Rebel News Podcast - SHEILA GUNN REID ｜ Marcel Latouche on how to bring sanity to city halls

00:00:00.000 Oh hey Rebels, it's me, maybe, for some of you, your favorite Rebel, Sheila Gunn-Reed,

00:00:05.980 and you're listening to a free audio-only recording of my weekly Wednesday night show

00:00:10.140 aptly called The Gunn Show, but you know what, this is the internet so you can listen or

00:00:14.260 watch whenever you feel like.

00:00:16.440 Tonight my guest is somebody completely new to my show, to Rebel viewers, but he's been

00:00:24.480 on my radar for a little bit.

00:00:25.780 His name is Marcel Latouche, and he's with the Institute for Public Sector Accountability,

00:00:31.960 and you know me, I love public sector accountability.

00:00:37.220 Now, we're talking about the upcoming municipal elections, how municipal budgets are not budgeted

00:00:45.980 the way that you think they are, and just how much of your tax dollars are going to

00:00:55.120 salaries and benefits at the municipal level, friends, it is chilling.

00:01:00.380 Now, if you like listening to the show, then I promise you're going to love watching it,

00:01:03.240 but in order to watch, you need to be a subscriber to Rebel News Plus.

00:01:06.560 That's what we call our long-form TV-style shows here on Rebel News.

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00:01:47.220 Just go to rebelnewsplus.com to become a member.

00:01:52.680 Now, please enjoy this free audio-only version of my show.

00:01:59.060 You're listening to a Rebel News Podcast.

00:02:05.820 What is the true cost of public sector pensions to your municipality?

00:02:13.100 And we're also talking about the neat budgeting trick that allows municipalities to keep asking

00:02:17.680 you for more and more money every single tax season.

00:02:22.960 I'm Sheila Gunn-Reed, and you're watching The Gunn Show.

00:02:35.820 Friends, on Monday night, I was at a campaign event for my friend, United We Roll organizer

00:02:48.840 Glenn Carrot.

00:02:49.940 You see, Glenn's running to be the mayor in Innisfail, Alberta, and full disclosure here,

00:02:55.260 Glenn is also a Fight the Fines client after he hosted an Easter event for the locked down

00:03:02.700 children in his community in the RCMP showed up.

00:03:06.260 Graciously, they did not take the Easter bunny off to the slammer.

00:03:09.300 However, the cops did ticket Glenn, and we are helping Glenn at no cost to him fight that

00:03:15.220 lockdown ticket in court through fightthefines.com.

00:03:18.120 Anyway, the show tonight is not about Glenn Carrot.

00:03:21.680 However, one of the reasons I really like Glenn, one of the dozens of reasons I really like Glenn

00:03:26.580 is that he thinks municipalities are so often out of control in their spending and unaccountable

00:03:31.920 to the people.

00:03:33.300 Today's show, though, is about somebody I met at Glenn's event.

00:03:37.620 His name is Marcel Latouche, and boy, that is such a fun name to say.

00:03:43.120 Anyway, Marcel is with the Institute for Public Sector Accountability, which sounds like it's

00:03:50.200 the institute for me.

00:03:52.980 Now, at Glenn's event, Marcel gave the most amazing explainer of how government budgeting

00:03:59.460 and private sector budgeting don't look the same.

00:04:04.160 Government budgeting is skewed so that governments can continue to ask you for more and more money.

00:04:11.660 And so I thought, Sheila, we better have Marcel on the show to explain this to everybody else.

00:04:18.600 So here's the interview Marcel and I recorded Tuesday morning.

00:04:22.920 Take a listen.

00:04:23.520 Joining me now from his home in Calgary is Marcel Latouche.

00:04:42.320 Marcel is with the Institute for Public Sector Accountability.

00:04:45.520 And I heard him speak on Monday night at Glenn Carrot's campaign event in Innisfail.

00:04:52.760 Glenn's running to be the mayor there and one of the few politicians that I like and trust in the entire world.

00:04:59.080 And Marcel, you've been on my radar for a little bit, but you were saying some things there that I think a lot of politicians need to address,

00:05:09.300 especially during this municipal election cycle.

00:05:12.440 But before we get into that, why don't you tell us a little bit about yourself, your background and the work that the Institute for Public Sector Accountability does.

00:05:20.700 My background is in finance and economics, and I have been in the public and private sector as a financial manager for over 50 years.

00:05:33.560 I worked at the City of Calgary for 17 years as a senior financial accountant.

00:05:38.680 And after that, upon retirement, I moved on and I started lecturing at both Mount Royal College and not university.

00:05:49.500 And I want if people want to know why, I will tell them later.

00:05:53.100 And I went to SAIT where I designed a program called the Public Sector Finance Program.

00:06:00.860 So it's all accounting about the public sector, because most people don't understand that the private sector accounting standards and the private sector accounting standards are totally different.

00:06:13.720 And this is where we have this problem with people understanding what happens in the public sector.

00:06:22.220 Mostly, I will discuss those issues from a municipal point of view, because we have a big election coming up at the municipal level in Alberta.

00:06:31.460 The key with that is that we have a problem in Alberta.

00:06:37.500 Most, if not all, local authorities and municipalities have a major component of the operation dealing with salaries and benefits.

00:06:51.220 And within those benefits is something called the overcap pension, which councillors of large municipalities are entitled to.

00:07:03.420 It was started in Calgary, very nicely done by administrators who wanted to boost themselves and their pension fund to go over and above the amount that they could not contribute to their RRSPs.

00:07:22.140 So what they did in Calgary was very simple.

00:07:24.860 And we disclosed this in my book, Take Back City Hall in 2004.

00:07:29.620 Oh, and we told people about this overcap pension, but nobody paid attention, because they didn't really understand it.

00:07:38.120 When we talk about it, the media, it totally ignored it until Farkas, the new young councillor in Calgary, brought it up again.

00:07:48.180 And what that means is, these councillors have an additional pension fund, which was passed by saying, the administrators told them, if we get it, you will get it too.

00:08:03.140 So what has happened now, this has proliferated to the big municipalities.

00:08:07.700 And my point of view is, if the big municipalities are doing it, local authorities are going to say, why not us?

00:08:17.060 So this is going to be a burden that is going to be on all taxpayers if this proliferation continues.

00:08:24.280 The problem we have is that, for instance, right now, there is a PAC that has been started by a retiring councillor, Keating, who's leaving politics.

00:08:38.280 But he started a PAC, and today I found out he's supporting Cara, Collier-Cartre, Demong.

00:08:49.000 One is a leftist, a liberal, Cara.

00:08:54.120 Then he has Demong and Collier-Cartre, who've passed themselves as conservatives.

00:08:59.880 But most of their decisions in the past does not really show that they have been conservatives, since they voted for tax increases.

00:09:08.760 But more importantly, he's now supporting somebody who left council years ago, Councillor Putman's.

00:09:16.980 My point is, people be very careful.

00:09:21.020 Why are they supporting each other?

00:09:23.580 It's very simple.

00:09:24.520 They want to continue what they've been doing for years.

00:09:29.240 The policies that have hurt Calgarians and taxpayers for years.

00:09:35.480 Why would you vote for somebody who you don't want to vote for, despite the fact that his left politics is supporting the same people that he worked with to continue this proliferation of tax and spend that they've done for a number of years.

00:09:55.640 And in effect, this is why part of what we do at the institute have been to monitor the finances of municipalities.

00:10:05.720 There are excesses all over the place in municipalities.

00:10:10.340 They get into things outside of their jurisdiction to create political legacies.

00:10:16.400 And what happens is it is always passed on to the taxpayer because municipalities don't produce anything that they can sell.

00:10:26.940 What they do is they produce services that they deliver to you.

00:10:31.020 But the increase in taxation from the property tax does not really reflect an increase in your services.

00:10:39.640 It's the same services at a higher price.

00:10:42.180 So I just wanted to, before we keep going here, I wanted to go back just a second to talk about these insane pensions, because the second politician, a local politician says, let's bring these perks, benefits and pensions back in line with the private sector.

00:11:01.600 You're being accused of, you know, wanting mass layoffs and completely destroying the public sector, when all you want is a little bit of accountability and to bring it in line with the people who are paying the bills, the private sector.

00:11:17.760 What portion of a municipality's budget is going to pensions, salaries and benefits?

00:11:25.360 It's over 50% in most of them, in the majority.

00:11:29.700 Over 50% is of your operating budget is in salaries and benefits.

00:11:37.320 And most people don't know that.

00:11:40.080 When they issue their report at the end of the year, they never break it down in the components of the budget.

00:11:48.900 What they tell you is the amount of money being spent on police, fire, streets, and so on and so forth.

00:11:57.720 But what the public should really find out when they examine the finances of a municipality is to find out what are the components, salaries, consultant fees, outside contractors.

00:12:14.380 These are the things that we are going to have to tell people that these are the elements you should be focused in.

00:12:22.200 How much you spend on police, fine.

00:12:24.300 How much you spend on fire, fine.

00:12:26.700 But what are the components of those expenditures?

00:12:30.260 And as I said to you, 50% of the total operating costs of the majority of municipalities is over 50%.

00:12:40.340 And that includes benefits, those high pension funds that they have told you about.

00:12:46.520 You know, that's outrageous.

00:12:48.260 And you just briefly touched on something there that one of the things that really annoys me about municipal governments doing is these legacy projects that they do.

00:12:59.920 Ugly public art, solar panels in Edmonton's River Valley that serve no purpose.

00:13:05.200 And Calgary very nearly ended up with a very expensive, in the realm of, I think, probably $10 billion in Olympics would have been.

00:13:14.600 And all of that would have been a legacy project for Mayor Naheed Menchi.

00:13:19.140 How do we as taxpayers, I guess, put the pressure on our municipal politicians to say,

00:13:28.160 this is not what you're supposed to be doing.

00:13:30.500 You're supposed to be making sure the garbage is picked up and the potholes are fixed, not putting up massive art installations that look like garbage left along the side of the road.

00:13:41.240 But you see, we are the Institute.

00:13:43.540 We have a different attack on this.

00:13:45.320 It doesn't matter.

00:13:47.200 I was at the center of the, against the Olympics 2026.

00:13:53.680 I attended meetings.

00:13:55.880 I made speeches and so on and so forth.

00:13:57.840 I was extremely glad that we killed that.

00:14:01.080 Then has come the entertainment center.

00:14:03.880 And I will come back to this in a minute.

00:14:06.520 What is the problem with the way we do things?

00:14:11.000 I don't mind art.

00:14:12.300 In fact, I dabble in art myself, but that, that doesn't matter.

00:14:16.880 That's a hobby.

00:14:18.280 But I have proposed from the Institute's point of view, there is a better way of doing it.

00:14:23.400 Instead of using taxpayers' money to promote art, why don't you give an incentives to the number of great people we have in Calgary who are philanthropists, who would give money to make art, to give to the art center, to give to the art projects in Calgary.

00:14:45.120 What you do is very simple.

00:14:47.600 You take what they give and you ask them in your property tax or your corporate taxation, we will reduce your taxation or your contribution to your property tax over a number of years when you donate.

00:15:02.780 So it's an incentive for them to give, it's an incentive to get better art, and as opposed to legacy art from a political point of view.

00:15:12.720 The other thing that we have proposed is, we don't mind international artists, we don't mind international cooperation, but we must have transparency in the selection of the artists.

00:15:24.120 And that has changed a little bit, and that has changed a little bit, we've been successful in doing this.

00:15:28.920 The other problem we have is the way we finance projects.

00:15:33.320 Let's look at the entertainment center and the entertainment arena.

00:15:36.840 I'm all for it, but it's the funding.

00:15:39.600 The institute has opposed the funding of the arena, which, by the way, the arena is now going to be 1,000 seats less than the saddle dome.

00:15:51.820 The community rink promised that was going to be part of the project has disappeared, and we have another additional contribution from the city.

00:16:01.960 The problem we have is certain projects and certain facilities should have an element of public sector, but how we finance it is totally ridiculous, straight from taxpayers' money.

00:16:17.520 We have proposed that new projects of large expenditures should also have an element of financing for tax-free municipal bonds.

00:16:34.740 That will give the ordinary taxpayer an opportunity to take part in the investment of that particular project.

00:16:44.140 What they need to do is lobby the provincial government and the federal government to allow the tax-free municipal bonds, and that would be part of the financing.

00:16:56.300 So the burden would be less on the taxpayer, as opposed to just creating debt to be repaid in future years when the taxpayer has got to bear it.

00:17:07.000 So many taxpayers cannot afford their property tax, let alone new taxes to pay for legacy projects.

00:17:17.460 And that's why we've always said we need tax-free municipal bonds.

00:17:22.340 You can put it in a TFSA, you can have a contribution that will be part of what they always talk about, engage the public.

00:17:31.340 That was the way that we think that will be total engagement by the public.

00:17:37.140 We will be part owner, we will be investing in the project.

00:17:40.580 Now, Marcel, you said something on Monday night that I think surprised a lot of people in the audience when you were at Glen Carrot's event, and that was that municipal governments, though they keep raising our taxes, they're not actually as broke as they let on.

00:17:58.440 And you pointed out that this has a lot to do with how they calculate their budgets and do their accounting.

00:18:05.880 Yeah.

00:18:06.360 The budget is done on a cash basis.

00:18:09.280 The financial statement is done on an accrual basis, meaning it's on a historical accumulated basis.

00:18:18.280 When you do the budgets, they just tell you, this is the amount we are going to spend to provide your services, including our big pensions.

00:18:27.340 So then we are going to look at this amount, and we are going to say, we need to raise that amount for taxation, either property taxes from residential or non-residential taxes to pay for what we have.

00:18:43.340 Included in this is always the fact that they tell you that we don't have the right to have a deficit in municipal government.

00:18:52.880 There's the first bondo goal.

00:18:54.840 I don't like it, but it exists.

00:18:57.400 You can have a deficit at the municipal level, but you have to repay it within the next three years.

00:19:04.540 So I don't like it, but it is there.

00:19:08.300 So an excuse for the municipalities to do this is very simple.

00:19:12.780 We can't have a deficit, so we're going to raise the money.

00:19:15.660 And what happens is we have and create surpluses.

00:19:20.340 Surpluses are a good thing as long as you use it properly.

00:19:25.080 I don't mind reserves.

00:19:26.940 We have reserves in Calgary right now, which is about half a billion dollars.

00:19:31.940 And suddenly with an election, we can see all sorts of expenditures coming out of those reserves.

00:19:37.360 And this is what I call political legacies or buying votes in an election year.

00:19:42.420 All these years that they've told you we don't have any money, they've been accumulating surpluses.

00:19:48.520 And they've been purchasing or accumulating assets over the years.

00:19:53.840 We've been telling people about this for 20 years.

00:19:57.140 Finally, the CD Howe Institute produced their own report and came up with the figure of surpluses in Canadian municipalities of 11 billion dollars.

00:20:12.700 And since municipalities don't create any wealth and all the money comes from taxpayers that has been created through overtaxation, this 11 billion dollars of surplus is your money being used by politicians to create political legacies.

00:20:32.700 So it is important for people to look at new ways of doing budgets.

00:20:39.920 And this is why at the Institute, we are pushing forward the idea of zero-based budgeting for municipalities, meaning you start every year when you do your budget with the idea that you're starting afresh.

00:20:55.200 Everything is new.

00:20:56.540 You look at it.

00:20:57.340 With technology today, so many things can be done differently.

00:21:00.480 If the private sector is putting rockets in the air now instead of NASA, I bet you we can collect our garbage by a private company.

00:21:13.040 So by doing zero-based, you're going to look at the best way of doing and providing services for the taxpayer.

00:21:20.200 So when you start afresh, you say to yourself, where do we go from here?

00:21:24.280 So now that we've reviewed how we can deliver services better, we will need a new level of taxation.

00:21:33.100 Hopefully, it will show that technology has brought down the amount of taxes required to provide the same services or better services.

00:21:42.180 Then, if you have a surplus at the end of the year, we propose one thing.

00:21:49.380 What you do is you look at the surplus and you say, maybe we should have no more than 5% of our operating costs as reserves.

00:21:59.460 The remainder of what you have left as a surplus should be returned immediately in the following taxation year.

00:22:08.820 Then you will start having accountability.

00:22:11.820 But we need transparency first for us to have accountability.

00:22:16.160 And that's one way of doing it, by having zero-based budgeting.

00:22:19.460 You know, it's funny, Marcel, that you brought up garbage collection and private garbage collection.

00:22:25.040 Because in the county that I live in, I can get garbage pickup to my rural, very rural house, thanks to the county.

00:22:33.920 However, I've opted out of that and I use a private garbage collection service because it is cheaper, more efficient.

00:22:41.120 And I think that has a lot to do with those public sector union pensions and benefits that I don't have to pay the guy tossing a garbage bag in the back of a truck, you know, an overinflated salary coupled with overinflated benefits.

00:23:00.280 And so, just even for me as my family, I can see that as a practical thing that we're already saving money on.

00:23:05.580 So, multiply that across the entire county that I live in.

00:23:09.340 Absolutely.

00:23:09.780 Absolutely. Let's talk about garbage because that's what we have a lot at the municipal level. 0.93

00:23:15.140 Yeah. 1.00

00:23:15.720 Garbage politically and garbage that we distribute, right? 1.00

00:23:19.520 So, let's put it this way. 0.99

00:23:20.860 When they first put this on the agenda at council, we made a presentation and we warned people that putting the garbage under the jurisdiction of the municipality was the wrong thing to do.

00:23:35.560 Because the first thing was, they put three businesses out of operation.

00:23:40.560 Right.

00:23:41.240 They killed three businesses.

00:23:44.180 Now, the absurdity of it all, having been warned that this was not going to work and there are better ways of doing it, the city of Calgary decided we're going to have a pilot project to see if we can get it from the management. 0.95

00:23:58.860 And this is the garbage we have nowadays.

00:24:01.860 You know, we get to do a pilot project after the fact. 0.99

00:24:08.080 I mean, you know, this is so absurd.

00:24:11.060 We spend millions of dollars.

00:24:12.440 So, now, if we go back to the private sector, what are we going to do?

00:24:16.740 Sell all these assets that were bought for to deliver the service at a lower price.

00:24:23.000 Once again, the taxpayer loses because to sell it would be at a loss.

00:24:28.660 Yeah.

00:24:28.740 And the fact is, they do not want to hurt any negotiations between the taxpayer and the union because that's what it is.

00:24:39.960 I mean, anything happening at the municipal level is a negotiation by our representatives, the councillors, with the unions.

00:24:50.420 So, they do not want to take that step and say there is a better way or there are better technology to deliver the services.

00:25:00.100 Unions, in effect, have outlived their existence.

00:25:06.060 Technology is going to make them obsolete if they do not agree to make changes on how they are compensated.

00:25:14.320 And that is a major.

00:25:15.300 This is why we have 50% of our operating costs in wages and benefits.

00:25:22.620 Yeah.

00:25:23.260 From your lips to God's ears that the unions have outlived their usefulness.

00:25:27.820 Marcel, you told me a little something before we jumped on camera here.

00:25:32.040 And that's that you've started a political action committee.

00:25:34.720 Can you tell us about that?

00:25:36.020 Correct.

00:25:36.400 We've started a political action committee to advise and listen to people, select candidates, and provide a platform for the next municipal election in Calgary.

00:25:50.820 Our pack is called Lead Calgary.

00:25:55.100 And we are already interviewing candidates.

00:25:57.640 At the end of August, but now perhaps a little bit later because of the upcoming federal election, we are going to issue a list of candidates with a series of ideas and ask them to be part of a new way of doing business at City Hall.

00:26:20.500 So, leadcalgary.ca, and we are on Facebook at Lead Calgary.

00:26:26.620 So, that's what we are going to do.

00:26:28.540 Well, you know, it seems like, at least in media sometimes, I'm a bit of a lone wolf in driving home the point that conservatives should not really walk off the field of municipal politics.

00:26:39.360 This is where all those bad ideas are so often born and then they grow up towards the federal level because they start off with all those pilot projects you point out that happen after you start the project itself.

00:26:52.500 And, you know, municipal politics, they're the things that it's the thing that affects you first and the most.

00:26:57.660 And that enormous property tax bill is one of the largest tax bills, single tax bills you'll pay all year.

00:27:04.860 And so, it's important for us to be holding our politicians to account.

00:27:07.920 Now, Marcel, one last thing.

00:27:10.120 How do people support the work that you do at the Institute for Public Sector Accountability and how do they find out about some of the things that you're doing?

00:27:16.680 We have our website.

00:27:18.520 We have all our reports published on it.

00:27:21.180 It's called theipsa.org, T-H-E-I-P-S-A dot org.

00:27:32.000 Well, Marcel, I want to thank you so much for taking the time.

00:27:34.660 I know I just sort of sprung this interview on you, but you know what?

00:27:37.820 You're a sharp guy and you know your stuff, obviously.

00:27:40.380 We'll have you back on again really soon because I'd be very interested to see the support, the sort of people that you identify through your PAC initiative.

00:27:49.780 Actually, I would be delighted to have a platform like The Rebel to do this, actually, because we are going to seek social media support of all sorts to be able to reach people out there.

00:28:03.500 One of the things I want to add, we have an idea that because the federal election has been called virtually at the same time as the municipal campaign.

00:28:15.800 I wrote a book called Conservatives, Dead or Alive, and it is important for us to do this.

00:28:23.540 To me, 2021 is a very big year for politics in Canada in general.

00:28:29.540 At the municipal level, I ask conservative candidates to help conservative candidates at the municipal level campaign together, support each other, because if you have the same goals of freedom of speech and free market economy, you should have a complete joint platforms to talk about the same thing at the doors.

00:28:58.540 So I'm requesting, I'm requesting, I'm requesting, I'm requesting candidates to work together, because otherwise we are going nowhere.

00:29:07.060 This election 2021 year is extremely important.

00:29:12.280 Well, Marcel, I could not agree more.

00:29:17.060 And again, I think conservatives, we forget what happens at the school board level.

00:29:22.260 If we're concerned about the things that our kids are being taught in school, why aren't we getting involved in the school board elections?

00:29:28.680 Why aren't we asking the people who are knocking on our door, what do you think about critical race theory?

00:29:33.480 How much money do you think we should spend on recycling if it's the local town councillor running for office this year?

00:29:40.880 We have to ask those questions.

00:29:42.980 And I think it's important that if folks are conservative or progressive and they're running, they need to identify themselves as such.

00:29:50.740 And we don't see enough of that.

00:29:51.900 We see a lot of gray area.

00:29:53.460 And then people find out the hard way once, you know, our elected municipal politicians start voting, we find out who they really are.

00:30:02.380 But this is where the media should come through.

00:30:04.740 You bet.

00:30:05.040 You know, what has happened is all these issues are intertwined in one single thing.

00:30:13.180 It's about conservative, small c, common sense, conservative values.

00:30:20.140 And if we work together, we'll get better results.

00:30:24.120 And I will leave you with that thought and ask your listeners to start working together because they are all intertwined issues.

00:30:33.640 School, municipal, federal, they are all about the freedom of conservative values.

00:30:40.560 That's what it's all about.

00:30:42.420 Marcel, thank you so much for being on the show.

00:30:44.960 Thank you for taking the time.

00:30:46.180 And we will check in very, very soon because, like I said, I'm very interested to see who you identify as the lead Calgary slate.

00:30:56.080 All right.

00:30:57.180 Thank you.

00:30:57.920 I accept that very generously.

00:31:00.500 And it was a pleasure to speak with you this morning.

00:31:03.640 Thank you.

00:31:11.840 Well, you heard him say it.

00:31:13.280 Marcel's been at this a very long time, first uncovering the double pensions of Calgary's public sector way back in 2004.

00:31:21.220 And yet, 17 years later, very little has changed.

00:31:24.820 And I think the problem lies with us conservatives.

00:31:27.460 You see, we mostly look at the big macro issues.

00:31:30.140 Right now, we're so focused on Justin Trudeau that we're not focusing on the things that we can fix right in front of us at the municipal and local levels.

00:31:41.200 It reminds me of something Jordan Peterson says, and boy, am I ever paraphrasing here, but he says something like, you can't change the world unless you start with your bedroom.

00:31:51.660 So clean your room.

00:31:52.660 You know, it's good advice for life in general, but also really good advice for politics.

00:31:59.520 Well, everybody, that's the show for tonight.

00:32:01.420 Thank you so much for tuning in.

00:32:03.040 And I'll see everybody back here in the same time, in the same place next week.

00:32:07.380 And remember, don't let the government tell you that you've had too much to think.

00:32:33.040 Thank you so much for tuning in.

Rebel News Podcast - August 19, 2021

SHEILA GUNN REID ｜ Marcel Latouche on how to bring sanity to city halls

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