Category Archives: Economics

Enbridge Review Panel’s Skimpy Insurance Requirements Fail to Reassure Public

Economics, Energy and Resources, Oil&Gas, Pipelines and Supertankers
Share

The news out of the Joint Review Panel looking into the Enbridge pipeline should have a profound effect on us all.

One of the conditions is a requirement that Enbridge carry close to $1 billion in insurance, plus $100 million on hand to cover losses from spills.

I find this interesting, since normally an assessment of future damages covered is accompanied by an assessment of the risk to be covered. What is the size of the risk and how big a part of that risk will be taken? This so in every kind of insurance – be it life, casualty, automobile, what have you. This means not only must there be an assessment of the risk – i.e. is there likely to be a loss – but how much is a loss going to cost? This is especially true of casualty insurance, as the Joint Review Panel is dealing with here.

The second critical point is whether or not the insurer will continue to cover Enbridge after a loss has occurred? Can they cancel, leaving Enbridge’s further damages up to us the people?

This story will be seen (Enbridge hopes) as an encouraging sign, because opponents will be shut up now that these big numbers are involved.

I am not impressed – indeed quite the opposite – for this indicates that the Joint Panel thinks that there’s a risk involved. There is in fact acertainty. Dealing with this as simply “a risk” and announcing the coverage required is asking us to accept that “risk” because the damages are prepaid. Moreover, the amount of insurance involved is nowhere near what the ultimate cost will be and ignores the question: what will the long range cost to our environment be and how do you comopute that loss?

If one uses, as an example, the Enbridge spill into the Kalamazoo River, two years later they had used up all of their insurance of $650 million. The cleanup continues and the cost is expected to be over a billion dollars and much of the damage is forever.

Enbridge will be required to demonstrate insurance coverage at $950 billion – roughly equivalent cost of the Kalamazoo spill. BUT, the Kalamazoo spill was easily accessed. There were no mountain ranges like the Rockies or the Coast Range; no Rocky Mountain Trench; no Great Bear Rainforest to contend with. Let us, for God’s sake, ask a key question: How does Enbridge have access to spills on land? How does it get labour and heavy equipment to the spill? Doesn’t the Kalamazoo spill demonstrate that there can never be a total cleanup?

The BP disaster in the Gulf of Mexico has cost, so far, about $36 billion and rising.

Another critical question is who insures oil tankers, especially when many of them will be owned by companies flying a flag of convenience like Panama, the Cayman Islands and the like?

How is a coastal spill to be cleaned up and at whose cost?

What the people of British Columbia are certainly to have are spills on land and sea for which they will pay much of the cleanup out of their taxes. What we are also certain to have is enormous environmental damage forever.

Finally, the pronouncement of the Joint Review Panel should be assessing the frequency and probability of damage and laying that before the public for a decision as to whether or not these pipelines should be built in the first place.

This won’t be done and the Harper government is on record giving its approval of these pipelines no matter what the National Energy Board recommends.

Given the Kalamazoo experience, how does Enbridge control and clean up a spill when the only access is by helicopter? Every way one looks at this case shows huge costs – much paid by the public – with permanent damage to our environment.

Share

RBC CEO’s Open Letter Shows Foreign Worker Issue Touching Nerve with Canadians

Canada, Economics, Politics
Share
0 RBC CEO’s Open Letter Shows Foreign Worker Issue Touching Nerve with Canadians
RBC CEO Gord Nixon

An open letter issued to Canadians by Royal Bank of Canada President and CEO Gord Nixon (read here) apologizing for his company’s decision to shift 45 Canadian jobs to imported temporary foreign workers from India reflects a growing concern over the issue.

Immigration Minister Jason Kenny reacted to the scandal, stating, “The rules are very clear. You cannot displace Canadians to hire people from abroad.” And yet, RBC maintains it was acting in accordance with the rules. “The question for many people is not about doing only what the rules require – it’s about doing what employees, clients, shareholders and Canadians expect of RBC,” Nixon argued in his letter.

RBC’s predicament is just the latest incident calling into question the Harper Government’s foreign temporary worker program, which permits Canadian companies to pay imported employees from other countries 15% less than equivalent Canadian workers.

The issue was brought into focus earlier this year with the controversy over a Chinese-owned mine in northeast BC planning to import 200 foreign labourers. The move prompted the Construction and Specialized Workers Union to launch a federal lawsuit, alleging that the company made no real effort to offer the jobs to Canadians first. Even BC Liberal Jobs Minister Pat Bell chimed in on a Vancouver radio program, calling the Harper Government’s foreign temporary worker policy a failed program.

We have been reporting on this issue over the past year, raising questions about the Government and corporate resource sector’s claims of labour and skill shortages to justify a now estimated 380,000 foreign temporary workers in Canada – despite mounting evidence that it’s more about savings on labour and exerting downward pressure on Canadian wages across the board.

Herewith Gord Nixon’s open letter to Canadians:

RBC has been in the news this week in a way no company ever wants to be.

The recent debate about an outsourcing arrangement for some technology services has raised important questions.

While we are compliant with the regulations, the debate has been about something else. The question for many people is not about doing only what the rules require – it’s about doing what employees, clients, shareholders and Canadians expect of RBC. And that’s something we take very much to heart.

Despite our best efforts, we don’t always meet everyone’s expectations, and when we get it wrong you are quick to tell us. You have my assurance that I’m listening and we are making the following commitments.

First, I want to apologize to the employees affected by this outsourcing arrangement as we should have been more sensitive and helpful to them. All will be offered comparable job opportunities within the bank.

Second, we are reviewing our supplier arrangements and policies with a continued focus on Canadian jobs and prosperity, balancing our desire to be both a successful business and a leading corporate citizen.

Third, our Canadian client call centres are located in Canada and support our domestic and our U.S. business, and they will remain in Canada.

Fourth, we are preparing a new initiative aimed at helping young people gain an important first work experience in our company, which we will announce in the weeks ahead.

RBC proudly employs over 57,000 people in Canada. Over the last four years, despite a challenging global economy, we added almost 3,000 full-time jobs in Canada. We also hire over 2,000 youth in Canada each year and we support thousands more jobs through the purchases we make from Canadian suppliers. As we continue to grow, so will the number of jobs for Canadians.

RBC opened for business in 1864 and we have worked hard since then to earn the confidence and support of the community. Today, we remain every bit as committed to earning the right to be our clients’ first choice, providing rewarding careers for our employees, delivering returns to shareholders who invest with us, and supporting the communities in which we are privileged to operate.

I’d like to close by thanking our employees, clients, shareholders and community partners for your input and continued support.

Sincerely,

Gord Nixon President and Chief Executive Officer, Royal Bank of Canada

Share
First Nation taking on Canada-China trade deal needs your help

First Nation taking on Canada-China trade deal needs your help

Economics, First Nations, International, Politics
Share

A legal challenge underway by a BC First Nation may hold the last, best hope in the battle to protect Canada’s resources, environment and democracy from the Canada-China trade deal, known as FIPPA (Foreign Investment Promotion and Protection Agreement). But they need the public’s support in order to see their costly court case through.

The Hupacasath First Nation from Vancouver Island is heading to court this month in an attempt to block the controversial trade deal by asserting its infringement on the nation’s tile and rights. The Hupacasath’s representatives argue their constitutional rights to consultation have been violated by the deal and the manner in which it is being brought in. FIPPA would have a detrimental effect on this and other nations’ title and rights, as it entrenches the rights of Chinese investors above and beyond Canada’s First Nations and citizens.

FIPPA would mean Canada’s environmental laws and the concerns of the public are trumped by access to resources for Chinese companies –for a 31 year period once it’s ratified.

For instance, for the Hupacasath, a proposed coal port in nearby Port Alberni would be built by Compliance Energy, a Chinese company, thus, receive special protections from environmental or public health concerns. The same applies to logging, mines, private hydro projects, roads and any other Chinese-driven industrial development “promoted and protected” by FIPPA.  Inevitable oil spills from tankers destined for China would also impact the Hupacasath and other nations’ traditional way of life on the land and water.

To help fund their $150,000 legal bills, the Hupacasath are running a crowd-funding initiative, which you can support here.

Share

Rafe Mair: What I Want from Next BC Government

Economics, Energy and Resources, Politics, Western Canada
Share

I was recently asked by a reader what it is I want, presumably in the way of government.

I’m not so naïve as to think I’ll ever be satisfied, but neither is anyone else. Unless we’re members of a party or one of its cheerleaders we understand that human institutions will contain the human frailties we all have.

First, I want an understanding of this simple proposition – the NDP in the 90s were hit by the failure of the Thai baht, which crippled our forestry industry, thus our provincial coffers. The NDP had no notice of this event nor did anyone else. During their time in office, the BC Debt increased two fold.

On the other hand, the Liberals suffered from the crash of the stock market and a fairly deep recession. They did or ought to have had notice of this. All the signs were there. The longest Bull Market in history. Bad mortgages being bundled as “securities”. An over-heated economy. If the BC Ministry of Finance didn’t report the obvious signs, they should have been cashiered to a person. Or, more likely, if the Finance Minister didn’t demand the key figures on a regular basis, or didn’t report the truth to the cabinet, he should have been cashiered. But I go further – it wasn’t just the Minister of Finance who had that obligation but Treasury Board. I’ve been there and know how the system is supposed to work.

During the Liberal years the provincial debt and other hidden “taxpayer obligations” – which are a debt, just by another name – have more than quadrupled!

Secondly, I want a government of people for people, not political hacks governing for the few.

During the Liberal era, we’ve seen the privatization of BC Ferries, the giveaway of BC Rail and the essential bankruptcy of BC Hydro.

Let’s deal with the latter. And I suggest that the main reason the Campbell/Clark Government hasn’t been more answerable for Hydro is that no one can believe that any government could be so goddamned stupid as to force BC Hydro to take private power, whether they need it or not, at more than double the market price and up to ten times more expensively than Hydro can make it itself. BC Hydro has gone from being the jewel in our crown to a faded rose that owes private companies about $60 BILLION, which will be paid off by the taxpayer.

That, sad to relate, is not the only bit of bad news from Hydro, which is fixing to build Site “C” as an $8 billion dollar support of the natural gas industry and its commitment to Liquefied Natural Gas (LNG). This will be done notwithstanding the distinct possibility that there will be no long term international need of our gas. Site “C” will destroy more than 4,000 hectares of some of the finest farmland in the country. This isn’t supposition – Premier Clark has dedicated Site “C” power to the making of LNG.

Thirdly, I want a government that cares about the environment. The Liberals are very good at saying they are for the environment but that sort of Orwellian bafflegab ought not to fool anyone.

It is they who are responsible for the death and disease to our wild salmon by farmed Atlantic salmon cages.

Not only have the Liberals not stood against sending bitumen in pipelines across our province – they have, through the premier’s mouth, supported one for David Black’s proposed refinery in Kitimat. It follows from this that the Clark government supports oil tanker traffic in at least three ports in BC, including the port of Vancouver.

I want a government committed to the preservation of farmland – not one that gives it away in Delta and destroys it in Peace River country.

I want a government that is committed in fact to the concerns of First Nations.

I want a government that does not spend public money on party business.

I want a different attitude than expounding tenets of the Fraser Institute, where help for people is given grudgingly and then only because they must; I want a government that looks after people because it is the right thing to do.

Finally, I’m just tired of this bunch. Perhaps it’s BC Rail and the private power bust-up of BC Hydro that has me most upset. These two acts were not a mistake…or perhaps just a deal that didn’t work out. The former wouldn’t pass the most elementary smell test and the latter is plainly a pay-off to pals. In both cases the damage to our economy has been enormous and in the latter case ongoing.

If nothing else, it’s time for this bunch to sit in the sin-bin and watch for awhile.

Share

LNG ‘Prosperity’ Will Always be Just Around the Corner for BC

Economics, Energy and Resources, LNG, Oil&Gas
Share

In assessing Premier Christy Clark’s political sins, add one other: irresponsibility…big time.

In the Sun of February 26, on the business page, is an excellent article by Scott Simpson on natural gas prices and their uncertainty. In it you will see that exports of natural gas, in liquefied form (LNG), to Asian markets are scarcely a slam dunk proposition. Gas prices in most Asian markets are controlled by governments and the private sector in a number of cartels, with the idea of maintaining high prices. But, to say the least, the matter is in a state of flux.

Getting ordinary facts on this situation is a crap shoot. Christy Clark tells us that China will be our next big customer. On the other hand, we hear that China has discovered its own massive shale gas reserves – while yet other sources warn this gas will be a challenge to access. Russia sits on the world’s most plentiful conventional gas reserves and is developing a plan to venture into shale gas. The US is awash in the stuff.

Ms. Clark has based her economic position on gas revenues increasing 20 fold in the next 20 years, predicated on the assumption that LNG prices will be 2½ times higher than our domestic price in 20 years.

She has also promised a “Prosperity” fund, starting in two years, which will have us rolling in dough. To tie that all up, she has signed a long-term deal with a consortium of First Nations for gobs of cash to come when a gas pipeline is built through their territory.

This raises, of course, a critical question – if the market we want to serve is awash in natural gas, why in the years to come would it need the stuff from BC?

It rather reminds one of President Hoover, as the Great Depression started rolling, in the election year of 1932, promising a “chicken in every pot” and that “prosperity is just around the corner.”

In The Globe and Mail of February 26, an interview by Justine Hunter of Premier Clark has a little gem in it. The Premier, with her Prosperity Fund “just around the corner”, admits those LNG exports are “four or five years away”.

To top it all off, the International Energy Agency has recently stated, “it is questionable whether freely available LNG will be available from Canada as the main partners in developing other terminals — PetroChina, KOGAS (from Korea), and (Japan’s) Mitsubishi — have dedicated markets for sales in Asia.”

There is also the obvious point that in BC pipelines must cross two huge mountain ranges.

I am no expert in these matters, God knows. However, I have attained a pretty good tummy and an ability to spot horse buns when I see them.

The plain fact is that with the rapid discoveries of shale gas taking place around the world, but especially in the US, Australia, Poland, Russia and China, it doesn’t make sense to promise that any LNG will available from BC to Asia…ever.

Moreover – and please, dear readers pay attention to this – if Australia is any example, LNG plants will only be built with huge incentives (read money) from the public. That’s us folks.

If I am accused of not knowing what the hell I’m talking about, well, neither do Premier Clark and her government.

And I’m not running for a fourth term to lead this province.

Share

Vaughn Palmer’s wrongheaded defense of private power projects

Canada, Economics, Energy and Resources, Hydropower, Media, Politics, Western Canada
Share

Wow! The Vancouver Sun has been a-burst with environmental issues, two on the front page February 6.

Let’s first back up to Vaughn Palmer’s ill thought out column of February 4. It’s nice to see Palmer has finally sacrificed his virginity and tackled the Independent Power Producers’ (IPP) obscene contracts foisted by the government on BC Hydro. Before we rejoice at Palmer’s brain transplant we must recognize what tripe this column was.

Palmer defends gross overpayments to IPPs on the grounds that the contracts were granted at a time when electricity prices were much higher, which ignores the standard practice of tying contracts to prices at the time of sale. Certainly that would make matters riskier but that’s the name of the game in business.

Then Palmer attacks us skeptics by making the case that we will welcome these IPPs when we are short of energy, which Palmer sees in the immediate future. This is not so as Economist Erik Andersen has demonstrated. (You would see more of Andersen’s work if the Fraser Institute’s house organ, The Sun, would publish his work).

Mr. Andersen recently wrote in a letter intended for The Sun, but unpublished thus far, “When one sees value in a deliberately created surplus of anything costly, it can only be from ignorance of need. For decades, BC Hydro has an unbroken record of estimating provincial demand well in excess of recorded demand. The BCUC (BC Utilities Commission) recognized this several times in the last century but BC Hydro keeps coming back.”

Palmer also ignores the huge debt to IPPs by reason of these shameful overpriced contracts, which stand at over $50 BILLION and rising. It doesn’t seem to bother “Poodle Palmer” that if in the private sector BC Hydro would be in bankruptcy protection at best and that as of now BC residents owe about $16,000 per man, woman and child because of Hydro’s massive $70 BILLION in debt and contractual obligations.

Naturally, Palmer ignores the huge environmental cost of these projects; moreover, he neglects to mention that the IPPs are mostly out-of-province and out of Canada companies who – and these dots connect – take all the profits straight out of the pockets of ratepayers who will be dinged with ever-increasing rates to cover the costs of these government-cosseted corporate leeches.

The lead headline in The Sun of February 6 leads into a report that the federal government is ill-prepared for a tanker spill and talks about such a thing as “unlikely” – even though the Department of the Environment, scarcely made up of tree-huggers, assert that spills are a certainty.

That’s two certainties – a spill is certain and there is no way it can be cleaned up.

In Ancient times, Cato the Elder ended every speech to the Roman Senate, whatever the subject, with “Carthago delenda est” (Carthage must be destroyed”.) Eventually the Senate got the idea and Carthage was destroyed.

We must imitate Cato and wherever appropriate pronounce the essential truth about oil spills from pipelines or tankers: NOT IF BUT WHEN!

Share
Oil, China and Why David Emerson Wants Alberta to Start Paying Taxes

Oil, China and why David Emerson wants Alberta to start paying taxes

Canada, Economics, Energy and Resources, Oil&Gas, Politics, Tar Sands
Share

Alberta Premier Alison Redford recently took the unprecedented step of holding a “State of the Province” Address. This hauntingly American-style public relations stunt came about as a result of the longstanding work of behind-the-scenes chief architect of Canada as an Energy Superpower, David Emerson.

Here at the Common Sense Canadian we have tracked in some detail the efforts of former Harper Government Trade Minister David Emerson and his role as Chair of the Energy Policy Institute of Canada (EPIC). We have noted that while Mr. Emerson garners little coverage in mainstream media, his fingerprints can be found on every aspect of Canada’s evolution into a petro state. The corporate-driven policy “think tank” EPIC is the instrument of Emerson’s work.

This, we demonstrated, was evident when premiers took centre stage in Nova Scotia last summer to talk up Canada’s “National Energy Strategy”, while exploring “what was in it for every Canadian.” A central talking point dictated by Emerson and his EPIC communications shop in the exhaustive National Energy Strategy package he provided to all of the nation’s premiers, energy ministers and the PMO/PCO.

We underscored how this was just the tip of the iceberg in a longstanding trend where Emerson and EPIC drafted, promoted and delivered every recent development we have seen on the energy file. From the National Energy Strategy, through the raft of legislative changes we have seen since Harper came to power, including the paradigm shift in environmental policies dictating resource exploitation contained in the recent Omnibus Bills.

We undertook an exhaustive campaign, which grew exponentially in response to the secretive processes surrounding the establishment of the FIPA treaty, and we pointed to Emerson’s time in office as Minister of International Trade and Minister for the Pacific Gateway (before returning to the private sector in 2008 to work for the China Investment Corporation) where he claimed that establishing the Chinese FIPA was his “ultimate goal.” And we did our best to stop it.

Today we are going to explore Emerson’s role in what is being billed as a “once in a generation” restructuring of the Province of Alberta,establishing a New Normal, while the Province prepares to ratchet up Tar Sands production to meet the five-fold increase the Harper government and industry outlined as their shared goal early in the Conservative mandate.

For decades the Alberta Advantage defined that Province as the apparent envy of the nation. No Provincial sales tax, capital tax, payroll tax or health premiums was the “advantage” Albertan’s enjoyed as a result of their oil bounty. This was the foundation of a mountain of oily rhetoric that promoted self-reliance, hard work, small government, no taxes, cheap fuel and lots of toys – all of which defined “freedom” in the public psyche of Alberta.

Enter David Emerson.

Albertans have come to accept that oil wealth does not translate into cheap gasoline for their huge trucks. They have come to understand that small government means less service, but are proud to dig deep for the services they want, because they are “self-reliant”. They know first hand the environmental impact of a massive exploitation agenda and are aware of the “myth” of climate change. But, can they accept that much like death, provincial taxes are inevitable?

Can they accept that not even a massive escalation in oil production can balance budgets?

Massive escalation of Tar Sands production is the undercurrent that drives the entire Albertan frame of mind. You can feel it in the streets, at the coffee shops and on the “highway of death” that leads to the EPIC undertaking of the internationally-renowned Tar Sands, the largest industrial activity known to man.

It is therefore widely known that much of the Alberta advantage is oil-driven cultural myth, however the one thing no one can deny is there are no provincial taxes. This is evident in every purchase Albertans make, and apparently this daily reminder is enough to perpetuate the advantage myth and condition the average Albertan to accept foreign interests infiltrating their natural resource bounty, running off with the profits and leaving them to hold the environmental and fiscal bag.

Clearly the real Alberta Advantage falls in favour of foreign investment and almost entirely at the expense of average Albertans. Redford’s whole “State of the Province Address”, while predicated on myth, does forecast a 6 Billion dollar deficit in the March budget. Yes, thats right, oil rich Alberta, at a time when production rates have never been as high, is filing a SIX BILLION dollar shortfall in oil royalties.

So what does David Emerson have to do with all of this? We have established that Emerson and his shop are the architects of the real Alberta Advantage, steeped largely in favour of foreign interests – and now Albertans are experiencing first hand how he operates.

But what might come as a surprise to even Albertans is Emerson’s role in “reshaping” their future.

As appointed chair of the Alberta Premier’s Council for Economic Strategy (thanks to former premier Ed Stelmach who leaned hard on Emerson to get him through the battle over Royalties), Emerson has skillfully guided the policy fix – once again from the behind the scenes and on behalf of the largest most powerful companies on earth – and the Chinese Government.

His intention? The end of the Alberta “no taxes” advantage with a “broad based long term approach,” for which they have been priming the pump for years.

The reason? The corporate fabricated Bank-Backed Bitumen Bubble.

Former ICBC CEO and respected independent economist Robyn Allan skillfully analyzes this most current myth-making that EPIC puppet Premier Redford has put at the centre of her “once in a generation” restructuring. In a recent piece, Allan bursts the Bitumen Bubble the EPIC-affiliated propagandists have blown way out of proportion, which sets out Alberta’s “New Normal.”

Industry and government talking heads are singing from the Bitumen Bubble song sheet, and Allan rips it to shreds in her in-depth, rock-solid analysis, proving that much of the current fearmongering surrounding the finances of oil exports is indeed a bubble of hot air. “The narrative goes like this,” she writes. “Resistance to oil pipelines like Keystone XL, Northern Gateway and Trans Mountain’s twinning means an ever increasing supply glut in the U.S. Midwest, forcing the price of Western Canadian crude oil downwards as compared to the North American crude oil benchmark West Texas Intermediate — WTI.”

The implication is that oil sands operators would get more value if they could just access new markets via new supply routes. Allan demonstrates this is hogwash, built on some very fuzzy math and ignoring the fact that Alberta bitumen is a low-quality, expensive-to-process product which has and always will fetch bottom dollar compared with more favourable alternatives.

The bottom line of Allan’s analysis, is that we are being misled and that lack of access to new markets is not the real problem contributing to Alberta’s gargantuan debt, nor will access to new markets via BC fix it. Only reasonable, responsible royalty rates can balance Alberta’s budgets, protect and secure the Alberta Advantage and avoid a complete restructuring of the province.

Here is the hot air EPIC’s propagandists are using to restructure the Alberta Advantage. By blowing up the Bitumen Bubble and handing the advantages of oil to his corporate colleagues, Emerson’s fix is to dump the disadvantages onto average Albertans.

Instead of simply fixing budget shortfalls by establishing responsible royalty rates on massively escalating production rates, Albertans will be treated to a sleight of hand, by funnelling puny royalties into a new fund called “Shaping Alberta’s Future”. A two year-old Emerson recommendation now topped off with his shafting of Albertans by exploring the “expenditure side of the ledger.” I.e. deep cuts and reduced services. But the kicker, of course, the end of “no taxes.”

How does Emerson think he is going to strip Albertans of the last modicum of the Alberta Advantage that has long been the pride of Alberta? Can his propagandists shift the public psyche and alter the longstanding reality Albertans have clung to as their one distinguishing factor?

Here is Emerson in his own words:

The culture of Alberta has been built around low or no taxes for many decades. It’s not going to be an overnight psychological shift for the people of the province. My own view is you have to start first on the expenditure side and be fairly broad-based and multi-year in your approach.

In other words, start by cutting services, then phase in taxes over several years so people don’t get quite so hopping mad.

Redford parrots Emerson’s view. “It’s about this being a new reality and us having to face that,” she said in a recent interview.

In a conference call Monday with more than 5,000 members of her Conservative Party, Redford confirmed the province will borrow to pay for new infrastructure, such as roads and schools, and did not rule out the possibility that Albertans will one day be subject to a provincial sales tax.

So Alberta, looks like you have won! The race to the bottom that is, and with EPIC’s Emerson as your jockey. And you all thought it was Alberta telling British Columbians what to do! 

But don’t worry, he has been “shaping the future” of BC for decades, as onetime chair of the BC Progress Board – not to mention CEO of Canfor, the BC Transmission Corporation, the Western Bank of Canada, the BC Trade Development Corp and a directorship at BC Gas…to mention just a few significant BC-specific posts Emerson has held.

Just look at the shape we are in! Our oil and gas deficits are merely a third of what you are looking at. Relax and enjoy the ride. It will be EPIC.

Share
The Business of a Cortes Forest

The business of a Cortes forest

Economics, Energy and Resources, Logging and Forests
Share
The Business of a Cortes Forest
The old growth forest of Cortes Island. Photo by TJ Watt of the Ancient Forest Alliance

In a world of global business connections, faraway is as close as next door. In this case, next door is Cortes Island, a remnant of rural paradise at the northern edge of the Salish Sea — a pocket of ocean in the Pacific Northwest that a mere century ago teemed with an estimated 500 resident whales and unimaginable quantities of fish and wildlife. Little remains of that original marine bounty. And the surrounding majestic forests of Douglas fir, technically designated as CDFmm (Coastal Douglas-fir,Moist Maritime), have been obliterated to less than 1% of their original area. Cortes Island happens to contain one of the last sparse pockets of this once spectacular forest ecology.

But the business connections that link Cortes Island to the rest of the world are healthy and flourishing. They stretch along the edge of the Salish Sea and beyond. The offices of Island Timberlands (IT), which owns the patch of Douglas fir forest on Cortes Island, are situated in Nanaimo. The headquarters of the BC Investment Management Corporation (bcIMC), which have financial interests in IT, are located in Victoria. Wall Street in New York is the home of Brookfield Asset Management Incorporated, the majority shareholder in Island Timberlands. And Beijing may soon be connected to Cortes Island as the China Investment Corporation (CIC) attempts to use a $100 million sliver of its $200 billion capital to buy a 12.5% stake in Island Timberlands, a purchase that would give it influence over the Vancouver and Cortes Island forests that are now owned by Brookfield.

These are the business forces allied against Cortes and the people of Wildstands Alliance who are trying to mitigate the impact of logging in one of their island’s rare and cherished forests — a forest now “owned” and “managed” by a network of business connections so far removed from the ecological reality of trees and the local community that loves them, that the investors might as well come from another planet.

The proportions must be dismaying to the 1,000 rural folks who live on Cortes. Brookfield is one of the largest investment corporations in the world. It owns 51% of Island Timberlands. bcIMC, which owns a 25% share in IT, manages $92.1 billion in pension funds. Island Timberlands, the corporation that intends to log the remnant coastal Douglas fir forest that Cortes Islanders want to protect, is committed to return profits to bcIMC and Brookfield. The corporate expectations are about lucrative returns on investments, not about trees, ecologies or aesthetics. The logging project, if not stopped or moderated, will contribute to the healthy returns paid to investors by bcIMC and Brookfield. And, in a sad irony, most or all of the logs will likely go offshore for milling and processing.

The next chapter in the dismaying saga of the big-and-international vs. the little-and-local is the intention of the Chinese Investment Corporation to buy a portion of Island Timberlands. Under the terms of the federal government’s pending Foreign Investment Promotion and Protection Agreement, known as FIPA, the fate of this rare stand of Douglas fir on Cortes and 258,000 hectares of forest on Vancouver Island could be decided in secret by a three-person panel appointed by FIPA, if the CIC believes its investment is being unfairly handicapped by federal, provincial or local regulations. This is not an auspicious prospect for Canadians, British Columbians or the stalwart conservation efforts of the Cortes Islanders trying to mitigate the damaging effects of logging on a little remnant of coastal Douglas fir forest.

Their heroic efforts are not supported by the supposedly stringent logging principles of the Sustainable Forestry Initiative (SFI), the guide Island Timberlands uses for its cutting practices. The purported high standards of SFI have been widely debunked by environmental critics as hollow, nothing more than an “initiative” devised and funded by the lumber and paper industry to give the impression of careful ecological management. If credible standards were being used, such as representative ecosystems in protected provincial reserves or the more stringent standards of the Forest Stewardship Council, logging would not be taking place in a maritime forest ecology that has been “managed” to the verge of extinction.

Anyone with a history in environmentalism should be cautious when foresters profess to be “managing” a forest — forests have been successfully managing themselves for millions of years. And when Island Timberlands uses expressions such as “managing our properties”, the coded meaning is even more ominous. It has financial obligations to its New York owners, Brookfield, and to its Victoria investors, bcIMC. These obligations translate as “profit” and have little to do with the sensibilities of Cortes Islanders or the last of the remnant Douglas fir forests ecologies surrounding the Salish Sea.

So the local logging problem on Cortes Island represents a larger problem. Corporations are getting bigger, more borderless and less personal. Trade agreements and investment connections are eroding national, provincial and community autonomy. Although Island Timberlands has 258,000 hectares of Vancouver Island to log, it insists on taking every ounce of the flesh it purports to own, regardless of how treasured and rare it may be.

In the larger perspective, this can only be viewed as an uncaring obstinacy, a blind greed that violates the very principle of proportion which keeps the ecological structure of the planet intact. Locally, it mocks the caring intentions of Cortes Islanders. If the business of business is only reducible to the cold, heartless and inflexible brutality of profit, then little Cortes Island becomes a symbol for the failed prospects of our future on this small and delicate island lost amid a sea of stars.

Share
Are there really any jobs for Canadians coming down the Enbridge pipeline?

Enbridge ‘Jobs’ Argument Rings Hollow as US Vets Recruited to Work in Canadian Oil Industry

Canada, Economics, Energy and Resources, Oil&Gas, Pipelines and Supertankers, Tar Sands, , , ,
Share

The argument we hear most frequently from the Harper Government in favour of bulldozing through the proposed Enbridge Northern Gateway pipelines is the major job benefits the project would carry for Canadians. But recent talk of importing foreign workers from the United States and China make a mockery of that boast.

The latest evidence to this effect – a job posting on the American website run by Veterans of Foreign Wars, which helps vets find employment – bears some claims that are so absurd as to beg the question whether it’s a hoax. Some of the figures cited are highly suspect; nevertheless, on the whole, it provides telling window into an alternative narrative emerging around the Tar Sands pipelines issue. The posting reads:

The Veterans of Foreign Wars of the U.S. is proud to announce that its partly owned veterans jobs board has secured an exclusive employment initiative with Alberta, Canada, that could see thousands of U.S. veterans heading north to work on their oil pipeline.  

“This is a great opportunity for veterans, transitioning military, National Guard and reservists, and their family members,” said Ted Daywalt, founder and CEO of VetJobs (www.vetjobs.com), a recognized industry leader in helping veterans find work.  

“Though America’s Keystone Pipeline is delayed, the Canadians are moving forward on their side of the border and have an immediate need for tens of thousands of workers,” said Daywalt, whose website averages more than 55,000 daily job postings by employers strictly interested in hiring veterans. He said the Edmonton Economic Development Corporation anticipates a shortage of 114,000 workers in the Alberta area, and they want to hire American veterans to fill that shortage. 

According to the development corporation, the positions being offered are long term, with many paying as much as 30 percent more than similar industry positions in the United States. Some positions will require a move to Canada, but many others will allow veterans to commute — working several weeks in Canada, then one week back home. (emphasis added)

The posting came my way via a BC-based environmental discussion listserv, Land Watch, and has provoked some interesting questions.

For starters – beyond the matter-of-fact assertion that “the Canadians are moving forward on their side of the border” with our highly controversial proposed pipeline projects – there’s the eyebrow-raising jobs claim. Creating 114,000 jobs would essentially mean doubling the current employment of the entire Canadian oil and gas sector, and yet the ad only mentions pipeline construction jobs specifically.

Even Enbridge (whose new ad campaign touting myriad economic benefits sputtered recently over a spoof by Province cartoonist Dan Murphy that went viral) and the project’s looniest boosters acknowledge the pipeline would provide a few thousand temporary jobs at best. Once it’s built, BC would see only several dozen permanent jobs. A recent study by the Petroleum Human Resources Council of Canada suggests the workforce of the Alberta Tar Sands – which altogether employs just 20,000 people, constituting 15% of Canada’s total oil and gas jobs – will rise by 73% by 2021, but that pales in comparison with the numbers being thrown around by Veterans of Foreign Wars.

The posting rings true on another front, though – the fact that both BC and Alberta are approaching full employment territory, putting paid to the argument we need new jobs at the expense of our environment. BC and Alberta are both seeing strong job growth today – with unemployment in BC falling by .8% from May to 6.6% in June (though some of BC’s lower unemployment numbers derive from workers heading across the border to Alberta). Alberta lost a handful of jobs in June, but its unemployment rate remains at a paltry 4.6%.

We’re told ad nauseum that we need to accept the certain risk of pipeline leaks and tanker spills because we badly need the jobs that come with these projects, yet the plain fact is we don’t have the workforce to provide tens of thousands of new employees for Tar Sands-related development.

One line in particular stands out in the job ad, namely that “…[the] veterans jobs board has secured an exclusive employment initiative with Alberta, Canada…” Secured? With whom? The Alberta Government? The Government of Canada? Has an American company signed a deal with our government(s) to provide foreign labour to Canada, and if so, why have we heard nothing of it from our elected officials? It could be this is just exaggerated salesmanship on the part of this jobs site, but these are questions that need answering.

Another question the posting raises is why would we pay these workers 30% more in Canada than south of the border? This claim seems to conflict with the other major challenge to the jobs argument – the recent revelation that state-owned energy giant PetroChina wants to build the Enbridge pipeline. The advantage to Enbridge from this proposition is a significant discount on labour, as the Harper Government recently changed our laws to allow companies operating in Canada to pay temporary foreign workers 15% less than the average wage for Canadians. This hardly seems like the policy of a government concerned about creating oil and gas jobs for its citizens.

And again, these direct job-related concerns are on top of the certain environmental and economic calamities of pipeline leaks and tanker spills – which would also be a huge blow to BC’s tourism and natural resource-dependent economy.

Perhaps a larger issue at hand is the matter of Canadian energy security and economic sovereignty.

The picture now emerging is of Chinese and American companies harvesting our bitumen, using Chinese and American labour to extract it, and building the pipelines to transport it back to their own countries to refine it (where the real jobs are), along with the profits from the whole operation. Moreover, we’re only a trade deal away from it being illegal to stop exporting oil to China once we’ve started. We’ve already sacrificed much of our resource and economic sovereignty under NAFTA and the privately controlled American corporation, NERC, which we’ve empowered to regulate our public energy system. Now we’re talking about recently retired American soldiers coming up here to build our oil infrastructure, which is more than a little unsettling.

Finally, in addition to the hollowing out of the “jobs” argument, the macro-economic impacts of expanded pipelines and Tar Sands development have been questioned by the likes of Official Opposition Leader Thomas Mulcair, economist and former ICBC CEO Robyn Allan, and the Organization for Economic Cooperation and Development.

Thus, when Stephen Harper and his minions declare the Enbridge pipelines would be good for “the economy”, we must ask the key question: “Whose economy?” US veterans, Chinese migrant workers, China itself and the mostly-foreign shareholders of multinational corporations? Check.

The public of BC and Canada? Not so much.

Share