Monday, December 31, 2012

"Improved" PST will look much like HST

With less than 20 weeks before the BC election, our Liberal government continues spending tax dollars to promote themselves. It's not the first time they aimed to influence the vote with government-paid advertising. This is from an opposition press release after the 2005 vote:
"Following revelations that the Campbell government deliberately overspent its advertising budget by $7.5 million to produce pre-election ads, NDP Leader Carole James today re-iterated her call to ban all partisan advertising by government..."
Now almost eight years later, with Clark's Liberals in bigger trouble, the amounts have escalated. As Adrian Dix told The Tyee:
"People are outraged by the jobs plan advertising ... To be advertising incessantly in a week where you missed your budget targets by $500 million that you believe in balanced budgets, even by the standard people sometimes hold political advertising in, that's a big stretch. Then to have the public pay for these Liberal Party ads I think is a little much."
Not only are Liberals using tax dollars for partisan purposes, the ads make statements that are demonstrably false, such as the claim that BC leads in job creation. But, false claims are not new; they are a standard part of the BC Liberal style. When HST was announced they said it would be revenue neutral, result in lower consumer prices and create 113,000 jobs.

In fiscal 2010, the last full year under the old system, PST raised $4.7 billion. The following year, with only nine months of HST, the combined sales taxes raised $5.5 billion. That suggests almost $100 million a month extra came in under HST. Given the staff and information resources within the Ministry of Finance, you can be sure that extra money was no surprise. Truth had been too inconvenient to be told.

Misinformation abounded in the government's effort to sell the new tax. The BC Chamber of Commerce interpreted the government initiated Mintz report to say there would be "A lower tax burden for consumers" through HST. It didn't bother to explain how both consumers and businesses would both save while government raised hundreds of millions extra each year. Again, truth had been inconvenient.

55% of votes cast in the 2011 referendum said Yes to this question:
"Are you in favour of extinguishing the HST (Harmonized Sales Tax) and reinstating the PST (Provincial Sales Tax) in conjunction with the GST (Goods and Services Tax)? Yes/No"
It seems clear from the finance ministry's numbers that Liberals do not intend to reinstate PST as it was. To reinstate is to restore something to its former state. If that were planned, the expected sales tax income would be about $800 million lower than projected for the fiscal year 2013-14. People in business tell me they are expecting continuation of most exemptions enjoyed under HST. These things mean that consumers will not see a reinstated PST, they'll see a new "improved" PST that applies as widely as HST does now.

Ministry of Finance projections are at odds with a website maintained by the ministry's Finance Communications Office. www.pstinbc.ca says:
"If we go back to the PST/GST, the province would see a sales tax revenue loss of about $820 million in the first year. That loss would increase to $893 million in the second year and would widen each year."
Perhaps again, truth is inconvenient.


UPDATE:
A question was posed in comments about repaying the federal government's $1.6 billion transition grant. Rather than trying to determine if we did or will send that money to the feds, let's look at the history of federal contributions to the BC budget and the estimates for the next three years.


It could be that the two senior levels of government played with the numbers to use the $1.6 billion transition payment as a way to influence the outcome of the HST referendum. The last two fiscal years, and projections for the next three, show that government to government transfers are substantially above the pre-HST levels.

Again, what they say and what we see reading the financial statements are not the same thing.

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Sunday, December 30, 2012

Five myths about charitable giving

From the Washington Post, follow the link for complete article. Of course it refers to American organizations but Canadian charities are not substantially different.

1. Charities are principally dedicated to serving the poor and needy.
"...hospitals are the largest component of the U.S. charitable sector, but they are more likely to be profitable than for-profit hospitals and aren’t much more likely to serve the needy..."
2. Donors should reward charities that have low overhead.
"...But charities need to spend on research, training and financial systems, all classified as “overhead,” to be effective. Those that shortchange these investments — and many do — are less likely to achieve their goals..."
3. Tax incentives are critical to charitable giving.
"People with income in the lowest quintile give a higher percentage of their earnings to charity than do more wealthy Americans. This pattern persists despite the fact that low earners have less disposable income and rarely take advantage of itemized tax deductions for charitable donations..."
4. Nonprofits are not profitable.
"In 2010, U.S. charities reported more than $2.7 trillion in assets. ...many lesser-known charities have substantial war chests. In 2007, Ascension Health, a large Midwest charity hospital chain, reported reserves of $7.4 billion, more than twice the cash on hand at the Walt Disney Co..."
5. It is easy to find a good charity to support.
"In fact, it is enormously difficult..."
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Prudent fiscal management, BC Liberal style

Note 16 of BC Hydro's audited financials statements, March 31, 2012
"Energy Commitments
"BC Hydro (excluding Powerex) has long-term energy purchase agreements to meet a portion of its expected future domestic electricity requirements. The expected obligations to purchase energy under these agreements have a total value of approximately $53 billion... Powerex has energy purchase commitments with an estimated minimum payment obligation of $2.5 billion..."
Including Powerex, BC Hydro's total commitment for future energy purchases was $55.6 billion, nine months ago, an amount NOT included in the Ministry of Finance report on provincial debt, which totalled $50.2 billion. Adding the massive amounts together gives a truer picture of government debt for which citizens of BC are responsible. That amount, nine months ago, was $106 billion.

Adding 3/4 of the $6 billion debt increase forecast for the current fiscal year, brings the current total above $110 billion, not including additional debt commitments arising from BC Hydro's private power purchases.


In 2006, BC Hydro commitments for energy purchases totalled $13.2 billion and other taxpayer supported debt brought the total to $47.6 billion, well less than half today's amount.


Anyone else remember when potential Liberal candidate Suzanne Anton praised the B.C. Liberal government for its "prudent fiscal management"?


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Citizens shouldn't face legal assault by their own governments

Elizabeth James, an independent minded columnist with the North Shore News, is regularly a far better read than many of her high profile colleagues in BC newspaper enterprises. James would not have embarrassed herself the way Times Colonist writer Dave Obee did recently, when he chose to be an apologist for Christy Clark.

In this column Ms. James writes,
"I decided to clear my work space a little to make way for the seemingly endless stream of paper I deal with on a daily basis. I turned on the shredder and set to work, but soon, as always, good intentions collided with my habit of reading everything one more time 'just to be sure.'"
I began a clean-up effort at this blog and ended similarly. Often, when I read through old material published here, I realize that issues have not changed, or perhaps they've grown more important. As usual, I find it difficult to condense the archives of Northern Insight and this item about government bullying is based on a piece from March 2011.

My first awareness of authorities rolling unconscionably over the affairs of individual citizens was in the late sixties when an aunt and uncle and five cousins had their home disappear under waters of the Columbia River, following construction of the Keenleyside Dam. That experience primed me for sympathy for citizens ruined without proper compensation during construction of the transit line along the Cambie corridor.

It amazes me that in this recent situation, a government professing to care about families and small businesses allowed their agents to fight so hard against those who were displaced.

Susan Heyes was subject of an Elizabeth column, Provincial Goliath has deep pockets.

Ms. James warns,
"Take heed: Out of the blue, these assaults can happen to anyone."
This is true of course, particularly when our government are servants of the elites and care little about justice for ordinary citizens.
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Association precludes effective regulation

When governing parties are controlled by big business, agents shuffle back and forth between the regulated and the regulators. Now, faux capitalists are so confident in their right to rule, they drop pretences that their guys work for the public during times they handle the business of industry regulation.

Energy company staff working at climate ministry, Damian Carrington, The Guardian, December 30, 2012:
"Almost two dozen employees from companies including the energy giants British Gas and npower are working at the Department of Energy, and in most cases are being paid by the government to do so, documents released under freedom of information rules reveal. Oil companies such as Shell and ConocoPhillips also have staff inside the department, and civil servants have travelled in the opposite direction to work for the companies."
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Saturday, December 29, 2012

"Marginalization continued"

Writing in The Tyee, Bob Mackin makes an incisive point about recent work of remittance man Wally Oppal, the loyal BC Liberal go-between when $6-million cash from taxpayers topped up Basi/Virk prosecutor Berardino's offer of slap-on-the-wrist sentences in return for an end to the BC Rail trial.

After Year of Highs and Lows, Five Questions for 2013, Bob Mackin, The Tyee
[Wally Oppal's] report was dated Nov. 19, but the release was held off until the Monday of the final business week of the calendar year, a week before Christmas. Even in the Oppal Commission's final major act, the marginalization continued. Reporters and victims' families were given just an hour in a lockup to review the phone book-thick, nearly 1,500-page report before Oppal's news conference.

By comparison, when the Stanley Cup riot report was released in 2011, there was a 90-minute lockup to review just 386 pages.
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Thursday, December 27, 2012

Pay no attention to the men behind the curtain

Not surprisingly, Laila Yuile has a good piece. She demonstrates an example of obedient political loyalty within the corporate press. A Times Colonist editor, who might be competent on matters of genealogy, failed miserably in writing an apologia for Premier Clark. Ms. Yuile dissects the defence and leaves it in tiny pieces.

Alex Tsakumis earlier provided an unvarnished version of Clark's appearance on Radio Comox, Got MILF? Christy Clark Continually Degrades Women. The reach of Tsakumis' blog is so large that BC Liberals knew they had to act.

First, they pressured the owners of Comox Jet FM to remove streaming audio of the Christy Clark interview. Vista Radio, a unit owned by the Thomsons, Canada's richest family, took down the audio almost immediately, "out of respect."

Secondly, Liberals asked loyal owners of the mainstream media for help. Dave Obee, Sam Grippo's man in Victoria, obliged. Of course, Grippo and his companies are big Liberal contributors, hundreds of thousands worth, in fact.

Surprisingly, Postmedia allowed ace Province reporter Cassidy Olivier to ask,
"MILF or cougar: A premier shouldn’t have to choose, so why did she do so publicly on the radio?"
As a commentator fully rooted in the vast acreage of anti-BC Liberal sentiment, I paid attention to the l'affaire de Comox. However, I see it mostly as distraction from real issues.

While this blog is in its fourth year, I'm still surprised by what is revealed through detailed examination of the province's financial reports. I was amazed that BC Hydro could commit more than $55 billion — with more to be revealed when they are next forced to do so — to future energy purchase agreements, yet draw next to no analytical comment from professional journalists.

I'm surprised that, without media comment, mining companies could expand their production immensely, enjoy substantial commodity price rises — in the hundreds of percent — and yet contribute less, little or nothing, in fact, to the putative owners of the resources, we the people. I'm shocked that Vaughn Palmer would defend the government's refusal to recognize the liability of $702 million owed to gas producers for drilling credits. Yes, those are uncashed. unrecorded subsidies to the wealthy oil and gas industry, granted by the province that has been Canada's leader in child poverty.

While the Premier's illustration of her own true dullness in a Comox broadcast is fair game for commentators, it removes our attention from more important matters. Without doubt, Christy Clark was inserted into her position for convenience of people who actually manage the province. She had ambition to be popular but not to achieve or develop policies of substance. She was thought to be a perfect tool: attractive, glib, relatively thoughtless and fully complaisant.

The transparency of this appointment was so apparent that it failed. The fatuous Clark was not the right choice; she's merely confirmed to be Gordon Campbell's successor as licensor of the looters.
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Tuesday, December 25, 2012

Another corporate charity misleads

Galen Weston speaking for President's Choice Children's Charity states in TV commercials running currently:
"Please, make a donation at pc.ca/charity. 100% of it goes to helping children"
We're supposed to assume the billionaire Weston family behind President's Choice, Loblaws, Real Canadian Superstore, Holt Renfrew, Selfridges, and other brands have their business picking up overhead costs of the children's charity.

Except that reports filed with Canada Revenue Agency (charity info often not available during night, try during daytime) tell a different story. In the four years 2008 to 2011, President's Choice Children's Charity paid $1.1 million for management and administration and $2.2 million in fundraising costs.

In plain language, 100% does not go to the children.
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Deception and financial fakery for friends

A few days ago, I wrote Cronies, henchmen and the future and noted a loss of government revenue derived from natural resources, even though production and commodity prices have risen dramatically in the past decade. BC's take from natural resources, according to annual public accounts, were these:
  • 2001 = $3,975,000,000
  • 2012 = $2,699,000,000
I also pointed out that, under HST, resource companies no longer pay provincial sales tax, a savings of hundreds of millions annually.

A Simon Fraser University geology report from 2009 said this:
"Today, mining in British Columbia is an estimated $5.6 billion dollar industry – almost double what it was in 2001...

"Coal is BC’s number one exported mineral, contributing close to 35% of B.C.’s annual mineral production value...

"After coal, copper is the highest valued metal mined in B.C..."
Coal, the largest mineral production in BC, sold at prices 567% higher in 2011 than 2001. Copper, the second most valuable production had prices rise 386% during the same period.

All commodity prices have changed significantly. These statistics are taken from the Ministry of Energy, Mines and Natural Gas.


Citzens enjoying a substantial rise in before-tax income across the past decade pay substantially higher taxes; metals and minerals extractors, despite exceptional revenue growth, pay less.

Teck, BC's largest mining company, had gross revenue of $2.4 billion and cash operating profits of $402 million in 2001. Ten years later, revenues were $11.5 billion and profit from operations $4.5 billion. So, Teck's operating profits went up over 1100% but BC citizens' take from natural resources went down by 32%.

By the way, Teck companies and chair Norman Keevil donated $1.14 million to the BC Liberals in recent years. Other resource companies, Goldcorp, for example, donated millions more. The returns on political donations have been substantial. I'm left wondering why the BC Liberals sold out so cheaply if all they got from Teck and other big mining companies was a few million dollars.

It turns out that British Columbia's current revenues from natural resources are in dispute. Vaughn Palmer writes about the issue,
"[Auditor General John] Doyle's proposed treatment of the credits that government makes available to petroleum producers who drill deeper (and hence more expensive) natural gas wells.

"The credits can be used to reduce royalties paid to government from those same wells. Lately, with output slackening because of the glut of natural gas, the credit-holders have been banking them to claim in future years.

"The auditor general argues that the credits should be booked as a liability, thereby increasing the deficit by a hefty $702 million.

"The comptroller disagrees, arguing that the credits don't represent current cash paid to producers, but rather future reductions in royalty payments to government..."
Most every professional accountant in the province would agree with the Auditor General on this one, although Vaughn Palmer is not persuaded. Clearly, the government has an existing material liability owed to gas producers that will reduce revenues received in the future and that liability is unrecorded.
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Monday, December 24, 2012

The reason Liberals hide BC Rail files

While British Columbia's government hides BC Rail documents from the Auditor General, consider this current news story. It demonstrates one more example of why full disclosure and transparency is needed for all public and quasi-public financials transactions:

York University sues former executive for “vast” fraud, Toronto Star, Dec. 23/12
"A former top York University executive received about $250,000 worth of home improvements including a Jacuzzi hot tub in a widespread phoney invoice racket that he masterminded on campus, the school alleges.

"In a major lawsuit with supporting documents, York says former assistant vice-president of campus services and business operations Michael Markicevic used staff and construction materials from the university for work at two family homes, while the school unknowingly covered the costs through a “vast” scheme featuring scores of bogus invoices..."
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Friday, December 21, 2012

Who are these Greens, really?

Candidate choice splits B.C. Greens in Saanich South, Rob Shaw, Times Colonist
"Sterk said her election readiness committee will unilaterally acclaim Branko Mustafovic — a local photographer and chef — as the riding’s Green candidate. The move bypasses any vote by members in the Saanich South constituency association."
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Thursday, December 20, 2012

What next at Port Mann?

It's time for the Liberal government to explain what might happen next. The Port Mann bridge and highway project cost $3.3 billion but we've seen that provided no protection from ice falls. What assurance do we have that other known problems of cable stayed bridges were not similarly ignored?

From the archives of the New York Times:
A FUROR has erupted in the world of bridge engineering over the long-term reliability of an innovative design that has come to dominate the modern generation of great bridges, all but replacing the traditional suspension bridge.

Two experts have conducted an international survey of these new bridges, known as cable-stayed bridges, and they say that their inspections revealed widespread corrosion -premature and potentially dangerous - in the cables that hold up the roadways.

''There's a cancer in these bridges,'' one of the experts, Stewart C. Watson, said in an interview. Last Friday, he told a group of experts on bridge safety in New York, ''After looking at 100 of these bridges, we're scared to death.''

In Germany, where the the cable-stay design was invented, bridges that were meant to last for many decades have had to be shut down so that corroded cables could be replaced. ''We were just shocked to see new bridges, 4 to 10 years old, with tremendous corrosive degradation of the primary cables,'' Mr. Watson said...
It is worth noting that in days of not-net-zero, TIC Grant Main eked out a 20% raise in fiscal 2012, about $3,800 monthly. He didn't make out as well as Kenneth Tan who earned $171,800 in 2011 and $376,224 in 2012. Garry Dawson, VP technical services, suffering under current austerity, had only a 20% raise between 2010 and 2012.

In happier days, Mary Polak offered coupon for free ice

H/T Alex Tsakumis for reminding us about the photo of the minister of something.
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Wednesday, December 19, 2012

No celebration of another contract to foreign ship builder

Updated with comments about the economic benefits of a locally manufactured SeaBus:

Do you use electricity, live in a space that attracts property tax, purchase motor fuel or pay fees to park your chariot or ride transit after after actually paying a fare? Well, if you do any of those things, you're putting money in the bank accounts of TransLink.

However, while the transit agency is eager to put its hands into each and every one of our pockets, it's not so keen on spending that money in British Columbia. Spending that might create jobs, as in shipyards that may or may not, eventually, someday, build navy ships, if F35's don't empty the armed forces budgets first.

The Seabus vessels have been cost effective successes and long-time symbols of west coast industrial capability but the TransLink board decided to hire Damen Shipyards Group of The Netherlands to build a replacement vessel, at a cost of $25 million. That price is 75% more than original cost of the locally built MV Burrard Beaver, price adjusted for inflation. Also, there was no announcement about fuelling the new SeaBus with natural gas, something that should have be a no-brainer in this gas-rich province. Norwegian operators are not reticent about using this fuel. Read Reinventing the wheel, timidly.

After the TransLink decision, I did note the failure of Premier Photo-Op and her Jobs Plan entourage to hold a celebration of the award of an actual contract to build an actual ship, in the Netherlands. She was more than willing to take credit for possible BC shipyard spending by the federal government so why not the same for spending of the transit agency created by her administration.

Premier Photo-Op addresses a character from central casting

Once, the SeaBus vessels were proof of BC's design and manufacturing prowess. The all-aluminum catamarans were the first of their kind anywhere in the world. Each of the two ships cost $3.7 million in 1976, $14.25 million in today's dollars. Transit officials came here from all over to examine this highly efficient people mover.

Perhaps because it was an initiative of the Dave Barrett government, a Vancouver Sun columnist called the SeaBus project "a great civil service boondoggle." However, no boondoggle, the entire project has been undeniably successful and 25 years passed before a vessel missed a single day of service. Operators claimed 99.993% reliability. Despite 35 years of service MV Burrard Beaver continues dependable operations day after day hauling thousands of passengers in comfort and safety.

The TransLink board is populated entirely by affluent dilettantes, who don't worry about where next month's rent money is coming from. Jobs? Most of the directors are collecting remuneration from numerous sources, many of them funded by taxpayers. Too bad there is so little commitment to creating employment for British Columbia trades people.

Here is a list of TransLink diectors, not exactly representative of the community it allegedly serves. Note the absence of people representing labour, community groups or, gasp, transit users.
  • Nancy Olewiler, board chair - faculty member, Simon Fraser University;
  • James Bruce, board vice-chair - investment manager;
  • Robin Chakrabarti, investment manager;
  • Rick Christiaanse, GM at Glentel, wireless retailer;
  • Lorraine Cunningham, ship broker, agent and itinerant board member;
  • John Dawson, accountant and investment manager;
  • Barry Forbes, credit union CEO;
  • Sarah Goodman, VP Tides Canada;
  • Howard Nemtin, real estate developer;
  • Don Rose, lawyer specialized in resource industries;
  • Marcella Szel, former CNR VP, another itinerant board member;
A reader's comment to this article recognizes the multiplier effect of spending. It is an important issue when government or consumers consider purchasing locally created goods and materials versus the import of finished goods. From a helpful British site, Economics online, we have The multiplier effect:
"Every time there is an injection of new demand into the circular flow there is likely to be a multiplier effect. This is because an injection of extra income leads to more spending, which creates more income, and so on. The multiplier effect refers to the increase in final income arising from any new injection of spending.

"...It is important to remember that when income is spent, this spending becomes someone else’s income, and so on. ..For example, if 80% of all new income in a given period of time is spent on local products, the marginal propensity to consume would be 80/100, which is 0.8.

"Hence, if consumers spend 80% and save 20% of every $1 of extra income, the multiplier is 5, which means that every $1 of new income generates $5 of extra income."
Potentially, local manufacture of a new SeaBus at $25 million, could add more than $100 in spending to the BC economy. That would depend on the actual multiplier effect and the proportion of goods and services originating here.

Nevertheless, if TransLink thinks they can save 8% buying overseas, they have no understanding of first year economics. A cynic might imagine other reasons for sourcing large acquisitions overseas.

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Makes me go hmmm...

The Millau Bridge, crossing the River Tarn in southern France, is the highest road bridge in the world. It is almost certainly the most beautiful, stunning from every angle. Gwen and I drove across it a few years back and remain amazed by the experience. The French built viewpoints in a number of places for admiring travellers, even including large bus parking areas for tourists visiting the region to see the bridge.

The bridge opened in 2004 and, with approaches, cost $524 million ($609M in 2012 dollars). By comparison, the Port Mann bridge in British Columbia cost $3.3 billion. Yes, there are additional interchange costs here but government hides the details so nobody can excuse the cost differential, other than by pure faith.



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Ice bombs inevitable

The reason for ice bombs dropping onto vehicles from the $3 Billion Port Mann bridge? Take a look.



Compare the Alex Fraser bridge.


On the new Port Mann, the bridge decks, east and west bound, are shrouded to the outer edges by cables carried from the centre towers. On the Alex Fraser, the cables are on the outside of the bridge deck.

Failure to deal with the predictable ice falls was a serious error. The entirely predictable difficulty was known to bridge design engineers. An Ohio facility had similar problems.

Ice prompts review, ToledoBlade.com, December 13, 2007
"The possibility of ice falling from the Veterans' Glass City Skyway's stay cables after winter storms was considered during the bridge's design but deemed unlikely to occur often enough to justify countermeasures, an Ohio Department of Transportation spokesman said yesterday.

"Now state officials will have to decide if this week's weather sequence - an ice storm followed a day later by steady rain that sent chunks of ice plunging onto the bridge's southbound lanes - is as fluky as they thought.

"...The falling ice prompted officials to close two of the three lanes for about six hours Tuesday and was a contributing factor in a collision on the span..."
The engineering school at Dartmouth has a worthwhile webpage offering one possible solution, De-icing the world
"Dartmouth Engineering Professor Victor Petrenko and his research team discovered that applying short pulses of electricity directly to an ice-material interface produces some novel and desirable effects. This discovery led them to invent an ultra-fast and efficient method of ice removal and prevention called pulse electro-thermal de-icing (PETD).

"...Petrenko's PETD method was also put to the test in Sweden where a 1712-meter-long 'cable stayed' bridge is experiencing major problems with icing. The $250 million publicly-funded bridge currently must be closed down for significant periods of time during the winter months due to dangerous chunks of ice falling at random off the towers and cables from heights of up to 140 meters.


"The first tests of PETD on a few cables and one pylon demonstrated instant de-icing action at very low energy consumption as compared with conventional de-icers."
Wondering about the high cost of the new Port Mann bridge? Read Talking real money here at Northern Insight.



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Monday, December 17, 2012

Poor people are economic stimulators for a few

Now that Mr. Oppal has delivered his report, let's ask whether the $9 million spent on Wally and friends was worthwhile.

Oppal has been charging $1,500 a day. According to CTV four months ago:
Senior commission counsel Art Vertlieb charged the province $483,741, while first-year lawyer Jessica McKeachie – who was hired to do research for the inquiry – has billed $203,134.
Now, that's a dream job for a first year lawyer. I'm old but my first year in accounting after university paid $3,900.

Poor people are real economic stimulators, aren't they.

Just to keep things in perspective, I checked with an operator and discovered that a 25-passenger bus with two drivers could shuttle from Prince George to Prince Rupert and back three times a week at a yearly cost of about $220,000. That's cost, no operator mark-up but it would change things on the Highway of Tears. (Even cheaper if we brought in drivers from Mexico or China.)

How many lives would that save?



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Sunday, December 16, 2012

Cronies, henchmen and the future

It's 21 weeks before the BC provincial election and the government's hired guns are working overtime, adding to the pile of IOU's Liberals expect to settle by further payments of public assets. RossK, The Gazeteer, knows the inevitable result; the one not talked about in the media echo chamber:
"In fact, now that the debts are starting to come due it is becoming increasingly clear that things will very likely get much worse for we who will be forced to pay the massive bill (see BC Hydro and its commitments, in the tens of billions, to the cronies' and henchmans' gargantuan IPP guarantees, for example)."
It's a script followed across the western world. With hands deep in the treasure chests of government-supplied benefits, the real takers complain about our aims for a clean world and a just society or when truly needy people hold out hands for a small share of the nation's wealth.

The echo chamber asks where advocates would find money for social programs but they mean the question to be a rhetorical one, attached to the conclusion that there is no money to be found. The cupboards are bare. Yet, how often have media analysts asked why government revenues from natural resources are declining while production and prices escalate?


The numbers to remember, lifted from annual reports of public accounts, are these:

  BC Government revenue from natural resources:
  • 2001 =  $3,975,000,000
  • 2012 =  $2,699,000,000
In addition to taking less revenue in the form of fees and royalties, government earns less from big business through consumption and corporate income taxes. Today's multinationals simply don't regard taxes as a moral responsibility.

In Britain, controversy rages around companies like Starbucks, Amazon and Google that pay little or no incomes tax.

Despite sales of more than £1 billion in the last three years, Starbucks paid zero UK corporation tax. It paid just £8.6 million on over £3 billion in sales since launching in 1998.

Amazon reports European sales through a Luxembourg-based unit and pays less than half the average corporate income tax rate in its major markets.

While enjoying a profit margin of 33%, Google's main UK unit had a tax charge of about 1.5% of sales. It avoids tax by routing revenues to offshore tax shelters.

Anyone wonder about the situation in Canada? Good luck in finding the information; it's largely unavailable.
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Saturday, December 15, 2012

Guest post from Conservative house leader

Peter Van Loan published this item when he was an opposition member during the time Paul Martin was Prime Minister of Canada's Liberal government. Van Loan's subsequent behaviour, and that of the government he supports, demonstrates he is well versed in the hypocrisy of Conservative Party politics.

My Saddest Day in the House of Commons So Far, July 5, 2005
By Peter Van Loan, MP, York-Simcoe

As the session wound to a close, I was hoping to find myself writing to you about the uplifting state of Canadian democracy, and fondly recalling the high points of my first year in the House of Commons.

Instead, I feel compelled to write with sadness about the remarkable arrogance with which the government treated parliament in ramming through the NDP budget and the same-sex marriage proposal.

The night of Thursday, June 23 was the momentous occasion. That evening, with the House sitting on what was its last scheduled night, before the St. Jean Baptiste Day holiday, the Liberal government had a motion on notice to extend the sittings of the House into the summer. Already we had been sitting until midnight each night for weeks. The objective was to get through the NDP budget and the re-definition of marriage.

I was very concerned with the financial recklessness of the NDP budget. Taken together with the other Liberal fiscal announcements with which it was made in April, the Liberal-NDP spending plan will cost $26 billion – or $3030 for a typical family of four in York-Simcoe. That’s $3030 that family must pay to prop up the Liberals in office for 8 or 9 months.

After the vote to extend sitting into the summer (at about 8:45 p.m.) many of my colleagues began heading home to their ridings. Something in my subconscious told me not to leave. Although I faced a 4 ½ to 5 hour drive home, I went up to my office and worked on some correspondence that could easily have waited until after the weekend.

After less than an hour, the bells (signaling a vote in the House) started ringing. I returned to the Chamber where we were faced with an extraordinary closure motion to shut down debate – made late at night, before a holiday weekend.

The vote passed.

As a result, the third reading of the NDP budget took place that night, and had only two speakers in a one hour debate – one Liberal and one New Democrat. The parties opposing the bill were not permitted a single speaker – an outcome about as offensive against the principle of democracy as one can get.

A handful of Conservative MP’s missed the surprise, late night motion to shut down debate. The Liberals – usually quick themselves to get out of town – pounced on this.

In fact, it emphasized the extent of Liberal deception. Earlier in the day, we had the “Thursday Question” – a ritual after Question Period wherein the Opposition House Leader inquires as to the legislative agenda for the next week.

The government answers, to let MP’s plan their affairs. That afternoon, in answer to the question about next week’s business, the Liberal House Leader, Tony Valeri, told us we would deal with the NDP budget and then the marriage re-definition. He clearly was misleading all Members, as the government secretly planned to deal with the budget that night.

What’s more, the only way this extraordinary shut down of debate could be done was with the support of at least 3 parties. As a result, the Liberals entered into a signed, written agreement on a legislative agenda with the Separatists – a first in Canadian history. In itself, this first-time agreement to co-operate with the Separatists should have been big news. But because it involved also moving to shut down debate on the marriage bill and get it through quickly, the national media chose to turn a blind eye and did little to report on the Liberal-Separatist written agreement.

A major reason I became politically active was because many in my family (I’m Estonian) lost their lives, or freedom at the hands of the Soviets or Nazis. I believe our democracy is fragile, and something we must cherish and defend. Thursday, June 23, 2005 was a sad day for democracy in Canada
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Friday, December 14, 2012

BC Liberals' startling success

Many commentators claim BC Liberals are incompetent and ineffective. While true in ministries such as Justice and Children and Family Development, Liberals have been successful in the centerpiece of their strategic plan. Startlingly successful.

In 2001, Gordon Campbell's platform document promised a "business environment that is second to none" and BC Liberals have consistently delivered on that objective, most particularly for the large multi-nationals and outsourcers.

My last article discussed reduction of the public share of revenues from mining and petroleum industries. In fiscal 2001, the final year of NDP rule, the province earned $2.1 billion in forest and water revenues. Eleven years later, the Liberal government took in $900 million. This despite massively larger use of fresh water by private power producers and frackers in the energy business. In 2001, total revenue from natural resources was $4 billion; in 2012, it was $2.7 billion. This results not from reduced activity — production has grown substantially — but from reduced royalties and other indemnities.

In 1999, BC corporation income and capital tax amounted to $1.55 billion. Thirteen years later, corporation tax for 2012 amounted to $1.63 billion, a difference of 5%. Luckily, to ease that burden, businesses were saving $2 billion a year after Liberals relieved them of paying provincial sales tax.

Perhaps this strategy is the only possible one anyway. The world's big players see tax as something for compliant schmucks to worry about. Aljazeera offers: How can tax avoidance be stopped?
"It is estimated that offshore tax avoidance costs the US government $150bn annually, and at a time when Washington is fixated on the debate over the so-called fiscal cliff, there seems to be little political will to address the problem.

"This contrasts to attitudes in Europe.

"When it was revealed how little tax companies including Starbucks and Amazon have paid in the UK, there was a public outcry and parliamentary hearings were held.

"Tax evasion costs the EU about $1.3 trillion a year. It has drawn up an action plan to try and claw back at least some of the revenue being lost."
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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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Thursday, December 13, 2012

Peace region changes

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A society doomed by greed

Is the future healthy when one company's CEO draws a larger salary between breakfast and lunch, on one day, than a loyal 20 year employee earns in a year? Well, during the four hours that a long time McDonald's crew person earned $35, his boss gained $16,827. We might assume it was through better productivity, as in faster delivery of sugar and fat laden factory foods.

Information empire Bloomberg draws a sad portrait of a sick western society. Remember, Bloomberg is not the organ of the Occupy movement; these are guys who plead for the free market variants of capitalism.
"Tyree Johnson scrubs himself with a bar of soap in a McDonald’s bathroom and puts on fresh deodorant. He ...hops on an El train. His destination: another McDonald’s.

"Johnson isn’t one of Chicago’s many homeless people who seek shelter in fast-food joints. He’s a McDonald’s employee, at both stores -- one in the Loop, the other about a mile away in the shadow of Holy Name Cathedral.

"He needs the makeshift baths because hygiene and appearance are part of his annual compensation reviews. Even with frequent scrubbings, he said before a recent shift, it’s hard to remove the essence of the greasy food he works around.

“ 'I hate when my boss tells me she won’t give me a raise because she can smell me,' he said.

"Johnson, 44, needs the two paychecks to pay rent for his apartment at a single-room occupancy hotel on the city’s north side. While he’s worked at McDonald’s stores for two decades, he still doesn’t get 40 hours a week and makes $8.25 an hour, minimum wage in Illinois.

"Johnson would need about a million hours of work -- or more than a century on the clock -- to earn the $8.75 million that
McDonald’s, based in the Chicago suburb of Oak Brook, paid then- CEO Jim Skinner last year...

McDonald’s, for example, spent $6 billion on share repurchases and dividends last year, the equivalent of $14,286 per restaurant worker employed by the company. At the same time, restaurant companies have formed an industrywide effort to freeze the minimum wage..."
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Wednesday, December 12, 2012

Nothing can go wrong, nrthng cun go rong...

One of Murphy's Laws:
"If you perceive that there are four possible ways in which something can go wrong, and circumvent these, then a fifth way, unprepared for, will promptly develop.

Corollary: It will be impossible to fix the fifth fault, without breaking the fix on one or more of the others"
Fracking to blame for well blowout near Innisfail, CBC News, December 12, 2012
"An investigation into the blowout of a well near Innisfail last January shows fracking was responsible.

"...The [Energy Resources Conservation] board found Midway Energy didn't follow its own guidelines... when it began pumping high-pressure fluids underground in an attempt to release oil deposits."
Enbridge pipeline hearings return to Prince Rupert, Vancouver Observer, Dec. 10/12
"...hearings come just days after Capesize Giuseppe Lembo, a tanker from Tianjin, China, arrived at Prince Rupert on Dec. 6 with a crack in the hull, according to the Maritime Bulletin."
BC coal terminal berth wiped out in ship collision, Canadian Press, Dec. 10/12
"A 289m bulk carrier, the Cape Apricot, crashed into a trestle supporting a conveyor system that moved coal from the terminal to the berth. The collision destroyed approximately 100m of the conveyor system and caused approximately 30 tonnes of coal to be spilled into the harbour. It also destroyed a roadway connecting the terminal and the berth."
Two vessels collide in the North Sea, Canadian Press, Dec. 6/12
"The 485ft Baltic Ace sank after colliding with the 440ft container ship Corvus J in darkness near busy shipping lanes some 40mi off the coast of the southern Netherlands."
Ship Sinks Off South China, The Maritime Executive, Dec. 11/12
"Four are missing after a ship sank on Sunday in waters near south China's Guangdong province. The Qingyuan-registered ship experienced an engine room flood that caused it to sink near the city of Yangjiang around 11 p.m. locally."
Coastal safety, Northern Insight, Nov. 23/12
"Second B.C. shipping incident in two days..."
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Ottawa's habitual condescension

A study conducted by UBC Fisheries Centre, funded by World Wildlife Fund Canada, notes in the summary abstract,
"If [the economic value of social, cultural and environmental damages] are accounted for, all of the projected economic gains from the Enbridge Northern Gateway project could quickly turn into losses in the event of a tanker spill."
Shippers of bitumen respond,
"...these impacts would not be of such a scale as represented in this report."
The questions would be easier to resolve if we had only to compare financial debits to credits. However, west coast residents believe that mega-projects should consider ecological and socio-cultural impacts as well. Alas, when the decision makers do their cogitating at Ottawa's opulent Rideau Club, 4,800 km from Kitimat, economics seem more important than matters of culture, and survival.

Government of Canada actions demonstrate little regard for the lands, forests and oceans where First Nations have been custodians for centuries. Ottawa's habitual condescension is akin to attitudes that prompted Jonathan Swift to write A Modest Proposal in 1729. Swift diligently laid out financial justifications behind his proposal for Irish children.

Canada's energy minister Joe Oliver would have been convinced.
"a young healthy child well nursed is at a year old a most delicious, nourishing, and wholesome food, whether stewed, roasted, baked, or boiled; and I make no doubt that it will equally serve in a fricassee or a ragout.

"...A child will make two dishes at an entertainment for friends; and when the family dines alone, the fore or hind quarter will make a reasonable dish, and seasoned with a little pepper or salt will be very good boiled on the fourth day, especially in winter."

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A modest appeal

I wrote recently of one business using charity for self-promotion and self-congratulation. Here's an example of the polar opposite, a small effort where every dollar delivered to the charitable purpose goes to the charitable purpose.

Jody Paterson is in Honduras with partner Paul Willcocks, quietly doing good works through CUSO International. The Children of Angelitos Felices is a personal project by Jody. Friends here are helping. Jody's recent message from Honduras:
"Through your amazing support, we have surpassed the original $8500 goal and been able to do all the major projects we started out to do - and more - in much less time than I had anticipated. I'd expected to accomplish the water project and maybe one floor of ceramic tile, plus maintain a weekly activity with the kids. Instead, we've done the water project, laid ceramic tile throughout the home, installed two new doors, repainted the place, bought a washing machine, and are now working on a new window at the front and a gate or two to stop the smaller kids from getting into dangerous areas. We've also been able to respond with more generosity to daily needs like clothing, shoes, cleaning supplies and disposable diapers.

"We're still here for another year and I figure we might as well just keep those projects coming as long as the support for our work continues. So I've kicked up the goal to $12,000 in order to add an indoor jungle gym for the kids to the wish list. The kids spend most of their time stuck inside the home, with very little to do. But there's a big space downstairs where I'm sure we can get something built that will provide them with a safe, fun place to burn off all that kid energy!

"Thank you, thank you for all you've done to make this work possible. Your support has been well beyond what Paul and I anticipated. Best of the Christmas season to all of you!"
If you admire the effort, and the results, follow the LINK. You know what to do. Even a few dollars will help.


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Monday, December 10, 2012

Memories of Vancouver a while ago

Aaron Chapman's great Tyee piece, Ten Legends of Vancouver's Penthouse Nightclub, brought back memories.

I visited The Penthouse only a handful of times, in its declining, maybe declined, days. In the seventies, rules governing liquor service in BC were primitive but a far cry from decades preceding. By then, people didn't visit the Filippone establishment for pairing of food and wine. More for the pairing of man and woman.

My boss at the time was a single gentleman who prowled late spots regularly. He summoned me to The Penthouse after a long dinner at one of Hys' eateries. A couple of drinks were ordered. No doubt, we would discuss the latest quarterly reports. However, my leader spotted a comely friend across the room and had to say hello to the lady.

Moments later, he's back and fumbling with himself under the table. I saw that he'd removed his belt. He mumbled about extra stashed for fortuitous encounters and, from a split on the inside of the leather, he extracted a number of $20 bills. Having apparently lost interest in discussing the quarterlies, he asked if I could find my own way home.

Another unique place I recall from early days was the Blue Horn Jazz Club on Broadway. Circa 1965, Duke Ellington's band arrived late after a concert elsewhere. One renowned sax player joined our table; we were in thrall. Then, he made a too bold effort to pick up one of the young people at our table. Me!

A different night, legendary night writer Jack Wasserman led followers to a table nearby. Waiters instantly delivered large glasses of clear soda water to Jack and friends. A moment later, the fluid was darkly coloured. I never saw a brown bag or a bottle pass over the glasses; it must have been miraculous conversion of inorganic fluid to specialized organic fluid.

Other Blue Horn memories included the great Charlie Mingus playing with a small group. Some say that Mingus' music was sometimes too difficult to play. Well, it sure the hell was that night because Charlie and the boys were drinking straight from the bottle. They could barely sit upright, but they could play. Man, could they play.

Maybe the most vivid recollection is of Canadian jazz/pop great Moe Koffman. Of course, he did the much improvised, extended version of Swinging Shepherd Blues. What knocked my socks off though was Koffman playing Herbie Hancock's Watermelon Man on two tenor saxophones - at the same time.

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Fracking fraud

In Fissures appear in scientists’ assurances about safety of frackingGlobe and Mail writer Mark Hume describes how industry used the work of Charles Groat, of the Energy Institute at the University of Texas, to discount concerns about the safety of fracking.
“Now a review panel appointed by the University of Texas has taken a hard look at Dr. Groat’s report, and has concluded his study “fell short of contemporary standards for scientific work.

"Not only was the work suspect, reported the panel, but Dr. Groat himself was in a troubling conflict of interest....

"In British Columbia, where the gas industry is racing to tap into vast shale deposits in the northeast, the government has been assuring first nations that fracking is not causing any environmental harm. The groundwater is safe, the government says. It is now clear there is reason to doubt that."
StateImpact, a reporting project involving NPR, provides more detail about the science-for-hire expert who came to Vancouver to reassure British Columbians about the safety of intensive fracking in north-east energy fields.
"[Groat] sits on the board of Plains Exploration and Production Company, a Houston-based company that conducts drilling and fracking in Texas and other parts of the country. According to the new report (and a review of the company’s financial reports by Bloomberg) Groat received more than $400,000 from the drilling company last year alone, more than double his salary at the University. And one of the shales examined in Groat’s fracking study is currently being drilled by the company, the report says.

"Since 2007, ...PAI says Groat’s total compensation from the company is close to $2 million."
Postmedia gave uncritical coverage to Groat's report favouring fracking but the "news" organization provided a clear implication that environmentalist opponents were engaging in fearmongering and speculation. Looking through the Twitter stream of Margaret Munro, National Science Writer, Postmedia News, I didn't find any recognition that the newspapers' reporting about Groat was mindless cheering for little-regulated polluters.



Much of the definitive reporting on fracking has been provided by ProPublica in the series: Fracking - Gas Drilling's Environmental Threat.

Ms. Munro might be wise to spend a few days reading the more than 100 examinations offered by ProPublica.

Alternatively, she might browse through the articles at Public Accountability Initiative.

Rod Smelser tweets about another good piece at Skeptoid.com: All About Fracking.

Almost any choice would be more informative than reading (and echoing) industry press releases.

P.S. - Ms. Munro tweeted Dec 10, about 3 pm:
"Fissures appear in scientists’ assurances about safety of fracking at AAAS."
Good start from the writer. Postmedia readers, let me know if the newspapers provide follow-up. I won't hold my breath.
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Saturday, December 8, 2012

Gov't ads: Public information or disinformation?

The Plan:
The Tyee, Andrew MacLeod, November 16, 2011
"The British Columbia government is preparing to spend "lots" of money to advertise Premier Christy Clark's jobs strategy, Jobs, Tourism and Innovation Minister Pat Bell said today.

"...The bulk of the campaign will be international, but also with some advertising within B.C., said Bell..."
The Claim:
BC Jobs Plan advertising

The Reality, from Statistics Canada:



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Friday, December 7, 2012

Those in the way may end up in jail

When the Cohen Commission was holding hearings in Vancouver, I attended. It was not a happy or satisfying experience. The most unsettling single observation was of government scientist — a person known for opinions that challenge Ottawa's papal view — being closely escorted by security personnel.

They  made certain there was no engagement with non-approved audience members. That highly educated and very well respected person was held on a tight leash because the entire event was not about science or fact-finding. It was about reinforcing positions that served objectives of bureaucrats who've never soiled their shoes with sea water.

A forum aimed at extracting truth from controversy should not have been a place where witnesses were intimidated by squadrons of lawyers and security personnel and legions of industry executives and flacks. Now, the Harper Government is moving to silence other scientists that hold inconvenient views.

Today, this arrived in my mail box. It's worth republishing.

An important note from Alexandra Morton:

Last December, my lawyer Greg McDade made a prediction that was recorded in the Cohen Commission testimony - that within 12 months the federal government would attempt to strip the lab I am using to test for ISA virus of its international status.

He was right. They are trying.

In response I went back to the wealth of information Justice Cohen and his Counsel Brock Martland gave us on ISA virus in BC and laid out what is known to the Director General of the Organization of International Epizootics (OIE).

7 labs have detected ISA virus in BC, 4 of them are federal government labs, whose results have been hidden, muzzled or misrepresented in government communications

Only 1 lab says 100% of his tests have been negative - Dr. Gary Marty, Provincial farm fish audit lab. His lab is now an outlier.

1 lab is non-government and thus harder to muzzle - that is the one the CFIA has gone after.

Last spring government drafted Bill 37 that would have made this research punishable by 2 years in jail.

The CFIA is clearly under pressure too.

The workers in the fish farm industry must feel uncertain about their future as does everyone depending on the wild fish economy. This virus is well known to damage their industry, which is already on its knees running out of food and customers.

I am asking the Director General of the OIE to cast an international eye on what is happening in BC, in hopes that we will be able to finish this work without escalating harassment.

Here is my letter to Dr. Bernard Vallat, DG of the OIE http://alexandramorton.typepad.com

I could really use your help. Everyone needs to speak up, there is a petition on the site above. Share widely so people know they can help.

If you want to know the extent of what is going on please read my blog. This is sheer nonsense, in a high-stakes game that everyone looses; the shareholders, trade partners, fish farm workers, the wild salmon economy, politicians the wild salmon of the North Pacific and everyone that comes after us.
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Monday, December 3, 2012

Under threat of perjury...

Legal Saga, Mark Hume, Globe and Mail, December 3, 2012
"A legal battle by the Auditor-General to get billing records in a political-corruption case has taken a surprise turn with an admission by the British Columbia government that it has documents it long denied having...

"Last year Mr. Butler [a legal services branch lawyer] filed an affidavit with court in which he stated 'the Government never received copies of any statement of account or supporting information,' from the lawyers reviewing the bills from Mr. Basi and Mr. Virk.

"Mr. Butler acknowledged that he also told Mr. Virk and Mr. Virk’s lawyer that he never saw any of their detailed billing records.

"But in a new affidavit filed Monday he said that information was simply wrong..
."
For decades, I have admired British Columbia journalists named HUME. Mark Hume is one of those people and he's done admirable work throughout his career. However, he works for the Globe and Mail and that constrains his work. Knowing the limits, we can be certain that his published assertions and implications don't tell the whole story.

I'm not constrained. Unlike Mr. Hume, when I see bullshit, I can call it bullshit. The term may not be polite but it fits.

No person, beyond an ardent Liberal partisan, believes that the sale of BC Rail was anything less than corrupt. Everything that has gone on since proof was offered is bullshit. We get it from ass-covering government lawyers, from a superior court with unclean hands, from politicians prepared to lie without second thoughts, from radio broadcasters (yes, you Messrs. Good, Palmer and Baldrey) who told us this was old news, fit to be ignored.

Don't expect the Auditor General's efforts in Supreme Court to succeed. The court, specifically Justices Dohm and MacKenzie, put politics ahead of the law. That fact cannot be acknowledged by the remaining judges without diminishing respect for the court itself.

The Auditor General and others seeking to report truth about the sale of BC Rail face interminable barriers. That fact alone demonstrates the fraud underlying BC Rail. If it was honourable, why have they resisted full disclosure?

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CFIA - Inept custodian of food safety

Food Safety Agency Should Protect Public, Not Cover up Virus for Salmon Farming Industry, Damien Gillis, The Common Sense Canadian, Dec. 1, 2012
"...Charged with ensuring your food is safe to eat, the Canadian Food Inspection Agency (CFIA) increasingly appears to be acting as a political arm of the Harper Government and an inept custodian of Canadian trade which will do our export business far more harm than good in the long run..."
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Sunday, December 2, 2012

A government of universal deceit

Theoretically, politicians are stewards of the nation's resources and regulators of industries that exploit public assets. Yet those chamberlains receive contributions worth millions of dollars every year from the people they are supposed to regulate. Clearly, this is a conflict that occurs only because the beneficiaries are also the rule makers.

Gas producers like EnCana Corp and Canadian Natural Resources (including large shareholder Al Markin) have given BC Liberals close to a million dollars in recent years, according to Elections BC. I searched on the FRPC site for corporate contributors with the word energy in their names. The report showed an amount going to BC Liberals that was 74 times the amount given the opposition NDP. Those same companies gave nothing to the BC Conservative Party and the Green Party of BC.

Are these corporate citizens simply doing a civic duty, supporting democratic institutions? Of course not. They are purchasing influence over people who regulate their economic prospects. Government ministers, who should be acting as trustees of the public interest, choose to be agents and facilitators for businesses with deep pockets and generous inclinations.

We've been hearing for months from BC Liberals that revenue from natural gas production is sharply reduced in the current fiscal year. No doubt the public share is reduced but we should be asking why.

I suggest there was a political decision to relieve gas companies from payments they would otherwise have been obliged to make.

In the current fiscal year, sharply lower government revenues do not result from lower gas prices earned by the industry. Here is a chart of natural gas prices in the first half of the current fiscal year.


This is not the first time that a business friendly government in BC has consciously reduced the public share of revenues earned from public resources. The following is a situation that I wrote about in a personal chronicle, Recalling BC Pioneers:
"Ian Mahood was angered by what he believed were under the table subsidies to large forest companies, achieved by 'short scaling' agreed to at the highest political levels. Scaling measured the quantity of log production, which was used to assess stumpage owing to government as the public share of the forest resource.

"American producers were already complaining that BC stumpage charges were too low and therefore an improper subsidy. They wanted punitive tariffs applied. However, the BC companies were complaining that stumpage was too high and depressing their profitability. The BC government dared not reduce stumpage rates because that would add fuel to the American arguments. Instead, an under the table agreement led to keeping the stumpage rates as they were but artificially depressing the 'scale'. That reduced the amount payable to government by BC producers but avoided giving ammunition to Americans because it was hidden.

"However, some contracts between major forest companies and independents called for the actual working loggers to be paid according to the government scale. By artificially depressing the measurement of timber produced, not just the stumpage was reduced; so were the payments to contractors for log production. In effect the small logging operators subsidized profits of the big guys, the forest license holders.

"Ian Mahood's company believed they were out large sums of money but Ian said terrific pressure was put on the loggers to keep quiet. Of course, the big companies and the government had significant leverage they could apply."
It seems to me the same strategy is at play today in the energy sectors. Government intends to reward corporate participants and it is doing so through the back doors. With an election only 23 weeks away, Christy Clark and Mike de Jong dare not admit their real intent.
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Only when their lips move

Trust me friends, my lips aren't moving
Days ago, I posted the article If BC Liberals lied before, can we believe them now? The main point was that our provincial government feels no obligation to speak honestly to the electorate. Almost everything said is shaped and reshaped for political effect. If the facts are inconvenient, they are reworked until more convenient. Unfortunately, indifferent reporters echo government claims without examining credibility.

For example, in the second quarter financial report, according to the Canadian Press,
"De Jong blamed the continuing dropping government revenues on falling coal prices and collecting less property taxes."
Does the Finance Minister's statement hold up to scrutiny? Let's see.

The ministry's second quarter report shows that coal revenues and property taxes, which amount to 1/6 of the total revenue shortfall, are down $46 million from the budget forecast. That is only 16% of the variance and about 2% of total budgeted revenue.

More significantly, expected natural gas revenues are down three times as much, by $142 million. However, it is expedient to not draw attention to sagging gas revenues while Christy Clark is boasting about liquefied natural gas projects worth a claimed $1 trillion. Of course, zero LNG projects are more likely than the five talked about by Clark, which is good news considering the vast quantities of low cost electricity taxpayers are expected to facilitate liquefaction. Producers are also expecting a break on the usual royalties. Together, those factors mean that most economic benefits of the considered LNG plants will flow to multi-national energy companies, not the citizens of B.C.

Ian Reid has an excellent piece about Liberal sleight of hand in budget preparation:
"At budget time the actual deficit – prior to the forecast allowance – was expected to be $768 million. Now, it’s projected to be $1,369, million which means the actual projected deficit has grown by $601 million since Christy Clark’s first real budget.

"That’s over a $100 million more than the BC Liberals told the media yesterday.

"Now, given their usual strategy, the whole budget is probably a pile of malarkey with an overstated deficit that will miraculously shrink just prior to the election to show us what great stewards the BC Libs are."
David Schreck also supplies a point of view that questions Finance Minister de Jong's candor.

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