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DOLPHIN: Inside Alberta Budget 2020

Ric Dolphin takes a dive into the UCP’s 2020 budget.

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Coming less than four months after last year’s, the Kenney government’s budget for 2020-21 offers little that is new and proceeds on the slow path toward (sort-of) fiscal balance, with spending freezes, staff reductions, some tax increases, and dubiously optimistic predictions for improved oil prices, increased energy investment, and reduced unemployment.

Things could hardly be worse than for the current 2019-20 fiscal year. According to the third-quarter update – which was presented alongside the Budget 2020 – growth was essentially flat at 0.3 per cent, unemployment topped seven per cent (20 per cent for 18-25-year-olds), personal income tax revenue was $160 million lower than budgeted, and bitumen revenue – while estimated to be up slightly over budget ($4.7 billion), began a downward trajectory in the second half of the year that is predicted to result in a 33 per cent revenue drop in 2020-21, down to $3.3 billion. 

This reduction is the result of higher differentials and reduced exports caused by lack of access to markets (that is, no pipelines).  Finance Minister Travis Toews told reporters that he does not expect resource revenues to exceed their 2019-20 levels for four years. This is despite the de-indexing of income tax brackets, which Jason Kenney denounced as “bracket creep” when he was the young head of the Canadian Taxpayers Federation.

Nonetheless, the Finance ministry is predicting 2.5 per cent GDP growth for the coming year. This optimistic forecast is based partly on an expected 1.5 per cent population increase, a one per cent decrease in the unemployment rate, and gains in the energy sector. The latter include increased drilling activity, new energy projects coming on line, and growth in oil and gas investment encouraged by more cost-efficient production methods and the imminent prospect of greater market access (the US portion of Enbridge’s Line 3 is expected to open in 2021).

And according to the budget document, “With investors becoming increasingly concerned about U.S. shale oil well productivity and lack of investment returns, Canadian energy companies are in a good financial position to attract investor funds.”

Despite the predicted growth in the overall economy, the government itself is projecting a two per cent reduction in its revenue for 2020-21 – from $50.95 billion to $49.99 billion – largely as a result of those lower bitumen royalties.

On the expense side of the ledger, total operating spending is estimated at $56 billion, which is $865 million (1.7 per cent) less than that forecast for the previous year in the Q3 update. And in the absence of any other good news, Toews was quick to point out that the estimated $7.54 billion deficit for 2019-20 was $1.2 billion lower than budgeted. 

The deficit for 2020-21 is budgeted at 6.8 billion, which, as will doubtlessly be repeated ad infinitum from the opposition benches, is slightly greater than that NDP’s last deficit of $6.71 billion in 2018-19.

Asked how this could be considering the 1.7 per cent reduction in spending, Toews blamed it on the cost of the Notley-initiated oil-by-rail contracts, which the UCP recently cancelled at a cost of $1.2 billion. Another contributor is the incremental increases in servicing costs on a debt that will grow from $67.9 billion in 2019-20 to $76.9 billion in 2020-21. This means the servicing cost will rise from $2.1 billion to $2.5 billion.

Despite this fiscal millstone, Toews was adamant that the UCP government will eliminate the deficit by 2022-23, in part by reducing operational spending by three per cent. The deficit-elimination schedule is also predicated on revenue rising to $54 billion in 2021-22, and $58 billion in 2022-23 – predictions based on increases in oil revenue, which in turn are dependent on completion of the Line 3 and TMX pipelines.

Asked what will happen if these predictions are unrealized, Toews said, “If we don’t achieve additional energy egress, additional restraint will be required.”

The budget is titled “A Plan for Jobs and the Economy,” and Toews touted the increase in capital spending – from $5.8 billion in 2019-20 to $7.0 billion in 2020-21 – as a stimulator of employment in projects that will include the twinning of Highway 40 in the gas fields between Grande Prairie and Grand Cache and expansion of the Peter Lougheed Hospital in Calgary.

Ric Dolphin is the Alberta Political Editor of the Western Standard. He has had a long career in journalism with Maclean’s, the Globe and Mail, Edmonton Journal, Calgary Herald, Alberta Report, and the original Western Standard. He was previously Publisher and Chief Editor of Insight into Government. 
rdolphin@westernstandardonline.com

Ric Dolphin is the Alberta Political Editor of the Western Standard. He has had a long career in journalism with Maclean’s, the Globe and Mail, Edmonton Journal, Calgary Herald, Alberta Report, and the original Western Standard. He was previously Publisher and Chief Editor of Insight into Government. rdolphin@westernstandardonline.com

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McCOLL: Canada’s airforce replacement program getting it half right, half wrong

Alex McColl on how the very mixed bag of Canada’s airforce replacement programs.

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On June 6, the Department of National Defence (DND) announced that the two oldest 1980s-era Bombardier VIP jets (the Challenger 601) would be replaced with a pair of new sole-sourced Bombardier Challenger 650 jets. The old Challengers no longer meet international civil aviation standards nor could they be affordably upgraded. 

While some have criticized the Challenger fleet, Canadians should be proud of how much money the affordable Challengers have saved the taxpayer.

The United States Air Force (USAF) spends more on a single 8-hour Air Force One (a Boeing 747) flight than the Royal Canadian Air Force (RCAF) spent on the governor general’s 109 Challenger flights between April 2011 and February 2014. That said, the Liberal government has taken a step backwards on the VIP jet file by missing an opportunity.

The Bombardier Global VIP jet can carry more people, can fly farther (over 11,000 km), and is a proven military platform. Finland is currently evaluating the new Bombardier/Saab GlobalEye as a component of Saab’s bid to replace Finland’s F/A-18 Hornet fighter jets. The Global is also the basis for the Bombardier/Saab Swordfish maritime patrol jet that is the leading contender to replace Canada’s aging CP-140 aircraft.

Canada needs to keep RCAF operating costs affordable while adding capabilities. A proven way to save money is to reduce the variety of jets in service. It would be better to replace all four Challengers with new sole-sourced Bombardier Global jets and six Bombarder/Saab GlobalEye airborne radar jets. The government should also announce that the CP-140 maritime patrol aircraft will be replaced in the 2030s by Bombardier/Saab Swordfish jets. This would both enhance our military capabilities while reassuring potential export customers that militarized Global jets are a safe investment.

On Tuesday June 16, the United States Government announced the approval of a foreign military sale to Canada of approximately $862.3 million (USD) worth of CF-18 upgrades and weapons. Phase one of Canada’s Hornet Extension Project will upgrade avionics and mission systems to extend the life of up to 94 CF-18s until 2032. Phase two will use the upgrades to enhance the combat capabilities of up to 36 CF-18s.

The upgrades quote includes fifty of the latest AIM-9X sidewinder missiles, twenty AGM-154C glide bombs, thirty-eight APG-79(v)4 AESA radars, thirty Improved Tactical Air Launched Decoys (ITALD), and a host of other upgrades to bring Canada’s CF-18A jets to an equivalent standard with the United States Marine Corps (USMC) F/A-18C Hornets. The Marines plan to upgrade 98 of their Hornets – 7 squadrons worth – with these systems between 2020 and 2022. The new radar is nearly identical to the APG-79 AESA radar found in the Super Hornet.

Phase one and the addition of the AIM-9X missile should be considered the bare minimum required to keep the CF-18 fleet flying to 2032, when Canada’s next fighter is scheduled to reach full operational capability. Phase two will offer significantly enhanced combat capabilities and give RCAF pilots some valuable experience with modern radars. The Department of National Defence (DND) released a budget estimate of $500 million for phase one of the Hornet Extension Project and a total cost – including phase two – of $1.3 billion.

All four of the candidates for the leadership of the Conservative Party of Canada have promised to increase military spending. During the June 18th leadership debate, Dr. Lewis – the only candidate to not commit to a 2 per cent of GDP spending target – questioned the commitment of MacKay and O’Toole by pointing out that the Harper Government didn’t get it done despite its own commitment.

Even proponents of sole sourcing the F-35 – like Peter MacKay – should support the CF-18 phase two upgrade. The May 2020 United States Government Accountability Office report on the F-35 outlined issues and cost overruns that have delayed the availability of fully capable Block 4 F-35s until 2026. 

This delay – combined with the fact that allied nations are already in the order queue – casts serious doubts on if Lockheed Martin could even meet Canada’s CF-18 replacement timelines. Lockheed Martin could deliver Block 3 aircraft, but that would impose considerable future upgrade costs on Canadian taxpayers. The rational course of action would be to delay an F-35 purchase until Block 4 jets are available. 

If Conservatives are serious about rearming the RCAF and reaching Canada’s NATO spending targets, then they should demand that phase two of the Hornet Extension Project is fully funded and delivered on time. Conservatives should also push the Liberals to do more and replace the aging Challenger and CP-140 aircraft with a combined fleet of Bombardier Global based VIP, airborne radar, and maritime patrol jets.

Canada’s airforce fleet replacements – and the fighter replacement in particular – have been a morass of bureaucrat inertia and political interference, but the there is finally a glimmer of hope that they might get it right.

Alex McColl is the National Defence Columnist with the Western Standard and a Canadian military analyst

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Inside Seattle’s CHAZ – where warlords rule and vegan food is in short supply

At the heart of the CHAZ, is a Seattle police precinct, abandoned by officers and now being used by protesters, oh, and warlords.

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As a strategy for American urban renewal, it’s certainly an interesting experiment.

Thousands of protesters – many hailing from the far-left ANTIFA terrorist organization – have taken over a six-square block area of Seattle – now dubbed the Capitol Hill Autonomous Zone (CHAZ) – where no police officers are allowed.

Just 24 hours a day of protesting, music, dancing and communing without a cop in sight, they have already run out of food, putting out a plea for “vegan meat alternatives” and other soy-based food donations.

At the heart of the CHAZ is a Seattle police precinct, abandoned by officers and now being used by gun-tooting warlords who have established themselves as the new keepers of law and order.

CHAZ

They have a list of demands, including the “abolition” of the Seattle Police Department and its attached court system, free college for all people in the state, as well as “the abolition of imprisonment, generally speaking, but especially the abolition of both youth prisons and privately-owned, for-profit prisons.”

 

The streets are apparently controlled by a hip hop artist-turned-warlord by the name of Raz Simone, who has established an armed private police force that does not hesitate to dole out beatings to communal scofflaws.

Another video shows Raz and friends confronting a man for making unauthorized graffiti on Raz’s turf, which results in the “police” stealing the man’s phone, breaking his glasses, and reportedly repeatedly kicking him in the head.

“We are the police of this community here now,” the man is told before the beating.

The video reveals Raz’s gang telling the man, “For your own safety, you need to go,” and “You might need a little love tap” before seeming to assault him.

The vandal is then ordered to hand over his phone as tribute to Raz, under the threat of more violence. “You just broke my glasses! I’m blind! You just broke my glasses and stole my phone!” the man pleads, before being told, “Yeah, we should have broken your face.”

“Don’t be making no threats … I’ll blow your brains out,” Raz says.

In other sections of CHAZ, there are tents with supplies for volunteer medics as well as food donated by local restaurants, along with fruit, snacks and water bottles.

“The scene here is peaceful as hell,” said a demonstrator who identified herself as Jahtia B.

“This is our city. I was born and raised in this city. Let’s give it to the people, the people who live in Seattle and have been thriving here,” she told AFP news agency.

Seattle City Councillor Kshama Sawant disputed accounts of violence or intimidation by protesters within the area and said it was more like a street fair with political discussions and a drum circle.

CHAZ occupiers

“The right wing has been spreading rumours that there is some sort of lawlessness and crime taking place at the Capitol Hill Autonomous Zone, but it is exactly the opposite of that,” said Sawant, 

An African American demonstrator, Rich Brown, told reporters he was scared Sunday when police used tear gas and flash-bangs in an attempt to clear the area.

“Today I feel supported, welcomed,” he said.

“We’re able to speak, it’s what we’ve been wanting to do this whole time, without intimidation, without fear.”

U.S President Donald Trump and Seattle’s Mayor Jenny Durkan are currently engaged in a war of words over the Zone.

“Take back your city NOW. If you don’t do it, I will,” Trump warned Durkan and Washington state governor Jay Inslee – both Democrats – in a tweet late on Wednesday, calling the protesters “domestic terrorists” who have taken over Seattle.

“This is not a game. These ugly Anarchists must be stooped (sic) IMMEDIATELY. MOVE FAST,” he said in another tweet.

Durkan replied, telling Trump to “go back to his bunker” a reference to when Trump sheltered in the White House bunker after D.C protests and riots got too close.

Inslee tweeted: “A man who is totally incapable of governing should stay out of Washington state’s business. ‘Stoop’ tweeting.”

CHAZ

In a Thursday press conference, Durkan said it would be unconstitutional and “illegal” for Trump to send military forces there to clear protesters occupying part of the city.

But, at the same news conference, Seattle Police Chief Carmen Best said the protesters could not remain camped behind barricades in the city’s Capitol Hill neighbourhood.

“You should know, leaving the precinct was not my decision,” Best said in a video addressed to the members of the department. 

Assistant Police Chief Deanna Nollette told reporters police had received reports that protesters allegedly set up barricades, “with some armed individuals running them as checkpoints into the neighborhood.

“While they have a constitutionally-protected right to bear arms, and while Washington is an open carry state, there is no legal right for those arms to be used to intimidate community members. No one at these checkpoints has the legal authority to demand identification from anyone,” Nollette said.

Nollette also said police have “heard anecdotally” of residents and businesses being asked to pay a fee if they want to operate in the area.

“This is the crime of extortion,” Nollette said.

Officials say there is no indication the occupied area is being coordinated by left-wing groups under the umbrella of Antifa.

The U.S. has been wracked with violent riots since the death almost three weeks ago of George Floyd, a black man who was murdered by a white Minneapolis police officer.

Dave Naylor is the News Editor of the Western Standard
dnaylor@westernstandardonline.com
Twitter.com/nobby7694

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Wexit Saskatchewan ramps up for its first election

With a fall election around the corner, the new Wexit Saskatchewan Party is preparing for its first big fight.

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The new Wexit Saskatchewan party is quickly preparing for its first election coming up this October. The party’s interim leader, Jake Wall says he is excited as prospective candidates for the permanent job step forward and they gear up for their first ever convention.

“I’m getting calls from people saying, ‘Listen, I want to help buy some memberships. What can I do? So the numbers are starting to pick up.”

If Wexit Saskatchewan has grown quickly, it’s because the party had little choice. On January 23, the Saskatchewan Party and NDP both agreed to change the requirements for new political parties to be established. It meant that Wexit had to collect 2,500 signatures by March 26 – much sooner than the fall deadline the party expected.

As it was, Wexit handed in 3,599 signatures on March 10, becoming just the seventh registered party in Saskatchewan.

Harry Frank estimates that he collected 500 of those signatures in 70 hours of work, canvassing Regina, Moose Jaw, Pilot Butte, and Balgonie.

“The response was overwhelming,” Frank said. “Trudeau got in again and you saw what happened. Things just exploded.”

Frank said the decision of establishment parties to make it more difficult for Wexit to gain status only made people even more eager to add their name.

“Our party is young but it’s growing,” Wall says. “We will definitely be a force in October come the election date. I know the Sask Party is worried about us.”

Wall says Wexit is picking up disillusioned voters from across the political spectrum.

“We’re getting people who are disgusted with the NDP because they have gone so far left – probably 20 per cent of people who contact us. Those who had leaned towards Sask Party but don’t like [Premier] Moe would comprise of about 50 or 60 per cent. And then others who have never voted before would be the last 20 per cent of those people.”

Wall says Moe has lost support because of high debt levels, the expenses of putting transgender bathrooms in schools, and the shut down of the provincial bus company. 

Another controversy arose when the emergency wards of 12 rural hospitals were shut down for weeks due to the pandemic. The premise was to make physical changes to the facilities and to train staff on protocols. Some felt the closures were made too quickly, were poorly communicated, and left people an hour from a hospital if they needed help. The Facebook group, “Citizens concerned about rural health care” was formed in response and now has 2,300 members.

Wall says Moe and his Saskatchewan Party refused to let the people vote on whether they supported Saskatchewan independence, and were clearly warned that if they refused, Wexit supporters would form a party.

“Why do you think Moe doesn’t want to have the plebiscite? He doesn’t want to hear the answer. If the answer comes back, 75 to 80 per cent of people want to have a [binding independence] referendum – he doesn’t want to hear that answer.”

“But we know and you know and so does everybody that reads this article, Ottawa will never respond to those demands, because if they did they’d be foolish. When you own the keys and get the gas given to you, you don’t give away the car.”

Wexit has sent out candidate application forms as people step forward to become candidates. Harry Frank wants to be one, as does Constance Maffenbeier, a former RCMP officer who ranches between Humboldt and Watrous.

“We’re just being so treated unfair[ly] you know. We’re just like the ugly stepsister,” Maffenbeier says of how Ottawa treats the West. 

“Even if we do have a different federal party in there, they’re never going to give the West the representation that they deserve. So this is one way that maybe we can wake the East up as to how exactly how important Western Canada is to confederation and Canada.”

The party will be reviewing the applications for the potential candidates and hammer out its policies in July during its inaugural convention. The party will also pick its first permanent leader to carry the its banner into the election coming a few months later. 

“I hear this all the time,” Wall says, “’You’re going to split the vote.’ Even if we did split half of the Sask Party vote, they have 51 seats. That’d mean one of us would have 26, one would have 25, the NDP would have 10. But we’ve got so many educated voters, I don’t think they’re even going to get 10.”

Wall hopes the party will run a full slate of candidates and get 30 per cent of the vote. 

“We don’t have any seats at this point. So our goal at this point is to have our voice in Regina, and maybe make Ottawa stand up and take notice. And also to show that the western separation movement is alive and well and growing.” 

Lee Harding is the Saskatchewan Affairs Columnist for the Western Standard. He is also a Research Fellow at the Frontier Centre for Public Policy and is the former Saskatchewan Director of the Canadian Taxpayers Federation.

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