Wednesday, October 2, 2013

Of business, by business, for business

British Columbia's revenue from natural resources totalled $4 billion in fiscal year 2001. The Bank of Canada inflation calculator shows the equivalent in current dollars is $5 billion.

Natural resource revenue received by the province in fiscal 2013 was $2.5 billion, half the value, in constant dollars, returned to the province by the resource sector when BC Liberals took office.

Petroleum, natural gas and minerals returned $1.3 billion in 2013 compared to $2.4 billion in 2001, adjusted for inflation. That seems strange considering commodity prices are up by well more than inflation. Examples:

BC coal production: (source)
2001 - 25,680,900 tonnes worth $959 million
2012 - 28,578,000 tonnes worth $5,060 million
<< Increase: 11% in volume, 527% in value >>
BC metals production: (source)
2001 - worth $1,394 million
2012 - worth $2,453 million
<< Increase  76% in value >>
BC industrial minerals: (source)
2001 - worth $296 million
2012 - worth $472 million
<< Increase  60% in value >>
BC construction aggregates: (source)
2001 - worth $217 million
2012 - worth $328 million
<< Increase  51% in value >>
During their time in office, BC Liberals chose to shrink the public share of produced resources. This provided huge benefit to such as the Teck Resources group, a major producer of coal and metals. Their sales in 2011/12 were six times sales of 2000/01. Operating profits were up more than 1100%. Teck gained rewards worth billions and passed a few millions to the BC Liberals. The list shown here includes contributions from 2005. The Teck group is the BC Liberal's largest contributor but other mining and energy companies have been generous supporters. Clearly, it's good business for business to do business with the political party owned by business.

Unfortunately, that leaves the public treasury short of money for essential services. Representative for Children and Youth Mary Ellen Turpel-Lafond has been pushing the government to protect the province's most vulnerable children. Years after promising significant improvement, the Ministry of Children and Family Development still fails to meet its own standards. There continues to be insufficient resources.

Addendum:
I've had messages saying this article ignores the downward trend in natural gas prices and this contributes to reduced government revenues. Here is the Stats Canada graph of prices. I think it reinforces my basic position.


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11 comments:

  1. For Business, Business friendly and all that. The taxpayer is only called upon to ensure the vote goes the way they want it to.

    This equation has to be changed... In light of the "privatization" of crown assets, or businesses, the taxpayer is paying more and more money for reduced services. The "friends of the government" are paying less and less taxes. The taxpayer's, most of whom can ill afford to pay higher taxes, simply have no way out. The middle class in this province, indeed this country, has to find a way to fight this corporate,
    run kleptocracy. Make no mistake, this is a calculated strategy that has been in place, since the 1980's. It is a disease that is undermining our society, and future. Unless it is stopped, the cost will be increasingly high, and the damage irreversible.

    It is truly time for taxpayers in this province to organize, and take back government for the people, not corporations.

    ReplyDelete
  2. The Campbell Years will be viewed by history as "The Years the Locusts Have Eaten "; the locusts being big business. Campbell and his henchmen have raped this province and so bankrupted the provincial treasury that it is near to impossible for the provincial government to maintain the standards the citizens enjoyed in the previous century.

    With his equally evil brother acting as Lord Ha Ha on the radio, the truth is no more, rather a Kafka-Orwellian Premier speak is disseminated to the mainstream media which prints it without question. Lies are now truth; prosperity is bankruptcy; honor is dishonor; charity is graft; democracy is dictatorship.

    Campbell has brought a new dark age to the province, made more sinister by the likes of the Fraser Institute and other pseudo professionals who pretend to be experts, who seem to be only expert in getting massive stipends.

    This province, this country is on the brink of a financial and moral maelstrom, which when breaks, may do untold horror to this once great county.

    Canada did have concentration camps, just ask the Japanese the Canadian government interned in 1942.
    Adolph Hitler and the Nazi party were elected to the Reichstag several times in democratic elections.
    Income tax was supposed to be a temporary measure to pay for WW1.
    Canada and the Allies used chemical weapons in WW1.

    Premier photo-op will let the gravy train roll on for big business and pretend it is good for the province.

    ReplyDelete
  3. And just to add The Fraser Institute has a "charity status" so all the "donations from big business" are written off with tax breaks, so we the people are subsidizing these windbags and the garbage they spout!

    ReplyDelete
  4. Great analysis again! Another thing to consider is that BC is producing more gas by far than ever before. Your graph shows the value which seems high against market prices at sales hubs. At today's prices on the escalating royalty scale, little revenue is generated for the province. Now deduct "credits " as you have previously shown and producers are getting a free ride. Not much wonder producers can afford to be such heavy donators to the liberals.

    ReplyDelete
  5. Norm, I don't have the training or background to know about high finance, royalties and subsidies — but I hope I'm getting this straight: that resource industries used to pay the province a lot more than they do now, for the resources that we allow them to take out of the ground.

    Now, the focus has shifted to the activity these developments generate, with the tax man hitting the workers and small businesses that benefit from spin-off industries. Everybody feels the buzz when the "circus" comes to town... then when the circus pulls out, our wallets somehow feel lighter.

    Am I on the right track?

    ReplyDelete
    Replies
    1. Certainly it's correct that resource industries pay to the public a much smaller share of the value extracted from BC lands, compared to the days of Social Credit and NDP governments. Economic activity generated by today's resource exploration and extraction is not dissimilar to that of earlier times except that modern machinery and technology results in fewer job benefits for locals. Add to that the preference of multinational companies to import foreign workers and export free assets to tax friendly locales. Profits of multinational firms are especially hard to tax so governments look to workers and small business operators to gain revenues. However, sometimes politicians forgo the public share if benefits flow to good and loyal friends. Understanding that, corporations influence public policy through campaign contributions, through lobbying, and through captured regulators.

      In my view, reform of political party financing and lobbying law reform are starting points to improvement. In addition, access to information rules must be improved. As the Globe & Mail reported, "Canada finds itself tied for 51st in the world on a list of freedom-of-information rankings, languishing behind Angola, Colombia and Niger."

      Delete
    2. welcome to beautiful blackout BC.

      Delete
  6. $18.8 million per year of BC public money given to BC businesses, so the BC public sector can be "carbon neutral":

    http://thetyee.ca/Blogs/TheHook/2013/06/28/CarbonPurchase/

    ReplyDelete
  7. http://blogborgcollective.blogspot.ca/2013/10/premier-christy-clark-has-tunnel-vision.html

    ReplyDelete
  8. Hi Norm
    I see TREO the PRIVATE company that built the Port Mann bridge is now saying they {a private company} are going to use ICBC resources {public Company} to collect the tolls that haven't been paid for them, It sure must be nice to be friends of the Lieberal Government BC and have the use of public resources whose wages are paid by the citizens of BC to do your work for you. Just wondering what your thoughts are on the above?

    ReplyDelete
    Replies
    1. I find it utterly ridiculous that we ,the taxpayers, signed a 30 YEAR contract with these corporate welfare bums to get this bridge built and operating.
      If the BC Govt is a good enough credit "risk" to sign a 30 year contract with the private sector to build a fricken bridge, then why didnt we float a bond on the stock market as we used to do in the past ( and this bridge builder did) to get large infrastructure projects done?

      We are now stuck over paying these swine for the next 30 years for a depreciating asset that will be "ours" in 2042.

      Well done BC Liberal fiscal "managers", well done.

      Delete

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