Government in competition with the private sector

From Crown corporations setting up in-house ad agencies, to marketing boards stifling enterprise, to government-appointed committees and officials elbowing private sector charitable boards out of the way, big government has been in competition with its funders, the taxpayer. It’s time for a change and to let the world know that Manitoba is open to opportunity.

Dorothy Dobbie Issues in the News
Dorothy Dobbie
Issues in the News

It has been a busy 100-and-something days for the new Tory regime, which has been swiftly changing the way local government does business in this province. Changes cannot happen quickly enough. If we are to salvage what is left of our spirit of enterprise, we need government to get out of the way and to stop competing with local business.

We want to grow the economy; that means allowing enterprising firms and individuals to do what they do best – compete, but on a level playing field.

Here are just a few areas where government meddling is causing or has caused havoc for private enterprise.

Concert Hall in competition with the performing arts

A number of years ago, the Winnipeg Symphony Orchestra was removed from the Concert Hall for several weeks at the start of its season to accommodate the Phantom of the Opera which had been brought in by the Concert Hall management. This was the same year that a change in the legislation governing the Concert Hall came into effect. The changes mandated the Manitoba Centennial Corporation (MCC) to compete with its tenant performing arts groups as a way to bolster the Hall’s revenues.

This move led directly to a devastating loss of audience and a subsequent $750,000 deficit that year for the WSO, which never recovered that season from its displacement and struggled for the next four years to pay off that debt while still balancing its budget.

This competition with a government funded corporation has led to several displacements and difficulties over the intervening years, although none so devastating as that first year, but it appears that the conflicts are again on the horizon as the Concert Hall gears up for more revenue generation activity. As a result, the WSO has been asked to adjust its schedule to accommodate them on several occasions.

On the surface, making the Concert Hall revenue-generating may sound like a sensible plan, but when revenues drop for the WSO, the ballet or the opera, the three main users of the Hall, the government is generally left picking up the tab. There is no net gain, only a lot of pain when government competes with local business, be they the arts or some other enterprise.

As for the Hall, it may be able to operate commercially without harming the private sector arts business, but the sensible plan would be to have one of the arts groups, logically the WSO, its principle tenant, manage the Concert Hall operations, fitting outside acts into the schedule of the key tenants rather than the other way around.

The MCC is essentially a property management organization (it owns the Manitoba Museum, the Manitoba Theatre Centre and several other properties), not an impresario. The way things work right now, it’s a bit like having your landlord manage a business that competes with yours. He hasn’t the technical experience to do it right and he is putting his tenant at risk.

And remember that the board and the chair are appointed and paid by government, so motivations are political and administration costly. Currently, the WSO has to rent office space outside the Hall because the prime space, originally built for the WSO, is now taken up by the administration of the Manitoba Centennial Corporation.

Crown corporations that run their in-house advertising agencies

A local advertising agency informs me that he has had no business from a certain crown agency for the last three years, even though his firm launched a very successful, award-winning campaign the last time he did business with the group. I won’t name the firm because I don’t want to put my friend at risk of suffering the wrath of this powerful crown organization.

The Crown agency has a fully-fledged media operation under its wing, so that dollars that would be spent in the community supporting other local businesses are now spent on supporting a very large internal staff with no particular experience in media placement or strategy. Meanwhile, dollars that should be spent on getting the word out (the key part of this Crown agency’s mandate) are spent on supporting the internal system – and, I might add, not doing this effectively, let alone efficiently.

This vastly undermines local business, sending a message that influences large private enterprises to go outside for its advertising support – after all, if all powerful government has no confidence in you, why should they? Local firms are shrinking as a result.

Government in competition with private sector not-for-profits

Many of you will remember the big kerfuffle when the NDP government got into bed with the Red River Exhibition and tried to take over Assiniboia Downs from the Jockey Club. The Club fought back and kept its autonomy, but others in the not-for-profit sector were not so lucky. The Osborne House Women’s Shelter was taken over by the NDP government, which declared war on it, seized its funds and shut it down.

While the funds were later returned, the organization has not yet been able to reopen although it runs a telephone service for battered women. The government then re-opened the house with a new name, Willow Place, and appointed a “community board” of loyalists.

These are just two examples of where the previous government bullied private non-profits. It is going to take diligence and vigilance to reverse some of these arbitrary actions that have so impacted the private sector charitable community here in Winnipeg.

Getting the government out of the fishing, vegetable, food supply industry

Recently the Pallister government announced that it would withdraw participation in the Freshwater Fish Marketing agreement to allow fishermen the choice to market through the FFM or to sell their own harvest.

Their next step should be the same liberation of vegetable growers from the tyranny of Peak of the Market. There is nothing wrong with allowing farmers to control their own marketing efforts. If Joe Smith can raise the best potatoes at the best price and sell them to the local supermarket, more power to him and better food for the rest of us.

But veggie production isn’t the only commodity our government controls. Take a look at the long list of other marketing regulatory bodies, called producer boards, in the province. (Interestingly, the Manitoba Farm Products Marketing Council, which oversees the various commodity boards, has no website.) The list includes dairy, beef, chickens, eggs, honey, and hogs. All of these groups put limitations on production and prices. While this system may have served some in the past, it does little to serve the public and in today’s world of internet access to worldwide markets, the marketing agencies have reached their best-before dates. They are bureaucratically unwieldy, slow to react to market changes, rule bound and difficult to change.

Open for opportunity

With a new and market-oriented government installed in Manitoba, this is the time to proclaim to the world that we are open for opportunity by making large scale changes to the marketing board system, by bringing new ways to fund not-for-profits (more about this next month) and by ensuring that Crown corporations focus on their mandates rather than building empires for themselves.

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