Friday, December 14, 2012

Of shoes--and ships--and sealing-wax--of cabbages--and kings

A paper produced for the Business Council of British Columbia in 2010 stated:
"Since 2001, British Columbia’s natural gas sector has experienced nothing short of phenomenal growth..."
Mineral production in the province has also trended upward, as demonstrated by this chart, prepared from government statistics:


Despite this, government experienced one deficit after another and taxpayer supported debt rose to incomprehensible levels. At March 2012, BC Hydro owed more than $73 billion in direct debt and future energy purchase commitments.

So, if gas production experienced "phenomenal growth" and commodity prices have been through a cycle of high prices, I wonder why the natural resource revenues to government look like this:


Of course, the answer is that BC Liberals made choices to benefit its big business sponsors. Those organizations paid millions each year to the government political party. The rewards in return are measured in billions. When downgrading the province's credit rating, Moody's Investors Service found that the province's growing debt and reduced revenue prospects could not be ignored.

If government remains committed to reducing the public's share of natural resource revenues and relieving business of consumption and other taxes, we know where the burden lands. BC Liberals have shown no reluctance to pick the pockets of middle income taxpayers. This is but one example:

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6 comments:

  1. And we the taxpayer sit on our collective hands and say"Tsk, tsk, what a travesty!" Well, it is a travesty, but what are we going to do about it? I could set myself on fire but I doubt that would do much good! I'm just an old construction worker quickley fading into the past, but I urge the next generation to take heed of Norm's column AND GET OFF YOUR ASSES. I'm mad and I'm not going to take it any more!! Anyone got some matches?
    John's Aghast!

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  2. Can one discuss any debt of BC Hydro's without correlating it to Powerex profits?

    ReplyDelete
    Replies
    1. Powerex financial results are consolidated with other operations in BC Hydro. The BCH annual report provides this background:

      "The markets in which Powerex operates are complex and volatile, which can cause net income in any given year to vary significantly. Over the previous five years, Powerex net income has ranged from $12 million to $259 million. Powerex’s net income for fiscal 2012 was $142 million."

      No pot of gold there!

      Delete
  3. Great illustration of an ongoing problem Norm. Many of the producing companies that are taking part in the windfall from low royalties are threatening capital flight should any increases be put forward. None of their promises of jobs and business opportunities materialize as they bring in outsiders for most of the work. For most BC residents "capital flight" has already occurred as we find ourselves victims of an overly generous corporate favouring government.

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  4. This whole concept of "capital mobility", being tied to taxation and even royalty manipulation, by a serving government, to its corporate alliances, is incredibly short sighted in the least, if not down right economic subversion. I tend to think the latter describes the problem to a "T".

    The use of "capital" as a weapon against the "electorate", is what we are seeing here. Increasingly we see taxes "morphed" into ever increasing "fee's". Sure we now have the lowest provincial "taxes", in Canada, but higher fee's than most...same thing isn't it? The manipulation of "taxpayer" resources to create IPP projects, or other such "creative" opportunites for a select few, has awakened us, to a new and potentially damaging chapter, in provincial politics.

    It as if the Liberals are "choosing" to use these "resources" as a private hedge fund, where profits are kept, by a select few and losses put back, on the taxpayer. The use of outsiders, whether corporate or labour, is a flaunting of Canadian "rights" that have been hard fought and won over many decades, of negotiation. This almost sounds like the "prelude" of the "right to work " legislation that is being passed, in many southern states.

    The solution of all of this, is going to be very intresting. The BC Liberals are in all likely hood "toast" after the election, next May. The incoming government, must immeadiately reverse any damaging contracts, and/or laws that essentially continue, the "current business practice" from continuing or expanding, with regard to the "blackmail" of BC taxpayers or employees working in these industries.

    The so called "foriegn worker program", must be overhauled both locally and Canada wide, to enure that
    abuses, and illigalities are reported, investigated and prosecuted.

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  5. Jobs, Jobs, Jobs! We just lost 125 of them in Kamloops. Domtar is shutting down the A-line mill. After receiving "an injection of $57.6 million from Ottawa two years ago" according to the Kamloops Daily News.
    Not to worry though. Perhaps they can go north and teach ESL to the Chinese miners. Perhaps Christy has a reciprocity agreement with China and they can go there as 'exchange workers'. Perhaps its a ruse to permit the Ajax mine to proceed with 400 new jobs thus requiring only 275 'temporary workers'. Never mind. Christy will fix it.
    John's Aghast

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