Thursday, September 11, 2003

Collins' gloomy economic forecast should make you nervous
By Paul Willcocks
VICTORIA - As the boss, you should be a little worried about Gary Collins' first quarter financial report.
After all, you write the cheques. When the finance minister shows up to report on the progress for the first three months of this budget year, it's your approval he needs.
In a past corporate life I used to go through this process, both as a presenter, putting the best face on often ugly news, and as an audience, waiting to see how much confidence I could have in the brave plans of managers.
I wouldn't be calling in the outplacement counsellors to help Collins pursue other interests yet. But it is time to get nervous.
Too many things have gone wrong. The Liberals knocked down their forecast for economic growth this year and next when they presented the latest update. The economy is now expected to grow 1.5 per cent this year, down from the 2.4 per cent the government predicted back in February. B.C. will have the worst performing economy in Canada.
There has been a ton of bad luck - SARS and mad cow scares, a soaring dollar, and of course the softwood dispute.
But the prolonged softwood shouldn't have been a shock. And other provinces have confronted many of the same issues, and done better than B.C.
And anyway, you don't hire managers to tell you that things have gone wrong - well, except for accountants - you hire them to fix things.
Here are three things that should concern you in Collins' report.
First, and most importantly, the government's economic measures are not producing results. The New Era of prosperity isn't here, and the government's own projections have B.C. limping along at the Canadian average through 2007. Politicians can cherry pick statistics and trot out all the upbeat anecdotes they like. The fact is that the B.C. is under-performing.
Second, the prospects for a quick recovery look slim. The first quarter reforecast knocked personal income tax revenues down from budget, because we aren't earning as much. And it says the shortfalls will be greater over the following two years. The same pattern is true for sales tax. We don't have the money to spend the Liberals expected.
And third, the Liberals' promise to bring in a balanced budget in six months is looking risky.
They'll make it. Give Collins credit - he has hit all his targets so far, and there's no reason to doubt him when he says he'll hit this one. But missing the target isn't the only risk.
The government's plan called for a $2.3-billion deficit this year. But that included a $500-million cushion, and before the forest fires a real deficit that was up to $1 billion lower was likely.
Not now. Moving from a $2.3-billion deficit to a balanced budget in one jump will require a big jump in revenues, or a sharp decline in expenses. The plan calls for revenue to jump by $1 billion next year, a steep but doable target.
The Liberals also want to cut spending by $850 million. Every ministry, outside health and education, must spend less than it did this year. Even the solicitor general's ministry, concerned with safety and emergency preparedness, faces a 20-per-cent cut.
Even hitting those targets leaves the government with a razor-thin surplus, and no cushion for emergencies like this year's $500 million forecast allowance.
It can be done. But the danger is that the poor economic performance - the Liberals' original plans predicted much higher growth and revenues - are going to force dangerous cuts, made not because they make sense but because an artificial political deadline looms.
You're the boss. It might be time to congratulate the finance minister on managing to the budget. But it also might be time to note the lack of real results.
After all, that's what managers get paid for.
Footnote: The Vancouver missing women's case has now cost you something like $40 million. The investigation - mostly at the Pickton farm - will cost $26 million this year, on top of more than $10 million last year. Trial costs are expected to reach another $4 million this year. How much would it have cost to keep them alive, instead of sifting through dirt to learn about their deaths?

Wednesday, September 10, 2003

No stars, but credible candidates at NDP debates
By Paul Willcocks
VICTORIA - OK, so the heavens didn't open and send down a golden shaft of light to illuminate a new leader who could guide the NDP out of the wilderness.
But at least there's a decent roster of candidates offering a chance for the drifting New Democrats to redefine themselves.
Seven candidates are ready for a series of debates around the province, events which will actually matter. There's no star, and Gordon Campbell isn't going to be in panic about any of the candidates. (Although those chants of 'Orcherton, Orcherton' from the premier's office may indicate who they would like to face in 2005.)
Who cares, you might ask?
You should. One party states tend not to be a good thing. And given the way we flail around in this province, the New Democrats could be elected just because we get mad at the Liberals. We should at least make sure they're not clueless.
Any one of five candidates has some sort of shot at winning. It's early days, and their policies, positions and personal qualities will become clearer, or fuzzier.
Left and right don't really work anymore as useful labels. But you can parse this race on the basis of how far the candidates want to run from what the NDP used to be. (What was that? Some would say a reckless, incompetent government that rewarded its friends; others would say a government committed to economic development and social opportunity. I'd say both.)
Put Steve Orcherton at the 'hey, we did OK camp.' He was an MLA in the Clark government, one of a small group that never made it into cabinet. He's proud of the record, and favours an interventionist government to take from the rich and give to the poor, with close ties to unions and a special place for them in the party.
Put Nils Jensen at the other end. He joined the party when he launched his leadership bid and figures the NDP needs a fresh, centrist start. Jensen's a Crown prosecutor and Oak Bay councillor. He's also the chair of the water board here in Victoria, a group that always seems to lean towards zealotry on the conservation side.
Jensen looks like a surprisingly strong candidate right now. He's toured much of the province already, and got more positive attention for the NDP than all the other candidates put together. The best way to get any job is to start doing it and wait for people to notice. That's working so far for Jensen.
In between, there's Leonard Krog, a Nanaimo MLA in the Harcourt government who has lost out in several election tries since. He's more centrist than Orcherton, and likely more competent. But his endorsement by former ministers Dale Lovick and Jan Pullinger, a warning label to many New Democrats.
Carole James is probably closer to Jensen. James is a widely respected former Victoria school board trustee and chair of the BC School Trustees Association. She now lives in Prince George. James lost a Victoria seat by 35 votes in the last election. She has decent credentials, but it remains to be seen if they are the right preparation for political leadership.
And Craig Keating, the North Vancouver councillor, also tends to be in the new directions camp.
It's a decent field, competing for what is a pretty bad job. No seat, little budget, bleak electoral prospects, a millstone-like record to lug around. It's hardly a golden opportunity.
Maybe that will turn out to be a plus. In the last NDP race, when there was the chance to be premier - even briefly - thousands of instant New Democrats signed up and the contest approached farce.
This time, about 13,000 core members have the chance to give some thought to what kind of party makes sense for the province.
Footnote: Unions are still going to be big players in this process. About 30 per cent of the delegate slots at the November leadership convention will be reserved for union-appointed voters. The rest will be selected at constituency association meetings.

It's doomed, but offer to Haida still a good move
By Paul Willcocks
VICTORIA - Just because the Haida immediately dumped on the province's surprise treaty offer doesn't mean it was a bad idea.
Attorney General Geoff Plant caught everyone off guard when he called reporters down to his office to offer the Haida control of 2,000 square kilometres in the Queen Charlottes - if they come back to the treaty table.
It won't happen. The Haida broke off talks eight years ago. Last year they launched a suit in BC Supreme Court claiming all the islands and resources around them. The head of the council of the Haida Nation quickly rejected the offer as "mischief."
Plant says it's a serious offer, and a generous one. The 3,700 Haida would get ownership of 100,000 hectares and partial control of a further 100,000 hectares.
That sounds good, especially given the Haida's current land base of about 1,700 hectares. But the Haida are claiming five times as much land as the government has offered. And they're not in a bad position, legally and politically, to be optimistic about the eventual results of their lawsuit.
Meanwhile, most of the pressure is on the province. The BC Court of Appeal ruled last year that the government hasn't been fulfilling its duty to consult and accommodate the Haida on logging issues. Licence-holder Weyerhaeuser has agreed to cut its timber harvest in half, until a long-term plan is in place.
That's a lot of lost jobs. Add in the investment chill created by the uncertainty over ownership, the province's inability to get land use decisions made, and the Haida's ability to create problems for existing operators, and you have a major headache for the government.
That headache escalates to four-alarm status when you start considering the Liberals' big hopes for an offshore oil and gas industry by 2010. Oil companies have made it clear that a resolution of First Nations issues has to happen before they even look seriously at the offshore potential.
The province is appealing the B.C. ruling to the Supreme Court of Canada, and that's likely one factor in this surprise offer. The courts have said that negotiation is the preferred way to resolve treaty disputes. If the Supreme Court decides either side hasn't been willing to make a reasonable effort at negotiation, that could hurt their case.
This offer probably counts as a reasonable effort. It's undercut - badly - by the lack of federal participation. B.C. has put up land, but Plant says the government never asked the federal government to put forward any monetary proposal. But the offer still signals a willingness to resume talks.
Why aren't the Haida interested? Guujaw, head of the Haida council, says the offer falls far short of what they're claiming. (That is to say, everything.)
That's an unreasonable expectation - about one-third of the Charlotte land is privately owned. But they have a good claim for a big chunk of land, given that no treaty was signed and most of the land is available. It's a question of ownership, and the Haida have a strong, clean claim.
The province isn't just dangling the land offer as bait; it's also wielding a stick. Plant says the offer is good for six months. After that, no more Mr. Nice Guy.
"If we're not able to get the treaty process started meaningfully with the Haida then we are going to look for ways to more enthusiastically assert our ability to make land use decisions to restore access to the land base," Plant says. If the Haida disagree with the government's actions, they can head back to court. (That's risky, especially for government, which faces the prospect of damaging losses in future court cases, direct action on the ground and international boycotts.)
Plant's offer is still a good move, with more positives than negatives. The government signalled its willingness to negotiate to the Haida, the public and the courts. That can't hurt; there's a small chance it could help. And in the world of negotiations, that makes it worth a try.
Footnote: The latest development is a reminder of how distant the prospect of offshore oil and has development remains. Oil companies looking at the opposition of federal Environment Minister David Anderson and the land claim problems are going to keep B.C.'s offshore far down their priority list.