Monday, September 30, 2013

"Revenue neutral" carbon taxes - hollow claim

In its June budget update, the BC Government said,
"When the carbon tax was introduced, one of the key principles was that the tax would be revenue neutral – that all carbon tax revenue would be returned to individuals and businesses through reductions in other taxes and not used to fund government programs. The principle of revenue neutrality will be maintained."
How do we know the carbon tax is revenue neutral? Well, because the BC Liberals say it is. They cannot demonstrate reductions - except in corporate accounts - so the only available claim is that citizens would have faced even larger tax increases but for the carbon levies.

Let us examine numbers provided by the BC Ministry of Finance. Keep in mind that, after implementation of carbon taxes, British Columbia's population grew by 5%. If the per capita tax burden was unchanged, government revenues would have grown by a like percentage.

However, from 2009 to 2013, personal income taxes rose 11% and sales taxes were up 18%. Other revenues - including medical service fees, licenses, education fees and miscellaneous - increased 19%.

There were some beneficiaries in the revenue neutral game. Natural resource revenues dropped 35% and corporate income taxes dipped by 4%.

$3.7 billion in carbon taxes since 2009 didn't stop revenues from medical services plan premiums rising 28% in four years. Nor did it stop the upward push on transit taxes, BC Hydro rates and ICBC premiums.

The obvious truth is that carbon taxes enabled the BC Liberals to reduce corporate income taxes and eliminate royalties once paid by natural gas producers.
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Thursday, September 26, 2013

Taking care of business (friends)

Source: 2013 June Budget Fiscal Plan, Table A9 Revenue by Source (Page 120)

From Auditor General reports, we know that natural gas revenues reported by the province did not account for the increased liability for credits owed gas producers. From the most recent audited financial statements of British Columbia:
"The province offers credits for certain costs incurred by producers including the deep well, road and summer drilling programs. Deep well credits of $913 million (2012: $752 million), road credits of $12 million (2012: $16 million) and summer drilling credits of $9 million (2012: $6 million) have been incurred by producers and will reduce future natural gas royalties payable when wells go into production."
If the increase of the liability to gas producers had been offset against natural gas royalty income, the numbers for the last three years would be this:

In the three years from April 1, 2010 to March 31, 2013, the actual net royalties received from natural gas producers in BC amounted to $63 million.

You're (edited) not likely to read or hear about these numbers in the obedient corporate media. They're too busy telling us about Adrian Dix's fatal flaws or about how business wants to rename and restore the HST.

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Monday, September 23, 2013

They assume we're feckless idiots and they might be right.

Before the May 2013 election, BC Liberals promised the entire provincial debt, budgeted this year at $62.5 billion, could be eliminated within 15 years with government proceeds of natural gas production.

In fact, the time frame is likely a bit longer. Actually, more than 500 times longer.

The most recent financial reports show natural gas royalties contributed $169 million to BC government revenues in the fiscal year ended March 31, 2013. However, drilling credits owed producers grew by $161 million in the same period.

Failure to record credits was one of the issues that prevented Auditor General John Doyle from giving an unqualified opinion respecting fairness of the province's financial statements for 2012:
"No provision has been made in the summary financial statements for royalty credits earned by natural gas producers under the government’s deep-well drilling program. In this respect the summary financial statements are not in accordance with Canadian public sector accounting standards."
The unrecorded royalty credits owed to natural gas producers rose from $752 million to $913 million in fiscal 2013. Had the increased liability been recorded, net revenue from natural gas royalties for the year would have been a paltry $8 million.

At that rate, the BC government would pay off the provincial debt in a little over 7,812 years, as long as they don't do any new borrowing. But then, didn't Premier Photo Op just announce a new bridge over the Fraser farmlands?


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Saturday, September 21, 2013

Broken trust

After shifting his focus in recent months, Alex Tsakumis is blogging again and getting ready to launch as a 3-hour a day webcast on politics, media and other current affairs. A segment of AGT's Thursday post caught my eye. He described a moment in the recent Legislative session when Minister of Children and Family Development Cadieux was thanking her crew for loyal service. Alex's words,
"...Cadieux singled out “Lisa Leslie,” who, let me confirm, is Sean Leslie’s wife. The Minister thought nothing of (painfully) pointing out Sean Leslie’s glaring conflict of interest (he is required to cover, WITH UNIMPEACHABLE IMPARTIALITY, the very government who provides his household with a healthy cheque every month). It is a moment that did not go unnoticed with many media colleagues–and NOT ONE wrote about it or pointed it out..."
No doubt, the Leslie family would happily say to the Minister, "You're welcome. Glad to be of service." For her work, Lisa Leslie is rewarded quite well. Certainly better than life-saving paramedics and school support workers who were able to gain modest increases in a new contract negotiated this week, after receiving 6% over the last five years. Because of low pay rates and irregular schedules, CUPE says the average support worker salary is $24,000.

The BC Liberal government pays Lisa Leslie 3½ times that amount and she has enjoyed increases of 26% in the last five years, not a bad amount considering the net-zero mandate that's been in effect much of the time for government workers.

One may wonder why media spends no time comparing treatment of senior civil servants to  treatment of unionized workers such as those in healthcare and education.  The answer may be that some writers and broadcasters benefit from the unequal treatment. Leslie and Smart are not the only ones with a close relative who has been appointed to work for the BC Liberal government or its caucus.

I wonder how Sean Leslie's boss at CKNW would explain how Lisa Leslie's employment does not put her husband in conflict of interest that offends principles published by the Association of Electronic Journalists (RTDNA). Ian Koenigsfest, head of programming at CKNW, is also President of RTDNA. Here is a portion of the RTDNA's Code of Ethics:

The Canadian Association of Journalists publishes Ethics Guidelines that includes:
  • We generally do not accept payment for speaking to groups we report on or comment on.
  • We do not report about subjects in which we have financial or other interests...
How would Leslie or Koenigsfest excuse themselves or their colleagues on these ethical matters?

Regular readers will recall the CBC Ombudsman upheld a complaint that Stephen Smart, CBC Legislative Reporter for Radio and Television in BC, was in conflict because he reported on the BC government while his wife worked as a press officer in the Premier's office. In his report, Ombudsman Kirk LaPointe stated,
"...Whether a real or perceived conflict of interest, no amount of managing it can do more than mitigate the impact on an impartial fulfillment of duties."
Essentially, CBC ignored LaPointe's findings. Smart continues in his position and his wife serves as a Public Affairs Officer in Christy Clark's government. No disclosure of the relationship is made on air.

This is the way media behaves in British Columbia. Apparent conflicts and ethical gaps are discussed only in the alternative media, never in corporate properties. Payments from groups affected by coverage flow without sanction to the "journalists" providing that coverage. Keith Baldrey recently called references to the RTDNA code of ethics "lame."

Hollow are claims that British Columbia's mainstream media pays attention to codes of conduct and commonly accepted principles of journalism.

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Monday, September 16, 2013

Consumers targeted by BC Liberals

Governments prefer indirect taxation partly because politicians assume they'll take less heat if hands of tax collectors slip into our pockets surreptitiously. That's done in BC by instructing crown corporations to overcharge customers and transfer surpluses to the public treasury. This allows BC Liberals to make a claim like one on the finance ministry website:
"The general corporate income tax rate in B.C. is among the lowest in North America and the G7 nations."
Liberals also could say that oil, gas and mining companies pay among the lowest royalty rates anywhere in the world. But, low corporate income taxes and low resource returns mean that government looks elsewhere for revenues.

One of those places is ICBC. The insurance company delivered $677 million to the provincial treasury in 2010 and 2011 and has been told to contribute another $550 million in the next three years. Former Liberal MLA Geoff Plant, whose law firm billed the province more than $1 million in 2013, sees overcharging by crown corporations as good. Mind you, he's not worried about insurance rates as long as $50,000+  sails his way each year for attending a few meetings of BC Ferries. (He and his family also get free passes to ride the ferries.)

The cash transfers are only part of the amount contributed by ICBC. For one thing, it saves costs that would otherwise fall on the government by providing a fine salary and corner office to Paul Taylor, a good Liberal who found a road outside government, while still paved with gold, was bumpy. More on Taylor at A cheapjack's parachute is stained.

ICBC also contributes hundreds of millions each year to the province through insurance premium taxes and by directly paying for road improvements, traffic safety programs and driver and vehicle license administration.

The real money for the BC treasury comes from the public utility company. Since 1998, BC Hydro paid $11.5 billion to government. The largest transfer was in the year ended March 31, 2011: $945 million. However, that was also the year that BC Liberals promised a new energy policy with greater emphasis on private power production. Not long after, buying that power high and selling it low created a major drag on BC Hydro financial results. With the 2013 election pending, government could not sustain the 2011 level of cash transfers without even higher rate increases.

Not surprisingly, with the election behind them, BC Liberals are preparing massive increases in electricity prices. The 26.4% suggested in a leaked document would take a billion dollars a year out of our economy. It will be painful for us all.

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Laila Yuile with Ian Jessop today on CFAX 1070

At 1 pm, independent journalist Laila Yuile chats on Victoria's CFAX 1070 radio with Ian Jessop.

Laila won't be there to sell anything, defend anyone or shill for businesses or political interests. You will hear honest, informed commentary about life and politics in British Columbia.

For a long time, Ian Jessop has been an observer and participant in BC political life. In 1988, as a veteran legislature reporter for CKNW, Jessop was appointed Press Secretary for Premier Bill Vander Zalm and he held the same position for the next Premier, Rita Johnston. When Socred days ended, Jessop became director of communication for the Liberal caucus, then moved into private communications before his return to broadcasting.

Jessop promises to offer a variety of voices with a variety of viewpoints.

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Friday, September 13, 2013

Punishing electricity consumers

When Gordon Campbell led BC Liberals into the 2009 election campaign, his platform promised,
"We will maintain our competitive advantage from low cost heritage power, for residential and industrial users alike."
When that promise was made, BC Hydro's annual domestic revenues were $2.8 billion. In 2013, BCH extracted over $4 billion from the pockets of British Columbians for domestic power. Price increases imposed in 2013 result in the utility scooping another $400 million in the current fiscal year. On top of that, according to a leaked document, prices will rise another 19% in the next year.

So much for low cost power promised voters a few short years ago.

In earlier 2013, CBC reported Energy Minister Rich Coleman, cutting proposed rates increases, said families need a break and the Crown corporation can afford the cut.
"Next April, ...electricity rates are due to increase by 1.4 per cent, Coleman said."
Families must now ask Coleman if he was ignorant about energy issues before the election or if he was telling lies. The Minister of Graft and Corruption knows the answer.

This graph provides a hint.

Most of the BC Hydro price increases result from contracts made with private power producers. In 2009, long term energy purchase contracts totalled $22 billion; in 2013, the present value of those obligations was $55 billion.

Liberals also pledged that 50 per cent of all new demand for power would be met through conservation. That promise has been kicked to the curb because multinational energy companies demand huge amounts of subsidized electricity so they can produce liquid natural gas. The Minister of Graft and Corruption is handling those negotiations so we should be very worried.

Consumers in BC will be punished again because, if LNG plants fire up, domestic gas prices will rise to match levels determined by Asian export markets. Based on recent experience, consumer prices for gas will rise but royalties paid by gas companies will not.

Here is a graph of BC Hydro domestic revenues from 1998. It demonstrates the disastrous impact of  energy policies that BC Liberals imposed on this province in 2009.

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Thursday, September 12, 2013

Feel a class action lawsuit coming on?

A reader comments at my recent article In the dining room, an OOPs moment:
You may have hit on to something really big here. I recently learned that an acquaintance is doing an unpaid internship for 6 months in order to possibly get a paying job as a paralegal. At a major Vancouver law firm. How pervasive is this?
Mind you, if major firms in the law industry are improperly using  unpaid interns, there won't be a rush of legal factories wanting to start a class action lawsuit.

However, if labour law is being routinely ignored and unenforced in British Columbia, chances of a class action suit succeeding are good. Ontario courts recently certified a class action for an unpaid overtime claim by current and former employees of investment company BMO Nesbitt Burns Inc.

If anyone wants to participate, I can put them in touch with a lawyer not afraid to act. You can email me at the address shown at the upper right.


Fairmont Hotel is not one of our good corporate citizens. The company is owned by capital pools in USA, Saudia Arabia and Cayman Islands. It would be interesting to know if any corporate income tax is paid in Canada or if the income moves to convenient tax havens.

The Canadian Intern Association offers information and resources. It also discusses Fairmont HERE.

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Justice delayed: time is money

In the USA today, a black youth was jailed for life after a jury trial convicted him of a March 2013 shooting. The time from homicide to related conviction: 5 months and 22 days.

In British Columbia today, prosecutors announced they will seek to appeal the acquittal of Const. Bill Bentley on a charge he gave perjured testimony to an inquiry after he and three other RCMP members killed Robert Dziekanski. Perjury charges against the three others are unlikely to proceed until the Bentley case is finalized. That might take years and taxpayers are paying for both the prosecution and the defence.

The time from homicide to the present day: 5 years, 10 months and 29 days.

Yes, time is money. Taxpayers' money, for a number of people.

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Wednesday, September 11, 2013

Lots of shock, tons of awe - You can help!

H/T: Susan H

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CFAX 1070 - Wed Sep 11, 1 pm

I'll be talking with Ian Jessop about current affairs in British Columbia. Join us live or listen to the session by podcast HERE.

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Tuesday, September 10, 2013

A weapon to change the world

: Updated 9/13/2013 to add audio clip and comment about Global's supposed correction.

“Those who educate children well are more to be honoured than they who produce
them; for these only gave them life, those the art of living well.” ― Aristotle

This week the BC Teachers' Federation and the BC Government are in Supreme Court, duelling over a number of education issues, including class sizes and compositions and special-ed resources. The dispute dates back to January 2002 when BC Liberals introduced legislation that teachers challenged as unconstitutional on the basis that it deprived them of collective bargaining rights.

The BC government believed it had the right to impose legislation that unilaterally overrode provisions of existing collective agreements and that prohibited future collective bargaining on the same subject matters. Madam Justice S. Griffin held that most of the controversial legislation was unconstitutional. She included this sagacious comment in the reasons for judgement:
[380] The legislation undoubtedly was seen by teachers as evidence that the government did not respect them or consider them to be valued contributors to the education system, having excluded them from any freedom to associate to influence their working conditions. This was a seriously deleterious effect of the legislation, one adversely disproportionate to any salutary effects revealed by the evidence.
However, that was far from the end. Liberals were determined that being at war with public school teachers was a political issue that might pay dividends.

Justice Griffin suspended the declaration of invalidity for 12 months to allow the government time to address repercussions of her decision. Their response was to pass new legislation that essentially reenacted the terms that had been found unconstitutional.

It was a cynical response that further disrespected teachers and demonstrated the BC government intended to pay little attention to directions from the Supreme Court. This unveils an uncomfortable reality: the government holds purse strings that can punish or reward each and every program or person functioning in BC courthouses. Whereas citizens who ignore judgments are at peril, governments, because they fund judges and the courts, are not.

What promises to be a lengthy trial of the issues is underway and, if the BC Government loses again, they might simply reintroduce more legislation and keep the issues unresolved for another decade.

Legal skirmishes have been ongoing since the April 2011 decision. The BCTF was denied right to inspect many important documents and had to go before Justice Griffin to gain access. In dealing with reluctance to deliver documents, a comment of the judge was revealing,
[79] However, the problem with the Province’s argument is that it is too broad: it would justify the government not producing any documents whatsoever. Furthermore if the documents do reveal a good faith bargaining strategy by government, they may help prove a defence to the Province’s actions; equally, if the documents reveal a bad faith strategy, then the plaintiff is entitled to explore this as part of the litigation.

As the trial unwinds, BC Liberals will have their anti-education astroturfing crews at work on social media and their mainstream media pals are still loyal. I noted one example on Global TV on the beginning day of the trial. The provincial government is claiming that another victory by teachers would have huge financial consequences. They've thrown out a number of $5 billion although without the slightest detail of its calculation.

Randene Neill, with an assist from Keith Baldrey, claimed that number actually came from the teachers' federation. She said the following before tossing to Baldrey who spoke in circles but accepted, even reinforced, the intro, which said,
"But the BCTF is throwing some big numbers around. Six billion dollars that it would cost taxpayers, they're saying."
Yes Randene, those teachers are so greedy. There are no issues about class sizes, teaching resources, services to special needs children, extracurricular activities or general matters of education quality. No, it's all about selfish teachers determined to bankrupt the provincial treasury. But then, Randene, your notes didn't explain the real issues, did they.

A person from Global TV told me a correction was made on the Sept 9 5pm Early News and I should "Live with it." I can't verify any correction since that program is not available online. However, RTNDA rules say, "Errors will be quickly acknowledged and publicly corrected on all platforms." I recorded this clip from Global's BC site at 10:30pm Sept 10, 2013, after the supposed correction:

From the Vancouver Sun:
"The provincial government has pegged the cost of reinstating the provisions of the teachers' contract at $6 billion. While BCTF president Jim Iker insisted that figure is unrealistic..."
By the way, I caught Julie Nolin's report on Monday's CTV News at 6pm. It was excellent; an example of balanced coverage that explained the basic issues in this very complicated story. Vancouver's Legends of Journalism would be happy with CTV and shaking their old grey heads at Global.

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In the dining room, an OOPs moment

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Sunday, September 8, 2013

Bombs & explosives are chemical weapons

An eastern blogger, who I previously mentioned in this estimable piece, is a loquacious commentator for a preeminent corporate welfare bum. On his website Saturday, he was cheering for an escalation of death and destruction in Syria, hoping American cruise missiles and strategic bombers would be deployed without delay and concern for legalities.

One of the stated reasons,
"Nearly 1,500 innocent civilians were murdered by Bashar al-Assad on the morning of Aug. 21."
That number is less than certain. According to Propublica and The Guardian, France set the count of dead at 281, Britain had it around 350 and the Americans at 1,429.

Of course, body counts in conflicts are problematic and victims with dark skins are peculiarly challenging to quantify. Some people had the number of war dead in DR Congo at 5.4 million. Others had it closer to 3 million. In the Rwanda genocide, estimates had a half a million to one million dead. Regardless of the numbers, Americans expended little fuel and ammo in central Africa.

Wait 'till you see what the little bombs split up into.
Global interests of America are different in the middle east, especially in countries that border Israel. That results in well orchestrated outrage after someone, intentionally or by accident, deployed poisons against Syrian civilians. Certainly, deaths of people by chemical weapons is appalling. But then, I don't include only volatile agents like Sarin. I include chemical weapons that come in other forms, such as the explosives in $640 million worth of cluster bombs Americans are supplying to Saudi Arabia and in the 1,000 pound warheads delivered by Tomahawk cruise missiles or the 40,000 pounds of bombs in a single B-1 bomber.

Explosions are chemical reactions that instantaneously release large quantities of potentially destructive gases. To some observers of warfare, chemicals that kill with a loud bang are more genteel than silent ones. Thus, we are less offended by explosions, particularly if delivered by smart bombs that promise to kill and maim fewer innocents than unguided versions.

The bombing that President Obama aims to do - with Stephen Harper's ardent support - will visit additional tragedy on the people of Syria and may have unintended consequences. Sure, most targets will be command and control positions but hardened facilities require large munitions, resulting inevitably in significant collateral damage. Even so-called precise weapons are imprecise. The New York Times published a piece that claimed 98% of drone strike victims in Pakistan were civilians, not intended militants. Sadly, everyone in a bombsight is the enemy. The NYT writers noted that violent shows of American force solidified the power of radicals in targeted areas,
"While violent extremists may be unpopular, for a frightened population they seem less ominous than a faceless enemy that wages war from afar and often kills more civilians than militants."
Similar reactions have been evident in other nations where the USA kills with drones. Contrary to Obama's implication, an assault on Syria will not be over in two or three days. This is not a video game that can be turned off or rebooted.

Intending to stop the bloodshed in Syria, Barack Obama and the neo-con hawks, the guys applauding more than a decade of continuous war, aim to do additional, but worthy, humanitarian killing in Syria. It's a dangerous path to follow, more deadly than doing nothing.

So what's another alternative? International sanctions have not been wholly successful but they have not been abject failures. The first aim of peacemakers is to stop the flow of arms and equipment that facilitate warfare. Those come from many G20 nations. Additionally, the civilized world must enforce trade embargoes on all goods except for what JFK called, in the Cuban missile crisis, the necessities of life. Here was Kennedy's first direction on October 22, 1962:
"To halt this offensive buildup a strict quarantine on all offensive military equipment under shipment to Cuba is being initiated. All ships of any kind bound for Cuba from whatever nation or port will, if found to contain cargoes of offensive weapons, be turned back. This quarantine will be extended, if needed, to other types of cargo and carriers. We are not at this time, however, denying the necessities of life as the Soviets attempted to do in their Berlin blockade of 1948."
Is it possible to isolate Assad's Syria? Not completely but sanctions could be effective - Syria's immediate neighbours are American allies -  if western governments would take actions against enterprises that do international dirty business. Instead, typical sanctions are applied on the basis of "Wink wink nudge nudge. Say no more, say no more." By example,
"Member of German Companies Presiding Board: 'Ignore Sanctions against Iran' "
The New York Times ran this piece a few months ago,
"Large amounts of computer equipment from Dell have been sold to the Syrian government through a Dubai-based distributor despite strict trade sanctions intended to ban the selling of technology to the regime..."
Truth is that sanctions only work when the nations imposing them are determined to make them work. If the British were serious, they would not have granted export licences for bulk chemicals useful for weapons. If American were resolute about Syria, Michael Dell would be in jail. But then, America is not in the habit of prosecuting billionaires, it prefers building and deploying armaments. That pleases the billionaires.

Strangely, some of the best commentary comes from humour site The Onion:
Experts Point To Long, Glorious History Of Successful U.S. Bombing Campaigns

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