Friday, October 08, 2004

Huckleberry Mine owners get a gift from taxpayers

VICTORIA - It's hard to see how letting a company off the hook for $3 million owed to the government isn't a subsidy, something the Liberals considered odious during the NDP years.
That's what the government has just done for the owners of the Huckleberry Mine southwest of Houston.
And it's likely just the first, smallest installment in taxpayers' kindness to the mine's owners. Another $14.5 million may be written off in two years, as the mine nears the end of its life.
Revenue Minister Rick Thorpe says writing off the company's debt isn't a subsidy. The government - like any other creditor - had two choices, he says. It could forgive the debt. Or the company would close the mine and 175 people would lose their jobs.
It was a business decision, he says.
But it was also a political one, and it is a subsidy. Other mining companies are out there trying to compete without the benefit of government largesse, while Huckleberry Mine gets a break.
The tangle goes back to the NDP days, when subsidies were flowing to companies.
Imperial Metals of Vancouver wanted to develop the copper mine, and in 1996 the government came up with a $14.5-million loan - about 10 per cent of the total mine cot - to help with development. It was supposed to be a commercial loan, at competitive interest rates.
But eight years later, not a dime has been repaid. The mine has been operating, although apparently not terribly successfully due to low copper prices, since other creditors have also gone unpaid. Imperial has since taken on four Japanese investors, who have a 50-per-cent share in the property.
Imperial made a $3.4-million profit last year, and is developing another mine at Mount Polley. With a well-crafted loan agreement, you would expect the government and other creditors to be able to exert some pressure and get some of your money back.
But Imperial also restructured last year, turning over the management of the Huckleberry Mine to a separate company. The ultimate ownership stayed the same, but the debts are now on the new company's books. Its only asset is the Huckleberry Mine, which is slated to shut down in a little over two years, and it has large debts. Creditors have little leverage, because the owners have don't have much to lose if the mine is forced into bankruptcy and closes now.
Thorpe notes the Liberals have closed the door on any new grants and loans to companies.
That was a good decision. If no bank or investor considers the risk worthwhile, taxpayers shouldn't be tapped for the money. And a subsidy to one company inevitably disadvantages competitors, creating a tilted playing field. The NDP's decision to pump more than $400 million into Skeena Cellulose not only cost taxpayers money, it hurt other companies trying to operate pulp mills without government cash.
Why the break to Huckleberry, without any benefit to taxpayers or commitment from the company to make regular payments? The government hopes the company will pay the remaining $14.5-million debt in late 2006, but it has no commitment and will have even less leverage then.
Huckleberry president Jim O'Rourke says the deal with creditors means they'll get first shot at any profits. With good prices the province will see payments, he says. "It was a good business deal."
Thorpe says the government had little choice. It could forgive the $3-million in accrued interest on the loan, or the mine would close. The deal was reached after negotiations with the owners.
It's not an easy political decision. Pressing for repayment - calling the company on its threat - might have worked. Or it might have resulted in the mine closing early, and the debt still left unpaid.
The Liberals - like the NDP before them, though on a much smaller scale - opted to protect the jobs, and let the debt slide.
Footnote: The Liberals appeared uncomfortable with the deal. Cabinet quietly approved the write-off, with the only public notice a 15-word reference in a list of about 70 cabinet decisions posted on the web. A decision to spend $750,000 on materials for schools rated a news release; a decision to approve a $3-million break to a company didn't.

Thursday, October 07, 2004

Safe streets bill not a real answer to urban problems

VICTORIA - I'd file the Liberals' safe streets legislation under empty gestures.
The Campbell government - after some initial scoffing - has glommed on to MLA Lorne Mayencourt's idea that tougher laws are needed to get rid of squeegee people and aggressive panhandlers.
Mayencourt introduced his version of a Safe Streets Act last spring. The private member's bill would have made it an offence to approach cars offering to clean windshields and put strict limits on soliciting money. It would bar panhandling near ATMs, or at bus stops, and outlaw threatening or intimidating behaviour or language. (Yes, those are already illegal.)
The government was cool to the idea, and the bill - along with Mayencourt's proposed new law that would let landlords bar people more easily - didn't go anywhere.
But the proposals seemed to play well with the public, so Premier Gordon Campbell sent Mayencourt off on a tour around the province to talk about the proposal. And when delegates to the Union of BC Municipalities backed the idea last month, the government decided it was time for its own version of the laws.
"People want to feel safe in their towns, they want to feel safe in their streets," Campbell said this week.
The government was expected to introduce the bill early this week, but backed away. It's tricky, as Attorney General Geoff Plant noted when Mayencourt floated the balloon, to write a law that won't get tossed on constitutional grounds or have unintended consequences. (Mayencourt's bill would have made a Girl Guide selling cookies at a bus stop into a law-breaker.)
The public reactionshows that people perceive a real problem, not just in Vancouver but in smaller communities across the province.
And this is one of those cases where that perception matters.
If people feel threatened in their communities, that is a real problem. Their right to use the streets - to go downtown shopping, or walk a child to the park - is being limited. That's unfair.
The law faces its own problems. It is a thin and crumbly line between dealing with people who are threatening, and sweeping away people because they make us feel uncomfortable. The streets belong to all of us, but much of the talk from the bill's supporters contemplates an underclass with fewer rights than the rest of us.
The law is also largely symbolic. Virtually all the things Mayencourt complained of in explaining the need for the bill could be dealt with under existing laws. He cited a case in which a woman's car window was smashed by a squeegee person as evidence of the need for the law. But assault, smashing windows, threatening people, even jaywalking are all already offences.
The laws are there. But police have better things to do than arrest panhandlers, or issue tickets that people with no money can't pay. They don't believe that would be effective.
The law is best viewed as a gesture, an acknowledgment that the public would like to see something done even if the government doesn't actually think the idea will work. In politics and life empty gestures sometimes have their uses.
Locking up panhandlers isn't going to happen, and wouldn't work if it did. The real solutions are likely to come from finding out why people - especially the most difficult people - are on the streets. Lack of treatment or housing for the addicted and mentally ill is one likely cause of problems. So is inadequate help for youths to keep them off the street, and give them a chance at a better life once they are there.
The best hope for change is a committee of five majors asked by Campbell "to tackle the challenge of mental illness, homeless and addictions in B.C. communities." The five - Kelowna's Walter Gray, Prince George's Colin Kinsley, Victoria's Alan Lowe, Surrey's Doug McCallum and Vancouver's Larry Campbell - have a chance to offer real solutions.
And that will make much more difference than another unenforced law.
Footnote: Vancouver's police chief says people shouldn't give to panhandlers, but Campbell says he does. People concerned about the problem also have the option of giving to community agencies that help people find their way off the streets. And each of us can change the tone simply by being pleasant to our scruffier neighbours.

Tuesday, October 05, 2004

Capital punishment: Road kill victory, lame open cabinet and quiet days

VICTORIA - Free road kill, a lifeless open cabinet and a fogbound legislature. Notes from the halls.

Day one in the fall session, and we're talking about road kill.
Every day before Question Period about 10 minutes is set aside for members' statements, a chance for MLAs to talk about whatever they want for a few minutes. (Or at least whatever they want that the party strategists consider appropriate.)
East Kootenay MLA Bill Bennett wanted to talk about road kill. Specifically he wanted to celebrate the fact that the New Era includes a partial return to the good old days when you could sling that dead deer in your trunk without having to pay any troubling fees, introduced by the NDP in 2000. (They argued that if hunters have to pay fees to kill animals, drivers should have to pay to scoop them up.)
Now the Liberals have lifted the fees for trappers, who like the dead animals for bait.
A blow for freedom, said Bennett. "Let us rejoice at the democratic spectacle of free trappers all over this heavenly province scooping up dead animals from our roadside ditches, no longer living in fear that a tax collector may be lurking," Bennett said.
The rest of us still have to pay - $61 for a dead deer, $25 for most species - but Benett hopes that will someday carrion will again be free for "British Columbians who wish to utilize road-kill for lunch, a fur coat or a living room rug."
Bennett offered more good news. A booming economy will mean more traffic and more dead animals, he said, and more chances to add new meaning to the promise to pick up something for dinner on the way home.

Maybe they should let Bennett help script the next televised cabinet meeting.
When the Liberals promised monthly open cabinet meetings it seemed like a good idea. The theory was that the public would get a chance to see decisions being made. The reality has been considerably, and increasingly, lamer.
I didn't expect sharp exchanges or big debates. The meetings were inevitably going to be managed, with the aim of making the government look good.
But I didn't expect this big a flop either, with the cabinet generally looking disengaged, sycophantic or irrelevant.
This week's meeting started out with a report on the federal-provincial health care summit, for example. Premier Gordon Campbell said what a good job Health Minister Colin Hansen had done; Hansen revealed that Campbell played a vital role. The results were rehashed, as if cabinet ministers had somehow been out of touch for the last several weeks.
Education Minister Tom Christensen reported on a useful plan to encourage elementary schools to hold open houses for three-year-olds and their families. It's a good idea, and cheap at $2,500 a school. But there were no questions from cabinet ministers about how the program would engage those families that need it most, or about whether programs were available to help kids catch up if parents realized help was needed.
Cabinet got a drought update, but weren't asked to make any decisions. They got a similar briefing on Avian flu and the mad cow disease scare. Both were fine; both could have ben covered with a briefing note to the ministers.
Then the televised meeting ended - after costing about $25,000 - and ministers adjourned to the real cabinet meeting behind closed doors, which lasted about six hours.

Half the NDP caucus - OK, Joy MacPhail - and a clutch of Liberal cabinet ministers missed the first day of the session, stranded in Vancouver by fog.
They shouldn't miss too many days. The Liberals are already hinting the session could be cut short for lack of business. Legislation on the new community living authority has to be debated, and other bills will set up the Northern Development Initiative, make some gesture towards fighting panhandlers and try to deal with privacy concerns around the U.S. Patriot Act.
But the focus is on the election now, not new initiatives.
Footnote: Premier Gordon Campbell, who doesn't make legislature attendance a priority, missed day one. He was speaking to a business group in Calgary. The sitting date has been fixed for more than a year.