How mediocre political leadership is undermining the B.C. economy

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      Too often, provincial governments hijack Crown corporations to advance unrelated objectives, causing colossal problems for the economy many years into the future.

      The Gordon Campbell government was so eager to promote the private power industry that it forced B.C. Hydro to purchase expensive run-of-the-river electricity from companies controlled by B.C. Liberal supporters.

      It's one of the reasons why B.C. Hydro rates rose nine percent on April 1, with more hikes expected in the coming years. That's going to siphon money away from other areas of the economy.

      Had B.C. Hydro not entered into these contracts, those rate increases would not have been nearly as bad.

      The previous NDP government used B.C. Ferries as its political football, building three aluminum-hulled catamarans for $460 million in the 1990s. They performed dismally in the Strait of Georgia and were later sold for just $19 million.

      The NDP wanted to promote a local shipbuilding industry and create unionized jobs even though the minister at the time, Glen Clark, had been warned that the vessels were inappropriate for B.C.'s west coast waters.

      Subsequent B.C. Ferries rate hikes have resulted in a sharp drop in traffic, undermining the Vancouver Island economy.

      The transit system is another area where the prime objective—moving as many people at the lowest cost—is bypassed in favour of other goals, such as promoting real-estate development or stimulating the high-tech sector.

      A provincial Crown corporation, B.C. Transit, plans to sell its 20 hydrogen buses, which were part of a $90-million plan to showcase B.C.'s hydrogen-fuel-cell economy. The vehicles were purchased at a much higher price than diesel-powered buses.

      When decisions like this are made, it invariably means higher fares for people who use the transit system. Those users who suffer the consequences of bad decision-making are rarely the politicians who invest in transportation boondoggles.

      The long-term impact of bad government decisions is an uncompetitive economy, which results in less money coming into the treasury to pay for health care and education.

      When rapid-transit lines are built in mostly single-family or industrial zones (think the Canada Line or the Millennium Line), this doesn't relieve the most congested transportation bottlenecks.

      As a result of political stupidity around transportation, employers in Vancouver have trouble hiring workers who don't want to pay the exorbitant cost of riding transit over two or three zones.

      Similarly, when a provincial government builds an $883-million convention centre—only to see out-of-town delegate days drop to levels that existed before the facility was even built—it shows a shocking lack of due diligence on the part of our elected officials.

      Don't even get me started on the roof over B.C. Place Stadium.

      We're seeing a similar tale unfold over liquefied natural gas. Postsecondary programs are being overhauled to train a workforce for a B.C. industry that will probably never exist. No university, college, or institute president wants to utter a word about this publicly for fear of being cut off from some government funding.

      If Shinzo Abe is reelected prime minister of Japan, you can expect him to fire up some of the country's 54 nuclear reactors. This is obvious to anyone who is paying attention to global affairs.

      The revival of nuclear power in Japan, in turn, could sharply curtail international demand for LNG. Keep in mind that Japan consumed 37 percent of the global supply in 2012 after its reactors were shut down following the Fukushima disaster. LNG prices will fall, crippling the feasibility of B.C. becoming a major player.

      Here's another one: TransLink decided to buy compressed-natural-gas-powered buses, claiming they would offer lower operating costs than ones using diesel.

      But since the decision was announced, the price of oil has plummeted. So it's questionable whether those operating savings will be achieved.

      In the meantime, TransLink will face higher capital costs for the new compressed-natural-gas-powered buses.

      But this fits into the B.C. government's objective of promoting the natural-gas industry, so to hell with arithmetic. In the same vein, B.C. Ferries will convert ships to run on LNG.

      Premier Christy Clark said in the last provincial election campaign that LNG would lead to a "debt-free B.C.". It reminds me of when Glen Clark used to talk about the glorious future of catamarans sailing across the Strait of Georgia.

      The recent sale of the hydrogen-fuelled buses is only the latest example of our mediocre political leadership in B.C.

      But as the zeal over all things LNG illustrates, it certainly won't be the last.

      Comments

      16 Comments

      anonymous

      Dec 6, 2014 at 1:07pm

      "mediocre political leadership" in BC indeed. It's really sad seeing the limp-wristed Opposition NDP's opaque double-speak on LNG as Les Leyne has reported:

      If I was to vote provincially today, it would be for the Green Party.

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      Michael Puttonen

      Dec 6, 2014 at 1:26pm

      NIce piece. I'd like to see a "Follow the money" follow-up. All these decisions are tied to something.

      I look at the history of the hydrogen highway alongside the rising and falling of Ballard stock. There is a repeating pattern over the decades...break through announcement, government contract, private investment, government subsidy, stock split, failure to launch.

      Then there's that stadium. The Pontiac Dome, it's twin, sole for $500K a few years ago. That's right, half a million dollars, half the price of the average Vancouver home. So they had to do something, because without an overhaul it was just another piece of real estate. Sometimes it's not what they do so much as why and how they do it.

      According to a report in the Sun I can still recall, Pr. Campbell personally guaranteed the MLS Governors, that the roof and reno would be built, a guarantee that secured the franchise. The Whitecaps were worth $250K as a minor league soccer club. The MLS franchise cost $34 million.
      The average price of an MLS franchise last year was $95 million.

      The same year as Pr. Campbell was bowing and scraping before the MLS, for political cosmetics, the BC gov't sold Bridge Studios for $40 million. Gave $33 million to PavCo to hide the Convention Centre ($25+ million) and BC PLace ($7+ million) operating losses for 07-08. The other $7 million went to the BC Arts Council for 09-10 supplementary funding.

      Bridge Studios was returning a yearly net profit of $2 million+ to the "taxpayer", year in and year out, until it was sold.

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      Ronnie Lonnie Ding Dong

      Dec 6, 2014 at 3:10pm

      The worst thing - the WORST thing! - about that stupid fucking stadium roof isn't that it leaks, or that it's metal spires look like shit. Never mind that when you think of Rome the Coliseum comes to mind or when you think of New Orleans you see the superdome, but that you would never remember Vancouver by that ridiculous lit up pincushion because it's so sinfully without architectural value.

      No, the worst thing is this: it's a retractable roof in a city where it RAINS 7-8 MONTHS OF THE FUCKING YEAR. It just makes no sense! It's nonsense! Why don't we all drive convertibles if that makes sense? Leaky, cloth-topped convertibles, of course. So, so, so very, very stupid and wasteful.

      So yeah, +1 for 400PPM there. Gordon Campbell was as much a hometown boy as it gets. Take a look at his first speech back in BC after leaving the Premier's office -- to the Vancouver Board of Trade, of course. Right away he self-congratulates about the Grey Cup win.

      https://www.youtube.com/watch?v=qBUQuDXIG2o

      Now that's a shady Vancouver promoter if I've ever seen one, a slippery Pt. Grey eel. Thank the High Commissioner for the current style of terrible government, as Christy too is a hometown girl. Gord gave away tens of billions of public funds to his friends through a series of complex schemes -- run-of-river power contracts, the BC Rail sale, the Olympics, criminally low royalty taxes, various privatizations and P3s, and of course his wonderful legacy projects. He paid the public a pittance to look the other way by nominally slashing income taxes while helping pump up real estate values, making homeowners house-rich. Oh yeah, he got rid of photo radar! If they can't do the math then who cares.

      Of course, now the tax giveaways and feel good vanity projects are impossible because there's no room in the budget. Deferred costs are a motherfucker.

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      Real BC Born & Bred

      Dec 6, 2014 at 3:53pm

      I agree with Mr. Smith (usually do over the last 25+ years).

      However some minor editing needs to be done so that the wrong impression is not left with those relativity recent to these issues which span over a decade.

      Possible Edits.

      Old Gordon made BC Hydro buy ABOVE Market Rate Power guaranteed via legal Agreements, not simply expensive.

      Leading to Enron style accounting & Tens of Billions in Debt at BC Hydro.

      Hydro rates are Compounding Annual increases not simply 9% year over year.

      The Fast Ferries where built at reasonable cost compared to Foreign Ship Yards, that is you would spend the same or more to have them built elsewhere.

      The NDP did NOT sell the Fast Ferries for pennies on the dollar instead the BC Liberals, so called fiscal conservatives sold them for $19 Million.

      The Fast Ferries did the job just as well as any other Ferry, the proof is that private investor bought them and is looking at deploying them a decade later, for profit.

      The big media circus around the Fast Ferries where a few NIMBY's in the Gulf islands complaining about slightly higher waves when the Fast Ferries went by, big deal, but in BC the Canadian Capital for complaining these idiots were given way too much attention plus consideration above & beyond the majority of the BC travelling public!

      Translink.

      This is a grossly mismanaged bureaucracy ($171 + Million in inoperable Fare Card Gates + about $10 Million a year to operate in order to save less than $4 Million, as per Translink's own figures).

      Translink does not need more Ca$h it needs strict accountability currently there is little to non and more efficient operations.

      Translink pays about $600K to $1 Million for a regulars diesel bus! Competitive bids would cut that by 50 to 60% or more! And get rid of the management save Millions!

      The Convention Centre, Bc Place & Major Construction Projects (Bridges etc)

      These were NEVER done for the benefit of the BC Public or Economy but to legalise payments in the $100's of Millions to their Construction Industry supporters.

      LNG Debacle.

      LNG is already economically NON Viable in BC for Industry without MASSIVE Government Subsidies. Petronas has already effectively pulled out despite the current heavy Subsidies.

      LNG powered Buses are not a bad thing environmentally & health wise (think lung Cancer from Diesel smoke) plus the price of Crude will go up soon enough.

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      TCG

      Dec 6, 2014 at 4:52pm

      We are getting corporate shill governments. When corporate money buys politicians who owe favours the public gets fleeced and nobody cares. Well not the politicians or their corporate friends and most people are too busy/ apathetic/ stupid to understand what is happening and get involved. Neoconservative governments like the BC Liberals and the Federal Conservatives are destroying our economies, resources, environment, future.

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      Roy Stewart

      Dec 6, 2014 at 9:07pm

      Canada's government is as dysfunctional as ours!
      Money has destroyed Washington.

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      Easy Peasy

      Dec 6, 2014 at 11:47pm

      The question is: Why do you have zero impact on the politics of this province? You have the answers, you have an audience and the means to influence society, but nothing ever comes of it. I think all of the leading figures of this province, including those in the media, are mediocre.

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      tony

      Dec 7, 2014 at 7:50am

      Nice try Charlie;

      You make some good points however, you're dead wrong on LNG! The BC government didn't create this nascent industry. chevron, Shell, PETRONAS etc, came here for what was and still is an amazing and obvious opportunity. These huge companies don't waste their time and money on half baked ideas. If these projects don't go ahead, it has nothing to do with the government. At least they're trying to help get an industry going to create jobs and tax revenue. We should be supporting the government in their efforts as opposed to trashing them as you are doing! it's a hell of a lot better than taxing and spending which is I suppose, what you'd like to see happen! Do your homework a little better next time!

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      William

      Dec 7, 2014 at 11:22am

      Over 20% of the world's fuel cell research and development now takes place in BC. At the very least, BC's investment in the hydrogen buses has helped develop the province as an internationally recognized hub for the technology, attracting attention and investment in this fledgling industry. Mercedes-Benz investing $50 million to establish their fuel cell production facility here in BC is prime an example that comes to mind.

      Aren't there some spin-off benefits to fostering development of this technology here in BC? People complain that the fuel cell technology hasn't taken off, but realistically it takes a lot of time to bring in new technology on a mass scale. Fuel cell vehicle technology has to compete with mature technology in internal combustion engines, a competitor with all the international suppliers, processes, and infrastructure long established.

      There are so many aspects to making fuel cell vehicles viable, but it'll take vision and patience to stay the course and reap the benefits down the road. I for one applaud the government for supporting innovation and taking a risk to diversify BC's economy. Perhaps it won't work out, I don't think it's been a foolish pursuit (unlike the BC fast ferries, BC Hydro run-of-the-river partnerships, or LNG dreams).

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