How political patronage caused the Liberal’s film tax credit train wreck: Morning File, Monday, April 20, 2015

News
Views
Government
On campus
Noticed
In the harbour
Footnotes

News

1. Film tax credit: the problem with patronage

“Members of the Liberal party’s inner circle continue to be mystified by the way the McNeil government is handling the film tax credit situation,” writes Michael Gorman, the provincial reporter for the Chronicle Herald:

Several people who are are high-ranking members of the party and spoke on the condition of anonymity said they are struggling to understand why the government has allowed itself to take it on the chin so badly over $12 million. Even if the government is correct as a matter of principle, they have gone about this all wrong, said one Liberal.

“It’s not whether you’re right or wrong,” the person said. “It’s what the people think.”

[…]

The government’s position and talking points are even bigger losers, according to one source, because the casual observer doesn’t usually have a firm grasp on how a tax credit works.

“They know jobs and money,” said the source.

In this case, the job numbers connected to the industry range from 2,200 to 2,700, depending on who’s talking, and the money in question is about $140 million. The notion that the government is doing something that could jeopardize either (and that it’s coming without a proper economic impact study) isn’t playing well in broader party circles, according to the sources.

Let’s talk about how political patronage has affected the film tax credit issue.

For all its sins, the former NDP government did an excellent job on turning the page on old-school Nova Scotia political patronage, going perhaps even too far in keeping old political rivals in their civil service positions. But when the Liberals took power, Premier Stephen McNeil turned the page right back again, appointing prominent Liberals to positions of power, not because they were the best qualified for the job but rather because they were connected.

There are several examples of this, but the two that concern us here are Laurel Broten, the former Ontario MPP and cabinet minister, and George McLellan, brother of former Liberal Premier Russell McLellan.

Last year, Broten’s husband landed a job as chief legal counsel at Emera, parent company of Nova Scotia Power. Before the family could even unpack their bags in their new Kingswood home, McNeil appointed Broten to conduct a tax review of the Nova Scotian government, for which she was paid $50,000. The tax review called for big, but unspecified, changes to the film tax credit. That completed, Broten was appointed head of Nova Scotia Business Inc, the province’s economic development agency, where she’ll make in the ballpark of $200,000 annually.

Last week, it was announced that the film tax credit would be reduced from $24 million to $6 million and no longer be available to all companies that met the criteria. Rather, the money will be doled out through a newly created Creative Economy Fund, which will be administrated by none other than Nova Scotia Business Inc. Bureaucrats under the direction of Broten will pick and choose which companies will get funded through the fund, and which won’t.

And just in February, two months before the budget announcement, McNeil appointed George McLellan as Deputy Minister of Finance and the Treasury Board. The announcement doesn’t say how much McLellan will be paid. As I wrote at the time:

McLellan was CAO of the Halifax Regional Municipality from 2001 to 2005, back in the anything-goes seat-of-the-pants days at City Hall. Even at the time, he struck me as the consummate insider, the sort of guy who got where he was not through administrative talent or leadership, but rather through skillfully using his connections and favour-trading. After he left City Hall he got himself appointed as head of the province’s ambulance service and sat on a few boards, where he no doubt chuckled it up with other talentless mucky mucks.

The Ivany Report means whatever anyone wants it to mean, I guess, but I vaguely recall reading somewhere in the report that we were supposed to start doing things differently, that maybe appointing someone to the most important government finance position in the province should be based on something besides some drunken conversations at the Halifax Club. Take note, bold people.

I should point out that former city councillor and NDP MLA Howard Epstein disagrees with my assessment of McLellan, but I stand by it.

As I see it, the decision to cut the FTC was made by very small circle of Liberal Party insiders — McNeil, Broten, McLellan, Finance Minister Diana Whalen, and perhaps some long-serving Finance Department bureaucrats — without broader consultation even within the party itself.

A good recipe for a political train wreck is to have a small clique of insiders make decisions without first running them up the caucus flagpole and without considering the broader political dynamics. And here we are at the film tax credit junction, the Liberal Party jumping the rails and careening into the chemical plant next to the elementary school.

2.  Film tax credit: how to lose the public

Going into the film tax credit issue, the Liberals had something of a case for at least rolling it back a bit over time. But the way they’ve gone about it has completely lost the public. Not only is the cut to the credit too steep, too radical, and too quick, supporters of the cut have an attitude problem.

Even if they believe cutting the tax is the right thing to do, there’s no disputing that the cut is disrupting people’s lives and brings great worry to people who are simply trying to go about their lives. Acknowledging that fact would go a long way to dialing down the us-versus-them rhetoric that has come to characterize the debate. Instead, supporters of the cut have doubled down, and are straight out attacking people in the film industry for no reason at all.

Take, for example, Mark MacPhail, the executive assistant to Keith Colwell, the Minister of Fisheries and Aquaculture. After last Wednesday’s demonstration against the film tax cuts outside Province House, MacPhail took to Twitter:

Wait, what? For the record, I went to the demonstration and no one anywhere near the place was smoking pot. Whatever you think of the protesters, they were a well-organized group of professionals, invoking their democratic rights.

Last night, MacPhail continued in the same vein, further attacking people in the film industry. I didn’t catch all of it, but here’s a sample:

Ah, the old “my tweets are my own” dodge.

MacPhail’s twitter account has since been deactivated.

There’s so much wrong with this I hardly know where to start. Maybe pointing out the irony of a taxpayer-paid civil servant dissing taxpayer subsidies to others? Or maybe making baseless accusations of, horrors! pot-smoking to discredit 2,000 people who showed up to be civicly engaged? And what if a handful of people were smoking pot (they weren’t)? The criminalization of marijuana is stupid and anyone who takes part in it — the cops who enforce it, the prosecutors who make the charges, the governments who don’t change the law, the judges who convict, the assholes vilifying people for smoking — are a disgrace to our justice system.

Making broad charges of nameless people smoking dope a block away from a demonstration in order to discredit democracy is beyond the pale. It’d be as if I accused a Liberal Party supporter a block away from a Twitter feed of being drunk off their ass in order to discredit their late night rantings.

3. Jail

CBC has “obtained transcripts of the interviews six guards gave to investigators from the Department of Justice after an inmate was mistakenly released Dec. 8.” The release really isn’t that big of a deal — the inmate was serving weekends, and was let out at 6am instead of 6pm on a Monday; he may have even thought he was simply being let go to relieve over-crowding. But the transcripts reveal disarray at the jail.

4. Mayhem in Dartmouth

This is a little broader than “pedestrian struck by driver.” A police release from yesterday:

At 3:30 p.m. on Sunday, April 19, Halifax Regional Police responded to the 300 block of Portland St for a report of a man struck by a vehicle. The police officer on scene observed the adult female suspect in a vehicle attempting to leave the scene. This female suspect refused to stop for the police officer and attempted to leave in her vehicle, nearly striking the police officer who was forced to jump out of the way to prevent being struck. The female suspect then fled in her vehicle, leaving the scene at a high rate of speed. Prior to the incident in the parking lot, the female suspect and another adult female became engaged in an argument, during which the female suspect struck the female victim in the face. When the victim’s husband attempted to prevent the suspect from leaving before police arrived, the female suspect struck the man with her vehicle. It was at this point that the police member arrived and confronted the suspect. Officers later located the suspect on Lakecrest Drive and arrested her without further incident. No injuries were sustained by any of the people involved. The 35-year-old female suspect faces charges of assault, assault with a weapon, assault police and dangerous driving and will be attending court at a later date. 

5. Reunion tour

The Suspicious Package returned for a Trollope Street performance. All were entertained.

6. Wild Kingdom

A couple of dogs made a break for it Friday, jumping in a car and driving away from the Parade Street Animal Hospital in Yarmouth.

Views

1. Hypocrite

After billionaire lobster middleman John Risley “piled on in the film tax credit debate,” writes Stephen Kimber:

Social media has gone giddy this past week calculating just how often Risley has tapped government money trees for millions in direct grants and/or loans, indirect funding for scientific research and here’s-our-resources-for-your-profit giveaways.

And Risley calls the film tax credit “nuts”?

What is nuts is the stunning hypocrisy of the likes of AIMS, John Risley and Marco Navarro-Génie.

Part of that social media giddiness concerned my own post, “John Risley, billionaire hypocrite,” which detailed the public money that has gone Risley’s way. That post is the most viewed page in Halifax Examiner history, by far.

2. Schmidtville

Stephen Archibald talks about his busy weekend, which among other things included a discussion about historic Schmidtville.

Government

City

Accessibility committee (4pm, City Hall)—agenda here.

North West Community Council (7pm, Five Bridges Junior High)—agenda here.

Province

Legislature sits (4–10pm, Province House)

On Campus

Whales and Humans (7pm, Rowe Building Dalhousie University, Room 1014)—Armando Manolo Alvarez Torres will speak on the philosophies and perceptions behind conservation approaches.

Ethics in the Evening: Ethical Public Discourse (7pm, CCEPA Boardroom, 630 Francklyn st.)—David Deane will talk about what he sees as a crisis in liberal democracies.

NSCAD Film Screening Night (6-7pm and 7.30pm, Park Lane Cinemas, $10 for one screening, $15 for both)—Screening of NSCAD thesis films and 3rd year student films.

Noticed

Here’s a picture of Ring Galaxy AM 0644-741, taken from the Hubble Telescope.

Explains NASA:

How could a galaxy become shaped like a ring? The rim of the blue galaxy pictured on the right is an immense ring-like structure 150,000 light years in diameter composed of newly formed, extremely bright, massive stars. That galaxy, AM 0644-741, is known as a ring galaxy and was caused by an immense galaxy collision. When galaxies collide, they pass through each other — their individual stars rarely come into contact. The ring-like shape is the result of the gravitational disruption caused by an entire small intruder galaxy passing through a large one. When this happens, interstellar gas and dust become condensed, causing a wave of star formation to move out from the impact point like a ripple across the surface of a pond. The intruder galaxy is just outside of the frame taken by the Hubble Space Telescope. This featured image was taken to commemorate the anniversary of Hubble’s launch in 1990. Ring galaxy AM 0644-741 lies about 300 million light years away.

Quadriga, container ship, Quebec to Pier 41, then sails to sea
Transpine, cargo ship, arrived at Pier 27 this morning
Voruta, cargo ship, arrived at anchor this morning, will soon sail to sea

Footnotes

I’m becoming somewhat exhausted. I’ll be taking a short vacation next week… details soon.