Sunday, May 06, 2007
Interesting Editorial in The Telegram.
Desperate times make for desperate solutions indeed. I have had quite a few desperate times since 1989 and quite a few times i have found solutions. Sometimes they could be called desperate solutions. Maybe the author of the piece may have had a few in his life and had to do the same. I found it an interesting read and the ordinary little guy like myself can only read about such things because he really has no say in those matters daily. My only logical solution comes around very seldom and all i can do then is to mark an X.
How to hide resource revenues
From a New York City classified ad: “I work at a very prestigious nail salon in New York, with an A-list clientele. I have a collection of nail clippings from various clients such as Cameron Diaz, Gwen Stefani, Beyonce and Scarlett Johansson. My son who is in seventh grade is in desperate need of a math tutor. I live in Manhattan and I would be willing to meet at a mutual location with my son. I will be willing to trade my collection for four one-hour sessions. Serious inquiries only, please.”
Desperate times make for desperate solutions, like bartering away your nail collection.
And talk about desperate times: Saskatchewan is facing the same bad news about resource revenues and the federal government’s new equalization program as Newfoundland and Labrador. So that province is now officially looking at a little bartering of its own.
In order to keep from having resource royalties drive down its equalization benefits, the prairie province is looking at foregoing royalties in exchange for having oil and gas companies, and other resource companies, build roads in the province.
The idea is a simple one: instead of having royalties go to the province’s general revenue fund where they’d be counted against equalization, get the companies to “contribute” infrastructure instead. The province is looking at a suggestion from equalization expert Thomas Corchene, who wrote about the concept in an essay for Policy Options magazine.
“Why would any province continue to collect any royalties,” the article suggested. “Why not reduce them to zero and require energy companies to make compensatory contributions to hospitals and universities?”
It’s not that far-fetched: already, Hydro Quebec undertakes projects like a 2001 $200-million effort to beautify communities by hiding electrical lines around historic sites and scenic views. The beautification process lets Hydro Quebec keep a little of its money off the profits side of the ledger, and, presumably, allows the province to hide the profits and protect its equalization payments.
Finance officials in Saskatchewan told the StarPhoenix that at least two provinces, Manitoba and Quebec, already use resource loopholes to hide hydroelectricity profits from the equalization equation.
It makes for fascinating, if not depressing, consideration. Imagine — our fellows in Confederation feel they have to find a way to short-circuit equalization calculations, simply because the federal government can’t seem to find a way to live up to pre-election commitments.
Who knows? Perhaps our provincial finance department is busy trying to figure out if it can do exactly the same thing. In fact, we got a whole Happy Valley-Goose Bay hospital out of Voisey’s Bay Nickel, and the money involved probably didn’t show up in any equalization accounting.
We all live in the same house, and we’re seriously considering hiding away money from each other while we battle about just what’s a fair share for our living expenses.
These are desperate times indeed, when we have to consider hanging on to money by our fingernails — or bartering those fingernails away to get a better deal.