The Liberals are heading into a nasty year
By Paul Willcocks
VICTORIA - The bad news is that it was a pretty crummy year for the Liberal government.
And the worse news is that next year looks even tougher.
You can chalk up some successes. Premier Gordon Campbell survived the drunk driving conviction. Vancouver got the Olympics, a huge win for the government. There was some job growth in the Lower Mainland. The oil and gas industry did well. And there was more progress on relations with First Nations, through treaty talks and interim economic agreements.
After that, the good news gets skinny. Things didn't get worse in health or education, which is something.
But an awful lot did go wrong.
Campbell is less popular than ever. The Liberals are still doing well in the polls by B.C. standards, but have lost a lot of support.
The BC Rail sale could have been considered a triumph, if it wasn't so badly tainted by the broken campaign promise, and the premier's almost delusional denials.
The attempt to privatize the Coquihalla bought the Liberals a lot of grief, for no benefit. The botched liquor store privatization made them look both incompetent and untrustworthy, especially to people who invested big in private liquor stores on the strength of the the government's now broken promises.
And then there's economic development. This was supposed to be the year of forestry, but you sure can't see any results on the ground. The 20-per-cent tenure takeback, central to market-based stumpage, is stalled. The softwood dispute is unsettled, and the proposed deal includes quota provisions Forest Minister Mike de Jong said would never be accepted by B.C.
And despite all the talk about the Heartland, it's tough to see much activity beyond the oil and gas boom in the Northeast.
And on top of all that, there's the ugly sight of police raiding the offices of top staffers for ministers Gary Collins and Judith Reid.
But tough as it's been, next year looks much worse for the Liberals.
The economy should be better. Most forecasts have it growing by about three per cent, but good enough to jump B.C. up to the middle of the pack among provinces. The Liberals will bring in a balanced budget. And the Citizens' Assembly on Electoral Reform is the best thing ever to happen to government in North America.
But the headaches for the Liberals are going to be enormous. And they are going to come in the final 12 months before the next election.
The biggest will be in health care. The regional health authorities still have major changes - unpopular changes - to make to meet the Liberals' spending limits. Meanwhile, doctors and the government are heading towards a war as the fee agreement with the BC Medical Association expires. Doctors want more money while the government says the wage freeze applies to them. The result will be more disruptions in the health care system. And no matter what the positions are, the public always ultimately sides with the doctors. (Nurses will also be in a similar position.)
The teachers' contract will also be up, and the government is going to try and have it rolled over for another year to allow for reform of the bargaining system. Teachers don't want that; again expect more conflict.
Then there's the new mandatory time limit on welfare, which will see thousands of people lose benefits, and the continued confusion in the ministry of children and families, where a restructuring is more than a year behind schedule and budget cuts are being pushed through despite significant risks to kids.
And on top of all that, there are the big spending cuts. Spending has actually risen by $870 million so far under the Liberals. But the balanced budget due in February will include $900 million in cuts. Three ministries must cut more than 20 per cent of their budget; another five must cut more than 10 per cent. It's going to hurt.
It's a tough way to start a prolonged election campaign.
Footnote: The unknown quantity is new NDP leader Carole James. If she champions issues of high public concern - health care, education, jobs and community stability - and demonstrates competence, she'll begin to appear as an alternative for some voters. If she is seen as defender of big public sector unions, or anti-economic growth - she's already burned bridges in some coastal communities by opposing offshore oil exploration and aquaculture - Campbell will look more attractive.

Ho, ho, ho. . .

Thanks, and a wish that will change your lives
By Paul Willcocks
VICTORIA - It's time to thank you all, and offer you my one special wish, a way to change your life in less than a minute.
I sent some 36,000 words your way last year. If you stuck with me through all of them, it's as if we sat down and had a three-hour chat,
Thanks for that. Not just because if you didn't read, I wouldn't be able to do the column, and my children would be selling pencils on the street. (Though I invite you to keep that in mind anytime you consider skipping the column.)
I really wanted to thank you for letting me have this conversation with you.
Sure the work itself is fun and interesting much of the time, and there's no heavy lifting. And it's a living.
But that's not why I like to do this. The joy in this job isn't in cataloging what's gone wrong this week. It's in believing that people, given the facts and a chance to look at an issue, will generally do the right thing, and in being part of that process.
And I get to talk with you - or rant at you, sometimes - about things I think are important, or things you've told me you think are important. I get to try and provide some facts, and offer an opinion about what we should be doing to make things better.
That's why I write most often about things that have gone wrong, and am more often critical than kind. It's nice - and even useful - to take 30 seconds to think about something that's worked. But it's much more important to look at the things that aren't working, and figure out how to fix them.
I don't expect readers to end up agreeing with me. (Though of course, I always hope for that.) I've got information, and ideas to offer. But the ideas may be wrong. I'm just hoping that together we'll agree some issues are important, and worth our serious attention. (The most dangerous people in the world tend to be those who believe that their ideas and beliefs are certainly right.)
Which leads to my wish for you this year.
I'd like you to make one New Year's resolution. This year, pay attention.
Not to me, but to everything in your life.
It's racing by. That child who wants you to read a story today, she'll be gone before you know it. And you can't know where. Maybe she'll be your best friend, maybe she'll have developed a nasty crystal meth addiction. Maybe she'll be happy. Maybe she'll be dead. It's unknowable.
The only thing you do know is that you have a chance to pay attention now. To notice what her eyes are telling you, just before you turn off the lights. It's not just children - friends, strangers, lovers, the way the sun looks over the rooftops tomorrow morning. Just pay attention. You'll change their lives. You'll change the way you see the world.
it sounds kind of new age, self-absorbed even. but it's not. The first step to a better world is paying attention to the one we've got.
Go back to the reason why I like this work. It's important to me because everything I've seen of people indicates that collectively we want to do the right thing. We don't want people around us to be unhappy, denied dignity and opportunity.
If we noticed their suffering - if we paid attention - we wouldn't stand for it. We wouldn't let the government slash spending on children and families if we paid attention to the scared girl in foster care who is losing some of the meager support she had. We are not that kind of people.
So that's my wish. Pay attention. The beauty and power will amaze you.
Footnote: And further, to all the politicians I have written about this year, and will next, thanks. No matter how painfully critical columns may be, I recognize that you all have given up a lot for the simple chance to make your communities a better place for people to live. Actions can be criticized; not your motives.


Back-to-work deals bad deal for B.C. economy
By Paul Willcocks
VICTORIA - There's nothing to celebrate in the government's role in ending the BC Ferries strike or the walkout by some 10,000 coastal IWA members.
That's not to say the government was wrong. It faced a wretched situation, and given the economic importance of both operations a prolonged shutdown would have been disastrous.
But government intervention can't get at the root causes of a dispute, and often can't produce anything but the shakiest and shortest of peace.
First the ferries.
The ferry workers' union scored a huge win with their illegal, irresponsible strike. Instead of having to labour on under essential service legislation and negotiate a deal with BC Ferries, they can now wait for an arbitration award from Vince Ready. It won't be all they hoped for, but it will be much better than any deal they could have reached at the bargaining table. And the government promised not to seek any damages for their illegal actions.
The ferry workers' union learned - again - that ignoring the law and the contract they signed worked. For more than 30 years governments have taught the union that illegal strikes get results, and bring no consequences.
The blame doesn't all rest with the union.
The illegal strike was sparked by a dispute over which unionized workers would staff the ships. Since cafeterias were closed, the company didn't want to schedule people paid a premium for that work. The union disagreed. And the ships stayed tied up.
My reading of the Labour Relations Board's essential services ruling indicates the company' was right. But BC Ferries could have avoided the showdown, allowed the ships to sail with the higher-priced crew and headed to the LRB for a remedy.
Instead the service was shut down, things got ugly and Labour Minister Graham Bruce imposed an 80-day cooling off period - which the union defied until it won arbitration.
The company is seeking major clawbacks, especially in terms of contracting out language which would leave no ferries job safe. The stage was set for those demands by the Liberals' changes to BC Ferries. The company faces the possible loss of its $70-million annual subsidy in four years and will be forced to show lenders it can repay some $2 billion needed for new ships over the next 15 years. BC Ferries made about $25 million last year; it needs much bigger profits to deal with those changes.)
The IWA strike is a similar disaster. Again, the union blundered with an illegal walkout, breaking their own agreement. The company responded by imposing a new contract. And the stage was set for a hopelessly long strike.
IWA president Dave Haggard agreed to a government back-to-work order, standing alongside Premier Gordon Campbell and the companies' spokesman.
In this case, the union has lost. The deal calls for an arbitrated deal if mediation doesn't work. And it says that the agreement must consider the economic well-being of the coastal industry.
That almost guarantees major contract rollbacks.
Meanwhile, on the ground, IWA members are attacking their leadership and each other, in some cases physically.
The disintegration of the IWA as a functional union is a problem that goes beyond this dispute. It's distant from its members and unable to come up with workable solutions to the real problems faced by the forest industry.
And instead of addressing those issues, the IWA is selling out workers in the health care sector to keep its numbers up. The private health care companies taking over contracted-out support services are signing sweetheart deals with the IWA before they hire a single worker, in order to avoid HEU certification. Employees have to sign an IWA membership before they are hired. They get no say on who represents them, or the terms of their contract.
B.C. has a reputation for a lousy labour climate. The last week has done more damage.
Footnote: Much second-guessing about whether Bruce imposed the ferry cooling-off period too quickly. Probably. But based on the situation at the time, and the blockades by ferry travellers, it was not an unreasonable call. It's harder to justify abandoning any penalties for the illegal actions.

Ferry chaos far from over
By Paul Willcocks
VICTORIA - The ferry workers behaved like thugs, management substituted bravado for brains and this government - and its predecessors - set the stage for the whole mess.
And the damage done goes far beyond the current disruption.
You can’t entirely blame the ferry workers’ union for ignoring both the law and the contract they signed. It’s learned behaviour. For more than 30 years governments have taught the union that illegal strikes get results, and bring no consequences.
And that’s the lesson again. The union has won, gaining binding arbitration and a promise that the company won’t seek any damages after this strike.
Governments occasionally talked tough over the years. But their actions showed the union that law-breaking is an effective, risk-free tactic. When workers staged an illegal wildcat strike in 1997, the government promised to go after damages. Instead, the union and the corporation each ended up chipping in $30,000 for grievance resolution training, and the government forgot about the loss to taxpayers and ferry users.
So it’s hardly a shock that the union is prepared to break its contract and the law. The tactic has worked, and been accepted by government. (And the current government has given up some moral authority by breaking contracts it doesn’t like.)
Ferries management shouold have known the risk, and avoided blundering into this dispute.
The system was shut down Monday over a relatively small issue. Restaurants and gift shops were not going to be operating, so management wanted to schedule lower-paid deckhands instead of workers getting a premium for doing those jobs. They would still be fully trained union members, and my reading of the Labour Relations Board essential services order indicates management was within its rights.
But the union didn’t like it. The upside of essential services designation, from a union perspective, is that service can be disrupted without too much harm to members, who largely stay on the job. So the union refused to work.
The company’s anger at that is understandable. The union doesn’t own the ships, or decide who will staff them. But the smart move would have been to let the ships sail and head to the LRB for a remedy. The focus should be on protecting the business and reaching a settlement, not on symbolic victories and defeats. (Based on my direct experience in one strike, one lockout and too many difficult negotiations, that focus is hard to maintain.)
Instead, the service was shut down and Labour Minister Graham Bruce imposed the back-to-work order and cooling off period. The decision looks hasty today, but given the escalating stupidity at ferry terminals on Tuesday, it’s hard to fault Mr. Bruce.
The problem is far from resolved. The union’s track record suggests that it won’t hesitate to strike illegally if it doesn’t like arbitrator Vince Ready’s recommendations.
And the company still faces major financial pressures as a result of the Liberals’ move to create a semi-independent ferry authority.
Leaving aside one-time charges, the ferry corporation made about $24 million last year. But it faces immediate financial problems. The government has only guaranteed the $74-million subsidy from gas taxes for five years. And the ferry company has to borrow some $2 billion over the next 15 years, without government guarantees. Lenders will want to see a realistic projection of profits that allow the loans to be repaid.
Looking ahead five years, the company faces a potential operating loss of more than $100 million. Revenue gains, from both rate increases and more business, may help.
But the company will have to cut costs. And since wages, at $250 million, make up more than half the operating expenses, that’s where the savings will have to come. The current truce is merely a respite from the problems ahead.
It’s been a grim week, and not just for travellers and ferry-dependent businesses.
B.C.’s reputation for destructive labour relations has hurt the economy for years. This strike reinforces that reputation, at a very bad time.

Liberal MLAs shun chance to do their jobs better
By Paul Willcocks
VICTORIA - Why in the world would MLAs not want an extra tool for making sure government is working?
Liberal backbenchers on the finance committee sure didn't seem interested, as they sniped at efforts by the province's auditor general to give them just that.
Auditor General Wayne Strelioff was before the committee to answer questions about his budget request for the coming year. The auditor is an independent officer of the legislature - he works for MLAs, not the premier. They get to decide his budget.
Strelioff made his case, based on a report he'd given to the Speaker a couple of days earlier.
That was apparently a mistake. MLA Lorne Mayencourt was horrified, but not at the report's revelation that budget cuts had forced cancellation of a review of public-private partnership plans. No he was fuming because - the outrage - the report had gone to the legislature before it had been presented to the committee.
The auditor general is the truth-teller in government. Ministers want to look smart. Bureaucrats want to defend their performance. The opposition wants to make the government look bad.
But the auditor general looks at the numbers, and the facts, and lays out what he finds.
That's sometimes not in the government's interest. But it is in the public's interest.
It's not just checking the government's financial statements, although that's important. The auditor general has tackled issues like forest fire protection, issuing warnings - largely ignored - about big holes in the province's planning. He's examined the way government consulting contracts were awarded under the NDP, and found major irregularities. A recent report identified major problem with a program that pays $300 million a year to doctors. (Problems made worse because of arbitrary staff cuts by the Liberals.)
The auditor general is your friend.
And if the system was working, he would be the MLAs' friend too. Backbenchers are protective of their party. But they should also be protecting the people who voted for them.
Strelioff was explaining why his budget should be increased by $1 million, instead of being cut for the second straight year. "Now is the time for a stronger — not a weaker — independent public scrutiny of the performance of government," he said.
His arguments were sound. The government is doing a massive restructuring during a tough economic time. It's important that MLAs get information on whether it's working. It's moving to more performance-based management, which needs MLAs need to know whether the targets are really measurable, and being achieved. And any organization needs an independent watchdog to make sure things are being done right.
Last year's budget cut meant the auditor's office had to abandon a number of planned projects, including a review of the approach to public-private partnerships, an examination of how the government manages major environmental issues and education effectiveness. They all sound valuable.
It's not cheap. The auditor will get about $7.9 million in funding this year, and take in another $2 million for auditing fees. But that is about half the budget of the auditor general in much smaller Alberta.
Strelioff proposed a $500,000 increase operating funds, and another $500,000 allocated as a contingency fund in case MLAs on legislative committees wanted him to look at something. They have that power. If they chose to use it, the money would be there, pre-approved. If they didn't, it wouldn't get spent.
I'd like that. I was on the education committee, and wanted independent, fact-based information how the four-day week was working for students, I'd like the idea of the budget being there. If I ws on the public accounts committee, and wanted an independent look at the soundness of an Olympic megaproject, I'd like to know the money was there.
But these Liberal MLAs thought that was a terrible idea. The expense would show up in the budget, wouldn't it, worried MLA Brian Kerr.
It was a curious sight to see, our MLAs choosing to turn their backs on an opportunity to make government more effective.
Footnote: I could be wrong, of course. Read the transcript yourself at www.legis.gov.bc.ca/cmt/37thparl/session-4/fgs/hansard/n31204a.htm. At the meeting: Brenda Locke, Kerr, Patty Sahota, Jeff Bray, Ida Chong, Arnie Hamilton, Mike Hunter, Wendy McMahon, Dave Hayer, Mayencourt.

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.

Liberals head for extra-billing fight with doctors

By Paul Willcocks
VICTORIA - Who would have thought the Liberals would be the ones to battle doctors over extra-billing and private health care?
The New Democrats pretended nothing was going on as doctors and clinics found more and more ways to charge patients directly. Jumping the waiting list, at a price, is routine for many procedures, from surgery to diagnostic tests, and the violations of the Canada Health Act are blatant.
But the Liberals seem to have put principle ahead of both pragmatism and politics, introducing a bill that will end much of the direct-billing that has fueled the growth of private clinics.
In the process they have opened another front in what will be a bitter war with doctors over the next six months.
The Liberals are due to pass the Medicare Protection Amendment Act in the next few days. Health Minister Colin Hansen introduced the bill modestly, promising only "greater clarity to both patients and private clinic operators about billing practices for medically necessary health care services."
In fact the bill outlaws most direct billing for medically necessary procedures. It specifically bans the most common abuse, in which patients get around the ban on direct billing by having a friend pay. And it sets up tough enforcement powers and maximum penalties of $20,000 per violation.
Mr. Hansen's position is that if clinics are operating in accord with the Canada Health Act, they shouldn't have a problem.
But they aren't, as the doctors' immediate reaction confirmed. The BC Medical Association called the act "Draconian," warning it was "basically setting up a medicare Gestapo.'' And doctors complained bitterly that they hadn't been consulted.
It's tough to say how many thousands of procedures would be banned under the new act. But Dr. Brian Day, medical director of the private Cambie Surgery Centre, predicted some of the province's 50 private clinics would have to close. They would just lose too much business.
Not all direct billing violates the Canada Health Act. If a procedure isn't medically necessary - if you're just curious and want a CAT scan, or opt for a facelift - you can pay. And the federal government has legalized queue-jumping by organizations like the WCB, which are allowed to pay for fats private treatment for clients. (The Liberals used to think that was unfair, but have changed their minds since the election.)
But doctors and clinics the act to have a big impact, and everyone will feel the shock wave.
Waiting lists will grow. Leaving aside the question of fairness, every operation done in a private clinic means one less name on the waiting lists for hospital treatment.
And despite Mr. Hansen's denial, the crackdown will cause big problems in already troubled negotiations with doctors. Doctors already complain that inadequate funding has forced hospitals to close operating rooms, meaning they can't work or get paid. Private facilities - and direct billing - allow them to perform more operations and add to their incomes.
Proposing to take that opportunity away - while at the same time refusing any increase in doctors' fees under the Medical Services Plan - will lead to a major confrontation as negotiations head towards an April deadline.
Mr. Hansen says B.C. is under pressure from Ottawa, which complains the province isn't enforcing the Canada Health Act. (B.C. was docked $5,000 in federal health transfer payments this year over two direct billing cases in 1999.) The Ontario government introduced similar legislation this week.
And he may have decided that it's worth a showdown with doctors to clear away a number of issues. This week the auditor general reported major problems with the $300-million alternate payments program to doctors, which is an alternative to fee-for-service. Planning is inadequate, spending is crisis-driven and results are unmeasured, said the report, done at the health ministry's request. But any changes risk another battle with doctors.
Mr. Hansen is doing the right thing. But his timing, and tactics, are ensuring a very tough New Year for B.C.'s health care system.

CN the big winner in BC Rail deal

VICTORIA - First, count the BC Rail sale as a broken promise, and one that's being handled with a notable lack of honesty.
CN Rail is buying the railway -- a 90-year deal counts as a sale. And public ownership of the rails and land under them doesn't change that reality. The Liberals promised not to sell or privatize the Crown corporation. They broke their word.
That out of the way, is it a good deal?
It is for CN Rail, for certain. CN is paying $1 billion. But $250 million of that is buying BC Rail's past losses; CN hopes to reduce its own taxes by at least that much. If Revenue Canada turns down the plan, then the government has to give the money back.
That leaves $750 million for a debt-free railway and all its equipment and buildings, valued at more than $250 million. CN will put some extra cash in for new cars to serve the forest industry and improved container service. It will make some quick cash by selling some locomotives and 1,300 of BC Rail's existing cars.
But work with the $750 million as the investment.
The takeover will add something like $100 million a year to CN's profits. CN Rail expects to improve on that, in part by eliminating one-third of the remaining jobs and increasing the business.
So conservatively, figure that CN spent $750 million and can expects to earn about $130 million a year. That's a 17-per-cent return on the company's investment, a great deal even given the risk of buying a business that is largely dependent on volatile resource industries.
Why did they get such a good deal? Under the conditions the Liberals set for the sale, CN was the only potential buyer. If the government wanted to sell -- and they made it desperately clear that they did -- then CN was in a position to drive a very hard bargain.
The competitive bidding process was merely an exercise. The railway is integrated with CN's existing lines; CN has the infrastructure in the West that allows it cut the most jobs; CN has the chance to take control of the market and make the most money out of running BC Rail. It was always going to be able to pay the highest price.
That wouldn't have been true if the government had decided to consider a range of factors in deciding on a successful buyer, like job protection or guarantees against line closures.
But those weren't a significant part of the decision. CN gains the right to run the railway as it sees fit, abandoning lines or starting new services or selling equipment. (Line closures are barred for five years.)
And on a straight cash basis, CN was always going to be able to pay the highest price. (That may explain CP Rail's complaints that the process was unfair.)
Partly, the price just reflects market forces.
But the government weakened its bargaining position dramatically by making it clear from the outset that BC Rail was going to be sold. From the time the Liberals said they were not prepared to allow BC Rail any capital to finance improvements -- even if the corporation could make the payments out of its profits -- the sale was certain.
And knowing the government was desperate to sell quickly, CN was in a very strong position to cut a good deal.
The benefits for northern communities -- some $156 million -- will be welcome and useful. There's a significant economic development fund, and spending on the Port of Prince Rupert and a Prince George airport expansion.
But northerners will rightly wonder why they had to wait for the sale of BC Rail to see this spending.
If investing in Prince Rupert's port makes sense, it should not require the sale of a Crown corporation before the money is available.
The bottom line? A broken promise, for sure.
And a deal that achieves the Liberals' goal of getting taxpayers out of the railway business.
Footnote: The NDP was denied their usual chance to examine the deal in Question Period hours after the premier's glitzy announcement. Speaker Claude Richmond, apparently miffed at heckling from Joy MacPhail and Jenny Kwan, refused to recognize MacPhail and instead allowed a string of softball questions from Liberal backbenchers.


James should hit the road to rebuild NDP
VICTORIA - New NDP leader Carole James is a mighty popular woman around the Capital Region. Even after a dozen difficult years on the school board, through cuts and labour disputes, she emerged with what looks like a huge pool of goodwill.
Not a bad start for a new leader. Earned respect is a valuable currency.
Overall, James looks like a sensible choice for the party. She falls -- apparently -- into the middle of the NDP policy spectrum. Ex-MLA Leonard Krog was seen as more loyal to the party's traditional positions (too hard, in the language of Goldilocks); newcomer Nils Jensen as more eager to move the party to the middle (too soft); and James fell somewhere in between.
One of the big questions is just what that means. The James' campaign was long on good intentions and short on specifics. She's opposed to offshore oil development, a position that will cost the NDP votes in many coastal communities, but play well in Vancouver. She apparently believes in the need to balance budgets, while having a strong economy and healthy communities.
But it's all rather sketchy. I've yet to hear of a candidate from any party opposed to healthy communities.
The mushiness clearly wasn't a bad strategy for the leadership campaign, and will likely play well in the election campaign now barely a year away. No matter what the NDP says, they will be running in 2005 for the chance to form a larger opposition. That means voters will accept some policy vagueness.
But they will be looking for competence, credibility and the ability to reflect their interests and concerns. James' challenge is to demonstrate, in short order, that under her leadership the party can live up to those expectations.
She already has one big advantage.
She's not personally lugging the tawdry baggage of the last NDP government. The Liberals' favorite comeback to any attack on their record has been a ritualistic reference to the fast ferries.
It's a rebuke that has long grown tired; it will seem even more stale directed at James.
But the Liberals keep using the line because it still resonates.
As the polls show, it takes more than a couple of years for people to forget the bungling of a government as inept as the former NDP administration.
That's the challenge for James.
She has to explain how the NDP is now different than it was through the late-90s. How has the party's structure been changed? How has it become more broadly based, and less a party with a bias towards representing the interests of public sector unions? (James had strong support from both CUPE and the BC Government Employees' Union; the party's newly elected president is from the BCGEU.)
She has to explain how her policies differ from the past NDP regime.
And she has to show that she can bring competence and effectiveness to government.
James can do that more readily without a seat.
While the house is sitting, Joy MacPhail and Jenny Kwan can continue to question the government, with James just hitting the big issues.
That gives her the chance to travel the province and make the case for the party. (And it also avoids a highly public baptism by fire in the legislature.)
It also gives James a chance to start recruiting credible candidates, which may be the most important task in the time before the election. Even people who don't trust the NDP may be prepared to send the party's candidate to Victoria -- if they know and respect the local nominee.
That doesn't mean James will get a free policy ride, especially if the Liberals succeed in their attempts to pin her down. But it does mean voters will accept vagueness on specific issues, if they are satisfied that, overall, the party recognizes their concerns.
Footnote: James starts with a couple of other advantages. She's lived and worked mainly in Victoria, but has spent the last two years in Prince George. She's well positioned to tackle the Liberals' on their failure to make significant improvements for people living outside Victoria and Vancouver. She has inside knowledge of the children and families ministry, one of the Liberals' most mismanaged files.

Why you should care about the NDP leadership vote
By Paul Willcocks
VICTORIA - OK, it's time to start paying a little attention to the NDP leadership race.
The battered party picks a new leader Sunday morning, after a contest that hasn't exactly dominated media headlines.
That's not a bad thing. After all, the last NDP leadership race earned headlines mainly for controversy over mass sign-ups of new members and allegations of dubious practices. (Who can forget Moe Sihota's claim that he had boxes of signed membership forms in his basement, but hadn't decided whether he'd actually send them to the party?)
But it's worth tuning in now, in part because the convention should be entertaining - at least there's a real race - and in part because the NDP may be sick now, but it will likely be a political force again.
The generally acknowledged front-runner is Carole James, who has the support of Jenny Kwan, Svend Robinson and the province's biggest public sector unions. She live in Prince George now, where she has been working with a First Nation. But she did live in Victoria, worked for the government and was the long-time chair of the Victoria school board and the BC School Trustees Association. James came within a few dozen votes of winning a Victoria seat in the 2001 election.
She's got a good reputation down here, and has built a broad base of support. Her campaign has been a bit mushy, long on generalities and weak on specifics. But broadly, she's a centrist candidate in the NDP world.
Chasing her is Leonard Krog, a one-term MLA from Nanaimo who was part of the Harcourt government. Krog's a lawyer, and he's won backing from a number of party leading lights, including a former premier Dave Barrett, and ex-ministers Dale Lovick, Tim Stevenson and John Cashore.
Krog has pitched his skills and experience, and green credentials. Like James, he's towards the centre of the field in terms of traditional NDP values, although most observers would likely position him slightly farther left. (What does that mean? He's more likely to defend past NDP policies, and more likely to slide fiscal restraint backwards as a factor in decisions.)
Figure that those two will emerge as the first ballot leaders.
But close behind should be the most intriguing candidate, party newcomer Nils Jensen.
Jensen faced an uphill run. He joined the party days before entering the race, although he can note that as a Crown prosecutor he needed to keep his distance from politics. But he donated money to Liberal Sheila Orr's campaign, a move that raised NDP eyebrows.
Jensen has run the strongest, most interesting campaign. He has positioned himself as the candidate to help the NDP start fresh by moving towards the centre and building a coalition of those dissatisfied with the Liberals. (When candidates were asked about free university tuition at a leadership forum, only Jensen said that it was a bad idea because the province can't afford it.)
He's lined up some impressive support, with Corky Evans agreeing to head up a panel on resource communities and former premier Dan Miller backing his bid.
And Jensen, as the chair of Greater Victoria's water district board, has been irritatingly green, a move that should allow many environmentalists to return to the NDP.
There's three other candidates, including former MLA Steve Orcherton who is the staunchest defender of the party's old path. But their significance likely rests more on where their support will go on the second ballot.
The race is too close to call. And whoever wins faces the prospect of at least five years in opposition.
But the NDP has managed to find several candidates who could move the party on the road back to credibility with voters.
The fastest progress - and maybe the riskiest, given the number of unknowns - would likely be under Jensen.
Footnote: One striking element of the race is the lack of candidates from the Interior and North, where at the NDP currently has the strongest support. Krog's from Nanaimo; James has been in Prince George for more than a year. But the candidates really represent urban B.C. Jensen's link with Evans is a useful one for developing rural support.


Don't blame trustees for school fund shortage
By Paul Willcocks
VICTORIA - School trustees should be mighty steamed at Education Minister Christy Clark.
Clark has just made the baffling claim that the reason parents aren't happier with their school system is that - wait for it - that school trustees have been socking money away in the bank, instead of spending it on kids.
Now even without looking at the facts, that seems a little odd. It's hard to see why all across the province, people ran for trustee - a job that pays poorly, takes a huge amount of time and involves a great deal of pressure - for the purpose of hoarding cash.
Look at the facts, and you see Clark's claim is empty.
The criticism comes because audits show the school districts finished up last year with a surplus of $145 million last year. Too much, Clark says. The districts are hoarding money instead of spending it on children.
"We allocated an extra $92 million in the last two years to school districts and still parents are telling me they don't see that in improved services in classrooms," she says. "Now we know why. There's $145 million that's been socked away."
She should know better.
First, more than one-third of the surplus was created because the education ministry came up with a last-minute $50 million for school districts weeks before the fiscal year ended. That was welcome. But it would be irresponsible - and ineffective - for school districts to rush out and spend the money before the year-end. In fact, they generally set aside the money to reduce the cuts needed this year.
That leaves about $95 million. Not small change, but only a little over two per cent of district spending. Districts are supposed to be balancing their budgets; that seems pretty close.
But in fact, trustees say, almost all the money was actually committed at year-end. I live in Saanich, where Clark's tally would claim the school district had a $2.9 million surplus at year-end, money that should have been spent.
But about $1.2 million was money allocated too late in the year to be spent effectively. Another $1.2 million had been saved by schools, through cost-cutting measures, and set aside for needed equipment like photocopiers or shop tools. Still more money had been reserved for purchases that had already been made, even though the invoice haven't been received.
It all sounds sensible. And the money has hardly vanished. In fact it's already been spent on education.
So why are parents complaining to the minister?
The best guess is because the Liberals have decided to squeeze education funding. The announcements make much of funding increases for schools. But the extra money the government has found is barely one per cent a year. The education ministry budget was $4.8 billion in the Liberals' first year in office. It's $4.8 billion today.
That isn't enough money to keep on providing the same services. (Remember, the province gave teachers a 7.5-per-cent pay increase, but only provided the money to cover one-third of it.)
So trustees did what they could to reduce costs, and some of those changes hurt the quality of education. Districts did not move to a four-day school week so children would learn better; they did it because they couldn't afford to offer a five-day program.
The government has decided that education costs have been increasing too quickly, B.C. is bucking a trend. Ontario's former Conservative government reviewed its three-year education funding freeze before the recent election, and found that it was a damaging mistake.
And Alberta's Ralph Klein has promised to act on a government report that called for an immediate $137-million funding increase to reduce class sizes, and a $500-million annual spending increase over the next five years.
The government would do better to defend its decisions, instead of trying to dump the blame off on school trustees.
Footnote: More headaches ahead. The teachers' contract expires next June. They want a raise; the government has rejected any public sector pay increases. And a just released report recommends a total overhaul of the hopeless bargaining process. The government is going to want to put talks off until after the new process is in place - and the next election.

By Paul Willcocks
VICTORIA - Christy Clark either lacks financial skills, or has chosen to pick a pointless fight with school trustees.
The education minister criticized school boards because financial statements show they finished last year with a collective $145-million surplus.
Parents aren't happier with the school system, she concludes, because school trustees are hoarding money instead of spending it on children. "We allocated an extra $92 million in the last two years to school districts and still parents are telling me they don't see that in improved services in classrooms," Ms. Clark says. "Now we know why. There's $145 million that's been socked away."
I hope she's not serious. Even a cursory look at the facts shows the claim makes little sense.
More than one-third of the surplus is Ms. Clark's doing. With only weeks left in the last fiscal year the province came up with an unexpected extra $50 million for schools. That's great, but to criticize school districts because they didn't rush out to blow the money is ridiculous.
That leaves less than $100 million as the year-end surplus, barely two per cent of spending and hardly a fat cushion for districts trying to avoid deficits.
Ms. Clark should also know that almost all the supposedly surplus money was already committed at year-end. My local school district had, by Ms. Clark's reckoning, a wasteful $2.9-million surplus.
But about $1.2 million was money received too late to be spent effectively within the fiscal year. Another $1.2 million had been saved by schools, through cost-cutting measures, and set aside for needed equipment. Other money has been reserved for purchases that had already been made, even though the invoice haven't been received.
Other school districts have similar logical, prudent explanations.
So how to explain Ms. Clark's puzzlement about why additions to school funding haven't produced any greater parent satisfaction?
The answer is simple. The increases - barely one per cent a year - aren't enough to cover increasing costs, and don't allow districts to maintain existing services to students. The education ministry budget was $4.8 billion in the Liberals' first year in office. It's $4.8 billion today.
In that time teachers' wages - under a government-imposed contract - were raised 7.5 per cent. The government only funded one-third of the increase. Other costs have also outstripped funding increases. So trustees have had to cut programs, close schools and shift to four-day school weeks.
Cost increases - not for new services, but to maintain the existing ones - were greater than the districts' revenue. They made spending cuts. And that's why Ms. Clark is hearing concern from parents.
It's hard to see why Ms. Clark would start this public spat. Trustees, for the most part, have grumbled about inadequate funding, but then tried their best to make them work.
And while effective spending is still seen as important, the political tide appears to be turning toward more funding for schools.
Ontario's former Conservative government reviewed its three-year education funding freeze before the recent election, and found that it resulted in school boards cutting services to students each year. The government pledged to restore the needed money - about $600 million a year - but voters still turfed them out.
In Alberta, Ralph Klein has promised to act on a report from a government commission that called for an immediate $137-million funding increase to hire more teachers, and a $500-million annual spending increase over the next five years (The proposed Alberta standards would call for much smaller classes than in B.C.)
Even in B.C., a legislative committee dominated by Liberal MLAs sounded a warning as this year's budget was being prepared. "The shortage of funds is reaching a critical stage for rural schools and schools-based programs in urban areas," said their report on budget priorities.
If parents are complaining to the minister, she should listen.
And she should acknowledge that it's the government's funding decisions, not some year-end

Step 1: MLAs stand up to enviros. . .
By Paul Willcocks
VICTORIA - Some people are getting excited because Liberal MLAs have been pushing back a bit at protesters by standing up for salmon farming and logging.
Bill Belsey and Rod Visser got the ball rolling, showing up last week at an anti-fish farm protest at a Safeway in a posh Victoria riding. The Forest Action Network wanted the store to quit selling farmed salmon.
Belsey, from Prince Rupert, and Visser, from north Vancouver Island, made their way past the protesters, bought some farmed salmon and came out to defend the industry.
Next Chilliwack MLA Barry Penner showed up at a press conference where the Forest Action Network, the David Suzuki Foundation and three other groups announced they were urging Chinese buyers to boycott B.C. lumber. The groups took a half-page ad in The China Daily and sent emails to 8,000 lumber buyers in China. They say too much clear-cutting continues, old growth is being logged and habitat threatened.
Liar, said Penner, taking the most offence at a claim that logging threatened spotted owls in Penner's own riding.
There's nothing wrong with the MLAs speaking up for their constituents, politely and reasonably. It's ironic, maybe, that Penner showed up uninvited at the environmentalists' announcement. The Liberals keep security tight for their own events to prevent such a happening.
But speaking for their constituents - especially when their jobs are at stake - is part of what effective politicians do.
And unfair campaigns - like the effort to get China to boycott B.C. wood - do cost people jobs.
The boycott call came as Premier Gordon Campbell was in China trying to convince people that wood-frame housing makes sense, and that B.C. is the best supplier.
China's not a big market for B.C. It's the world's second largest wood importer, but uses little of the kinds of lumber we produce. But that's expected to change, and New Zealand and other exporting countries are competing with B.C. to get into the Chinese market.
There's lots of room for debate on B.C. forest practices, and it's legitimate for groups on either side to pressure government.
But their tactics need to show balance and judgment. And nothing in today's B.C. logging practices justifies sacrificing workers, families and communities to an environmental pressure campaign. A boycott call, when resource communities are already struggling, should be a desperate last measure. Instead it looks like a cheap and callous publicity stunt.
Likewise, there is room for debate on salmon farming. The industry has behaved irresponsibly, and government oversight - under the NDP and the Liberals - has been weak.
But the best science indicates that, properly managed and regulated, the industry can produce food safely and efficiently. It provides jobs where there are few other options. Pushing Safeway to stop selling farmed fish puts those jobs at risk; it's not surprising that Belsey and Visser would push back.
Is it part of a co-ordinated strategy? Probably, since MLAs don't do much without checking with their masters. It would be helpful for the Liberals to have MLAs seen publicly as defenders of their constituencies.
But only moderately helpful.
Many people are looking for signs that their MLAs are defenders of their communities within government, and they aren't seeing that. The MLAs, in fairness, often argue that they are raising the issues, behind closed doors.
But what communities see are health care cuts, and more closed stores on main street. They see the Coquihalla slated for sale, or the loss of hundreds of jobs due to the sale of BC Rail.
And while they don't expect MLAs to attack the government, they do expect their concerns to be raised. A Liberal MLA may not be free to oppose the idea of selling BC Rail, but he can argue publicly that the proceeds should all go into an economic development fund for the province's Northwest and Interior.
Here's hoping the trend to outspoken MLAs grows.
Footnote: Rural MLAs should be cheered by a new hire in the premier's office. A new deputy minister - at somewere between $130,000 and $200,000 - has been hired to try and get land use issues resolved more quickly. Jessica McDonald has been working as a consultant for five years in the same area. Her hiring responds to the continued complaints about stalled land use decisions.
willcocks@ultranet.ca


Why a higher liquor tax makes sense, and other notes

VICTORIA -- Capital punishment, or random notes from the front:

It's tough to get too enthusiastic about Green leader Adriane Carr's pitch for a junk food tax. (Though it did get her some needed news coverage.) It's too complicated and a hassle for stores, even if it is right to make people pay for their sins.
But B.C. school trustees' call for a tax on alcohol to pay for support services needed by students with fetal alcohol syndrome makes good sense.
We already accept taxes on alcohol. And B.C. could be the first province to do a true needs-based fetal alcohol strategy, helping those already affected and making prevention an obsession. Say the whole deal would cost $50 million a year. A $20 bottle of gin would cost 50 cents more.
The benefits would be huge. Kids with fetal alcohol damage lead immensely difficult lives, often veering from disaster to disaster. Helping them, or making sure that no more children are born damaged, will save lives and save millions.
It's a stunningly simple, painless way to deal with a major social and criminal problem, and save thousands of people from suffering.


The legislature works. Prince George-Omineca Independent MLA Paul Nettleton asked about the recent U.S. ruling that B.C. Hydro's trading arm had done nothing wrong during the California energy crisis. What did the ruling mean, and was there still money owed that California didn't want to pay?
And Energy Minister Richard Neufeld answered, clearly and without spin. Yes, it was a big victory for Hydro. Yes, some $282 million is still owed and in dispute. It was the kind of response you'd give if someone asked you a question.
And for that, Neufeld deserves our collective thanks for showing how the legislature could actually function. (I know, you're wondering why a straight answer qualifies as a great moment. Tune in to Question Period at 2:15 each afternoon and see.)

Things went less well for another minister a few days later. NDP leader Joy MacPhail asked Transport Minister Judith Reid why the government wants to sell B.C. Rail when it's profitable. The good times won't last, Reid said. Forest companies have just been rushing wood out because of the softwood dispute.
"That is creating an unusual situation in the marketplace that is leading to increased traffic on B.C. Rail," she said. "That is not sustainable." It was an easy set-up for MacPhail, who leapt on the prediction of even worse times ahead for the forest industry.

Premier Gordon Campbell is taking a calculated risk in the B.C. Ferries contract talks. Campbell stepped in to say he might not accept an LRB ruling on essential ferry services during a strike. Campbell was sending a message to ferry workers -- be careful about striking, because I can legislate you back anytime, and I'm ready to do it.
The immediate risk is that anytime the premier starts talking about ferry strikes, businesses in ferry-dependent communities suffer. Rumours of a strike are enough to persuade people that a weekend on Saltspring might be risky.
The premier's comments also acknowledge reality. Despite all the effort put into spinning off B.C. Ferries as an independent authority, the public will hold the government accountable when things go wrong.

The crime issue is turning out to be a rough one for the Liberals. The NDP has been pressing the government on when it will keep a campaign promise to transfer 75 per cent of traffic fine revenue to municipalities for increased policing. The Liberals say - rightly - that they only promised to provide the revenue sometime in their first four-year term, and they will. But it's tough to talk about the need to get tough on crime now while putting off a pledge to give communities money they need for policing.

And, finally, the premier's attendance record for Question Periods this session. To date, the legislature has sat for 16 days. Campbell has made it to five, thanks to a busy schedule of trade missions. For more than a century premiers have made it a point to be around while the legislature is sitting - it's only 71 days this year - to lead the government and answer questions from MLAs and people like me. Times have changed.
willcocks@ultranet.ca

Liberals take on princely powers to push development
By Paul Willcocks
VICTORIA - The Liberals' latest economic development bill looks remarkably like something Glen Clark might have written.
It's called the Significant Projects Streamlining Act. But it could as easily be called the 'Making the Premier King Act.'
The idea is that it's too hard to get approvals to build things or open mines in B.C., despite the Liberals' pledge to get rid of regulations and make government work better. Approvals take too long, municipalities ask too many questions and things don't get done quickly enough to keep the developers happy.
And the Liberal solution is to give cabinet - which means the premier - the power to designate any project as "significant." Once that's done, cabinet can rewrite the rules, or eliminate them, and make sure the project gets approved in short order. The people behind the project only have to persuade the cabinet that it's a good thing, and with a wave of the pen almost all obstacles can be made to disappear.
It will be convenient. Anyone who has tried to add on to a house or build a new deck would recognize the benefits of being able to skip all those building inspections and plan approvals.
And it's a useful part of the sales pitch for the premier when he courts new industries. What about regulations and approvals, the proponents can ask? No problem, says the premier. We'll designate this a significant project, and the only approvals you need are from me.
If you were a developer, you would love it. And if you were premier, you would really love it. You could get a lot done, quickly, if you didn't have to worry about public consultations or municipal bylaws or planning and zoning restrictions. Attractive idea, public benefit, pressing need - clear the track.
But taxpayers shouldn't be quite so welcoming. This is the kind of approach, after all, that brought us the fast ferries. It could be that we need a stringent approval process most when cabinet or a premier has fallen in love with a project.
Here's how it would work in real life. You would convince a cabinet minister or the premier that the your plan for a new racetrack would be great for the province, And you would warn that it has to be built quickly, or the project couldn't go ahead.
Once the cabinet designates the racetrack a significant project - and their power to pick a public or private partnership is unlimited under the proposed act - things start happening.
If you've got a problem with approvals or zoning, or neighbours are demanding to be consulted, or municipalities are worried about traffic congestion when 200,000 spectators head to the race, you can go to the premier or a cabinet minister. He can order a facilitator to try and resolve the problem. And if that doesn't work, cabinet can just give you a green light to go ahead without the required approvals, on the terms he choses.
There are few limits. The laws says cabinet can't ignore or over-ride provisions of the Agricultural Land Commission Act or the Environmental Assessment Act. But every other act, or any municipal provisions, can be ignored to get a project built more quickly.
Some municipalities are onside, keen to see development come more quickly. And the province does need the jobs.
But taxpayers should be worried. The temptation to take shortcuts - for Olympic projects, the hugely expensive RAV line, new public-private partnerships, a power plant, mine or resort - will be huge. And decision-making will move from the public arena to behind the tightly closed doors of cabinet and the premier's officer.
It's the kind of extraordinary power that should include safeguards and protection for the public interest, or be restricted to clearly defined project types.
But that's not what the bill does. Instead, it confers near absolute power on cabinet.
And that, no matter how good the intentions, should be worrying.
Footnote: The bill is a confirmation of just how much trouble the Liberals have had delivering a streamlined, clear approval process. After more than two years, Industry and developers are still complaining of regulatory overlap and unreasonable delays. Municipalities, and front-line provincial staff, come in for much of the criticism.



Tough talk on youth crime mostly - and wisely - empty
By Paul Willcocks
VICTORIA - There's much less than meets the eye to the Liberals' youth crime bill.
That doesn't mean the new law isn't useful. While politicians love bold initiatives - because we do - small, smart changes often make more sense.
The spin - dutifully reported - was that the new law would see more youths go to jail for doing bad things like trespassing on school grounds to recruit gang members or coerce kids into the sex trade.
The maximum penalty for those offences has been a fine or probation. Now the courts will be able to jail offenders for 30 days.
The government's news release, Solicitor General Rich Coleman and even Premier Gordon Campbell talked about getting tough with young offenders. Earnest reporters trotted off to make sure there would be enough jail space.
But the reality is that almost nothing has changed. Only a few more kids will likely go to jail - which is a good thing.
There's nothing wrong with the changes. They send a signal that certain offences are viewed seriously. There's a remote chance that they'll make some kids think twice, although that's not likely. The average 15-year-old offender is not great at considering consequences. If he was, he wouldn't be doing dangerous things.
And the changes give principals another weapon. If a problem youth won't stay away from the school - whether he's trespassing to get in a fight, sell drugs or just hang out - then school act charges could, in an extraordinary case, result in a few days in custody.
But it's going to be a mighty rare occurrence. All across B.C. only 51 trespassing charges were laid last year under the school act. (There are more than 1,800 schools.)
A few more charges may be laid. And a few youths may spend a couple of days in jail, when they're a real nuisance around a school and police can't figure out a way to make more serious charges stick. But charges will be scarce, and probation the norm.
That's good. Some youths need to be locked up because they're a danger to others. Some kids benefit from a few days in custody so people have a chance to try and help them.
But mostly kids who are locked up learn to be better criminals. That's why the number of youth in custody has fallen by 40 per cent in the last three years.
So if the bill's measures really represent only an almost insignificant, though useful change, why all the tough talk from the Liberals?
They've decided it's a good idea to be seen as tough on crime. That's why Solicitor General Rich Coleman, who does a good tough bit, did the talking about what was really Attorney General Geoff Plant's bill. That's why the news release talked about tougher penalties for kids who trespass on school property for gang activities or sexual exploitation, when really the penalties apply to all school trespass. Usually, it's drug dealing or picking fights that results in charges, not pimping.
It's a risky tactic. Practically, the public loses if our approach to crime is simplistic. It will take much more than tougher penalties to make communities safer. Most criminals don't think about the penalties first.
And politically, the Liberals are on thin ice. People are already worried about the effects of the government's policies on crime rates. And next year Coleman's ministry plans to cut $19 million - about eight per cent - from spending on policing and community safety. Probation officers will have larger caseloads, and supervision of people on house arrest will continue to be lax.
It was a good bill. The changes, although small, are useful.
But the Liberal spin was worrying. We don't need slogans about crime - from either the 'lock-em-up camp' or the 'it's-all-someone-else's-problem camp.'
It's going to take smart, complex - and in the short-term costly - programs to deal with our crime problem.
Footnote: The media - that's me - needs to take a look at our work on this one. Our crime reporting is consistently misleading, giving an overblown sense of the risk. Look around at your family; in B.C., they are 10 times more likely to kill themselves than they are to be killed in some crime.

Liberals should come clean on welfare time limits
By Paul Willcocks
VICTORIA - If the Liberals' radical plan to chop people off welfare makes sense, why are they afraid of telling the truth about it?
B.C. is set to become the first province with mandatory time limits on welfare. If the government deems you employable, you will only be allowed to collect welfare for two years in any five-year period. The first people will hit the deadline April 1.
What will that mean? How many people will lose benefits, and what will become of them?
Human Resources Minister Murray Coell won't say.
He has the information. The ministry has built its budget on reducing the number of people on welfare, and plans to cut spending by $200 million next year. It has calculated how many people will hit the time limits.
But it's a secret. On documents obtained under the freedom of information act, the numbers are blanked out.
Coell won't provide the information. Instead he started a recent newspaper column by trashing people who had concerns about the plan. "People who are opposed to this government's time limits policy are really saying that they are in favour of 'welfare forever' for individuals who can work," the minister wrote.
It was bad enough when Coell talked such rubbish as he avoided questions in the legislature. We're used to such foolishness here. But it's insulting to be told that if you don't unquestioningly follow the Liberal line you're some sort of crazed spendthrift who wants to see people on welfare.
In fact there are important, legitimate questions about the Liberals' radical policy. Some leaked documents suggest 29,000 people will lose benefits, about half the welfare recipients deemed employable.
The government should provide its estimates. It should say how many people it expects to find work, and how many will leave the province. It should reveal how many will be be forced into homelessness.
And it should explain what will happen to a single parent who has received welfare for two years, is hired and then thrown out of work when the business closes. With no welfare or employment insurance, and no savings, what will become of her family while she seeks a new job?
Provinces, including B.C. under the NDP, have made welfare tougher to get. They have used a combination of incentives, job training and punitive measures to push people into the workforce.
That's a good thing. Welfare is a terrible and destructive way to live. Escaping - even for children growing up as welfare's next generation - is hugely difficult. Coell can take pride in successfully reducing the number of people on welfare since the election.
But the public needs straight answers about the coming time limits. Across Canada, if you can't find work and have no money, then you are helped. But now in B.C., if you use up your two years, then you fend for yourself. (Many recipients are exempted, including those with disabilities or multiple barriers to employment. If you have very young children, you won't be cut off, but benefits will be reduced.)
Coell says people who want jobs will be able to get them. The government is spending $75 million a year on job placement and training, he says, and contract agencies have 10,000 jobs waiting for welfare recipients.
Critics say the move will result in serious hardship. With a weak economy, unemployment over nine per cent and some 200,000 people already looking for work, job prospects are bleak for unskilled welfare recipients.
If the Liberals have a sound plan, based on realistic projections and an accurate assessment of the job market, they should come clean. Coell should explain where the needed jobs will come from, and who will be affected and how.
The fact that he is hiding the truth from the public raises serious doubts about whether the Liberal plan makes sense.
Footnote: About 20,000 people have moved from work to welfare in the first 28 months of the Liberal tenure, Coell says. That raises new questions about the likelihood that a greater number can find work in the coming 12 months. Communities and social agencies need to know how big the impact will be when the new rules kick in.


Join the campaign for bring-your-own wine
By Paul Willcocks
VICTORIA - OK, enough with the life-and-death matters of government, of tax cuts and health care and welfare.
Why can't we take our own bottle of wine to a local restaurant for dinner?
Albertans can, as of this week. The government looked at its liquor regulations and realized it was none of the state's business whether people could bring a bottle of wine into a restaurant.
The decision should be up to the restaurant owner, and the diner. There's no need for government red tape to set the rules, Alberta's Conservative government decided this month.
So tonight in Red Deer someone is going to stroll into their neighbourhood restaurant with a $9 bottle of B.C. red tucked under her arm, order a steak sandwich, and enjoy a dandy, low-cost meal. Here, that same bottle of wine will cost $20 or more.
Why not free choice for restaurant owner and diner here, in the land of deregulation, where red tape is to be pruned like so much ugly, tangled growth choking the life out of us?
That's your fault.
Solicitor General Rich Coleman is the man in charge of liquor regulations in the province. There doesn't seem to be any big public policy question involved, he says. Nobody has raised the BYOW issue, he says, so he hasn't given any thought to the idea of allowing British Columbians the freedom to bring their favourite wine to dinner out.
So let's raise it.
There's not a single legitimate argument to justify a role for government in dictating that outside wine is some toxic substance in restaurants, while a bottle plucked from a fat wine list is OK.
Many restaurants won't be keen on the change. Wine is an important profit centre, bringing in up to 20 per cent of revenue for full-service restaurants. Restaurants generally sell it for twice as much as the liquor store cost. Since there's no preparation, that's a tidy profit. Take that away, and food prices may rise, restaurants warn.
Maybe. But perhaps restaurants would find themselves just a little busier if dinner for two cost $25, not $50, because people would eat out more. Maybe those empty tables would be full, and the extra business would more than cover the lost wine revenue.
Or maybe not. But surely that's not government's problem. If I want to take a bottle of wine to dinner, and the people around the corner at Wonder Wok think that's OK, there's no reason the government should be bossing us around.
It's important to remember that the changes in Alberta don't force restaurants to let people bring in wine. The owner gets to decide. If owners value the mark-up, or think it important that the servers pair the right wines with different foods, they can just say no to outside wine.
But if they don't want to stock a wine cellar, or think more people would come if they could BYOW, then they can say yes. So far, many Alberta restaurants have made that decision. (Restaurants can charge a corkage fee for opening the bottle and providing the glasses.)
Alberta's not breaking new ground. Quebec restaurants have the option of having a wine list or letting customers bring their own. A whole segment of moderately priced, casual bring-your-own restaurants has sprung up.
But Alberta is going further, allowing restaurants to choose to serve their own wine while welcoming customers who bring their own. (Most U.S. states and many countries take the same approach.)
Restaurants and their customers get freedom of choice, wine stores pick up some more business, and red tape gets shredded. No wonder the Alberta government embraced the policy.
And surely the B.C. government would too, being just as ardent exponents of choice and free markets.
That leaves it up to you. Want the right to bring that special bottle to your anniversary dinner at the Club Cafe?
Tell Rich Coleman, and your MLA.
Footnote: Giving restaurants and diners freedom of choice would also be a nice gesture to the people who spent money planning and building private liquor stores believing the government was serious about getting out of the business. Now that the Liberals have abandoned that plan, the owners could use the chance to sell a few extra bottles of wine.

The old Campbell would have seen a conflict question
By Paul Willcocks
VICTORIA - First day back in the legislature, and NDP leader Joy MacPhail raised what seemed to be a pretty good question.
As the Liberals were hard at work on their energy plan last year, they decided to hire some expert outside help to present it to the public. They turned - as the NDP had in the past - to National Public Relations' Vancouver office, and signed a $22,000 contract with Marcia Smith.
No harm there. In a perfect world governments would be able to handle these kind of things with the large gang of people on staff who charged with communicating with us. But in a perfect world I'd be smarter, too.
However only days before Energy Minister Richard Neufeld's department hired Smith, she had registered as a provincial lobbyist for the Canadian Coalition for Responsible Energy.
Sounds nice, doesn't it? There's not many people about to organize a counter group, the citizens for irresponsible energy.
But the coalition would be more accurately labelled the Canadian coalition of businesses worried about getting hurt by the Kyoto Accord, especially the oil and gas and coal industries. (There is no shame in being in that group; many good questions remain about the accord's approach to reducing greenhouse gases.)
Now those two jobs would strike many people as a problem. Smith was working for a special interest group to make sure it's anti-Kyoto Accord message was heard by the Liberal government. And then she's hired - at the same time - by the same government to develop a plan to explain their new energy policy to the public and stakeholders.
If it's me, and I'm sitting in my office on a grey Sunday morning putting the finishing touches on the communications plan, I'm going to wonder - did I add this sentence because it's the best for the government, or best for the companies that I'm lobbying for?
And even if I'm sure I've kept the roles separate, I'm going to wonder how this would look.
Neufeld ignored the questions, just filled in the time with a lot of blather about how great the Liberals are and how bad the New Democrats were. If you asked your kid a simple question and they answered with a lot of self-serving irrelevancies and ignored the real issue entirely, you'd wonder where you'd gone wrong. In Question Period, it's par for the course.
But an hour later Premier Gordon Campbell did a rare session with reporters in the waiting room outside his office and faced the issue.
He didn't see a problem, the premier said.
But couldn't the public wonder at the impartiality of a consultant drafting a plan to emphasize some parts of the energy policy and downplay others, who was also being paid to influence government energy policy? Couldn't it make people nervous to know that a person registered to lobby for an industry group was getting an advance look at the policy?
No, said the premier, and anyway the lobbying was about the Kyoto Accord, not energy.
But surely the province couldn't have developed an energy policy without considering the Kyoto Accord?
"Absolutely," said Campbell. Kyoto didn't even figure in the energy policy.
Anyway, he added, it's not the government's problem. The contract says it's up to the consultant to tell the government of any potential conflicts. The government is clean.
Here's how to figure out who's right, Campbell or MacPhail.
Cast your mind back a few years, and imagine it came to light that the NDP government had hired a consultant to help launch a new labour law policy. And imagine that it turned out the same consultant was being paid to lobby on behalf of the a group of big unions on the same issue.
I'm guessing Gordon Campbell would have found something wrong about that.
Footnote: Give the Liberals full credit in one area. The issue arose because they passed a law requiring lobbyists to register and disclose who they're working for, on what issues and who they're contacting in government. The lobbyist registry was an important step forward in accountability and openness, and the government deserves full marks for putting it in place.


Who sent a Canadian citizen to a Syrian jail?
By Paul Willcocks
VICTORIA - A Canadian citizen is snatched by U.S. police while changing planes in New York. The Americans send him to Jordan, then Syria, against his will. He spends a year in jail without being charged, facing a secret trial. Then he's returned to Canada without explanation.
And our government, the people who are supposed to be protecting Canadians from abuse, wants to keep the circumstances -- including its role -- a deep, dark secret.
Maher Arar was on his way back to his Ottawa home from a Tunisian holiday when he was arrested in New York and sent to the Mideast. American police or the CIA apparently considered him a suspected terrorist.
But what's supposed to happen in such cases that the Americans can either hold a suspect, if they have charges, or deport him to Canada.
So why was Arar, a software engineer, sent to Syria, locked up for a year and separated from his wife and two young children without any charge? What role did the Canadian government and the RCMP play in the affair? And now that he's released -- having missed a year of his childrens' lives while languishing in a Syrian jail -- what justification was there for the snatching of a Canadian citizen by three foreign governments?
None of your business, says the federal government. He's back in one piece, so just drop it. (I'm paraphrasing.)
It's not just Arar who wants answers. MPs from all parties have been trying to find out how and why this happened, and what role the Canadian government played.
They especially want to know whether the RCMP set Arar up, sharing intelligence with the U.S. that led to his imprisonment. (But not to any supportable charges.)
That seems a reasonable question.
But Solicitor General Wayne Easter won't answer the MPs' questions. "Aren't you as mad as a wet hen that [United States officials] took a Canadian citizen and sent him to a Syrian gulag?" Liberal MP John Harvard demanded at a foreign affairs committee meeting this week.
Easter isn't mad. He stonewalled the committee. Discussing RCMP operational matters could compromise continuing investigations, he said. That's the same non-answer RCMP assistant commissioner Richard Proulx tried when he appeared before the committee.
MPs -- again, including Liberal MPs -- wanted to know what role the RCMP played in the arrest and whether they had told the Americans to grab Arar and send him to a Mideast jail. Proulx wouldn't answer. I'm the police, you're just MPs. Beat it. (I'm paraphrasing again.)
Prime Minister Jean Chretien said pretty much the same thing. "Every time that we have a problem in government we cannot have an inquiry on everything," he said.
A problem in government? A Canadian citizen is snatched and transported to Syria against his will, with no charges and no hearing, no access to a lawyer. He's questioned by the CIA, and his own government is denied access to him.
The rule of international law, and basic principles of human rights, were tossed aside.
Canadians deserve answers. Did the RCMP play a role in Arar's detention by the U.S.? They won't say, but the Americans say they grabbed Arar because of information provided by Canadian police.
Did the Canadian government play a role in having Arar sent to Syria -- the country he left 17 years ago as a teen? Was there an attempt to get around Canadian law, where some evidence is required before a person is arrested, by conspiring with the U.S. and Syria?
MPs from all parties haven't been able to get the answers to those questions, stonewalled by police and federal ministers.
The only solution left is a full, independent inquiry.
Our laws hold us all responsible for our actions. They are also intended to protect us from abuse by our governments.
Canadians need to know whether the government decided a citizen's rights didn't matter in this case.
Footnote: The Arar case also highlights the drift in Ottawa, where Chretien and Paul Martin are both acting like prime ministers, with the result that neither is really accountable for the decisions now being made. Chretien's desire to stay in power until February looks increasingly destructive.

BC Liberals, NDP get warning from Ontario vote
By Paul Willcocks
VICTORIA - Both the NDP and the Liberals in B.C. could take a lesson from the Ontario election.
Voters turfed out the Conservative party, choosing to place spending on health, education and infrastructure ahead of tax cuts.
The Ontario Conservatives have been frequently cited as an example of how things should be done by the Campbell Liberals. Mike Harris took power promising a "common sense revolution," which would include big tax cuts and spending reductions.
Eight years later, his party is gone.
There's lots of factors - this is, after all, Canadian politics. Harris was succeeded by Ernie Eves, who was unable to convince voters he was equipped to lead. The Conservatives bungled some critical issues, like power deregulation and privatization.
But the debate over tax cuts, and the kind of society people wanted, was central to the campaign. The Conservatives went to the voters promising more tax cuts - a reduction of corporate tax worth about $550 million, savings for seniors and homeowners and people who send their kids to private schools.
It was a similar message to their promises in the last two elections, based on the same premise - that tax cuts will boost the economy, and that voters' priority is on keeping money in their own wallets.
It didn't work.
That doesn't mean that voters don't like saving money. But the Liberals successfully argued that public spending isn't bad, if it is used to deliver needed services in an effective way.
And they found a receptive audience. For the past couple of years there has been a growing sense in Ontario that the things that residents were once proud of - quality health care, good public schools, parks, clean cities, opportunities for children - were deteriorating. Talk to Ontario residents, or read their papers, and you heard of mounting concern about health care waiting lists. People noted that schools - once well-maintained and a centre of community pride - were now dirty, with scruffy yards and unpainted buildings, because there wasn't enough money.
They simply decided that they were willing to pay taxes to see those services maintained. And they didn't buy the argument that further tax cuts would generate any economic benefits. The Conservatives dropped from 59 seats to 24; the Liberals went from 35 to 72.
It's an important lesson for the BC Liberals.
The Campbell government's focus is firmly on cutting spending. The government needs to cut more than $850 million from this year's programs to meet the goal of a balanced budget by next year. And they are in a tight enough bind that the quality and value of services matters much less than the arbitrary budget deadline.
And that is the kind of government that Ontario voters rejected.
But the BC NDP, as they head toward a leadership convention next month, can also learn from Ontario.
Voters didn't take the NDP seriously or believe that the party had a credible plan for governing. The Ontario New Democrats focused on public ownership of power generation as a key issue. It wasn't enough for voters, who elected only seven MLAs - not enough for official party status in the larger legislature. (Barely a decade ago Ontario had an NDP government. The party's descent to fringe status is quite remarkable.)
The bottom line lesson is that the voters wanted a balanced government. They rejected the tax cuts before people policies of the Conservatives. And they rejected the NDP's record of bad management.
Instead they elected a government that pledged to improve schools and health care and strengthen communities, and promised to do that without major tax increases or deficits. Voters rejected the notion that tax cuts are more important than the quality of services.
The situation is different here. There is no centrist party at this point, just two choices occupying their own far sides of the spectrum.
But parties have a way of emerging, when there's a political vacuum to fill.
Footnote: The Ontario Liberals - like the Campbell government - are committed to a referendum on electoral reform. They received fewer than half the votes, but ended up with 70 per cent of the seats. The Conservatives captured a third of the vote, but elected fewer than one-quarter of the MLAs.

Treaty optimism great hope for B.C. economy
By Paul Willcocks
VICTORIA - Newish treaty commissioner Mike Harcourt sounds pretty optimistic about the next couple of years.
But let's face it, he's a positive guy. You can't dispute the upbeat credentials of a man who falls down a cliff, almost drowns and then makes an amazing recovery from serious injuries. The former NDP premier is a walking example of the power of positive thinking.
He's right this time. The BC Treaty Commission presented its 10th annual report this week, the most upbeat I've covered. (That's not saying much, of course. The last few years have been gloomy.)
For one thing, there's some real progress this year. Harcourt noted that two agreements in principle have been ratified, and three others are almost there.
OK, it's not exactly a stunning success after 10 years and some $500 million spent on the process. Agreements in principle are a forward step, but they don't address many of the key issues, which have been left for talks on a final agreement.
But in the context of the treaty process, this is cause for celebration.
It's not just the agreements in principle. Harcourt says the parties - the federal government, provincial government and First Nations - are making progress on some of the bigger, tougher issues.
The Liberals' willingness to work towards interim agreements, on everything from revenue sharing to economic development to resource management, is allowing some measure of certainty and progress even when treaty talks are stalled.
And the Liberals - after a shakey start with their ill-advised referendum (ill-advised is column code for dumb) - have provided more resources to negotiators, and a more relaxed set of instructions about what they can do at the table.
We should be celebrating any progress. The lack of treaties is probably the greatest single barrier to economic development in much of the province. The courts have ruled that until they're are treaties, then government and private companies have a duty to engage, consult and accommodate First Nations before undertaking any activities in their traditional areas.
That's possible, of course, But it's all cumbersome and costly, and anyone contemplating a big investment, in a tourism resort or a mine or a mill, will likely look instead to a jurisdiction where the rules are clear and the zoning and regulations in place. Why spend money on planning and negotiations, with no guarantee of a successful outcome?
The treaty commission annual report quotes a 1999 study by Grant Thornton Management Consultants that found signing treaties will be worth something like $4 billion to $5 billion in economic activity, and would result in more than twice as much in new investment.
So it's good news that progress is finally being made.
But don't get too excited, too quickly. Harcourt also warned that a lot can go wrong.
Part of the reason for the recent progress is that the parties just decided to give up on including some of the toughest issues in preliminary agreements, leaving them to be resolved in the talks towards a final treaty. Agreements in principle are sorting out cash and land compensation, and some economic issues. But thorny problems like the extent of First Nations' political independence, compensation for resources taken in the past and certainty still remain.
Harcourt says they can all be dealt with, and some final treaties can be in place within 18 months - if the parties have the political will and determination.
That's a pretty big qualification. All three parties have shown themselves unable to get deals done in the past. First Nations negotiators have signed deals, only to have their communities turn them down.
And it's important to remember that most of the more than 40 negotiating tables are still far from reaching any sort of agreement.
Still, after years of disappointment, there is reason for hope on the treaty front.
And that's worth celebrating by all British Columbians.
Footnote: The commission was critical of provincial and federal governments on a couple of issues. B.C.'s unilateral offer to the Haida - long before treaty talks ahd reached that stage - have disrupted other talks, Harcourt said. And excluding First Nations from a federal-provincial task force on fisheries was a mistake that should be fixed, the commission said.



Desperate Kitimat forced to court over Alcan-Liberal pact
By Paul Willcocks
VICTORIA - It all looks rather embarrassing, the way a succession of B.C. governments have messed up their dealings with Alcan over the Kemano power project.
Unless you live in Kitimat, or Terrace. Then it's not embarrassing, it's infuriating.
I followed the Kitimat River into the aluminum town this month, a beautiful drive from Terrace. The town was laid out in the '50s, a planned community built from scratch for Alcan's work force, showcasing the best and worst in town planning of the era.
But Kitimat's got worries. About one in 10 residents have left the community in the last five years. That exodus - along with concern about the future of the town's industrial base - has driven down real estate prices and hurt small business. Tax assessments are down 40 per cent, a loss in real estate value that works out to about $20,000 a resident.
And Mayor Richard Wozney and council figure the province is letting a chance to ensure the town's future slip away.
Kitimat was born more than 50 years ago. Alcan wanted a smelter; B.C. wanted jobs in the northwest. So to get Alcan to build the smelter, the provincial government handed over the right to generate power by diverting the headwaters of the Nechako River. The company carved a tunnel through a mountain and sent the water racing to the Pacific, and had itself a dirt-cheap source of power.
The 1950 contract, and legislation authorizing the deal, were clear. The power was to be used to smelt aluminum, or for other industrial enterprises "in the vicinity of the works."
And that's the way it worked for decades.
Then in the 1990s, Alcan was allowed to sell power ' surplus to its needs.'
And in 2001, when the California crisis hit, the company was selling power - very profitably - while operating the smelter at 65 per cent capacity.
That's when people got nervous in Kitimat, and started lobbying the provincial government.
Town manager Trafford Hall says no one is mad at Alcan. The company's loyalty is to shareholders. If it can make more money by shifting aluminum production to Quebec and selling the B.C. power, then that's what it will try and do. The company is just interpreting the contract to its own benefit, pushing a little and setting precedents each time the province doesn't push back, he says.
Alcan sees it differently, arguing that it is not violating the agreements. The ability to sell surplus electricity helps protect the viability of the mill, it says.
And the Liberal government agrees. Attorney General Geoff Plant says government has reviewed all the agreements since 1950, and concluded that Alcan isn't breaking the rules.
Anyway, tangling with the company could be risky, he adds. Alcan filed a massive lawsuit when the NDP cancelled the Kemano Completion Project, which would have increased power production. The NDP and Alcan reached a settlement in 1997, but Alcan kept its option to sue. Pushing the power sale issue could lead to Alcan relaunching its lawsuit, Plant says.
But Plant hasn't provided any legal opinions or analysis to support his claim that the agreement isn't being broken. And it's tough for the community to hear that avoiding a lawsuit - due in part to a previous government's incompetence - means their interests get short shrift.
Lobbying hasn't worked. Now Kitimat is preparing to go to court to argue that the contracts are being broken, the province isn't acting, and a judge should review the entire case.
It shouldn't be necessary. But it's hard to see an alternative. The original agreement with Alcan gave up a valuable public resource in return for a major investment, with a clear requirement that electricity be used to benefit the region.
If some government has quietly changed the deal, the public is owed a clear explanation of when and why.
Footnote: Alcan released an economic study it paid for this month in response to the community's concerns. It warned of continued job losses at the town's big three employers, and said the community needed more entrepreneurs. And, the study added unsurprisingly, everyone should be nicer to Alcan to encourage investment.