Martin-Pierre Frenette

• What I think of business subsidies

  09.02.2012,Politics,Martin-Pierre Frenette,

  Every day in the Journal de Montreal under "Où vont vos impôts " we see government subsidies to Quebec private companies which exasperates me at the highest point. I have an alternative idea to create jobs without harming free enterprise.

  Free enterprise

  Indeed we live in a capitalist society where companies, at the very least, live and die according to the free market law.

  Subsidizing a business is always at the expense of its competitors and taxpayers while leaving an impression of political favoritism: why this company and not its competitor?

  Government loans

  I can always understand a small loan by the government to avoid closing a business, provided that the government really expects to eventually be paid back and charges appropriate interests. In this case the government replaces the banking institutions.

  We're talking about a loan, for example, to help rebuild a factory plagued by fire or for a company to pay its employees after being defrauded. It would a last resort to save quality jobs.

  But subsidies are helping to create jobs, right?

  Month after month, we learn that companies are closing and leaving and despite having promised a minimum number of jobs in Québec to receive a subsidy.

  Day after day we see subsidies of several hundred thousand dollars for creating a handful of jobs paying only a small percentage of taxes to the government for the money invested.

  My proposal

  It seems to me that there is a simple solution: subsidies on increase of the payroll.

  When a company reports its deductions to the federal source, it indicates the number of employees covered by the declaration. The provincial government would use this number to see if the number of employees increased and store the historical maximum number of employees employed by each company (although after a few years, we can adjust to not penalize our old businesses ).

  Whenever the historical maximum number of employees increases for a firm, the firm will receive automatic partial credit (or full) for contributions for new employees for a fixed period (eg 3 months).

  If my company has never had more than 10 employees when I hired two new ones, I get the subsidy on the deductions for these two employees, but my new historical maximum is raised to 12. Even if I fire them and then hire more employees, I will not touch this grant again my number of employed will be 13 or greater.

  The advantages of this solution are:

  • The grant is universal, all the companies receive it and therefore there is no favoritism to one company
  • As the grant is universal, there is no apparent conflict of interest
  • Since the subsidy is automatic, there are no forms to fill out, no officials to supervise, no new office to evaluate applications
  • As the grant is divided over several months, it encourages companies to keep their new employees to receive the subsidy.
  • Since the subsidy is on the ceiling of the historic number of employees, it encourages companies to retain employees beyond the grant period
  • The government does not pay any funds out its pockets and only briefly reduce the money it collects 

   

   

• Ma reaction to the demands of the CPE Union

  08.02.2012,Politics,Martin-Pierre Frenette,

  The CPE educators demand wage increases of 11.25% over three years, six weeks vacation and 10 personal holidays in a time when non-union employees face wage freezes and have only the bare minimum regarding holidays.

  I have several problems with these applications:

  • By funding the CPE, the government reduced the perceived value of the profession of child care educator
  • Requests for public unions unbalances the labor market by reducing the value of non-union jobs

  I'll address both individually:

  The value of child educator services

  When my daughter was of preschool age, there was no place in a CPE and we found an excellent private daycare at a cost of $ 25 per day, meals not included.

  There were 18 children to 3 educators. Revenues were therefore $ 450 per day or approximately $ 112.500 per year.

  Let's assume for a moment that the rent and administration costs are $ 12.500 per year, that leaves $ 100,000 for the employees(which were co-owners of the daycare) or $ 33.333.

  As they couldn't increase the number of children, the only option for salary increases would be to increase fees to the parents.

  This daycare had a lot for it: stability in employees because they were co-owners, interesting and unique educational program, warmth and tenderness on the part of employees, customers stability and commitment of the parents usually self-employed who offered products or services to make the days more enjoyable. My daughter was able to bond on these three employees rather than change educator every year.

  In a normal society, they could index the cost of child care to inflation or more but there is a problem: by subsidizing the CPE, the government reduced the perceived value of a day in CPE to only $ 5 ( now $ 7).

  The private preschool my daughter attended billed therefore $ 20 (or $ 18 dollars) more than in a CPE or 4 times (or 3.5 times) the rate of a CPE. Who would pay such an exaggerated amount for a service so cheap in CPE?

  Yet in reality the CPE cost more than $ 40 per day, but parents are not aware. Worse, by forcing a fixed fee from the parents rather than a fixed subsidy from the government, it makes sure to be the big bad wolf at every collective agreement negotiations.

  If parents assumed salary increases from their own contribution, I'm not sure that the union would dare to demand the same knowing that they would have it's customers against them.

  For years, I have to admit that educators in child care were not valued by society and that they now want to be paid for the important role they play is that of parents alternates. However, it is not by charging only $7 per day that the CPE will be seen in the minds of parents as fulfilling a crucial role.

  Imbalance of the labor market

  We live in a world where all jobs have the same value. The more a job requires special unique skills and the more, in theory, this job should be well paid.

  A programmer who specializes in a particular discipline may request more money in this discipline. A commissioned salesperson who improves his sales techniques will get him higher commissions. A reporter who produces quality articles in demand can negotiate a better salary.

  Tt is the logic of our society. The unique talents make more money under the laws of supply and demand.

  But by setting high uniforme salaries for popular professions, government unions reduce the impact of wages of non-unionized employees.

  How? By artificially increasing the number of people in the same salary bracket as the top specialists in the private domain.

  This means more people who want homes at a price higher than the average, more requests for the same cars, more demand for the same consumer goods. 

  Normally, I would fully support such an increase in collective wealth but the problem is that this wealth is not created, it is taxed: wages are paid out of taxes by all Quebec employees.

  If, to pay an increase of 11.25% of state employees must raise taxes by 1%, this means that all private sector employees have just had a reduction in their salary to pay an increase to a handful of employees of the state.

  The three teachers of the child care that my daughter has attended have years of experience but will never have the right to an increase or such working conditions even though they do the same job as their colleagues in a CPE.

  Unions talk about the difficulty of working in a childcare center but let's be honest, this is not the only tough job to do. I think that in a period of massive government debt that it should reduces its contribution in the CPE and let the parents pay for increase demands from the educators to parents. 

• My problem on how the Québec government collects sales tax

  07.02.2012,Politics,Martin-Pierre Frenette,

  In her book, "pour en finir avec le gouvernemaman" Joanne Marcotte denounced among other things government regulations that affect the profitability of companies by making them less competitive.

  There is a regulation which, as a business leader personally annoys me: the method of collecting sales taxes in Quebec.

  For each product and service sold in Quebec, the federal GST and provincial PST are added to the price and the company providing the product or service collects these taxes on behalf of the Government. 

  Quarterly (for SMEs) or monthly (for larger companies),  compagnies must file a tax collection report and return to Quebec government taxes charged. A company can deduct from this amount the taxes it has paid for itself.

  Have you seen the error in the previous paragraph? No?

  The error is the word "charged". Companies do not have to remit the taxes collected but the taxes charged.

  In a restaurant, bills are paid within minutes of charging, but in a development and hosting firm sometimes a bad debt is spread over several months or even years.

  If my company issues an invoice in one tax quarter that is paid only in the next quarter (or later), I must submit to government taxes that I still have not received.

  If I do not have the money, I must borrow to pay the payment to the government because a delay of just a single day in remitting taxes adds penalties of 15% or more.

  But the worst part is that the government itself is typically 90 days or longer to pay its bills. As they sometimes refuse to pay contracts in multi-phase steps, it can severely indebted company.

  Imagine that the Quebec government agrees to contract my company is an intensive one year full-time contract for an amount of say $ 500,000, allowing me to hire new employees and to grow my business

  Logically, it would be an economic boom providing a commercial success. But in fact, receive such a contract would close my business.

  First, the government would most likely not pay monthly bills, preferring to pay the $ 500,000 once the contract ends, forcing me to borrow to pay my employees, but when I do issue the final bill, I will be forced into bankruptcy .

  To a bill of $ 500,000, there must be added about $ 75,000 in taxes that I will remit to the government (under threat of penalty) before the latter has paid the $ 575,000 in question, 90 days after issuance of invoice After borrowing to pay my new employees for a year, where will I find the additional $ 75,000?

  "Charge them interest" calls my accountant every time, but in both government contracts that I realized, a clause prevented me from charging interest for late payment.

  Moreover, if a client promises to pay a bill but never does, I will have given the government the taxes charged while the bill has never been paid. I can recover taxes upon cancellation of the debt, but will not receive any interest.

  Yet there is a simple solution: simply ask companies to provide the government the taxes collected and not the charges billed. 

• How the government should spend money

  06.02.2012,Politics,Martin-Pierre Frenette,

  The government has a habit of dumping its deficits on a debt it never pays, therefore leaving to future generations the need to pay for services and goods that will have since broken down or stopped.

  In theory, this was supported by the constant growth hypothesis which stipulates that growth will make any current deficit negligible.

  We now know that constant growth is a myth and the current generation is possible the first generation in centuries to inherit a world in worse shape than their parents inherited and the massive debts of the world governments prevent any improvements.

  So, how can the government finance its programs and project in an equitable way? I am not an economist but I see only three ways which reasonable.

  Paying cash

  In short, all current programs should be paid by the current revenues of the government. Subsidized daycare for example, should be funded by the current taxes, because they are currently operating.

  The same can be said for day to day healthcare operation, road repairs, the justice system, the police department and any other services pay for by the government which have a recurring fee.

  All these services should never incur a deficit otherwise, it will be a never ending loop of debt: a simple 10$ deficit shoveled on the next year will mean at least 20$ after two years and will only spiral into debt.

  A rare occurrence such as expenses caused by a major natural disaster could be amortized over two or three years because in theory, such major expenses should only occur every few years.

  Amortized payments

  When the government wants to pay for something with a high purchasing or construction cost and a long expected life, it would be authorised to borrow money to pay for the construction.

  For example, let’s say the government wants to build or rebuild a bridge at the cost of 800 million dollars. If the interest rate is zero (to keep the example clearer) and the bridge is expected to last 40 years, the government would pay out of its budget 20 million dollars each year to repay the debt on the bridge.

  If the immobilization budget of the ministry of transport is 200 million dollars per year, it could built ten of such bridges without any problems, but past that, one of the bridges will need to have been paid or the budget would need to be raised.

  Any years where the budget isn’t spent will have its remaining budget used to pay in advance the project(s) which seem to age the worst.

  If a bridge was expected to last 40 years but after 20 years already is requiring more repairs than necessary, it will be the focus for early repayment.

  Under this system, when a bridge is due for replacement, additional funds became magically available since the previous bridge built 40 years earlier, receive its last payment.

  I know it’s terribly naïve as a proposition, but I believe it is much saner than simply borrowing money in the general fund and letting future generations pay for the bridge (and its replacement) years after it is torn down.

  Generational funds

  In some cases, certain services are funded by the general population for future use, such as a retirement fund.

  Under the current system, the current generation pays for the next with no guarantee there will still be enough money for them.

  Worse, there is no guarantee that the paying generations will be of the predicted size: sickness, war and quick changes in the birth rate can reduce the size of the next generation causing problems and generational injustice.

  To solve the problem, I propose to create generational funds which will group citizens by decades and use their contributions to fund their own future retirement.

  To reduce risk, each citizen would actually contribute to two funds, not just one. Being born in 1976, I would contributed to the 1970s fund and to the 1975-1984 fund, each contributing to my eventual retirement plan.

  All of the funds would be managed by a central agency but counted separately.

  If my two funds allow me to have my retirement at 65, that’s when my generation would be able to retire. If our fund only allows us a retirement at 68, then so be it.

  But it will be our fault. It will be because we didn’t contribute enough to our own fund, not because our parents emptied the government’s reserves when they retired at 60.

  If, collectively, we decide to raise the contribution on our funds, we will be the one paying for it and the one benefitting for it.

  When a generation dies and there is a surplus, the funds are deposited in the following generations but no other additional funds will be deposited into so that payments will need to be adjusted accordingly to ensure the funds do not get empty.

• Fixing the healthcare system in Québec

  13.12.2011,Politics,Martin-Pierre Frenette,

  After years of denial, the Québec health minister finally admitted that there isn't a shortage of doctors in Québec and that the health care problems are administrative in nature.

  I believe there are relatively easy ways to fix the health care system, and I hope one day someone will listen to my ideas.

  Here are they, in no particular order:

  • Doctors in private clinics have multiple billing limits: per week, per month and per trimester. All of the weekly limits reset on Thursday mornings, creating an artificial shortage of doctors on Wednesdays. The expiration should be spread along the week, along the month and along the year in the same way our license plates expire on different months of the year.
  • Doctors in private clinics should be allowed to work occasional shifts in hospitals, giving them a salary for their work which doesn't count toward any limits.
  • Areas without any hospitals should have at least one big clinic designated as a primary emergency healthcare facility for which no limits on acts would be imposed on doctors such as is the case right now for hospitals.
  • Instead of only building massively big hospitals, the government should build "emergency" hospitals which are small hospitals consisting of only an emergency room, a small trauma ward, an x-ray lab and perhaps a maternity wing. The idea isn't to create a full hospital with multiple floors to house long-term patients, just a small emergency room where patients in cardiac arrest, car accidents or even just any condition too severe for a clinic might go without driving too far. But the kicker would be that those hospital would be financed like clinics and not like hospitals: they wouldn't have a yearly budget but instead, would finance themselves on the acts performed.
  • Next to each and every hospital, build an hospital run clinic (like at the Maisonneuve hospital) with a unified front desk determining if a patient should be seen at the hospital (priority 1 to 3) or the clinic (priority 4). This would free hospitals from patients who shouldn't even be in the hospital in the first place.
  • Create a new position in hospitals to follow up on clinic diagnostics. If you go to a clinic and the doctor diagnoses you but needs the resources of the hospital (such as to make a cast), you currently have to get a new diagnostic from the hospital, wasting time and resources.
  • Create first level treatment positions which would allow nurses with special training to begin treatment of certain common problems. A urinary tract infection usually requires a simple pee cup test with a test strip. If performed by a nurse early during the waiting period, the patient might elect to go home if negative instead of wasting hours in the waiting room.
  • Split the waiting rooms in two independent areas: one for sickness and one of injuries. A person with a broken elbow isn't contagious, for example.
  • When possible, create two lines of treatment: one of fast responses and one for slower ones. Many conditions require only a one or two minute consultation and allow to fast track many patients. This wouldn't be a full time position: if a hospital has 2 doctors on staff, they could each fast track quick patients 15 minutes per hour

   

   

• My thoughts on the Death Penalty

  08.04.2010,Philosophy, Politics,Martin-Pierre Frenette,

  Most Canadians are either opposed to the death penalty or in favor of it in case of serious crimes like serial killers or pedophiles.

  Personally, I do not think any crime during peace time is serious enough deserves the death penalty as a sentence. Sure, in case of a horrible crimes I do think that a life sentence in jail with no possibility of release is appropriate.

  Still, I am opposed to the use of the death penalty on civilians, if only because of the chance of error.

  However, there are distinct cases in which I am in favor of the death penalty. Let me first enumerate them:

  1. I believe the death penalty should be the default sentence applied when the crime was committed while the criminal was protected from prosecution
  2. I believe the death penalty can be applied when the criminal had a significant legal control over his or her victim
  3. I believe the death penalty can be applied when prisoner already condemned to a significant sentence commits further crimes and is judged impossible to detain

  Let me review with you the 3 cases.

  The legal immunity clause (the first one) is there for diplomats, politicians, police officers, judges, army officers or other special professions which enjoy significant protection from the law.

  If the protection from the law is used to commit a crime, I believe the death penalty should automatically be applied.

  Let me explain my reasoning. If, as a civilian, I take a gun and shoot my neighbor, I will be arrested and prosecuted. If found guilty, I will probably be sentenced (in Canada), to life in jail with no possibility of parole before 25 years.

  If, instead of being a civilian, I am a police officer and I use my position to justify that the shooting was performed in the line of duty or if I use my position as a diplomat to invoke diplomatic immunity, then I am using a protection the law offers me to perform my official duty in order to justify a crime committed for personal reasons.

  To me, that deserves the death penalty because you have shown that the law agreed to trust you with an extraordinary power no civilian has, and you abused that power.

  Of course, that doesn't mean that if you are immune from prosecution you automatically get the death penalty for any crimes committed, only that you get the death penalty if you try to use that immunity to cover up a crime which had nothing to do with that immunity.

  If a police officer, in his line of duty, make an error and kills and innocent man he thought was about to shoot an innocent victim, the current law stands. But if a police officers used his badge to rob a bank and tries to resist arrest by using the protection police officers normally get, I think only the death penalty is a proper sentence.

  The second case is a little more complex to explain, so I'll just give examples. In Québec, if a person is ruled by a judge to be incapable of legally taking care of themselves, the judge may place that person under a "curatelle", which means that another person is responsible for that person and can make legal decisions for him, regardless of his wishes.

  The same would be said to a person operating a orphanage and who receives legal custody of the kids, while operating funds from the government for them.

  If the legal custodian abused the person using that legal link, then I think the death penalty should be in the list of potential sentences because the criminal, in this case, abused the legal authority which was entrusted to them to take care of that person.

  Please note that the only case this applies is when the law applied a specific authority over a specific person. Teachers, doctors or sport coaches do not fit in this category because they don't have full and complete authority over their students/patient/team members. Parents are also excluded

  For the third case, I doubt there are many people already within this category, but if a prisoner is constantly killing or attacking other prisoner and guards despite multiple attempts to regulate his behavior, then perhaps it is time to use the death penalty as a last resort.

  I think that what keeps partially in check potential criminal is the fear of prosecution and prison. If the criminal is already in jail and continues to commit crimes, perhaps the only solution is to invoke the death penalty.

  You will notice that a civilian would be in no cases subject to the death penalty. Under my rules, if I was framed for any crime, the death penalty couldn't possibly apply because :

   

  1. I have no special immunity from the law to invoke
  2. I do not have anyone who was specifically entrusted to me by the law
  3. I am not already in jail

  This would give me time to possibly find proofs of my innocence and regain my freedom.

   

   

• So, I watched Sicko yesterday...

  28.05.2008,Politics, TV/Movies,Martin-Pierre Frenette,

  Aside from all of the comments I could make on the different health care systems (or lack thereof), one thing struck me when the comparison between the French social system and the US (absent) social system.
  
  One of the ladies mentioned that in France, the government is afraid of the people, while in America, the people are afraid of the government.According to that theory, that’s the main reason the French government takes better care of its citizens than in the USA.
  
  I don’t necessarily agree, since the Canadian federal and provincial governments aren’t particularly afraid of its citizens.
  
  But there is definitely a pattern, in my opinion, and that’s the structure of the electorate. In the USA, the same two parties have been dominating the elections for decades, alternating frequently.
  
  Having been close to politicians, I can tell you most are relieved to work occasionally in the official opposition, since it moves the focus of the population away from them while the party in power is free to stumble and pave the way to a return to power.
  
  Therefore, neither the Democrat nor the Republic have to fear staying out of power for more than eight to twelve years, and in most cases, they don’t even have to campaign to improve the lives of their constituents since the elections are generally either on “lets re-elect the current guys” or “lets get rid of the current guys” themes, and not so much on party platforms.
  
  In France, the proportional system is doomed to force parties to listen to their constituents, since most of the governments are bound to be either minority governments, coalition governments or rare majority governments you won’t be able to re-elect because of political entropy.
  
  In Canada, we have a system similar to the USA, but since our prime-minister is elected by our house of commons, the focus in elections is on the House of Commons, not on the presidential race like in the USA. Furthermore, campaign contributions are not only very restrained, but at the same time, parties get funding from election Canada in proportion to the vote they get (50 cents per year per vote) so small parties are able to exist.
  
  In my opinion, the system the USA has pretty much guarantees a docile population since even if it elects a congress in opposition of the senate and/or the president, the bickering will simply either discourage the general population or cause a blame wars between the two parties which will further confuse the issues.
  
  And since corporations can finance the candidates, the elections are mostly a war of visibility and not a war of ideas. This suits the lobbies perfectly, since it allows “buying” a candidate by spending a lot of money on his election/re-election
  
  In the end, the politicians in the USA seem to only care about them, their lobbyist and the other party, but never about the voters.
  
  Since corporations are not pushing for a more social USA; that leaves the Americans without universal health care…