Saturday, October 04, 2003

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.

Wednesday, October 01, 2003

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.