MB Budget 2013: Five Lies

Lies ... So many lies ... It makes me sad.

I am not happy about the PST hike -- few people are -- but for me the worst aspect of this week's budget announcement wasn't the tax increase itself but all of the lies that accompanied it. I appreciate honesty. I may not like what you're doing, but if you're honest about why you're doing it and have a good reason for doing so, I will not resent your actions.

But that is not the case here. There is a tremendous arrogance in how the government delivered this budget that I'm finding hard to articulate, so let's just get on with the show ... here some of the more grievous lies from this week's budget announcement:

LIE: The tax hike is required for flood infrastructure. Direct quote: "this revenue will help protect Manitobans against flooding." There are 13 consecutive paragraphs in the budget speech about flooding, leading up to the tax increase announcement.
FACT: Spending on water-related infrastructure is actually decreasing $11 million from last year -- from $59m to $48m. This amount also represents a very small fraction of the revenue that will be generated from the tax increase.

LIE. Holding a referendum on the tax increase would make us miss construction season. Direct quote: "We have to get on with it now. The construction season is in front of us."
FACT: This has got to be one of the worst excuses I have ever heard from a politician. I don't even know where to start. How exactly is this supposed to make sense?  You see .. much like pizza at New York's famed Grimaldi's Pizzaria, you can only pay for flood infrastructure in cash, and we ... um ... don't seem to have any cash on us. Do you have any cash Greg? No? Ya, neither do I. Gosh, where are we going to find all that money so we can protect Manitoba families from flooding? This really is quite the conundrum. I think the only solution is to instantaneously raise $48 million on July 1 with a PST hike so that we can get those construction crews working!
As already mentioned, flood infrastructure spending is going down from last year, and in any case these projects can be financed. A referendum has absolutely no bearing on whether a dike gets built this summer.

LIE: Our sales tax rate is still 3rd lowest in Canada. Direct quote: "Our PST will remain third lowest in the country."
FACT: We aren't even the 3rd lowest in Western Canada.
Alberta: 0%
Saskatchewan: 5%
BC: 7%
Manitoba: 8%  ← 4th lowest
Or .. you could look at it this way: we are 4th highest in Canada, lower than only Quebec, PEI and Nova Scotia.
FUN FACT: Two other provinces are decreasing their sales tax, including Nova Scotia. By July 2015 we will be tied for the 3rd highest sales tax rate in Canada.

LIE: The global economy is to blame. Direct quote: "But the economic outlook remains uncertain. The source of that uncertainty lies outside our borders."
FACT: As I've progressed through life I have learned that there are certain phrases that you never want to hear. Phrases like:
"We regret to inform you.."
"I just got my results back.."
and 
"While we have weathered the recession better than most provinces, the global economy remains uncertain.."
If you have the opportunity to pour yourself a scotch before hearing the remainder of any of those sentences I highly recommend it. Anyhow, on with the facts .... revenues for the year that just passed came in at only $200k less than what was budgeted for 2012/13, and those revenues were 3% more than the year before. In other words, the government's revenues are pretty much exactly as anticipated when the Premier said "Ridiculous idea that we're going to raise the sales tax. That's total nonsense, everybody knows that."


LIE. We are on track to balance the budget by 2016. Direct quote: "It will allow us to deliver a balanced budget by 2016."
FACT: The budget does indeed show Manitoba achieving a balanced budget in 2016/17. How? Through spending restraint unlike any we have seen from this government in the past. Spending growth projections are:
2014/15: 1.3%
2015/16: 2.1%
2016/17: 2.1%
For reference, the smallest increase the NDP has budgeted since it came into power in 1999 is 2.5%, and they have averaged spending increases of 4.6%. While it is technically possible for the government to keep this promise, they know very well that they will not.

The Manitoba Government subsidizes strippers

It's true. Just ask Finance Minister Stan Struthers.

Struthers has been the Government's point man in a very public battle with the Manitoba Jockey Club over the future of the Assiniboia Downs race track. The government intends to cut what it calls "subsidies" to the Jockey Club by "at least $5 million". To the jockey club, this could mean the end of horse-racing in Manitoba. To the government, this is just cost-cutting:

"We understand that the MJC is disappointed with the government's intentions, but we have a duty to spend public funds responsibly."

You see? The government is just being responsible in this time of austerity.

Except ... hang on to your seat ... that's not exactly true! I know .. I am sorry to have shattered your faith in our elected officials. I will make it up to you somehow.

More than one person has pointed out that what the government is calling "subsidies" or "funding" is actually the venue's share of VLT and other gaming revenue collected on-site. One of those people is Wayne Anderson:

"If these funds are grants, then so are the funds flowing to the hotels, legions, aboriginal casinos and the Jets from VLTs, slots, etc."

The places receiving this so-called funding includes strip clubs like Teasers, which in addition to featuring "Sleek & Sheek, Sexy, Exotic & Erotic, Applebottom babes, Big bang bootys, MilkJugs, Curvy, Mind Melting Hourglass figures, Long Legged Ladies, Big Bouncing boobs, Shocker Knockers & fun all the way around" also offers VLTs for your gaming pleasure. Each VLT could net Teasers up to $50,000 per year in revenue, thus the government is likely funding "nipple popping snow shows" to the tune of hundreds of thousands of dollars a year.

Thank you, Stan!

The government's decision to cut revenues to the Manitoba Jockey Club is peculiar, given that the government had only just negotiated a new agreement with them less than two years ago. This agreement allows the MJC to retain a much larger share of their VLT revenues than most institutions. The actual percentage is hard to know without more information, but it's greater than 75% -- probably in the 85-90% range*

It is fair to question whether the MJC should get such a large cut of the revenues. The rationale (in the government's words) was to "strengthen the Assiniobia Downs as a key component of the Manitoba’s diverse tourism, agricultural and thoroughbred industries". The $5 million drop in revenue would essentially put Assiniboia Downs on the same footing as hotels and bars, which get to keep only 20% of the revenue that they generate from VLTs.

Why should the jockey club get a more generous deal? Well for one thing, they may not be able to survive without it. Indeed, the Jockey Club accuses the government of trying to bankrupt it with this move, paving the way for the Red River Exhibition to take over the property. I haven't figured out what vested interest the provincial government has in seeing the Ex control the Assiniboia Downs property, but that appears to be the goal.

Also, horse racing is a small but unique part of the entertainment fabric of this province, and as such it would be hypocritical of the province to not give them a special deal. After all, Manitoba Lotteries is building a dedicated casino, er ... gaming centre, to provide financial support to the Jets.

As an aside, Manitoba First Nations get to keep 90% of their gaming revenue -- everything less a 10% fee to cover administration costs. This increased amount is "provided as a contribution to promote sustainable social and economic benefits and opportunities with the First Nations communities" ... like a vacation to Rome for the Chief, the Chief's wife, and 5 friends. (The government's position in that particular case was that the band can spend the revenue however they wish, but I think most people would prefer that VLT revenues stay within the province to support local communities and institutions, like for example Teasers, where you can see "one of the wettest shows on stage, where the girls take hot steamy wet showers, bathe and washing every succulent curvy part of their sexy moist soft bodes.")

Where was I? Oh yes ... the Mantitoba Jockey Club.

If the government wanted to reduce the Club's share of the revenue for what appeared to be legitimate reasons, I wouldn't be writing this post. If, for example, the government felt that gambling at the Downs was cannibalizing gambling at venues where the government gets a bigger slice of the pie, and could therefore generate more revenue through this action. If that's what they have in mind they've done a poor job articulating it.

In actuality, the government has an interest in supporting gaming activity at Assiniboia Downs because there is money to be made there. Common sense tells you that VLTs are likely to do particularly well at a horse race track where the primary activity is synonymous with gambling.

The numbers support this: VLT revenues at hotels and bars, both inside the city and in small towns, has been on the decline since 2009; while gambling at the Downs has been increasing...

Whatever the government's intentions, it is not going to go as smoothly as they planned. If the Jockey Club is going down, they're going down swinging. This past weekend they printed a half page ad in the Winnipeg Free Press and have launched a lawsuit against the government. Never mess with a Jockey, my mother always told me.

Whether horse racing will survive when all is said and done, I don't know. I suspect it will, even if the Red River Exhibition takes over the race track. The government will ensure that there is some sort of funding through some means.

If not, we have other things in these parts to entertain us. Like strippers.

*MJC's take of VLT revenues in 2010 was $5.5m or 75% of $7.3m total revenues. The current agreement provides the MJC with up to $6.5m, which would be 89% of total revenues if total revenues were to remain steady. source.

Exchange Brew Pub

A column in the Free Press this weekend - Exchange brew pub might make Irish eyes smile - correctly points out that Winnipeg does not have a brew pub. I am not quite sure why this is, but it is shameful.

The author, a Benjamin Gillies, also reminded us of the complete lack of foresight that our civic government had when it rejected a proposal to sell an abandoned pump house in the exchange district to an entrepreneur to create a unique brew pub: the Pump House Restaurant and Brewing Co. This, and the nonesense that followed whereby the city lost $600,000 in a failed attempt to do something with the building, is also shameful.

Benji (can I call you Benji? Good... thanks) goes on to propose a reviving that old brewpub idea:

"Should another developer approach the city with a solid business plan for establishing a microbrew restaurant, the government should seriously consider donating the pumping station to the project (as it did for the Red River College's downtown campus).
Instead of holding onto an empty building as it slowly succumbs to demolition by neglect, the city would be putting the heritage structure to productive use and earning tax revenue in the process. It would also be contributing to the growing list of unique attractions that make Winnipeg a more dynamic place to live in and visit. And that is definitely something worth raising a glass to."

The location is great. It's an area that growing in popularity with condo developments springing up, and an interesting development directly across the street where Sunstone Group is developing a boutique hotel and outdoor plaza area on the waterfront.

The concept includes a restaurant and wine bar to be built in another old building: the Harbour Master building that juts directly out onto the Red River.

If the James Avenue Pumping Station doesn't work out, that doesn't mean that we should give up on a brew pub in the exchange district. It's a great idea, and a natural fit in my opinion. There are lots of heritage buildings with wood beams and rustic brick walls -- not to mention space for vats and equipment -- that could make a great brew pub location.

ahem...

Source: www.winnipeglovehate.com/

There is certainly more to this absence of brew pubs than a shortage of appropriate spaces, and I suspect part of the answer lies in mounds of red tape. I haven't had an opportunity to compare the Manitoba brew pub application process to those of other provinces, but given that the MLCC has 12 different types of liquor licenses, one could guess that anything having to do with booze in this province is probably unnecessarily complicated.

Nevertheless, I am hopeful that our local beer diversity may increase. One reason: The Government of Manitoba is slowly relaxing some of it's liquor laws. Some initial changes were made in 2011 and 2012, and you can view some more proposed changes here. (Thanks Ben). Though the changes are mostly incremental, the general tendency is to make liquor regulations less restrictive, which is a good thing for consumers. For brew pubs, one of the most important changes I think is this one:

"Brew pubs will be able to sell their product on an off-sale basis and through other retailers such as Liquor Marts."

There is also a brew pub concept brewing in Brandon MB. The Brewtinerie, to be established in an old fire hall, is not yet a sure thing but it's an exciting proposal for beeries, especially those in Brandon, and I see it as a good omen for Winnipeg.

Another local beer development that is worth mentioning is Farmery Brewing: a true made-in-Manitoba beer. Read more about it here.

While the old Waterfront pump house might have missed it's opportunity to become a brew pub, I am optimistic about the beer landscape expanding beyond our existing local beer heroes Half Pints Brewing Co. and Fort Garry Brewing Co. because of the developments mentioned above.

"There's so much duplication"

I was sitting in a waiting room recently, and struck up a conversation with the person sitting beside me. Just small talk at first ... "so, where do you work?"

"Manitoba Mental Health"

I don't recall the exact name of the organization, but it was something like that. Nor do I recall the name of the lady with whom I was speaking, and even if I did I would not tell you because I do not want to get her in trouble. In any case, her answer interested me because I knew nothing of this organization. So I asked her: "What does this organization do?"

"We provide support, counseling, assistance finding employment and that sort of thing. There is so much duplication."

"Pardon?"

"There is so much duplication. You wouldn't believe how many organizations do the same thing we do."

She just threw that out there, completely unsolicited. "There is so much duplication." That she would think to include that statement in casual conversation about her place of work tells me that it's really a significant factor. Perhaps something that frustrates her or limits her sense of accomplishment at work.

That led to a conversation about why there is so much duplication. The consensus was that there are certain areas that, for reasons of optics, are immune to cutbacks. Like police services at the municipal level, health services at the provincial level are nigh impossible to cut. They are, however, extremely easy to increase. Announcing a new program for mental health services or anything else is good PR. Thus, with new programs being added all the time and no old programs getting cut, duplication arises.

This squares with something I heard from a friend who used to work in the Finance department on Broadway. He said that prior to any budget, proposals would be made to trim one thing or another in the area of health care and they were all systematically rejected. This was something that my friend found frustrating and limited his sense of accomplishment at work.

What is stopping the current NDP administration from cutting some of these programs? In theory, the NDP should be able to trim some things without fear the opposition PCs will criticize them for it. The PCs ought to understand the necessity of cutting duplication, and are not really in a position to criticize modest health care cuts after their last experience in power.

The problem (I think) is that the NDP hammered the PCs relentlessly in previous elections for health care cuts, and it worked too well. This is their biggest weapon: the PCs are the party of cutting health care and the NDP are not. They do not want to lose that advantage. They don't want the PCs to be able to say "you cut health care too" the next time the NDP attacks the PCs in an election campaign.

*****

In a Twitter discussion today, reporter Dan Lett asked pundit Luc Lewandoski to explain "What part of health and education is non-core?" It's not really a fair question. Mental health services are a "core" service, for example, but that doesn't mean it can't safely be trimmed or consolidated without impacting the final product.

Any suggestion that budgets should be trimmed are immediately countered by a government MLA with simplistic arguments about "core" services being cut, as if there is no grey area. The fact is that there is probably a great deal of room for budget trimming, but you need to be familiar with the organizations to know what those are.

I never knew anything about mental health services until recently -- I don't use mental health services because I still cling to the belief that I'm mentally stable and do not require urgent medical attention -- but it seems everybody has some kind of story about how a government agency or department is wasting time or money. All of this knowledge needs to be harnessed, and the government needs to be fearless in attacking these areas of waste and excess if it ever hopes to get its spending under control.

Final thoughts on this small businesses matter

Some final thoughts on this whole small business / Dragonfly Affair thing ...

Some people may not have sympathy for poor Dragonfly Games. You can never rely on money or help from others, even the government, they say. You need to be independent and succeed or fail on your own merits.

I would counter by saying that you shouldn't offer assistance if you don't intend to follow through in a honest way. You shouldn't claim your program is reliable and then rescind it a year later. You shouldn't require a company to submit dishonest financial statements. You shouldn't force somebody to hire your wife.

Maybe the government shouldn't be in the business of actively helping business at all. Maybe they should just keep regulations and red tape to a minimum and get out of the way. That's a fair position to take ... I won't argue against that. However, I am personally not opposed to the government providing assistance.

I have friends who are better able to speak about these matters than I am, but that's okay ... I am going to offer up a couple of suggestions anyhow:

1) Programs should be simple and permanent. I know it's tempting to announce new programs before every election but it must be confusing and frustrating for businesses when they keep changing.

Tax credit or assistance programs should not be specific to certain niche industries, but general programs with clear guidelines that any small business can apply for. They should be managed by an independent board to keep politics out of it as much as possible. The board or a jury should select applicants based on some combination of factors such as need, probability of success, strategic industry, employment potential, etc. The program should be permanent, so that as businesses rotate through it, it will develop a track record. This will make manipulation or interference more apparent and harder to hide.

2) We need to get to the bottom of the Crocus debacle. It's still poisoning the venture capital environment. The current government's position has been to pretend it never happened and hope that people forget. They will, eventually. The noxious cloud of Crocus will slowly dissipate until one day the people investing in their RRSPs will once again be inclined to trust a Manitoba small business venture capital fund because they were too young to remember what it was all about when it happened.

But that will take too long. We need to cleanse this ASAP with a proper investigation or inquiry or something. Nobody has ever been held accountable for what happened, which means that the people who made it happen are still out there, which means that it could happen again, which means that people will not invest in venture capital to any significant degree, which is bad for small business n Manitoba.

AND maybe or maybe not ...

3) Scrap the NRC & BCC. I really don't know enough about this .. only anecdotal information suggesting that the research and incubation programs run by the National Research Council and Biomedical Commercialization Canada aren't very efficient. I'm all for research and development, but maybe there's a better way.

*****

These are just my thoughts. I do not guarantee the quality of my thoughts. I absolve myself of any responsibility for the actions of those who read my thoughts. Reading my thoughts may cause dry mouth or liver disease.

The Dragonfly Affair

Meet Dragonfly Games: a small Winnipeg-based developer of educational video games for children, including children with special needs. A small but growing high-tech company with endless potential but a need for capital. Exactly the kind of company we would like to see grow and employ people here in the province.

*****

In 2005, Dragonfly was approached by the Province of Manitoba and encouraged to apply for the MFS (Manitoba Film & Sound) Tax Credit program. The work they were doing was considered "highly desirable" by the Province and this MFS Tax Credit was promised to be a "highly reliable program" that Dragonfly could use for securing financing from other sources, and could be used to apply for matching funds under other programs.

Late that year, budgets were submitted, hands were shook, and the two parties signed a contract. Relying on this Tax Credit, as they were told they could do, Dragonfly applied to Telefilm Canada for a matching equity contribution. Final applications were made with revised budgets, as directed by government employees, and in January 2006 a Certificate of Acceptance was provided to Dragonfly by the Government.

Everything was in place. Dragonfly was going to get a $168,000 capital infusion from the Tax Credit, and they would leverage this capital and a loan guarantee from the Province to get $100,000 in bridge financing from a credit union. The production total was just over $500,000.

*****

In June 2006, despite the Certificate of Acceptance from the Manitoba government and all their assurances, the tax credit for Dragonfly was cancelled. The government suddenly decided that the video game business did not qualify. Lee Doerksen, the owner of Dragonfly, was forced to put up his house and business assets as collateral to continue doing business and sustain the bridge financing.

With Dragonfly now in a financial bind, the government came forward again with a new program -- the 'Manitoba New Media Production Grant' -- and Dragonfly had little option but to participate. The government promoted this new program using Dragonfly as an example, even holding a press event for television from Dragonfly's offices. The government publicly announced that it would help Dragonfly and companies like it succeed.

The New Media grant was to increase with the amount of qualifying labour for the grant. With these new assurances, the funding commitment from Telefilm Canada also increased, allowing Dragonfly to manage a total production budget of $1.1 million. Of that, approximately $350,000 was to come from the government's New Media program. An increase in bridge financing of another $100,000 was also required. They were back on track now, and with a larger budget than before.

*****

As Dragonfly was engaging in the provincial funding programs, it was approached by Biomedical Commercialization Canada (BCC), a program funded by the National Research Council (NRC), Western Economic Diversification (WED), and the provincial government, for participation in their business incubator program.

With this program, Dragonfly would pay BCC $5,500 per month for business services, and BCC would provide additional services valued at twice that amount: $11,000 per month. This was made possible because BCC receives government funding in addition to the fees paid by the client. The promised services included a full-time employee and various professional services on a part-time basis, as well as office equipment, amenities, and other resources. The total value of these services was to be $16,500 per month or $396,000 over 2 years.

As you might have guessed, BCC did not come through with the promised services.  Dragonfly complained and asked BCC to document the services provided to no avail. The BCC and NRC "threatened, harassed and intimidated Dragonfly" in an effort to deter them from further complaints. Meanwhile it was suspected that BCC was submitting invoices to its funders to recoup funding for these services that it did not provide.

Dragonfly is not alone: they became aware of other clients who had similar complaints. A company called Health Media Network Inc is already embroiled in a lawsuit with BCC. In fact, all of the companies Dragonfly spoke with were very concerned that BCC was submitting invoices to its funders including NRC, Western Economic Diversification, and the provincial government, for services that it did not provide. To date, none of these departments have contacted Dragonfly for information on the matter.

It gets worse though: in 2007 "BCC and the NRC sought to persuade and coerce Dragonfly to hire a spouse of an NRC staff member." Dragonfly refused because the person was not qualified. This resulted in additional threats by BCC to withhold services, and later that year BCC and NRC terminated the contract and expelled Dragonfly from the program.

Dragonfly paid into the program, but did not get value for that money, nor did they get the additional assistance that was promised and that Dragonfly was counting on. They were, however, subjected to treats and coercion.

*****

As mentioned, BCC did not provide Dragonfly with the level of services as promised and expected, but some services were provided and Dragonfly required an accounting of those services for it's financial statements. Dragonfly made repeated requests to BCC for an accounting of the services provided but all such requests were denied. Instead, BCC instructed Dragonfly to account for its services as if actually rendered. They were expected to make false reports to the Manitoba Department of Science, Technology , Energy and Mines (STEM), the government branch overseeing the New Media grant, and Telefilm Canada. 

...  Coincidentally (or not) STEM's Deputy Minister John Clarkson was on the BCC board.

Dragonfly was put in a difficult position of trying to report the value of services received from BCC, such as they were, without any documentation from BCC, while refusing to illegally misstate amounts and run afoul of CRA or Telefilm Canada.

In 2007 a staff member in the provincial government "openly and falsely accused Dragonfly of misrepresenting and falsifying its budgets". Because of this alleged fraud, the government announced that it would not honour its remaining commitments under the New Media grant program. 

They didn't stop there. Government representatives went to Telefilm Canada and told them about this, and Telefilm subsequently withdrew its funding as well. Government representatives also contacted Dragonfly's credit union, preventing Dragonfly from obtaining the financing it required.

All of this transpired as the government and BCC were in the process of proposing yet another program: Centres of Excellence for Commercialization and Research -- a program with some big-name backers designed to "marshall Manitoba's research and commercialization assets to create growth". This program, like the BCC program that failed Dragonfly Games, would also require investment by the client firms, but to an even greater degree, and it would require the client firms to fork over intellectual property rights.

*****

Dragonfly eventually coaxed Telefilm Canada back to the table, and with a lot of unpaid labour, they were able to complete a scaled-back version of their project. However, for Dragonfly, the consequences of this government "assistance" were harsh. According to their statement of claim, "Dragonfly has been rendered and remains insolvent and unable to conduct business", the company's credibility has been tarnished, key employees have abandoned the company, creditors have gone after Doerksen's house and business assets to settle claims, and as a result Doerksen himself has experienced "extreme financial hardship".

*****

All of this flowed from an attempt from a small, high-tech company to seek assistance to grow its business. It accepted assistance from a supposedly reliable government program and high-profile business incubator, and ended up in ruins.

Unfortunately many small businesses may be in the same position today, with little choice but to seek help from these same organizations, because there are few other sources of capital in Manitoba.

 *****

Disclaimer: most of the information above was taken from Dragonfly's statement of claim against the government and BCC, and from correspondence with the owner. As with every lawsuit, there are two sides to the story. This post portrays one of those. That said, I have no reason to doubt the accuracy of any of the information stated above.

It's tough to be a small business in Manitoba

Let's suppose I had a small business in Manitoba. Let's call it Anybody Want A Gizmo? Let's suppose that I wanted to expand my gizmo business to include doohickeys but required additional funding to take that next step, and suppose as well that I was turned down for a spot on Dragon's Den. Who can I turn to?

Manitoba can be a tough place for an entrepreneur to do business. We hear a lot of talk about how innovation is important, and how growing small business is critical to Manitoba's economic future, but there aren't many stable sources of support and funding for budding businesses. "There are few places to turn for growth capital in Manitoba" Martin Cash, the Winnipeg Free Press business journalist, tells us.

Venture capital funds are a great source of financing for promising young businesses, and they are a great source of tax breaks for investors, but they are almost non-existent in Manitoba. There are a couple of small funds (GrowthWorks, Golden Opportunities -- which sounds more like a retirement retreat than a venture capital fund) but the Crocus calamity has forever tarnished venture capital in the minds of many Manitobans.

Crocus was by far the largest and highest profile fund if its type in Manitoba, such that it became synonymous with venture capital investing in this province. But even as the Crocus fund was incurring massive losses, it was being pumped by the Provincial Government as a great place for people to put their hard-earned cash. The end result of course was that the fund crashed and people lost money. If individual investors can't trust a government created and promoted venture capital fund, it's little wonder that there isn't much venture capital for small businesses around here.

With the lack of available venture capital, a business may need to turn to a hodge-podge of ever-changing government programs if they don't have the private connections to raise money. It seems that every two years the programs change ... probably so that every two years the government can send out another press release to announce another new program to help small business. Though the names of the programs may change, the entities that offer them generally do not.

One of the current programs, announced in 2011, is the Commercialization Support for Business Program, created by the Manitoba provincial government from a recommendation of the Manitoba Innovation Council which was appointed in 2009 by the Premier. There is also BCC (Biomedical Commercialization Canada) which is funded largely by the National Research Council and the Province of Manitoba. BCC affiliated programs with names like "Manitoba Knights" ostensibly help foster small businesses -- for a fee and a chunk of their equity.

Now another program is being pitched to supply start-up capital to entrepreneurs, as long as they "manage their progress through government-licensed incubators, such as ... Biomedical Commercialization Canada."

All of this is fine if it works and actually helps small businesses innovate and succeed commercially. I am sure sometimes it does, but as it turns out sometimes it doesn't. Sometimes things go terribly wrong. Let me tell you a story about one small local hi-tech business that not only didn't get the help it was expecting, but was driven into insolvency as a result of breaches of contract and extortion by the BCC and provincial government programs.

So grab yourself a cocoa and come back shortly for The Dragonfly Affair.

*****

I recently painted a dragonfly ... I will share with you ...

Unibroue and the MLCC

Everybody knows that the Manitoba Liquor Control Commission (the "LC") is a communist instrument to control our drinking behavior and limit our quality of life so that, like a bunch of deprived North Koreans, we plunge into a depressed malaise that prevents us from caring about life enough to bother rebelling against the government that is suppressing us in the first place. It's kind of like Stockholm Syndrome, except with beer instead of chains.

That said, Liquor Marts are generally well located across the city, and I have no complaints about the selection of wine and hard liquor. There are also independent wine stores that you can shop at, although they too operate within the firm embrace of the ever-caring and wise LC.

Beer, however is a problem. The LCs have a limited selection, and precious little refrigerated beer. Hotel beer vendors, of which there are none in my neighbourhood, have more cold beer but an even worse selection, and under archaic laws are required to operate in association with a hotel .. which is why there are none in my neighbourhood. For the life of me, I cannot imagine why independent beer boutiques should not be allowed to operate in Manitoba.



I went to a Festivus party recently, and brought with me a 750 ml bottle of Unibroue Éphémère. During the traditional Festivus Airing of Grievances, I expressed the following peeve of mine: that Unibroue beers are only available in Manitoba in these large 750 ml bottles. Unibroue makes some of the best and tastiest beer in Canada, but I'm deterred from buying it because each bottle of beer is a commitment.

You see, sometimes 750 ml is more beer than I feel like drinking in a given evening. Now according to the host of that Festivus party, you can cover or recork the bottles and keep them in the fridge for up to 3 days. That may be, but to me keeping an open beer in the fridge overnight is just wrong and immoral. A beer can never be at it's best if it's been open for a day or three.

Sometimes 750 ml is also more than I should drink in an evening. Many of the Unibroue creations have higher than average alcohol content. For example, Trois Pistoles, La Fin Du Monde, and Don de Dieu all have 9% alcohol. That makes 1 (one) bottle of any of those beers the equivalent of drinking 4 (four) 341 ml bottles of any average beer.

To make matters worse, the big bottles are plugged with a cork that's a bitch to get out unless you have a pair of Vise Grips handy.

All of these beer do come in regular 341 ml bottles. I know because I saw it with my very own eyes last time I was in Montreal. I bought a six pack for my hotel room. Can we get these here in Winnipeg? No.

Today MLCC tweeted (yes, they're on Twitter, aren't you?) that they were bringing in Collection Packs from Unibroue.

The Collection Pack is a variety pack containing a couple bottles of different brews (Trois Pistoles, La Fin du Monde, Maudite and La Fringante, according to Cody). This is fine and everything, but the point of a taster pack is to allow somebody to try different beers and find one or two that they like more than others. Once they find that flavour that they enjoy, they're forced to buy the becorked 750 ml bottles if they want to continue drinking it.

Apparently we used to have Unibroue 6-packs here but the distributor stopped bringing them in. This just raises the question about why our beer selections are being limited by a single distributor. How can our beer selection be at the whim of a faceless corporation? Why can't MLCC allow individual beer stores to import their own selection? Why do we even need the MLCC?

One of the quirky search terms that I found when doing my 2012 wrap-up post was "we want beer protest". I think this person may have been on to something. People, it's time for us to rise up and demand more! More choice. More freedom. More beer!

Boomtown Reston

Whaddya know .. CTV had a story about Reston Manitoba on the news today, about selling plots of land for $10. As chance would have it, I happened to be in that very same hamlet this past weekend.

CTV is certainly correct that Reston is experiencing a boom. A "boom" in Reston terms involves two duplexes being built as we speak, in addition to several other houses that were recently constructed or moved in as pre-fab units. This may not sound like much, but in relative terms, Reston's recent growth would be equivalent to 45,000 people moving into Winnipeg in one year.

With growth comes opportunity.

$10 in Reston might not get you as much as it does in Maricopa County Arizona, but it's still a pretty good deal. There may be potential for some big real estate gains there for an enterprising real estate speculator if the oil keeps flowing in that corner of the province. Be sure to read the fine print before pulling the trigger. You will need to actually build a house, and you might even have to live in it too.

If building a new house doesn't appeal to you, there are some other potential opportunities:

The Panda: Reston's requisite Chinese food restaurant The Panda is up for sale. If you want a captive market and don't mind a little cooking, this is for you. Your only competition is the Dennis County restaurant up the street. By the way, if you eat at Dennis County I recommend the hamburger steak. Avoid the chicken filet.

Beverage Room: Reston did have a bar, much like every other small town bar, but it burned down. The owner has not yet begun to rebuild due to an insurance dispute, and this leaves a wide opening for YOU. Oil workers pulling in 200 Gs need places to drink too, and right now Reston is not providing that. If you blow into town and build a new bar, you can capture some of that small town binge down magic.

Hotel: Since you're building a bar, you might as well build a decent place to stay while you're at it. There were a few rooms at what used to be the bar, but even if they're technically still open (and I'm not sure they are), you probably don't want to actually sleep there unless the spot under the bridge on the golf course is already occupied. Neighboring Pipestone doesn't have a hotel anymore. For visitors to the area, there's not much choice but to stay in Virden half an hour away.

Tim Hortons: Reston lies on highway 2 at that magical three hour mark from Winnipeg -- the point at which everybody in the car needs to take a whiz and refuel on coffee -- yet there is no coffee to be had along the highway. In fact from the Perimeter highway to the Saskatchewan border and beyond, you will not find a Timmy's anywhere. True, this highway is nowhere near as busy as the TransCanada, but there is also nowhere near as many places to stop. Thanks to a new card lock Co-op gas station, many more truckers are pulling off the highway at Reston than ever before. This, combined with passenger cars filled with under-caffeinated people filled pee, combined with locals who want a change of scenery, spells success!

****** UPDATE ******

The message is spreading. Yahoo! is now covering the story, so you had better hurry! I should also warn you that I'm getting quite a few google hits about this story.

See also Slurpees and Murder.

Manitoba Liberal leadership idea.

This fall, the Manitoba Liberal Party will start the process of choosing a new leader to replace the outgoing Dr. Jon Gerrard. One man, the little-known Robert Young, has so far announced an intention to run. I don't know much about Mr. Young, but given his lack of political experience and journey-man career, I don't get a good vibe from this.

What the Liberal Party needs is a man who is ready to jump into the position already familiar with the political game, but with fresh ideas. I think I have just the person:

James Beddome

It's not so crazy. Trust me.

Okay... it's crazy, but read on anyhow:

With James you have a guy who has experience with the operational aspects of leading a political party. You have a guy who is well-spoken and reasonably charismatic. He is clean-cut and wholesome in appearance, yet has hair that dangles down in front of his face that tells younger voters that this is a different kind of politics -- a kind that they can potentially relate to. More importantly, he has fresh ideas. His Green Party platform in the last election was not radical or unreasonable, rather it was principled and grounded in logic for the most part.

What James doesn't have is a way of bringing these ideas to the floor of the legislature. It could take decades for the Green Party to build a base in Manitoba large enough to grabs seats from the NDP. The Liberal Party on the other hand has a significant, though dwindling, chunk of the vote. Every election there are certain people who always vote Liberal because they have always been Liberal, or because it's viewed as the moderate choice.

From the Liberal Party point of view, a resurgence is desperately needed. The inertia that they've been coasting on since the Sharon Carstairs days has been eroding under the coma-inducing leadership of Gerrard, and has not been helped by the implosion of the parent party in Ottawa. A 50 year old business consultant who once wrote a Christian novel is probably not the spark plug that they need to fire up the engine again.

This is where James comes in. He has some youth appeal that could help revitalize the party, but has already earned the respect of other politicians. I know that Hugh McFadyen respected James as a peer and as a political opponent, for example.

But what about the Green Party? Am I asking that he abandon his Green roots? No.

But surely the Green Party has a clause in their constitution that prevents their leader from running for another party. Therefore this will require a bit of a gamble on Beddome's part. He will have to resign the leadership of the Greens to run for the Liberals. If he wins the leadership of the Liberal Party he can begin negotiations with the Green Party to amalgamate the two. The Green Party will be willing because they know James and they know what he stands for. As the freshly elected leader of the Liberal Party he would have the leverage to pull the party into the negotiations.

And then the master plan is complete! A young, stronger Liberal party with the combined strength of the Libs and the Greens, and a new platform of distinct and practical ideas that will stand out from the stale and predictable drivel presented by the NDP and the PCs.

It could work.

~~~~~~~
UPDATE
~~~~~~~

A new face, Ajay Chopra, plans to jump in the race ... just as soon as he returns to Manitoba from Toronto where he was working as a lobbyist. Ajay's outlook is better that Robert Young's in my opinion, because he is younger and somewhat familiar with the political machine, but this is not a big enough development to derail the above plan.

Yurts, Spruce Woods & Cacti

Camping is one of the many things that white people like. You may not know this, but even some white people don't like camping. For people who don't like camping but still want to "camp", God gave us yurts.

Actually, according to Wikipedia, Turkic nomads gave us yurts. For those who are unfamiliar with this ingenious invention, it is a round soft-walled structure that provides actual shelter from the elements, and is able to contain actual furniture like beds and tables.

The variety that you'll find in Manitoba campgrounds more like a rustic hotel room that's missing its bathroom. It has electricity, a locking door, a heater for those cool nights, track lighting and a covered porch with a stainless steel counter. There is no air conditioning however. You will have to make do with the plug-in fan that is provided with the yurt.

A few people have asked me about these things, so this post is for you. The cost is higher than a normal camp site, but it's perfect for small families .. or people who don't like camping.

*****

Did you know that Manitoba has cacti? I have photographic proof. Here's a little pincushion cactus in full bloom that I found while hiking at the Spruce Woods spirit sands.

Some more pics:

This TEDx thing

UPDATE:
For a review of TEDx that has a little more thought put into it, please see Karenia's blog. I really should fire my correspondent and hire Karenia.

*****

Who is this TED^x guy and what is he trying to prove? Does he have any relation to Bush^x? Anybody Want A Peanut sent a correspondent to find out more...

*****

TED^xManitoba is an offshoot of the famous-in-some-circles TED Talks: a series of inspirational and insightful presentations by leaders in all walks of life with the common goal of sharing ideas. The "x" version was not a nude version of TED as I had hoped, but more of a small independent (and free) version. The quality of speakers, however, was still high. Almost all spoke with a passion and clarity that engaged the audience.

Grant Barkman, president of Decision Works, kicked things off with a presentation about utilizing visualization to help build consensus and lead to action. That works for this correspondent, because I'm big on visualization.

Linda Cureton, CIO of NASA (yes that NASA), spoke of finding the inner hero behind the mask. Perhaps we all can't be a Johnny Oduya, but we can all find strength that we didn't know we have, and make it work for us in some way. Perhaps this cherenkov character should come out from behind his mask, but then again I've seen him without his mask on and ... well ... let's move on ...

Getty Stewart started an organization called Fruit Share, and shared that story with us. I heard many positive comments about her story throughout the day. The little fruit idea that could really struck a chord with a lot of people. My thoughts will probably drift back to this presentation when I'm raking up 4 bushels of rotting crab apples in the fall.

David Zinger was a talented speaker, who on this day talked about bees. There were some analogies to human organization and behaviour, but at the end of it I wasn't quite sure what to take away from the talk, except that bees are remarkable little creatures.


Aisha Alfa, whom you might know from WFPtv, also happens to be a comedian and motivational speaker. Here she spoke about not being afraid of failure, because without it you can't succeed. I tried to draw a picture of her in my notebook but I failed. But that's okay because failures, much like bees, are necessary.

Robert L. Peters used his time to tell us about a remarkable energy-efficient house that he built in the 70s. It's called Solace House. Looks like a nice place.

Wilma Derksen, mother of murdered teenager Candace Derksen, gave an inspirational talk about the challenges of going through what she went through. While her notion of polarity -- that you can't hold two things of equal value at the same time (in her case love or need for justice.) -- was true for her, I'm not sure it applies to everybody. A great talk though.

Robert J. Sawyer, award-winning science fiction writer, gave one of my favourite speeches "To live forever -- or die trying". We know what causes aging and death, and once we know the problem it is only a matter of time until we solve it. It's been happening all along ... the growth in the limit to a human life span has been accelerating and there's no reason why it shouldn't continue to do so. But is this good? He argues yes: longer lives will lead to better perspectives and greater focus on solving the great problems of the world, and will result in better stewardship of our resources.

Gem Newman, founder of Winnipeg Skeptics, gave a very colourful and theatrical presentation. I thought for moments that I was watching a Fringe festival play, but it was an engaging presentation about how science is unjustly beaten down and vilified. Bottom line: be curious about everything.

Matt Henderson is a creative teacher who told us about helping kids create their own knowledge. The general sentiment afterwards was "I wish Matt was my teacher back in high school."

Kale Bonham and Michael Champagne gave separate speeches but are both young Aboriginal Winnipeggers from the North End. Kale led an effort to create new banners for Selkirk Avenue and instill pride in the neighbourhood among the youth. Michael was an remarkable young man who started Aboriginal Youth Opportunities, and talked about turning oppression into opportunity. That's awesome, because I think it's the perceived total lack of opportunity that causes many kids to end up in gangs and crime. I wish him well.

TJ Dawe, in his black shoes, black jeans, and black t-shirt, moved very little during his talk about collective intelligence, but he did speak very well. It was about how dualistic thinking (right/wrong, etc) is programmed into us, but gets in the way of true intellectual progress which requires compromise and seeing things from another's perspective.

Hazel Borys spoke about walkable neighbourhoods, giving specific examples from her own area in Crescentwood. Her presentation should be required viewing for everybody at city hall. An interesting stat that she brought up was that mixed use development generates something like $225,000 in property tax revenue per acre, whereas big box stores generate something more in the range of $5000 per acre.

Lastly, Brad Tyler-West is a dynamic and amusing speaker who talked about "changing your story". I have to be honest ... I was kind of burning out by this point, but it seemed to touch on some of the same things that TJ Dawe talked about in terms of expanding your range of thinking. It's a bit of a blur to me now. Sounded good at the time though.

Overall it was a pretty good way to spend the day. The emcees and entertainers were excellent, as were the snacks during the break. This was year 2 for TED^xManitoba, and it will almost certainly be back again next year. Certainly worth looking into doing if you can get the day off. I will be lobbying for a nude version: TED^xxx

See also: Melissa Martin

How to rebuild the PC Party of Manitoba

Some 'Rods' have stepped forward with solutions: The Black Rod's solution is a secret formula that he/she/it wants to sell. The Rouge Rod is proposing a merger with the Liberals. Clearly we need more ideas.

Naturally the AWAP? Policy Team has been hard at work coming up with boffo ideas in between margarita parties and building a LEGO version of the MTS Centre. Our plan is based on the premise that people aren't stupid. This is a false premise. People are stupid. Some people. But most people are intelligent enough to recognize when somebody is being disingenuous, and they appreciate honesty.

Our plan is also based on the premise that just because people have voted for the status quo 3 years in a row does not mean that they want the status quo or are happy with it. They haven't been given an alternative. The PCs said they offered an alternative, but they did not and by saying they did they were being disingenuous and insulting the voters' intelligence.

So, here's what you do:

STEP 1: Cut a hole in the box. No, wait. That's for something else. Dang ... my notes are all mixed up. K .. Step 1: get a charismatic leader. It does not matter where they are from; only that they have good communication skills and appear trustworthy. I thought McFadyen was that guy 5 years ago, but even a well-spoken youngish lawyer cannot overcome a God-awful campaign.

STEP 2: Accumulate good policy ideas. There are plenty of ideas out there. The CTF has some. The CFIB has some. AWAP has some awesome ones. Steal from the Liberal Party or the Green Party. It doesn't matter where they come from, just collect good ideas. Remember, I'm not talking about ideas that poll well or are easy to sell -- we'll deal with that in Step 3 -- but ideas that makes sense and actually make things better.

STEP 3: Start selling the ideas well in advance of the next election -- like, 2 years. Get them out there, have discussions with the community, and start rebuilding your oh-so-damaged brand. I suggest presenting the ideas in a Problem/Solution format, such as:

Problem: Manitobans consume more electricity than any other jurisdiction on the planet.

Solution: Implement inverted rates that will keep electricity affordable for small households while increasing the benefits of reducing energy use.

See: people will be begging to be charged market rates if you present it the right way. Okay, maybe not, but they will appreciate the fresh straight-forward approach after hearing nothing but rhetoric trash for 10 years. This approach also allows the challengers to attack the government's record, but in a constructive manner.

STEP 4: Ignore the other party's attack ads. It will make the other party seem petty and void of ideas, giving more strength to your own.

If you follow these 4 easy steps you should have a chance, and I guarantee voter turnout will increase, and voter pissed-offness will decrease. Some may argue that it's time to scrap the PC Party altogether and start something new like the Wild Rose Alliance or the Saskatchewan Party which just cruised to a massive majority next door. That is an option, but I think there is still some political capital left to be exploited with the PCs in Manitoba, and starting a brand new party foregoes any chance of winning the next election.

Regardless of if it's the PCs or the Prairie Crocus Alliance or Manitoba Party, they need to drastically change what they're doing for the good of the province.

MANITOBA ELECTION: STILL UNDECIDED?

I don't blame you. Choosing between the parties in this provincial election is like choosing between a light grey Chevy Malibu and a dark grey Chevy Malibu. If only a bright red Dodge Challenger SRT8 was available...

So far in this election, the boldest idea has come from the Green Party: free bus fare. The second boldest idea has come from the Liberals: relax Sunday shopping laws. Both the Greens and the Liberals are holding back on the excessive spending promises, meanwhile the NDP and PC parties are dropping money bags from helicopters. Unfortunately, neither the Liberals or Greens have a chance in this election. John Gerrard may get re-elected as the Liberal's only seat, meanwhile Green Party leader James Beddome is an underdog in Wolseley and no other Green candidate even has a shot.

The realistic discussion pertains to the NDP and the PCs, but when you look at the two main parties from a high level they look pretty much the same:

CRIME
NDP: more cops on the street
PC: more cops on the street

HEALTH CARE
NDP: more doctors and nurses
PC: more doctors and nurses

ECONOMY
NDP: won't balance the budget
PC: won't balance the budget

TAXES
NDP: minor tax credits with no significant tax reform
PC: minor tax credits with no significant tax reform

EVERYTHING ELSE
NDP: spend lots of money
PC: spend lots of money

Rather than campaigning on ideas, the NDP is campaigning on things the PCs might do, and the PCs are campaigning on things the NDP failed to do. The only difference is the NDP has a track record, and the PCs do not. Whether you think that track record is good or bad may be your deciding factor in voting, but if you're looking for something to tip the balance, this should be it:

BIPOLE III

I haven't blogged about Bipole III 2,587,398 times because I think it's just that interesting. I've written about it because it's an irreversible and extremely costly decision, and also because I have a very low tolerance for idiotic behaviour. The NDP government has routinely addressed problems by throwing money at them rather than making any sort of difficult decision, and this is the most extreme example of that, except in this case there is more at stake than just money.

Let's just cover the main aspects:

COST: The west route will cost about $1 billion more. That's "billion" with a "B". This is if we build additional capacity with Keeyask and Conawapa. If we scrap our export plans because they turn out to be too high-risk or may result in losses for Manitoba Hydro, then the East side route will not require converters, saving us an additional $2 billion, for a total of $3 billion savings.

FOREST: The argument is that the last piece of "pristine" boreal forest east of Lake Winnipeg need to be protected. A) the forest east of Lake Winnipeg is not pristine. There are mines and communities and roads and other things. B) Even if it were "pristine", there are thousands of square KMs of pristine forest elsewhere, from Labrador to the Northwest Territories, in the vast Boreal forest. C) Even if it were the last piece of pristine forest in Canada, the government has already promised to damage it even more than a HVDC line would by zigzagging a new road right through it. D) There are scarce aspen parklands to the west of the lakes. I don't know to what extent the preferred route impacts them, but I know it was a concern in the routing study. E) The west side route plows through as much forest as the east side route. In terms of the quantity of lumber produced, it's a saw-off. (haha, get it? "saw off". Anyways ...)

LINE LOSSES: The amount of electricity burned off in transmission depends on the how close to capacity the lines are running, but whatever the amount, it will be much greater for the west side lines. The cost in lost exports will be in the tens of millions of dollars each year. These lost exports have another cost too: pollution. The wasted 'clean' hydro energy will not displace 'dirty' fossil fuel energy in the US, resulting in thousands of tonnes of additional green-house gas pollution each year. How green is that?

CARIBOU: Yes, there is a threatened caribou herd on the east side of the lake. Based on the 2005 Caribou survey, there are also four or so caribou herds that might be impacted by the west-side line, at least three of which are threatened. Furthermore, these herds have less territory to maneuver than the east-side herd, who's territory extends right into Northern Ontario.

UNESCO: A) A UNESCO official is on record as saying that the east side route will not preclude UNESCO designation. B) the government hasn't even applied for UNESCO designation. C) the east side line would only graze one corner of the proposed UNESCO site, and D) In what way is a UNESCO designation worth $1 billion anyhow?

LAND USE: Aside from forest, there is agricultural land to consider, and to this point, the west side route involves huge compromises. Land owners will need to be compensated; route adjustments will probably be required to avoid owners who refuse to be bought out (since Hydro will not expropriate), further increasing the cost; aerial spraying will be difficult or impossible to do safely along the route, impacting farm productivity; etc ...

EXPORTS: The argument that an east side line will somehow risk exports to the US is laughable. Environmental groups can't stop the US from buying every drop of oil sands petroleum that we can give them. On what grounds could they prevent the US from buying clean power? There are parties who are associated with power producers in the US who want the exports blocked because Hydro is a competitor, but they don't give a shit what side of the lake the route goes down. Honestly. It's preposterous. In fact, this Hydro report suggests that export sales could be compromised by the west side route, because it can't supply reliable power.

RELIABILITY: The west side route would be much less reliable because A) it is in an area of the province that is more prone to tornados and other weather-related disasters, and B) it's a longer route and therefore has more potential to be damaged.

ENERGY SECURITY: Should the Interlake lines go down, the west route would NOT be able to support our energy commitments, whereas the east-side route could carry the load.

TECHNICAL: Lastly, there are other technical aspects of the Bipole line that I can't begin to explain because I don't understand them, but what I understand is this: Hydro engineers prefer the east route. In fact, the east route is not just preferable ... it is the only route that makes sense from a technical perspective. In addition, the west route could require us to build another bipole line 25 years sooner. (source)


In the televised debate, Greg Selinger berated Hugh McFadyen for his "reckless" plan to move the bipole line to the east side. Only Greg would call accepting the advice of engineers, reducing pollution, protecting our energy security and saving $1 billion reckless. The venom and conviction with which Greg lied about the east side route was almost shocking. This isn't a matter of opinion. This isn't a case where each side has equivalent pros and cons that have to be weighed. This is a case where the east side route is superior in every tangible respect, and the costs of going the other way are enormous and long-lasting.

So if there is one issue in this election that should turn your vote, make it this one.

*edit*
here are a couple of other related blogs
stumbling
TTNTBS
dobbin
ice & grain with a good post