Thursday, September 24, 2009

A $12-billion boondoggle

Andrew Steele gets to the heart of the matter:
What makes this stunning is not the partisanship of public spending. Governments since the days of the Ch√Ęteau Clique have used taxpayer dollars to reward friends and supporters.
But prior scandals of this sort were typically involving secondary initiatives with middling importance to both the economy and the political outcomes of the government.
What makes this story stand out is that a government that has bet its very survival in the economic success of the stimulus package would be this dumb.
Unemployment and economic distress occurs across the nation. Tending to the challenge just in those seats held by Conservative MPs leaves most of Quebec, Ontario and Atlantic Canada, along with assorted places elsewhere, potentially dragging down the recovery in the rest of the country.
And remember the context in which the Conservatives brought in this stimulus package. Facing defeat on a confidence vote if they failed to wise up after missing the onset of the recession in the fall when they were preoccupied with partisan games, trying to destroy the opposition by cutting off political funding, among other things. The stimulus was supposed to be a correction, a reaffirmation by the Conservatives to serious economic priorities while they were under the gun. Following through and implementing it in a similarly serious way would prove that they learned their lesson. That's what makes today's report so galling. They didn't get it at all. They could have implemented measures to flow the stimulus more quickly and fairly, as Steele and the report itself notes, but they went on their own merry partisan way:
Like individuals, governments often show their essential character at times of difficulty. In January 2009, the major on-the-ground partners in any infrastructure endeavour, Canadian municipalities and the private construction industry, gave the government public advice that the only way to create jobs immediately and undertake quality building was to further expand the existing Gas Tax Transfer
program. On March 3, the House of Commons passed a Liberal resolution directing the Harper government to distribute half the infrastructure stimulus funds by Gas Tax Transfer, which would have permitted Canadian municipalities to incorporate the new funds into their budgets April 1. VII The opportunity was ripe for non-partisan collaboration across levels of government.
Instead, the Harper government decided to forgo the existing audit, administration and evaluation systems of the Gas Tax Transfer, to ignore the advice of experts, and to overrule the will of Parliament to devise an entirely new program. The result was a four-month delay to produce a one-page application form and processes that lowered accountability and eliminated traditional due diligence. Incredibly, this application process for a program justified in the name of jobs did not ask how many jobs would be created or when, nor did it take the local need for jobs into account in awarding funds. It also has no system to track how many jobs are actually created viii. The system did, however, allow all projects to be vetted by the Harper government.
Kennedy says he is happy to put his numbers up for third party review if there are any takers. He sounds pretty confident in his analysis and is challenging the government to do the same. Do we think they'll take him up on it?

What a fine mess the Harper crew have gotten themselves into.