Monday Morning Links

Miscellaneous material for your Monday reading.

- Simon Enoch nicely challenges the City of Regina's blind faith in "risk transfer" by pointing out how that concept has typically been applied elsewhere:

So what price should we put on such a risk transfer? This is where things can get dicey. How risks are monetized can be notoriously subjective, with empirical evidence rarely provided to "substantiate the risk allocations, making it difficult to assess their accuracy and validity." The recent revelations from the Ontario Auditor-General's report into the Brampton P3 hospital certainly supports this assessment, noting that "the "value for money" assessment was overestimated by $634 million, while the cost of construction using the P3 model nearly doubled. The value of "risk transfer," the estimate of what it will cost the consortium to deliver the project on time, was also overestimated by a wide margin, according to McCarter. Proponents of P3s say risk transfer is one of the major benefits of this funding model."

In an absolutely damning study of risk transfer for P3s -- called private finance initiatives or PFI's -- in healthcare in the United Kingdom, Jean Shaoul and Allyson Pollock and Neil Vickers argue in the British Medical Journal that "risk transfer" is more an accounting trick designed to make the P3 model more attractive:

"What is striking, however, is that in all cases risk transfer almost equals the amount required to bridge the gap between the public sector comparator and the PFI. This suggests that the function of risk transfer is to disguise the true costs of PFI and to close the difference between private finance and the much lower costs of conventional public procurement and private finance."

- Meanwhile, Erin Weir points out that the City could easily apply for federal funding that isn't contingent on P3 projects - that is, if it wasn't itself determined to keep the rents flowing to our corporate overlords.

- And SOS Crowns discusses the Wall government's continued stealth dismantling of Saskatchewan's Crown sector.

- Carol Goar is starting to catch on to a point long made by Weir and others: that the "skills shortage" used as an excuse to important cheap, temporary labour is more fiction than fact:

Don Drummond, one of the smartest economists in the country, is dubious. He hasn’t found a shred of credible evidence that Canada has a serious mismatch between skills and jobs. In fact, most economic indicators point in the opposite direction.

- Statistics Canada’s latest survey of job vacancies showed there were 6.3 unemployed people for every job vacancy. That doesn’t suggest a shortage of skills. It suggests an oversupply of workers.
- There are no wage spikes in the skilled trades, information technology or scientific, professional and technical services. If Canada had skill shortages, employers would be paying a premium for workers in those fields.
- Ottawa does not have the ability to forecast labour needs accurately. Its methods are flawed, its projections unreliable, Drummond says. He is in a position to know. He spent 23 years in the federal finance department and 10 years as chief economist for the TD Bank.

The only proof he could find of a misalignment between the skills of Canadians and the needs of employers was a chart on page 62 of the 2013 federal budget. It showed that 4 per cent of available jobs were unfilled. That worked out to roughly 600,000 positions; a far cry from what StatsCan was reporting.

Puzzled by this discrepancy, Drummond asked finance department officials how they came up with the figure. (The attribution under the chart said “finance department calculations” using data from Statistics Canada and WANTED Analytics, a headhunting firm). They refused to provide further information, saying it was “confidential.” With no way to corroborate or verify Ottawa’s number, he discounted it.

At this point, he considers it a strong possibility that Ottawa’s heavily promoted Canada Job Grant — the centerpiece of its economic plan — is built on a false assumption.

- Finally, Danielle Celermajer and Madeleine Finn lament the lack of discussion of poverty and inequality in Australia's ongoing election campaign.