Are Overpaid

The Fraser Institute is notorious for pushing a hard right, neo-liberal, approach to economic and fiscal policy.  In my experience, their methods are at best sloppy analysis and at worst outright twisting to push a particular policy agenda.

This past week they have published a battery of "reports" that they claim show the public sector workers are being paid considerably more than their peers in the private sector.  They have produced these reports for Alberta, Ontario, and British Columbia (so far). Presumably, this is because once you have set up the analysis for one province, it's pretty much boilerplate to apply it to other provinces with similar datasets available.

For the sake of simplicity, I will focus my commentary on the Alberta version of this report.

Saturday, November 16, 2019

On Williams' Defence of Bill 207

In today's Calgary Herald, UCP MLA Daniel Williams has published a defence of his recently introduced legislation on Bill 207.

I've already discussed my concerns after reading the First Reading draft of this legislation here.  The head of the Alberta Medical Association has stated that the legislation is unnecessary, and the troubling breadth of this legislation has been discussed here.

However, I do think it's worth exploring Mr. Williams' comments about his bill and to examine them more carefully.

Friday, November 08, 2019

Alberta's Bill 207 (Conscience Rights)

Now that Bill 207 has been tabled in the Alberta Legislature, we can look at the bill and its implications more closely.  What follows here is my personal analysis of this bill and the potential implications for Albertans.  Since it isn't a very long bill (8 sections, 8 pages of legislation), I'm going to go through it one piece at a time.

I will foreshadow my comments with a general statement that this bill is extremely broad in its wording, and that has significant implications for Albertans accessing health care.

Sunday, March 10, 2019

Thinking About SNC-Lavalin

The whole SNC-Lavalin business is a mess.  It contains a nasty combination of commercial, criminal, and political matters that need to be teased apart to make any sense of it.

Before I go into this in any depth, I want to be absolutely clear here:  I do not believe that the Liberal government has handled this situation well at all, nor am I here to defend the actions of any singular party.  This post is mostly an attempt to tease apart the various threads of the matter so that I can make sense of it all.

Sunday, February 10, 2019

On Deferred Prosecution Agreements

With the uproar over SNC-Lavalin this past week, I decided it would be a worthwhile exercise to familiarize myself with this legal construct that the government introduced with Bill C-74 (2018 Budget Implementation).  Because this is a large chunk of the legislation, I'm not going to do a detailed analysis of its clauses.  Instead, I will refer to a number analyses in various legal journals that are readily available online.

I will endeavour to be objective in the first part, and reserve my personal comments on the matter for afterwards.

What Is A Remediation Agreement (Deferred Prosecution Agreement)?

Dentons provides the following summary of the structure:
One distinctive feature of the Canadian DPA regime is the label attached to it. Specifically, the proposed legislation announces that Canada’s version is based on “Remediation Agreements,” eschewing the conventional “DPA” label adopted by other jurisdictions. However, it is clear from the precise provisions of the legislation that, whatever the label, the framework is fundamentally similar to DPA regimes adopted in other jurisdictions, most notably the UK. 
The core elements are as follows: 
  • Remediation Agreements will be available for a range of economic crime offences, including almost the entire gamut of fraud and domestic bribery offences contained within the Criminal Code, as well as—notably—offences under the Corruption of Foreign Public Officials Act;
  • Only “organizations” (as already defined within the Criminal Code) will be able to take advantage of Remediation Agreements – they will not be available to natural persons;
  • The decision as to whether to offer a Remediation Agreement to a corporate accused will be made by the assigned prosecutor, subject to the Attorney General’s consent;
  • The prosecutor will be required to take certain factors into account when deciding whether to offer a Remediation Agreement, including the following (non-exhaustively):
  • How the impugned conduct was brought to the attention of authorities;
  • Any efforts by the organization to remediate the wrongdoing and address deficiencies in its compliance program;
  • Whether the organization has taken disciplinary action against employees involved in the impugned conduct, and whether it is willing to identify individual wrongdoers to the authorities;
  • The gravity of the conduct, as well as any history of offending by the organization;
  • "Any other factor the prosecution considers relevant,” thereby giving the prosecutor considerable latitude to take account of specific circumstances.
This provides a fairly good summary of what the basic construct is.  It appears, superficially to be designed to create an environment where it becomes beneficial to the corporation to cooperate with a corruption investigation, better enabling access to the perpetrators of whatever acts have come under suspicion, rather than attempting to prosecute the entire corporate entity as a whole.

Dentons' analysis goes further to describe what the agreement must contain, and some of the implications of these agreements.
The proposed legislation also sets out the mandatory terms of any Remediation Agreement, which most notably include (summarily and non-exhaustively): 
  • An agreed statement of facts and an acknowledgment of wrongdoing, to be made publicly available (save in prescribed exceptional circumstances)
  • Obligations to fully cooperate in any investigation relating to the alleged conduct, including by providing testimony to support related prosecutions (such as against individuals)
  • Certifying that information disclosed to Prosecutors in connection with the offence is both complete and accurate;
  • An obligation to forfeit any benefit or proceeds derived from the wrongdoing (or to otherwise deal with such benefits/proceeds as may be directed by the Prosecutor);
  • Payment of a penalty to the Government, as well as an additional victim surcharge of up to 30% of such penalty (except in CFPOA cases, as the CFPOA makes no provision for victim surcharges to be applied);
  • Payment of “reparations” to any “victims” (as defined), or if no such payments are proposed, the reasons why they are not considered appropriate;
Given that the required terms include not only payment of a penalty, but also require forfeiture of any benefit (which could include the entire proceeds from a tainted contract or concession), as well as payment of potential victim reparations or restitution, the potential sum payable for a given DPA is potentially vast. 
While not a mandatory requirement, the legislation also contains a framework for an independent monitor to be appointed to oversee the organization’s compliance and remediation efforts throughout the term of the DPA. This potential requirement is likely to incentivize companies to demonstrate to prosecutors that proactive and comprehensive remediation and compliance enhancements have already been carried out, such that ongoing monitoring is unnecessary. 
As expected, the Canadian regime also provides for a significant oversight role for the court, similar to the UK DPA regime. Specifically, Remediation Agreements will require the approval of a Superior Court, which must be satisfied that the DPA is in the interests of justice and that the terms are reasonable and proportionate to the wrongdoing.
Borden Ladner Gervais' overview of the legislation points out that the decision to initiate such negotiations rests with the prosecution, not with the corporation.
Negotiations for a Remediation Agreement are formally initiated by the prosecution, although we expect that corporations accused will typically invite the initiation of a negotiation as part of a company’s cooperation with an investigation. Prior to commencing a negotiation, the prosecution must determine that there is a reasonable prospect of conviction, that the negotiation is in the public interest and obtain the consent of the Attorney General to the negotiation. The prosecution must also determine that the act or omission did not result in serious bodily harm or death, injury to national defence or security, and was not committed at the direction of organized crime or a terrorist group. The prosecution must also inform victims of the negotiation, including non-Canadian victims (e.g., in the case of a foreign bribery prosecution).

What Is The Justification For This? 

Prosecuting corporations has long been a complex problem.  Even if you can successfully prosecute the company, levying any punishment beyond fines, and possibly imposing some kind of oversight on the activities of the company, is extremely difficult.  

Stephen Aylward, writing for the Globe and Mail, argues as follows:  
These agreements (called “remediation agreements” in the draft legislation) will be available to corporations facing charges of economic crimes such as fraud and bribery. Prosecutors must consider how the misconduct came to light and corrective steps taken by the corporation when deciding whether an agreement is appropriate. The corporation must agree to publicly acknowledge the relevant facts, compensate victims, pay a financial penalty and co-operate in the prosecution of any individual wrongdoers. The bill foresees an important role for the courts in overseeing these agreements (unlike the U.S. model, which leaves greater discretion to prosecutors). 
A conviction may block a firm from bidding on government contracts for 10 years. But the more serious impact may be on a firm’s reputation. Arthur Andersen was one of the “big five” audit firms before it was convicted in 2002 of obstruction of justice for shredding documents relating to its audit of Enron. The conviction was overturned years later by the U.S. Supreme Court but the firm had already collapsed, with more than 100,000 jobs lost. 
These high stakes mean corporations must treat prosecutions as a life or death battle. There is little incentive for corporations to settle or to come forward when they uncover criminal activity internally. Well-funded defendants dig in for drawn out legal battles. Meanwhile, victims wait for years without knowing whether they will be compensated for their losses.
Critics complain of special treatment for corporations. Individuals cannot pay their way out of criminal charges and neither should corporations. But corporations are not typical defendants. They are a legal fiction that represents the shared interests of a wide array of stakeholders, most of whom are innocent bystanders. Failing to recognize this can have perverse consequences. BNP Paribas pleaded guilty and paid US$9-billion in fines for evading U.S. trade sanctions in 2014. None of the bank’s executives were charged, although some were demoted and a few were fired. The focus on punishing the corporation left shareholders to shoulder the fine while those responsible walked away. Deferred prosecution agreements require corporations to co-operate in pursuing individual wrongdoers, and so place the focus where it belongs. 

My Thoughts

I am by no means in complete agreement with the legislative construct that has been created here.  My first thought is that critics are well within their rights to criticize it for creating, at the very least, the appearance of an exemption for corporate elites from accountability for their actions.  However that isn't entirely true.  It appears that the intent of this legislation is to make it easier to ferret out the culprits and make it more likely that they can be brought to justice.  The fact that oversight of this process is in the hands of the courts, and not politicians is somewhat reassuring.  That is, in fact, where oversight belongs.  

Prosecuting corporate corruption has long been a difficult conundrum, especially with larger companies.  The larger the entity, the easier it is for corruption to take hold in corners while not necessarily being connected to the overall operations of the company.

In my own experience, corrupt practices can survive a long time in an organization as long as they are "beneficial" to someone a step or two above, but not necessarily be visible to higher levels of the company.  Ferreting this kind of corruption out should be the job of internal company processes, but oftentimes the doctrine of "enlightened self interest" takes hold and a blind eye is turned towards the problematic behaviours, or they are even actively supported.  From the point of view of addressing this kind of corruption, there is some merit to the approach being taken. 

That said, I would like to see the creation of greater direct accountability for the executive and board of directors in these matters.  While in some cases of corruption, it truly is a small group of malfeasants involved, the executive and board have fiduciary responsibilities that should be seen as including the identification and handling of corruption within the organization.  When, as in the situation of SNC-Lavalin, there is evidence of long term corrupt behaviour, the consequences must include those charged with oversight of the company's operations.  However, that may be somewhat outside the purview of this particular legislation.  It is not clear to me how this would play out when senior management and above become implicated in these schemes.  

For those currently trying to make political hay out of this (especially the CPC), it is worth noting that Scheer met with SNC Lavalin's CEO in May, 2018 on this very subject.  While I am not familiar with the nature of any conversation between the PMO and the AG on this subject beyond the broad allegations in the news, I presume that any request to change course was refused on the basis of the state of the case against SNC Lavalin.  If the PMO in fact pressured the AG to change direction, as Scheer and others have asserted, it seems quite likely that Scheer himself would have done the same thing.  

The only thing about this legislation that puzzles me is why it got stuffed into C-74.  It seems to have little to do with the core of the government's budget, and could easily have been a standalone piece of legislation.  I do believe that embedding it in the budget bill has done a significant disservice to the interests of political debate in this country.  

Sunday, February 03, 2019

In Response to Ron Ghitter

In the Saturday, February 2 edition of the Calgary Herald, former Senator and MLA Ron Ghitter published an opinion piece titled “O dysfunctional Canada, laments former senator Ghitter”. This piece is perhaps good rhetoric while being terrible reasoning.

Structurally, Ghitter’s argument is intended to get readers to “buy it” by first appealing to their sense of emotional outrage on a number of topics. He then closes it by essentially arguing for something that strongly reflects René Levesque’s “Sovereignty Association” concept from the 1970s. Essentially he is arguing for Alberta taking “greater control” over affairs while remaining part of Canada. Sovereignty Association failed to become a reality for good reason in the 70s, it’s certainly not a good idea now.

As an example of the “make you mad, show you a proposition”, I present the following from Ghitter’s article:
Meanwhile, Alberta contributes billions of dollars in equalization payments over the years so that Quebec can balance its budget while deficits are the truths in a struggling Alberta.
Firstly, it is time to immediately renegotiate our equalization agreement or opt out of it and take the heat.
The first part of this argument is a classic argument in Alberta politics, and it is designed to foment outrage. It conveniently ignores several key aspects of equalization and how it works, but it is clearly designed to provoke the reader's ire ("Omigod, how could they be so unfair to us?!"). Then it presents a proposition to "solve" the issue which is similarly ill-informed.

First of all, the opening of the argument makes it sound like Albertans contribute to this program “disproportionately” compared to other Canadians. This is false - Albertans pay federal taxes at exactly the same rates as other Canadians. The argument that we “pay more” is trivially explained by the fact that Alberta’s average incomes are significantly higher than those in other provinces. The argument that equalization “allows Quebec to balance its budget on the back of Alberta taxpayers” is at best a distortion, designed to promote outrage rather than to foster discourse. Alberta also needs to be reminded that Equalization as a program is not a buffer or emergency fund intended to save provinces when their economy tanks (which is always when the issue suddenly becomes a big deal in Alberta)

Other provinces would rightly look at Alberta’s “low tax” regime and rightly point out that their citizens each pay proportionately considerably more in taxes than Albertans do provincially. Our income tax base rate is considerably lower than most provinces, and we do not have a sales tax at all - both of which are levers that the provincial government could, and should, use to balance its budget before making a fuss about equalization going to other provinces. Whether the calculations that determine whether a given province receives payments under this program reflect political and economic realities adequately is a whole other matter.

Ghitter goes on to complain that “Quebec always gets what it wants” (more or less):
It’s a certainty that the demands of the province of Quebec for $300 million for immigrants’ expenses, more control over immigration, income tax collection, more money for Bombardier and support for dairy farmers will be accepted.
The premier of Quebec, while gladly accepting Alberta coin, says no pipeline will cross his borders with dirty Alberta oil, while tankers flow down the St. Lawrence Seaway with oil from Venezuela or rerouted from Saudia Arabia, Nigeria or the United States. Meanwhile, rail cars containing oil move on land through Quebec, creating a danger to its communities.
First, I must point out that it isn’t “Alberta coin” that Quebec receives. Again, this is a manipulative statement designed to make it sound like Alberta is directly funding Quebec. These are Federal dollars, collected through federal taxation powers. They are in fact CANADIAN monies, not specifically Albertans’, or Ontairians’ money. We would do ourselves well to remember this little fact.

It is no particular secret that Quebec has always been very successful in advocating for its own interests in confederation. Alberta has long looked at that success with suspicion. Part of Quebec’s success in this regard is a willingness to use the levers it has at its disposal, sometimes ruthlessly. Quebec has never been afraid to change its vote depending on the issues of the day. For all that I may disagree with the stated political objectives of the Bloc Québécois in terms of Québec sovereignty, it is hard to deny their effectiveness in forwarding that province’s interests in Ottawa - even while an “Alberta Prime Minister” (Stephen Harper) was in power.

Perhaps, Mr. Ghitter would like to discuss with Mr. Harper why the current equalization formula ended up being ratified if it was so unfair to Alberta’s interests. I imagine he would find that Mr. Harper would explain to him the political realities of such negotiations.
Under the guise of concern over the environment and First Nations rights, the feds propose legislation that will severely hamper oil and gas development in Canada. They say they support the pipeline but their actions belie such statements. Even their purchase of the pipeline seems to be an insincere (and costly) charade.
With all due respect to Mr. Ghitter, but I wonder just what aspect of the rule of law he would have the current government throw out the window in order to move the TransMountain Expansion project forward? The courts have made clear what needs to be done, and that process is unfolding as it must. It cannot be rushed or hurried, it must not only be comprehensive, but it must be seen to be so. Yes, I know that there are those who rail on about how we “just need to get the thing built”, but the blunt reality is that a narrow consultation process as created in 2012 is inadequate.

I find it most ironic that Mr. Ghitter goes on to rant about “foreign funded opponents” of TMX and other projects. Yes, we all know about Tides Foundation funding, but let’s not ignore the mega dollars that the oil industry (especially via the Koch brothers) has poured into climate change denialism and convincing Alberta in particular to loosen the regulatory restrictions on the industry. I am fairly certain that the Westcoast Environmental Law group will come along and challenge the outcome of the current process in the courts as well. That will also set of another round of bleating from Alberta’s politicians (not entirely without reason). However, such is the nature of our legal system. People have a right to be heard, and to challenge the government in the courts - to subjugate that right for a singular project would be a poor precedent to set in a free country.
I am not suggesting separation. I am too much of a Canadian to ever propose such a measure. But I do suggest that we take steps to take more control within our borders and face the realities of Alberta in the 21st century. 
Firstly, it is time to immediately renegotiate our equalization agreement or opt out of it and take the heat.

Secondly, we should take over immigration powers within the province.
Thirdly, we should take over our own income tax system and thereby control our own financial destiny.

Fourthly, we should examine every policy intertwined with the federal government and remove ourselves from them wherever possible. This includes everything from French on our corn flakes packages and elsewhere and positioning our securities and stock exchange institutions to become independent of federal controls.

We have learned from bitter experience that we cannot depend on Ottawa to be respectful of our needs and aspirations.
Quite frankly, this looks little different than Lévesque’s conceptualization of “Sovereignty Association” for Québec in the 1970s. To argue that we could “opt out” of equalization is laughably naive. The only way that could happen is if Albertans ceased paying federal taxes at all. If you are going to remain in Canada, federal taxes will remain a reality. I doubt very much Ottawa would be overly interested in providing an “exemption” on those taxes to any province on the basis of a disagreement over how those funds are disbursed within Canada.

To argue that we “should take over our own income tax system” also ignores the reality that it is the politics of Alberta that have stayed the hand of even a “tax-and-spend” NDP government in significantly changing our tax regime. The current system actually saves the Alberta government millions of dollars in administering our income taxes by offloading it to the CRA (a federal agency). For a tax-averse province like Alberta, it seems almost laughable to imagine that taking that back from the CRA would be beneficial.

With all due respect to Mr. Ghitter’s comments about our regulatory framework for investments and securities, he is completely at odds with the rest of the world. Canada is the last of the developed economies to not have its securities and exchange oversight federally regulated. This is actually widely held to be impeding Canada’s economic growth.

Alberta is fully within its powers to change its income taxes, levy a PST, or a Carbon Tax. We are already more than our own masters financially. Ottawa isn’t restricting our ability to balance our budget - our political climate is. Decades of “look how amazing we are” politics that played up the idea that we can “afford” low taxes on the basis of resource revenues had made us temporarily wealthy created the mythology that Alberta doesn't need to raise funds through taxation. It was a short-sighted bit of populist nonsense then, and the price of that short-sightedness is now coming home to roost. 
We are a forgotten appendage in the Canadian mosaic.
I wonder at the apparent speed with which Mr. Ghitter and other Albertans have forgotten the speed with which the Federal Government acted when it became apparent that Kinder Morgan was likely to cancel the TMX project outright.  A truly disinterested government would have quietly let that happen, similarly one opposed to the ongoing business of the oil patch would have acted similarly.  Instead, they bought the damn company in order to keep the project alive.  A more direct "transfer payment" is hard to imagine.

While on the political stage, Alberta is often ignored, we have to take some responsibility for that ourselves.  Alberta gets ignored because we can be predicted.  The odds are that we will vote conservative.  All the parties know this.  The conservatives ignore us because they can; the other parties do because they see no value in trying to sway a province with a decades long habit of voting one way.  This is precisely why Québec's efforts _are_ successful - that province has shown time and again that it will reward efforts made in its direction.  Alberta, not so much.

Mr. Ghitter's column is cleverly written, and will no doubt raise the ire of a good many people.  However, on the whole, it does little more than reiterate the same tired arguments that conservative politicians in this province have been flinging about for some time.  We should all take a step back when reading these types of pieces and ask ourselves "what is the writer's intent?", especially when we see phrasing that is clearly designed to raise our ire through the use of emotionally laden wording. 

The Cass Review and the WPATH SOC

The Cass Review draws some astonishing conclusions about the WPATH Standards of Care (SOC) . More or less, the basic upshot of the Cass Rev...