Harmonized Means Putting on the Rubber Gloves

The British Columbia provincial government, soon to be followed by Ontario, will harmonize the GST with its provincial sales tax.

That means in BC, consumers will pay 7%PST, plus 5% GST on ALL purchases. That word ALL is important because, previously a number of purchases were exempt from either GST or PST.

Now everything will be subjected to the 12% tax. Some examples:

A new house lists for $400,000. GST of about 5% or $20,000 is applied, but there is an adjustment bringing the GST down to about $8,000. Previously there was no PST. Not any more! Now a combined GST and PST of 12% will apply. That is $48,000 before the GST credit!!

Last year you bought a used car from your neighbor for $10,000. You had to pay the 7% PST, but the sale of a car from a private owner to another was not considered a commercial transaction, so you didn't pay GST. Not any more! Now, you get to pay GST! But is the odd thing. Your neighbor bought the car 5 years for $20,000 from a dealer and paid $1,000 in GST. Since your neighbor is NOT the final consumer of the car, and has sold it to you for $10,000 then why does your neighbor not get the $1,000 he paid, returned as a GST input tax credit!!!

From my perspective the harmonized GST and PST will decimate the restaurant business here in BC. If an item on the menu reads $20.00, you will be paying near $30.00 by the time taxes and tip are included. A $6.50 drink actually sells for $10.00. There is simply, no value in eating out.

There are a number of professional fees that will now have to charge PST. Accounting, real estate etc.

Will taxpayers get some benefit from the additional taxation. Absolutely not. The new taxes will simply pay for improved pension plans, more sick days and fewer hours working for B.C. public servants. The harmonized tax is simply a way to use legislation to extort money from main street.

Would You Pay to Watch CTV?

CTV and Global Canwest are promoting the concept that cable and satellite subscribers should pay a mandatory fee to receive local television stations (read CTV and Global).

You can read more about this concept at: http://savelocal.ctv.ca/

CTV and Global are trying to make the cable and satellite subscribers appear to be the bad guy because they receive "free" signals from CTV and Global stations and then charge their own subscribers to receive the signal.

At first glance it seems the argument to save-local-tv makes some sense. But only if one assumes, the final user - the viewer - has the chance to accept the CTV/Global station and pay the fee, or decline the station and thus the fee. However, save-local-TV says that the subscriber must pay the fee, EVEN IF THEY NEVER TUNE IN TO THE CTV OR GLOBAL STATION.

CTV and especially Global have a business model predicated on one CRTC rule. That rule is that any show, originating from outside Canada on such networks as ABC, CBS or NBC, must have its commercials over-ridden with Canadian commercials even if the viewer is tuned to the American station. That business model failed with the advent of satellite TV. CTV and Global failed to produce any relevant programming except for local news, and even that is horrid outside of Toronto and sometimes Montreal. Now, with network viewing way down, the CTV and Global business model is failing.

The irony of the CTV argument is that the save-local-TV campaign is now necessary because of the success of the old CTV model which favoured repeats and streaming of US shows rather than production of valuable Canadian content.

CTV would have us think that unless they can get more of our money, they can't keep showing repeats all day long, and we won't get local news. In fact, in a typical one-hour CTV news program, nearly half the "news" is commercials, including the so-called entertainment and fashion news, which are simply commercials packaged up like news. In addition, far too much "local" programming is about events outside Canada which will likely NEVER impact on Canadians. Do Canadians really care about the Koreans setting off a nuclear test underground, a war in Sri Lanka, whales being beached in Africa, a fire in Tasmania etc. etc?

I have 59 TV channels available to me. I have only ever watched about 15 of them. Just 12 stations represent 100% of what now I watch. They are CBC & Newsworld, ABC, CBS, NBC, City-TV, The Weather Network, FOX-Seattle, TSN, CNN, SportsNet, ESPN, and ROB-TV. I know that CTV, Shaw, Global and Rogers do not want to read this but no-one watches the 500 channel universe. In fact, once a person has about 20 channel to select from, they no longer increase the hours they view TV.

This may surprise CTV and Global but I do not need to watch Friends, Seinfeld and the Simpsons, 10 times a day, 7 days a week. I could care less about Hindu TV, don't care about Parsi news, do not need to see local programming from Hull, Quebec, am not interested in the talking heads at Shaw proclaiming the need for or against needle exchange programs, etc. etc.

Let us pay for what we watch, but only for what we watch, not for what is made available.

GM Still Doesn't Get It

For decades, GM has held a rather bizarre business model. Deceive the customer and the shareholder, while pleading disability to various levels of government in order to qualify for incentives and interest free loans. And too many governments said "yes", not realizing their acquiescence simply delayed the inevitable death of GM and worse, took money away from valuable pursuits.

GM had gotten so dependent on hoodwinking governments that when it came to their own investor base, they figured they could hoodwink them as well. So yesterday, GM offered its bondholders the chance to swap debt for GM stock. It was a hollow and illusory offer, just like GM's "negotiations" for bailouts. The problem for GM is that the bondholders saw through it in 5 seconds and simply said "no". Here is why they turned down the offer.

Yesterday, GM's debt was worth about 10 cents for every $1.00 held. So GM came up with a plan to exchange $1.00 in debt for about 48 cents worth of shares. It was a sham. Within 5 minutes the investment community had calculated the true offer which was $1.00 in debt for 5 cents in shares. Since the debt was already worth 10 cents per share, why would anyone in their right mind agree to the exchange? The same question could have been asked to the government regarding the bailout. But here is the difference: the government is playing with other people's money, the investors are responsible for their own money. "No deal," said the investors, a foregone conclusion for everyone except GM management, the employees and the union LOL.

GM's death is just a few weeks away. The deadlines imposed by the financial markets are unlike the collective bargaining deadlines GM is used to. In collective bargaining, a deadline of Friday, midnight is imposed; bargaining occurs "round the clock" and out comes the midnight oil. The deadline passes with no settlement in site, so the deadline is simply reset, a new supply of midnight oil comes out and the bargaining continues. GM is now up against a financial markets deadline. In June, GM will run out of cash. GM has no access to money. So GM will stop paying its employees, and stop paying everything else. Midnight oil does not grease the wheels of the financial markets.

Embrace Change - Don't Grab Hold of the Temporary

This post is about change in the business world, but it also about life and death. The collapse of a business is similar to transition in life and the need to accept that sometimes things and people pass on. We can find solace in the passing, take a break and then prepare for something new. Bad news is something that stops us for a while, but we eventually recover and move on. Hope, where the outcome is inevitable, is paralyzing. It prevents us from going forward.



The North American auto industry is taking its last gasps of breath. The reasons are legion and there is no reason to repeat them. Whatever life that is left is temporary and is a massive drain on resources that could be best to use elsewhere. There is hope, but the result is inevitable.



There are two ways to approach the death of the auto industry. One is to extend it a lifeline, in the form of billion dollar bailouts. That will work, just like putting a terminally ill 95-year-old cancer patient on life-support will work. There is always hope right! But it is temporary. Death is inevitable. The money should be spent elsewhere.



The Canadian government is spending $6 billion to bail out GM which now, as it turns out, produces only 15% of its cars in Canada. GM employees about 12,000 people in Canada.



The bailout works out to $500,000 per employee!!



As an alternative, perhaps every employee could get 3 years re-training paid for by the government (paid for with a loan), plus the first 2 years of the re-training, employees would be paid $50,000 each. That works out to $1.2 billion, a fraction of the bailout, which will be temporary and will be followed by the death of GM within a year anyway. In addition, $3.8 billion would be saved which could then be used elsewhere.

Everything in life is temporary. Eventually everything ends. Holding on to the temporary because of hope is not the right way to go. Faith in yourself to move on is the best approach.

Roads are Not for Parking Nor Pedistrians

The City of Toronto is considering restricting traffic on one of its most important north-south roads, Jarvis Street, to make more room for cyclists and pedestrians.

The project, which is estimated at $6.5 million and will take a year to complete (as we well know, it will cost $19 million and take 4 years), is clothed in irony. You see, the additional space on Jarvis already exists. It is filled with parked vehicles, cars making left hand turns where no left hand turn lane exists and double parked delivery vehicles. The pedestrian space also exists. It is called a sidewalk, but admittedly it is difficult to navigate, full as it is of sign boards, parking meters and gigantic recycling bins.

So it should be obvious that, to solve the problem, just get rid of the parked vehicles and prohibit left hand turns and then we have the space for cyclists. And remove the signboards and the parking meters and we have room for the pedestrians. It will cost $300 and take one day.

However, there is another agenda at play. If there is no parking, then there are no parking meters and no parking tolls for the city. There are also no parking tickets. That means fewer people working for the Toronto Parking Authority and fewer meter readers. If there are no signboards, then there are fewer people working for the city department that regulates such things. If there is no grand project to rework the street, the politicians have nothing to hang their hat on at election time. The planners have nothing to plan.

Roads are for the movement of vehicles including bicycles, not for storing same. Sidewalks, by their very name, run beside roads and are used for walking. Seems so simple doesn't it.

New and Used Available for Sale

I understand that a number of new and used Ak 47 assault rifles as per the above image are now available for sale.

These rifles apparently will make excellent tools for the UAW as they attempt to "negotiate" pension plan protection from the Ontario government. Former US post office employees might have an interest.

These items are being re-possessed by a number of "lenders" from the Tamil Tigers. Just climb the Toronto Gardiner expressway later in the week and look for the red flags. Cash, gold or diamonds can be used to pay the bill.

Do Motorists Really Drive Poorly?

The Toronto Star ran an article today that suggests that people are morons on the road http://www.thestar.com/news/insight/article/635489

It isn't that people are poor drivers. Its that the driving process, the way it is presently conducted, is designed to create misfortune and poor driving.

Simply put, people get the keys to a powerful tool - the car, and from that second going forward, society creates as many obstacles as possible for the tool to function as it is designed.

First, we have a test to use the tool. Its a test which ignores 90% of the capabilities of the tool or the environment the tool will be used and that is by intent. For instance, driving tests are always conducted during the day, despite that 40% of driving is done at night. Driving tests do not include children in the back seat, nor loud passengers. Driving tests are not done on ice or snow. Driving tests do not test the capability to install a child seat. I could go on.

Second, for most drivers their objective is to get from point A to point B. Once they are buckled into their car, and the music is right and the mirrors are right, they will shift into drive. Fine. Now, what is likely the first thing they will do after they have accelerated. That's right. They will brake. And the second thing they will do is come to a stop. I cannot think of ANY other tool that humans use, for which the default setting after turning it on is for the human using it to place it into a complete stop. That type of process is called conflict.

Third, once the car is in motion, the driver will be overwhelmed with information, almost all of it road signage that has nothing to do with driving the car forward as per its intended use! Think about it: you drive the car down the road and this is what you see:

Click on the above image and make it bigger and you will see the conflict associated with all these signs. These are all real road signs and virtually none of them actually pertain to driving a car forward to its destination! Imagine how well a plane could be flown if the pilot has deal with so many messages from OUTSIDE the plane. These signs do not include traffic lights which themselves often have a plethora of signs affixed to them.

As for traffic lights, what does a flashing green light mean? In Ontario it means an advanced left turn, in Mexico it means the light is about to turn amber, and in British Columbia it means that traffic could pull out from either the left or right side at any time. For heaven's sakes, there are only 3 colours of lights. Couldn't we agree on the same meaning for them on the same continent after 100 years of driving!

And we haven't even covered all the advertising and other sorts of commercial messages bombarding our driver from outside the car, as well as inside the car.

Lets assume our driver has managed to get the car going, accelerate and is ignoring the signs. What comes next? Ahh...our driver gets to dodge cyclists using the road, and pedestrians that walk off the sidewalk without looking. Even wild animals usually know better than to walk or run in front of a train. But apparently humans don't know this rule.

Well what might our driver face next? How about the public utility truck, parked dead-smack in the middle of the road, installing cable to bring the 500 channel universe to our homes. Or a beer truck unloading. Or a Shred-It truck......shredding, or the Canada Post picking up the mail. Would Roger Bannister have broken the 4 minute mile if, on his last lap, he had to run through a javelin pitch?

OK, so our driver is finally on the way. He seems to have overcome the obstacles. As he is driving along at 80km/hr he realizes that there is just one thing worrisome. Other drivers are doing exactly the same thing he is, but in the opposite direction, closer to him than the glove compartment of his own car. He is always 1 second from death.

Given the driving environment, I would say drivers are, for the most part, nearly divine :-)