Category: Current Topics

Harris or Trump? – America Votes

In July 2016 I wrote an article that I shared with a few friends about the Republican nominee for the November 2016 election – Donald Trump. I have copied the article below for interest and reference.

As it turned out America did elect Trump in 2016 and he did exercise the coveted prize of appointing three US Supreme Court Justices. The religious right did turn out to support Trump; however, it would be naive to assume it was only the religious right and a loyal red-neck following that brought Trump to power over Hilary Clinton. In fact, 53% of white women supported Trump even in the face of all the slights he made about women.

In the last 8 years, we saw Trump win in 2016 and then lose the 2020 election to Joe Biden and he never accepted the outcome. Trump fueled a riot on the Capitol on January 6, 2021 from far right extremists. It appeared their goal was to get to Vice President Mike Pence given he would not overturn the results of the 2020 election. A very scary situation for America as their democracy was threatened. Hard to believe that America and the Republicans did not learn more from this insurrection as they have nominated Trump as their candidate for 2024. The litany of name calling, belittling people who do not agree with him and spreading fear to the nation continues unabated. Some Republicans have reacted; however, the majority sits silent and caters to a person who lacks substance and integrity.

The stage is now set for the 2024 election. Trump and J.D. Vance versus Kamala Harris and Tim Walz. To get here I believe both parties made terrible mistakes coming out of the primaries.

It is hard to believe the Republicans surrendered to the Trump train again and are carrying on with such a divisive, shallow and old candidate. His hold on the Republican Party and certain elected Republican politicians is difficult to comprehend.

The Democrats coronated Joe Biden even though his age and declining health became obvious weaknesses. It was not until the Presidential debate in June that it became clear that Biden was not capable of continuing. Pressures came to bare from a broad number of Democrats and their donors and Biden stepped aside in July.

Here is where the 2024 election became interesting because Biden had no hope of beating Trump and he almost lost the election before it happened.

The tables have now turned. It is Trump who is looking old as the Democrats quickly coalesced around Harris. She raised over $200 million as the Democrats donors came on board after Biden stepped aside.

It appears Trump does not know how to deal with Harris as she brings an exuberance and uplifting style that is contrary to his own. He is trying to stay on message about the economy and immigration – his strengths according to the polls – but he still lapses into personal attacks and name calling.

So the question remains – does Harris have the momentum to win the election?

The polls indicate that the race will be close. The national polls do not mean much because the majority of states are clear wins for either the Republications or the Democrats. The 7 battleground states that will decide the election are Michigan, Wisconsin, Pennsylvania, North Carolina, Georgia, Arizona and Nevada. This is where the money will be spent and the candidates will be dropping into every major battleground city.

So what will it take to win the battleground states?

I see Trump winning if his message on the economy and immigration resinates. In addition, if the electorate thinks Harris and the Democrats are too far to the left, they will opt for Trump again.

For Harris to win, she must convince America to vote for a woman of colour. This is not a stretch given that Hilary Clinton and Barack Obama have opened the door for her in previous elections. I believe Harris must continue the wave of momentum that includes women, young people and minorities. If the protection of women’s rights has any meaning, then many of the women who voted for Trump in 2016 should gravitate to Harris in 2024.

There is one significant concern that hangs over the 2024 election. If Trump loses by any amount, will he accept the results or will he empower his base to violence? It’s hard to believe that America, a country that says it values democracy and the rule of law, can have this ominous threat leading up to an election of any kind. Time will tell.

My second cup is now empty…………………..

TRUMP ARTICLE – JULY 2016

Donald Trump is not a true American Conservative.  I believe my first noticeable encounter with a true American Conservative occurred in Las Vegas about 12 years ago.  Kathy and I were in our favourite comedy club having a drink before the show started.  They was a well dressed couple, about 60 years old (not old by today’s standards) from Texas were sitting across from us. After dealing briefly with the usual cross border health care debate issues, the gentleman asked what Canadians thought of the American involvement Iraq.  Speaking confidently for all Canadians, I suggested that we were concerned about the military involvement and did not necessarily see the connection between the September 11 terrorist attacks and the invasion.  This gentleman emphatically stated that “he believed, as did his wife, that the United States was at war with terrorists”.  He seemed comfortable speaking on behalf of his wife and she seemed equally comfortable for him to do so.  A true American Conservative.  The image of Mike Pence now comes to mind.

When Donald announced his run last summer for the Republican nomination there were skeptics.  His position on building a wall with Mexico, his comments about women, his mocking of a disabled reporter, his views on illegal immigrant sponsored violence and his overall tone seemed to be in conflict with what I thought people believed.

I said there is no way in hell that Republicans would be that stupid to nominate Donald Trump.  I was wrong. I was not alone.

I made a couple of bad assumptions.  You know what happens when you assume.  It makes an ass out of you and me (ass-u-me).  First off, I discounted that Donald would only appeal to rednecks.  Secondly, I assumed that Jeb Bush would carry the nomination because he had appeal in Florida, his wife is of American Spanish heritage and a Clinton – Bush election would be fun to watch.

I got an indication that I was wrong about Donald’s ability to carry the nomination this winter while in Las Vegas.  I talked to another Texan and asked why Republicans were not warming to Jeb Bush yet he was the Republican candidate who was raising the most money to fund the  campaign?  He was very clear.  Jeb is not like his brother or father. He is NOT conservative enough.  The lights started to come on for me.

It became clear that the mainstream Republican Party is out of touch with the American people who hold conservative beliefs.  These people may include rednecks; however, the support is much broader then that.  It includes the far right conservative (think religious right) but also includes the lower, middle class group who actually look down on the folks below their position in life (think white male of any religious affiliation) This Class distinction view is the last hold over of the Class system brought to us by our British friends as they spread love and joy around their Empire.  Bottom line is that Donald has a broader base of support then was anticipated.

The mainstream Republican Party had no idea how to deal with Donald as he bullied and insulted his way past them to earn the nomination.  When it came to the convention coronation, the pillars of the Republican Party acted quite differently.  The Bush family, John McCain, John Kasich and other prominent Republicans stayed home because they could not compromise their principles and support Donald.  Ted Cruz, protector of the Tea Party and card carrying religious right member, spoke at the convention, at Donald’s request, and had the back bone not to endorse Donald even though he was in the lion’s den.  Others like Chris Christie and Paul Ryan put aside Donald’s personal insults and compromised themselves to try and get closer to the trough.  Very sad.

Donald made a wonderful political choice for a running mate with Mike Pence.  Mike will solidify the religious right and calmly promote his position.  You see, he is a true American Conservative.  He will also stand by and watch Donald promote fear and doom for America while declaring that he alone can save America! 

The Republican Party dearly wants to win in November, not only to have the Presidency and satisfy their hate for Hilary, but to control the nomination for the vacant Supreme Court position. This prize has the ability to shape a divided Supreme Court and influence the direction of American law for many years to come.

I think Hilary also made a good running made choice in Tim Kaine.  He should appeal to the ever popular white male vote and the Democrats need to win Virginia.  The fact that he is not liberal enough for the Bernie Sanders supporters will mean nothing in November.   The Sanders people cannot vote for Donald and they cannot stay home (as some Republicans will do) because they have to stop Donald.  They will get on their bicycles (probably made in China) and ride to the polls to vote for Hilary and Bill Clinton in November.

I expect there is no way in hell the American people are stupid enough to……………..

God Bless America!

My second cup is now empty………

Russia invades Ukraine: The Failure of an Appeasement Policy

We are all familiar with the school yard bully. He usually exerted physical dominance and was in a habit of getting what he wanted by threatening and abusing others. He surrounded himself with people who were either like minded or they were themselves intimidated and fell into line behind the bully.

The bully succeeded for a number of reasons. Some of his victims avoided him while others were content to stand by as the bully harassed other kids. The “so long as it’s not happening to me” scenario. Some kids tried to be nice to the bully, some even praised him for his power, and rationalized how he really wasn’t such a bad guy once you got to know him. Probably best to appease the bully and perhaps he would just go away or at least leave me alone.

The policy of appeasement is not restricted to the playground because a bully grows up and acts the same way as an adult.

Europe and the West appeased Russia for years and now the Ukraine is feeling the full affects of a bully flexing his empowered muscles. How could the World not see this coming? There was Georgia and then the Crimea. Each time the West was outraged and implemented some modest sanctions that ultimately meant nothing. The pattern of abuse by Russia was clear. Perhaps the ultimate insult to victims everywhere was when a United States President legitimized the bully by praising and, thereby, further empowering him.

So how did Russia get into a position to capitalize on the policy of appeasement? Oil and natural gas.

The Russian economy is abysmal in relation to the size of their population. They make up about 2% of the World economy which is the same as Canada but they have almost 4 times the population of Canada. The substantial Russian oil and natural gas revenues have benefited their leader and the Oligarchs. The Russian people continue to suffer under Communism and they do not share in the oil and natural gas wealth. It is this wealth that has financed the war on other sovereign countries.

Given the Russian history under their current leader, how could Europe become dependent on Russian oil and natural gas and at the same time the United States and Canada made no meaningful objections? In fact, the United States and Canada import Russian oil.

A number of pipelines flow from Russia through the Ukraine to Europe and the Nord Stream pipeline carries natural gas from Russia to Germany under the Baltic Sea. The Germans liked the idea so much they agreed to a parallel line called Nord Stream 2. The second line is complete but certification is on hold given the Russian unprovoked attack on the Ukraine. Will future Russian appeasement see the Nord Stream 2 line operational?

The political influences of socialist policies in Germany has lead to the closure of their nuclear power plants. The hope for sustainable wind and solar power is but a dream when you consider the demand for power. Hence the dependence on Russian oil and natural gas. The same political influences exist in the United States and Canada where the Keystone Pipeline has been cancelled and new energy projects are draped in red tape and propaganda that insists oil is dirty. A west to east pipeline in Canada is shunned while Ontario and Quebec rely on foreign oil from jurisdictions that do not adhere to the same standards our Canadian companies must operate in.

It is worth noting that the current Russian sanctions by the United States and Europe do not mention Russian oil and natural gas. Does the appeasement effectively continue?

Sadly, we watch the Ukraine being devastated by a bully and the only way we can assist is by hurting Russia economically. The Ukrainian people must fight for their own destiny as do the Russian people. If they want something better it is up to them.

It is time to recognize the Russian leader for what he is and isolate him and his friends financially such that he is not in a position to wage war on innocent people. This isolation must continue long after the current conflict has subsided and the policy of appeasement must stop.

My second cup is now empty……………………..

Minimum Wage – Some Clarity

Do you know many people earning minimum wage in Canada or Saskatchewan for their livelihood?

There is quite a bit of talk in Canada about minimum wage levels given Ontario has raised their minimum wage to over $14 per hour for 2018 and plan for it to go to $15 per hour in 2019.

Some argue the increases will improve life for those at the lowest end of the work scale and others argue that jobs will be lost and the very people the raises are supposed to help will actual be hurt.  Both sides refer to studies to support their case.

I want to point to some statistics as well as lay out some common sense considerations on the subject.

  • Actual Employees Earning Minimum Wage

First off, how many employed people in Canada and Saskatchewan actually earn minimum wage?  I have asked this question to a number of people – in business and in employment positions – and I received answers mostly in the range of 25% to 35%.  I was in this range of personal belief as well.  These answers give the perception that quite a few people earn minimum wage.  In fact, these responses lead us to believe that many people in our society are really affected by minimum wage and it should be a hot topic that needs to be addressed and indeed rectified.

Let’s look at the real facts and not the perceptions.  The following information is from a Canadian Labour Congress article using information from the “Labour Force Survey microdata 2015, Government of Canada Minimum wage database”

There are about 8% of Canadian employees earning minimum wage and less than 5% of Saskatchewan employees earning minimum wage.  In addition, of the people earning minimum wage, 60% are between 18 and 24 and live at home. Therefore, the people actually earning minimum wage is  significantly less than the people I talk to perceive and I expect the numbers are less than most people believe.

It appears to me the actual numbers suggest that over 95% of Saskatchewan employees and 92%of Canadian employees earn more than minimum wage and employers are already reacting to the supply and demand in the market place and not the level of minimum wage set by legislation.  For the vast majority of employees, minimum wage is irrelevant.

The above study also determined that about 25% of Canadian employees earn less than $15 per hour and for Saskatchewan the amount is 23%.  In effect, 75% of Canadian employees earn over $15 per hour.  Not bad at all in my way of thinking.  Considering that many jobs should have an entry-level wage, I think the marketplace is working just fine in establishing wage levels without the need for a legislated minimum wage.

  • Employees Already Earning Above a New Minimum Wage Threshold

Let’s consider an employee who currently earns $16 per hour and all of a sudden their colleague or someone else now gets a minimum wage increase from $11 to $15.  How can the $16 person not feel that they deserve an increase as well given there were logical differences for the original pay differential between themselves and the minimum wage person?  I expect the $16 person has more education or experience or skills than the other person earning minimum wage.  The result of a minimum wage increase is simply not fair and it skews the labour supply and demand pay scale.

If the employer is expected or must then give the $16 person a wage increase, a cycle is started that will effectively raise prices for goods and services and will cause inflation.

There are reasons people seek greater education or stay with a job to gain experience. They want to earn more money or create more skills to move onto better paying work.  Employers do pay more for real education and for job experience and the fact there is such a low percentage of minimum wage earners proves this point.

Take an entry-level job at a fast food restaurant.  It does not take long to get proficient at the job; however, an employee can learn skills to move onto higher end restaurants and earn more or apply the skills learned to their educational endeavours and future employment.  These entry skills include being on time, taking and following instruction, working with other employees and work appearance and safety.  Is this entry-level job their career?  Probably not.  If it is, perhaps this is the highest level of job they can aspire to and that’s alright as well.  The fact is some jobs only pay so much and the labour supply and demand marketplace should decide this, not a legislated minimum wage.

  • Employer Options to Minimum Wage Increases

It seems to me that of the low percentage of minimum wage jobs in Canada, that fast food restaurants and retail stores probably have the most employees earning minimum wage at the entry levels.  So how do the employers react to a significant legislated increase to minimum wage from say $11 to $15?

They can raise prices to cover increased wage costs, reduce benefits not covered by minimum wage, reduce their bottom line net income or automate to remove the minimum wage position.

If prices are raised, will the marketplace accept the increase or will business sales suffer and then employees will be reduced and the business net income will fall?  Price increases can also directly affect the minimum wage earners as they are consumers of the products sold at fast food restaurants and low-cost retailers.

Reducing employee benefits is a real possibility; however, many employers will not want to do this if a better option exists. Perhaps a short-term solution.

A reduction in bottom line net income.  I don’t believe the business owner will jump for this option if other options exist.

I think business will default to automation if it is possible in their industry.  Think about it – there is a labour cost threshold whereby automation makes sense to replace an actual worker.  We are seeing automation with self scanners in grocery stores and large retail stores. There are even some fast food restaurants that have started to introduce ordering on a computer board as opposed to a person taking the order.  Given these innovations are already taking place, it is not a leap to see the technology grown and expanded.  The result – less minimum wage jobs and more automated self scanners and self ordering.

Who really suffers?  Jobs will be lost for the very people who need the jobs the most for life and for entry to get to the next level.

Government intervention for the perceived betterment of society does not always return the intended results.  Perhaps it is better to let the marketplace work and quit the onerous interference and unnecessary rules and regulations.

 

My second cup is now empty………………………………

 

 

 

 

 

Premier Brad Wall – Well Done!

Is your family in Saskatchewan better off today then it was 10 years ago?

This question is easy to answer for me – YES.  Not everyone would agree and I wish them well in the next 10 years.  Of course, we should first consider in what context “better off” means before we make any knee-jerk reactions.

I’m speaking in the context of better off as it relates to the role of our provincial government.  My belief is that provincial governments do not exist to make me:                                                                                                                                            happy, more confident, less dependent on drugs or booze, manage the economy, run businesses in competition with the private sector, find me a job, go to school, take care of my children or use common sense.

In my opinion the role of provincial government should be to provide basic services in a financially responsible manner.  These services include road infrastructure, public safety, public education, public health, facilitation of provincial free trade and stewardship of our natural resources.  This list is not exhaustive and has expanded over the years as people demand more services with the intent of using other people’s money to fund the services  or to fund the services with debt.  The following quote from Voltaire may be appropriate.

In general, the art of government consists in taking as much money as possible from one party of the citizens to give to the other.

—Voltaire, 1764

This seems rather true in the context of our federal government and Prime Minister Justin Trudeau.  There is an insatiable demand for public services and our federal leader appears to be satisfied to meet the demands by taking from others or using public debt.  Sadly, another topic for another day.

In Saskatchewan, in the last 10 years, we have received leadership from Premier Brad Wall and I want to congratulate him on his current retirement from politics.  I have valued good leadership of various political stripes over the years – Roy Romanow, provincial NDP and Paul Martin, federal Liberal to name just two, although, I must say the list is not long.

Brad Wall brought an attitude change in this province that helped move a good number of people out of our “1930’s” mentality.  The old mentality told us to be careful and not venture out into new possibilities.  Of course, there were some people who overcame this on their own, but sadly, many had to leave Saskatchewan to achieve their goals and attain greatness elsewhere.  The new attitude that Brad Wall instilled was that we could be better and we could create jobs and we could increase our population and be economically better off.

Brad Wall was not perfect and I disagreed with some of the people around him who did not conduct themselves in a manner befitting public office.  Guess what, this has happened before and will happen again because government is basically inefficient and as some people come to the trough of power they seem to eat in excess.

Brad Wall’s detractors will say that we still had deficits under his command.  Considering the economic slump in 2008 – 2009 and the precipitous decline in commodity prices, he did alright.  If you check the following website, provided by The Canadian Taxpayers Federation, you will find that Saskatchewan has the lowest public debt in Canada.

http://debtclock.ca

The cumulative debt is still far too large for my liking and yet there is a loud group of people wanting more services with no rational way of paying for the services.  You can’t have it both ways.  More services require a way to pay for them.  This will be the continued challenges for future provincial governments.

I believe Brad Wall’s tenure as Premier has been good for our province.  Did your children have to leave Saskatchewan in the last 10 years to work in Alberta or British Columbia?  Do you know of people who came home in the last 10 years because there are now meaningful jobs here for them?  I know in our business we had three CPA’s came home from Alberta after having had to go to Alberta to find work.  Can you imagine what this has meant to them and their families.

Both our sons live and work in Saskatchewan and I could not have envisioned this before 2007.  We do not take for granted the ability to see them, go out for lunch or supper together or just talk face to face at any time we choose.   In Saskatchewan, prior to 2007, our best exports were our people.  Just ask the people around you.

I think the 10% plus growth in the Saskatchewan population speaks to a changed attitude and an economic improvement under Brad Wall’s leadership.  We can now celebrate success in Saskatchewan and do not have to apologize for it.

Brad Wall is a cheerleader for the province and has a good sense of what it means to live, work and run a small business here with the support of government.  I think you will be missed.

Brad Wall, I do not know you; however, thank you and all the best in your next ventures!

 

My second cup is now empty………………………….

 

 

Government Deficit Budgets

“The bank would lend me more money then I could ever repay.  I didn’t take it.”  Quoted from my Dad when he was a man and I was a boy.

My parents were simple people.  They were short on education and long on common sense.  My father and I discussed politics regularly and he was an avid CCF and NDP supporter.  He had several simple principles.

“If the Co-op doesn’t have it I don’t’ need it.”

“Assist those who cannot truly take care of themselves.”

“Be responsible for your actions.”

“Live within your means.”

“Only borrow money that you can repay.”

“Put back into the community.”

“Only rich people can afford to by junk, because they can buy it again and again.”

I don’t ever recall my dad talking about the ratio of debt to GDP or the world inventories of commodities and their affect on market prices.  He never delved into Keynesian economic theory or speculated on how a raise in the Bank of Canada interest rate would affect inflation.  He did not understand these things, and with all do respect, I’m not sure the people we put in charge do either.

The dust has now settled on the 2017 Federal and Provincial Budgets.

Investors reacted positively to the projected $28 billion Federal deficit as bank stocks rose nicely the day after the budget.  How sad is that when we applaud irresponsibility. Of course, the applause comes as no surprise because we were given exactly what was promised in the last Federal election.  You cannot blame the Liberals for making good on a direction they clearly laid out for the Canadian people.

In Saskatchewan, there is the typical hand wringing and outrage that comes when a budget is presented.  The sense of entitlement is front and center as we try and determine what is, or what is not in the budget, for me.  How sad is this for a Province that has produced some of Canada’s greatest leaders.  We want more services and yet we still have a 2017 projected deficit of over $685 million.  Irresponsibility is not just reserved for our friends in other Provinces.

Simple question – I can’t operate my life with deficit financing, so why can governments?  Answer – because the people demand it and vote for it.

I hear with considerable regularity that, “the government is wasteful, they squander resources, they don’t spend enough on this, they spend too much on that, they need to tax the rich more, it’s the government’s fault, the government needs to create jobs…..”  The fundamental flaw in these tirades is that this assigns the blame to the government, thereby, removing the responsibility from the people. In a democracy, the people elect the government and they govern at the behest of the people.

We live in an increasing global society that has embraced deficit financing to provide and enhance government services for the people.  We are paying for these services with debt that presumably must be paid off in subsequent years.  Our priorities are skewed and the current excessive entitlement priorities will have lasting affects in the coming years. As Canadians, we care about many causes and we demand the government finance them with debt and let someone else pay for them down the road.  This is a short term, selfish view that makes me wonder how we can blindly burden our children with this debt to satisfy our current wants.

Current deficit financing will ultimately affect the poor more then the wealthy.  People with money will always be able to access health care and other services world wide.  Not so for the poor.

We pride ourselves on the universal access to many services in Canada, not the least being health care.  These same universal services will be eroded if we are not responsible with our government spending today.  In the future, money that would otherwise be available for services will go to reduce debt.  Compound this with the fact we have an aging population that will require even more services and we are facing a colossal financial problem. For those who believe this is or should be someone else’s problem, then I must respectfully disagree. We have spending problems in this entire country and not revenue generation problems.

I always find it is helpful to review a few numbers to enlighten myself. The Canadian population is roughly 36,000,000 and the Saskatchewan population is roughly 1,100,000.  We make up about 3% of the Canadian population and I can only assume that is why we are sometimes viewed as irrelevant in Ottawa and Toronto.  The Saskatchewan population also includes our children and our friend’s children who didn’t have to go to Alberta to live and work in the last 10 years. Think about it – this is a big deal to our family and should be for yours.

It appears the accumulated national debt is about $636,000,000,000.  The accumulated provincial debt is about $7,600,000,000.  That’s a lot of zeros.  I had to bring out my fancy calculator to do the ciphering.

The following are the average debt amounts for EACH person in Saskatchewan.

2017 annual Federal projected debt – $778 per person.

Accumulated Federal debt – $17,667 per person.

2017 annual Provincial projected debt – $623 per person.

Accumulated Provincial debt – $6,909 per person.

Therefore, the combined Federal and Provincial debt accumulated to date is almost $25,000, and growing, for each person in Saskatchewan.  When you consider that there is a large segment of any population who has no ability to assist in paying this debt, it seems a bit daunting.

Now some of you may think it would be a good idea to pack your bags and move to another province to be part of a lower overall debt.  Best rethink that move because Saskatchewan has the lowest debt per person in Canada if you believe the following website that tracks both Federal and Provincial accumulated debt numbers.

http://www.debtclock.ca/

 

Life is about choices.  We can choose to pay our way now or we can leave it for our children to pay.  You decide.

My father was a simple man.  I miss him.

My second cup is now empty…………………

 

Omar Khadr Settlement

The Federal Government made a financial settlement for Mr. Omar Khadr in July 2017.  The announcement came after Parliament recessed for the summer and as the Prime Minister was leaving for the G20 Summit.  So much for accountability to answer questions.

The major problem I have with a government settlement is that Canadians did not get to hear why Mr. Khadr felt he deserved a financial settlement or what the various arguments were.  Mr. Khadr’s case for compensation deserved to be heard in a Canadian court.  This is important for transparency of the claim and more so to ensure we get a judicial decision and not a political decision.  Let the court make a judicial decision and if a settlement was warranted then at least the Canadian people can debate the merits of all the arguments.  The Liberal government did not allow this to happen and choose instead to make a significant financial settlement to a convicted terrorist.

My personal opinion is I find it difficult to justify how this country can pay money to a terrorist.

Prime Minister Trudeau recognized that Mr. Khadr is a convicted murderer and a convicted terrorist.  You can find these comments online as well as Prime Minister Trudeau advising that Mr. Khadr needs his rights and freedoms protected as any other Canadian. I thought criminals had limitations put on their rights and freedoms?

You can also view a video online, referred to in a National Post article, where Mr. Khadr wss making improvised explosive devices (IED’s).  I have to wonder who the victims were when these IED’s were detonated? I wonder how their rights and freedoms were protected?

The other problem I have with this quiet, political decision is that it intentionally ignored a United States court judgment against Mr. Khadr assets by the widow of the US soldier who died from a grenade that Mr. Khadr admitted throwing. Another US soldier was disabled in this same attack and was also a party to the successful US court judgement.  Mr. Khadr gets 10.5 million dollars, tax free, and these victims get nothing.  Not quite the way I would treat our US neighbor and ally.

My second cup is now empty………………….

Sasktel – To Sell or Not To Sell?

SaskTel is a telecommunications corporation in Saskatchewan that is owned by the government.  It is typically called a “Crown Corporation”.
 The mere mention of Sasktel invokes considerable emotion these days and the political ideologies jump to the fore to justify either the sale of or the retention of the crown corporation assets.

At our house we use SaskTel services for cell phones, Internet and TV.  We recently dropped our telephone land line as it became outdated.  Does anyone under 30 have a land line anymore? Times are a changing.

Over the years, I have been involved in many business valuations and related business sale transactions or non-transactions. One thing that was common in determining business values was to try an remove the emotion from the decision.  To be fair the emotion related to SaskTel exists on all sides of the political spectrum and I do not see that going away anytime soon.

The purpose of valuing a business is to determine the underlying value of the tangible and intangible assets.  Tangible assets are the things you can touch, feel and smell, such as, land, buildings and equipment.  Intangible assets commonly relate to the goodwill of the business.  Goodwill can exist because of the business location, employees in the business, product line and proven profitability.

Fundamentally, a business has more overall value when it is profitable and a has a long history of profitability.  Keep in mind that a business is purchased based on the future ability to be profitable.  The past profitability is only used as an indicator of future profitability.  Current factors that affect future profitability are always considered in determining the overall asset value because it is the future profitability that will pay for the investment purchase.

I believe SaskTel is currently profitable and has a history of profitability.  It has also been on the leading edge of technology and Saskatchewan has received good value from SaskTel services.  These facts are probably not disputed by many Saskatchewan residents.  As with all business values, and the related decisions to purchase a business, it is the future expected profitability that is important in determining the overall value not the past profitability.

If SaskTel can maintain or enhance future profitability, then it makes sense to me to keep the crown corporation.  My concerns are that there are a number of considerations that will have a detrimental affect on future profitability and, therefore, will reduce the overall value of the SaskTel’s assets in the future.  In fact, one day the value could be seriously eroded in relation to the current value and it all has to do with profitability. A few questions in this regard.

  • How many people are reducing services by abandoning their telephone land lines?
  • How aggressive are other providers (Telus, Rogers, Shaw, ADT) trying to enter the Saskatchewan market?
  • How will SaskTel deal with global technology that continues to expand services and reduce service rates?
  • Given the pure competition, can a regional company like SaskTel continue to provide services at the same rates as the larger national and, eventually, international providers?
  • Can you think of any factors that exist that will enhance SaskTel’s profitability in the future and maintain the current asset value?

All of the above impact SaskTel’s future profitability and the related value of SaskTel’s assets.

I also have to wonder how many people who want to keep SaskTel as a crown corporation actually use the services of other providers like Telus, Rogers, Shaw and ADT?  If they are not supporting SaskTel services, then how can they argue for keeping SaskTel?  I take no issue with people making their own decisions in a competitive market; however, they can not have it both ways. They have effectively already made the decision to sell SaskTel by abandoning the SaskTel services.  Perhaps check with your friends and family to see what services they actually use.  You may find that the SaskTel market is shrinking or will shrink as a percentage of the overall Saskatchewan market

There has been talk that a referendum is necessary to decide whether or not SaskTel’s assets should be sold.  If this is done I expect we will be into a costly, emotional, political debate that can possibly lead to an uninformed decision.

Strong leadership, with the assistance of qualified professionals, is required to evaluate the business merits of selling or not selling the SaskTel assets. Given this process, I will be content with the decision either way!

My second cup is now empty……………….