Good riddance to B.C. LNG

There were lots of things wrong with former Premier Christy Clark’s plan to produce liquefied natural gas but let me start with the good.

image: the Tyee

At least it was a plan that labour and business could agree to. It was a provincial strategy that had workers and industry pulling together in the same direction.

It was an ambitious plan but unrealistic from the start. Markets for were weak and no one wanted to develop the plants. Now one of the last players, Petronas, has pulled the plug.

I can only speculate why they bailed out only one week after the BC Liberals were defeated. Was there some deal with the Clark government to provide concessions such that the LNG plant would be built regardless of whether it was viable? It’s not inconceivable considering how much political capital Clark had invested in the project.

Or was it because of Canada’s so-called anti-business climate, including high taxes, environmental reviews, and Indigenous land claims? Instead of recriminations, let’s celebrate the passage of Petronas says economist Jim Stanford.

Stanford has a unique perspective of LNG projects in B.C. and Australia. He’s a professor at McMaster University in Hamilton, Ontario, and lives in Sydney, Australia.

“In fact,” says Stanford, “far from blaming government red tape for the collapse of this misguided project, we should be collectively grateful. Those rules likely saved us from wasting tens of billions of dollars on the biggest white elephant in Canadian history.”

Stanford’s analysis shoots down an impression I had. I wrote that Australia was a LNG success story and that Australia’s early entry into the market was why B.C.’s plants were doomed. I now realize that Australia’s experience was not as rosy as I thought.

When Asian gas prices started to surge in 2009, Australia decided to chase after those markets. Unlike Canada, Australian developers faced few environmental hurdles and Australia’s Indigenous people had little negotiating power.

What followed was a spectacular construction boom in which $200 billion Australian was spent on LNG plants.

The boom had a dramatic effect on Australia’s economy. Their dollar, now at par with Canada, spiked up to $1.30, resulting in what economists call the “Dutch disease.” When Australia’s currency rose dramatically, the price other countries paid for Australia’s products rose. As well, imports were cheaper. Exports fell, imports rose and Australian factories could no longer compete. Australia became deindustrialized including the shutdown of their auto industry.

With the drop in gas prices, Australia’s LNG online plants are marginal. Boom towns that sprung up during the construction years are becoming ghost towns. Housing prices have collapsed.

Gas plants are selling into markets at discounted prices. Unlike Canada, Australian plants don’t have to supply the country first and so, ironically, there is a shortage of gas in Australia and a glut of gas on world markets. Domestic prices have doubled because of diversion to export markets.

B.C. has no economic strategy. Only one per cent of our GDP comes from mining, oil and gas and most from finance and real estate.

Our new NDP government faces a challenge. In our polarized political climate, unifying strategies are rare. Just ask former Premier Clark.

The psychology of B.C. voters

At first glance, it looked like the split between interior and lower mainland voters was along the usual lines of social values.

   image: Macleans

Cities tend support liberal social values such as gay marriage, women’s rights, support of immigration, treatment for drug addicts, and poverty reduction. Rural dwellers support conservative values such as the integrity of the conventional family, individualism, and a no-nonsense approach to addiction.

An electoral map illustrates the divide between conservatives (BC Liberal) and progressives (NDP-Greens) with the interior coloured red and the coast and lower mainland orange and green.

This time the split was something else. Closer inspection of swing ridings indicates that something other than social values was at play. The south-east corner of B.C., including the Kootenays, is typically progressive. However Columbia River/Revelstoke swung from NDP to BC Liberal. It’s unlikely that those voters stopped being socially progressive. The Fraser Valley turned orange. It’s unlikely that the farming communities of the valley stopped being socially conservative.

There’s a close correlation between employment and how people voted. The lack of jobs creates a sense of uncertainty, whereas job growth creates optimism.  The interior has not recovered from jobs lost in the Great Recession of 2008. In 2016, the interior lost jobs while the lower mainland and Vancouver Island gained jobs. The Kootenay area was hard hit with a job loss of 2.3 per cent. The lower mainland had a job growth of 4.7 per cent while Vancouver Island had a growth of 2.6 per cent.

Shannon Daub, a director for the CCPA, believes he has the psychology of voters figured out. After talking to resource-sector workers for years, he has seen how government cutbacks in social services create insecurity. It erodes the social safety net and enforces the sense that governments can’t create jobs; that only the resource extraction industry can. And the notion of jobs in a green economy seems vague and remote.

Yet it was the BC Liberals that helped create that uncertainty in the first place. In the early 2000s, the BC Liberals cut public service jobs unevenly across the province with reductions to the interior being about twice that of the lower mainland in terms of percentage. In small communities, one of the top employers is often public service jobs. The loss of even a few well-paying jobs has a greater impact there than in urban areas where the economy is more diversified.

In addition to cuts in public services, the BC Liberals failed to restore jobs lost in the forestry sector to the pine-beetle disaster and deregulation of the industry. The government could have created jobs through value-added products, use of wood waste, and greater reforestation.

Rural B.C. voted for the BC Liberals despite the fact that the Clark government contributed to their uncertainty. Voters see resource-extraction jobs as their only hope and that’s just what the BC Liberals promised with pipelines and dam construction.

Also, energy corporations have been promoting resource-extraction jobs which offer hope. Enbridge has placed full-page ads in The Walrus and on TV Life’s moments, made possible by energy. My Facebook and Twitter feeds have regular ads from the Canadian Association of Petroleum Producers featuring a heartfelt discussion between a son and dad about cleaning up mining sites once they close.

It’s too late to decriminalize pot

Decriminalization of marijuana should have happened decades ago. Now it would only add to the confusion.

Marijuana users are caught in a legal limbo. The government intends to legalize marijuana before Canada Day, 2018, but until then it’s illegal. Then, like a light being switched on, what was once a criminal offence will not be.

Alberta Legalization of Cannabis Committee

Government intentions aside, police are going about their business. They arrested activists Mark Emery (the “Prince of Pot”) and his wife Jodie as reported by CFJC Today.

The Liberals have been dithering over decriminalization for decades and this Trudeau is no different. Pierre Trudeau could have decriminalized marijuana in 1979. Then Justice Minister Marc Lalonde was playing politics when he said that he would decriminalize it before the upcoming election if opposition parties would just fast track the legislation. He was doubtful that they would. “I’m not optimistic,” Lalonde said (Calgary Herald, Feb. 22, 1979).

The opposition parties took Lalonde up on his challenge, agreeing to fast tracking.  Both opposition leaders Joe Clark and Ed Broadbent sent me letters of approval for decriminalization. They were responding to letters I sent on behalf of the Alberta Legalization of Cannabis Committee. I helped organize the group in 1977.

Prime Minister Pierre Trudeau wrote me to explain how his government was trying to decriminalize marijuana. His government had initiated a bill in the Senate, Bill S-19, in 1974.”The Commons, however, was unable to find the time to give the bill further attention; so it died on the order paper when the last session of Parliament ended (January 17, 1978),” Trudeau explained.

In my letter to the Calgary Herald, I complained about Lalonde’s tardy pace: “Why does the government seem so reluctant to do what all agree must be done? If Lalonde wants us to believe that this is a demonstration of his government in haste, then it’s time to see what a new government in action; a government that will not fiddle while Canadians get burned (April 14, 1979).”

Lalonde had teased Canadians long enough with his promises of decriminalization. His government was defeated by Joe Clark’s Progressive Conservative Party in June 11, 1979.

Executive Assistant to Clark’s Minister of Justice wrote me: “Mr. Clark’s government is currently reviewing this and other issues with a view to formulating policies and setting priorities.” “Be assured, Mr. Charbonneau, that your comments will be given serious consideration by the Government as it continues its study of this important matter (Aug. 3, 1979).” However, Clark’s government didn’t last long enough to decriminalize marijuana.

A Globe and Mail editorial argues that the government should decriminalize marijuana before legalizing it because users are in legal purgatory: “Besides, there is no viable interim regulatory regime that could accommodate a quasi-legal retail market. But there is when it comes to personal possession. It’s called decriminalization.”

It’s too late for decriminalization. More legislation would only add to confusion. There is a simple solution –what the Dutch call “gedogen.” Police simply don’t enforce marijuana laws. Unlike the Netherlands, where the law has been ignored for 30 years, police only have to turn a blind eye for another year.

Stop treating B.C.’s interior like a colony

Premier Clark’s plan for job growth in B.C.’s interior is a failure. Her plan to extract Liquefied Natural Gas from the interior evaporated. She is sending more raw logs out of the interior than any other government according to the Canadian Centre for Policy Alternatives.

Clark treats B.C.’s interior like a colony of Victoria: drill for natural gas and sell it overseas with no regard to the contamination of water or earthquakes that fracking causes; send raw logs, and the jobs that go with them, elsewhere instead of restoring those jobs in the interior.

The interior-as-colony mentality didn’t always exist. Before 2003, the government made sure that jobs stayed in the communities where trees were logged. That meant that sawmill workers could earn good wages where they lived. Once logging companies were free of that obligation, they shut down mills. Since 1997, 100 mills have closed and 22,400 jobs were lost.

That loss of jobs means a transfer of wealth out of the interior. By my calculation, the loss of the above jobs amounts to $1.5 billion.

Since 2013, when Premier Clark was elected, nearly 26 million cubic metres of raw logs worth more than $3 billion were shipped out of BC. No previous BC government has sanctioned such a high level of raw log exports. Last year, about 6.3 million cubic metres of raw logs left the province. Had those logs been turned into forest products in the interior, 3,600 workers could have been employed.

We can do better. B.C. does a poor job of extracting value from our publicly-owned forests compared to other provinces. Ontario’s value-added wood industry was almost three times that of B.C.

B.C. should be a leader in extracting value from our forests, not a laggard. Waste wood can be used for more than paper mills and as fuel to generate electricity. That’s a good start says The Forest Products Association of Canada. They suggest other uses for waste wood -make wood pellets to heat homes, manufacture alcohol for vehicles, and make solvents for industry.

In addition to these bio-products, engineered wood products add more value. Such building systems include wall panels and roof trusses that are made from lumber in factory settings. The completed pieces are then moved to construction sites where they are secured into place, forming the walls, floors and roofs of finished houses or multiple-dwelling buildings.

In one demonstration, two identical triplexes were constructed in Edmonton.  The pre-fabricated building went up faster, with less on-site waste than the building next door.

Victoria can afford to be blasé. Vancouver Island gained 9,000 jobs last year; two-thirds of them went to Victoria. The Lower Mainland did OK as well, gaining 94 per cent of all B.C. jobs.

All other regions outside of Victoria and the Lower Mainland lost jobs last year compared to 2008 before the Great Recession (CCPA Monitor, March 2017).

Rather than treating the interior as a colony the government should create jobs and wealth where people live. The forestry sector is an obvious place to start since forestry has been a proven record as a job creator.

 

Trump tweets while Afghanistan burns

President Trump seems only dimly aware the turmoil in Afghanistan. Or maybe he has foreign policy related on the country and is simply unable to articulate it in 140 characters. Most likely, and more disquieting, his contradictory and unintentionally humorous tweets truly reflect his confused views.

trump

On July 23, 2016, two suicide bombers struck Kabul, Afghanistan, killing 80 and injuring 250 in the recent conflict’s most deadly attack. An average of 50 Afghan soldiers are killed a day, another 180 are lost to injuries and desertion. More than 10,000 soldiers died as well as thousands of civilians.

Advisor to the President of Afghanistan, Scott Guggenheim, hopes the new administration can achieve what the Democrats couldn’t:

“It breaks my heart to have to say this, but the Republican government is going to be better than the Democrats for Afghanistan,” he told May Jeong in her investigative report for Harper’s magazine (February, 2017).

“The Republicans will say ‘These guys are fighting radicals; we have to stay engaged with them.’”

The Taliban has an opposing view. A spokesman told Jeong:

“He should withdraw all U.S. troops from Afghanistan, and unlike other U.S. rulers, he should neither seek any more titles of ignominy for himself and American generals nor worsen American prestige, economy, and military by engaging in this futile war.”

The fog created by Trump’s lack of clarity has created an opportunity for Russia.  Vladimir Putin has reason to cheer the selection of Trump’s secretary of state, Rex Tillerson, who is CEO of ExxonMobil and has met with Putin. Russia is investing in housing and factories in Afghanistan and recently sent ten thousand automatic rifles to Kabul in hopes of strengthening ties. An exit by the U.S. would aid Putin’s grasp for regional dominance.

Trump seems unaware of what his own military has to say. A Republican-led investigation determined that troops will remain at 8,400. The top commander in Afghanistan, General John Nicholson, says: “We have adequate resources.”

While the Republican’s views might be clear, Trump’s foreign policy for Afghanistan remains impenetrable. On one hand is his principle of “America first” which suggests isolation. On the other, he speaks aggressively of the Islamic State: “Their days are numbered.”

Stephen Biddle, adjunct senior fellow at the Council on Foreign Relations told Jeong:

“His policies on the campaign trail were so mutually contradictory and changeable that he much harder to predict than an orthodox president would be.” “He talks about Afghanistan only when he’s cornered, and when cornered, he has said he simply wants to get out.”

Trump has more power than either Presidents George W. Bush or Barack Obama to bring peace to Afghanistan. He has the support of a Republican Congress and expanded executive powers.

But Trump’s war remains at home. He is paralyzed with his war against the media and his decrees by tweet only thicken the fog on foreign policy.

Jeong lives in Kabul and is fatalistic:

“The survivors of the conflict, awaiting the next chapter of diplomacy, have no choice but to be patient.”

Afghans live with hope and patience. That’s all they have with this president in power.

 

 

 

 

 

 

Electoral reform disappointment #3

I was disappointed but not surprised when Prime Minister Trudeau abandoned his plans for electoral reform. I’ve been let down before.

fairvote.ca

fairvote.ca

The first time was in 2005 when a Citizens’ Assembly was created to study models of reform. After much deliberation, they recommended a made-in-BC type of Single Transferable Vote called BC-STV.

The referendum was coincident with the provincial vote. Only weeks away from the vote, an Angus Reid poll showed that two-thirds of respondents knew “nothing” or “very little” about BC-STV.

Then to everyone’s surprise and my delight, BC-STV almost passed despite the high threshold: 60 per cent of voters had to be in favour as well as 60 per cent of the provincial districts.

The threshold for districts easily passed with 76 of 79 districts in favour. The popular vote came within a hair`s breadth of passing: 57.7 per cent. Support in Kamloops was the lowest in the province at 49 per cent in both districts (Elections B.C.). Bud Smith, the popular Social Credit MLA from 1986 to 1991, led the no vote in Kamloops.

The popularity of BC-STV seemed baffling given the lack of understanding of just what voters were supporting. But not so baffling in light of a recent referenda, such as Brexit. British voters were as much against immigrants as they were for leaving the European Union. Clearly, voters don’t necessarily answer the question on the ballot.

BC-STV was on the ballot but not on voter’s minds; rather, it was dissatisfaction with Gordon Campbell’s BC Liberals. The BC Liberals lost 31 seats, down from their record win of 77 out of 79 in 2001.

My second disappointment was the defeat of the BC-STV referendum again in 2009. With the earlier referendum being so close, I hoped, against discouraging opinion polls, that earlier support was not a fluke. This time, even in Kamloops, electoral reform would prevail. I joined city Councilor Arjun Singh, Gisela Ruckert, and others in Fair Voting BC. In a column for the Kamloops Daily News (May, 2005), I implored:

“This is a limited time offer.  The chance to change our electoral system comes once in a lifetime, . . . Don’t let this chance to make history pass you by.”

It was not to be. A disinterested electorate, 51 per cent of eligible voters, returned the BC Liberals for a third term, defeated BC-STV by 61 per cent and buried electoral reform for decades.

Trudeau raised my hope federally by proposing unilateral legislation. But Canadians want a referendum (73 per cent in an Ipsos poll).

A referendum would doom electoral reform to failure. Voters like the idea of proportional representation but have trouble understanding the voting systems that would accomplish it. The outcomes of referenda in B.C., P.E.I and Ontario made that clear. The same would be true of a federal referendum says pollster Environics. The vote would be split between three alternatives –the current system and two types of proportional representation:

“In a referendum, not one of these three alternatives would achieve majority support — leaving the reform project to die, along with virtually every other proposal ever put to a referendum in this risk-averse country.”

And that assumes they vote on the ballot question.

Provincial health ministers should stop bickering

The provincial health ministers should resolve in the New Year to stop bickering, take the money from the feds, and use it as intended.

bickering-health

 

It’s a recurring bad movie says Canadian Medical Association president Granger Avery: “The Groundhog Day-type discussions where political leaders bat around percentages and figures at meetings in hotels have to stop. Our system needs better, and most important, our citizens deserve better (Globe and Mail, Dec.19, 2016).”

The provinces have had thirteen years of increases from the feds at 6 per cent a year to improve health delivery. “The transfers have been growing quite generously,” says Livio Di Matteo, a health-care economist at Lakehead University in Thunder Bay. “If you go back to about 2007, if you look at public-health spending, which is largely provincial, it’s grown about 40 per cent. The Canada Health Transfer to the provinces has grown about 70 per cent.”

We need to spend smarter. Canada spends more on health care than Australia, for example, with poorer outcomes as measured by life expectancy and infant mortality.

The provinces have not fixed the problem during times of plenty and now are faced with problems of an aging population. In addition to increased funding at 3.5 per cent a year, the feds have offered $11.5 billion for home care and mental health. I don’t know who writes the province’s absurd scripts: let’s refuse the offer, even though it’s what we want, because we want more.

Provincial health ministers don’t get it. B.C. Health Minister Terry Lake worries that if B.C. were to take the money offered, and start home-care programs, that the programs wouldn’t be sustainable when funding dries up. That would be true if hospital costs remain the same when home-care programs are added.

Home-care programs would reduce hospital costs. Hospital beds cost $1,100 per day whereas home care is one-quarter that cost according to the Canadian Institute for Health Information. Seniors take up 85 per cent of those expensive hospital beds and one-half of them remain in beds even though they are well enough to be moved because there are no long-term care facilities or home care.

Take the money spent on hospitals and spend it in the community. That would mean that four seniors would be cared for at the same cost as one in a hospital -and they would be happier.

The politics and perception of health care would have to change. Hospitals have become a measure of a politician’s success because they are highly visible monuments to health care; something that you can be sure the B.C. minister will point to often in the campaign leading up to the provincial election next May.

It’s a problem of perception, too. Home care is virtually unseen except by the few affected. It’s hard to point to the thousands of seniors happily living at home as a measure of success. British Columbians will have to change perceptions of health, from hospitals as shrines were doctors are the high priests, to a flatter hierarchy where care is diffuse and in the hands of other professionals.