Gabriel Yiu: Gordon Campbell's $100-billion legacy

RAFE HERE

This document is another must read. It was prepared by Gabriel Yiu a former and perhaps future candidate for the NDP, something he  scarcely denies. I felt the need, therefore, to ask The Common Sense Canadian’s Economist, Erik Andersen, scarcely a socialist, to review it and he replied,

“Looks good. The only addition I can think of is that at the end of the IPP contracts Hydro do not own the assets. This was what John Calvert stated either in his "Liquid Gold" or to me personally. You know the contracts are designed to pay off all loans held by the IPP before the contract end.”

I would advise Liberals against reading this and depend on their natural state of denial instead. If, however, they wish to respond, I will give that response the same circulation I’m giving Mr  Yiu’s piece

This article is reprinted from The Georgia Strait.

Gabriel Yiu: Gordon Campbell's $100-billion legacy
Publish Date: September 25, 2011

Recently, the Fraser Institute again praised Gordon Campbell as the best premier in fiscal management in Canada. This is indeed a big joke, as well as a lie. But such an absurd matter was reported by many media outlets.

This so-called “research report” has shown again the total lack of trustworthiness of the right-wing think tank.

Let’s take a look at the Campbell Liberal fiscal record from 2001 onward.
When the NDP formed government in 1991, the provincial debt was $20 billion. In 2001, the year the Liberals got into power, there was  an operational $1.2-billion surplus and a debt of $33.8 billion. In other words, after a decade of NDP rule, the provincial debt increased by $13.8 billion.

The biggest deficits in BC’s history were recorded during the decade of the Liberals’ governance.
 On the debt front, the Liberals' record is very scary. In 2011, the traditional debt on the books is $53.4 billion—that is, an increase of $19.6 billion in the years after they formed government. It’s 42 percent higher than the NDP government's debt increase in the 1990s.

Nevertheless, behind the image of adroit fiscal management, the Liberals have another ledger that they’re unwilling to account for. The debt load in this ledger is a staggering $80.2 billion! It’s because the Liberal government has been using the P3 (public- private partnership) model instead of the traditional approach for financing their capital-spending projects (building bridges, roads, hospitals, etc.).

In the traditional model, the cost of construction is borrowed by the government, so it’s defined as debt and must be reported in the budget this way.

Since the government can borrow at a much lower interest rate than the private sector, its cost is less compared to proceeding with a P3.

Under the P3 model, the government still needs to pay for capital projects, but this payment is defined as a “contractual obligation” and not debt. As a result, this enormous “contractual obligation” (in fact, debt) is not shown in the B.C. budget.

The humongous “contractual obligation” also includes long-term power purchase contracts signed by BC Hydro with private power merchants. These contracts last for decades and the purchase price
is double that of the market value, or 15 times the cost of B.C. Hydro’s generation cost. The price under which the provincial government agreed to buy private power is higher than what B.C. Hydro charges its customers.

The Liberal energy policy brings huge losses not only to B.C. Hydro. B.C.’s residents and businesses all have to pay higher electricity bills as a result.

The intriguing coincidence is that many of these private power merchants who benefit from the deals are generous donors to the B.C. Liberal party.

At this time, the public can only find out the contractual obligation “debt” in the B.C. Public Accounts. If the former Auditor General had not instructed the government to declare the  contractual obligation, then the public would have no idea how serious the matter is.

The contractual obligation was first revealed in 2005. Since then, the sum has grown threefold. Just last year, the Liberals added $27.2 billion “debt” to the contractual-obligation ledger.

So if you add the Liberals’ traditional and non-traditional debts together, the last decade has seen an increase of debt to the tune of $99.8 billion.

That is seven times more than that accumulated by the NDP in the 1990s.

Ten years of Liberal governance with almost $100 billion of new debt, and yet we don’t see a single media feature on this grave matter. Instead, we have a right-wing think tank praising Campbell as the best fiscal manager. That’s truly incredible.

Gory details revealed in megaproject estimates.

The about-to-be-completed new roof of the B.C. Place was supposed to cost $365 million, according to government announcement in January 2009. Now, the government says it will cost $563 million. That’s more than 50 percent over budget, but the Liberal government keeps saying the project is “on budget”. And so many media just report the deception without checking the facts.

Yet Campbell can still be held up as fiscally the best premier in Canada. Isn’t it amazing?

The fact is, this kind of nonsense is not unique. Earlier, the Fraser Institute released a shocking study, which said that immigrants are a huge burden on Canada. Each year, according to the report, the government has to subsidize an immigrant $6,501 on average or $23 billion in total.

Immigrant communities immediately rebutted the findings of the report. But since this is a study conducted by a renowned research institution and the media has reported it, many Canadians would think that it’s true.

Then, two scholars at Simon Fraser University studied the Fraser Institute immigration report and concluded that it overstated the subsidy by 11 times! According to the calculation of the SFU  scholars, the average subsidy per immigrant is $450.

Many might recall that in June last year, just before the implementation of the HST, the Fraser Institute released a “study” supporting Campbell’s HST. The right-wing think tank stated that HST is revenue-neutral, so the B.C. government would not collect more tax. The Fraser Institute study also stated that low- and middle-income families would save money due to the HST.

After more than a year with the HST, we all know how unreliable the Fraser Institute study is. By now, I hope the media and the public will realize that the mandate of the Fraser Institute is given by big businesses, and it definitely does not stand for the public interest with these types of studies.

*********************************************************

http://www.straight.com/article-470026/vancouver/gabriel-yiu-gordon-campbells-100billion-legacy

BC Hydro's Plans.

Greetings,

I’m sending you this email because you are on my 10,000 person email list of community leaders in British Columbia and I know that you want to be made aware of a very serious event which has emerged due to dryer climatic conditions here in BC.

Yesterday, our public electricity utility BC Hydro applied to the B.C. Utilities Commission to use $220 million from a deferral account to cover increased power exports expected during the fiscal year that ends next March.

The BC Hydro deferral account is used to keep fluctuations in electricity costs from causing sudden spikes in electricity rates. The account is drawn on when costs go up, and the utility pays it down in years like 2007 when an abundance of water allowed more power to be sold for export.

“We” as BC Hydro customers pay a "rate rider" on our monthly bills that goes into the deferral account, currently at four per cent of the residential electricity billing.

This application represents a pivotal point in energy policy where BC residents will be blatantly abandoned in favour of export contracts with the United States. This is a trend that must be reversed. BC energy must be first and foremost for the people of British Columbia – not to be used as a cash cow for decision-makers in Victoria.

The trend is clear, northern BC rivers are running at near-record low levels, the region missed out on much of the June rain that filled lakes and streams in the rest of the province after a warm winter that left low snowpack behind. The Peace, Stikine, Nass and Skeena Rivers are all near record low levels for this time of year, according to this week's water supply bulletin from the B.C. environment ministry.

The dry conditions have left the Williston Lake reservoir on the Peace River at 77 per cent of normal level for this time of year. Stream flow conditions are normal in most of southern B.C., except for the Fraser River, which is well below normal level throughout its length.

Using the environment ministry rating system, the drought level for the Southern Interior and Vancouver Island is generally level one (normal). The Central Interior is classified as level two (dry) and the drought level for northern rivers is generally level three (very dry).

Last year saw summer drought conditions in parts of the southern Interior that prompted the first-ever suspension of a water license for a ranch in the Nicola Valley. So what we are learning is that in BC there are extreme and fluctuating climatic conditions that are unpredictable.

The government must set a priority to protect its citizens within a good framework of stewardship first – before it creates export contracts that it may not be able to deliver on.

Please make your voice heard – tell your MLA that you are not satisfied with the BC Hydro application to squander “our” deferral account.

Email your concern directly to the Minister in charge:

Honourable Bill Bennett

Minister of Energy, Mines and Petroleum Resources

EMPR.Minister@gov.bc.ca

Please forward this email to your friends and contacts.

Sincerely,

Don Elzer

*************************************************************

Decision on massive B.C. hydro project could be near -- The Canadian Press

A map of the proposed location for the Site C dam in northeastern B.C. A map of the proposed location for the Site C dam in northeastern B.C. (Courtesy of BC Hydro)

The province is about to announce a decision on the decades-old proposal to build a massive hydroelectric-generating dam, known as Site C, in northeastern B.C., says Energy Minister Blair Lekstrom.

Lekstrom won't say exactly when the government plans to announce the decision, but suggests it will be soon because the province has promised to deliver a decision in spring 2010.

The Site C megaproject near Fort St. John would cost an estimated $6 billion, but would produce enough electricity to power 460,000 homes.

Heralded by some as B.C.'s energy saviour since the 1970s, the project has been reviled by environmentalists and farmers because of the amount of land it would flood.

"The key issue is that we're going to live up to the commitment that we made. One way or the other we're going to make a determination to either proceed or not proceed," said Lekstrom.

If the government decides to move ahead, the proposed project will undergo environmental assessments and consultations with local First Nations, area residents and governments, he said.

"Ultimately, it will be government's decision to proceed or not proceed to the next stage."

Site C would be the third hydroelectric dam on the Peace River, joining the W.A.C. Bennett and Peace Canyon dams.

Crown-owned BC Hydro says the proposed dam would be located about seven kilometres southwest of Fort St. John on the Peace River.

Site C, providing about 900 megawatts of power, would create an 83-kilometre long reservoir and flood more than 5,340 hectares of land in the Peace River Valley.
Renewable energy vs. vast reservoir

BC Hydro says the dam would create clean, renewable energy while emitting minimal greenhouse gases.

But people, buildings and roadways will have to be moved and wildlife and farmlands will be lost.

Matt Horne, of the Pembina Institute, said he expects environmental groups and some area First Nations to voice strong concerns about any decision to move ahead with Site C.

Environmental groups are concerned that the government appears to be considering huge projects on an individual basis rather than looking at developments and their potential environmental impacts on a more province-wide basis, Horne said.

"It would be concerning to see the province move ahead, or continue moving ahead with the project, without any meaningful decision-making process about the types and scale of projects we're pursuing," he said.

BC Hydro has said the project would undergo a number of reviews and assessments before it could proceed.

"Should the provincial government decide to continue pursuing Site C, the project would be subject to provincial and federal regulatory review including comprehensive environmental assessment and permitting processes," said a report on the corporation's website.

"Effects on the environment include flooding and water flow impacts on fish, wildlife and agricultural land, local air quality impacts and construction impacts," said the Hydro website. Read more!

**********************************************************************************