Saturday, December 16, 2006

Bernard Landry's animal farm

As a Finances minister of Quebec, Bernard Landry certainly didn’t imagine that his “accomplishments” would turn out to be extremely decried to death. In fact, a report made by Renaud Lachance, the Auditor general of Quebec, reveals us that by trying to save the industry of horse racing through the creation of the Société nationale du cheval de course (SONACC), Landry inadvertently created an uncontrollable animal farm.

In his wild days of being Quebec’s Finances minister, Bernard Landry was not closely involved in the deplorable embezzlements done by the administrators he appointed. However, Landry’s reputation is now terribly sullied, because even though the SONACC was apparently under governmental control, it really was managed like a private company. In addition to that, let it also be said that the SONACC wasn’t held by concrete governmental control mechanism and this explains why so many mismanagement occurred.

The SONACC actually received many funds from the government of Quebec, but unfortunately, this money wasn’t well used. The report of Renaud Lachance contains horror stories that reveal us that:


  • Many administrators of the SONACC unjustifiably spent more than $15 million on extravagant activities.

  • An administrator who earned $100,000 per year received a severance pay of $82,500 just before he immediately got hired back as an advisor with a contract of $350,000 for two years.

  • While the SONACC’s administrators were having fun, they constantly begged for a governmental help from the Ministry of Finances and $40 million was granted to the SONACC in 2001 and 2002.

  • A head of the SONACC was refunded for his replacement and representation fees at an amount of $93,000.


Why was such a big amount of money injected in a dead industry (i.e. horse racing)? Bernard Landry is certainly a smart economist without a doubt, but his ludicrous leaning towards state intervention in economic sectors doesn’t necessarily fit with reality. In fact, Landry often proudly upholds that the state can succeed where the market fails. Really? This theory might have a convincing resonance in certain domain, but not for the horse racing industry in Quebec.

Despite the efforts of the government of Quebec to keep the horse racing industry alive, this industry, at this very moment, is still as unpopular, pathetic and useless as it was just before the SONACC was created. In fact, most Quebeckers are not interested to bet on horses and hence, the low demand of tickets for racing events. It is not economic intervention from the government that will bring people to see horse racing. Furthermore, according to the golden rule of interventionism, the state should intervene in an economic sector only if this sector is viable and profitable.

The heritage of Bernard Landry, as a Finances minister who granted $260 million to the SONACC, attached the government of Quebec with a provincial debt of $12,8 million related to the SONACC. Furthermore, the SONACC also borrowed $15,7 million from the Banque Nationale and $10 million from the CIBC bank. So, in general, the provincial debt that is related to the horse racing industry is officially at $38,5 million and that excludes the stolen sum of money…

Bernard Landry, since he got out of politics last year, enjoys commenting on the dynamics of Canadian and Quebecker politics, if you look at the way he grinds his axe in order to rhetorically chop André Boisclair, the leader of the Parti Québécois (PQ), in the media. It looks like Landry wants to be back in the ranks of the PQ. Nonetheless, the scandal of the SONACC is a major reason that should keep Landry at home.

blog comments powered by Disqus
Related Posts with Thumbnails

About This Blog

Lorem Ipsum

Subscriptions

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP