Tuesday, March 31, 2015

Changes inevitable for Teck Resources

Teck Resources and its associates invested more than $2.25 million in contributions to political friends in British Columbia. That was a good deal for BC Liberals but, whether or not it benefited shareholders - the largest of which are Sumitomo Metal Mining Co., China Investment Corporation and Blackrock Inc. - is uncertain.

In recent days, Teck Resources has denied rumours of a merger or takeover involving Antofagasta PLC, a significantly larger company controlled by Chile's wealthiest family, headed by Iris Fontbona-Luksic. According to the company, about 20% of Teck's non-current assets are in Chile.

Teck Resources Share Prices
Almost half of Teck's average annual revenues during the last five years are from coal ($4.4 billion) and the future of coal is not bright. Inevitable reductions in coal production will affect various segments of British Columbia's economy but will not have substantial effect on provincial resource revenues. 2015 budget documents indicate the income from all metals and minerals during fiscal year 2015 was only $83 million, less than 1/5 of one percent of total government revenue. Because government takes such a tiny share, there is little do be done for the mining community short of more direct subsidies.

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Monday, March 30, 2015

Chomsky on media

What Makes Mainstream Media Mainstream, Noam Chomsky, Z Magazine, October, 1997

Part of the reason why I write about the media is because I am interested in the whole intellectual culture, and the part of it that is easiest to study is the media. It comes out every day. You can do a systematic investigation. You can compare yesterday’s version to today’s version. There is a lot of evidence about what’s played up and what isn’t and the way things are structured.

...The real mass media are basically trying to divert people. Let them do something else, but don’t bother us (us being the people who run the show). Let them get interested in professional sports, for example. Let everybody be crazed about professional sports or sex scandals or the personalities and their problems or something like that. Anything, as long as it isn’t serious. Of course, the serious stuff is for the big guys. "We" take care of that.

What are the elite media, the agenda-setting ones? The New York Times and CBS, for example. Well, first of all, they are major, very profitable, corporations. Furthermore, most of them are either linked to, or outright owned by, much bigger corporations, like General Electric, Westinghouse, and so on. They are way up at the top of the power structure of the private economy which is a very tyrannical structure. Corporations are basically tyrannies, hierarchic, controled from above. If you don’t like what they are doing you get out. The major media are just part of that system.

What about their institutional setting? Well, that’s more or less the same. What they interact with and relate to is other major power centers—the government, other corporations, or the universities. Because the media are a doctrinal system they interact closely with the universities. Say you are a reporter writing a story on Southeast Asia or Africa, or something like that. You’re supposed to go over to the big university and find an expert who will tell you what to write, or else go to one of the foundations, like Brookings Institute or American Enterprise Institute and they will give you the words to say. These outside institutions are very similar to the media.

The universities, for example, are not independent institutions. There may be independent people scattered around in them but that is true of the media as well. And it’s generally true of corporations. It’s true of Fascist states, for that matter. But the institution itself is parasitic. It’s dependent on outside sources of support and those sources of support, such as private wealth, big corporations with grants, and the government (which is so closely interlinked with corporate power you can barely distinguish them), they are essentially what the universities are in the middle of.

People within them, who don’t adjust to that structure, who don’t accept it and internalize it (you can’t really work with it unless you internalize it, and believe it); people who don’t do that are likely to be weeded out along the way, starting from kindergarten, all the way up. There are all sorts of filtering devices to get rid of people who are a pain in the neck and think independently. Those of you who have been through college know that the educational system is very highly geared to rewarding conformity and obedience; if you don’t do that, you are a troublemaker. So, it is kind of a filtering device which ends up with people who really honestly (they aren’t lying) internalize the framework of belief and attitudes of the surrounding power system in the society. The elite institutions like, say, Harvard and Princeton and the small upscale colleges, for example, are very much geared to socialization. If you go through a place like Harvard, most of what goes on there is teaching manners; how to behave like a member of the upper classes, how to think the right thoughts, and so on.

If you’ve read George Orwell’s Animal Farm which he wrote in the mid-1940s, it was a satire on the Soviet Union, a totalitarian state. It was a big hit. Everybody loved it. Turns out he wrote an introduction to Animal Farm which was suppressed. It only appeared 30 years later. Someone had found it in his papers. The introduction to Animal Farm was about "Literary Censorship in England" and what it says is that obviously this book is ridiculing the Soviet Union and its totalitarian structure. But he said England is not all that different. We don’t have the KGB on our neck, but the end result comes out pretty much the same. People who have independent ideas or who think the wrong kind of thoughts are cut out.

He talks a little, only two sentences, about the institutional structure. He asks, why does this happen? Well, one, because the press is owned by wealthy people who only want certain things to reach the public. The other thing he says is that when you go through the elite education system, when you go through the proper schools in Oxford, you learn that there are certain things it’s not proper to say and there are certain thoughts that are not proper to have. That is the socialization role of elite institutions and if you don’t adapt to that, you’re usually out. Those two sentences more or less tell the story.

When you critique the media and you say, look, here is what Anthony Lewis or somebody else is writing, they get very angry. They say, quite correctly, "nobody ever tells me what to write. I write anything I like. All this business about pressures and constraints is nonsense because I’m never under any pressure." Which is completely true, but the point is that they wouldn’t be there unless they had already demonstrated that nobody has to tell them what to write because they are going say the right thing. If they had started off at the Metro desk, or something, and had pursued the wrong kind of stories, they never would have made it to the positions where they can now say anything they like. The same is mostly true of university faculty in the more ideological disciplines. They have been through the socialization system.

Okay, you look at the structure of that whole system. What do you expect the news to be like? Well, it’s pretty obvious. Take the New York Times. It’s a corporation and sells a product. The product is audiences. They don’t make money when you buy the newspaper. They are happy to put it on the worldwide web for free. They actually lose money when you buy the newspaper. But the audience is the product. The product is privileged people, just like the people who are writing the newspapers, you know, top-level decision-making people in society. You have to sell a product to a market, and the market is, of course, advertisers (that is, other businesses). Whether it is television or newspapers, or whatever, they are selling audiences. Corporations sell audiences to other corporations. In the case of the elite media, it’s big businesses.

...They all say (I’m partly quoting), the general population is "ignorant and meddlesome outsiders." We have to keep them out of the public arena because they are too stupid and if they get involved they will just make trouble. Their job is to be "spectators," not "participants."

The complete article is linked HERE.

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Sunday, March 29, 2015

Response to inhumanity: resilience

Photos of Kobani, Syria, a former city described by The Guardian:
...it’s an extraordinary, nightmarish place they find, barely recognisable as a city. Piles of rubble where buildings once stood, burnt-out cars and tanks, bodies and burials all over the place. And the battle still raging all around – the rat-a-tat of Isis sniper fire; a boom as a Kurdish teenage girl fires a mortar back; bigger booms still, as coalition bombs rain down from planes flying overhead...
Without discussing the rights and wrongs of actions, I asked on Twitter:
Remember when Canada focused on humanitarian actions and peacekeeping, instead of bombing?
In the Globe and Mail, respected jurist Louise Arbour voices "grave doubts about the way wealthy and powerful countries, such as Canada, deliver [beliefs and values].

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Saturday, March 28, 2015

The moderating effects of moderation

RossK writes about the Pro-Media Club and its implicit rulebook, which includes a requirement that no one reprove a colleague, even if overstatements and misrepresentations morph into purposeful lies. The blog world doesn't follow those guidelines so we can point at any load of old codswallop encountered. In coverage of the Metro Vancouver transit plebiscite, there is plenty, particularly from alternative media that claim to publish content less influenced by special interests. Unfortunately, the interests are still special, just different.

Although a photo of the writer attached to the article gives a hint of bias, there is no indication Paul Hillsdon's work is a paid advertisement. His Vancouver Observer "Special Report" presents implications of a "NO" vote. These are but a few:
  1. TransLink's ...communications to the outside world effectively eliminated.
  2. The Pattullo Bridge will be delayed for three more years, but eventually begin construction under a tolling regime.

  3. Broadway [SkyTrain subway extension] will become the next priority. ...The project will start moving forward in 2020.

  4. Governance, administration or corporate structure will not see any major changes.

  5. The TransLink-owned and operated subsidiary Coast Mountain Bus company will be dissolved.

  6. To address issues of governance and regional equity, TransLink is dissolved.

  7. TransLink will make strategic investments in property that produces dividends for the agency.
This "special report" is not worth special attention but, if TransLink were to end communications to the outside world, would tens of millions of dollars paid to friendly communication contractors also end? Would TransLink continue to publish bus schedules and explain SkyTrain stoppages? Would $110,000 a year fare checkers be allowed to talk with transit riders?

#2 claims Pattullo bridge tolls would result if the sales tax is defeated, which leaves one to assume their absence if the vote is yes. In fact, TransLink intends to collect tolls on the new crossing regardless of the vote result.

In #3, The Observer reports the Broadway subway will not move forward until 2020. However, TransLink has already spent millions on design and property acquisitions for the SkyTrain extension. It's construction is, shall we say, on track.

#4 is in direct conflict with #5 and #6. As Stephen Leacock might have written: The yes vote proponent flung himself upon his horse and rode madly off in all directions.

The final item references the possibility of financing transit improvements through "value capture" by securing a portion of incremental values gained by commercial properties after installation of mass transit facilities. However, such a policy is not dependent on a regional sales tax vote, it needs elected governments to alter taxation philosophies. As the yes side claims elsewhere, this issue is not on the ballot.

Top Five Myths about the Transit Vote by David P. Ball is an improvement but The Tyee allows partisan enthusiasm to get in the way of accuracy. Ball goes wrong in his second sentence. He writes the vote is "on whether to boost sales taxes by 0.5 per cent to add $7.7 billion to the transit and transportation budget."

The proposed sales tax would not guarantee that sum is added to TransLink's budgets. By the company's own reckoning, it would raise $250 million in the first year, which wouldn't pay 3/4 of the annual interest on $7.7 billion, if TransLink can borrow at the province's rate of 4.45% (FY 2014) and not the 6.7% paid on Golden Ears Bridge financing (Note 8, 2013 audited financials).

Clearly, the addition of almost $8 billion to the transit and transportation budget is more dependent on decisions of senior government than the choice of Metro Vancouver voters to accept or reject a new type of taxation dedicated to TransLink. Of course, there is also the possibility that the 0.5% regional sales tax would elevate to 1.75%, which is sufficient to repay $7.5 billion over 20 years.

Ball writes that myth #2 is "TransLink tax grab will cost households $258 per year." The Mayors' Council claims an average cost of 35¢ a day, or $128 a year. Of course, any tax that imposes a $250 million burden on roughly a million homes, needs a little mathematical manipulation to fit the Mayors' assertion. I've seen convoluted calculations and explanations but none that fit this OED definition of an average:
The value obtained by dividing the sum of several quantities by their number.
Yes, some households will pay more, some will pay less, but the average is not $128. The myth listed by David Ball should have referenced the average cost propagated by the YES side.

The Tyee reports the third myth is "The debate is between the political left versus right." No knowledgeable person has made that statement and suggesting existence of this fallacy undermines the writer's credibility. A more accurate argument would be that the debate is between the publicly paid entitled (like TransLink's countless media contractors) and the people who do the paying.

Ball says it is a myth that TransLink's high CEO salaries are wasteful and offers a defence that "that other government agencies pay high salaries to their top executives." That latter assertion is true but it is like arguing that I should be able to drive 80 km/hr through a school zone because drivers elsewhere are driving even faster. In reality, many people have complained about high TransLink salaries, but not just the amounts paid their imperfect CEOs. Excessive salaries in the corner offices create a demand elsewhere in an organization and remove the moderating effects of moderation.

Responding to financial pressures, one very large private company had this response:
Samsung Group said Friday it will freeze wages for about 2,000 executives next year as Korea’s largest conglomerate tightens its belt.

...In order to reduce costs, Samsung Electronics in July ordered executives to travel in economy class for flights under 10 hours and reduced allowances for business trips. It also encouraged employees to take vacations instead of receiving pay for unused time off.

As for the group, it has taken other cost-saving measures, such as reducing the number of executive promotions, restructuring business divisions and redistributing employees...
By the way, annual TransLink revenues are about 1/2 of 1% of Samsung revenues. The Korean company is a sophisticated conglomerate with a record of steady growth and substantial profitability. It also has a record of paying its top executives a small fraction of what individual executives make at North America's largest companies.

At the North Shore News, former full-time journalist Trevor Lautens writes about transit tax proponents, saying they:
Overwhelmingly have this in common. They are politicians, downtown business people, high bureaucrats, self-important media types, charity moguls, and the delivery people who supply and sustain them. They write off their driving and parking costs. They don’t take public transit themselves. Never will. They want other people to take it.
At the same newspaper, estimable columnist Elizabeth James concludes,
TransLink, the agency that believes your pocket is the gift that keeps on giving — whether or not you are given good value for your money in return.
At The Common Sense Canadian, Rafe Mair makes an argument for a yes vote but commenter Evil Eye provides a response that is worth reading. It includes this:
To exaggerate the number of people taking transit, TransLink uses the number of times that transit-users board or alight transit. TransLink in effect creates clones to inflate ridership on transit and to make certain key statistics for transit (tax subsidies) by TransLink seem less bad than they really are:

“However, TransLink is unique in using that number — both Toronto and Seattle use “revenue passengers.” Seattle doesn’t even make “boarded passenger” counts public. Dermod Travis, executive director of IntegrityBC, questioned why TransLink would use a different term. He said… TransLink’s rationale is illogical.

“If you are using different measures, people will naturally feel that you’re doing it because you don’t want to be compared,” he said. “If you don’t want to be compared it’s because you don’t think you’ll measure up.”

TransLink is dishonest, rotten to the core and my gorge rises if even I contemplate a YES vote!
Transit Referendum and Congestion

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Thursday, March 26, 2015

Enough said...

Please, take time to scroll through my writings on education.

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Wednesday, March 25, 2015

From outside the Liberal spin machine - RERUN

The following first published July 21, 2014:

Does it surprise you to learn that British Columbia earned a net of only $61 million in gas royalties in the last two fiscal years?

Revenue statements report $534 M in royalties from April 1, 2012 to March 31, 2014 but in footnotes to the province's audited financial statements, we learn that credits owed gas producers grew in the two fiscal years by $476 M, to a total of $1,250 M. BC Liberals choose not to record this liability although it will reduce future royalty payments. This is but one example of accounting flimflammery that distorts the province's true financial state. It also indicates that expectations of riches to come from massive public investments in LNG plants are sheer fantasy.

Last March, the government MLA for one of Canada's wealthiest municipalities rose in the Legislature to speak about natural gas. Jason Sturdy said,
"our government's deep-well royalty credit and infrastructure royalty credit program will also help to increase the competitiveness of our province's natural gas sector and support the long-term prospects of the industry."
The credit programs Sturdy describes are tax expenditures, which are described by a business dictionary as,
"Revenue a government foregoes through the provisions of tax laws that allow (1) deductions, exclusions, or exemptions from the taxpayers' taxable expenditure, income, or investment, (2) deferral of tax liability, or (3) preferential tax rates."
Politicians often use tax expenditures when they don't want to draw attention to transfers of wealth from public to private hands. The BC Government's objective is to reward natural gas producers billions of dollars while citizens — like disabled people in their seventh year of a benefits freeze — are told cupboards are bare. Liberals prefer little discussion or comment not processed by their spin machine. In this case, Robin Austin, opposition critic for natural gas development, did not provide the rest of the story. Instead, he stood after Mr. Sturdy and applauded the government's gas strategy. That, I believe, is opposition that is too loyal.

I am prepared to wager that not one in twenty carbon tax paying British Columbians — perhaps including MLA Austin — know the amount taxpayers subsidize fossil fuel development. Since handout beneficiaries are among their funders, the Canadian Taxpayers Federation does not rate as important the billions in tax expenditures encouraging fossil fuels. Today, one of Jordan Bateman's complaints is about $77.82 the Ministry of Finance spent at an online Disney store. Gas subsidies have not been on Bateman's list of subjects fit for examination.

Search Google for BC natural gas subsidies and you will find the corporate press has almost no coverage. It is discussed at sites like this and by The Dogwood Initiative and the Common Sense Canadian. Otherwise, the subject is considered not something taxpayers need to know. God knows it is material, but that's matters not to corporate media.

The following is extracted from documents published by the Ministry of Finance, including audited financial statements of British Columbia.

LNG updates at The Straight Goods.

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Words paint revealing picture...

Written by Jessica Kiang of The Playlist, a phrase describing a new film resonated with me about a subject I examine almost every day:
A [ ____________ ] that hides its actual badness under a tarpaulin of mediocrity so thick and heavy it's difficult to even lift a corner to peek beneath...
Regular readers will know how I would fill in that blank.

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Tuesday, March 24, 2015

NF with Ian Jessop, CFAX1070, March 24, 2015

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Don't miss...

BC Legislative Press Gallery searches for news
The account of a one small Alaskan newspaper holding a BC Minister to account for his misstatements of fact:
The Bleatings Of Bill Bennett...Not Just For Domestic Consumption Anymore
Now ask why BC journalists don't ask the same questions...and why this takedown has generally been ignored by BC media properties that see themselves as partners with resource companies.

From Blog Borg Collective:
If Bennett had just kept his cool and ignored Juneau Empire Editor he could have kept British Columbian failed mining statistics on tailing pond practices to himself, thereby keeping the public in the dark, Americans too...

50+ years of pollution, Tulsequah Chief Mine

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Join me on CFAX1070 with Ian Jessop, Tuesday, 1 PM

I'll be in Victoria Monday and Tuesday and will be on CFAX1070 with Ian Jessop, 1 PM Tuesday, March 24.

Join us live or listen to the podcast available at the CFAX1070 website.
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Monday, March 23, 2015

Pavco pain

What happens when you've got a stadium that cost taxpayers more per seat than almost any sports arena in the world has cost the public and it's only needed a few days a year? If you're a BC Liberal, you trust your friends in the mainstream media will stay quiet, except perhaps to remind citizens of the PacifiCat ferries. Here is a list of stadium events in the last two fiscal years. The ones shown in red are events where paid attendance soared over 2/3 capacity.

You will find additional mentions of BC Place by scrolling through items linked here.

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Sunday, March 22, 2015

"Very, very irresponsible..."

Dr. Norman Spector, is a highly educated individual with experience at the highest levels of government service. After serving as Deputy Minister for BC Premier Bill Bennett, he was Secretary to the federal cabinet for Federal-Provincial Relations and then Chief of Staff for Prime Minister Brian Mulroney. Following a period of diplomatic service, he worked in journalism and, a resident of Victoria, he is a frequent media commentator about matters political. This is from December 2013.

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Saturday, March 21, 2015

LNG in Howe Sound - Dr. Eoin Finn

Eoin (Owen) Finn B.Sc.,Ph.D., MBA, a 30 year resident of Bowyer Island, Howe Sound, retired KPMG consultant.

From Vancouver Observer

From the Spring 2014 edition of Rising Tide, a newsletter of Living Oceans:
We found it interesting to note how that same government reacted to a U.S. proposal for a tanker route passing through Canadian waters in Passamaquoddy Bay, New Brunswick. Downeast LNG is a proposed export terminal in Maine. Their preferred tanker route bypasses critical habitat for North Atlantic right whales and would see the tankers navigating a narrow channel with a bend. Sound familiar? But in New Brunswick, Conservative MP Greg Thompson leapt to the assistance of project opponents. Soon, the entire Cabinet was explaining Canada’s vehement opposition to the project.

Gary Doer, Canada’s ambassador to the U.S., stated, “Canada continues to have serious concerns with the proposal to construct an LNG terminal on the Maine side of Passamaquoddy Bay. These concerns relate to the environmental, navigational and safety risks as well as the adverse economic consequences arising from the passage of LNG tankers through Head Harbour Passage, New Brunswick, which the Government of Canada opposes.”

Maxime Bernier, Canada’s new minister of foreign affairs, assured a citizens’ group that “Canada is strongly opposed to the prospect of LNG supertankers navigating the treacherous waters that lead into Passamaquoddy Bay between Maine and New Brunswick.”

In 2006, Stephen Harper said, “… there are well-founded concerns about the construction and operation of LNG terminals in ecologically-sensitive areas like Passamaquoddy Bay.”

Japan Feb LNG spot price falls a quarter to $7.60/mmBtu, Reuters, March 10, 2015
...demand from other major buyers South Korea and China has disappointed, reflecting weak overall Asian demand.

Spot LNG contracted in February for delivery to Japan averaged $7.60 per million British thermal units (mmBtu), down from $10.20 per mmBtu a month earlier, the Ministry of Economy, Trade and Industry (METI) said.

Spot cargoes booked earlier and arriving last month averaged $10.70 per mmBtu, down 23 percent from $13.90 in January.

Asian spot liquefied natural gas prices LNG-AS for April delivery fell below $7 per mmBtu last month, trading at a discount to Europe's benchmark UK gas hub prices,
as ample stocks, a mild winter and slowing economic growth have dampened demand in parts of Asia.

Goldman Sachs forecast last week that Asian LNG prices would dip to $6.25 per mmBtu in the third quarter of 2015, before rising to $7.00 per mmBtu in 2016...
From a letter in the Bowen Island Undercurrent by Anton van Walraven:
...the people of BC will see very little benefit and most likely will be paying foreign investors to take BC’s LNG. In a nutshell, BC’s royalties on LNG are not paid on units of gas but rather on the net-profits of the LNG producer/exporter. In other words, if there is no profit, BC will get zero royalty income. Norway, on the other hand, claims royalties by the unit of North Sea oil. It now has a trillion dollar heritage fund. Compare this to Alberta. Like BC, it claims a tax on the net-profits and its heritage fund is… empty! On top of that, add the subsidies and tax breaks offered by the Provincial and Federal government and the balance is pushed right into the red.

...the price for LNG has plummeted. For BC, the projection is now that it will take up to 15 years, after the first project starts up, before we see any royalties coming in.

The foreign owners of Woodfibre LNG are in it to make profit... they won’t pay taxes until all their start-up costs have been absorbed. When profits are made, will they ever pay any taxes? Maybe, maybe not. The profits can always be booked to the parent company Woodfibre LNG Pte. Ltd. based in Singapore, which has very low taxes for LNG firms. And Canada has an agreement with Singapore not to double tax when a firm is already taxed in one of the states.

Taking this all in, you might wonder why Councilors [Alison] Morse and [Gary] Ander show support for the Woodfibre LNG project, when the economic benefits for BC and Canada will be non-existent. Their support becomes stranger when we consider the negative impacts on the environment of Howe Sound and the impact daily trips of LNG supertankers through Howe Sound will have on the local tourism economies and real estate values.

It leaves me wondering how long someone can remain loyal to an ideology that is so counterproductive to our economy, health, environment and quality of life.
Washington LNG Blast Spotlights Natural Gas Safety, Reuters, April 2014
An unexplained blast this week at a liquefied natural gas (LNG) facility in rural Washington state, which injured workers, forced an evacuation and raised alarm about a potentially large second explosion, could focus attention on the risk of storing massive gas supplies near population centers...

Early Monday, a “processing vessel” at the Williams facility near the small town of Plymouth, Washington, exploded, spraying chunks of shrapnel as heavy as 250 pounds as far as 300 yards, according to local emergency responders.

The flying debris pierced the double walls of a 134-foot LNG tank on site, causing leaks. Five workers were injured, and local responders warned that vapors from the leaks could trigger a more devastating, second explosion. A county fire department spokesman said authorities were concerned a second blast could level a 0.75 mile “lethal zone” around the plant.

Everyone within a two-mile radius of the site was evacuated, and a bomb-squad robot was deployed to snap photos of the damaged tank to avoid putting workers at further risk. Some who did approach were reportedly sickened by fumes...

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Friday, March 20, 2015

Would 7¢ fines deter improper acts of Canadians?

The National Energy Board penalized Enbridge Pipelines Inc. $16,000 in February and $264,000 in March 2015 for four separate incidents in western Canada. The Harper Government set the maximum penalty for corporations under the NEB Act at $100,000 per incident.

Is that penalty sufficiently onerous that a company is unlikely to offend? Not likely. In 2014, Enbridge had annual revenues of $38 billion, total assets of $73 billion and equity of $19 billion. Statistics Canada reports median annual income of Canadians is $27,600 and median net worth per individual is about $85,000.

So, comparing annual revenues, a fine of $100,000 to Enbridge is equivalent to a fine of 7¢ to a person with the median Canadian income. Looking at net assets, a fine of $100,000 to Enbridge is equivalent to a fine of 45¢ to a person at the Canadian median.

Finland is a nation that believes in both progressive taxation and progressive punishment. The Guardian Newspaper reported how the system works:
A millionaire businessman in Finland has been fined €54,000 ($73,000 CAN) for speeding. While the businessman’s fine may seem extortionate, it is part of a tradition of “progressive punishment” that stretches back over nine decades.

In Finland, speeding fines are linked to an offender’s income.

Reima Kuisla was driving at 103 km/h (64mph) in an 80 km/h zone. The fine was calculated based on the €6.5m earnings posted on his 2013 tax return.

This is not even the highest ever financial penalty received for speeding in the country. Back in 2002, a Nokia executive received a €116,000 ($158,000 CAN) fine for speeding on his Harley Davidson motorcycle.

Since 1921, some offences that require a non-custodial sentence in Finland have been punishable by “day-fines”. These are calculated on the basis an offender’s daily disposable income...
If the National Energy Board could impose fines against resource corporations equivalent to the impact a person with median income experiences when paying a $173 transit fare infraction ticket, the penalty for Enbridge would be $238,200,000. Instead the maximum fine allowed by government is 0.042% of that amount.

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Tuesday, March 17, 2015

Astroturfing, Liberally

Damien Gillis of The Common Sense Canadian talked with Ian Jessop on CFAX1070 about a group that is funded by government and industry. The audio segment is available below.

We should pay attention to this organization because it aims to convince citizens that natural resource extraction should occur with little oversight and a minimal share paid to the public. Although one object is to deprive taxpayers of revenues, taxpayers helped fund Resource Works. The astroturf organization received initial funding from the BC Business Council after that industry-centric organization got more than a half-million dollars from government. In effect, taxpayers fund efforts that damage the financial interests of taxpayers. That's the neo-liberal style of BC Liberals.

Stewart Muir, Executive Director of Resource Works is married to Athana Mentzelopoulos, one of Premier Clark’s closest friends according to Sean Holman. Ms. M. has been a government insider during Clark’s term and previously served as an attack dog, spokesperson and assistant to various Liberal politicians. In August 2014, while the government was escalating its bitter education dispute, Mentzelopoulos, with financial assistance of taxpayers, filed a defamation lawsuit against BC NDP education critic Rob Fleming.

In listing Resource Works insiders, Rafe Mair includes former cabinet minister Geoff Plant, an ex-MLA who landed on his feet after leaving politics. Law firms associated with Plant were paid almost $1 million during fiscal year 2014 and Plant personally received more than $50,000 in directors’ fees from each of BC Ferries and BC Land Title and Survey Authority. He also serves as chair of Providence Health Care but payments to Plant from that quasi-public agency are not disclosed.

Donald Gutstein, adjunct professor, SFU School of Communication, has a more extensive critique of Resource Works at his website: New BC Think Tank’s Findings Remarkably Helpful to Clark. What should be noted from his article is the clear and complete journalistic failures of Vancouver's Postmedia dailies. They provided platforms for misinformation and did it in the style of Izvestia, before and after dissolution of the Soviet Union.

Here's a sample from Gustein's article:
More resource-based jobs are created in the Lower Mainland than in the rest of the province, Cross’s study found.

This could be true. Think of all those Lower Mainland-based lawyers, lobbyists, insurance executives, financiers and PR flaks needed to protect Imperial Metals from the damage wreaked by its devastating Mount Polley tailings pond collapse. Then think of the baristas to serve their coffee and the foreign nannies to look after their kids. And so on.

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Saturday, March 14, 2015

The Life and Hopeful Death of a Pipeline Promoter Talking Point - Guest Post

Note: Today, Northern Insight features a contribution from freelance writer and journalist Brett Mineer, winner of the 2011 Jack Webster Foundation award for Best News Reporting of the Year - Radio. His accounts of the 'Whistler Sled Dog Killings' were heard around the world.

This item follows a couple of pieces I did that involved Tom Fletcher: Agenda journalism and Hey Tom Fletcher, whose energy policy is nonsense?

A Kinder Morgan talking point promoted by the President of the BC Legislature Press Gallery sounds great – until you give it a moment of thought (and a fact check).

Brett Mineer, March 12, 2015

It was the kind of thing Twitter is known for – ad hominem and baseless assertion. As I'm periodically guilty of the same heat of the moment Twitter foolishness, I would have been plenty happy to leave well-enough alone were it not for the fact that one such assertion had appeared in print before.

In early December, protests were well underway on Burnaby Mountain over test holes Kinder Morgan contractors were drilling in an effort to gather data for their proposed expansion of the Trans Mountain Pipeline. There had been over 100 arrests by this time and the rhetoric was heated, including from the President of the Legislature Press Gallery, the Black Press man in Victoria, Tom Fletcher. Once upon a time his dual role of columnist and reporter might have been thought to have been incompatible – but not these days.

On this night someone raised the concern many of the protesters had that the Kinder Morgan proposal wasn't just for a near tripling of oil volume, but a change in the product being shipped. Under the proposal before the NEB, Trans Mountain would transport a majority of its overall volume in the form of dilbit instead of light crude.

Because the bitumen coming out of Alberta is too thick to flow through pipes on its own, it needs to be diluted using a cocktail of solvents and derivatives of natural gas in order to go from point AB to BC. The industry widely acknowledges dilbit poses a greater risk of corrosion and other technical challenges, therefor requiring a greater level of maintenance and monitoring to ensure their safety. This was a concern oft brought up by protesters and opponents of the Trans Mountain proposal but it was a concern easily brushed aside by Fletcher and the communications staff running the Trans Mountain twitter account:

You'll notice I don't have the original tweet from @TransMtn that Fletcher retweeted. They deleted it after I began email correspondence with them days later (more on that shortly).

As you can see, I responded by repeating something I'd asked @TransMtn before to no response.

My thinking was thus:
We've always known this pipeline shipped crude. True they may have sent a few test runs of bitumen through to test the feasibility of one day getting Alberta's land-locked bitumen to foreign markets – but this is, and always has been, a very traditional oil pipeline. So how much bitumen have they shipped?
Fletcher's response surprised me.

I don't have my response – but I remember it tersely read "Frankly Tom, I'm shocked you consider yourself one."

For a reason I can't quite put my finger on, I now really wanted to know those annual bitumen volumes for the existing pipeline. I reached out to Trans Mountain this time through a direct message on Twitter.

Four days later they Tweeted this back:

Looking at their own numbers, it clearly appears the Trans Mountain has remained primarily a crude oil pipeline. The largest amount of dilbit ever carried as a percentage of total annual volume was 18.6% in 2010.

Admittedly, they never explicitly claimed to primarily carry dilbit however their claim "Transporting bitumen began in 1986, almost 30 years, half of Trans Mountain's history" seemed designed to imply it, or at least deflect questions about the proposed shift to majority dilbit.

Because their claim (and by proxy Fletcher's) is that dilbit shipments have been occurring since 1986, it seemed to me a chart that only went back to 2006 left a pretty big data hole.

I followed up by email:
-----Original Message-----
From: Brett Mineer [mailto:xxx@xxx.ca]
Sent: Monday, December 08, 2014 12:03 PM
To: Info Transmountain

Subject: Dilbit percentages prior to 2006

I'd first like to thank you for your efforts in responding to my requests on Twitter for Dilbit volumes as a percentage of annual totals. The information you provided for 2006-2013 is exactly what I was looking to see.

As a follow up I'm just seeking some clarification on pre-2006 numbers. In your tweet you mentioned the practice of shipping Dilbit via the Trans Mountain Pipeline began in the 1980's. I am wondering if numbers from the 80's to 2006 were not included because the amounts were negligible, unavailable or a bit of both? If you have any additional numbers or could point me in the right direction of pre-2006 data it'd be much appreciated.

Brett Mineer
I received a response a few minutes later:
From: Info Transmountain
Sent: Monday, December 08, 2014 12:11 PM
To: 'Brett Mineer'
Cc: External Relations

Subject: RE: Dilbit percentages prior to 2006

Hi Brett,

Thank you for your follow-up email. I have forwarded your question to my co-workers in External Relations for Kinder Morgan Canada, as they will be better able to speak to questions regarding existing/historical information.

Kind Regards,

Trans Mountain Expansion Project Info
Kinder Morgan Canada Inc.
With that, my questions were kicked over to Calgary. The next day I received one of those LinkedIn notifications that someone was viewing my profile. I guess they were curious why someone was asking reporter-type questions who hadn't identified himself as a reporter. I'd be curious too.

Anticipating I may want to write something somewhere about this, I tried looking for the original tweet from Kinder Morgan that got this all started. It had mysteriously disappeared from their feed but as luck would have it, I found it alive and well as a Tom Fletcher retweet (as shown earlier).

On day two, I half expected a response from Andrew, the guy who'd been looking over my LinkedIn. Instead I heard from Natalie. On Dec 10, 2014, at 11:13 AM, External Relations <externalrelations@kindermorgan.com> wrote:
Hello Brett,

In response to your follow up question, the detailed information you have asked about is not readily available.

When the pipeline first started operating in the 1950s it transported conventional light crude, refined products were introduced in the mid-1980s and in the late 1980's Trans Mountain began the transportation of heavy oil. The heavy oil volumes were initially low and as both supply and demand for heavy oil increased over time so too did the volume transported by Trans Mountain up to the percentages that were previously provided to you. 
Natalie Loban
Communications Advisor
External Relations, Kinder Morgan Canada
In other words, volumes pre 2006 were negligible to non-existent. Shipments of bitumen that "began in 1986" appear to have been nothing more than periodic and barely notable – perhaps feasibility studies.

Kinder Morgan and Trans Mountain may never use that talking point again – but don't count on anything different from Tom Fletcher.

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Thursday, March 12, 2015

Takin' care of business, every day and every way

I read a letter to the editor published by The Tri-Cities Now, March 11, 2015. Since it adds information about the Narrows Inlet project that has been discussed here previously, it is worth republishing:
I was disappointed to read a letter by BC Liberal MLA Linda Reimer regarding closing of Burrard Thermal in the Feb 20th edition of the Tri-Cities NOW.

In her letter, Ms. Reimer stated NDP MLA Selena Robinson was misleading constituents and creating an issue where there isn't one. I submit Ms. Reimer is the one misleading constituents when speaking of a $14-million-a-year saving to B.C. ratepayers. I invite her response to the BC Liberal decision to proceed with more private power contracts, of which the recently approved Narrows Inlet Hydro project on the Sunshine Coast is a prime example.

Based on their Energy Purchase Agreement from BC Hydro, this project alone will represent an approximate $10-million-per year obligation by BC Hydro ratepayers. This project is not "run-of-river." It involves draining alpine lakes by levels of 60 feet in depth, diverting waterfalls and clearcutting lineal swaths for power lines and penstocks. This will permanently industrialize a local pristine fjord for the sole purpose of private profit.

Unlike Burrard Thermal, and like the majority of IPP (independent power producer) hydro projects, it cannot provide power when we most need it. The water mysteriously goes hard in the winter. The Narrows Inlet project is far removed from point of use, and unlike Burrard Thermal, relies on a spider web of transmission lines to supply power to our area.

Narrows Inlet is but one example of approving private projects over the continuing use of our already paid for, economically feasible and publicly owned Burrard Thermal. It is with equal disappointment I see Ms. Reimer disregard comments made by Martin Cavin in his letter to the editor of Feb 27, which refuted all of Ms. Reimer's comments.

This is not a left or right thing; it is about looking after our province. Our current (no pun intended) provincial government is following the lead of the federal Harper government by way of stifling those knowledgeable in the field.

I challenge Ms. Reimer to justify her concern for greenhouse gas emissions and local pollution when Premier Christy Clark has proclaimed burning of natural gas exempt from any such worries if used for LNG export purposes, yet not the case when a publicly owned facility is involved.

Following is the letter referenced above. It is by another writer who has knowledge of his subject gained by years of direct experience:
I retired in 2013 after working 24 years as a power engineer at Burrard Thermal. I take issue with many of the statements about Burrard made by MLA Linda Reimer in her letter to the editor.

If Hydro needed Burrard to run non-stop at full output for decades, perhaps $1 billion would be required to refurbish the plant. But Burrard's ideal role is a standby plant for system emergencies and for meeting peak loads during the winter months. The plant would typically run no more than 10 per cent of the year and the cost to refurbish it for this role would be closer to five per cent of what Ms. Reimer suggests.

Burrard's efficiency is typical for a standby plant. No electrical utility spends billions to build highly efficient standby plants that sit idle most of the time. Nor are millions spent installing advanced pollution control equipment.

Burrard is an exception, with equipment that reduces its nitrogen oxide emissions by 90 per cent. At 900 megawatts (MW) output for 10 per cent of the year, annual nitrogen oxide emissions would be 85 tonnes out of a Lower Fraser Valley total of 55,000 tonnes. In comparison a single LNG export terminal burning gas would emit over 3,000 tonnes of such emissions annually.

As for greenhouse gas emissions, Burrard on 10 per cent standby would emit less than one per cent of B.C.'s total. A single LNG export terminal burning gas would emit 10 times the greenhouse gases of a standby Burrard. Ms. Reimer should read BC Hydro's 20-year Integrated Resource Plan, released Nov. 2013 (Google "BC Hydro IRP"). Of interest is Chapter 9 - Recommended Actions. There is a contingency plan which shows what Hydro needs to do if its very aggressive energy conservation program is only partially successful.

The critical shortage would be capacity, meaning Hydro would not have enough generators to supply peak loads. Burrard is ideal for providing such capacity. The capacity chart on page 9-78 shows that peaking power may have to be imported (from the U.S. or Alberta) as early as 2016, the same year that Burrard is shut down. This power, 40 per cent of which is coal generated, may not always be available and could cost up to $1,000 a megawatt hour. In addition new gas-fired peaking plants could be required in B.C. as early as 2018. Saying that $14 million a year is saved by closing Burrard is only half the equation.

What is the cost to replace the lost 900 MW? I challenge Ms. Reimer to show where this much capacity can be reliably obtained elsewhere that is cheaper and cleaner than Burrard.

In past years such issues were reviewed by the B.C. Utilities Commission, which determined that shutting down Burrard would end up costing Hydro more money than it would save.

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Wednesday, March 11, 2015

Transit referendum and Pandora's box

When financial numbers involve billions, many of us struggle to gain understanding and perspective. Usually, the beneficiaries of large scale spending are the worst sources of information. Here's an example.

A "fact-check" statement from the paid-for-by-taxpayers Mayors council website says:
A “Yes” to Transit vote would cost average households $125 a year.
Readers are invited to click on a link to view "the math" and that brings up a PDF file that states:
The Mayors’ 10-year plan to improve transit and transportation as the region grows by one million more people will cost the average household $125 a year. That’s about 35 cents a day.
You don't have to be a mathematician to know an average is calculated by dividing a sum by the count of numbers contributing to that sum. Transit referendum proponents claim the 0.5% tax will raise a sum of $250 million and they admit the count of households in Metro Vancouver is 967,948. Those numbers produce an average of $258.28 in new tax collected for each household.

TransLink proposes to spend $7.5 billion to expand its asset base. Financing that amount at 4.45%, the effective rate it paid to the Municipal Finance Authority according to TransLink's most recent annual report, would require annual payments for 20 years of $568 million.

That results in an average burden of $587 per household, almost five times the amount suggested by the Mayors Council.

The tax proponent's website also states:
The Mayors’ 10-year plan to improve transit and transportation as the region grows by one million more people...
The implication intended is dishonest. If Metro Vancouver grows by 1.24%, the annual percentage forecast by Stats BC, population will grow by 310,000 in ten years, not by one million they want you to believe.

However, there is more important set of facts ignored by the Mayors Council and their army of public relations operatives. Substantial capital expenditures result in additional operating costs and when those are not covered by transit fares, there is an additional burden placed on taxpayers. These reported numbers are taken from the 2013 annual report, the projected numbers I calculate:

It is egregiously wrong to pretend that a yes vote on this transit referendum will affect families by only $125 a year. It could be ten times that amount.

Personally, I'm not against improving transit but there are fundamental questions that we must ask and they are not part of the conversation that most municipal politicians and plutocrats want to hold.

TransLink management, I've said repeatedly, is a too comfortable place for too comfortable people. They claim to serve the less privileged people of British Columbia but those customers are often the ones at or below British Columbia's individual median income of about $30,000 a year (Statistics Canada. Table 111-0008). We need to ask if we should pay executive salaries a dozen times greater than what half the system users earn and we need to rethink the levels paid for many other TransLink positions that result in 6-figure salaries.

However, restraint and moderation is not going to happen when people who've grown fat at the public trough are making decisions. There is a very small clique that chooses TransLink directors and they cast eyes over very few candidates, none from groups that typically use transit. That governance structure is the first change needed. Without substantial movement down the road of reform, I'm not prepared to vote yes to a regional sales tax.

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Tuesday, March 10, 2015

"Mix ideological agenda and dubious accounting"

Many British Columbians of my generation were involved directly with the forest industry. As a kid, I lived beside a log dump and, to mother's futile distress, played regularly on log booms. As Hans Peter Meyer said in his Tyee article, Working in the Woods, almost every adult male in my life was in the forest industry. As a 10 year-old, I volunteered to refuel camp vehicles then drove every one around private logging roads to ensure the fuelling was successful. My first paying job was cutting slash on coastal logging roads, although Jack the road boss called my teenage partner and me the laziest S.O.B.s he'd ever encountered.

At 16, I flew in a Piper Super Cub to the head of Powell Lake, landed on a meadow, and spent days in camp with no change of clothing, lugging diesel fuel uphill, five gallons at a time, to the excavator constructing road into old growth timber that would yield flawless Douglas Fir logs 35 feet in circumference. At 17, I worked the summer on those hills as Chief Engineer in Charge of Electrical Communications, or as old guys in camp called me, the whistlepunk. In the days before radio communications, rigging crews used voice and hand signals to a signalman who was attached with 1,200 feet of wire to a horn on the yarding machine. It was primitive and a signalling mistake could mean death for chokermen.

In that camp, where we spent 11 days out of each 14, I gained new respect for forest workers. These guys had a work ethic that is rare today and everything happened at rapid pace. Maximum production was the goal and, sadly, sometimes safety was ignored. After those months in the bush, I worked summers at the Powell River pulp and paper mill until my schooling was complete. That involved stints in the sawmill, the grinder room, maintenance shops, yard crew and paper machines.

Those early experiences left me a life-long respect for the industry that was the foundation of modern British Columbia. Today, I'm saddened at the ignorance of political leaders who establish forest policies to satisfy their financial sponsors who want high returns for little investment and care nothing about job creation. As a result, trucks drive to tidewater past idle sawmills so ships bound for Asia can be loaded with prime saw logs. An earlier article on the subject of exports and lost value-added forest enterprise drew a comment from Scotty on Denman. He's both thoughtful and knowledgeable so I repeat his contribution here:
The Forest Act mandates the "liquidation" of old-growth, and the regeneration of fast-growing "second-growth"; the evolution includes a "fall-down effect"--- the sustained yield of subsequent harvests is substantially less than the initial OG volume from the same area. Jobs, public revenues, product mix are affected by this transition, but biometric and market givens shouldn't be confused with the BC Liberals' dys-management of forestry which is equal parts imposed ideological agenda and dubious accounting method, both interacting to obscure, rationalize and conceal the fact that these policies diminish the public interest in its own resource.

Political authority potently obscures diminishment of public benefit from its own resource. Biometric inventory is complex, yet BC Liberal obscurantism is rather blunt: simply ignore keeping a proper forest inventory; the public isn't much inclined nor able to discern its veracity.

Long term Crown forest licence-holders cooperate with the government to shed capital-heavy processing by unionized workers, and to focus increasingly on logging and trucking by independent, non-union contractors for the raw-log-export market. Forest licensees have contributed generously to the BC Liberal party in return for the favourable policies permitting increases in raw-log export.

The BC Liberals also take advantage of the mountain pine beetle outbreak which, obviously, did a real number on inventory, and gifted the neo-right agenda with a valuable opportunity to obscure and confuse losses due to the beetle with those due to BC Liberal policy. Most absurdly, neo-right shills have availed the chance to blame the NDP for the outbreak---absurd because management policies contributing to it predate any NDP government. Nevertheless, the beetle-kill conveniently absolves forest companies from harvesting what they didn't much want anyway. The government has tried to use the supposed "loss" of this low-valued species to rationalize "compensating" loggers with higher-valued species in parks and other protected areas. It's blamed the beetle for everything from mill closers, to mill fires, to toxic but unconfessed aspects of neo-right public policy. This fact remains: the beetles ate themselves out business, the outbreak is over and the killed timber has degraded to useless. Yet the species nobody wanted forms a substantial part of BC Liberal bullshit when it comes to forest policy.

The BC Liberals have taken advantage of notions fostered originally environmentalists that coastal rainforests need urgent protection from immanent eradication by clearcut harvesting which obscures both the facts that vast tracts of coastal bush remain for both sustainable harvest and preservation, and that the high value of the OG makes it a prime candidate for value-adding processing here in BC, compared to second-growth which offers less in this regard, and has little competitive advantage over second-growth from other jurisdictions. OG forest are far from being liquidated yet, but BC Liberal forest policies of raw-log export, which includes both OG and second-growth, do nothing to compel local value-adding of our most competitively advantaged timber type, and, further, erode stock in protected areas, aided and abetted by neglected inventory and pine-beetle mythologizing.

The BC Liberals can make forestry matters as inaccessibly complicated as they want---and it serves their neo-right agenda well. The better policy, however, is simple: raw-log export needs to be reduced, ideally to zero. The only real way to do this is to get rid of the BC Liberal government. Until then, Norm does a sterling job in regularly reminding us of some of the fundamental facts about raw-log export that, properly analyzed, demand Crown forest resources be returned to benefit to its owners and not skewed unfairly and imprudently toward profiteering.

Thank you once again, Norm. We'll get there yet.

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Saturday, March 7, 2015

RCMP should not stand for Secret State Police

The CEO of Tides Canada issued a copy of his recent letter to RCMP Commissioner Paulson. If anyone doubted the once iconic police agency had become servant to rich industrialists and governing politicians, uncertainty was removed by its decision that a mostly foreign-owned industry needed protection from legitimate discussion of public policy by Canadians.

There is an irony involved in the RCMP suggestion that a respected organization staffed and supported by people aiming to preserve the livable space of our nation is allied with extremist criminality. In fact, there are no examples of Tides involvement in unlawful conduct. However, the RCMP has been involved in many crimes, including theft, fraud, arson, assault, homicide and more.

When the Harper Government appointed Paulson, many, including serving members, hoped the new Commissioner would be a change from the misguided and incompetent leaders who preceded him. Instead, he has been an even unprincipled disaster, more loyal to government masters that any colleague. The cop who was supposed to be a master of purpose, principle and process understands little of those elements.

It is worth repeating Ross McMillan's letter to Commissioner Paulson:
The recently leaked January 2014 RCMP report, “Criminal Threats to the Canadian Petroleum Industry,” incorrectly names Tides Canada as a part of an “anti-Canadian petroleum movement” involving violent extremist and criminal activity. The report also minimizes the threat posed by climate change and questions the link between greenhouse gas emissions and the continued use of fossil fuels. The report is based on patently false and biased information. We have registered our concerns with RCMP Commissioner Paulson in the following letter from Tides Canada President & CEO Ross McMillan.

February 26, 2015

Mr. Robert Paulson
Royal Canadian Mounted Police
RCMP National Headquarters
73 Leikin Drive
Ottawa, Ontario K1A 0R2

Dear Commissioner:

I am writing to you regarding the recently leaked RCMP report, “Criminal Threats to the Canadian Petroleum Industry,” that named Tides Canada as part of an organized movement that opposes the petroleum industry. I wish to express our grave concern that the RCMP would produce a document asserting that Tides Canada, a respected Canadian charity, is associated with a movement involving violent extremist and criminal activity.

For the record, Tides Canada has not taken a stand against the petroleum industry. Our organization’s overarching position relating to climate and energy issues is that the country needs to transition to a low-carbon future while meeting our commitments to address climate change. We also believe that all voices should be involved in related public policy dialogue.

Tides Canada, in its 15-year history, has earned a reputation for building bridges between and among sectors to address complex environmental and social problems. Our ability to bring together diverse voices to develop durable solutions that support the environmental, social, and economic well-being of Canadians is at the heart of our success as a charity. We have a proven track record of working collaboratively with all stakeholders – including all levels of government – and building consensus on environmental and social issues of importance to Canadians.

The RCMP report leads the reader to a very different, and wholly erroneous, perception of Tides Canada. It uses biased and patently wrong information to make its case. The report’s broad brush and false depiction of Tides Canada as a key player in a nefarious movement is demeaning to your organization and a disservice to Canadians and the truth.

Could you please provide me with an explanation of how the RCMP produced a document with assertions about Tides Canada so biased and false?

I would welcome the opportunity at any time to discuss with the RCMP Tides Canada’s work.


Ross McMillan
President and CEO

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Friday, March 6, 2015

Log exports still rising

The latest release from BC Stats demonstrates that log exports continue to rise. The volume (in cubic metres) shipped in January 2015, is 40% above the monthly average during Liberal years and is almost 600% higher than average monthly levels under NDP governments. The January 2015 quantity exported is 50% higher than January 2012 when first year Premier Clark promised to review the subject.

Using data from BC Stats and dollar value calculations of the Bank of Canada, I calculated unit values in current dollars of annual volumes exported. The average unit value in the last three years of NDP governments was $198. In the most recent three years, it was $118.

Raw logs might actually be worth far less today because of long term market conditions or because lower quality timber is being exported. A third possibility involves undetected cheating in the quantities, qualities and values reported. Government has insufficient boots on the ground to assemble accurate production information and exported logs may be sold and resold numerous times between forests and foreign sawmills. Maximizing public revenues from public resources is not high on the very short list of BC Liberal values.

I remember when log booms were not towed to ship loading docks; they were floated to mills and used for lumber, chips, pulpwood and hog fuel.

Click on the "LOG EXPORTS" label shown below for more discussion of the subject.

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Thursday, March 5, 2015

No celebration of another contract to foreign ship builder

The following was first posted here December 19, 2012. It is a reminder that TransLink is not always aligned with serving British Columbian workers' long term interests, despite the present position of trade unions representing transit workers.

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." It was 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 million 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. It's some BC Liberals do frequently.

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Wednesday, March 4, 2015

Sales tax war resumed

The good doctor at The Gazetteer diagnoses a similarity between issues underlying the now debated transit sales tax and the late and unlamented HST. RossK is focused on the tax 'shiftyness' involved in both.

Quite right. BC Liberals have slowly shifted away from progressive taxation, preferring revenues from fees and taxes that have greater impact on the lower and middle classes. For example, the provincial tax on clear gasoline is 32.17¢ a litre. To a person earning $200,000, average fuel consumption would result in a tax of 0.5% of income. To a person earning $50,000, the same amount of fuel tax is 2.0% of income.

If that were the only regressive tax element, we might not have concern. Of course, it is not. Here is one example. If you are one of the fortunate few with employer paid extended health, vision and dental care, you are less burdened than others. Employer contributions for those are tax-free but uninsured individuals pay for the services with after-tax dollars. For example, if you face a $5,000 orthodontia bill and have a marginal tax rate of 30%, you must earn $7,150 to pay the dentist bill. The uninsured tend to be the retired and the people working in small business and on the margins of the economy.

Consumption taxes on necessities are not progressive and even if one begins at a small rate, it may not stay small and will become destructive to people who can least afford it. This year in BC, the richest taxpayers are relieved of about a quarter billion dollars in income tax, which is about the amount to be raised in the first year of the transit sales tax, if TransLink numbers are incautiously believed.

Additionally, the province is allowing natural gas producers over $600 million in credits to subsidize production costs, while it annually spends over $400 million more to promote the gas industry and aims to spend $8-10 billion so Site C can provide underpriced power to mining and gas companies. (The promotion the industries really wants is relief from paying the actual cost of electricity used, relief from assessment of royalties and taxes, waivers of environmental rules and employment standards and the right to import foreign workers.) In the meantime, we close plants that once added value to forest products and ship raw logs overseas and BC Hydro sells electricity to other industries for less that what equivalent energy costs, without calculating the number of jobs that result, if any. Residential consumers are asked to make up the difference.

A taxation system is much more than a way of raising money for essential public services. It can be a means to address inequality and promote a healthier economy. Alternatively, it can be a way to enrich influential insiders and their pals. The Liberal Government chose the latter path and it has had remarkable success. You won't find a label on the door, but the most powerful segment of British Columbia's government is the ministry of graft and corruption.

When transit tax proponents argue that its imposition is the only way to improve transportation services, they are wrong and they know it. As is apparent from my earlier scribbling, I believe the first action should be to clear out Translink's self-serving Board of Directors and any part of senior management not willing to maximize efficiencies and economies. The Board should not be a resting place for patronage appointees who only come close to transit vehicles when they drive past them on the street. Management must commit to zero-base budgets and to full transparency and detailed, timely reporting of financial information. The veils of secrecy must be torn down so diligent reporters like Bob Mackin can let in the sunshine.

Translink must eject the self-interested consultants who've taken control and they must engage transit users in decision making, without filtering by consultants. Independent experts, conducting peer-reviewed work, should examine transit plans for effectiveness and determine that goals being addressed are the right goals. All of this could be done in a few months. Then, there could be an open discussion about how best to fund the objectives, including the capture of value created by new transportation infrastructure.

Once TransLink has set a new course, then we will move forward. Without change, we dig a deeper hole and the people who benefit most are the ones selling us shovels.

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