Category Archives: Economics

Canada backs foreign investor rights to protect mining sector: Book

Canadian Prime Minister Justin Trudeau with OECD Secretary-General Angel Gurria during a bi-lateral meeting in Paris (OECD/Flickr CC Licence)

Canada’s controversial mining sector may be the driving force behind the country’s insistence on protecting foreign investors’ rights over laws that guard its own citizens and environmental values. Prime Minister Justin Trudeau, like Stephen Harper before him, has doggedly defended corporate rights enshrined in an increasingly controversial aspect of many international trade deals, commonly referred to as an Investor-State Dispute Settlement (ISDS) clause. The provision protects foreign investors from domestic environmental and labour laws that could impede their development of a mine, a pipeline, or other potentially destructive industrial projects.

This is just one of the many fascinating revelations detailed by Canadian author Joyce Nelson in her new book Bypassing Dystopia: Hope-filled Challenges to Corporate Rule – the essential sequel to her 2016 book Beyond Banksters: Resisting the New Feudalism, which my late colleague Rafe Mair reviewed in these pages.

In her latest effort, available now from publisher Watershed Sentinel, Nelson paints a frightening picture of what The Economist has called “The Arbitration Game” – a system of corporate lawyers, hedge funds, industry-friendly governments and secretive international tribunals that enable corporations to profit off these clauses. 

Canada defends Corporate Magna Carta

World Bank headquarters, home to the International Centre for the Settlement of Investment Disputes (Photo: Makzhou/Flickr CC Licence)

The idea grew out of a “magna carta for corporations”, which The World Bank endorsed in 1964, setting up the International Centre for the Settlement of Investment Disputes (ICSID) at its Washington, D.C. headquarters. There are four other venues for ISDS-related hearings, Nelson explains: the Permanent Court of Arbitration in the Hague, the Court of International Arbitration in London, the International Chamber of Commerce in Paris, and the Chamber of Commerce in Stockholm. These closed-door arbitration panels preside over cases arising from some 3,000 international investment agreements. “Lawsuits have been increasing exponentially in recent years, rising from about 15 per year in 2000, to 70 in 2015,” Nelson notes.

So important are these ISDS clauses to the Trudeau Government’s trade policy that when another government it’s negotiating with proposes to cut one from a draft agreement, it’s often a deal-breaker for Canada. “Reportedly, in 2016 Canadian officials stopped free trade talks with India ‘until it agreed to sign’ the Foreign Investment Promotion and Protection Agreement that included ISDS – which India still has not done,” Nelson writes, drawing on a story from The Council of Canadians. A source within the Canadian government’s NAFTA negotiation team told The Washington Examiner in 2017 that Canada “would refuse any changes to the existing [ISDS] system. ‘It would be something we couldn’t accept,’ the source said, adding that was ‘a pretty hard no.’”

The same issue threatened to topple the Canada-EU Comprehensive Economic and Trade Agreement (CETA) when the EU’s top court ruled in 2017 “that any deal allowing foreign investors to challenge national governments, such as the proposed investment court system within CETA, must be unanimously approved by all [28] EU states,” the Toronto Star’s Thomas Walkom explained. “Just a few weeks after EU’s top court ruling (May 2017), discussions around another Canada trade deal were ‘paused’ because of Trudeau’s insistence that it must include the ISDS provision,” Nelson adds. 

Chapter 11 costs Canadian taxpayers

With all the pushback against ISDS clauses, why is the Trudeau Government so hell-bent on protecting foreign investors’ rights? After all, Canada is about as big a loser as they come from these international courts and related settlements. The country has been sued at least 39 times under NAFTA’s Chapter 11 ISDS clause, costing taxpayers over $300 million, though that figure is set to skyrocket this year, with big, new judgments in the pipeline. That’s all in addition to bizarre, voluntary settlements like the one Stephen Harper made with US forestry, pulp and paper company AbitibiBowater for $130 million in 2010.

In that case, the provincial government of Newfoundland and Labrador had justifiably reclaimed water and electrical rights from the company after it closed the mill they were tied to, costing the community of Grand Falls-Windsor 800 jobs. The company sued for compensation over the expropriation of those rights and rather than try the case at the NAFTA tribunal, the federal Conservative government cut one of the largest Chapter 11-related cheques ever written at the time.

Today, that figure is less astonishing, compared to the ballooning settlements and judgements under ISDS clauses. Canada just lost its appeal of a $570 million judgement against it over US concrete company Bilcon’s rejected quarry in Nova Scotia. And the country could well face its biggest ISDS judgement yet if Texas-based Kinder Morgan decides to file a Chapter 11 case over the Trans Mountain Pipeline.

Digging for gold through ISDS claims

So, on the surface, Canadian leaders’ support for these clauses is puzzling. But Nelson offers a compelling explanation for why Trudeau and company would continue to champion investors’ rights, writing:

[quote]A February 2017 report from Corporate Europe Observatory (CEO) called Gold-Digging with Investor-State Lawsuits sheds some further light on the situation. It states that Canadian mining corporations are “among the worst in the world when it comes to using investor-state lawsuits to bully governments” into backtracking on environmental regulations: “62% of the 55 ISDS cases that involved a Canadian investor until 2015 were in the resource or energy sectors. And 58% of the cases challenged resource management or environmental protection measures.”[/quote]

Nelson underscores this point with the dispute between two Canadian mining companies and El Salvador. “For more than a decade, the people of El Salvador fought against a mining site proposed by Canadian gold mining company Pacific Rim,” she writes. “Understandably, they were concerned that toxic cyanide from the mining would enter the watershed of the Rio Lempa, a river that provides water to more than half of El Salvador’s population.”

Photo: Eric Carlson/Flickr CC Licence

But when Pacific Rim was acquired by larger Canadian-Australian mining company OceanaGold in 2013, the new owner, despite holding only a preliminary exploration licence, launched a $300 million ISDS challenge against El Salvador for balking at the project’s environmental impact statement. The tiny nation eventually won the case, but still had to foot a $12 million legal bill for its defence. (Despite a 2016 court order to reimburse the country for $8 million of these costs, OceanaGold had yet to pay up by the time the 120-day deadline passed in early 2017).

Hedge funds join the “arbitration game”

The ISDS “arbitration game” could prove highly lucrative for Canadian mining firm Gabriel Resources through its $4.4 billion claim against Romania, over the government’s rejection of permits for the company’s proposed Rosia Montana mine. Corporate Europe Observatory’s 2017 report documents the case, raising a troubling new development in the world of investor rights litigation – the money hedge funds are putting up to back and profit from such arbitration:

[quote]Despite the secrecy, it has emerged that Gabriel’s claim is financially backed by Wall Street hedge fund Tenor Capital Management. Tenor pays Gabriel’s lawyers in exchange for getting a share of the compensation that the company might win. The [hedge] fund has already profited handsomely from an ISDS case of another Canadian mining company, Crystallex: it will cash in 35% of a whopping US$1.4 billion ruling against Venezuela from 2016 – a return of over 1,000% on the US $36 million that Tenor had initially injected in the claim. Such funding arrangements allow companies like Gabriel to draw out legal fights, driving up defence costs for states and [increasing] the likelihood that governments give in to corporate demands.[/quote]

Other companies and countries are getting into the game as well. Another major “investor” in ISDS litigation is New York-based Burford Capital, which describes itself plainly as “the world’s largest provider of arbitration and litigation finance.” The company reportedly made $140 million when an arbitration panel awarded its client $324 million from the government of Argentina over the country’s nationalization of the airline Aerolíneas Argentinas. 

Meanwhile, Canada has become a major player in the global arbitration game. According to one of Nelson’s sources, Cecilia Olivet of the Netherlands-based Transnational Institute, Canada ranks fifth in the world in ISDS-related suits, led by its mining sector. “More than 60% of the world’s mining companies are headquartered in Canada (about 1,700 companies), operating more than 8,000 mining sites in over 100 countries,” Nelson adds.

“If these companies ‘are among the worst in the world’ when it comes to using ISDS lawsuits to bully governments, it becomes clearer why the Justin Trudeau government (and previous Canadian administrations) have been so adamant about trade deals needing to contain ISDS.”

Is the jig up for investor rights clauses?

Montreal-based writer and activist Yves Engler supports this notion, writing last year“Nearly two years into their mandate the Trudeau regime has yet to follow through on any of their promises to rein in Canada’s controversial international mining sector. In fact, the Liberals have largely continued Harper’s aggressive support for mining companies.”

That should come as no surprise given the amount of lobbying access the industry has received from the Trudeau government. Between November of 2015, when Trudeau was sworn in, and March of 2018 (the last month for which data is available), federal government representatives recorded 636 communications (meetings, emails and phone calls) with The Mining Association of Canada, the industry’s chief lobby – according to data from Canada’s lobbying registry. That doesn’t include other groups and corporations within the sector. 

Yet while Canada continues to push hard for ISDS clauses protecting its mining sector, many other countries are growing fed up with the arbitration game. As Nelson writes, “India – like Ecuador, South Africa, Bolivia, Venezuela, Indonesia, China and other countries resisting ISDS – has developed its own Model [Bilateral Investment Treaty] that requires investors to pursue disputes in public domestic courts for at least five years before moving on to international arbitration.” 

If this trend continues, the Trudeau government will face increasingly hard choices between growing international trade and protecting its mining sector. Even Donald Trump reportedly wants to scrap Chapter 11, as Canada and the US renegotiate NAFTA. Trudeau would be wise to let him have his way on this one, rather than defending a clause that runs so contrary to regular Canadians’ interests.

The ISDS racket is just one of many important topics Nelson addresses in Bypassing Dystopia. The book serves two important functions – first, decoding the corporate jargon used to disguise what is really the transfer of wealth from the pockets of everyday citizens to the hidden offshore accounts of multinational corporations and the elite investor class. Terms like “quantitative easing” (bailouts for big banks), ​“austerity​“ (passing the cost onto regular people), and ​”asset recycling” (privatizing public assets) are translated into plain English, so the public can know what it’s up against. 

The other role the book plays is offering solutions from empowering stories of resistance to these neoliberal economic policies. Through Rafael Correa’s Ecuador, Mexico’s Zappatistas,​ Spain’s “Indignados”​, Cuba’s revolutionary organic farmers, the North American divestment movement, Denmark’s happiness-boosting social services, and ​​Japan’s erasure of “sovereign debt” with smart central banking, Nelson provides a roadmap to liberation from the ​greedy banksters’ ​deathgrip on our environment and societies.

For all that, you need only buy her book.

Former TD Bank Comptroller: Site C Dam too costly, unnecessary

Swain: Building Site C would harm BC’s credit rating; cancelling it would not


Former TD Bank Comptroller: Site C Dam too costly, unnecessary

The head of the Joint Review Panel on the controversial Site C Dam, Harry Swain, is dispelling the notion that cancelling Site C would somehow harm BC’s credit rating. In fact, it’s quite the opposite, he warns:
[quote]Terminating Site C means paying back the money that’s already spent in order to avoid another $10 billion in debt. From the credit rating agencies’ point of view, that’s a huge relief. No downgrade will be necessary.[/quote]
A lower credit rating means a higher cost of borrowing for the province, which would strain the budget and further hamper the NDP-led government’s ability to deliver on its campaign promises. Swain’s comments are in line with a warning from Moody’s that the single biggest threat to our Triple-A credit rating is BC Hydro-related debt. The already over budget Site C – piled on top of all the costly private power contracts and new debt the crown corporation accrued under the Liberals – would only compound an already bad situation.
Harry Swain

Swain’s comments, made in an emailed statement obtained by The Common Sense Canadian, add to the message he delivered at a press conference earlier this week, when he rebutted claims that cancelling the $10-12.5 Billion project would cause a significant increase to power bills in the coming years. “A decision to continue to build the dam based on fears of a big rate hike from cancellation would be a decision taken in serious ignorance,” Swain noted today.

“The decision about how many years it will take to pay off the termination costs will be decided by BCUC,” he added. “It will not be immediate. It will be done over a reasonable period of time so as to avoid unnecessary rate shock.”

Swain has repeatedly dispelled the need for the power, drawing attention to BC Hydro’s poor track record on predicting future demand, and quoting from the BC Utilities Commission’s similar finding on the subject, stating at the recent press conference:

[quote][The BCUC] was severely critical of BC Hydro’s load forecasting ability…noting that in forecasts going back fifty years, 77% of the time, they had been high to way-too-high…Even by Hydro’s account, we don’t need new power until somewhere in the middle of the 2030’s. By better load forecasting, that’s probably put off to the 2040’s.[/quote]

Why approving Site C could sink NDP

Illustration by Jonathan Ramos

It’s getting down to the wire for the NDP-led government to announce its decision on Site C Dam. The corporate media and a some big guns for labour have been making a sales push to throw the beleaguered project a lifeline, and many fear they could succeed. That would be the biggest mistake the NDP could make. They didn’t create this monster, but they will own the consequences if they keep it alive.

There are three reasons given for carrying on with Site C: 1. We’d be throwing away $4 Billion if we killed it; 2. We’ll eventually need the power; 3. The jobs!!! All of these are bogus – and the cost of getting this wrong, for ratepayers and taxpayers (YOU), is astronomical.

A bottomless hole

Former TD Bank Comptroller: Site C Dam too costly, unnecessary

Even if you buy the overstated remediation costs for the project, even if you accept the far-fetched premise of $4 Billion lost (experts like the head of the Site C Joint Review Panel peg it closer to $3 Billion), you’d have to consider the cost of not cancelling Site C. For once, let’s be frank. Even the BC Utilities Commission, when it found the project could easily exceed $10 Billion, even go as high as $12.5 Billion (up from Hydro’s estimate of $5 Billion-6.6 Billion in 2007), wasn’t fully appreciating how bad this could get.

Just look at Newfoundland’s yet unfinished Muskrat Falls project, estimates for which have more than doubled from $6.2 Billion to $12.7 Billion. At $6.7 Billion spent, many there say it’s past the point of no return (familiar), but Site C isn’t nearly that far along, so it should be viewed differently. The net result for Newfoundlanders will be an additional $150 a month in electrical costs per homeownerforever! Newfoundland has a smaller population to absorb its cost overruns, but we’ve got our own share of problems to compound the damage from Site C. Think of the lawsuits from First Nations whose treaty rights are being undeniably violated (while both the provincial and federal governments tout UNDRIP – i.e. they know better).

But the biggest issue is the shaky ground on which the project is being built – literally. Way back in 2009, I interviewed a longtime farmer in the region, Dick Ardill. His family has been in the Peace going back as far as mine, the Beatties, who lost their ranch to the first big dam there, WAC Bennett. Dick must have been well into his eighties when I spoke to him, with a lifetime of practical knowledge of the soil and slope stability in the valley. He told me then the biggest reason not to build the project was the unstable land. He’d seen firsthand the Attachie slide of 1973 and many others over the years. The mixture of shale, clay, and alluvial soils made for an awful place to put an earthen dam.

Slumping around the Williston Reservoir, circa 2008

The 80 km section of the valley – from Hudson’s Hope to the foot of Fort St. John – where Site C was proposed was in some ways worse in this respect than where the Bennett Dam and Williston Reservoir were built (the Williston gobbled up far more land than originally contemplated, due to slumping, including my grandfather’s property above the planned reservoir). Granted, the Williston Reservoir behaves differently than would Site C, which is more a massive run-of-river project than a storage reservoir with large swings in water levels, but a 1991 report by geologist Norm Catto for the Ministry of Energy and Mines had this to say about the eastern Peace Valley, which includes the area where the dam itself is proposed:

[quote]Thus, all of the major terrain units present in the eastern Peace River region are subject to slope failure. Extreme caution should therefore be observed in any effort to exploit or utilize river valley slopes.[/quote]

This report appears to have been ignored by Hydro in evaluating Site C.

Cracks in the dam

Site C Dam construction site with tension cracks highlighted (PVEA)

Flash forward to the tension cracks formed around the dam site and the hundreds of millions of dollars of cost overruns already attributable to these very stability issues and you see that old Dick knew what he was talking about. And here’s the thing: There’s no bottom to this problem. Like a highly leveraged 2008 stock deal, we have no idea how deep this hole gets. Ten billion? How about fifteen? Or twenty?

If everything went perfectly according to plan (the opposite of what has happened thus far), Hydro intended to have the dam paid off by 2094! That’s now blown, so what are we talking? 2120? 2150? How many generations of your descendants will be paying for this mistake? And what’s the interest on $20 Billion amortized over a century, at much higher interest rates than we currently enjoy? (The BCUC rightly chastised BC Hydro for assuming low rates in perpetuity). In other words, what’s the real cost of this project? I could take a stab and say $60-80 Billion, and you could say that’s just a wild-eyed guess. Then I would reply, “Exactly – I’m using BC Hydro’s methods.” (For the sake of argument, though, at a rate of 5%, $20 Billion, paid off over 100 years, comes to roughly $100 Billion in principal and interest. Just sayin’).

Oh, and remember that the NDP wants to do all this while freezing Hydro rates. LOL! If they’re serious, they’ll have to raise taxes or make massive cuts to social services. They can’t have their cake and eat it too.

According to Moody’s, the single biggest threat to our Triple-A credit rating is BC Hydro-related debt. In other words, Site C – piled atop all the sweetheart private power contracts and financial blunders the crown corp committed under the Liberals’ direction – will cost us our rating. Then up goes the province’s cost of borrowing – for all our debt – and the house of cards comes tumbling down. We’re worried about (at most) $4 Billion in sunk costs, remediation and cancellation fees? Chump change!

But that’s not the worst of it. Dr. Vern Ruskin (PhD, MCom, BSc, Retired PEng [BC]) warned the BCUC of serious safety concerns, partly due to the above stability issues around the dam site. Dr. Ruskin is no less than the former Director of BC Hydro’s Planning Division, responsible for planning, designing, budgeting and contracting more than ten dams in BC, including WAC Bennett, Peace Canyon and Site C in its early stages. Among other things, Dr. Ruskin warned that changes made in 2011 to the original dam design pose increased risk of dam failure, as do these recent tension cracks and the instability they suggest.

The BCUC did not consider these concerns of Dr. Ruskin because dam safety was outside of the terms of reference for its review. But there is no reason the NDP-led government should ignore Dr. Ruskin. The enormous consequences of a dam failure – potential human injury and loss of life, widespread property damage – would make these financial concerns seem trivial by comparison.

“We’ll eventually need the power”

Here’s a thought: For the last decade, our population has been growing, we’ve been building bigger houses and acquiring more gadgets, but our power consumption has remained flat. Is it so wild a concept that ten or twenty years from now the same thing could be true? Our gadgets are getting more efficient, our building codes more stringent, and we’ve seen an exodus of heavy industry, which once consumed a third of our total electricity. Wait, are we stopping raw log exports tomorrow? Did I miss the memo about a whole bunch of pulp mills reopening? Are there dozens of new mines breaking ground this year? Will BC defy global economics and magically produce an LNG industry after all the years of failure?

But let’s play this out, for sake of argument. Say in 20 years we do need more electricity. We sure as heck wouldn’t be building Site C to supply it. At the rate renewables of all stripes are dropping in cost, we’d avail ourselves of the latest, best technology – which wouldn’t be a 70-year-old idea for a mega-dam. No less than the head of the Site C Joint Review Panel, Harry Swain, the BCUC itself, and other eminent energy experts not tied to Site C, Hydro or the government, have come to the same conclusion. We won’t need the power for a very long time and if and when we do, Site C will not be the best option, either environmentally or in terms of cost.

One final point that connects to the cost issue: Since we don’t need this power, it will have to go into our grid and across our borders to customers in Washington State and Alberta. In real terms, it will cost over $110/megawatt hour (MWh) to produce, yet the going rate to sell this power has been hovering around $35/MWh for years. You do the math. Every megawatt produced carries a loss to the ratepayer.

But the jaaaawwwbs!!!

A few quick notes:

1. BC’s big unions aren’t getting these jobs – a different, quasi-union called the Christian Labour Association of Canada, already has the lion’s share of this gig. It is also noteworthy that one of BC’s biggest unions, the BCGEU, has come out against the project, so there is a divide within labour on the issue.

2. We keep hearing 2,000 jobs – balderdash. With a series of layoffs and a significant decline in vehicles and visible work on the property – much of that related to these tension crack issues – local sources suggest the real number of workers is far lower than Hydro and the government claim, pegging the number at 500 or less. These jobs are temporary and have come under criticism for allegedly unsafe conditions.

3. If we’re prepared to spend large quantities of tax dollars and hydro fees simply for a make-work project, there are far better ways to employ far more British Columbians for far less money, as a new analysis from UBC’s Program on Water Governance underscores.

This jobs argument is the weakest link of the pro-Site C camp and the NDP should treat it as such.

NDP deciding its own future

If Site C proceeds, this could be the one and only time John Horgan and his NDP cabinet are sworn in by the Lieutenant Governor (Photo: Province of BC / Flickr)

The costs to ratepayers and taxpayers – along with all the other impacts on farmland, First Nations and the environment – are impacts Site C would have on British Columbians, fauna and flora. But the NDP would be wise to consider the impacts the project would have on them, politically. Had the BCUC come out with rosy outlook for the project, that would perhaps have given them some cover to continue forward. It didn’t. Now, the ball is in the current government’s court and it is not only deciding the future of Site C, but its own future.

Many in the environmental community appreciate the moves the NDP has made thus far – (partially) banning the grizzly hunt, (sort of) taking a stand against Kinder Morgan, reviewing professional reliance, reviewing Site C. Yet, I have spoken with many colleagues and seen scores of comments on social media to the effect that if the NDP proceeds with Site C, they will abandon the party.

On the flip side, if the NDP kills Site C, will it lose labour votes? Will union lobbyists Bill Tieleman or Jim Quail turn their backs on the party? Hardly. It’s unclear what the Greens will do in the short term, but this delicate, temporary arrangement will be severely strained and, in the long run, Site C will further drive a wedge through the Left, causing the NDP to lose votes in the next election. This will all be compounded by the fiscal woes that will accompany this inevitable boondoggle. Just look to Ontario and Newfoundland to see the  political fallout from poorly made decisions on large-scale energy projects.

Green MLA Sonia Furstenau said it best in the legislature last week:

[quote]Up until now, this has been a BC Liberal boondoggle. The cost overruns, the ballooning debt, the questionable need for such a costly project: this is the Liberals’ mistake alone. But if the government decides to continue with Site C, they will become responsible for the impacts. It will be on the shoulders of this government.[/quote]

Indeed, if this government chooses to flood the Peace Valley (again), we may look back in years, drowning in unbearable power bills and debt, and realize that 2017 was the NDP’s high watermark. Then came the flood.


NDP must name & shame or catch the blame – Don’t let Libs off hook for disastrous record

Former BC Liberal Premiers Christy Clark (Kris Krug/Flickr) and Gordon Campbell (Province of BC/Flickr)

One of the biggest mistakes Barack Obama made was not doing more to expose George W. Bush’s disastrous financial record as president. As a result, he was quickly blamed for America’s “Great Recession” though everything that set it in motion occurred on his predecessor’s watch. The BC NDP can learn from Obama’s mistake and be brutally honest about the mess they’ve been left by Campbell, Clark & co.

Already, the revisionism has started. The likes of ex-Deputy Premier Rich Coleman have taken to twitter, scolding the NDP for wasteful spending and poor management. Liberal-friendly pundits like Vaughn Palmer and Keith Baldrey are bemoaning John Horgan’s much-needed house cleaning at BC Hydro.

But it will get much, much worse from here on out – both the depth of the financial disaster for BC and the size of the whoppers told about it.

The problems the NDP will face have already been baked into the system, starting with Gordon Campbell and carried on by Christy Clark. They make the NDP’s Fast Ferries look like chump change (at a mere $250 million over budget, that penny-ante boondoggle looks like a bargain by Liberal standards). Here are just a few depressing realities the NDP must be clear they had nothing to do with – the shortest list I could come up with:

  • Under the Liberals, BC Hydro’s total debt and contractual obligations rose by at least $74 Billion (through the crown corp’s debt, plus so-called “deferral” accounts – much like a giant credit card – and ruinous, unnecessary private power contracts)
  • Conventional provincial debt essentially doubled
  • ICBC was driven deep into the red, necessitating huge, impending rate hikes
  • BC Ferries continued their downward spiral, with increased cost to the public, despite being nominally “privatized” (right!)
  • Our other once-great, strategically invaluable crown corporation, BC Rail, was sold off for cheap under a cloud of corruption, secrecy and criminality
  • Vital social services for seniors, the disabled, children and youth in care, and the impoverished were neglected at positively inhumane levels
  • Rather than investing wisely in public transportation, BC doubled down on disastrously expensive, outmoded bridge and highway projects
  • The Liberal government presided over massive, taxpayer-funded capital projects which routinely doubled in cost (The convention centre, the stadium roof, Port Mann Bridge and Hwy 1 widening, Northwest Transmission Line, etc.). And that’s to say nothing of Site C Dam, bound for true white elephant status unless it’s prudently halted by our new government
  • Real estate and housing costs, as we all know, have spiralled out of reach for many, while income inequality intensifies
  • Day care is so expensive and hard to find, especially in urban centres, that it’s become a serious impediment to economic productivity, and a huge burden on BC families
  • The Libs presided over an unprecedented hollowing out of jobs in forestry, wood products and pulp and paper – at least 40,000 lost
  • The Liberals’ one big economic idea, the galactically stupid LNG industry, proved a massive bust, as this publication warned it would before even the 2013 election!
  • Not to beat a dead horse, but so bad is the situation at BC Hydro that it is likely to cost us our Triple-A credit rating, as Moody’s warned earlier this year. Again, not your fault, NDP. But it will mean a higher cost of borrowing, making all the above problems seem that much greater.

In other words, take all the messes created by all our previous Socred and NDP governments, add them together, multiply by pi, and you still don’t come close to capturing the scale of mess left behind by the BC Liberals – these self-styled shrewd fiscal managers (and I apologize to readers for all the other worthy items not on this list, but I’m mindful of your time). The sad reality is, thanks in no small part to our woefully inadequate mainstream media, if the NDP don’t hammer this home every day for years to come, they will wind up being blamed for all of it – and losing the next election because of it.

Get ‘r done

NDP Premier John Horgan and his cabinet being sworn in by Lieutenant Governor Judith Guichon (Photo: Province of BC / Flickr)

John Horgan has a massive challenge before him: how to get BC back on track fiscally while stimulating new economy jobs and getting back in the business of taking care of people.

Difficult but not impossible.

I’m with the NDP-Greens on scrapping Kinder Morgan. It’s a terrible deal for BC, creating virtually no jobs yet risking so much environmentally and economically. We are also past the point where it’s OK – legally, practically, morally – to thumb our noses at First Nations in their unceded territories. So KM is a non-starter. So are Site C and LNG (though the latter may not yet be clear to Horgan). But that all heightens the need for creative thinking in building the jobs of the future. And there is much the NDP can do on that front – from Super, Natural BC tourism, to the tech sector, real green energy, the film industry, a better-managed forestry sector, value-added local manufacturing and food production, and investing in smart infrastructure.

In terms of tightening our belts, on the Hydro front, go ahead with the BCUC review of Site C – just be sure to cancel the project, and quickly. Do whatever is in your power to unwind these sweetheart private power contracts. And quit pretending you can freeze rates. It’s not your fault, but the reality is they will have to rise for some time to come. Find a way for this to impact lower income people less than the rest of us – we don’t need to add to their poverty with astronomical power bills.

No one knows how long this NDP-Green partnership will last, so you need to prioritize which election promises come first, and the one that has the greatest potential to impact all the others is election financing reform. If you do nothing else, getting big money and “pay-to-play” out of our system would strengthen our economy and democracy.

But when it falls apart and you’re forced back to the polls, remember that if you haven’t successfully put the blame for all of this squarely where it belongs – on the shoulders of the BC Liberals – then it will fall upon you instead and crush you…and a lot of other innocent British Columbians too.

You don’t have to be brutal – just brutally honest.


Why the BC Liberal economic record is actually worse than the NDP’s in 90’s


Many people are ready for a change in Victoria. Christy Clark is one of the least popular candidates for premier in BC history and, after 16 years of scandal-filled rule, her Liberal Party has tried British Columbians’ patience to the extreme. Yet every day on social media, I run across a familiar refrain: “Better than going back to the NDP’s lost decade.” Clearly, that narrative is so deeply embedded that it threatens to keep the NDP out of government yet again.

But memory, science now teaches us, is unreliable. It can play tricks on us. In order to make an informed decision on May 9, voters need to know the hard facts about BC’s economic history – a straight up comparison between the two credible options in this election. A serious examination of the best available data on key metrics reveals that British Columbians have far more to fear from another four years of the Christy Clark Liberals running our economy than they do taking a chance on John Horgan and the NDP.

Debt Bomb

For a government that claims to “balance budgets”, it’s astounding to consider how much debt the Liberals have racked up on our behalf. While the NDP grew the provincial debt by roughly $17 Billion over their decade in power, the Liberals had added $33 Billion by the end of the last fiscal year. But that’s just the tip of the iceberg. They’ve saddled BC Hydro with $24 Billion in debt and “deferrals”, plus another $58 Billion in unnecessary, sweetheart private power contracts, on which we lose over a billion dollars every year. This also explains the almost doubling of your power bills during their reign. And that’s before the unnecessary Site C Dam, which won’t be paid off until at least 2094! Here’s what UBC’s Dr. Karen Bakker had to say on the subject after she and a team of researchers published their damning report on Site C’s economics:

[quote]Site C will be 100 per cent surplus when it’s finished in 2024. That surplus energy will have to be sold, will have to be exported, from the province and B.C. Hydro’s own numbers show that those exports will occur at a high loss. Our figures show that loss will be about $800 million and could be as high as $2 billion.[/quote]

That’s just if the Liberal Government manages to keep to its $9 Billion budget for the project – hard to conceive of when their top 5 capital projects to date have doubled in cost, going over budget by a whopping $3.3 Billion (compare that with the NDP’s fast ferries, which went over by $250 million).

Courtesy of Norm Farrell/In-sights

All this fiscal mismanagement has taken a huge toll. Add up our official provincial debt and liabilities ($84.3 Billion, according to the Comptroller General), then factor in hidden taxpayer obligations from private contracts for electricity and infrastructure building ($101 Billion, according to the Auditor General) and you get $185.7 Billion of real debt for BCup from $39 Billion when the Liberals took over from the NDP. That’s about $40,000 for every man, woman and child in the province – double the per capita debt of the next closest province, Ontario, even when you factor in their own “additional taxpayer obligations”.

The BC Liberals also sold off one strategically vital and financially healthy crown corporation, BC Rail, and ran two others – ICBC and Hydro – into the ground, taking half billion to a billion dollar annual profits and turning them into equally large deficits.

The inputs into BC’s tax coffers are declining in other places as well. For instance, huge royalty giveaways to the gas sector have sucked billions out of our provincial revenues. As renowned geologist and shale gas expert David Hughes explains, “[BC’s gas] production has doubled since 2005 whereas revenue is down 87%”. The same thing can be said for stumpage fees from logging, which have sunk to pathetic levels over the past decade.

Given all this, the only way the Liberals can lay any claim to “balanced budgets” is by shunting debt into other accounts and onto the backs of ratepayers and crown corporations, while cutting services to the public. The effects of these debts may not be immediately visible – but they are guaranteed to be borne by young British Columbians and future generations for decades to come. BC’s credit rating is now under threat due to BC Hydro’s shaky position, which means servicing that growing debt is going to become even more costly going forward.

Jobs, Jobs, Jobs

One of the most telling moments during the televised leaders’ debate was this exchange between moderator Jennifer Burke and Christy Clark:

Clark went on to her mantra that she’s created 226,000 jobs. Even if it were true that British Columbians don’t care about anything else, or that jobs are a panacea for all BC’s socioeconomic ills, how true is her claim that NDP were so much worse for jobs than her government is?

The NDP inherited a high unemployment rate of 10% from the Socreds and saw that decline fairly steadily to 7.2 % in 2000 (BC’s lowest rate since the early 80’s) – the last full year before they left office. Things got worse early on under the Campbell Liberals, but that can be partly attributed to the tech bust and other factors beyond their control.

Throughout Christy Clark’s tenure, BC’s unemployment rate has come down from 7.5% to around 6% today – on the surface, marginally better than then NDP in the late 90’s. But let’s also not forget that Christy came to power in 2011 on the heels of the biggest economic collapse since the Great Depression – a natural period for job growth (the NDP faced their own challenges from the global economy int he 90’s). So how much credit can Christy take for these jobs? According to a group of leading BC economists, very little. “I would say the [increase in jobs] is mainly due to market forces,” said Helmut Pastrick, chief economist of Central 1 Credit Union.

It’s also important to consider the specific nature of the jobs we’re creating and losing. For instance, most of the new jobs under Christy’s reign have come in urban centres. “The rest of the economic regions in B.C.— the interior, the north, they are actually losing jobs, and that is worrisome,” says Canadian Centre for Policy Alternatives’ economist Iglika Ivanova.

Rural British Columbians know all too well the harsh realities of the BC Liberal job record. On their watch we’ve gone from 100,000 jobs in forestry, wood product manufacturing and pulp and paper to just 60,000 – largely due to poor government management, mill closures and raw log exports.  And what of the 100,000 short term and 60,000 longterm LNG jobs Clark won the last election by promising? A handful of short term jobs on projects since shelved. Zero plants or longterm jobs on the horizon, as the bottom has predictably fallen out of the Asian LNG market.

Finally, many of the jobs Clark has created are low-wage, part-time, short-term, and without benefits. Here’s what a recent report from The Vancouver Sun had to say on the topic:

[quote]…an analysis of the federal labour force survey shows the share of part-time jobs has steadily grown here, from 15 per cent in 1976 to nearly a quarter of all jobs in 2016.

In fact, Statistics Canada data shows, of the 72,000 new jobs created in 2016, more than half were part-time. [/quote]

Adds UBC Sauder School of Business Professor Mark Thompson, “They overlook the fact that we lag the rest of the country in full-time jobs and that the rate of wage increases has been amongst the worst in Canada.”

Unliveable Costs

Even if Christy Clark was telling the truth about her job creation record, what good is a job if you can’t afford your rent and bills? This is why affordability has become the biggest issue of this election. When Christy’s predecessor Gordon Campbell took office, the average price of a detached home in Greater Vancouver was about $369,000. That peaked last year at over $1.8 million! And Christy owns this one much more than Campbell. Since her Johnny-come-lately foreign buyers’ tax, the market for detached homes has cooled a little, but now it’s condos on the rise. The most dramatic increases have happened on Christy’s watch, as a Global News story from a year ago explained:

[quote]…[The Real Estate Board of Vancouver’s] data shows the average price of a single-family detached home in the Greater Vancouver area has increased as much in the past five months as it did from 1981 to 2005.

The average price of a sold detached home was $1.4 million in September last year [2015] – but climbed to $1.6 million in October, $1.7 million in December, and $1.8 million last month – overall, an increase of $420,000.[/quote]

At the pocketbook level, what used to be among North America’s most affordable power bills have almost doubled since the Liberals came to power. ICBC premiums are headed in the same direction . In 2001, there were no bridge tolls in the Lower Mainland; today, people are being nickle-and-dimed to death, or driving extra distances to avoid tolled routes. Childcare costs have skyrocketed – which has even the Board of Trade raising alarms over the negative effect on our economy. Meanwhile, for BC’s least advantaged, disability and welfare rates have barely moved.

Time after time, we hear stories of bright tech employees turning down jobs in Vancouver or young, talented professionals fleeing the city for rural communities or other provinces. We don’t yet have a grasp on the real cost of this brain drain of the Liberals’ making.

One financial metric is way up under the Liberals’ reign: corporate donations to the Liberal Party. If we judge her on this factor alone, Christy Clark is a bona-fide financial wizard. But by many other measures, it’s high time British Columbians came to realize they have far less to fear with the NDP than they’ve been told and a whole lot to lose by sticking with the BC Liberals.


Economist: Thanks to Liberals, BC is Canada’s most indebted province

The Liberal Government has already made BC Canada’s most indebted province. Projects like Site C, which Premier Christy Clark is shown announcing here, will only make matters worse (Province of BC/Flickr)

Almost four years ago I prepared an article on the financial affairs of BC, musing about the way BC voters returned the BC Liberals to government. This time I am posting their record before a vote in hopes that there will be a different outcome.

It began with a quotation from “The Divine Comedy” by Dante Alighieri (otherwise known as Dante’s Inferno): The Darkest Places in Hell are Reserved for those who maintain their Neutrality  in Times of Moral Crisis.”

In that same piece, I warned:

[quote]The citizens of BC had a front row seat to an election outcome that remains almost impossible to comprehend. After a determined push-back of the much reviled HST it appeared very probable that the BC Liberal party would go down to a well-earned defeat. It would have been a defeat, not so much because a better option was thought to be on offer, but more because enough voters had lost their trust in those who seemed divorced from contemporary economic realities and who were not serving the public’s interest.[/quote]

Ahead of next month’s election, we seem to be in a similar place as four years ago. The BC Liberals have been shovelling out large amounts of propaganda, some paid for by using the taxpayer’s own money, that include “alternative facts” and an avoidance of mentioning other inconvenient truths. Fact one, as presented by the BC Auditor General, is the staggering amount, $101 billion, of “Contingencies and Contractual Obligations” posted a year past. These obligations come from BC Hydro’s commitments to buy power from private suppliers at far above market rates, and from other infrastructure built under public-private arrangements. As such, it is in addition to our conventional debt and hidden from public view. The Government carefully avoids all talk of this debt and of BC Hydro’s “regulatory assets” accounts, which stand at another $6 billion.

Within Canada, we in BC have the dishonour of having the largest total of this type of debt of all the provinces and about 75% of what is shown for the Government of Canada. Hands-down, BC wins the race to be the most indebted province in Canada (see page 40 in the Auditor General’s report dated Feb. 2017). This condition is not accidental.

Back in 2013, I also wrote:

[quote]Standard & Poor’s issued a public report dated 15 April, 2011 titled “Canadian Provinces Face Tough Choices in Restoring Fiscal Balance”. The report directed provinces to curb rising debt levels and to correct the practices of deficit budgeting. It also recommended operating expense savings to be found in the budgets for health care and education.

“Rising debt service burdens further limit financial flexibility because as these burdens increase as a share of total spending, they crowd out other program spending,” claimed the report. “Debt service expenditures are contractually bound and as such cannot be easily cut.” [emphasis added]

This was an unambiguous disclosure that provincial credit ratings were under negative scrutiny, over two years ago.[/quote]

All those years ago, the credit rating agency gave the provinces the best of their advice so that credit downgrades could be avoided.  The BC Liberal government certainly paid attention to the suggestion that education and health care budgets be trimmed but that’s where it ended. The chart below by Norm Farrell makes it blindingly clear that the BC Government failed to read or heed the recommendation to “curb rising debt levels”.  Between when the S&P report was issued and last year, BC’s total financial liabilities increased from $117.8 billion to a staggering $185.7. That is a near +60%, exactly at the time the credit rating agency is suggesting a “go slow” on borrowing, either by direct means or by the indirect method of signing long-term contracts.

Courtesy of Norm Farrell/In-sights. Updated April 11.

This S&P report is a one-dimensional view of financial affairs – only about spending and borrowing. There should always be an inclusion of the revenue side to deliver balance in such discussions. What the BC Government avoided talking about was government revenues and, my goodness, does it show. For the period 2011 through to 2016 the per person revenue barely increased from $9,228 to $9,844. Removing inflation, this was not a record of growth but the opposite and there is no new evidence that this will reverse.

On that note, eminent geologist and energy expert David Hughes has taken the trouble to examine the reported volume of BC natural gas production (almost totally for export) versus the royalties booked by BC. In 2005, BC’s production was about 2.8 billion cubic feet per day and natural gas royalties were about $2.1 billion per year. Fast forward to 2016 and the respective numbers were 5.2 billion cubic feet per day and $200 million per year. In David’s words, “Production has doubled since 2005 whereas revenue is down 87%”.  If this is not a picture of giving away public resources I can’t imagine worse, unless maybe fresh water. If the public of BC are not benefiting from the extraction and sale of natural gas, then who is? This is the opposite to how the Norwegians do things. Perhaps we should hire folks from there to manage our natural gas industry.

Back to 2o13. Here’s what I said:

[quote]So what did the BC Government appear to do knowing this was like a warning shot across the bow? They did screw down on budgets for education and health care. They did not seriously attempt to find more revenues but rather promoted the fiction that the natural gas industry would provide fiscal salvation, which it did not nor is likely to happen despite election rhetoric. The government certainly did not curb its appetite for ever more debt.

At the end of fiscal 2012 (one year ago) total provincial liabilities reported by the Comptroller General were $70.358 billion or 100% greater than when the Liberal government first came into power. What was even more distressing was the government’s deliberate non-disclosure of “Contingencies and Contractual Obligations” the BC Auditor General publicly reported to be $96.374 billion. This liability amount was separate from the $70 billion, as confirmed directly with the Auditor General’s office. These provincial liability values were directly supplied to the four party leaders just following the writ being dropped, so they all knew, but for what ever their reasons, they remained silent. In a few words, BC voters were clueless about the province’s financial condition prior to voting, virtually all politicians and the mainstream media wanted to practice willful ignorance. It is not hard to understand why Premier Clark avoided this topic but why the others to do so is a big mystery.[/quote]

So what should be in BC’s future? The biggest standout is the rapid increase of provincial liabilities. A credit downgrade has to be a high probability and that will make everyone’s cost of living in BC higher. Suspending projects like Site C would possibly defer any credit downgrade. Carrying on spending and borrowing as before will only make the possibility of the downgrade greater. The second biggest issue is the deliberate reduction in revenues from the extraction of natural resources. If there is no “pricing room” for higher royalties, the solution is not to give away real assets for the sake of a handful of jobs but rather to wait for the next cycle to develop.


Rafe: Christy Clark must go!

British Columbians have had enough of Christy Clark, says Rafe Mair (Province of BC/Flickr)

The Christy Clark government and Clark herself must go!

I am not a socialist but neither are the NDP. Of course, we must have a thriving economy that supports our necessities and has room for earned luxuries. What we can no longer do, if we wish to have a British Columbia useful for enjoyment of life, is let entrepreneurial ambitions and corporate influence on government trump all other values.

Even if you do place the economy above all else, you have to examine the Clark Keystone Kops’ self-proclaimed business acumen, which, even in these good economic times, has doubled the provincial debt and ruined our former crown jewel, BC Hydro, and, having bankrupted it in all but name, committed it to a further $10 billion for Site C for power we don’t need and for which we have no customers

If you’re thick enough to believe that the Liberals’ declared balanced budgets are remotely honest, leave now – you are beyond salvation and will obviously believe anything.

This is my bottom line: Let’s just say that there were no other issues of consequence than these in this election. Would you reelect any government that had doubled the provincial debt in the past 14 years and had presided over the ruination of the largest and most successful public corporation in the history of the Province?

Remember, the Liberals not only kept this secret – the horrific debacle that has ruined BC Hydro has been exposed entirely by private citizens. The IPP issue, the ruination of rivers, the loss of fish, the outrageous sweetheart deals in favour of private power donor pals of Christy to the huge cost to Hydro ratepayers. The pay-offs to cronies was dealt with in the elections of 2009 and 2013 only by private citizens like Tom Rankin, Damien Gillis, Joe Foy of the Wilderness Committee and others including me, who spoke all over the province and have consistently written about it since and acquired their evidence from public-spirited people like Norman Farrell, Arthur Caldicott, and Erik Andersen, all private citizens. And at the end of the day, nothing from the Liberal party loyalist, Suzanne Anton, the pliant Attorney-General, not a resignation from any of the guilty, just massive incompetence with a load of political pay-offs thrown in.

This wasn’t rocket science – it was obvious, easily understood, oozing with incriminatory evidence from every pore. The Liberal government in a dozen years fucked up (no other term works) BC Hydro financially as well as ruining scores of rivers, without sufficient protest from Her Majesty’s Loyal Opposition or a soupçon of help from the Mainstream Media or the Greens. We know that the Green Party leader, Dr. Weaver, who’s about as green as last year’s Christmas tree, supported ruining the environment with so-called “run of river projects” because, without bothering to first look at one like the Ashlu, he proclaimed this outrageous environmental evil “clean, green power!” Here you have a hugely successful Crown Corporation, very popular, with a monopoly, a large customer base, ruined financially by this government, yet if it weren’t for a handful of persistent private citizens, over a decade of never quitting, no one would ever know!

As economist Erik Andersen said very recently:

[quote]I continue to stand by my words of several years ago. The board and management at BC Hydro have been either economic and financial illiterates or dutifully following the orders of those not having the public’s best interests in mind. [emphasis added][/quote]

All this plus, in constant dollars, the government virtually doubled the real provincial debt with Christy Clark, in four years, while pretending to balance budgets.

One has to wonder what else we don’t know!

I’m hard pressed to think of a single accomplishment of this bunch on the fiscal side and on the social services side their incompetence and lack of concern or even elementary decency borders on the cruel.

What about Horgan and the NDP?

BC NDP leadership race down to John Horgan
Time to give the NDP’s John Horgan a chance, says Rafe Mair.

I have no doubt that Mr. Horgan is an honest man and that alone makes him my choice as premier. I know many of his backbenchers and have no doubt of their integrity. I tell you straight that I’m very disappointed in some of Horgan’s stated policies, especially in my riding – specifically the proposed Woodfibre LNG at Squamish.

But I have learned some things over the past 8 1/2 decades, one being that you never really know about a new leader until they’ve had a chance. The premier’s office, in Samuel Johnson’s great phrase, “concentrates the mind wonderfully”.

On the other hand, there’s nothing left to know about Christy Clark. There can surely be no doubt that she’s the worst premier with the worst government in living memory. I would rather support someone for whom there is reasonable hope, and who couldn’t possibly be worse, than have the certainty of 4 more years of Christy Clark.

I don’t know about you but I often look at what’s seen as a minor thing in making my judgment on a person’s character. As we learn here from Mike Smyth, Christy Clark has cost taxpayers, not the Liberal Party, folks, for “photography: $923,374 to be precise, for the salaries and massive travel expenses of two full-time photographers to take still photos and videos for the government.

“The pictures and videos provide positive content for the government’s social-media channels on YouTube, Facebook and Twitter.”

With typical raw, blatant hypocrisy, here’s what Premier Clark says in her latest Liberal Party election pledge:

[quote]Controlling government spending is the foundation, it’s the bedrock, of what we’re trying to do.[/quote]

This woman is not only vain and incompetent beyond description, she’s incapable of telling the truth as she makes us look like fools to the rest of the country and beyond.

Again, Cromwell’a words in dismissing the Rump Parliament seem so apt: “You have sat too long for any good you have been doing lately… Depart, I say; and let us have done with you. In the name of God, go!”



BC Hydro’s real debt has grown 1337% under Liberals…Shouldn’t someone call the cops?

The Keystone Kops (1914)
The Keystone Kops (1914)

I start this exercise with a couple of general comments.

The detailed information available on the “progress” of BC Hydro since the Liberals took over in 2001 would be very difficult to pull together if we were left to government confessions of error or sleuthing by the NDP opposition. In fact, in this regard, the public are greatly indebted to Norman Farrell, Arthur Caldicott, Erik Andersen, Tom Rankin, John Calvert, author of Liquid Gold, Damien Gillis, myself and, on the question of Site C, people like Harry Swain, who have been steadily reporting and commenting, faced by stony silence from the government, since 2007 or earlier.

The Sun and the Province papers in Vancouver, with their mutual masturbation agreement with the Canadian Association of Petroleum Producers, have been in a coma where the government is involved, thus I think it imperative that The Tyee, The Common Sense Canadian, In-sights, Desmog Canada, and Laila Yuile be singled out and congratulated for providing a constant flow of information demonstrating the all-but-formal and clearly deliberate bankrupting of BC Hydro by the Campbell/Clark government.

Liberals raise Hydro’s obligations by $74 Billion

The hard fact is that under the Liberals, BC Hydro’s real debt – including all its obligations – in constant dollars has increased by 1,337%, from $6 billion in 2005 to $80.2 billion today. This total comes from Hydro’s most recent annual report (2016) and is made up by the following three categories:

  1. Regulatory (Deferral) Accounts: $5.9 Billion
  2. Long Term Debt: $18 Billion
  3. Long Term Private Power (IPP) Contracts: $56.3 Billion

It must be noted that since the Liberal reign began in 2001, Hydro hasn’t been hit by a depression, a burst dam, a substantial labour dispute, a diminution of its customer base, nor any other calamity that could explain this huge increase in debt. In fact, according to Premier Clark and the brains of the outfit, Deputy Dreamer, Rich Coleman, thanks to Liberal policies of perfection, we had absolutely Sooper-Dooper times. Just how their largest trust from the people, BC Hydro, went $74 billion in the goo and de facto bankruptcy on their watch simply isn’t dealt with, on the the theory that if no one heard the tree fall in the forest, it never happened.

BC Hydro HQ
BC Hydro HQ

During this period, Hydro has been borrowing large sums to pay yearly dividends to the Minister of Finance for his annual cooking of the books to make it appear that BC has a balanced budget, a noteworthy piece of fiction in a government noted for fiscal legerdemain.

In fact, this has been a government that doesn’t just employ puffery or exaggeration, it lies through its teeth, as if lying was its default position. I raise this because in a moment I’m going to talk about a criminal investigation being required and in such matters, believability is a critical factor and I tell you plainly that neither Clark nor Coleman can demand to be accepted as truthful people on their public record.

Unforeseen catastrophes aside, there are only three possible answers as to how Hydro could lose all this money: grossly negligent management, money being wrongly spent, or money exerting undue influence on decision makers.

In law there there’s a maxim, “res ipsa loquitur” meaning “the thing speaks for itself”, and I suggest the pissing away of $74 billion does speak loudly and fairly to bloody awful management; yet it hardly seems likely that there wasn’t some culpable conduct somewhere in the mix. There may or may not be a fire but there’s a hell of a lot of smoke. Moreover, never forget that this is a tightly controlled Crown Corporation and the government runs it using its own pet poodles.

The fix is in

BC Liberal Legacy: A Huge Debt Burden
Former Premier Gordon Campbell and Finance Minister Colin Hansen

Let’s turn to Premier Gordon Campbell’s radical change of policy in 2002, which forbade BC Hydro from creating any new hydro power of its own (except Site C, as it had been on the books for decades), with new power to be produced on a tiny scale – no more dams or big environmental devastation. Dr. Andrew Weaver, the leader of the BC Greens who has always supported this scheme, told me they only used water wheels! There would be no damage to the streams involved and they would be run by small “mom and pop” operations.

Well, it turned out a tad differently, with rivers blocked, with what sure look like dams, huge pipes, a substantial powerhouse, a notable lack of waterwheels, river banks demolished, fish runs destroyed, trees knocked down and run by little “Mom and Pop” operations such as Ledcor and General Electric. Incidentally, this substantial environmental loss is not computed and included in the $74 Billion loss.

These teensy-weensy “Mom and Pop” operations called Independent Power Producers (IPPs) got a very good deal, in fact the sweetheart deal of all sweetheart deals, such that if you gave the same to your family, the taxman, once he stopped laughing, would disallow it!

In simple terms, BC Hydro must take all the power IPPs produce and pay 3 times the market price. They must buy whether they need it or not and, if you guessed that means during the Spring runoffs – when the bulk of their power comes and our electrical demand is at its lowest – Hydro must buy all their power even though their own reservoirs are filled to overflowing and didn’t need it, you’d be right. If you also guessed that Hydro must have to sell a lot of excess power at large losses, you get a gold star on your report card!

Losing 72 cents on the dollar

Citizens for Public Power member and SFU professor John Calvert explained it like so:

[quote] B.C. Hydro announced the outcome of its 2006 tender call for electricity from private energy developers. The results were startling. Not only had B.C. Hydro agreed to buy three times the power requested in the tender, it had done so at locked-in prices far above projected market rates…

…The core of that policy was laid out in the 2002 Energy Plan, which prevents B.C. Hydro from building new generation assets, and transforms the Crown corporation from a generator of publicly-owned electricity to a purchaser of energy from the private sector.

The rationale for this change is hard to fathom. The old policy worked very well. By generating its own power, B.C. Hydro ensured that ratepayers enjoyed, on average, the second lowest electricity prices in North America. This is because prices were based on the historic cost of production, not the current energy market price…[/quote]

Flash forward a decade to Norm Farrell’s update on the situation:

[quote]…over the past decade, amounts paid to IPPs have tripled. Independent power producers, more than doubled deliveries to BC Hydro, and the utility was forced to dump surplus power outside the province, with trades sales at an average, since 2005, of just 28% of prices paid private producers. And that loss is made worse because of Hydro’s collection and distribution costs.

Then years later, for every dollar we pay them, we lose more than 72 cents.

Consumer demand was not growing, private power supplies were rising and export markets were soft. BC Hydro could only dump power outside the province for little revenue or reduce its internal production. Again, the utility’s own reports lead to a conclusion.

The following numbers are drawn from BC Hydro’s annual and quarterly reports and from U.S. Department of Energy market recaps. They demonstrate that in nine months, BC Hydro paid more than $600 million above market to independent power producers – having purchased the power from IPPs at $85,261/GWh, while the market for selling electricity to the US market was just $28,930 CAD per unit. Unfortunately, the rate of loss is accelerating…

…Dr. Calvert’s warnings were insufficient and subsequent Liberal actions even more egregious. The professor noted early independent power producer (IPP) contracts locked BC Hydro (and BC taxpayers) into financial commitments of up to 40 years. Recently, contracts have extended to 60 years and all are indexed to protect suppliers against inflation. Some required large public expenditures for distribution. Calvert said IPP prices were double the market value but they’ve since risen to even more.[/quote]

Now here’s a little observation from Mr. Farrell that will make you feel warm and fuzzy all over: “We also know that, instead of costing between $400 million and $500 million every year, IPP payments have climbed beyond $1.3 billion yearly, a number that has increased 188% since 2011 when Christy Clark was appointed Premier.”

Now, none of this would have been possible if this the recipients of this government largesse with our money didn’t have friends on the inside. Campbell before her knew and now Clark knows that BC Hydro’s potential profitability and financial strength guaranteed corporate raiders would attack, seeking to convert public wealth to private. To be successful, they needed cooperation of modern political rulers and, whether explained by incompetence, philosophical bent or desire for covert rewards, the Liberals have cooperated fully.

It will only get worse

Even if the Liberals are given the boot in May, Hydro’s skyrocketing debt won’t stop here. Additional costs already baked into the crown corp’s plans will see its obligations rise to the hundred billion dollar range in the coming years. So serious is the problem that BC Hydro alone could cost BC its prized triple-A credit rating, as The Times-Colonist reported – albeit belatedly:

[quote]…projects like Site C are pushing up B.C. Hydro’s debt levels, and adding to concerns about the province’s overall ‘high debt burden’ compared to its peers, Moody’s also wrote in its credit opinion. B.C. Hydro’s debt has increased from $8.1 billion in 2008 to a projected $18.1 billion last year, and there is a further $20 billion expected in the future for infrastructure projects, a $2-billion annual upgrade program and the Site C dam.

‘The anticipated increase in debt continues to pressure the province’s rating since it raises the contingent liability of British Columbia,’ wrote Moody’s…[/quote]

And that’s assuming Hydro keeps Site C on track at $9 Billion – which is impossible to believe, given the Liberals’ track record with major capital projects more than doubling in cost. Dams are especially prone to wild cost increases (see Muskrat Falls), as recent geotechnical issues with Site C illustrate. Hydro is trying to tamp down concerns over a 400 meter-wide tension crack at the dam site, but locals have been warning for years about the unstable ground upon which the project is being built.

Grandson helps destroy grandpa’s legacy

The father of BC Hydro, WAC Bennett
The father of BC Hydro, WAC Bennett

Ironically and to me sadly, among today’s political facilitators of the utility’s destruction is W.A.C. Bennett’s grandson, and my late friend Bill Bennett’s son, BC Hydro Chair Brad Bennett, who is, I’m told, is a Liberal apparatchik and close Christy Clark pal. Another is Hydro CEO Jessica McDonald. She was Deputy Minister and confidant to Gordon Campbell in 2006 when the premier’s office invited predators to get rich on electricity.

 The companies give generously to the Liberals but it’s hard to get full and accurate figures since, as we now know from Elections BC, who recently sent their investigations of Liberal fundraising to the RCMP, donations are often laundered through individuals, and companies have been known to lie through their teeth on this subject.

One way to get a general picture is to go back to 2008 when the long-term contracts were handed out and there was a call for independent power projects, 75 proponents registered with B.C. Hydro. From July 1, 2008 to September 30, 2010 – when B.C. Hydro was making its decisions – 14 proponents donated $268,461 to the Liberals. Ten of the 14 were successful.

Shouldn’t someone go to jail?

The duties and powers of the Attorney General, Suzanne Anton, for the purposes of this article, are set out in admirable simplicity by the ATTORNEY GENERAL ACT. Under Section 2, Duties and Powers, article b) states:

[quote]The Attorney General must see that the administration of public affairs is in accordance with law.[/quote] 

Bearing in mind the enormity of the losses and complete lack of explanation by the government for this incredible emptying of the public purse, where is the Attorney General?

By the simple statement of the law as quoted above, her duty is clear. By long tradition, she sets aside her political role – especially when evidence of a crime comes to her attention – and it is reasonable to assume colleagues are involved.

Christy Clark being sworn in as Premier of British Columbia in 2011, surrounded by her cabinet (Province of BC/Flickr)
Christy Clark being sworn in as Premier of British Columbia in 2011, surrounded by her cabinet (Province of BC/Flickr)

I place before you my opinion in plain terms. There is a great deal of money involved here and plenty of people who feel entitled to share it. We have a premier who, in a political context, has the morals of an alley cat. The deputy premier, also in charge of gas, is hardly any better. It’s surely fair to say that when politics is involved, a fairy tale is second nature, their default position.

The death of BC Hydro has nothing to do with the ordinary risks of the business world and there are no events beyond human control here. Of considerable importance, the premier and the minister in charge are struck dumb on the question of how a thriving monopoly on power could rack up $74 billion in unwarranted costs, with a full clientele and the means to meet all demands.

Ms. Anton, if you don’t order a full enquiry forthwith on the evidence before you, in light of the statutory requirement of the Attorney General Act and your sworn oath to “see that the administration of public affairs is in accordance with law”, it would be open to fair conjecture that this inaction is to protect your political colleagues.


Liberal pals plundering BC Hydro for tens of Billions



By Norm Farrell

Until the mid-twentieth century, much of British Columbia lacked reliable and affordable electricity. To resolve the privation, W.A.C. Bennett created BC Hydro, a publicly owned utility. The province’s leader acted because the private sector had refused to meet growing needs for electricity. Unlike less effective successors, Premier Bennett was a pragmatist, not an ideologue.

Longtime Bc Premier WAC Bennett's dream is dead
BC Premier and BC Hydro founder WAC Bennett

Existing power producers focused on profitable services in the southwest but Bennett had a province-wide vision. His was an audacious plan, but appropriate and successful. BC Hydro became indispensable to the growth and wealth of British Columbia. However, success sowed seeds of destruction.

BC Hydro’s profitability and financial strength guaranteed corporate raiders would attack, seeking to convert public wealth to private. To be successful, they needed cooperation of modern political rulers and, whether explained by incompetence, philosophical bent or desire for covert rewards, the Liberals cooperated fully.

Looting Bennett’s Legacy

Ironically, among today’s political facilitators of the utility’s destruction is W.A.C. Bennett’s grandson, BC Hydro Chair Brad Bennett, a Liberal apparatchik and close Christy Clark pal. Another is Hydro CEO Jessica McDonald. She was Deputy Minister and confidant to Gordon Campbell in 2006 when the premier’s office invited predators to get rich on electricity. (Blogger Alison Creekside named lucky BC Liberal operatives and allies in her article Gordon Campbell’s Big Jobs.)

A decade ago, Citizens for Public Power member and SFU professor John Calvert wrote:

[quote]B.C. Hydro announced the outcome of its 2006 tender call for electricity from private energy developers. The results were startling. Not only had B.C. Hydro agreed to buy three times the power requested in the tender, it had done so at locked-in prices far above projected market rates.

…The core of that policy was laid out in the 2002 Energy Plan, which prevents B.C. Hydro from building new generation assets, and transforms the Crown corporation from a generator of publicly-owned electricity to a purchaser of energy from the private sector.

The rationale for this change is hard to fathom. The old policy worked very well. By generating its own power, B.C. Hydro ensured that ratepayers enjoyed, on average, the second lowest electricity prices in North America. This is because prices were based on the historic cost of production, not the current energy market price…[/quote]

Dr. Calvert’s warnings were insufficient and subsequent Liberal actions even more egregious. The professor noted early independent power producer (IPP) contracts locked BC Hydro (and BC taxpayers) into financial commitments of up to 40 years. Recently, contracts have extended to 60 years and all are indexed to protect suppliers against inflation. Some required large public expenditures for distribution. Calvert said IPP prices were double the market value but they’ve since risen to even more.

IPP costs explode under Clark

We also know that, instead of costing between $400 million and $500 million every year, IPP payments have climbed beyond $1.3 billion yearly, a number that has increased 188% since 2011 when Christy Clark was appointed Premier.

All graphics courtesy of Norm Farrell
All graphics courtesy of Norm Farrell

Chronically overestimating demand

BC Hydro’s encompassing blunder was failure to recognize technology and market changes revolutionizing the energy industry. Hoping to grow their fiefdoms and deliver value to demanding friends, Hydro executives chose to ignore reality. They steadily issued demand forecasts predicting immense growth. (“If a boy holds a hammer, everything needs pounding.”) Meanwhile, consumers were conserving.

Here’s how badly they’ve gotten it wrong:

  • In 1994, they predicted 52% demand growth by 2004. Actual growth: 18%
  • In 2005, they predicted 20% demand growth by 2016. Actual growth: 0%
  • In 2011, they predicted 20% demand growth by 2016. Actual growth: 1%
  • In 2012, they revised to 9% demand growth by 2016. Actual growth: -1%

Indeed, the utility’s records reveal that electricity consumption by regular customers has been flat for more than a decade.


IPPs get rich on ratepayers’ backs

Despite all the above, over the past decade, amounts paid to IPPs have tripled. Independent power producers more than doubled deliveries to BC Hydro and the utility was forced to dump surplus power outside the province, with trades sales at an average, since 2005, of just 28% of prices paid private producers. And that loss is made worse because of Hydro’s collection and distribution costs.

10-yearsSo, for every dollar we pay them, we lose more than 72 cents.

Consumer demand was not growing, private power supplies were rising and export markets were soft. BC Hydro could only dump power outside the province for little revenue or reduce its internal production. Again, the utility’s own reports lead to a conclusion.

The following numbers are drawn from BC Hydro’s annual and quarterly reports and from U.S. Department of Energy market recaps. They demonstrate that in nine months, BC Hydro paid more than $600 million above market to independent power producers – having purchased the power from IPPs at $85,261/GWh, while the market for selling electricity to the US market was just $28,930 CAD per unit. Unfortunately, the rate of loss is accelerating.



Liberals pulling Hydro’s puppet strings

The Liberal Premier and cabinet failed catastrophically when they directed BC Hydro to contract for private power the utility did not need at prices it could not afford. The extent of this gross mismanagement, unprecedented and ruinous for the crown corporation, remains concealed by government-friendly media that is enjoying millions of public funds spent on advertising and public relations.

The Liberal decision to exercise absolute control over BC Hydro’s management was made clear in 2008. CEO Bob Elton, a qualified professional, was fired by Gordon Campbell after stating publicly, “Conservation is the cleanest, easiest and least expensive way to meet the increasing demand for electricity in B.C. – it’s like building a virtual dam.”

Reducing consumption of electricity simply did not fit with the Liberal gang’s desire to buy private power from their pals for tens of billions of dollars.

The goose that lays the golden egg

More recent opponents of Liberal power policy assume that, beyond grabbing the profits to be made flipping IPP contracts, political operatives aimed to cripple BC Hydro to make its privatization palatable. The writer believes that, while this was the initial plan, the guiding parties decided they could gain more another way.

There was no need to privatize Hydro’s assets and liabilities. Instead, they privatized its profits and left Hydro and the public with all the financial risks.

One example is Site C, which will create more unneeded and unaffordable power. No private investors in the world would fund a hydroelectric dam with environmental issues, First Nations conflicts and near zero prospects of profitable operations. But, if the public pays for the dam and sells power to the private sector at a fraction of cost, there are private profits to be made.

Former TD Bank Comptroller: Site C Dam too costly, unnecessary
Site C Dam will likely run well over its $8.8 Billion price tag

Budgeted at $8.8 billion, if spending on Site C matches other Liberal megaprojects, it will cost substantially more. That money goes straight into the pockets of big construction companies who have donated heavily to the Liberal Party. Far from caring about keeping the project on budget, they have a huge incentive to see that it goes over.

In addition, there are indicators the dam’s output will be less than forecast. In 2011 through 2016, BC Hydro’s three largest facilities annually produced 3.6 times stated capacities. Proponents claim that Site C, with 1,100 MWh capacity will produce 5,100 GWh. That is a ratio of 4.6, considerably above Hydro’s typical experience. Reduced production will mean higher costs for each unit of power the dam generates.

That should set off alarms for residents and small businesses operators. BC Liberal policy enables heavy industries to pay well below the average cost of new power so residents, commercial enterprises and light industry are the utility’s only profit producing customers. High production costs for private power and Site C output and weak export markets make significantly higher domestic prices inevitable.

Liberal donors control Hydro board

Hydro Board, Liberal DonorsClearly, BC Hydro has been in disarray for some time. In fact, it is operating as an affiliate of the BC Liberal Party. Of the eleven people collecting fees as directors of the province’s utility in the last fiscal year, all have records as party contributors or close associates of Liberal politicians. Some have business dealings impacted by business activities of BC Hydro.

Political meddling, moronic contracts, deceptive accounting and the self-serving management of mediocre hacks devastated what was once a competent and professional crown corporation. Not by accident or mere negligence, this was deliberate.

Recovery will not be simple or quick but, if it is to happen at all, a new beginning starts with the provincial election on May 9.

Note: Site C’s output was originally stated as 1,100 GW, which has been corrected to 1,100 MW.

Norm Farrell is a longtime blogger and published of IN-SIGHTS.


Fate of BC’s ancient forests is a question of “values”

Craig Pettitt of Valhalla Wilderness Society in the Incomappleux Valley (Image: Damien Gillis)
Craig Pettitt of Valhalla Wilderness Society in the Incomappleux Valley

How do we value wilderness? What metrics should we apply to an 1,800-year-old tree, or the tiny lichens that make their home on it? What numbers do we input into our calculator – ecosystem services rendered, tonnes of carbon sequestered, cubic metres of merchantable timber, jobs created? These are the questions that came to mind while filming my latest documentary, “Primeval: Enter the Incomappleux”, deep in the heart of the Selkirk Mountains in BC’s Kootenay region.

The Incomppleux's intact ancient forest
The Incomppleux’s intact ancient inland temperate rainforest

Depending on the metrics, one can arrive at starkly different answers as to the fate of our few remaining old-growth forests. After decades of clearcuts have made a checkerboard out of BC’s wild places, the Incomappleux is left in a rare category: one of the last truly intact stretches of temperate rainforest here or anywhere – growing continuously since the last Ice Age, forgotten by human time and imprint. To walk amongst its 25,000 hectares of ancient cedars and hemlocks is to get lost in nature in a way that was likely normal to First Nations inhabiting this land for the past 10,000 years, yet all but unknown to today’s British Columbians.

I had the unique privilege of entering the Incomappleux – no easy feat as access roads and bridges have been washed out by Mother Nature – to document a team of scientists and conservationists, led by Valhalla Wilderness Society, and their work to protect this place through a provincial park that would encompass a grand total of 156,000 hectares.

The result is a new 20-minute film premiering tonight (Nov. 23) at the Vancouver International Mountain Film Festival, with a repeat showing tomorrow (Nov. 24) at UBC’s Forest Sciences Centre (detailed info below). I hope it will provide audiences with even a small sense of the awe and wonder this place inspired in me.

Numbers game

But these feelings, and the demonstrated psychological and health benefits from spending time in wilderness, are hard to quantify in dollar terms. Nevertheless, it is difficult to deny that our present-day society, through its growing disconnection with nature, is losing something essential to the human experience.

But let’s deal for a moment with the metrics we do understand – as they have been drilled into us by countless industry op-eds, “position papers” by right-wing think tanks, and, broadly speaking, our mainstream media. Many of us have come to accept certain assumptions about the importance and nature of our “resource economy” – which are often incorrect.

A “decadent” forest

Let’s look at the Incomappleux as an example. It is currently covered by Category-A cut blocks owned by international forestry giant Interfor. Under a true “free market”, it would never be logged. This is because ancient trees hold little value as merchantable timber – they begin to rot from the inside out, even while they’re still standing.

The industry and government refer to these forests as “decadent”, which means “decaying” and “self-indulgent” – in other words, “How dare this tree be so selfish as to put its own existence ahead of what would be a much more economically productive monoculture tree farm.” This has been the way things are done in BC’s forests for decades: mow down and remake these “decadent” old-growth forests in humans’ image and to our exclusive, commercial benefit. What other reason could this forest have for existing, other than to serve our immediate needs?

A typical nurse log
Nurse log in the Incomappleux

But that “decadent” tree is providing many invaluable services to its ecosystem and the climate – by sequestering large volumes of carbon, which does very much concern us humans. When it keels over, this tree’s rich nutrients will seep back into the soil, feeding millions of organisms. New trees will sprout upon its back. I filmed one red cedar in the Incomappleux that was up to 1,500 years old when it died. Its corpse – very much still kicking around today – has a 300-year-old tree growing out of it. That puts the nurse log’s origin roughly at the time of Roman Emperor Marcus Aurelius or his son Commodus (as depicted in the film Gladiator). Surrounding this tree are myriad lichens, fungi, mosses and insects, all benefitting from this one “decadent” tree.

The lichen-caribou connection

One of the Incomappleux's 300 or so lichen species (Photo: Jason Hollinger)
One of the Incomappleux’s 300 or so lichen species (Photo: Jason Hollinger)

The lichens are of particular import as they feed endangered Mountain Caribou in winter months, when higher elevation slopes are out of reach. Those caribou are in free-fall (36% decline throughout the region since the provincial government’s 2008 recovery program was instituted).

This is chiefly attributable to habitat loss (not the frequent scapegoat, wolves). So if we keep logging these valleys, we will preside, sooner than later, over the extinction of a marvellous species. How does the value of caribou survival fit into our economic matrix?

Subsidizing old-growth logging

A clearcut near the Incomappleux
A clearcut near the Incomappleux

Back to those cut blocks. Not only do these trees hold little commercial value, but the valley’s remoteness means the cost of harvesting is high. Combine that with the fact that many smaller, local mills which used to create jobs for communities in the Kootenays have been shuttered in recent decades, in favour of larger, more centralized, often foreign-owned mega mills. That means greater trucking distances = greater cost. Ergo, the Incomappleux is highly uneconomical to log.

That’s where our “free enterprise” government intervenes in the market, offering steep corporate handout discounts on stumpage fees to incentivize logging in these uneconomical places. A rate that can be as high as $20/cubic metre falls to as low as 25 cents. What should have fallen short when evaluated by our economic calculator is now magically viable for logging.

Ancient forests still on chopping block

Clearcuts in the Klanawa Valley on Vancouver Island (Photo: TJ Watt)
Clearcuts in the Klanawa Valley on Vancouver Island (Photo: TJ Watt)

That’s not to say that Interfor will log it tomorrow, but this is how it could very easily happen. And it is happening around the province as we speak. On Vancouver Island – where 9,000 hectares of old-growth are still logged each year – at a place called East Creek, stumpage has been as low as 27 cents/cubic meter. This is, sadly, not particularly uncommon amongst hard-to-access old-growth forests on the coast and in the Kootnenays’ inland forests.

Bear in mind that these are public forests (private lands in BC carry no stumpage fees and even less regulation and oversight). Public forests are a crown asset and when our government gives away timber for pennies on the dollar, that is revenue that isn’t going to schools or hospitals – let alone being reinvested in regulating or modernizing the forestry sector. When local mills are closed in favour of bigger, central ones and logs are shipped overseas for processing, we are losing thousands of jobs in the bargain.

Raw deal

Raw Canadian logs for export (Paul Joseph/Flickr CC Licence)
Raw Canadian logs for export (Paul Joseph/Flickr CC Licence)

On that note, here are some more numbers that should give us pause: Last year alone, we saw 7 million cubic metres of wood leave this province in the form of raw logs – that’s enough lumber to frame 165,000 new homes in BC, according to researcher Ben Parfitt. All this, combined with other examples of mismanagement, has meant a steep decline in forestry jobs in BC – from 100,000 or so at the 1995 peak to around 65,000 today. So out-of-whack is the BC situation that as of 2012, according to Stats Canada, it took 1,312 cubic metres of harvested wood to create one full-time forestry job in BC – compared with just 292 cubic metres for the same job in Ontario.

Let me be clear: My family has worked in BC’s forestry sector for a century or more. I take very seriously the jobs the sector has provided to the province’s workforce. But there are many intelligent ways, through improved management and innovation, that we could bring jobs back without sacrificing the few remaining bits of true wilderness we have left. Not to mention a whole new economy out there in the form of clean tech, the creative sectors, value-added manufacturing and Supernatural BC tourism that we’re forgetting about.

A different calculus

Biologist Veera Tuovinen taking stock of the Incomappleux's biodiversity
Biologist Veera Tuovinen taking stock of the Incomappleux’s biodiversity

Moreover, standing in the heart of the Incomappleux, towering cedars swaying overhead, the mists welling up from Battle Brook below, moistening the mosses and hair lichens, it strikes one that there just may be deeper values than jobs, stumpage fees, and cubic metres of harvestable timber. Unfortunately, I can’t hope to do this revelation justice with my camera or mere words. Proud though I am of what we captured on this journey and excited to share it on the big screen, nothing can come close to the experience of being there. In that sense, I fear, numbers will always win out.

If that’s the case, then here are a few more figures to tabulate:

• 0.5% – the total of the planet’s land surface that these temperate rainforests covered, at their peak

• 10% – the amount of old-growth left on Vancouver Island today (1% if you look deeper into specific species like Douglas Fir on Southeast Vancouver Island)

• One tonne – the amount of carbon a single ancient tree is capable of storing

Seeing the forest for the trees

The Incomappleux River
The Incomappleux River

Alas, I suppose I’ve fallen into a trap in recent years. Hungry for credibility in the eyes of mainstream media, government and industry, I’ve sought to confront difficult conversations about resource projects based on the terms laid out by their proponents: i.e. engaging with claims of jobs and public benefits, questioning economic studies from the Fraser Institute and the like.

Meanwhile, my old pal and co-founder of this publication, Rafe Mair has often preferred to talk about the spiritual dimension of these issues. He speaks of wild salmon and free-running rivers as the soul of our province. Perhaps I didn’t get it, until now.

But there was a time when I did. When I was 10 years old, my aunt Vivian – a lone environmentalist amongst 5 brothers in the oil and gas industry (my mother, as a teacher, got a pass from both camps) – put me onto a campaign to protect the Carmanah Valley on Vancouver Island, where I grew up. I took the petition around my school and neighbourhood and was proud to sign up a few dozen names. My bedroom wall was graced by a poster of the valley, staring up at four iconic sitka spruce, sun glittering through the needles of the canopy. I never went there, but even that picture instilled a sense of peace in me growing up.

Then I forgot all about it and went off into the world to make money.

Mosses on the branches of the Incomappleux's ancient trees
Mosses on the branches of the Incomappleux’s ancient trees

Going to the Incomappleux reawakened in me that sense of calm and wonder at the natural world. And I understood Rafe’s point. There are some values that can’t easily be quantified. Call it quaint or naïve in this complex modern economy, if you will. But there is a soul in those trees and lichens – and, perhaps, in us too. Who are we to decide whether they exist or disappear forever into the annals of human time?

Yet, unlike many environmental battles in BC’s ancient and recent history, the story of the Incomappleux need not have any villains or losers. There is only this: a place so perfect and rare that once lost it can never be recreated; a company that could easily be compensated for relinquishing its tenures, which, without government intervention that would make Karl Marx blush, have no economical value; and a chance to leave a splendid legacy for the caribou, the lichens, the cedars and hemlocks, and our own children and future generations. So one day, my son or your granddaughter can have the opportunity to stare up at that canopy, feel the cool breeze on their cheek and forget all about the facts, figures, and petty concerns of our man-made world.

Sign Valhalla’s Selkirk Mountain Caribou Park petition here – and see  “Primeval: Enter the Incomappleux” at two Vancouver screenings:

• Tonight (Wed, Nov. 23) @ Vancouver’s Rio Theatre – 7:30-10PM (doors open 6:30). Part of VIMFF’s “Back to the Roots” night – also featuring short films by Daniel Pierce and Darryl Augustine, presentations by TJ Watt and Craig Pettitt and a Q&A with them, Damien Gillis and lichen expert Dr. Toby Spribille. Tickets available online here or at the door.

• Thursday, Nov. 24 @ UBC Forest Sciences Centre (2424 Main Mall – Room 1005) – 6:30-8PM. Featuring panel discussion with Prof. Suzanne Simard (see her incredible TED talk), Dr. Toby Spribille, Craig Pettitt, Damien Gillis and moderator Ngaio Hotte.