Thursday, July 21, 2005

Montana poses big threat to B.C. energy development plans

VICTORIA - Some time in the next several weeks Premier Gordon Campbell hopes to sit down with Montana Gov. Brian Schweitzer and head off a damaging cross-border battle over a Kootenay coal mine.
The battle over the mine has been quietly - mostly - going on for about 18 months. And so far, the B.C. government has been unsuccessful in managing the dispute, which is bad news for people looking for coal or coalbed methane development in the region.
It’s a tricky problem, politically complicated on both sides of the border. The issue is a pretty small open-pit coal mine planned by Cline Mining for a site about 30 kms from the U.S. border. A lot of Montanans - from environmentalists to the pro-development governor - are worried about the mine. They fear that it will put the headwaters of the critical Flathead River - a big wilderness symbol for Montanans - at risk of pollution.
B.C.’s response has been, basically, butt out, we know what we’re doing and it’s our province. And anyway, the government has maintained, it’s early days and there might not be a mine.
That last claim is one of the things making Montanans nervous.
Cline says it’s spending $1.8 million this year drilling 51 test holes, building a seven-km road and taking out 90 tonnes of coal to send to steel mills around the world. The company’s annual report suggests mine development could be mostly completed by the end of next year.
Which has left some Montanans - like Schweitzer - worried that the B.C. government isn’t providing all the information about the project.
Mostly the B.C. government has reacted with irritation to the concerns. MLA Bill Bennett, now junior mining minister, even got into a heated debate with Montana Senator Max “Blame Canada” Baucus in Fernie over the project.
The reaction is understandable. Schweitzer, for example, is opposing the Kootenay mine while at the same time pushing a plan to develop new coal mines in Montana, along with new refineries to turn the coal into oil.
But B.C. has often seemed needlessly belligerent, and hasn’t answered reasonable questions.
The politics are complicated. Alongside their pragmatic concerns about the mine, Montana politicians know it’s always popular to oppose a potential polluter in adjacent country. (As proved by the battle against the SE2 project across the U.S. border from Sumas.)
The last thing British Columbia need is yet another cross-border dispute to add to the long list of Canada-U.S. issues. Schweitzer and Baucus have both pushed the Bush administration to oppose the current plans for the mine. The U.S. government position - supported by Montana’s governor and senators - is that unless B.C. reaches an agreement with Montana, the dispute should be sent to an International Joint Commission - a long, slow process.
The consequences of U.S. pressure are significant. Energy Minister Richard Neufeld denied approve for another mine Cline planned, closer to the border, in part because of U.S. opposition. (The company says it still hopes eventually to develop the mine.) An auction of coalbed methane rights in the area last year drew no bids, and uncertainty about U.S. opposition to development was one of the factors that kept the companies away.
And opposition from Montana is going to be a factor as B.C. tries to open the federally controlled Dominion Coal Block for exploration. The 50,000-acre parcel is just north of Cline’s proposed mine.
Intergovernmental Affairs Minister John van Dongen is planning a Montana visit, hoping to spend several days finding out about their concerns and talking about B.C.’s position.
But Campbell has the best opportunity to at least reduce the strength of the U.S. opposition. The meeting with Schweitzer could be an important step.
It doesn’t really matter if the concern in Montana is legitimate. If the B.C. government doesn’t reassure at least some of the critics, then plans for mine and methane development in the region face big hurdles, and long delays.
Footnote: The development opponents in Montana have already begun linking up with Kootenay residents opposed to mining and coalbed methane development, another headache for the B.C. government. The position taken by the NDP - which won three of four Kootenay seats in May - will be important in this debate.

Wednesday, July 20, 2005

Bigger fares and fees hurt economy - just look at BC Ferries

VICTORIA - We Islanders have just escaped an eight-per-cent ferry rate increase, the kind of thing that makes any consumer crabby.
Just like, I imagine, someone who lives in Merritt feels when they roll up to the toll booth on the Coquihalla, or we all feel when we contemplate the tax component of $1 gas.
But we tend to forget that the economic impact goes far beyond our individual problems.
Take the BC Ferries' proposed rate increase, which the corporation wanted to offset rising fuel costs. (The BC Ferry Commissioner, the independent watchdog over fare increases, ultimately reduced the levy to four per cent.)
The proposed eight-per-cent fare increase, based on BC Ferries' models, would have reduced ferry passengers between Vancouver Island and the Mainland by 2.5 per cent. That's more than 70,000 cancelled trips.
Some of those cancellations would come from Islanders, giving up on a plans for a Vancouver weekend.
But a lot of the lost travelers would be tourists who decided that it was too expensive to zip over to the Island to see Butchart Gardens.
It's a simple economic law. As price rises, demand falls. If you're a tourist in Vancouver, trying to decide whether to head to the Okanagan or the Island, the ferry costs are a factor. Figure $135, with reservation charges, for the round trip. That's enough to take the family out for a day at the water park, or to splurge on a flashy dinner. The Interior starts to look like a better destination.
BC Stats looked at the impact of ferry rate increases last year. It found that fares had consistently risen faster than inflation over the last 30 years. The average inflation rate was 4.5 per cent; ferry fare increases averaged 6.5 per cent.
Those excess increases are costing Vancouver Island's tourist industry more than $25 million a year in room revenues alone, BC Stats projected. Include food and other spending, you're looking at an annual $40 million loss to the economy.
BC Ferries rates may be a good deal by global standards. But that's not the issue.
Back in 1975 a car and driver could make the crossing for $5. If price increases had kept pace with inflation, today's fare would be about $18. Instead, it's more than $30.
That's enough to discourage some travellers, the evidence suggests. B.C.'s population has increased more than 55 per cent since 1980. Ferry traffic has risen only 33 per cent., and the Island is capturing a smaller share of overall provincial room revenues.
"The trend in Vancouver Island's share of room revenues has closely followed changes in ferry prices," BC Stats reported. "This suggests that BC Ferries has been, to a degree, pricing Vancouver Island out of the tourism market."
It's not just an Island issue. Vancouver Island is a destination for visitors from outside the province, and BC Ferries rate increases discourage visitors who could range through other parts of B.C.
And the issue goes far beyond BC Ferries.
Prices have to go up as costs rise. But all price increases, and taxes, and fees, have their consequences for the overall economy.
The Liberal government's appointment of a BC Ferry Commissioner to rule on rate increases is a good step. (Although the government has refused to act on Commissioner Martin Crilly's warning that he can't do his job properly because he has no power to review reservation fee increases. This creates "potential for misuse of monopoly power" by BC Ferries, says Crilly. BC Ferries raised reservation charges 17 per cent last year; they are effectively required on many sailings.)
But it's often up to the public to be vigilant when governments or councils decide they need extra revenue.
Services need to be paid for. But the wrong decisions - like excessive ferry rate increases - can cause unintended damage to the economy, and communities.
Footnote: It's not just a question of rates. The discussion of tougher ferry travel security measures in the wake of the London bombings should also scare the tourism communities. Travellers have come to hate the hassles of airport security. Bringing metal detectors and line-ups into ferry travel will give people another reason to stay away, for what seems a very dubious threat.

Tuesday, July 19, 2005

School fundraising creating two-tier education

VICTORIA - Most parents know that schools are becoming more and more dependent on their fund-raising abilities.
That dependence isn’t just an inconvenience. It threatens to undermine the basic principle of public education, which guarantees every child a more or less equal chance to learn.
A Canadian Teachers’ Federation study surveyed more than 3,000 schools and found parents - and teachers - raised an average $15,700 for their school during the last school year. If the results are representative, that suggests some $225 million in education spending in Canada each year dependent on parents’ ability to collect donations, or children’ willingness to sell chocolate almonds.
That raises lots of problems, but the biggest one is equity.
My children went to public schools in affluent sections of Victoria. There were stay-at-home parents with time to work on fund-raisers. People had the money to write a cheque, if that was needed. When it came time for a silent auction, a couple of lawyers would donate the time required to prepare wills, and people who were good customers of local restaurants could usually get gift certificates donated. Fund-raising was still work, but it paid off.
But parents in a struggling coastal community, or in Vancouver’s poorer neighbourhoods, have a harder time. They could put in much more effort, and raise a fraction of the money.
The gap is large, and growing. The survey found the smallest fund-raising effort at an elementary school was $180; the largest $240,000. The gulf was even wider for high schools. (All these figures are on top of school fees and sponsorship deals with pop companies or other marketers.)
The official line of governments - including our own - is that the fund-raising isn’t that significant, and only pays for non-essentials.
It’s a claim that’s wearing thin. Queen Mary Elementary School, in an affluent Vancouver community, is one of the fund-raising heavyweights. Parents are asked for a $100 donation to cover textbooks and other materials, and the annual gala silent auction, at a yacht club, has attracted Premier Gordon Campbell as a speaker.
It’s tough for many elementary school in Port Alice to do anywhere near that well.
The money matters. The government put out news release last year celebrating the fact that it had come up with an extra$10 million for text books across the province. It was a significant step towards improved learning, then education minister Tom Christensen said.
For Queen Mary, the news meant about $6,000 - less than one-fifth what the parents raised for books and other school needs.
The quality of children’s education is increasingly dependent on whether they’re in an affluent community.
There are short-term solutions. Parent advisory councils could agree to equalization within a district. Schools could keep two-thirds of the money they raise, for example, and contribute the rest to a fund shared among all schools on a per-student basis. Parents’ efforts would still produce direct benefits for their children, but the playing field would be a little more level.
The real solution is for governments to fund all schools to a level that parents consider adequate.
The money going to B.C. school districts increased 8.2 per cent during the Liberal’s first term. The consumer price index, a basic measure of cost pressures, rose 14.2 per cent.
The government notes, rightly, that the number of students dropped, so school districts have to expect less money. But a drop in enrolment doesn’t necessarily mean lower costs for the school - if there are 10 fewer children, maintenance costs, even the number of teachers, may stay the same.
School should be the great equalizer. Some children get a great start at home; some don’t. It’s hard to change that reality.
But in school, every child should have an equal chance to learn, to make the most of his or her potential - and to set the stage for future contributions to our economy, and society.
We’re letting that principle slip away.
Footnote: The increasing reliance on fund-raising almost inevitably puts schools outside the large urban centres at a disadvantage. Fund-raising is more difficult when school populations are spread out, and the communities may lack the kind of large businesses that can be hit up to help with campaigns, and the concentration of affluent families in one school area.