Thursday, July 29, 2004

Notes: new subsidy for New Skeena; doctors' peace; and battling the U.S.

VICTORIA - Random notes on more taxpayers' money for the old Skeena Cellulose, a successful deal with the doctors and the risks of an environmental battle with the U.S..

Taxpayers - both local and provincial - appear to be on the hook for some $20 million in subsidies for the latest effort to revive New Skeena, the reincarnation of Skeena Cellulose.
The Liberals lasted the NDP's bailout of Skeena, which wound up costing taxpayers more than $400 million. And they've promised to end business subsidies.
But while the the details are still to come, cabinet has quietly changed the rules so northwest towns can write off taxes owed them by Skeena. The Terrace Standard reports that the towns are ready to write off more than half the $30 million they're owed in unpaid property taxes, with Prince Rupert taking the biggest hit. The province is also prepared to write off $5 million in school property taxes, the Standard reports.
Thats sounds remarkably like a subsidy. But New Skeena hasn't operated since the Liberals pulled the plug on the old company in 2001, and sold it for $8 million. It now apparently stands a good chance of negotiating a $70-million investment by The Woodbridge Company, the holding company for billionaire Ken Thomson and his family. That's about half the capital needed to restart the business.
But paying the back taxes would have gobbled up much of the investment, and Woodbridge apparently wanted a break. And now it will get it.
The move will play well in the region.
But it's tough to square with the Liberals' promise of no more business subsidies. Skeena gets a a tax break, while other forest companies - some in tough shape - have to make good on their debts.
Next date to watch is Aug. 9, when New Skeena, currently under bankruptcy protection, is back in court.

Good news for the government, and the public, in the new deal with the province's doctors. Doctors and government bashed each other when talks began last year, but this week Health Minister Colin Hansen and BCMA head Jack Burak announced a three-year deal. Doctors get no overall increase in the first two years, but about $100 million within the annual budget - about four per cent - will be moved around to meet their needs and improve care. About $60 million of the money comes from reduced payments for lab services; the other $40 million will come from unused money apparently sloshing around in the health care system.
Doctors also win binding arbitration in year three, although Hansen was quick to note that the government reserves the right to reject the deal, making it at best semi-binding.
The government made much of the fact that doctors accepted the no-wage-increase policy, like others in the public sector.
But the real win was in getting any kind of deal without a bitter dispute. Doctors, health authorities and the province are going to have to work together to make the health care system work better, and this is a good step.

Who would have thought that the toughest opposition to coalbed methane development in B.C. would come from across the U.S. border?
The province is auctioning off some leases in the Kootenays for development of coalbed methane reserves, but it's facing a fierce fight from Montana politicians and environmentalists, including the state's governor and powerful Senator Max Baucus, a frequent foe of Canada.
The reserves are near the border and an U.S. national park, and the Americans say B.C. hasn't done enough planning and investigation of environmental risks. Energy Minister Richard Neufeld says B.C. has a strong regulatory system and detailed studies aren't needed until the companies are ready to start work.
The issue of coalbed methane rates a separate column.
But the government, which is counting heavily on coalbed methane development across B.C., should be very alarmed at the U.S. opposition and the likely support it will garner in some corners of the province.

Footnote: Government can't stop fires. It can reduce the economic fallout. For the second year, tourism businesses are reporting cancelled trips by people from Europe and the U.S., who are convinced the province is on fire. An emergency fund of $2 million would be enough to counter the misinformation with some targeted messages aimed a our best markets.

1 comment:

Anonymous said...

Heh Paul, its Bill Bennett, the MLA for East Kootenay. I actually live where you write about. I am in the middle of the coal bed gas debate and the proposed coal mine debate. When do you figure you ought to talk to someone who talks to everyone and who is in this stuff up to the nuts? My cell is 250-421-9088. You and I have talked about this before. We get really tired of your lower mainland reporters writing about our world without actually coming here and without actually bothering to get all sides of an issue.


Bill Bennett