Theoretically, politicians are stewards of the nation’s resources and regulators of industries that exploit public assets. Yet those chamberlains receive contributions worth millions of dollars every year from the people they are supposed to regulate. Clearly, this is a conflict that occurs only because the beneficiaries are also the rule makers.
Gas producers like EnCana Corp and Canadian Natural Resources (including large shareholder Al Markin) have given BC Liberals close to a million dollars in recent years, according to Elections BC. I searched on the FRPC site for corporate contributors with the word energy in their names. The report showed an amount going to BC Liberals that was 74 times the amount given the opposition NDP. Those same companies gave nothing to the BC Conservative Party and the Green Party of BC.
Are these corporate citizens simply doing a civic duty, supporting democratic institutions? Of course not. They are purchasing influence over people who regulate their economic prospects. Government ministers, who should be acting as trustees of the public interest, choose to be agents and facilitators for businesses with deep pockets and generous inclinations.
We’ve been hearing for months from BC Liberals that revenue from natural gas production is sharply reduced in the current fiscal year. No doubt the public share is reduced but we should be asking why.
I suggest there was a political decision to relieve gas companies from payments they would otherwise have been obliged to make.
In the current fiscal year, sharply lower government revenues do not result from lower gas prices earned by the industry. Here is a chart of natural gas prices in the first half of the current fiscal year.
This is not the first time that a business friendly government in BC has consciously reduced the public share of revenues earned from public resources. The following is a situation that I wrote about in a personal chronicle, Recalling BC Pioneers:
Ian Mahood was angered by what he believed were under the table subsidies to large forest companies, achieved by ‘short scaling’ agreed to at the highest political levels. Scaling measured the quantity of log production, which was used to assess stumpage owing to government as the public share of the forest resource.
American producers were already complaining that BC stumpage charges were too low and therefore an improper subsidy. They wanted punitive tariffs applied. However, the BC companies were complaining that stumpage was too high and depressing their profitability. The BC government dared not reduce stumpage rates because that would add fuel to the American arguments. Instead, an under the table agreement led to keeping the stumpage rates as they were but artificially depressing the ‘scale’. That reduced the amount payable to government by BC producers but avoided giving ammunition to Americans because it was hidden.
However, some contracts between major forest companies and independents called for the actual working loggers to be paid according to the government scale. By artificially depressing the measurement of timber produced, not just the stumpage was reduced; so were the payments to contractors for log production. In effect the small logging operators subsidized profits of the big guys, the forest license holders.
Ian Mahood’s company believed they were out large sums of money but Ian said terrific pressure was put on the loggers to keep quiet. Of course, the big companies and the government had significant leverage they could apply.
It seems to me the same strategy is at play today in the energy sectors. Government intends to reward corporate participants and it is doing so through the back doors. With an election only 23 weeks away, Christy Clark and Mike de Jong dare not admit their real intent.