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Class of March 23. Anticipating the Ontario budget Anticipating the final exam Student presentation on Ontario Internship Program and opportunities for youth and new professionals Alternative Service Delivery Highway 407 privatization case Reading: Blakeney and Borins, chapter 11.

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Class of march 23
Class of March 23

  • Anticipating the Ontario budget

  • Anticipating the final exam

  • Student presentation on Ontario Internship Program and opportunities for youth and new professionals

  • Alternative Service Delivery

  • Highway 407 privatization case

  • Reading: Blakeney and Borins, chapter 11


Anticipating the ontario budget
Anticipating the Ontario Budget

  • Globe and Mail article today based on “sources close to the government”

  • Balanced budget by 2018

  • No new taxes or big spending cuts before the 2011 election

  • “an aspirational document rather than a detailed document”

  • Spending freeze for most programs

  • New money for priorities (all-day kindergarten plus 20,000 new post-secondary education spaces)

  • Process to identify savings


Tvo civics 101 budget simulation
TVO Civics 101Budget Simulation

  • TVO is also doing a budget simulation that they just told me about. Try it at:

    http://www.tvo.org/TVOsites/WebObjects/TvoMicrosite.woa?civics101


Alternative service delivery
Alternative Service Delivery

  • Public sector restructuring by sharing governance functions with individuals, community groups, private sector

  • Spectrum of Organizational Forms

    • Department

    • Service Agency (Canada Revenue Agency, Parks Canada, Food Inspection Agency, Canada Border Services Agency, Service Canada?)


Alternative service delivery1
Alternative Service Delivery

  • Crown Corporation (LCBO, OLG, Hydro One)

  • Government as Investor (loan guarantees, e.g. example US Gov’t. to JP Morgan Chase to buy Bear Stearns, BoA to buy Merrill-Lynch, preferred shares in Citigroup, BoA)

  • Public-Private Partnership (hospitals, gov’t buildings, infrastructure)

  • Privatization, usually accompanied by regulation and time limits (Highway 407)


Service agencies
Service Agencies

  • Clear mandate and charter

  • Full costing of activities

  • Business plan, access to capital on business criteria

  • Flexible staffing

  • Entrepreneurial culture

  • Federal-provincial cooperation


Crown corporations
Crown Corporations

  • Traditional vehicle for economic/policy intervention

  • Government sole shareholder

  • Minister ultimate decision-maker, board advisory and sometimes patronage

  • Some evidence of recent choices of president and board members based on experience and expertise

  • Capital from government borrowing

  • Sask. Crown Investments Corporation

  • LCBO, OLG, Hydro One


Other examples of asd
Other Examples of ASD

  • ServiceOntario kiosks: IBM builds and maintains for a $1 transaction fee

  • Nav Canada: non-profit corporation involving major stakeholders in air navigation system

  • Airport authorities: non-profit corporations involving major stakeholders in airport

  • Canada Post retail outlets: franchising to improve service and break through bad climate of labour relations


Government as investor
Government as Investor

  • Bailouts (recessions, one-industry towns)

  • Investment funds (Canada Pension Plan Investment Fund, Norwegian state oil fund, sovereign funds of other nations now investing in US banks)

  • US rules for bank investments

    -- limit dividends on common shares

    -- control executive compensation

    -- banks try to pay off gov’t loans as soon as possible

  • Blakeney rules

    • Be suspicious of bailouts

    • Entrepreneur must have a stake

    • Loan guarantee = cash

    • Monitor performance closely

    • Use progress payments


Highway 407 case
Highway 407 Case

Based on Mylvaganam and Borins, “If you Build It…. Business, Government, and Ontario’s Electronic Toll Highway”

(see www.407etrbook.com)


Reasons for development
Reasons for Development

  • Reduce traffic congestion in 905 suburbs

  • Support construction industry during early 90s recession

  • Rae NDP government running deficits, finance through road tolls

  • Use large contracts for quick delivery, supervised by small Crown corporation

  • Develop leading edge tolling technology (transponder plus video-imaging) in an urban setting


Outcome
Outcome

  • Highway completed and opened in 1997, 6 months behind schedule, $80M over budget of $1 billion => not bad!

  • Traffic growth faster than anticipated and tolling technology works

  • Harris Government wants to privatize something big before 1999 election; ideology and money (but not the LCBO)


Highway 407 privatization
Highway 407 Privatization

  • Government received $ 3.1 billion for a 99 year lease just before June 1999 election

  • Successful concessionaire an Australian-Spanish consortium

  • Rapid toll increases starting in fall 1999

  • McGuinty promises to roll back tolls in 2003 campaign

  • McGuinty Government challenges toll increases in court; concessionaire goes to court to restore license plate denial for unpaid tolls


Outcome1
Outcome

  • Courts uphold right of concessionaire to set tolls and require government to restore plate denial

  • Out-of-court settlement announced 5 pm Friday March 31, 2006, Ontario drops appeals and concessionaire agrees to frequent user benefits program, establish ombudsman


Completing 407 east
Completing 407 East

  • From Brock Rd to join Hwy 35/115

  • Who will supply the capital? (government has an advantage over private sector)

  • Who will supply the technology? (407 already has the technology, inefficient to introduce different technology, 407east will increase usage of 407 central and west)


Lessons learned
Lessons Learned

  • There were alternatives to privatization (public ownership or phased privatization)

  • Canada lost an opportunity to have a firm developing leading-edge transportation tolling technology

  • Transparency needed for major contracts

  • Road tolling works and is a huge potential revenue source (London, Stockholm)


Class of march 30
Class of March 30

  • Presentation on Ontario budget of March 25

  • Careers in the public service (continued)

  • Public service human resource management issues

  • Concluding comments


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