UCP govt decided to sell registry services after meeting with lobbyists

Earlier this year, the Alberta government issued a request for expressions of interest for the sale of several public registries.

According to the REOI documents, the sale would be for a 35-year contract “to modernize, operate and maintain the Province’s Land Titles, Corporate and Personal Property Registries”.

The three registries generated a combined $123.6 million in revenue for the provincial government during the 2019–2020 fiscal year: $81.2 million for land title, $35 million for corporate, and $7.4 million for personal property.

Assuming no revenue growth, that could potentially see the province lose out on $4.3 billion over the course of that 35 years. More if population and inflation would’ve driven up prices, and thus revenues.

This request for expressions of interest came following extensive lobbying, especially by two companies in particular—Teranet and Information Services Corporation—both of which were among the more than 100 parties on the bidders list.

Teranet already provides registry services for Manitoba and Ontario. According to the Alberta Lobbyist Registry, Teranet hired lobbying firm Maple Leaf Strategies in February 2020 to advocate “for new business models and alternate service delivery for land, corporate, and personal property registries.”

The same registries that just happen to be the ones the UCP have put up for sale.

Maple Leaf Strategies was founded in 2012 by Phil von Finckenstein, who had been director of communications and senior advisor to the leader of the opposition in the federal government. That tenure ran from 1993 until 2002 and included several leaders of both the Bloc Québecois and the Reform/Canadian Alliance.

Listed in their initial return as the primary lobbyist was Richard Truscott, managing principal at Maple Leaf. Interestingly, another partner with Maple Leaf (but who wasn’t listed as a direct lobbyist) was Dimitri Pantazopoulos, who served as a senior strategic advisor to the UCP during the 2019 election.

The initial return filed by Maple Leaf had an official filing date of 10 February 2020 and a termination date of 22 January 2021, just 4 days after the REOI was published.

According to the return, Maple Leaf intended to lobby though meetings, phone calls, and correspondence with the following groups:

• Legislative Assembly
• Executive Council
• Premier’s Office
• Treasury Board and Finance
• Economic Development
• Trade and Tourism
• Service Alberta

Information Services Corporation, which manages registry services in Saskatchewan, had been lobbying for much longer.

Their first initial return was filed by the company’s CEO, Jeff Stusek, in February 2017, while the Alberta NDP were still in power, and they indicated a termination date for their registration as a lobbyist for 7 months later.

The primary advisors listed were Bryan Burnett and Tyler Willox, both strategic advisors with ISC.

Their return indicated that their intent was to discuss “the government’s interest in alternative service delivery of registry services”.

They expected to hold meetings, phone calls, and correspondence with the solicitor general, Service Alberta and the Treasury Board.

There was no further lobbying from the company. Well, not until after the UCP were elected. Three months after the UCP won the 2019 provincial election, ISC hired the lobbying firm Wellington Advocacy on a 6-month lobbying contract. A month later, Wellington filed an initial return on behalf of the company.

This time the purpose mirrored that of Maple Leaf’s: “Advocating for alternative service delivery and business models for Land Registry, Corporate Registry and Personal Property Registry”; however, their filing was 6 months before Maple Leaf’s.

The intended to lobby these groups:

• Legislative Assembly
• Premier’s Office
• Economic Development, Trade and Tourism
• Agriculture and Forestry
• Service Alberta
• Treasury Board and Finance
• Energy
• Executive Council
• Transportation

Listed as primary lobbyists for Wellington were Nick Koolsbergen, (CEO), Trisha Rinneard (senior consultant), and Lauren Klammer (consultant).

Koolsbergen was chief of staff for Jason Kenney when he was the official opposition and then became campaign director for the UCP’s 2019 election campaign. He also served as Kenney’s director of communications while he was the federal minister of employment and social development.

In February, Koolsbergen filed a notice of change, which indicated that ICS had extended their contract until the end of 2020.

The following month, he filed another one, this time adding two more lobbyists to the list: Rachel Curran (president) and Brad Tennant (vice president).

Tennant was a former executive director of the UCP and a member of Kenney’s leadership election teams. Curran worked for several years as a policy advisor for Stephen Harper while he was prime minister.

Koolsbergen filed another notice of change in May, removing Curran from the list of lobbyists. Another filing in October, removed Klammer from the list.

Finally, at the end of 2020, he filled one more notice of change, indicating a termination date of the lobbyist registration for 19 June, the day after the REOI was released to the public.

Roughly two months after the REOI was released, Doug Griffiths, former minister of Service Alberta sent a letter to the current minister, Nate Glubish.

In his letter, Griffiths indicated that the PC government had investigated the privatization of registry services (specifically land titles) but found that there were problems with this model.

First, to ensure the “integrity, consistency, and security” of the system, it’d have to be contracted out to a single provider. This would guarantee a monopoly in the market, which means than any benefit—if there actually are any—from having services delivered through a competitive market would be absent.

Second, their exploration of privatization revealed that the greatest challenge—at least with the land title registry—was the the system needed modernization. Constant budget cuts and spending freezes resulted in “inefficiencies, backlogs, and increased costs” because successive governments kept delaying investing in upgrading the system that would be more efficient, reduce backlogs, and improve costs.

Finally, and related to that second point, because of a monopoly, there’d be little incentive for a private provider to innovate. Even so, as Griffiths said in his letter, “The Land Title System is not challenged by a lack of innovation, but by a lack of resources for modernization.”

Griffiths concluded his letter with 3 main findings from when they explored privatization:

• The government would lose long-term revenue
• Costs would increase for users
• The need for modernization would be converted into profit

The board of directors for the Association of Condominium Managers of Alberta also submitted a letter. Their concerns echoed those of Griffiths but included additional ones, all of which are listed below:

• Substantial annual costs to condominium corporations
• Increased cost of titles and other registrations related to selling, purchasing, and developing real estate
• Weakening of Torrens land title system and eroding land titles protections
• Potential exposure of a publicly funded assurance fund to liability for increased title disputes
• Job losses in an existing profitable government department
• Allocation of cost and service offering to other provinces/countries, and the loss of associated revenue stream
• Reduced accessibility of land data for research and matters of societal interest
• Security issues with future models in which administration and control of public records could be subject to fraud and manipulation

Related to increased costs, the Alberta Union of Provincial Employees issued a statement earlier this year, reporting that fees have increased in Manitoba and Ontario since their registries were privatized.

Before privatization, the fee for obtaining a land title in those provinces was $10 in Manitoba and $16 in Ontario. Teranet immediately raised the rates to $16 and $29.55, respectively, and now they sit at $26 and $33.22.

As another example, a 2013 report on the topic of privatizing registries, the Law Society of Alberta had this to say about the lower costs in general of registry services here in Alberta:

Alberta’s Land Titles fees are the lowest in Canada and would continue to be so, even with modest increases that might assist in funding the completion of the Alta 2 Redesign Project. As a rough comparison on an all-in basis, inclusive of fees and land transfer taxes (other than municipal land transfer taxes) a $600,000 home purchase with a $400,000 mortgage would cost roughly $320 in Alberta, over $7,000 in B.C. and over $8,500 in Ontario.

A report from the Law Society of Alberta with respect to the Government of Alberta’s review of the Alberta land titles system in its results-based budgeting process, p. 5