Consumers have grown used to this situation. So much so, that we don’t bother to notice when government hires experts to study the problem without ever getting around to addressing it. Who remembers the 2013 Senate report that called for removal of “barriers to competition in Canada to narrow the price discrepancies for products between Canada and the United States.” Few recall Conservative Finance Minister Jim Flaherty promising to legislate against country pricing, the policy that ensures nations that tolerate anti-competitive trade practices get higher prices than nations that ensure open competition.
However, the assertion that Canadian businesses – large ones, that is – face higher costs of operation is questionable. Currently, mining, oil & gas companies in British Columbia essentially contribute nothing for what Americans call severance taxes, payments for removal of nonrenewable resources. In five years of the Clark Government, those companies have paid rather little into the provincial treasury. The U.S. Energy Information Administration (EIA) reports the proportion of severance taxes to total state revenues in 2014 for a number of states. There is little comparison to British Columbia.
Large corporations in Canada’s western province enjoy another treat from the BC Business Party led by Christy Clark. EIA surveys average prices paid by American businesses for electricity; BC Hydro reports the same. This chart provides a comparison, with U.S. electricity prices converted to Canadian using the average exchange rate. If you’ve been reading my recent work here, you won’t be surprised:
One of the excuses given for higher consumer prices in Canada is that goods distributors must service lightly populated areas. Yet, BC Hydro is delivering subsidized power to many remote operations, including Red Chris mine, 900 kilometres by road northwest of Prince George. They are spending a fortune to do it. Guess who pays for that power transmission?
Imperial Mines, Red Chris and Calgary billionaire Murray Edwards are themselves worth a book. Although Walrus Magazine is the opposite of a radical journal, it provides surprising details in A Power Line to Nowhere. The Common Sense Canadian adds more in Bait and Switch: Red Chris Mine, ‘Green’ Funding and the Northwest Transmission Line. (Links below)
My point in this and other articles is that our so-called free enterprise economy has been captured by special interests and is being played to their advantage. The result for them is trivial taxation and unhindered conduct of business (the red-tape reduction gambit). Individuals and small and medium-sized businesses get higher priced goods, onerous taxation, municipal restrictions and fees for service at every turn.
Special interests grow wealthier and use financial power to consolidate control of the political system. Increased influence buys yet more benefits. In history, the flow has continued until the elites’ self-indulgent excesses led to revolt and revolution.
There is a wise old maxim:
If you do not change direction, you may end up where you are heading.
A large number of people in British Columbia should keep that in mind.
— Norm Farrell (@Norm_Farrell) March 14, 2016
* * * * * * * *
Links noted above: