Tuesday, December 09, 2003

Canada the loser in softwood deal
By Paul Willcocks
VICTORIA - Canada is getting clobbered in the proposed softwood lumber deal.
After 18 months of fighting, thousands of lost jobs and almost $2 billion in penalties, the Americans are getting want they wanted.
And B.C.'s forest industry is being clamped in a straitjacket.
Sometimes a bad deal is all you can get, but there are some big concerns in this case. Ottawa has been indifferent to the dispute. Jean Chretien famously claimed B.C. wasn't even being hurt, and wondered what all the fuss was about.
And B.C.'s efforts have been contradictory and confused.
B.C. is on the verge of accepting exactly the kind of deal that Forest Minister Mike de Jong said was unacceptable only months ago. "I'm not interested in any kind of a deal that would allocate to individual companies a fixed quota," he said back in May.
But that's what we're getting.
Then proposed settlement, still being debated, would cap Canadian duty-free exports at 31.5 per cent of the U.S. market. That's about 10 per cent less than Canadian producers have been shipping to the U.S.
Any shipments above that level and Canadian companies would have to pay $200 per thousand board feet. That's such a punitive duty that exports are effectively capped.
That's obviously bad news for Canada. B.C.'s largest export industry has lost the chance to compete freely in its most important market.
But wait. It gets worse.
Companies can't just magically keep shipments under the ceiling. The federal government is going to have to judge the size of the market, and then allocate export quotas to provinces and companies. Success won't be determined by efficiency, or ability to meet customers' needs. It will depend on who gets quota from government.
It looks now like some B.C. companies will be winners. Ottawa's current proposal is to base the quotas on each company's share of shipments since April 1, 2001.
That's great news for some of the big Interior forest companies, like Canfor and Slocan. They ramped up production during the dispute, hoping to push their costs down. Exports from large Interior companies jumped almost 20 per cent during that period, at the expense mainly of the industry in Quebec.
Under the proposed deal, those companies would grab a big chunk of quota. Good news for them, and the communities in which they operate.
But Coastal companies, which have reduced production, will get much lower quotas. And once the quota is in place, they'll be locked out of the U.S. market again.
The deal would also hammer B.C.'s remanufacturing industry, the people who make doors and windows and value-added products. They've been hurt badly by the duties and been forced to slash production. Their temporary problems will be made permanent, bad news for the province's hope of generating more jobs per tree.
The agreement would have a faint hope clause. If Canadian provinces show they've moved to market-based stumpage, through some sort of auction system, the quota could be raised.
But only a sap would believe that's going to happen. U.S. producers have shown that they'll fight any increase in exports from Canada, and they will have no trouble in raising a wall of objections to any Canadian proposal.
And Canada and B.C., by talking tough and then caving, have made a fundamental mistake. U.S. producers have just been taught that our bluffs can be called. They will have no reason to take Canada seriously in other trade disputes.
There's no clear solution. Fighting on through legal challenges could take several costly years. And clearly, an end to the dispute has value.
But this agreement violates all the principles B.C. took into these negotiations. The government owes us a clear explanation of why this deal makes sense. And they owe aid to the companies and communities that will be the losers.
Footnote: Despite the misgivings, an end to the dispute on these terms would still be positive for the province, according to first comments from ecnomists. And share values of Interior companies rose after the announcement, and indication that binvestors think their profits will rise.

Health ad campaign a waste of your money
By Paul Willcocks
VICTORIA - Gordon Campbell used to hate those taxpayer-funded government flyers and TV commercials telling people what a great job the NDP was doing.
"Disgusting," he said. "How many people were left on waiting lists so that we could have more NDP propaganda?"
And when the NDP was slow to say what one particularly objectionable pre-election ad campaign cost, Campbell was outraged. "The taxpayers who are funding this latest exercise in NDP election propaganda deserve to know the full cost, in terms of preparation, production and distribution,'' said the then-opposition leader.
How time flies, and promises along with them.
This month every household in the province got an eight-page flyer outlining what a great job the Liberals are doing on health care, and the next wave of TV ads started. The flyer's key information is that health care costs a lot, the Liberals have increased spending, B.C. compares well with other provinces, wages are a big cost in health care and that, by the way, did we mention that we're doing a great job.
There's nothing in it than anyone reading newspapers or keeping half-an-eye on the government's press releases and speeches wouldn't have known. There's no new ideas on staying healthy, except about 50 words on the flu and a brief bit about the BC NurseLine, a useful service. (Call 1-866-215-4700 for help with medical questions. If everyone could safely avoid one doctor visit, we'd save $250 million.)
Most of the information the flyer does provide would be considered appropriate propaganda from a political party. It's fine to point out that the number of surgeries and other procedures done increased 4.6 per cent in the last fiscal year. But a government bent on communicating real information would also note that waiting lists increased by 20 per cent, and offered some explanation and solutions. Likewise, it's fine for a political party to boast of lowering PharmaCare costs for 280,000; a government should acknowledge that they also raised costs for 400,000 other people and cut the Pharmacare budget.
It is, in short, taxpayer funded political advertising, exactly like the NDP efforts the Liberals used to find so appalling.
But the Liberals have gone the NDP one better. They're keeping the cost of the individual ad campaigns secret - even though it's your money. I'd figure around $250,000 for this one. That's on top of more than $600,000 for last year's TV ad campaign on health, $900,000 to sell the Pharmacare cuts, $500,000 for a self-congratulatory education ad campaign - and of course, the campaign to try and persuade people in the Interior that the Coquihalla privatization plan was a good idea.
Health Minister Colin Hansen defends the ad spending. People all over the province want more information, he says. Groups like Hospital Employees' Union are spreading misinformation. And anyway, the money comes from the $20-million ad budget under the premier's office, not the health ministry. (That $20 million is about one-fifth less than the NDP spent.)
But there's lots of ways to provide more facts and combat misinformation without spending taxpayers' money. And the HEU - while it did advertise heavily earlier - can't compete with the access a government has to the public. MLAs' columns, speeches, press releases, TV appearances, the Internet. All there, and all free.
The argument that the money doesn't matter because it comes from the premier's office is patently silly. If some $2 million hadn't been spent selling health policy since the election, it could have been spent immediately on reducing waiting lists.
Campbell had it right before.
It's a blatant abuse of taxpayers to finance party propaganda with their money. And it's a dumb waste of the money. People form their views of the health care system from the information they gather, and more critically from their own experiences. And on that basis, most believe that things have got worse, not better, under the Liberals.
And self-serving ad campaigns aren't going to change their minds.
Footnote: Who speaks for health care consumers? Doctors have the BCMA, employees have the HEU and other unions (at least for now), the government has its PR arm. Patients don't have any collective voice; it's past time for a BC Association of Health Care Consumers.