Sunday, March 11, 2007

Structurally unsound

Greg Weston discusses both the severe potential downsides of the Cons' fire sale of federal buildings, and the lack of any reason to believe the Cons have done anything to try to avoid the dangers:
Stephen Harper's government is offering to sell the Hays Building and eight other federal office towers in prime urban locations across the country -- and promptly lease them back for 25 more years of glorious public service.

The scheme could turn out to be a sweetheart deal for taxpayers, putting a wad of cash in the public purse, and a bunch of decaying buildings in the hands of more efficient private-sector property management.

Or it could be one of the most imprudent money-sucking shell-games ever attempted by a federal administration, providing the treasury with short-term capital gain for 25 years of punishing fiscal pain.

The deal, of course, is in the details, and the Harper government of openness and accountability is once again diligently offering Canadians none of the above...

Government insiders say noses have been turning up every time Fortier's planned fire-sale of federal assets is raised.

As one source told us: "Public works was asked if taxpayers were going to make money or get soaked, and all they could say was, 'We could either make a bundle or lose a bundle.' There is no apparent business plan for something that could involve billions of dollars."
Weston notes as well that some of the Auditor General's concerns surrounding Public Works already involve damaging choices to lease rather than purchase property. Which means that the problems with such a scheme are not only readily foreseeable, but already observed in previous leases. Which would surely offer a rather strong reason to thoroughly analyze exactly the kind of business plan which the Cons may not have even bothered to put together, and certainly wouldn't bother subjecting to scrutiny if they had.

Meanwhile, the alleged benefit of putting responsibility in the hands of third parties is almost certain to be illusory. Not only does that step involve adding in a profit margin for a private operator, but it also ensures that the federal government will need to maintain at least a significant portion of its current expertise in building management simply to make sure that any building operator meets the terms of the lease agreement. Which means that the end result is likely to be nothing more than even more cost and duplication of effort.

For the Cons, none of these concerns are apparently seen as even worth answering - though of course given their track record of fabrications, there's little reason to think that any answer would be honest in any event. Which should offer another reason for the opposition parties to take a wrecking ball to Harper's government before it's too late.

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