SMART | city


Government operating agencies What works, what to be cautious about.


I


n a world where governments have become bloated and inefficient, there is a search for leaner, more responsive answers to conducting public business. Government operating agencies are sup-


posed to allow a government to operate more effectively in a given area. These operating agencies are expected to


operate like businesses but are different from the P3s, or private public partnerships, used for capital projects where the government finances the work, owns the asset but leases it to the contractor, which manages its ongoing operation. Te private sector efficiencies are quickly transferred to the project, which can be delivered at a lower cost and on time. Such a project is the Charleswood Bridge, which is well-maintained and provides the city with ac- curate cost projections. However, when it comes to operating agen-


is in place to promote efficiency, it can also create a bully in the marketplace, whose taxpayer-supported elbows can be sharp and damaging when it comes to competition with private sector firms in the same or similar busi- ness – or when the agency begins to empire-build and move into areas that were not contemplated in its original mandate. Te agency is now not only using tax dollars


to compete in the marketplace, it has the ad- ditional benefit of quasi-government authority, something that can be very intimidating to the private sector.


WRHA not efficient Two operating agency examples come to mind


cies, the results are not so clear. Tese agencies are mandated to manage ongoing government responsibilities. Often they are set up by simply slicing off a section of government, bringing all the former government employees and their biases, habits and attitudes with them. Tey may or may not be given a new boss from the private sector. Sometimes effective in the early stages, operating agencies


can take on a role and an authority perhaps not originally envisioned. Let’s look first at how these agencies work. Most are not


allowed to run deficits (although the health agencies have been doing just that). Te expectation is that if the private operating agency makes money, some of the returns will come back to government, which may reinvest in the project or not. More often in recent experience, some operating agen- cies develop large surpluses and keep them, claiming that they need these funds as contingency against some future emergency. Tese surpluses can run into the hundreds of millions of dollars when you add the agencies all together. Te profit motivation is a double-edged sword. While it


Bold Ideas Dorothy Dobbie


in Manitoba, both of which have been around for some time. One is the Winnipeg Regional Health Authority, which has a massive budget of over $3 billion, representing about one-fifth of total government revenue. Last year, it rang up a $2.8 million deficit, quite a small loss compared to the year before when its deficit exceeded $25


million. In spite of this, health services did not improve and, in some cases, performance was actually lower. Some of its “efficiencies” have made life for the user insup-


portable – food services, where the food is transported to hos- pitals from distant kitchens, comes to mind. Te fare is almost inedible. Tere is also rampant waste in hospitals thanks to packaged supplies imposed in the name of efficiency. Te WRHA also likes to exercise its muscle against the


hospital foundations that raise money from the private sec- tor to fund special initiatives by hospitals. While it has no direct authority over the foundation or its board, the WRHA is not above acting as though it does, demanding of execu- tive directors that the foundation turn over money to fund WRHA-preferred projects. Tis is very difficult to push back against by foundation EDs, whose boards have a mandate to spend money on things that would not normally be affordable to the specific hospital they support. Travel Manitoba expands into private sector


Te other agency is Travel Manitoba, which is mandated


to promote travel to the province. It was given a healthy budget increase over the past year, thanks to the premier, who believes in tourism as an income generator for the province. And he is right in this. However, Travel Manitoba has expanded its mandate to


include a takeover of the travel publishing market. Years ago, these publications were produced by the government without containing advertising. Now Travel Manitoba is actively competing with small


local publishers by selling advertising in travel publications that used to be produced by the private sector. Over the past year, we estimate that Travel Manitoba


has taken well over a million dollars out of the local travel- advertising market. Travel Manitoba is not only in competition with small


local publishers. Te agency competes for ad dollars with small independent marketers, such as the guys who used to sell ads in the washrooms, those who sell ads through social media and the Internet, those who sell ads on exterior and interior video screens and the Internet, and so on and so on. Te agency is basically creating a monopoly over the travel ad business in Manitoba, pushing small independent businesses out of the market. Tis is unfair competition, since the agency is supported


by tax dollars and so has the advantage of scale that no independent can compete with. Tere are other examples of this (the Winnipeg Centen-


nial Corporation and the mandate given it by Gary Doer to compete with the local performing arts is one), but these two will suffice to say to government, before expanding in this field be very careful to spell out the mandate: no deficits allowed, no bullying of associated private agencies, no competing with the private sector. As well, ministers should be expected to police the


activities of the agencies to ensure that they stick to their mandated jurisdictions. Otherwise, the “efficiencies” of Crown agencies are no


more than a fiction and a licence for ambitious staff to create private empires that do tremendous harm to local business.


Transportation Management Centre an exciting development for our city


H


ello and welcome to another issue of Smart Biz! Many of you will have heard by now about the city’s new


Transportation Management Centre (TMC). This is a very exciting development for Win- nipeg – something that has been talked about for years, and this Council got it done! Te TMC has been officially


up and running since January, and you’ve probably been notic- ing smoother traffic flow around the city this year, and less traffic jams during peak times. Tat’s because this leading-edge facil- ity monitors all 650 signalized intersections around the city, delivering traffic light coordi- nation and remote response in real-time to signal malfunc- tions and unexpected incidents. Winnipeg has been an epi-


date. By combining new technologies with connectivity through Google’s Waze app, the TMC is blazing a trail for our city and modernizing how we manage traffic flow. I encourage all of you to


State of the City Brian Bowman


centre of innovation for some time now, and the new TMC carries on our reputation as innovators by being the most integrated traffic management centre in Canada to


download the Waze app! It is free to download and allows drivers to share and receive anonymous traffic information from the TMC to assist you in deciding which routes to take and which routes to avoid. Of course always use the Waze app as intended, by docking the phone and activating hands- free capability! As part of the implementa-


tion of the new centre, 70 traffic cameras have been installed at strategic locations around the city acting as the TMC's eyes on the street. With this visual


information as well as anonymous data shared from drivers through the Waze app, TMC operators can respond in real-time to unexpected situations like collisions, stalled


vehicles, barricades, special events and ad- verse weather. Traffic signal timing can be done quicker now that they can be adjusted remotely from the TMC and crews no longer need to physically attend to an intersection to make adjustments. Unlike most major cities in North America


that have freeways, Winnipeg depends pri- marily on a network of major roadways and nearly 650 signalized intersections. Te TMC also enables the City to monitor the health of the traffic signal network for malfunctions such as flashing lights and make quicker fixes. Rather than relying on citizen reports, traffic signals will alert the TMC when they go into flashing mode and crews can be dis- patched rapidly. Council approved a $3.6 million capital


investment for the TMC, and has an annual operating budget of $500,000. Winnipeg is a growing, thriving city at the


heart of the continent, and it’s imperative that we continue to find ways to prepare and respond to growth as we move towards one million people strong. Te TMC, along with recently started construction on the Waverley underpass, continued work on


Waze is an interactive Google smartphone app that helps you stay in touch with road traffic (wherever you are).


rapid transit, and record investments in road repair are important steps we’re taking today to build Winnipeg for tomorrow. I’m proud of this Council for working together to achieve these important milestones in building a stronger, more modern city we can all be proud to call home!


Smarter than the average grid: the benefits and risks of smart grids Adam Johnson A


n electrical grid is an important aspect of today’s modern infrastructure. With- out an electrical grid, cities would not


flourish, trying to use many electrical devices would be redundant, and today’s economy would not prosper. However, we take our current electricity


system for granted. Its complex technical en- gineering prowess, mixed with the simplicity of providing power leaves us in awe, since its early beginnings in the late 1880’s. Despite this, if you were to look at our cur-


rent electrical grid, and compare it to back to the start of the 20th century, not much has changed. In fact, if you were to whisk Tomas Edison into 2017, and he had a look at today’s electrical system, he would think most of the same components are from back from the early 1900’s. From rolling blackouts in California back


4 Smart Biz


in 2000 & 2001, the 2003 North Eastern US/ Canada blackout , and the impacts of extreme weather from climate change have, or will put further strain on an already fragile system. All of these impacts and scenarios are leading to the perfect storm of demanding dramatic grid upgrades. According to a 2012 Conference Board of


Canada report, by 2030, an investment of nearly $350 billion is required to ensure it will run smoothly and meet many challenges ahead. Smart grids offer a great opportunity in


updating our electrical grid system in 2017. Te World Economic Forum in 2015 said mod- ernizing global electrical infrastructure could provide a $7.6 trillion economic opportunity by 2040. Smart grids harness the power of information technology to improve savings and efficiency within the network. Accord- ing to techtarget.com, Smart Grids are a way to “improve operations, maintenance, and planning by making sure each component of the electrical grid can both talk and listen.”


Tink of smart grids as social media for our electrical grid system. ABB Group adds further context, suggest-


ing smart grids are “an evolved grid system that manages electricity demand in a sus- tainable, reliable manner, built on advanced infrastructure and tuned to facilitate the integration of all involved.” Smart grid markets will only grow in the


future. Zion Research has global smart grid markets at $120 billion, with a compound annual growth rate of just over 18%. Tere are four key benefits of smart grids,


according to WhatisSmartgrid.org . Tis in- cludes saving money for customers through smart meters; improved energy consumption through consumer data; better reliability, thanks to meters tracking and sensing where there is a power outage is before a customer calls into the utility; and limiting carbon emissions thanks to integrating renewable energy sources including wind, and solar energy. Cyber security concerns provide one major


www.smartbizwpg.com


drawback. Jason Bordoff, a former energy advisor to Barack Obama in the Wall Street Journal, said smart grids are potential targets for cyber attacks. Bordoff also said a shortfall of rules, and murky security measures leave an increased digitally linked energy system exposed to these vulnerabilities. It's clear to see smart grids will play a fun-


damental role in leapfrogging our electrical system into the 21st century. However, cyber security threats as seen in last October’s DDoS attacks, and Dragonfly incident in 2014, can create, as Future Crimes author Marc Goodman says a “cornucopia of malicious opportunity for those with the means and mo- tivation to exploit our common technological security.” Moving with gusto and caution, all in one fell swoop will ensure the smart grid’s future economic potential. Adam Johnston is a freelance writer and


owns a part time social media and clean tech writing business. You can go to his website at www.salayconsulting.com or email him at salayconsulting@gmail.com.


June 2017


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