Wednesday, January 28, 2015

Public service: a rewarding career

This is a small piece of information learned in my recent examination of business in Norway.

In the article Two Oil Economies, I mentioned Norway's Government Pension Fund Global, the sovereign wealth fund that collects the nation's oil and gas revenues. Based on last year's average exchange rate, the fund is worth $1.2 trillion CAN.

As CEO, Yngve Slyngstad was paid the Canadian equivalent of $1 million in 2013. That was after a significant raise following two years of excellent returns. His remuneration over four years was less than $3 million.

Doug Pearce, until recently the CEO of British Columbia Investment Management Corporation, earned $1.8 million in the 12 months ended March 2014. His four year take was $5.7 million. Many of Pearce's 13 Vice-Presidents earned more than Slyngstad.

One minor thing: Yngve Slyngstad manages funds ten times greater than the amount managed by bcIMC.

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Tuesday, January 27, 2015

Eventually, the piper must be paid

L.F. Copeland (1888):
Mathematics is an exact fact; figures don’t lie, but liars sometimes figure.
Financial statements of governments and crown corporations should be simple and understandable. They should be; but seldom are when the issuers would rather obscure than reveal.

I've been examining 25 years of BC Hydro Annual Reports, trying to gain an accurate understanding of the utility's financial position. I will post a number of small pieces with information that, when taken together, should provide a view of Hydro's financial performance over time and the challenges that lie ahead.

For knowledgeable people, major concerns are many but cost deferral is one subject that would be on everyone's list. BC Hydro has spent about five billion dollars and recorded the expenditures as "regulatory assets." Whether or not these items have tangible worth equivalent to the carried value is uncertain. The view of some, including me, is that massive deferrals have been an irregular accounting device to distort BC Hydro results. One purpose is to allow payment of "dividends" to government of "surplus equity." To make the payments, as we've demonstrated previously, the utility had to borrow the money.

I will write more of this subject in the future but one thing is indisputable: accounting policies of the last few years are materially different than in BC Hydro's first five decades.

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Monday, January 26, 2015

Performance short of promise

During the 2013 BC election, Liberals talked frequently of "Debt-Free B.C." The party platform included this:

No conscious person will be surprised when I state the performance has fallen short of the promise. It's a liberal shortage. Consider the actual numbers versus the promise displayed above:

Liberals and their allies from the world of crony-capitalism claim the government party provides superior financial management. That may well be true for those in the business of extracting metals, minerals and fossil fuels, selling electricity to the province at multiples of its market value or running consulting and public relations operations. It is not true for ordinary citizens who struggle to survive in a decade of reducing incomes. A couple of examples:

Rates for 2015-2017 are for increases implemented and announced.

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Friday, January 23, 2015

With Ian Jessop, CFAX1070, Jan 22

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Thursday, January 22, 2015

Speaking for the future - Updated

This week I got confirmation that new corporate funding has been assembled to counteract bloggers and writers in alternative media who reveal mismanagement of provincial assets and emphasize the public’s declining share of natural resources. This will involve typical media greenwashing (like that by Kinder Morgan and Northern Gateway) but also an internet campaign with front groups and artificial grass roots organization and coalitions. Some efforts involve people close to the BC Liberal Party.

That multinational resource companies believe they must spend heavily to blunt our messages is evidence we’ve been effective. However, our progress is fragile and the financial power of those we oppose is immense.

If you are comfortable with B.C. functioning as a plutocracy, rest assured, all is well.

If you believe that young people should grow and have opportunities to prosper with respectful attachments to the province's lands, cultures and history, then you must act to protect valued qualities of British Columbia.

That might involve a personal effort or expense but, if we maintain the current trends, more punitive costs will emerge in the long term. If not for ourselves, we act for our children and grandchildren. The public share of natural resource values has declined by billions and that has reduced spending for environmental protection, education and vital social services. If we continue to downplay or ignore the building blocks of a just society, a price will be paid.

Government politicians, traditional media, lobbyists and social media trolls are paid to look after the interests of powerful people. The Legislature functions for only a handful of days each year and the union movement is eroded. There are rather few major outlets for discussions not shaped by self-interest and each deserves your attention and support.

Read widely, participate in comments, forward articles and links to friends and contact your MLAs and MPs. Write letters to the editor and hold the papers accountable if they refuse to publish or change your message by editing.

Make your voice heard. It is essential.


From an article by Professor Sharon Beder, Public Relations' Role in Manufacturing Artificial Grass Roots Coalitions:
When a corporation wants to oppose environmental regulations, or support an environmentally damaging development, it may do so openly and in its own name. But it is far more effective to have a group of citizens or experts -- and preferably a coalition of such groups -- which can publicly promote the outcomes desired by the corporation while claiming to represent the public interest. When such groups do not already exist, the modern corporation can pay a public relations firm to create them.

The use of such 'front groups' enables corporations to take part in public debates and government hearings behind a cover of community concern. These front groups lobby governments to legislate in the corporate interest, to oppose environmental regulations, and to introduce policies that enhance corporate profitability. Front groups also campaign to change public opinion, so that the markets for corporate goods are not threatened and the efforts of environmental groups are defused. Merrill Rose, executive, vice president of the public relations firm Porter/Novelli, advises companies:
Put your words in someone else's mouth... There will be times when the position you advocate, no matter how well framed and supported, will not be accepted by the public simply because you are who you are. Any institution with a vested commercial interest in the outcome of an issue has a natural credibility barrier to overcome with the public, and often with the media...
I am interested in other articles by the same writer. One is Power Play - The fight for control of the world's electricity:
Noted author Sharon Beder argues persuasively that the track record of electricity privatisation and deregulation around the world indicates that it is a confidence trick. Her book shows how simplistic ideology and economic theory have been used to mask the pursuit of self-interest; how control of electricity has been wrested from public hands to create profit opportunities for investors and multinational corporations; and how an essential public service has been turned into a speculative commodity in the name of ‘reform’.

Power Play explores the battles between private and public ownership in the United States, the United Kingdom, and Australia since the early twentieth century, and the agenda-setting and public relations strategies involved. It investigates the way that developing countries such as Brazil and India have been forced to allow foreign investors to exercise a stranglehold over their electricity systems. And it uncovers the campaigns waged by think tanks, corporate interests, and multinational companies such as Enron to swindle the public in dozens of countries out of rightful control over an essential public service.
Enron? That's a familiar name to British Columbians because billionaire Richard Kinder, now head of Kinder Morgan, was President and COO of Enron before it disappeared in a fog of criminality.

Why industry is trying to tell you how to think, The Center for Public Integrity, January 2015:
And so [American Petroleum Institute] along with their PR counsel Edelman created online groups called Energy Citizens and had an advertising campaign called “Vote For Energy”, and it was really a chance for oil and gas to polish its reputation...
Port Metro Vancouver Hires Disgraced Edelman PR Firm, American Lobby Group to Push Coal Exports, DeSmog Canada, December 2013:
When it comes to shipping coal, it looks like the Vancouver Port Authority is taking a page out of the U.S. coal lobby's books. In an effort to combat negative public opinion about coal and the proposed expansion of coal exports through Fraser Surrey Docks, the port authority has hired public relations firm Edelman Vancouver to revamp its image.

Edelman is the largest public relations firm in B.C. and the company has a history of both pushing coal exports and disregarding public opinion...

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A few billion here, a few billion there...

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Monday, January 19, 2015

BC Prosperity Fund Accrual

February 13, 2013, Premier Christy Clark announced
...the new British Columbia Prosperity Fund to ensure communities, First Nations and all British Columbians benefit from the development of a new liquefied natural gas (LNG) industry...

LNG development is poised to trigger approximately $1 trillion in cumulative GDP within British Columbia over the next 30 years and that means more than $100 billion will flow directly to the Prosperity Fund.

Province wide, LNG is expected to create on average 39,000 annual direct, indirect and induced full-time jobs during a nine-year construction period. As well, there could be as many as 75,000 full-time jobs required once all LNG plants are in full operation...


...Projected total revenues to government are estimated between $130 billion and $260 billion over the next 30 years. In order to maximize the benefits of these developments to future generations of British Columbians, the provincial government is establishing a new British Columbia Prosperity Fund...
LNG revenues will not only ensure British Columbia is debt free but will also fund essential spending for health care, education and social services. This plan demonstrates the superiority of BC Liberal financial management. After almost 40 years, Alberta's Heritage Fund contains only $17 billion so it has accumulated funds at 1/10 or 1/20 the rate intended for B.C.

So that we don't forget this good news, Northern Insight will calculate the accrued income that is coming our way. It updates regularly.

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Saturday, January 17, 2015

Distracting, dissembling, deflecting - lest you forget

Are you unhappy with rapidly increasing electricity rates and the general state of BC Hydro finances? Are you looking for the party responsible? Well, the Vancouver Sun has the answer. It's a person named Clark, but not the one presently in the Premier's office.

Vaughn Palmer thinks readers should be reminded of past NDP sins so he offers Gordon Campbell's words from 2001:
“Under the New Democratic Party, BC Hydro has been viewed as little more than a cash cow for the government,” declared Opposition leader and soon-to-be premier Gordon Campbell on the eve of the 2001 election campaign.

“Since the NDP was elected, it has siphoned almost $2.5 billion out of BC Hydro into general revenue. This is $2.5 billion that could have gone to reducing the debt of BC Hydro, into the construction of new generation facilities, or been left in the pockets of customers.”
Shocking, isn't it. Kudos to Vaughn Palmer for providing key facts.

He gives this additional information:
Turns out Hydro has paid $5.4 billion in dividends to the province since 1992, of which 60 per cent — or $3.2 billion — had to be borrowed.

Presuming Hydro had been able to use that money to offset its own borrowing needs, the Crown corporation’s current debt ($15.4 billion and counting) would be that much smaller and the upward pressure on rates from interest payments would be reduced as well.
However, that turns out to be a rewording of government press notes and it is not entirely accurate. Since 2001, BC Hydro payments to government total almost $10 billion and it does not take a graduate degree in finance to know, had that money not been paid out, the crown corporation's borrowings would be reduced by the same amount. It is an illogical fiction to pretend that only $3.2 billion had to be borrowed to make payments to government during the past 23 years.

Mind you Palmer could also have reported that when Glen Clark became Premier, BC Hydro's long-term debt was $7.496 billion and, when he left the office three years later, it was $7.474 billion. When Christy Clark became Premier, the utility's debt was $11.712 billion. According to the September 2014 financial statements, the debt was $16.588 billion, not the lesser amount from ten months ago noted on the BC Liberal's press notes.

That's a 42% increase in long-term debt of BC Hydro, but the amount is chump change compared to borrowings planned in the next few years and the over $50 billion increase in contractual commitments to private power producers, which were non-existent during the days of Glen Clark's profligacy.

Another illustration of the different approaches to debt and spending during different times follows. It should be noted that quarterly statements of BC Hydro in the current fiscal year show long-term debt rising at a monthly rate of $171.5 million. That is the fastest ever rate of growth in BC Hydro debt.

Liberal policies aim to eliminate elements of a progressive tax system to impose the financial burden of government on lower and middle income citizens. Had BC Hydro been able to use the "dividends" and water rentals extracted from it by government, the utility could have eliminated the tier-1 residential rate for the first 1,350 kWh used over an average two-month billing period. Instead, residents are hit with increases well above the rate of inflation. This is reflected graphically but not show is the 28% rate increase announced in 2014. 9% took effect April 2014, which will cause another upward move when the numbers for fiscal year 2015 are added.

Dropping the irony, I can say this Palmer article leaves me thinking the newspaper's masthead could accurately describe the Vancouver Sun purpose to be,
“The job of the newspaper is to comfort the comfortable and afflict the afflicted.”
Maybe I'll suggest it to Vaughn if I see him entertaining Liberals at some corporate speaking engagement or encounter him resting in a quiet pasture.

H/T Rob S.

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Friday, January 16, 2015

Can someone report news while making news?

RossK at The Gazetteer linked to this item first published about three years ago. It is worth attention now since it demonstrates the issue of conflicts in media did not begin and end with Global TV Anchor Leslie Roberts.

Listen to the audio clip that follows but remember that certain bloggers "with an axe to grind" have argued that the NW trio themselves are conflicted by receipts of cash from commercial groups affected by their coverage of issues. Additionally, be aware that government payments totalling 7-figures have been made to family members of Press Gallery colleagues, without a single mention in the corporate media. 

Sensitivity to the morass of conflicts may explain the strained efforts on the audio clip as Bill, Vaughn and Keith pretend the issue should never have been raised. Conflict of interest is Oldspeak; hoary words stripped from the language of modern journalism.

From January 23, 2012:

Response to the CBC Ombudsman faulting Stephen Smart's position as Legislative Bureau Chief is muted in the local corporate media except for the Good, the bad and the other on Friday morning. CKNW's triplets typically dance together in favour of the status quo and conflict of interest is a subject that makes these guys uncomfortable. For good reason, too.

Charlie Smith at the Georgia Straight discusses the wider and more important issue in B.C. legislature press gallery should come clean on all conflicts of interest:
"So why will this ruling make other members in the press gallery squirm? It's because Smart isn't the only one with a family member who has collected cheques from the B.C. government for providing communications advice.

"In the past, I've written about press-gallery members receiving speaking fees from business organizations that seek legislative changes from the B.C. government.

"There's never any public disclosure about the amounts of money changing hands between these lobby groups and the scribes.

"I believe that the time has come for the press gallery to create a transparent ethics policy with a disciplinary process for those who violate it."
Blogger RossK at The Gazetteer exposes part of the silliness offered by the Three Amigos. I hope they are better reporters than they seemed Friday because of the reliance on misinformation and misdirection. For example, they suggested that Stephen Smart's wife was like any other government employee, as if being the Premier's Deputy Press Secretary is akin to making tea or trimming lawns at the Legislature.

Of course, these guys — operating on suspect motives themselves — assume critics of a news agency that ignores its own guidelines act as partisans for the opposition. In fact, they know that most MLA's and party activists purposely avoid raising complaints about media coverage, no matter how aggrieved the politicians feel. It is a no-win situation. So, if people denouncing the conflicted CBC situation were taking direction from party managers, the issue would not have been raised.

In early December, I wrote the article that follows. It connects to Charlie Smith's earlier work on conflicts and I think is worth examination again.
* * * * * * * * * *

It is appropriate to ask if political writers can report objectively after they become paid participants in the public forum, earning appearance fees and other remuneration from businesses with interests in their coverage. In 2009, Charlie Smith at The Georgia Straight wrote this:
"There are members of the press gallery who've accepted speaking fees from business groups that lobby the provincial government regarding pieces of legislation.

"I think the members of the press gallery should disclose these payments through an on-line registry, which would be available for the public to see...

"However, as long as the members of the press gallery are so busy patting each other on the back, they're not going to bother covering something like this.

"They'll go blue in the face telling the public how Ken Dobell or Patrick Kinsella were unregistered lobbyists, but they don't apply the same standards to themselves when it comes to disclosing their own potential conflicts of interest.

"I'm not saying that these payments influence the way they cover stories. Not at all. I am saying, however, that these speaking fees should be disclosed so readers, viewers, and listeners will know if members of the press gallery have recently been on the payroll of an organization that they're covering. It's called transparency."
A short while later, Smith touched on the subject again,
"I may have left the impression in recent blog postings that Vancouver Sun provincial-affairs columnist Vaughn Palmer only speaks to business organizations like the Council of Forest Industries, British Columbians for Private Forests, the B.C. Chamber of Commerce, the B.C. Roadbuilders and Heavy Construction Association, the B.C. Human Resources Management Association, the Council of Tourism Associations of B.C., and others.

"Palmer has also spoken to government associations as well as to civic and labour groups. They include the Professional Employees Association, the Bellingham City Club, and the Canadian Association of Members of Public Utility Tribunals.

"Next month, Palmer will speak to the Lower Mainland Local Government Association.
in April last year, Smith offered a particular example. He thought Vaughn Palmer:
"...could be caught between a rock and a hard place when it comes to the HST.

"As I've reported before on this site, Palmer has a public-speaking career in addition to his work as a paid columnist.

"In the past, he has appeared at events sponsored by such groups as the B.C. Chamber of Commerce, the Council of Forest Industries, and the B.C. Roadbuilders and Heavy Construction Association.

"National Speakers Bureau, which has arranged Palmer's speaking engagements, used to advertise on its Web site that he could be booked for $3,000 to $5,000 per appearance. I don't know how much, if anything, he charged to speak to these particular groups..."
Of course the obvious point was that Palmer was receiving fees for appearing before organizations that were fervent admirers of Gordon Campbell and the Premier's plans for HST. During that time, Palmer was an impartial commentator, appearing in print and on radio and cable TV to report frequently on Gordon Campbell and HST.

Charlie Smith put this issue up for debate during both 2009 and 2010, about Palmer but also Palmer's press gallery colleagues. Smith gained little traction, none in the corporate media. Yet, today the issue remains vital. Canada is trailing on a dangerous trail blazed by self-interest brigades in the USA.

With falling advertising and circulation revenues, newsrooms everywhere are cutting staff and budgets. Strict economies are eased by turning to outsiders offering free content that of course serves objectives of the providers. Star reporters supplement sagging salaries through freelancing and paid public appearances.

In the U.S., wealthy think tanks and brigades of right wing agents circulate free media-ready copy that is happily received and published uncritically. One example is the the Franklin Center for Government and Public Integrity. According to PR Watch,
"The group has 43 state news websites, with writers in over 40 states. Its reporters have been given state house press credentials and its news articles are starting to appear in mainstream print newspapers in each state.

"Who funds Franklin and what is its agenda? The Funding Trail Leads to Bradley, Koch, and Other Right-Wing Groups."
Canada is not immune from similar pressures and responses. As strong regional journalism disappears, space is quickly filled with syndicated copy or material from agenda driven sources such as industry groups and political think tanks.

The intermediate step for propagandists seeking to influence public opinion is to promote the loyalty of media people through direct and indirect inducements. Ethical journalists exercise caution but, unfortunately, ethical does not equate with influential.
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Monday, January 12, 2015

Tax preparation software - FREE

A message I've been repeating annually.

For most of us, Canada's income tax season is in focus, or soon will be. As previously noted here, I urge you to try certified tax preparation software at STUDIO TAX.

It works perfectly well for almost everyone, enables online filing and comes at a remarkable price: NOTHING.

The publishers of Studio Tax do ask you to make a modest monetary contribution toward product support, if you are pleased. However, that's entirely voluntary.

We've used Studio Tax in our house for years and I recommend it without reservation.
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A question to consider

BC's Missing Women

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Saturday, January 10, 2015

He can't handle the truth

Laila Yuile uncovered an indication that Stephen Harper has new plans for Gordon Campbell. It involves a telephone pollster with Conservative ties asking a call recipient if Gordon Campbell is trustworthy.

In politics, fact matters less than perception. The former Premier's trustworthiness could be determined from the record but the PMO cares not about that, they care about how BC residents regard Campbell. Instead of being guided by principle, Conservatives prefer government by polls, focus groups and preferences of their petulant prince.

Nevertheless, to assist pollsters in the determination of whether Gordon Campbell is trustworthy enough to be a Senator. I re-offer 'He can't handle the truth' from May 2009. It was one of the first articles published at Northern Insight. (Under Harper, trustworthy Conservative Senator seems oxymoronic.)

Before he was elected Premier, Gordon Campbell wrote,
"When government does its business behind closed doors, people will invariably believe that government has something to hide. Secrecy feeds distrust and dishonesty. Openness builds trust and integrity."
Another time, Campbell said,
"Information rights are meaningless if disclosure timetables cannot be met because there aren't enough staff to do the job."
In his 2001 victory speech, newly elected Premier Campbell stated,
"We will bring in the most open and accountable government in Canada. I know some people say we'll soon forget about that, but I promise that we won't!"
Since then, Gordon Campbell's Liberal Government has:
  • Passed amendments to make the FOI process more difficult and time consuming.
  • Been rated second-worst province in Canada for responding to freedom of information requests, according to an audit by the Canadian Newspaper Association.
  • Slashed the Information and Privacy Commissioner's budget and refused to fund staff needed to meet FOI disclosure timetables
  • Extended cabinet secrecy to several Liberal caucus committees, without consulting the Information Commissioner.
  • Removed B.C. Ferries from the scope of the act and refused to include VANOC, the Olympic organizing committee.
  • Tried to pass a bill to allow final reports of public inquiries to be kept secret.
  • Introduced a B.C. Community Charter to allow municipal councils to place many more subjects into closed meetings. There are no rules setting out what B.C. school boards, colleges, universities and some other public bodies can place in-camera.
  • Initiated a review of the FOI act by bureaucrats in 2005 instead of adopting the many pro-FOI recommendations of the 2004 special legislative committee. This review of government openness was itself secret. To avoid public disclosure, no written report was delivered to government by the consultant who reported on the secrecy process.
  • Failed to respond to urgent calls to clarify the abused section of the FOIPP act relating to policy advice so that only true advice and recommendations can be withheld, not background documents
  • Attempted to pass a bill in 2006 that would have exempted designated contracts and projects with private sector partners from FOI requirements.
  • Routinely made excessive fee estimates for access to records in order to dissuade requesters.
  • Routinely engaged in political interference with FOI requests. In February 2009, Commissioner Loukidelis called on government to cease using sensitivity ratings, whether these are applied to types of requesters––for example, media, political parties and interest groups—or to complex or otherwise difficult requests.
  • Been asked by Commissioner Loukidelis to begin meeting the statutory obligation to report annually to the Legislative Assembly on administration of the FOI law. This accountability duty has been fulfilled only once.

On April 29, 2009, the Campaign for Open Government published the following:
Two identical FOI requests filed on the same day with the offices of Washington Governor Christine Gregoire and BC Premier Gordon Campbell got very different results.

The Freedom of Information and Privacy Association filed the requests for information about intergovernmental meetings related to the new RFID equipped drivers’ licences now being phased in across the province. The licences are designed to meet the requirements of the Western Hemisphere Travel Initiative (WHTI) which will require a passport or other authorized ID to enter the United States starting June 1, 2009.

Governor Gregoire’s office responded in full in less than a month. Copying costs were US $5.30.

The Office of the Premier didn’t provide their initial response until after the Washington Governor’s office had sent all the requested documents. They still haven’t provided any documents, but did send a bill for C $620.

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Canada's radical makeover

Michael Harris is author of Party of One, published by Viking Canada. he is
a writer, journalist, and documentary filmmaker. He was awarded a Doctor of Laws for his “unceasing pursuit of justice for the less fortunate among us.” His eight books include Justice Denied, Unholy Orders, Rare ambition, Lament for an Ocean, and Con Game. His work has sparked four commissions of inquiry, and three of his books have been made into movies.

See if you can listen to the entire segment and not have a Howard Beale moment.

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Friday, January 9, 2015

An internet sage speaks

Lew said... about prisons

I think there's a conflict of interest here. The government shouldn't be allowed to design and build with public money what might (if there is any justice) be the future residence of some of its members.

This Day In Clarkland...Hey Rubes!

Lew said... about one politician's credibility

Interesting that de Jong says the government accepts the report in its entirety but he's still reviewing it. I recall him telling us four contradictory versions of the Basi/Virk payoff in its immediate aftermath, so I don't put much stock in anything he says.

I also recall that he was minister responsible in both of these travesties, and note the triggerman wielding the pen in both was one Graham Whitmarsh.

The McNeil Report Into Health Ministry Firings...How Thick And White Is The Wash?

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Anything wrong with this picture?

Canada's governments say that natural resources are driving economic growth across the country. They just don't specify which country.

Resource companies don't want to pay mining, income, sales and property taxes, they don't pay GST and now it seems, some don't want to hire Canadian workers. However, they want to export Canadian metals and minerals using land and sea transportation infrastructure paid for by taxpayers. And, of course, they want their assets kept safe and their foreign workers to access healthcare, drive on roads, rely on police, fire and ambulance protection and safe airports.

Read Wendy Stueck's article at the Globe and Mail.

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Thursday, January 8, 2015

Recipe for disaster: malpractice followed by neglect

Scotty on Denman left a comment at the previous article, Deplan, de plan and, for me, it resonates. Anyone who reads Recalling BC Pioneers will understand why.
Captain Vancouver reported BC timber was virtually worthless because it was too big. CPR didn't refuse the grant of east Vancouver Island, though, when it extorted its contract "extra" from the pro-Canadian faction--- with a value that would boggle the mind even today. Few fully realized the true value of BC forests back then and, after a century of liquidation, we've returned to indifferent ignorance of the resource.

I lived in Port Albernout when Mac-Blo had the highest productivity sawmill in the world. In 81 we went on strike for 18% and got a sandwich wrapped in a road map. I saw a convoy of b-trains hauling away the Toyota dealer's stock, plus the marquis; After about three years the fire marshall ordered vacated buildings in the downtown demolished.

The Socreds worsened the crash with their "restraint" program while business frontages of mill towns began to look like toothless grimaces. I took many sojourns to the woods in Alberta and got a forestry diploma, but real wages continued to drop in spite of skills upgrading. By the beginning of the 90s the wolf-kill program was happening, Socreds planned to open up parks to private concessions, Mac Blo was disgraced by obscene logging waste in the Charlottes and the equally venerable TM Thompson ended their long BC consultancy by lying about it and getting caught. The "War in the Woods" tallied new battlegrounds almost daily: Clayoquot, Lyell Island, Carmanah, Stein, etc.

A prosperous decade began when the NDP took over government. The Forest Practices Code finally addressed smouldering issues: First Nation inclusion in policy-making, increasing parks and protected areas, protecting wildlife, billing for logging waste and reducing the allowable annual cut to sustainable levels. Yet camp culture was in a state of shock with many erstwhile union workers moving ---with their long-guns---over to the Reform party. Work was fairly steady, if not well-paid. I realized one night in some cookshack somewheres that at 45 years old I was the youngest guy in camp; when I'd started in my late teens, about 25% to 30% of every camp was under 25 years old.

I'd expected the industry to generally slim down with annual cut reduction, but the elimination of an entire demographic didn't bode well. The industry had to absorb a 20-year gap in mature timber supply (the result of previous over-cutting). Unable to demand the decent wages of previous years, unions abandoned what little enthusiasm for apprenticeships they ever had, and adopted a policy of orderly attrition of aging workers. I'd gotten a highly regarded BCIT forestry diploma in the early 80s; by the time the BC Liberal government had entrenched itself, BCIT no longer had a forestry faculty. It had died for lack of interest.

The dying mill towns and an industry dominated by trucking are the hallmarks of the BC Liberal government's raw-log export policy, but the real legacy of this neo-right experiment gone wrong is the fading of the once mightiest industry from our consciousness. The crusty old timers are disappearing and nobody's replacing them. Like tourism and fishing, forestry is fading from memory---literally: we don't even know anymore how much timber we have, nor how fast it's growing, the BC Liberals having neglected inventory for over a decade.

Does it matter that we become less and less familiar with our forests? I suppose it might not if the government's idea of letting truck-loggers harvest in parks to "compensate" them for timber they "lost" to the pine beetle makes sense to you. But if it doesn't, the lack of timber inventory, and a parks system now invigilated only by "trail closed" signs might be cause for concern.

Thanx for the brief synopsis, Norm; the longer story is a sad one indeed.

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De plan, de plan! - UPDATED

BC Stats published the monthly numbers for log exports to November 2014. The number reinforce arguments made in a recent Times Colonist Op Ed. An excerpt:
B.C. government has gradually abandoned the province’s forestry heritage in pursuit of an unsustainable pipe dream: liquefied natural gas exports to Asia. The better option — for a resilient economy and for our climate — is to rebuild an innovative, sustainable forestry sector.

That’s not to say that forestry doesn’t have its own problems.

The current industrial model that has dominated forestry in western Canada is based on endless extraction and minimal domestic processing of timber resources. This approach has harmed watersheds and degraded entire ecosystems.

At the same time, we’ve seen more unprocessed or under-processed timber leave the province, resulting in a downward spiral of mill closures and layoffs. Clearly, this model is failing our forest ecosystems and forestry-dependent communities and families.

British Columbia lags far behind other jurisdictions in terms of jobs created per unit of timber harvested. In B.C., to create one full-time, year-round job we must cut 1,189 cubic metres of timber — one cubic metre roughly equals one city telephone pole. In Ontario, the forest industry produces one job for every 205 cubic metres of timber harvested, meaning they can cut the same amount of trees and employ almost six times as many people (or cut one-sixth of the trees and provide the same amount of jobs)...
BC Stats reports the quantity of raw logs exported and the value. Both trends are troubling.

The graphs immediately suggest the possibility of transfer pricing schemes. A few years ago, The Guardian newspaper did a series on tax avoidance and one article was Shifting profits across borders:
In recent days the Tax Gap series of articles has identified secrecy, complex organisational structures, tax havens and profit hungry accountancy firms as the key ingredients of the tax avoidance industry. They all come together in the biggest tax avoidance scheme of all, known as "transfer pricing". The name of the game is to shift profits to low tax jurisdictions and avoid taxes in countries where corporations have substantial trading operations.

...There are international rules on transfer pricing, but they all rely on notions of "costs" which are highly malleable. Tax rules require companies to use "arm's length" or normal commercial prices to transfer goods and services, but such prices are not always easy to find. Many markets are thin and often dominated by the same multinationals...
I raise a point made before by this blog. In Understaffed and incapable, by design, I wrote,
...material revenues were failing to reach government coffers because industry routinely undervalued and under-reported production. The individual said this continued because government's enforcement resources were inadequate to ensure collection of amounts properly due. An additional allegation was that mid-level officials were aware but believed corrective action was not welcome at the highest levels.
If forest conglomerates are avoiding taxes by accounting schemes, the BC government has few resources to prevent fraud and protect the public interest. Sadly, for BC Liberal leaders, that may be a considered strategy.

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Wednesday, January 7, 2015

Political success, program failure

In February 2013, shortly before the provincial election campaign began, the BC Liberal Government made an announcement about a new program that was to be funded with over $100 million:
GP For Me A Success Says Government

Friday, February 22, 2013 10:23 AM

The Province has announced new incentives and supports to work towards ensuring every family that wants a family physician, can have one by 2015...
It is now 2015 and the objective has not been achieved. But, that surprises no one involved in delivering medical care to British Columbia residents. The announcement was a pre-election ploy by the BC Liberal Party. Two years later, the shortage of family physicians continues and surveys of doctors demonstrate that because of retirements, it is growing worse.

Saanich family doctor can’t give away his practice, Cindy E. Harnett, Times Colonist, September 27, 2014
A Saanich family physician says his inability to give away, nevermind sell, his family practice is an indication of a system broken beyond repair.

Dr. Chris Pengilly, 68, says his futile attempt to find someone to take over his practice exemplifies the shortage of physicians and the challenges posed by a generation of doctors who don’t want the responsibility of owning a family practice.

“I have advertised literally all over the world,” Pengilly said. “I have had not one positive response.

“Not one of this year’s graduates coming out of medical schools and family practice residencies is interested in pursuing full-service family practice.” ...
The GP for Me program rations opportunities for people to be attached to doctors in general practice. Through financial incentives paid to doctors, high-needs patients gain attachment priority. As a result, for a person with less complex medical needs, the chance to engage a family doctor is reduced.

Beyond the paperwork burden imposed on doctors, another problem is that too little money committed by government reaches practising physicians. A significant portion is absorbed by bureaucrats, public relations officers, advertising agencies and quasi-autonomous non-governmental organisations. (Those last mentioned are known in Britain as Quangos and they are infamous for patronage and bureaucratic excess. They are now common in British Columbia.)

NOTE: To assist in a more complete examination of this subject, I encourage readers to share their own stories of difficulties securing an ongoing relationship with a general practitioner. You can do this in comments or by email to me at

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Monday, January 5, 2015

Ferries' future foretold

The inimitable RossK at The Gazetteer has another in a series: This Day In Clarkland...Transport Minister's Casablanca Moment. In his piece, RossK linked to one at Northern Insight and, although written many months ago, it is still worth reading. BC Ferries is the single best example of how bloated patronage can serve a political party but will never, ever, serve the citizens.

The remainder was first published May 8, 2014.


In a month or three, BC Ferries will publish statements of its financial position and information about remuneration earned by the top executives.

I had someone look into a crystal ball and we've determined that in 2014, as in all years prior, the ferry execs achieved key financial targets, improved value to customers at every point along the customer experience chain, continuously improved the safety of operations, improved operational reliability of vessels, terminals and facilities and just got better at everything they do.

As a result, bonuses will be paid. Again.

There may be a few ferry users scattered in coastal communities who do not agree this publicly-owned private-company has been delivering best value for money but, rest assured, the rooms full of directors and commissioners, who regularly helicopter to Victoria for meetings, observed first hand that all the ferries they saw were headed in the right directions.

The crystal ball had one other forecast and we proved it by extending information shown on the charts below. The first shows that traffic has been dropping steadily as British Columbia's population grows.

The second graph demonstrates that in 2004, there were 7.5 traffic movements of vehicles or passengers for each person in the province. By FY 2014, that number had dropped to 5.9. The 21% decrease may seem modest but in only 36 years, the per capita traffic will drop to zero.

Yes, the trend lines show that by 2050, we will have no further need for ferries. Fares will have climbed so high and service levels cut so low that nobody will use this coastal transportation. Having reduced operating costs to zero, the executives, directors and commissioners will be able to increase dramatically the compensation they pay themselves. The ferry corporation can spend the entire contributions from both federal and provincial government on the suits in the boardrooms who made this possible.

Washington State Ferries is where management costs are a fraction of those costs at BC Ferries. The Canadian ferry system has previously claimed that traffic reductions are common to all system. The most obvious comparison is to the large system across the border and its passenger and vehicle loadings were up 335,533 in the most recent fiscal year. BC Ferries loadings declined 326,786.

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Saturday, January 3, 2015

The ethics of business

Something got me thinking about business ethics and that brought to mind a short piece I wrote for the Jewish Western Bulletin (now The Jewish Independent) in 2003. The item described a course by the Jewish Learning Institute (JLI) and, although more than a decade has passed, I think part of the article is worth repeating:
Are the rules of conduct in business different from those in private life? Must a businessperson deal equitably with all, even the ignorant, weak and foolish? What constitutes fraud or theft? Who defines principle and where do the rules originate?

Nobel laureate Milton Friedman focused modern debate with his statement that ethics were not the concern of a corporation and that its only social responsibility was to increase profits. Others argue that good ethics are good business and a requisite of success. More recently, critics of business blamed amoral corporate governance for encouraging fraudulent, corrupt and illegal behaviors.

Friedman's thesis was broader than his famous quote.

"Only people have ethics," he said. "Ethics is me, the individual, as a person. I'm ethical or unethical." Clearly, Friedman believes that core individual values are important to everyone, corporate managers included.

The history of western business ethics reveals religious traditions at the root. Judaism's precepts, in particular, have provided important foundations for the ethical practice of business. However, perhaps in search of secularity, today's business schools hesitate to teach ethical issues. For example, among the almost 100 offerings of the University of British Columbia MBA program, only one six-week course specifically focuses on ethics.

Many other well-regarded business schools share this disinterest in an important subject. Some ethicists believe that results in a harmful void in the training of tomorrow's leaders. Writing in the Journal of Business Ethics, Martin Calkins states that we should "look to religions to understand better the working of big institutions and the motives that drive people to act morally."

According to Rabbi Yechiel Baitelman, "The first question after death is 'Nasata v'netata be'emunah' ('Did you conduct your business affairs with honesty and with probity?') This establishes ethical obligations between people as fundamental and demonstrates that social and ritual behavior rank equally as inseparable parts of Jewish morality."

JLI participants study the vital principle of Jewish law derived from the verse "You shall do that which is fair and good in the sight of the Lord." (Deuteronomy 6:18) Baitelman will demonstrate how that principle applies, not simply in business activities, but in all personal relationships and social obligations...

Comments about business schools teaching ethics may be out of date. I hope it is now a subject given more attention.

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Nobody's servant...

North Van's Grumps is the proprietor of Blog Borg Collective. While I search for material in the main aisles of information warehouses, NVG prowls the dark recesses. Happily, he shares many discovered gems and I appreciate him as a source of valuable leads.

In comments on the last article here, NVG connected us with a piece of work by the late Hubert Beyer, a journalist who covered public and political affairs in British Columbia. This is an introduction but I urge you to follow the link for the entire piece.

"When the press fails to keep its distance from politicians" Victoria Report by Hubert Beyer
...The traditional distance reporters have kept between themselves and politicians they are supposed to watch, has been replaced by an atmosphere of kinship and affinity.

At a recent Government House dinner hosted by Lieutenant-Governor Stephen Rogers for members of the press gallery, government house leader Bruce Strachan showed up. What the hell, I want to know, was a politician doing at a dinner for the press?

I wasn't at the dinner, but I was told that Strachan referred to press gallery members as servants of the legislature. I've got news for you, Bruce. I'm nobody's servant. Not yours and not the legislature's.

Aside from making my living at journalistic endeavors, the only reason I am in the press gallery is to keep an eye on politicians and tell readers what they're up to. I can't see how playing ball with politicians or drinking beer and eating pizza with them could possibly help me in that task.

By joining the politicians in this happy family environment, reporters are allowing themselves to be co-opted. And that spells bad news for the public which expects the press to be at arm's length from the politicians...

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