Intro

So last week, we discussed some root causes behind how the Brexit vote came to be; Britain’s frustrated voter base could have become disillusioned with the pundits, economists and politicians constantly bombarding them with the guidance that they knew what was best for Britain. I blamed it, “the Exit victory”, on collective mistakes generated by successive governments and the lack of a system, that’s able to catch these mistakes – ultimately the British people said “No” to EU mistakes generating costs and debts for the UK government. The big problem is that governments worldwide keeps making decisions, with some leading to mistakes and sometimes these mistakes are counted in the billions of dollars. In this week’s article, we’ll temporarily put aside discussion of the EU, and we’ll look at the smaller economy of Ontario whose market size is $750B (around 38% of Canada’s total economy and comparatively smaller than the EU economy which is around $14.3T). Costly mistakes keep seeming to happen in Ontario, that means the system is missing something, some type of feedback that stops those mistakes from happening in the first place. I will first talk about the current political scene, then go into detail about the political history of Ontario, until finally presenting a solid argument for what qualities a leader should have to lead a political party.

The Scene – it’s members

For those of you not in know, the Liberal Party of Ontario has been anointed the ‘centre-left party’ in Ontario and has dominated the political seen for well over a decade; the right end of the political spectrum is occupied by the Progressive Conservatives (henceforth denoted the PCs) and the left wing, by the NDP, who don’t even get an acronym explanation. The Liberals have been in power since the 2003 provincial election, which granted them a majority government and have basically been in that same position since then; outside of a 3-year window, where they were still the biggest party, but in a minority parliament situation. It’s safe to say they’ve been given ample time to prove their policies out.

Growing up in Ontario, I can tell you that it’s very clear from the election time ads that the Liberals have the support of the public sector. This is clear because in each of the last 2 elections, the Canadian version of superPACs, have bombarded our airways with scare campaigns that the right wing party (PCs) will take away all our rights and sell off public assets to satisfy their ideological viewpoints. Now this is reasonable for them to say because the last time the PCs were in power they passed the single most damaging piece of legislature that any party in Ontario has passed – the privatization of the 407; it’s basically given the Liberals a monopoly on politics for the last decade.

Why the Liberals have had a Monopoly on politics for the last 13 years

To put it into perspective why this was such a damning piece of legislature, to drive ~100 km from Hamilton/Burlington border (where the 407 starts) to Markham (where the 407 ends), it costs anywhere from $20-25 dollars one-way! Depending on if you have a 407 transponder, a $5 surcharge applies whenever you enter the highway with no transponder. Bullshit with a capital B. So let’s say you live in Burlington and get a job in Markham, you can do any one of the following (the number in parentheses is annual cost of each decision with the breakdown followed below):

Take the non-privatized highways ($4,000) Take the 407 ($10,400) Move or rent ($16,800)

Cost breakdown – Take the non-privatized highways ($4,000)

Now let’s say you want to stay in Burlington and not pay any toll fees, then option 1 is your course of action. But here’s where things get complicated because instead of paying out of pocket, you’re paying with your sanity. To drive that distance every day non-toll, (which people do) you’ll end up spending at least an extra 8 hours a week in traffic. That ends up being an extra 400 hours a year (if you work 50 weeks a year) that would get completely wasted. Let’s just say you’re getting paid minimum wage – which you won’t be because then you’d actually be crazy to drive the 401 to Markham from Burlington – that’s around a $4,000 annual cost + the opportunity cost of not using that time more productively.

Cost breakdown – Take the 407 ($10,400)

Your next course of action is to just suck it up and take the 407. Let’s see, assume you’re paying the lower end of the spectrum @ $20 per way. So that’s $20 * 2 (times a day) * 5 (days a week) * 52 (weeks in a year) which is $10,400/year. Ouch. That’s why I’ve hardly ever been on the 407, even when I was working construction, I genuinely felt bad expensing it and I woke up early to avoid having my boss pay that out of pocket.

Cost breakdown – Move or rent ($16,800)

Finally moving costs or renting. Rent in Markham can be expensive and typically you won’t find a ‘nice place’ for less than $1400/month. That ends up being $16,800 annual cost. Remember this is the economic cost, we’re not even taking into account social cost.

Decisions have consequences – Why the PCs are STILL paying for this today

Again, I touched on the ramifications of traffic in my last article and how traffic limits skills to a constrained geographic areas. It brings about inefficiencies to the Southern Ontario labour market because it effectively makes it so people work less in a day – a time tax. But forget people, think companies. This one piece of legislature has made conducting business in Ontario more expensive. It’s also effectively lowered the house prices all along the 407 corridor – again this is in theory, house prices in Ontario have just shot through the roof, and we haven’t been able to really understand precisely why. Btw the fact that policy makers don’t have this data already on hand is kind of embarrassing; the fact that they’re now getting to the data shows me government is in for a data revolution. The governments we currently vote for, react to problems that come up and are not active in observing where risk fundamentally lies. But you get what you pay for and currently I don’t know what exactly I pay for. This criticism of government has to lay dormant until government adopts control plans and PFMEAs, so we can know where we stand from a efficiency standpoint.

But back to the catastrophe which was the privatization of the 407. Let’s see, sold off to a foreign company in 1999 for $3B on a 99-year lease! Now it’s worth ~$10B and that means Ontario lost out on $7B since the PCs decided to sell it.

We did the math. We lost out on $7B.

What’s even worse is in the contract itself. Ontario cannot build any competing highways in a certain geographic area that would take traffic (revenue) away from the 407 (aka converting Highway 7 kind of deal) and the fact that we have 80+ years on the lease, makes it even harder to digest; a politician, who I didn’t vote for, had such a colossal f*** up in asset valuation, that he literally screwed his GREAT GREAT grand kids (who are probably not going to be living in Ontario). I know of Native cultures where the elder statesmen of the tribes consider the effects of a decision seven generations down, but someone should have told Mr. Mike Harris that those policy decisions were supposed to have positive, not negative effects on those downstream generations. I’m also glad that I didn’t vote for the mess that was Tim Hudak either. He was a cabinet minister under the PC government who sold off the 407 and the fact that he wasn’t sly enough to realize his government had been had means he’s not worth my vote. If he was just some backbencher, fine ignore it, but he was a cabinet minister. Moral of the story, if you’re a cabinet minister and your government does something dishonest or proves themselves to be incompetent, then there should indeed be a halo affect that rubs off on you. As I mentioned above, with the increase in pay, the cabinet designation should carry forth added responsibility that your government does not do anything foolish.

Punishing politicians for bad decisions should also carry over in the USA as politicians who voted for the Iraq War should have that badge of dishonor hurt their future ambitions. Such obviously terrible decisions need to be punished and as an electorate our only voice is our vote. If you disregard morally reprehensible actions by politicians by continuing to vote for them, you’ll continue to get that kind of incompetence from your elected officials.

In summary, unless politicians hold a plebiscite, they should be held responsible for major unnecessary cost decisions (e.g. Iraq War for USA & Highway 407 privatization for Ontario) that have negative effects on their countries. We live in a world of unlimited debt, where bad politicians can just mask their incompetency with social program or other promises to effectively selectively bribe the portions of the population they want to vote for them. By the way, this happens with both parties, no matter the level of government. I was disappointed in Stephen Harper and all his selective tax breaks (e.g. income splitting), rather than across the board tax breaks. Earlier in the article, I talked about some type of feedback that stops big mistakes from happening; voting out bad politicians is this feedback. Politicians should put a lot of thought into their votes and should understand that poor decisions have ramifications. This entire 407 debacle is also the primary reason I do not vote for political parties who privatize government assets (cough * Hydro One * cough). They’re not effective asset evaluators and they pay the people who will make the asset evaluation – screams corruption. But don’t worry I’ll write a Hydro One article too. Not this time though.

Liberal Ascension to Power

Now that we’ve kind of covered the primary reason behind why the PC party of Ontario has suffered for so many years, we’ll touch a little on what the Liberals have done since being elected. Since 2003, debt has grown by 230% with no clear end to annual deficits, in sight. The government says they’ll be back in the black by 2019, but who knows. In my mind, they don’t seem focused, and haven’t adopted important private sector efficiency tools. The rest of this article will discuss the three major spending scandals + one non-spending scandal from their checkered past. The scandals are as follows:

Spending scandals

Non-Spending scandal

Deleted email scandal

Computers and doctors do not mix

Let’s start this story off with the E-Health Scandal that rocked the Liberal majority government in 2008. E-Health was supposed to be exactly what its name infers, that is an electronic health record system for every citizen in Ontario. I guess it was supposed to replace some of the bureaucracy present in the current day healthcare system – all told it was supposed to save $6B dollars a year. Whatever that means and how those cost savings would have come to fruition are uncertain. What is certain is that this was a scenario where the auditor general brought up government incompetence as the root cause of $1B being wasted over a 6-year window (2002-2008). Everything from no-competition contracts being handed out, to clear evidence of corruption in sourcing those no-competition contracts, to over relying on consultants (auditor generals words not mine), to effectively giving an incompetent person a blank checkbook as the CEO. But the greatest error of judgement was the lack of accountability at the top – McGuinty (old Premier) did not go to jail over this, and neither did his Health Minister. Clear negligence and someone (ex-CEO) only got fired – McGuinty would go on to be Premier for another 5 years.

Ornge on the outside, rotten on the inside

The Ornge scandal was not one that was in the $1B ballpark, it was only in the tens of millions of dollars but it goes to show another case where control plans and PFMEAs could have saved the taxpayer money. In 2011, it was “uncovered” to the shock and dismay of the government that someone who headed the provincially funded air ambulance service, was hiding his salary from the public “sunshine list”. It’s been documented that there were examples of misuse of procurement in the Ornge scandal as well, specifically an inflated payment for helicopters whose owners provided an odd payment of nearly $7M to one of the CEO’s other companies. Who knows how much the CEO actually managed to extort from taxpayers (this is unknown) but again another scenario where the people at the top, found a scapegoat and a way to breathe another day. McGuinty did not take the fall and neither did the Health Minister, I’m surprised to see that the CEO got the axe but again, why don’t these guys go to jail. I could be sent to jail for stealing milk from a corner store, but steal millions from the taxpayer? Just hope the party in power has your back.

Gas plants & how we deleted how we talked about it

And here’s when we get to the straw that broke the camel’s back and finally saw Premier Dad (McGuinty nickname) leave the highest office of the Ontarian land. The Gas plant scandal and the deleted email scandal go hand in hand, adding much needed drama to the 2014 election. One (deleted email scandal) happened after the other (gas plant scandal) and they were directly tied to each other. They should have taken out the current premier (Wynne) along with the last premier (McGuinty). The current premier was able to apologize in a debate on public television and somehow that was enough to convince Ontarians that the Liberals were fit to lead. This scandal was so big that the government went to the extent of wiping email servers (not just hit delete on the email), so that it wouldn’t get around to the public that the government was fully aware of how it had lied about the cancellation costs. Long story long, power plant was supposed to be built at the Oakville/Mississauga border (south of the Ford plant), and after much debate the Liberals finally decided to cancel it, for purely a political means, might I add. Liberals blamed it on re-analyzing the supply & demand and seeing the plant really was unnecessary but it’s been basically proven they cancelled it because the Party knew it would lose 3-4 seats in and around where the gas plant was being build. How it got to the point that the province was still on the hook for $1.1B before having this realization is still not explained – partially deleted emails and partially politicians just straight up lying to our faces. During a transition of one government to the next (aka Premier dad quitting because the opposition pressed him into admitting that the cancellation costs were misrepresented), someone who didn’t work for the government, logged into “the system” and just so happened to delete emails related to the government cancellation of the plants. Forget that when initially asked how much the cost of cancelling the plants was going to be the government said $40M – the cost ended up being $1.1B (a mere 4% of the grand total). I don’t get how politicians (Premier Dad) can just claim that they didn’t know what was going on and allow for that to be an adequate reason for criminal activities going on. This is the biggest reason why we need control plans and PFMEAs, to stop mistakes like this from happening again. Imagine knowing what our politicians actually do and where their responsibilities begin & end. We need to know those types of things so citizens can better direct their input to the right person so that actual work gets done. There also needs to be a log of open action items so issues don’t linger. We shouldn’t allow for situations like the gas-plant cover-up to happen again. Due to a transition period between governments, we’re supposed to believe that that made it okay for someone who didn’t work for the government to log into the government system and delete sensitive emails? Really? This is where it’s important for young people to realize that if you want government to change to work for you, instead of you working for it, it’s essential to vote corruption like this out. Just like how the PCs got voted out for the 407 issue, we need to vote in parties that utilize the private industry tools of efficiency.

Moral of the story

For the reasons listed above it’s important for Conservatives to not put up with incompetence from our Conservative parties. Last time we voted (Canadians & USA) Conservative, our governments just flat out kept being dishonest (Bush & Harper) and it burnt us with left wing glory boys following them up. We (Canadians) elected someone who if he weren’t the son of an ex prime minister, would not have been elected prime minister, literally the textbook definition of nepotism. Mr. Trudeau does not have the economic knowledge to lead a country, for those of you who believe that he just needs to surround himself with an adept team? Well I prefer my PM’s to think for themselves because when tough times come (economically), I’d prefer my leader to not have to defer to someone for knowledge.

For left wing party supporters – you’re getting fooled, unless costs are controlled, the government can’t really do anything because they spend a ton of your money on non-value add tasks. Government is bloated and has services implemented that solved problems from 10 years ago with the technology present 10 years ago. You shouldn’t be solving problems and designing processes (essentially what government does) unless it’s the most efficient way to solve it or if you at least have efficiency tools set in place to optimize processes down the immediate line. Think about it… if we want more problems solved (World Peace, Space Travel, Global Warming, Homelessness etc.) we have to free up the capital & labour from the problems we already have solved (e.g. BUREAUCRACY) and re-train our public sector as this will carry over to the private sector. We also need to document and make sure that the problems we currently solve do not fail the “quality/$” relationship. When I vote for right wing parties who are not going to implement control plans and PFMEAs, I worry that this “quality/$” relationship will not be maintained. In this article, I spoke to the water catastrophe in Flint and how by utilizing Control Plans and PFMEAs, poisoning innocent lives could’ve been avoided. Right wing politicians should be cost cutting using those tools (as well as Pareto charting) since this is the way private industry regulates costs while accounting for RISK. Utilizing control plans and PFMEAs, will be the key to creating innovation in the workforce and society. Learn, if a politician makes a mistake. Punish them by not voting for them. Tell people about it so those politicians are unable to make poor future decisions. Politicians will stop doing a poor job because they understand that one poor decision means they’ll lose their job.

Primary reason I wrote this article

The primary reason for this article was to communicate that conservatives need to reject Donald Trump as the Republican candidate. The man is a racist & bigot and his election will lead to the public at large rejecting Conservative political parties. He has slip-ups and when those slip-ups occur, it shows his true character. I thought being a businessman, growing up in NYC, I thought that would’ve made him a non-racist person but the positions he eschews are not those of a President. The President controls an army. Obama did one great thing during his presidency and that was he did not start wars. He was diplomatic. I love Obama for this, even though he doesn’t know anything about the economy. I’m thankful for no new wars. I’m thankful for relative world peace and Trump’s antics from the previous few weeks have turned me from a full on Trump fan, to someone who would vote Gary Johnson (even though he has some precarious views) in a heartbeat. It’s disheartening as a voter when no new wars is looked at as a redeeming quality from a President. Obama got elected on so much of a promise for transparent and responsible government and 8 years later, trillions more in debt, there’s still no semblance of a transparent government.

At the end of the day, I don’t want a war and if you vote for Trump, I now no longer believe he would not start one. In my article from two weeks ago, I don’t think he can responsibly “ban all Muslims from entering the USA” either. He will push forth with a ban but he certainly won’t do it responsibly and I predict he’ll empower racists across the USA, if he’s voted President. Additionally, there’s a trend of disturbing things happening at a few recent Trump ralleys. Specifically there was violence and it wasn’t met with stern disapproval, Trump did not even condemn it on the spot. Conservatives do not need someone like Mr. Trump representing us. Trump should’ve at least said “no violence here please”; the fact that he didn’t disappoints me, along with the combination of his reaction to the Orlando shooter being gay, to how he talked about the Mexican judge, who was overseeing the Trump University case. It bugs me to the point where I’m not going to defend a person who I’ve never known before (outside of Celebrity Apprentice) just because he won the Repub primaries – as far as I’m concerned, I’m perplexed how this trust fund baby has been able to somehow finagle his way to the top of the Repub party. This shows me that the Republican voters of the USA are not ready to transform government – they got swayed by a tacky marketing campaign, forget the chance for real change. If I had my ideal President he wouldn’t be bringing people down and he certainly wouldn’t be advocating for violence at his ralleys. Trump will introduce inefficiencies in millions of American’s lives, forget about making America great. In the case of the Mexican judge, he shouldn’t be talking about race Period. If he wants to talk about how he thinks the judge will be biased, present thorough arguments and let people decide for themselves. The fact he defaulted to race as ‘a publicly held view’ makes me question him and certainly question his ability to be president. This is because Trump WILL make a major mistake and for the consequent 15 years, we’ll have a person even more left wing than Obama in office. Trump will fuck up. It’ll be royal. Then you can usher in the age of Left wing problem solving and see humanity crumble because that’s what Ontario just went through for the last (almost) decade and a half. It’ll happen if Trump is elected President & it cannot be stated that Trump is a racist and that’s why people shouldn’t vote for him. Urge Bernie to come into the race, and organize republicans to force Trump to run in a 1-on-1-on-1-on-1 otherwise it’s Shillary or the NYC Trust Fund Racist.

Future Articles

No more Trump articles, I promise. I’ve said all that needs to be said and I hope I’ve been able to effectively communicate why Conservatives shouldn’t want to associate with him. I also thought I’d make a little summary of important topic of conversation that need to be discussed in the near to immediate future. I hope to have articles on all topics listed below completed within the next 6 months.

Pareto Charts – how they’re used alongside Control Plans & PFMEAs to control costs Fishbone Diagrams & 8D decision making – where they’re used, why they’re used Toronto Public Transit Summary Hydro One Privatization – timeline and what Ontario ACTUALLY got Green Energy Act – from the view of a Mechanical Engineer

I’ll also sprinkle in some articles on the NBA and cold showers in there as well but hopefully I can present great articles in the time period I’ve mentioned above.

Article was written by gtareguy (Greater Toronto area real Estate guy) . I release a new article every Friday and I write about economics, the nba and real estate in the GTA.

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