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Threat or Opportunity? The Pending TRILLION Dollar Wealth Transfer

Published

5 years ago

11 minute read

By Perry Kinkaide, MSc, PhD, CMC – Kinkaide Enterprises Inc.

Winning a lottery can have tragic results.

Millennials and charities may not realize they are about to win a lottery, arguably the most monumental economic, political, and social event of the 21st century.

It will be the largest, broadest, deepest intergenerational transfer of wealth in history: the transfer of $trillions of wealth accumulated by babyboomers as they retire and expire. I’ve been tracking and alerting others to the associated threats and opportunities, namely: financial planners and high-wealth people, government and early-stage entrepreneurs.

Some millennials are already anticipating and pre-spending their inheritance. Most are not!

Hence, the boom underway of financial planners, new investment services, and government’s interest in how to access private capital. What has not been discussed in any depth is the impact of the wealth transfer on innovation and public services such as health and education.

The impact is expected to be profound and should be stirring a public policy discussion engaging those expecting more or less from governments.

Since the end of WWII, we’ve seen an extraordinary growth of government at all levels. Yet, debt worldwide is in the $trillions. The runup of budgets and services has contributed to an increasing sense of entitlement financed by increasing taxes on the wealthy, growing middle class, and debt financing.

Elected officials with access to “free money” have transitioned government and the public to expect “public” service for “free”. Governments have been getting elected on special interest giveaways, pandering to ever more powerful public-sector unions and professions, and blaming billionaires and corporate job creators if the public coffers are empty. The growth of public debt has been unrestrained. But why worry – the economy has been growing? Debt is under control as a portion of growing GDP and interest rates for serving debt are low. But…

A reckoning for this transfer of wealth is unavoidable

The reckoning will be triggered NOT by a crisis but by the huge transfer of $trillions by retiring and expiring babyboomers. The pending transfer should hardly be a surprise given the extraordinary economic boom and accumulation of wealth by middle-class babyboomers since their post-WWII birth. While the event can hardly be surprising, features of the event are SHOCKING and contributing to the reckoning.

Consider:

1. $Trillions are to be transferred. Recent estimates are that $68T – yes trillion US, will be transferred to millennials as babyboomers retire and expire. This number equates to $8.5T Cdn for Canada. It’s a once-in-a-career opportunity for financial planners. Some have speculated that the familiarity of millennials with technology may be good news for fintech including contemporary bitcoin solutions and cryptocurrencies

2. The transfer and its impact will hit quickly. Aging of the population is not smooth. Birthrates climbed rapidly after WWII creating a spike in their proportion of the population. The spike gives the financial industry little time to prepare for increasing usage of automated, self-help, on-line investing.

3. The transfer of wealth should increase the availability of private capital increasing economic activity: stirring innovation and job creation, exports and community enterprise. Economies most likely to gain will be those with a mature innovation ecosystem supporting survival, growth, and retention of innovation. Note. Fraud may also increase as regulators have difficulty keeping up with creative financing options.

4. Baby boomers were the source of demand for public services that continues to rise. Yet, the capacity to sustain the financing of public services through taxation is expected to drop sharply as taxpaying babyboomers retire and expire. The impact would be mitigated IF the wealth transfer were to stir taxable economic activity.

5. The size and aging of the babyboomer market sustain interest in “public” service delivery where health and education dominate government expenditures. These public services also constitute significant sources of employment.

Current levels of service cannot be sustained when babyboomers retire and expire: a) removing them as employees from the workforce, b) reducing demand for client services, and c) reducing the number of taxpayers for financing public services.

6. Babyboomers have fueled North America’s consumer economy. Markets MUST adapt quickly. Technology is more familiar and acceptable to millennials as the recipient of the wealth transfer. Institutional distrust and data accessibility are enabling the personalization of services and products in virtually every service sector.

7. Accumulation of public debt is crushing. Low-interest rates have continued to fuel the growth of public and private sector debt. ANY increase in interest rates and/or a sustained decline in tax revenues would shock public services.

I’ll pull no punches here and tell it as it is.

The debate must begin in anticipation of the looming tsunami. The good news is that the private sector is investing in technologies to accommodate and benefit from the transition and release of accumulated wealth. The bad news is that the public sector wants to sustain the status quo as it is dominated by beholden professionals with few schooled in transition management. Most claiming management status are really administrators – sustaining the profession.

What is needed to prepare?

1. Millennials need financial planning and their offspring need financial literacy. Without a plan, most will take their inheritance as an opportunity to spend, save or invest, driving a short term consumption boom and consequent hangover.

2. Banks will face increased pressure to accommodate the rise in usage of on-line investing, usage of cryptocurrencies, and other innovations in fintech.

3. Knowledge and technology seek a vacuum. Data is fueling the adoption of machine learning and artificial intelligence throughout the economy, necessary to accommodate a shrinking workforce.

4. Governments must rationalize social service standards and/or facilitate their personalization. Innovations in medicine and healthcare and the associated deinstitutionalization must be priorities.

5. As for education, it too must move beyond government as rapid increases in knowledge make lifelong learning necessary. Deinstitutionalization and innovation become essential for supporting service personalization.

6. Professions need relational skills and lifelong learning to complement their role as aides to consumer designed technologies.

7. Governments with any conscience must prepare for the crisis as an opportunity to give the client consumer status. This means personalizing public services: a) monitoring service satisfaction, b) incentivizing innovation contributing to service personalization, c) training and recruiting managers as change agents while d) maintaining public service insurance for the truly disadvantaged.

8. Collaboration among all stakeholders to increase productivity within industry.

9. Recognition that the humanities MUST guide any technology-driven transition thus calling for arts and science, humanities and technology, to work together.

If you’ve read this far, and are breathless, angry, or in denial…then consider the alternative.

Should governments sense that the public in a democracy can’t accommodate the anticipated shocks of a huge wealth transfer and free-spending, market-driven millennial, then government may step in and mitigate. How?

Mitigation may come by reducing the impact of the “free money” wealth transfer by reducing the buying power of millennials.

Do We Need a Wealth Transfer Tax?

This could be done by introducing a wealth transfer tax arguing that the new tax is dedicated to paying down the public debt accumulated while serving the former babyboomer generation. The downside of such intervention is that such measures will impede a critical improvement in productivity and the competitiveness of the affected economies.

Some governments may even declare innovation as a priority so as to preserve public services. Governments are already recognizing that technologies – such as AI, have the potential to dislocate expensive knowledge workers and address: a) increasing demand for service and it’s personalization, b) increased entrepreneurship and global enterprise, and c) a decline in the supply of social service resources. The policy of increased “innovation” typically fails in public services unless introduced with adequate resolve to confront institutionalized professional resistance and the drive/ culture to maintain the status quo.

Regardless – as no one knows the future, it is about time for Vision & Leadership, Creativity & Convergence.

It’s exciting to know that “free money” in the hands of the babyboomer’s offspring may be the very event to trigger an end to the 20th century’s assembly of “public” service supply and transition increase in the “personal” service market.

_________

Perry Kinkaide, MSc, PhD, CMC is the Founder and Past President of the Alberta Council of Technologies. He is the co-founder of several Alberta technology alliances for advancing cell therapy, cleantech, and fusion technology. He also previously served as the Managing Director of KPMG Consulting in Edmonton, Alta., and Assistant Deputy Minister with the Alberta government.

Produced with the assistance of the Government of Alberta, Alberta Media Fund

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Calgary / 5 years ago

Threat or Opportunity? The Pending TRILLION Dollar Wealth Transfer

Alberta

Scotia Place – Calgary unveils design for new arena / events centre

Published on July 23, 2024

By

News release from the City of Calgary

Scotia Place, Calgary’s new event centre, designed as a place for community where there is room for everyone

The City of Calgary and Calgary Sports and Entertainment Corporation (CSEC) are excited to reveal the design for Calgary’s new event centre – formally named Scotia Place.

The design is influenced by the ancestral and historical land of Indigenous Peoples and the culturally significant site that embodies our shared purpose – to gather. It brings together Indigenous cultural perspectives with Calgary’s and the region’s natural beauty, reflecting the four elements of nature – fire, ice, land and air.

A striking feature of the building is the central structure with a textured flame motif that emulates a home fire, which is further amplified when it is lit at night. The home fire, a place of warmth and energy that brings people together to share stories of the past and create stories for the future, rises from the white, glacial-like forms that define the lower parts of the building.

“When you consider that Calgary is already the envy of other cities with a new world-class convention centre in the heart of the Culture + Entertainment District, the addition of Scotia Place is another signal to investors that our city understands how to build a future that leverages hospitality and hosting as its core strengths,” says Mayor Jyoti Gondek. “We are also acknowledging and honouring the foundational role that Indigenous communities have played for generations in making Calgary, and now Scotia Place, a space where we all belong.”

Scotia Place, which is scheduled to open in fall 2027, celebrates the area’s importance as a place for all and will be a landmark attraction in Calgary’s emerging Culture + Entertainment District. More than a building, however, the 10-acre city block is designed for community and connection and includes a community rink, outdoor and indoor plazas spaces, four restaurants, the Calgary Flames Team Store, and future development opportunity in the northeast corner. It will provide gathering places and amenities for the 8,000 people who will live in this new downtown neighbourhood.

“Calgary has a long history of hosting world-class events, drawing millions of visitors to the city each year, generating revenue for local businesses, and boosting the economy,” says Danielle Smith, Premier of the Province of Alberta. “With construction on the Calgary Rivers District and Event Centre now underway, Calgary is one step closer to a revitalized downtown that will bring new energy into the city, attract more exciting events, and create jobs to improve the quality of life for Calgarians.”

A development permit application for the facility was submitted on July 19, 2024. This was a significant milestone for the project team, consisting of CAA ICON, HOK-DIALOG, and CANA/Mortenson. People interested in following or commenting on the permit can find the application at Calgary.ca/dmap. The application is expected to be heard by the Calgary Planning Commission by end of 2024.

“This is an important day for Calgary,” says Councillor Sonya Sharp, Event Centre Committee Chair. “Today is about so much more than the designs of a building. Today is the unveiling of a place where Calgarians and visitors from around the world will make memories at concerts, and sport and community events. I hope that everyone is as excited as we are, knowing that Scotia Place will become the complete experience in our new Culture & Entertainment District.”

“At CSEC, a key component of our mission is to be the heartbeat of our community, create connections and bring people together,” said Robert Hayes, CSEC President and CEO. “Scotia Place will become the perfect home to achieve and share this mission with all Calgarians. Seeing the design brings the vision of so many contributors to life. We are especially thankful to the City of Calgary and the Province of Alberta for their leadership and support to help bring us to this point. In stride with our partner Scotiabank, we are very proud to play our role in presenting Scotia Place as the culmination of diligence and passion, that is now visual in this breathtakingly beautiful and meaningful facility.”

“For years we have seen firsthand the value these partnerships bring to the communities in which we operate and for our clients,” said Aris Bogdaneris, Group Head, Canadian Banking of Scotiabank. “Scotia Place introduces a bold new vision for what will be Alberta’s premier sports and entertainment venue. For nearly 20 years, Scotiabank has been a proud partner of Calgary Sports and Entertainment Corporation and together, we are committed to bring fans and our clients an unforgettable experience when they walk through the doors of Scotia Place.”

“We are excited to start the construction of the critical infrastructure needed to build thousands of new homes and to make the Calgary’s new Culture + Entertainment district a reality,” says Devin Dreeshen, Minister of Transportation and Economic Corridors. “Albertans expect basic infrastructure to be maintained and improved and this commitment from the province goes a long way in helping Calgary build these projects.”

Acknowledging the significance of the building’s location at the confluence of the Bow and Elbow Rivers on the ancestral land of the Treaty 7 Peoples and the Metis Nation, The City, CSEC, HOK-DIALOG and CAA ICON worked with an Indigenous Advisory Group that included representatives from the Treaty 7 Nations, the Métis Nation of Alberta, Region 3, and the Urban Indigenous community throughout the design process.

“It was great to be part of a truly representative voice that included all indigenous peoples of southern Alberta regarding the design of this center acknowledging the historic significance of the land it sits on to the Metis people,” said Carmen Lasante Captain of the Calgary Elbow Metis District. “Inclusivity is a core part of who the Metis are. The City has worked hard to include many diverse histories together in creating this space.”

“Engaging in the right way is fundamental to the success of relationship development with the Indigenous communities, as we have played a critical role in the identity of the land now known as the city of Calgary as the Indigenous nations are inextricable linked to the landscape and environment,” says Ira Provost, Piikani Nation Consultation

A key theme heard often during the Indigenous engagement sessions was “Come in, there is room”, making it clear that Scotia Place needs to be a place that is designed for all.

The public plazas are designed to honour the deep-rooted connection that Indigenous Peoples have with the land, incorporating representations of the tipi, Métis Trapper’s Tent, and elements of Alberta’s world-renown natural landscape.

An important design decision was to lower the event and ice surface so that the primary concourse will be at street-level. Calgarians and visitors will be able to move seamlessly between the curb, the primary concourse and the outdoor public plazas.

“We at DIALOG are thrilled to join forces with HOK and combine our unique expertise to transform Calgary’s Event Centre into the catalyst for a dynamic new urban community,” says Doug Cinnamon, Partner Architect at DIALOG.

“Other design principles including public realm activation, the integration of indigenous influences, public art & storytelling, sustainability, and a balance between past, present, and future is central to our vision. The ultimate goal is to ensure seamless accessibility, promote mixed uses, and create vibrant public areas for everyone to enjoy. This joint redesign represents an opportunity to spur investment into the area and enhance its cultural vitality, anchoring Calgary’s position as a thriving, bustling community hub.”

Scotia Place is a generational investment in Calgary’s emerging vibrant Culture + Entertainment District. A modern event centre with universal accessible design throughout and with energy and water conservation built in to maximize efficiencies and the ability to be net-zero by 2050, Scotia place is designed to serve Calgary’s growing community for decades to come.

Construction begins this week. Additional information about Scotia Place including design renderings, a video, and frequently asked questions is available on Calgary.ca/ScotiaPlace.

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Alberta

Malign Neglect: What Calgary’s Water-Main Break Reveals about the Failure of City Government

Published on June 30, 2024

By

From the C2C Journal

By George Koch

The rupture of Calgary’s biggest water main revealed more than the problems of aging infrastructure. It showed a civic bureaucracy unable to provide basic services or fix things when they break, and a mayor eager to blame others and scold citizens for their selfishness in wanting city services in return for their tax dollars. Above all, it laid bare the increasing tendency of governments to neglect their core responsibilities in favour of social policy fetishes, and to sidestep accountability when things go wrong. Clear, competent, mission-focused public servants are a vanishing breed, writes George Koch, and governing a city is now mainly about keeping city workers, senior officials and elected politicians happy.

As the enormous task forces of the U.S. Navy steamed westward across the Pacific Ocean in the final year of the Second World War, aiming ultimately for Japan but with some of the most vicious fighting still to come on islands like Okinawa and Iwo Jima, commanding admirals issued orders that any man who fell overboard would be left behind. No ship was to slow down for search-and-rescue; nothing was to get in the way of the mission. Several weeks ago, during one of the Stanley Cup semi-final games, a player was hit hard, fell to the ice, got up with difficulty, hobbled towards the bench and disappeared down the “tunnel”. The game went on, uninterrupted. Here too, the mission – entertaining millions – took precedence.

But when two municipal workers on a crew attempting to repair a catastrophic infrastructure failure in a major North American city are injured, the work immediately halts. Although the broken item serves a function vital to civilization and life itself, the mission of restoring water supply as quickly as possible becomes secondary. This happened 10 days ago, a week after the rupture of a high-pressure water main in Calgary had sent water shooting up out of busy 16th Avenue, triggering frantic 911 calls and initiating a “one week” repair saga that as of this writing is still weeks from completion.

Mission failure: The rupture of Calgary’s high-pressure water main on June 5 flooded 16th Avenue and threatened the city’s water supply; repairs were halted for a day after two workers were injured, an excess of caution that led to anger and frustration over the city’s basic competence. (Sources of photos: (top) Acton Clarkin/CBC; (bottom) CTV News)

The two injured workers were taken to hospital (thankfully, with non-life-threatening injuries) and the repair work eventually resumed the next day. But the interruption, piled atop days of confusing, contradictory, self-serving and at times seemingly false explanations and promises from senior city officials and embattled mayor Jyoti Gondek, generated further mistrust and anger among Calgarians over their city bureaucracy’s inability to operate the basics and get things fixed when something breaks down. The safety stand-down came on the very day the city had originally promised to restore water service, a time when every hour was precious, when the sacrifices by city residents and businesses were still bearable, when a return to normality seemed imminent. So why imperil the mission with nearly 24 hours of navel-gazing?

Though soon forgotten as new problems arose, the decision is emblematic of governments’ misplaced priorities, subordination of their core mission to their social policy fetishes and confusion over whose interests they exist to serve. Governing a city appears to have become primarily about keeping city workers, senior officials and elected politicians happy. Above all, to shield them against real accountability. Residents and businesses – the people who vote and pay the bills – are basically problems to be managed.

Built in 1975, the Bearspaw South feeder main draws from the Bearspaw Water Treatment Facility on the Bow River (bottom) and supplies 60 percent of Calgary’s drinking water. (Sources of photos: (top) The City of Calgary Newsroom; (bottom) Environmental Science & Engineering)

A few key facts for readers distant from Calgary. The 2-metre-diameter Bearspaw South feeder main burst its concrete casing on the afternoon of June 5. Installed in 1975, it draws from the Bearspaw Water Treatment Facility on the Bow River in the city’s northwest, and normally supplies up to 60 percent of the city’s drinking water. The break required the city to rely on a much older but very reliable plant drawing on the Glenmore Reservoir, which dams the Elbow River in the city’s southwest. The rupture prompted Stage 4 water restrictions with various bans and recommendations (more on that below), including a call for Calgarians to collectively cut the city’s water consumption by 25 percent, to 480 million litres per day. People immediately responded and, within several days, the city was reporting a water surplus. (For those seeking more details, the Calgary Herald has logged the key daily events.)

From the beginning, the city’s attempts to explain things did not quite add up. The water main had been inspected and tested regularly, officials said, or at least once for sure, and had received “maintenance” as recently as April. Most people probably assumed this involved physically examining it from the inside, then subjecting it to excessive pressure to see if it would hold, and patching up any weak areas. But all that would require first draining a pipe that, after all, 1.6 million people depend on every minute of every day. Later it came out that the line had last been drained and inspected in 2007.

For a few days it seemed as if water service would be restored within the promised one week. But on June 15 it was announced that line inspections (which apparently had occurred in the physical world and not merely in city officials’ media narrative) had found five more ‘hot spots’ – i.e., potentially calamitous weaknesses.

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So then it was explained that sophisticated external sensors had not detected any leaks in the most recent inspection. But then someone pointed out that catastrophic failures of an entire multi-layered structure of inner concrete core, steel piping, wire tension coils and outer concrete don’t usually begin with small leaks. And then someone else let slip that the line’s robustness had been confirmed by modelling, i.e., relying on theory.

“This pipe is only at the halfway point in its life cycle,” lamented Sue Henry, Chief of the Calgary Emergency Management Agency. “By all accounts, this should not have happened, but it did.” But others pointed out that the 100-year-lifespan claim was itself bogus. Lines of this type, said Tricia Stadnyk, Canada Research Chair in hydrologic modelling with the University of Calgary’s Schulich School of Engineering, are rated to last 50 years. And the Bearspaw South line was built…49 years ago. (The lifespan issue gets even worse – more on that below.)

A story full of holes: City officials said the water main had been inspected and tested regularly, and that no leaks had been found; experts pointed out a catastrophic breakage of the line’s multi-layered structure would not likely begin with small leaks – and it emerged the line had not actually been drained and inspected since 2007. (Sources: (left photo) The City of Calgary Newsroom; (right image) The City of Calgary Newsroom)

Gondek, for her part, extended her track record of blaming anyone but herself by claiming the disaster could have been averted if only Alberta’s UCP government had “paid enough attention” and not denied Calgary the money it desperately needed for preventative maintenance and repair. The implications of her claim didn’t quite gibe with city officials’ assurances that the line was considered just fine. And Alberta Premier Danielle Smith shot back that Gondek “has never asked us for funding to repair their water supply infrastructure,” and that the province is providing the city with $224 million to allocate as it pleases. Others noted it was never a question of money at all, because Calgary has generated successive annual budget surpluses but either spends those funds on more congenial pursuits or carries them over into future years.

Still, for a few days it seemed as if water service would be restored within, or very soon after, the promised one week. But on June 15 it was announced that line inspections (which apparently had occurred in the physical world and not merely in city officials’ media narrative) had found five more “hot spots” – i.e., potentially calamitous weaknesses. The repair timeframe was abruptly extended to three to five weeks, well into July. And with that, the City of Calgary declared a State of Local Emergency.

Pointing fingers: Calgary mayor Jyoti Gondek blamed Alberta’s UCP government for denying Calgary the money for maintenance and repairs; however, Calgary had never asked for such funding, and in any case received $224 million this year to allocate as it pleased. (Source of screenshot: The City of Calgary Newsroom)

There is an emergency in Calgary – and virtually every city across North America and the Western world. At least two types of emergency, actually. The first type is the open, at times almost gleeful refusal to focus on the basic responsibilities of municipal government. Such as paving roads – Calgary’s are notoriously cracked and potholed – instead of removing lanes from busy thoroughfares and lowering speed limits in order to create still more unused bike lanes. Or ensuring that public transit facilities are clean and safe for law-abiding users, as opposed to all-but abandoning buses and C-Trains to drug addicts, while still pushing for funding of the next multi-billion-dollar transit line.

Many Calgarians have grown exasperated at such neglect and indifference, and quite a few are paying close attention. One letter-writer to the Calgary Herald pointed out that aging water infrastructure is a well-known problem in civic government circles, noting that the Alberta Urban Municipalities Association in 2014 set the goal of getting “unaccounted for” water down to 10 percent of total treatment plant outflow. While that figure seems unsettling enough, five years later a third-party engineering report estimated that Calgary was losing 17-28 percent of all its treated water. While some of that was for fighting fires and some was theft, the majority was believed to be leakage. That makes it sound like very few of those “100-year-rated” lines had ever been inspected, tested and confirmed sound.

Core failures: As in many Western cities, Calgary’s leadership refuses to focus on the basic responsibilities of municipal government, like fixing potholes, clearing snow or ensuring public transit is safe and effective; it prefers building bike lanes people don’t use and planning the next multi-billion-dollar transit line. (Sources of photos (clockwise starting top left): Dave Gilson/CBC; Rachel Maclean/CBC; Postmedia; Matt Scace/Postmedia Network; Nick Blakeney/CityNews; Rebecca Kelly/CBC)

The staggering water volume implied by that percentage range – and worse, the toleration of the problem for at least a decade – evokes a deeply disturbing decrepitude analogous to the massive leakage from oil pipelines in the dying years of the Soviet Union or the chronic tapping of oil pipelines by thieves in Nigeria. Neither is a place Calgary should emulate. The 17-28 percent range is also, coincidentally, similar to the amount of water Calgarians are now expected to conserve. If Calgary’s pipes didn’t leak, we’d hardly have to conserve water at all even with the city’s biggest water main down. “It’s time,” declared attentive letter-writer Guy Buchanan, “to rethink projects such as the Green Line LRT project and concentrate the $4-billion of reserves that council is hoarding to fortify life-sustaining infrastructure.”

This fiasco is, unfortunately, just one example of an operating mentality averse to focusing on dreary real-world problems. The City of Calgary also hates clearing roads in winter and, every year, whenever it snows hard, the warming Chinook winds fail to arrive on schedule and streets remain snowbound, chaos erupts and the excuse – every single time – is that the city lacks the money and equipment needed to plough its roads and, in any case, does not have a “bare pavement policy.” These words come out of the city spokesperson’s mouth right about the time that private-sector operators wrap up clearing streets and sidewalks at private condo developments and old folks’ homes, have restored Walmart and Safeway parking lots to pristine expanses of black pavement, and can all head to Timmy’s for a well-deserved round of late-morning dark roasts and crullers.

But the inversion of priorities that sees the city authorize spending on ugly cactus-like plants for roundabout verges or cartoon-like bas-reliefs of leaping trout in dank freeway underpasses, and the extirpation of men with a mindset like Buker are not the kinds of emergency Gondek or other public officials have in mind when they declare one.

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The second type of emergency is what has been termed the “crisis of competence” that is afflicting not only governments but utilities and complex systems in general. Put simply, two generations of experienced technical specialists, managers and tradesmen have been gradually retiring, quitting in disgust or getting purged from organizations that now prioritize adherence to internal process and conformity to progressive ideology over the nuts and bolts of keeping systems running, heeding numbers that don’t lie and respecting unforgiving physical reality. The incoming cohorts, meanwhile, often don’t know what they’re doing and don’t want to learn, hiding their ignorance behind a veil of virtue-signalling arrogance.

Crisis of competence: Experienced technical specialists, managers and tradesman have been leaving or getting purged from organizations that prioritize conformity to progressive causes like ESG and wokism over the nuts and bolts of keeping systems running. At bottom, engineer James Buker, a retired city waterworks employee. (Source of bottom photo: Darren Makowichuk/Postmedia)

The National Post’s Jamie Sarkonak had a good column on this over the past week. “Today’s students can’t read as well as their predecessors; workers are increasingly hired on non-meritocratic bases; medical errors and aviation ‘safety issues’ are on the rise,” Sarkonak wrote. “Meanwhile, decision-makers are often so risk-averse they struggle to decide anything. At small scales, everything still works. But at large scales, the effects can be disastrous.” His piece also references a more detailed description of the phenomenon in the Palladium online journal.

As luck would have it, Calgary’s water main debacle produced an archetype of that vanishing breed. James Buker was an engineer in what used to be called the Waterworks division from 1975 to 2016, serving as head of water transmission and distribution for much of the period. Following the Bearspaw rupture, Buker told journalists that such an event became foreseeable after a similarly catastrophic though less damaging water main rupture in 2004. Excavation revealed that pipe had deteriorated to “talcum powder”, as Buker described it, in barely 20 years. This in turn led to the conclusion that the precast concrete used in an entire generation of city water infrastructure installed between 1950 and 1990 was insufficiently resistant to corrosion from soil. Buker was present for the installation of the Bearspaw South line in 1975. The problem, in other words, was well-understood. By some, at least.

But the inversion of priorities that sees the city authorize spending on ugly cactus-like plants for roundabout verges or cartoon-like bas-reliefs of leaping trout in dank freeway underpasses, and the extirpation of men with a mindset like Buker (or another retired city engineer who revealed that 2007 inspection date mentioned above), are not the kinds of emergency Gondek or other public officials have in mind when they declare one. Their kind of emergency mostly involves increasing their powers to boss the rest of us around. In their minds, the critical task is getting the citizenry good and compliant, in this case focusing us entirely on water conservation, so that we don’t ask too many questions about how the work is going and we blame ourselves when “we” fall short.

Hectoring and lecturing: When the state of emergency was declared, local media focussed increasingly citizens’ compliance with water restrictions; the mayor lectured Calgarians on the need to “dig in and do a little bit more”. Shown at bottom, people filling their water jugs at the city’s emergency supply trailer. (Sources of photos: (top) Helen Pike/CBC; (bottom) The Canadian Press/Jeff Mcintosh)

This is more than a rhetorical flourish. Following the state of emergency declaration, local media coverage shifted emphasis from the situation’s technical aspects to water conservation and more water conservation. Multiple articles were devoted, for example, to showcasing how residents in bedroom communities like Airdrie, which draw their drinking water from the city, were “rallying” to cut their water use.

Gondek has been lecturing Calgarians as if we are schoolchildren or simpletons, noting “how well you’re doing” and “when you need to dig in and do a little bit more.” She urged businesses to ask employees to work from home because this, after all, “would save them the time of having a shower in the morning and no one has to worry what they look or smell like, for that matter.” The mayor, though, always turned up looking good, and there were no reports she didn’t smell good.

Going by the city’s rhetoric, the crisis was largely about our failures. As if a construction company owner worrying he’ll have to shut down the jobsite and lay off his workers because the “Stage 4” water restrictions have forbidden welding, applying hot tar or even using glue due to the purported fire hazard is being narrow-minded. As if the costly disruption to thousands of businesses employing tens of thousands of people can just be shrugged off. As if a retired business owner who laboured for 40 years to afford a decent house in a good neighbourhood and now wants to enjoy gardening – and who, after all, pays many thousands in property taxes and water fees every year – is being selfish in worrying that her plants will die. As if receiving water from the City of Calgary is a gift, a privilege the city has every right to withdraw.

Water, water everywhere: The clampdown was based on a fear the city would not have enough water to fight a single major fire, this in a city posting daily water surpluses of 100 million litres, with two rivers (including the Bow River shown at top), two large reservoirs (including the Glenmore Reservoir shown at bottom) and multiple small water bodies to draw from.

Governments today appear to have only two basic states: immovable indolence and unchecked panic. When the first state trips over to the second, a machinery of absurd over-reaction kicks in, including costly campaigns to eradicate phantom risks. The clamp-down on industrial fire hazards was so severe that a reported 800 Calgary construction jobs were at risk of shutdown. The city feared it would not have enough water to fight even one major fire. This despite posting daily water surpluses as high as 100 million litres and having available two rivers, two large reservoirs and dozens of smaller water bodies to draw upon with pumps. The blanket ban on outdoor fires wasn’t lifted even when it rained four days in a row.

The postmodern world’s inability to rationally assess risks and balance possible risk-reduction measures against foreseeable costs and benefits includes a blindness to the principle that too much caution itself creates danger. Every additional precious hour lost during the water main repair process – such as through that nearly day-long safety stand-down – placed additional weight on the 92-year-old Glenmore facility. It was considered an engineering marvel of its era and its feeder main has proved better-built than anything installed in the last 50 years. But if it failed too, Calgary would be without safe drinking water. People might actually die.

It’s worth noting that the same progressives who now worry about two injured workers more than 1.6 million city residents were happy to destroy anything and anyone who got in their way during Covid-19. Those questioning the narrative were cast aside like used Kleenex or crushed like cockroaches.

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Of course it is great – stirring, in fact – how Calgarians rallied almost as one and did what needed to be done under inconvenient circumstances. Limiting water consumption has been a topic in every conversation; people really do care. The same civic-mindedness was shown during a brutal cold snap last winter, when southern Alberta’s electrical grid became overloaded and the system operator was on the verge of ordering rolling blackouts. People responded within minutes to an urgent request to shut off unneeded lights and electrical devices, and the problem passed. But if a whole city’s population can instantly do the right thing on more than one occasion, why can’t that city’s government also do the right things, like paving roads and inspecting aging water mains?

They don’t make ‘em like they used to: The water main break forced the city to rely on the 92-year-old Glenmore Water Treatment Plant (right), built on the north side of the Glenmore Reservoir (left), an engineering marvel of its era.

In the same spirit, I’m certain there still must be dozens, hundreds, even thousands of earnest and well-meaning city managers, tradespeople and technical specialists who know what they’re doing and would love to focus on just getting the job done, if the internal culture would only let them. The repairs are getting done – even if it’s with the help of a small army of private-sector “partners” – so the entire city payroll can’t be incompetent.

But if the Bearspaw South rupture had been felt and not merely declared to be an emergency, then the repair work wouldn’t stop for two injured workers. As Star Trek’s Mr. Spock liked to intone, “Logic clearly dictates that the needs of the many outweigh the needs of the few.” All good progressives used to nod in rhythm to that line; but either the present-day City of Calgary is from a different other planet, or the “many” whose needs must be met aren’t actually the city’s residents.

It’s worth noting that the same progressives who now worry about two injured workers more than 1.6 million city residents were happy to destroy anything and anyone who got in their way during Covid-19. Those questioning the narrative were cast aside like used Kleenex or crushed like cockroaches. The (futile) mission of “stopping the spread” took precedence over everything: the economy, the individual, religion, social relations, common sense, basic rationality.

“Logic clearly dictates that the needs of the many outweigh the needs of the few,” said Star Trek’s Mr. Spock (left); the same progressives who used to nod in agreement to that line seemed more worried about two injured workers than the mission to repair infrastructure critical to 1.6 million Calgarians. Shown at right, a Japanese kamikaze pilot in a damaged single-engine bomber over the U.S. Aircraft Carrier USS Essex, off the Philippine Islands, November 1944. (Source of right photo: Rare Historical Photos)

But when it comes to civic infrastructure, the mission doesn’t top the priorities list. Unless the real mission is something other than what is stated. If the mission is to avoid accountability, to go back to the way things have been for the past 30 or so years, and to save the faltering political career of a deeply unpopular mayor, then it all makes a kind of sense. Bringing in specialists from the private sector (from the oil and natural gas industry, no less) to help get them out of the mess, as they quietly announced about 10 days into their week-long repair job – “our best and brightest”, as Gondek put it without any apparent self-awareness – should be seen as confirmation of their desperation, not as a hopeful sign they’re about to change their ways.

George Koch is Editor-in-Chief of C2C Journal.

Source of main image: @cityofcalgary/X.

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