How I learned to like the monarchy

As a ten-year-old, I was eager to see Princess Elizabeth when she visited Edmonton in 1951; a year before she became Queen. My parents and I lined the street along with hundreds of other Edmontonians to catch a glimpse of her, only a few blocks from where I lived.

  photo: Yousuf Karsh (1951)

I didn’t know anything about the monarchy. I probably would have been as enthused if she was a Disney princess. My parents probably understood the celebratory mood better. The pretty young princess and heir-apparent to the throne embodied both celebrity and power.

Older, I admired countries that had shed monarchies like the Republic of France with their evocative motto “Liberty, Equality, Fraternity.” I wanted Canada to be more like The Republic of the United States, our exuberant neighbour to the south.

Despite reservations about the monarchy, I liked the fact that Canada is part of a club: the Commonwealth of Nations of which Elizabeth is head. The motto of “free and equal” suited my sensibilities. In my twenties, I fancied myself as a citizen of the world. Since the Commonwealth spans the globe with 52 member states and one-third of the world’s population, it was a club worth exploring.

So in 1964, I quit work and spent a year traveling around the globe by ship visiting some countries in my Commonwealth: New Zealand, Australia, Singapore, India, and the United Kingdom. Looking back, I marvel at how easy it was to visit and find work in those countries.

I’m less thrilled with the Commonwealth now but more comfortable with the monarchy. The queen represents stability at a time when countries are rocked by politics.

When a crisis arises, such as in B.C. when former Premier Clark clung to power, the Queen’s representative in B.C. plays a critical role. After the BC Liberals were defeated in a confidence vote, Clark wanted to call another election -something no one else wanted. Lieutenant Governor Judith Guichon sensibly refused the request and invited John Horgan to form an NDP minority government. Guichon’s decision was not arbitrary: it was the result of deliberation and consultation with others of the Queen’s representatives in Canada and in the Commonwealth club.

Now I’m less envious of the United States where government is mired in politics, a maniacal president runs amuck, and constitutional crisis looms. I’d be happy to lend them our Governor General to settle things.

The Queen is remotely located but locally represented by Lieutenant and Governors Generals. They represent a kind of glue that holds the Canada and the Commonwealth together in turbulent times. When their duties are not required, they sit on a stately ceremonial shelf; descending only to lend gravitas to public events, awards, and ceremonies.

The selection of the Queen’s representatives generates pride in Canadians. Julie Payette is just such a person. As an astronaut, she saw the entire Commonwealth in 90 minutes –something that took me a year to do and I only saw a faction of it. As a scientist she is an ideal role model for kids who look for inspiration from a remarkable Canadian.

Now I think that a constitutional monarchy makes eminent sense.

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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.

 

Pipelines are good politics, bad economics

New pipelines get politicians elected. However, they will remain empty; much like election promises that remain unfulfilled. There are good environmental reasons not to build new pipelines but the economics are rarely discussed.

broken-pipeline

First the politics. Workers in the resource extraction industry like new pipelines because they symbolize well-paying jobs. NDP leader Adrian Dix learned that bitter lesson in 2013 when he opposed the proposed Kinder Morgan pipeline and regular unionized workers flocked to the BC Liberals.

Prime Minister Trudeau understands the politics of pipelines when he approved three pipelines and placed one under review (Trans Mountain, Enbridge Line 3 and Keystone XL approved and Energy East under review.)

However, approval of pipelines does not guarantee that oil will actually flow. Thomas Gunton, Director of the Resource and Environmental Planning Program at Simon Fraser University, has done some number-crunching. His analysis suggests that we are going to end up with a lot of empty pipelines:

“Building all four projects would therefore result in 2.4 million to 2.7 million bpd [barrels per day] of excess capacity in 2025, equivalent to about four Trans Mountain expansion projects worth of empty pipeline space (Globe and Mail, January 12, 2017.”

To put these numbers in context, our current capacity for pipeline and rail is five million bpd. The Canadian Association of Petroleum Producers (CAPP) forecasts that the current capacity will fill needs up to 2025. Note that this prediction is not coming from some environmental group but the very industry that produces the stuff.

Even existing pipelines may remain empty. The National Energy Board (NEB) projects that the price of oil price will drop by $17 a barrel. New climate policies that could further reduce production further.

Empty pipelines are expensive. Guess who’s going to pay for them?

“The capital cost of empty pipeline space would be about $25-billion, which would be borne by the Canadian energy sector in terms of higher tolls and by the Canadian taxpayer in terms of lower tax payments to government due to lower corporate profits. If current rail capacity is included, the surplus capacity would be even higher.”

You, dear reader, will pay for empty pipelines in higher fuel costs. The pipeline builders will recover the cost through higher tolls that oil producers will have to pay in order to move their fuel to market.

Politicians like to build monuments. Premier Clark is doing just that in proceeding with Site C dam. Like empty pipelines, transmission lines from the dam on the Peace River will remain empty. The market for electricity is flat and with conservation, consumption could be reduced by twice the output of the proposed Site C dam, according to the B.C. Sustainable Energy Association . They add:

“In its 2013 Integrated Resource Plan, BC Hydro assessed Site C and other possible resource options in relation to forecast energy and capacity needs over the next twenty years. BC Hydro concluded that Site C is needed for its earliest practical in-service date of 2023.”

Like the Egyptian pyramids, new dams and pipelines will create jobs but serve no practical purpose. The difference is that tourists will not flock to see them.

Supreme Court backs B.C. teachers

The government of B.C. has lost its battle with teachers and education will improve as a result. Education spending in B.C. is now the second lowest per student in Canada.

BC education spending is 2nd lowest (CCPA)

BC education spending is 2nd lowest (CCPA)

It was an irrational battle. When Premier Clark was education minister, she tore up the contract with teachers that allowed for bargaining rights related to class size and composition.  It’s galling to think that a member of the government’s government would brag about an bill of parliament that would break a legal contract but here’s what she said in Hansard (January 26, 2002) in support of the bill:

“I am so proud to speak in support of this bill, and I look forward to getting on with the job of building a top-notch education system for British Columbia (Vancouver Sun).”

How could a reduction in spending improve education, you might wonder. Other than a vague suggestion that “choice” was the answer, under-spending and quality education remain contradictions.  Faced with a loss in the Supreme Court, now she is now ready to bargain:

“We’re going to sit down and talk about two really important clauses in the contract, the contract stays in place, labour peace stays in place,” she told CKNW.

With a looming election in B.C., I can understand why her priority is labour peace. But if she’s really keen about resolving the issue quickly, bargaining would not be necessary says BCTF president Glen Hansman:

“Either we reopen bargaining with the restored language as the floor from which we are negotiating – or the government could take a more reasonable approach and say, ‘Let’s proceed with the language restored’ and put the funding in place so we could hire those people and get them into schools,” he told the Globe and Mail (November 10, 2016).

As well as being contrary, Clark is sometimes disingenuous. She extols the virtue of school boards while scapegoating them. She told parliament in 2002:

“And I should point out to the House that school boards, as you know, are locally elected by people in their communities. Their purpose is to reflect the needs of their local communities.”

Clark knows full well that school boards are the ones who must bear the brunt of underfunding. They may be elected by the people but they can be fired if they don’t do the government’s dirty work. The B.C. government has downloaded a whole array of costs, which the government controls but doesn’t provide funding for such as increased BC Hydro rates, MSP, Employment Insurance, WorkSafeBC, the carbon tax, and most recently the teaching of computer coding which will require more equipment –a doomed plan as I outlined in an earlier column.

Clark might argue otherwise, but we can afford to bring funding up to national levels. In terms of GDP, funding has actually dropped in B.C. despite claims that it is at “record levels.”

We can’t afford not to spend money on education. Real estate is worth more now to the provincial economy than the B.C. forestry, natural gas and mining industries combined but eventually we will have to rely on a well-educated work force. Why delay that inevitability?

Is spending on B.C. education really at “record levels?”

The BC Liberals claim in a fact sheet that spending on education is at record levels. A reality-check shows otherwise. Sure, spending is up if you consider only dollar amounts. When inflation is factored in, a different outcome emerges: there is no increase at all.

CCPA on Twitter

CCPA on Twitter

For example, from 2009 to 2013 B.C. education spending increased by 5.6 per cent which is almost exactly the rate of inflation. Across Canada, spending is actually increasing. It’s up by 12.3 per cent according to the Canadian Centre for  Policy Alternatives. Their assessment of the BC Liberals’ claim is blunt:

“As much as government may like to brag about the dollar amounts of funding, ignoring the basic inflation rate and other cost pressures obscures the meaning of those numbers.”

Spending is not at record levels and spending per student is dismal. Compared to the rest of Canada. B.C. is second last with PEI at the bottom. Alberta is second highest with Manitoba at the top.

However, Premier Clark can truthfully boast about record spending in one area. Funding for private schools has increased at more three times the rate of public schools over the past ten years, and is now projected to reach $358 million in the 2016/17 school year.

Premier Clark clearly likes private schools: she sends her son to St. George’s School in Vancouver at a cost of about $20,000 per year. In welcoming a new parliamentary secretary to the minister of education for private schools, she said: “I’m pleased to have him joining our excellent team of parliamentary secretaries, advocating for independent schools throughout B.C.”

She is mistaken in the belief that private schools are better. Student performance is affected by their parents’ socioeconomic status. In a study by Statistics Canada and reported by the CBC, the success of students is a result of resources at home.

“For example, compared with public school students, higher percentages of private school students lived in two-parent families with both biological parents; their total parental income was higher; and they tended to live in homes with more books and computers,” the report says.

Premier Clark makes it evident that she no intention in catching up with the rest of Canada on spending. In her mandate letter to Mike Bernier, Minister of Education, she instructs him not to increase spending:

“1. Balance your ministerial budget in order to control spending and ensure an overall balanced budget for the province of British Columbia.”

At first glance, the plan to close underutilized schools seems perfectly rational until you consider the details. They count computer labs, art and music rooms, as “empty” because they are shared by all students. By this warped calculation, a school with seventeen full classrooms and three “empty” rooms would be only 85 per cent full.

Despite all the perky talk about how great Clark’s government is doing, the real agenda of the BC Liberals is clear: keep spending on public schools low and ensure that private schools are available to the deserving rich.

Alberta to overtake BC on carbon reduction

Alberta is about to take the lead in reducing greenhouse gases says the non-partisan group Canada’s Ecofiscal Commission. In a recent report, they compared the four provinces that have a carbon price and concluded that Alberta will have the most stringent policy by 2020.

Canadians support carbon pricing -poll, April, 2016

Canadians support carbon pricing -poll, April, 2016

By stringent, they mean the most effective overall plan in reducing greenhouse gases in which carbon pricing is just one of five methods. Commission chair, Professor Chris Ragan, explains:

“When comparing provincial carbon pricing policies, it is useful to use metrics that take into account the various design details, such as coverage and trade that differ from policy to policy. That way we are comparing policies on a more level playing field.”

Of the five ways, carbon pricing is still the most important. For that reason, Alberta and British Columbia both have more stringent carbon pricing than Ontario and Quebec who use the cap-and-trade approach. Supporters of this approach argue that pricing alone through taxes is a misleading; that cap-and-trade will work.

The advantage of carbon pricing is that it is simple –it’s a direct tax applied at the gas pump. The cap-and-trade system uses market forces to determine the price of carbon by first setting a cap on the amount of carbon that any industry can emit and then allowing industries to buy and sell unused allowances. If one industry gets under the cap, they can sell the remainder to those who go over.

Watch out, you provinces without carbon pricing. The federal government is holding a big stick: if you don’t implement carbon pricing, the feds will. Federal Environment Minister Catherine McKenna said all governments will have to increase the stringency of their climate policies, including carbon pricing, in order for Canada to meet its international commitments.

Provinces aren’t used to federal leadership. In the past, the feds have been notoriously negligent in reducing greenhouse gases. As a result, Canada has become a international slacker in the fight to confront the global threat of climate change. Under the Chrétien Liberals, promises were made but never kept. Under the Harper Conservatives, no promises were made and provinces did as they pleased.

Several premiers have voiced opposition to any federal price on carbon – including Saskatchewan’s Brad Wall, Quebec’s Philippe Couillard and Nova Scotia’s Stephen McNeil.

Meanwhile, the clock is ticking, reports the Globe and Mail (July 27, 2016) and the commission’s report is timely. “Its report informs talks between Ottawa, the provinces and the territories as they attempt to reach a pan-Canadian climate strategy this fall. Officials are working through the summer on a series of policy issues, including efforts to forge a minimum national carbon price.”

While B.C. can take some pride in being the first province to implement carbon pricing, that lead is in jeopardy. With a B.C. election in less than a year, Premier Clark will have to walk the line between satisfying the business community that opposes higher carbon taxes and the progressive community who wants B.C. to keep the lead in the carbon-reduction.

Canada’s new economic reality

 

As Canada emerges from the Dark Decade, we need to get back on track with a modern economy.

The Harper government’s plan to make Canada an “energy superpower” was a disaster for a number of reasons. The plan reversed our progress as an industrial nation; it insured that Canadians would become the highest per capita emitters of CO2; it failed to anticipate the vagaries commodity markets.

lumberjack

As long as we are hewers of wood and drawers of oil, we are just a colony of economic powerhouses. Mel Watkins identified this failed strategy as the “staples trap” in 1963.

“The tendency for the country to tilt its economic resources and policies in support of one particularly in-demand staple or another that, inevitably, leaves the economy struggling when the staple falls out of favour (David Parkinson, Globe and Mail, July 2, 2016).”

Watkins, now 84, looks back on the Dark Decade: “We bet the farm on oil prices staying high and rising, but that hasn’t happened and, it would seem, is unlikely to in any near future. We need to go back to the 1970s when there was genuine debate in Canada about industrial policy transcending staples.”

Back then, after World War II, Canada had shifted its workforce from agriculture to factories. By 1999, the high-value sectors of automotive, aerospace, transportation, electronics and consumer goods employed 60 per cent of the workforce. At the same time, the resource-sectors of agriculture, energy mining and forestry together only employed one-quarter.

What seduced Canada back into the staples trap? In a word: globalization. We gleefully sent manufacturing jobs to low wage countries with low environmental standards. Exports of metal ores doubled since 2000. Energy exports increased by 55 per cent at the same time as auto exports fell by 11 per cent. Economist Jim Stanford sums it up:

“The global commodities boom shifted Capital and policy attention towards extractive industries. Canada’s economy has been moving down, rather than up, the economic value chain.”

We’ve these cycles before where expansion in one part of the world triggers a global commodities boom. This time it was the modernization of China that triggered the boom. In the past it was the reconstruction of Europe and Japan after the war, and before that it was the rise of the U.S. as an industrial power.

Parkinson looks to future: “For the oil and gas business, the long term prospects look even more grim. The growing global momentum for green energy looks poised to steadily erode demand for fossil fuels over the coming decades. We may one day look back on the oil-price collapse of 21014-15 as the beginning of the end for the industry.”

During the Dark Decade, Canada invested heavily, not only in political resolve to exploit the dirty tar sands, but in the human and financial capital needed to dig the stuff up. It will take time to shift gears but Canada must shed its colonial mentality. It’s happening. Enbridge has invested $1 billion in wind-energy. Alberta has budgeted $3.4 billion for renewable energy.

B.C.’s government still has grandiose dreams of a fossil-fuel economy with liquefied natural gas. While Premier Clark hasn’t yet admitted it, that plan is history.