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I’ve been looking at the Government of Canada portal and Prime Minister Harper’s website as well as the White House portal. The differences between the US and Canadian sites are dramatic.

In a word, the essence of the Canadian sites is political messaging, and the message is all about Stephen Harper. Both the Canada portal and the PM’s site have three columns, and the eye is drawn to the top of the middle column – the widest column – which contains news stories almost always featuring the photogenic (or not) Prime Minister.

The Prime Minister’s site has the news of the day dominating the central column, priorities and utilities in the left column and video and audio in the right column. Today, there are 7 – count

For the skeptics who claim that innovation in government is an oxymoron, the notion that a tax collection agency could be innovative seems even more oxymoronic. Yet my intuition tells me that the Canada Revenue Agency indeed has bragging rights to such a claim.

Historically, it has been a rapid adopter of information technology, using it to enhance service by providing for payment online or over the telephone and to enhance compliance through aggressive data mining. Its status as a special operating agency, discussed in David Brown’s article in the most recent issue of Canadian Public Administration, has likely facilitated its innovativeness.

More recently, the Harper Government has likely become a driver of innovation, because of its use of tax credits – rather than spending programs – to implement social and economic policy. This philosophy of government tends to leave the program departments sitting on their hands but puts the onus on CRA. Some recent examples that come to mind are tax credits for child care, child fitness, disabilities, public transit use, and now home renovations.

For each such initiative, CRA has to come up with a precise definition of what is creditable, communicate the ensuing rules to the public, and ensure compliance. The latter would involve requiring taxpayers, or their income tax preparers, to keep receipts and occasionally auditing. The home renovation tax credit will be an interesting case. It has been widely advertised and tremendously popular. As the end of the eligibility period and this year’s tax filing date approach, the question that comes to mind is what sort of auditing CRA will do to ensure that taxpayers have been following the rules. Given the populist nature of this program – with a maximum permissible claim of $ 9000 in expenditures – the standard practice of auditing the few biggest users won’t work. The possibility of the program being extended in the upcoming budget underlines the importance of effective administration.

While the next federal budget is likely to involve expenditure cuts or constraints, I would be very surprised if the Harper Government didn’t extend its philosophy of populist tax credits in some other area, again calling upon CRA for implementation.

As a public management blogger and a taxpayer who has taken advantage of several of these programs (universal child care, child fitness, home renovation), what I see is the tip of the iceberg. Below the waterline is what CRA is doing to implement these initiatives. I think there is an interesting story here of innovative policy implementation for a public management researcher to explore.

Just as Highway 61 (running from New Orleans to Duluth, Minnesota) kept reappearing in Bob Dylan’s life, Highway 407 ETR keeps reappearing in mine. I co-authored a book about it six years ago (If You Build it … at www.407etrbook.com), and I get asked to comment on its ongoing controversies.

I was just on Goldhawk Live on Rogers television, along with Ontario Transport Minister Jim Bradley, NDP transportation critic Peter Tabuns, Toronto Star reporter Jack Lakey, editor of Road Today magazine Manan Gupta, and a host of irate callers. The callers were incensed about several billing policies, including Ontario vehicle license denial for unpaid bills, attempts to collect unpaid balances going back up to 15 years, and 27 percent annual interest rate charges.

At the outset, it’s important to understand that 407 ETR’s business model is unlike most services in the economy (including old fashioned toll roads with collection booths) in that you can use it before you pay for it. This gives the operator, 407 ETR Concession Company Ltd., an incentive to be aggressive in collecting unpaid bills. What the operator prefers is that users lease transponders and have charges automatically billed to their bank account or credit card. Transponders are accurate virtually all the time. The $3.50 per trip collection fee imposed on video imaging is a strong incentive to lease a transponder, which costs $21 for a yearly lease.

By way of personal disclosure, I should say that I make about 20 trips yearly on 407 ETR and have had a transponder since the highway opened in 1997. I’ve had two small problems, a transponder’s battery wearing out and a transponder not functioning because I had placed it behind a metallic windshield sun shade, and both were handled quickly and videoimaging charges were refunded.

My guess is that somewhere in excess of 80 percent of the operator’s revenue comes from transponder users like me. As Pareto’s Law would predict, the administrative problems come from users who don’t have transponders. In an interview two years ago with co-author Chandran Mylvaganam and me, the operator’s spokesman told us that approximately 4 per cent of 407 ETR’s traffic is not billed, which includes both licenses that are not readable and those that are not billable because they are from jurisdictions that have not agreed to make their vehicle license data available. License plate denial is a very powerful mechanism for ensuring that Ontarians pay up, but of course it doesn’t extend beyond Ontario’s borders.

We heard numerous complaints on the program and it is hard to assess their validity. The most common complaint linked the three issues mentioned at the outset, claiming that the operator was deliberately taking its time billing, letting interest accumulate at a very profitable 27 percent per annum, and then using the threat of plate denial to collect.

If these accusations are true, they are a legitimate public policy concern. The question for a policymaker is what to do about them. Ontario Transport Minister Jim Bradley, citing the province’s failure to challenge the original privatization agreement in court, said that there was essentially nothing that could be done. The other panelists, myself included, weren’t so sure. Two possible approaches are suasion and legislation. Suasion would involve the government (perhaps the Ministry of Consumer Services rather than Ministry of Transport) gathering information about these complaints and presenting them to 407 ETR’s ombudsman and then the operator.

The operator is a Spanish-Australian consortium that has preferred to maintain a low public profile and collect the revenues rather than present itself as a high-profile good corporate citizen. This would suggest the government would get nowhere with suasion and the implicit threat of “naming and shaming,” but would have to legislate.
The legislative approach would not involve challenging the lease agreement, which the courts have already defended, but rather drafting consumer protection legislation applicable to all current and future Ontario toll roads, or perhaps even more broadly. This would require legal advice as to whether the courts would likely rule that such legislation contravenes the operator’s lease agreement.

Lurking down the road is an issue mentioned by Minister Bradley in the discussion, namely the development of Highway 407 East, a toll road running from the eastern end of 407 ETR in Pickering to Highway 35/115. The minister promised that the government would not repeat the mistakes of the past and 407 East would be built and run entirely by the government. A moment’s consideration suggests that likely will not come to pass. If it did, people would have to carry two transponders, one for 407 ETR and the other for 407 East, and would receive two bills for a single trip using both parts of the highway.

While the minister claims that this will lead to competitive benchmarking because drivers will compare the two operations, it is more likely that drivers will tell the two operators to get their acts together. In addition, obvious economies of scale will give both an incentive to make their technologies at least interoperable, and more likely completely integrated. Finally, by virtue of having developed and operated 407 ETR for over a decade, 407 ETR Concession Company Ltd. will have an enormous advantage over any other potential bidders for contracts on the development of 407 East. When the government moves to the contracting stage for Highway 407 East, it and 407 ETR Concession Company Ltd. will have to begin talking in earnest.

So if I were the Ontario Government, what would I do now? I’d gather information about billing practices and, if there are some that appear questionable, I would meet with the ombudsman and the operator. I would also get counsel to look at the question of whether consumer protection legislation would escape being over-ridden by the lease agreement. And I’d recognize that Minister Bradley’s “two operators, one highway” line will ultimately be untenable, and the two operators will have to talk about interoperability and integration.

Toronto transit riders are facing a fare increase at year-end and, because tokens are undated, the TTC has reduced their availability, thereby generating long queues and consternation on the part of riders.

By way of personal disclosure, I should say that I’ve seen this scenario played out often enough to know what was coming, so when I saw the first mention in the newspaper of possible fare increases I began hoarding. And last Sunday afternoon, despite the sign on the ticket booths indicating token sales were limited to five to a customer, a helpful agent was willing to sell me ten. I now have a cache of 23 tokens, which should be sufficient for my infrequent TTC trips over the next six weeks.

Recalling the TTC’s own slogan, is there a better way? Let me suggest two.

The first would be for the TTC simply not to restrict the sale of tokens, accept that there will be some loss of revenue due to hoarding, and recognize that it is the inevitable cost of maintaining good customer relations. That is what Canada Post does by selling perpetual (P) stamps valid at any time, rather than requiring customers to buy additional stamps every time rates go up.

A second solution would be to adopt better, more flexible pricing technology. Twenty-five years ago – that’s right, twenty-five years ago – I was in Hong Kong and saw how their subway system used what were called Common Stored Value Tickets. You bought a ticket for a certain value, and on every trip the automated card readers would deduct the price of that trip, until the ticket was used up. If the TTC had such a system today, fare changes would be easily implemented by increasing the amount deducted from the card on the day the new fares come into effect.

From a broader public policy perspective, I don’t think ever-increasing transit fares are the way to go. The better way would be to increase transit ridership and decrease automobile traffic in the core. The best way to do that, as has been demonstrated in London and Stockholm, is through an area pricing scheme, where road tolls are used to fund improvements in the public transit system. At the limit, I’d even support making transit free to riders, and fund it entirely through road tolls.

Highway 407 was an early foray into leading edge road tolling, so the technology exists right in our own backyard.

Let’s see if next year’s mayoral candidates are far-seeing enough to embrace these ideas. The one least likely to do so is the unimaginative stuffed shirt John Tory, who in the 2003 mayoral campaign even went so far as to set up a website attacking David Miller’s willingness to contemplate road tolls. Maybe next time will be different.

As the Government of Canada rolls out its Economic Action Plan, I have two projects that, as far as I can tell, are not under consideration for funding. In the interest of full disclosure, I should say that I’ve visited both several times with my children, and we’ve talked about how to improve these two museums.

The Canadian Air and Space Museum (casmuseum.org) is on the site of the former Downsview airport in suburban Toronto. The museum is smaller than the Canadian Aviation Museum in Ottawa, but offers a different perspective, focusing its attention on the aircraft manufacturers, particularly De Havilland and A. V. Roe, which were both located in Toronto. It contains the only full-size replica of the Avro Arrow as well as a Canadian-built World War II Lancaster bomber that a group of dedicated amateur machinists is laboriously refurbishing.

The museum is attempting to raise $2 million in funds for a major expansion to highlight the role of the different manufacturers. The website contains a pitch from actor Harrison Ford, proclaiming the virtues of Canadian designed and manufactured aircraft, such as the Twin Otter.

I would have thought supporting the museum would readily appeal to the Harper government. It’s in multicultural northwest Toronto, an area where the Conservatives would like to make inroads. It would send messages about government support for manufacturing and for Canada’s armed forces. Yes, the Avro Arrow exhibit criticizes John Diefenbaker, the PM who decided to kill the Arrow, but I would hardly think the current-day Conservative Party – less than a decade old – considers itself accountable for Dief’s decisions half-a-century ago.

The second project is the Canadian Automotive Museum, which occupies a 25,000 square foot former dealership in an aging section of downtown Oshawa. The Museum has a superb collection of vintage cars going back to the 1910′s, with a particular emphasis on those manufactured in Canada.

The building is too small so the collection is very crowded. It is also in poor shape, for example the heating is insufficient for it to be comfortable in the winter. If the museum were in better shape, or in a better location, it could display its collection in the context of the history of Canadian automobile manufacturing, and launch a discussion about the economic, social, and environmental impacts of the automobile.

Developing this museum would also appear to be a no-brainer. The local MP is Conservative Finance Minister Jim Flaherty. The museum is about a vital part of Canada’s industrial heritage, which would appeal to the government’s values. So why, in this case as well, isn’t funding from the Economic Action Plan available? Isn’t the museum’s board knocking on the door of their powerful local MP? If they are, why isn’t that MP speaking up for his constituents?

Both these museums are about important chapters in our industrial heritage, and spending stimulus money on them would be a great idea. I hope it happens.