Taseko's new plan shows B.C. too easy on mine approval

The Liberal government is looking a little inept in the Taseko Mines affair.
They certainly wouldn’t be a first choice if you needed someone astute to negotiate a good deal on a used car. They’ve proven to be too quick to believe the story about the former owner who only drove it to church on Sundays and too willing to pay the list price without asking any questions.
Since 1995, Taseko has been seeking approval for the open-pit Prosperity Mine 125 kilometres southwest of Williams Lake. The mine would make the company a lot of money and boost the economy, but there would be major environmental damage and conflict with First Nations’ interests.
The provincial government approved the project a year ago. The environmental damage would be significant, the provincial assessment process determined. A lake would be turned into a big tailings dump, for example.
But the provincial review process balances the damage against the economic benefits. Blair Lekstrom and Barry Penner — then the mines and environment ministers — decided the jobs from the gold and copper mine were worth the destruction.
But the project was big enough, at $800 million, that there also had to be a federal environmental review.
It was found the mine would have “significant adverse environmental effects on fish and fish habitat, navigation, on the current use of lands and resources for traditional purposes by First Nations.” Aboriginal rights and a grizzly population might be at risk. 
The Harper government considered the review, decided the damage was too great and said no.
Gordon Campbell was unhappy. So were many people in the region. The mine would mean about 375 jobs and $20 million a year in revenue for the provincial government. The north faces several decades of tough times while the forests recover from the pine beetle disaster; it hurts to give up opportunities.
The two governments took different approaches. The federal government focused on the damage done; the province on balancing the costs against the benefits.
They’re both legitimate. Any major resource project — or new road or trail — brings some environmental damage. But the provincial government’s approach calls for competence in reaching the best balance and making sure the company is doing all it can to address concerns.
The government, as it turns out, didn’t do that.
Because this week, Taseko announced a new plan. Copper prices are high, the company said. We can afford to build a tailings pond to hold the mine waste. We don’t need to destroy the lake after all.
But companies rarely make major investment decisions based on fluctuations in commodity prices over the course of a year.
It seems more likely Taseko thought governments would accept the cheaper, more environmentally destructive option of using the lake as a waste dump. That would save it $300 million — good news for shareholders.
The provincial government did accept the lake’s destruction; the federal government didn’t.
And as a result Taseko came up with a better plan.
That’s not too surprising. Taseko forecasts it can take $3 billion worth of gold and copper out of the mine over 20 years and produce a 40 per cent pre-tax return. It can afford a significant capital investment. (The public, which owns the minerals, will get about $400 million.) 
It’s reasonable to trade off the benefits and costs of development in assessing projects. But you need a competent government able to get the best deal for the public.
And in this case, at least, the B.C. government failed to ensure environmental protection which, it turns out, the company was able and willing to provide if pressed.
Enter Christy Clark. She made the mine an issue in her leadership campaign before Taseko unveiled its new approach. She called the federal decision “dumb” and promised to go to Ottawa and fight for a reversal. She backed the plan that would have — needlessly — destroyed the lake. The environmental damage was acceptable given the benefits, Clark said. (Stephen Harper said the project’s rejection was based on the facts and wouldn’t be reversed based on political lobbying. The government will review the new proposal.)
The Prosperity Mine case shows the provincial government — not the federal government — was a poor bargainer, too quick to buy the line that the lake had to go to make the mine viable. Taseko has now acknowledged that’s not true.
Which, of course, raises questions about the government’s skill in handling other projects and industry demands for subsidies and tax and royalty breaks.

Predicting a Kevin Falcon third-count win

Not me. I have no idea how the Liberal leadership vote will go.
But Bernard Von Schulmann makes a good case for a Falcon-Clark final count, with a Falcon victory here.

Winners and losers in years of tax changes

The Liberals have been cast as big tax cutters. But not everyone comes out ahead, based on the budget.
Poor individuals are the big winners; middle-class two-income families are the losers in terms of provincial and municipal tax bites.
Since 2005, the budget documents have included a chart showing the impact of taxes and fees on people in different income brackets and family situations. It’s a limited sample, but useful.
The latest budget shows of the two of the six selected examples are paying more to the province than they did six years ago.
A two-income family with two children and a household income of $90,000 — about average now for that demographic cohort — will pay 10 per cent more than they did six years go. Their “total provincial taxes” will be $9,427 — or $16 more a week than they paid in 2006.
The same family with a $60,000 household income will pay about four per cent more to the province, or about $5 a week.
Income tax is only part of the equation. The $60,000-income household will pay $690 less in income taxes, but more in MSP premiums, the HST, property taxes and the carbon tax, all included in the budget document report.
That’s why talking about income tax cuts in isolation isn’t useful; other fees and taxes are significant. For the $60,000 family, provincial income taxes are about 20 per cent of the total taxes paid to provincial and municipal governments.
The biggest reduction — at least in percentage terms — went to a single person with $25,000 in income. In 2006, someone in that unpleasant situation paid $1,520 in taxes and fees. This year, according to the budget, the provincial and municipal take will be $1,130, a 25-per-cent reduction.
Sounds good. But at $2,100 a month — figure a $13-an-hour full-time job — you’re struggling. And an extra $7.50 a week because of tax and fee changes isn’t life-changing.
An individual with an $80,000 income is paying about four per cent less in provincial and local taxes — about the same cut, in dollars, as the person getting by on $25,000.
The one senior example, a couple with equal pensions that provide $30,000 in income, basically break even. They’re paying the same amount in 2011 they did in 2006.
The real losers, in practical terms, are poor families. The budget looks at a family of four with two working parents and a total income of $30,000.
Those are people on the edge; their children growing up poor. But they paid $2,450 in provincial taxes and fees in 2006 and they will pay $2,100 this year. The reduction is about $7 a week, a dollar a day. That’s not going to change their children’s lives for the better.
The big tax cuts over the past six years have been in federal income taxes. The $90,000 family is paying $8,000 in federal income taxes, $2,500 less than in 2006.
When we spend money on most things, we’re concerned with value for money. We’ll spend more to get a reliable car.
But somehow lower taxes have become an unquestioned “good thing,” without considering the value of paying a little more.
Look at the middle-income family of four. They paid $2,000 in provincial income taxes in 2006, and will pay $1,300 in 2011. But what’s the benefit of $700 in tax cuts if one result is underfunding for public schools that means parents opt for private schools? The $700 in tax savings would be replaced by at least $15,000 in school fees for the two children.
Two observations leap out. The Liberals’ tax-cutting reputation is overblown.
And none of the leadership candidates, for either party, have been brave enough to suggest that government can — and does — provide services that people should be happy to pay for.