Economists write papers on the circular flow of income but they don’t include the flow between politicians, businesses and the public treasury. In BC, it is commonplace. If you are an observer grown cynical – like the writer – you may wonder what secret benefits are to be found in the circular flow of income between Government, the governing party of British Columbia from 2001 to 2017 and the companies they purport to regulate.
The government’s reckless decision to proceed with the $8.8 billion Site C dam project, without a proven medium term domestic need for the additional power, will seriously weaken BC Hydro’s already poor financial outlook. Possible options to finance the dam must not preclude the fiscal capacity of BC Hydro to reform and restore its existing financial situation, within the context of future affordable rate increases…
Clinging to power may offend our unwritten constitution but it enabled Liberals to advance favoured projects and reward favoured supporters. More importantly, the defeated Premier has used her illegitimate position to promote an entirely new election platform, mostly lifted from those of opposition parties.
BC residents: we’ve been played for fools by BC Liberals, the private power industry and a complicit media. Between 1997 and 2015, the utility increased assets by $17 billion and added another $4 billion by December 2016. With markets flat but purchases from Independent Power Producers rising steadily, BC Hydro must reduce production of low-cost hydroelectricity in its own facilities.
Anne Cameron: Well, we’re less than 300 fulltime residents, we’re at the end of a goat track, we’re an hour and a half out of Gold River and, frankly, who gives a poop. We’re being fleeced by two corporations, and we’re being screwed by the government which allows out-of-sight out-of-mind pillage which they will insist on calling “resource extraction”.
After four decades of successful operation, BC Hydro changed drastically under Campbell/Clark Governments. It’s become a patronage playpen, with the chief executive suite and the boardroom peopled with loyal Liberal friends. It’s been a comfortable ride for BC Liberals but a disaster for residents and small-medium businesses. Now the incompetents want to make it even worse by delivering billions more to companies of questionable integrity. Important Site C contractors have been implicated in corrupt and questionable practices.
Fraser Institute, the taxpayer supported voice of Canada’s billionaires and multimillionaires, uses the Vancouver Sun to raise a question, “Will a Horgan-led government keep the NDP’s election promise to balance the budget, and if so, how?” We provide answers.
The structure of the Canadian Entitlement makes it an extremely valuable commodity in the utility industry. Electricity is more valuable when it is virtually guaranteed to be available, or “reliable,” and when its delivery can be shifted to times of high demand, or “flexible.” The Canadian Entitlement offers both of these attributes. British Columbia’s sale of 4,540 GWh of electricity brings in about $120 million a year, which is 2.64¢ per Kwh. We didn’t need that power because, with ever-increasing purchases from independent power producers (IPPs), the province had surplus electricity. In the last reported quarter, December 2016, BC Hydro paid an average of 9.14¢ a KWh to IPPs. Had BC replaced IPP power with the Canadian Entitlement, at 9.14¢/KWh, it would have saved $295 million in 2016.
The prospect of lost power and influence has financial elites gathering money to conduct unprecedented misinformation campaigns. They will be assisted by a dependent corporate media that has grown too close and comfortable with the few people making political policy in our province. For example, as I’ve pointed out repeatedly, resource industries gained billions through subsidies and tax reductions and they are willing to spend heavily to maintain those benefits. In the transition period, it will be important for citizens to ensure that all points of view are heard and evaluated, not just the views of special interests.
The 2009 BC Liberal platform makes broad promises and one of them provides the title for this piece. Their platform offers this additional reassurance:
“. . . expenditures, backed up by a detailed business plan for every ministry. But our record shows that we have the competent team and credible plan to get it right.” Does that give you confidence tax dollars will be managed prudently? Perhaps we should examine BC Liberal announcements for one ongoing mega-project, BC Place Stadium.
BC Hydro’s own statistics prove the utility has no good business reasons to be building Site C. Domestic customers use the same volumes of electricity today as a dozen years ago and rapidly rising prices will ensure further conservation moderates consumer demand. BC Liberals argue the new dam should be built, not because it is needed, but because it is providing jobs. That, of course, fails to account for financial damage to commercial and industrial enterprises hit with rapidly rising electricity rates. The competitive advantage of low cost electricity once enjoyed by BC employers has been squandered.
Is the BC Liberal Party involved in racketeering, extorting cash from corporations in return for protection from legal and financial sanctions? That the question can reasonably be asked demonstrates the urgency of prohibiting major payments to political parties by groups doing business with government or subject to regulation by public authorities.
The first part of this article was written in November 2009 and the addendum was added April 2016 and subsequently updated. I repeat this item because it demonstrates that, while applying austerity to the province’s most needy citizens, the Clark/Campbell Liberals have treated a favoured few quite differently.
BC Hydro and their consultants have not moved up the learning curve despite being wrong year after year for more than 12 years and sadly the BCUC has let them ride on this way. The consequence of being deliberately wrong for 12/15 years is the condition we now have. Residential and small business rates up +70% with no increase in demand. We also have new contractual debts of plus $60 billion to IPPs…
Harry Swain, a former federal deputy minister, was Chair of the federal and provincial Site C Joint Review Panel. He has strong views about the project and about financial reports issued by BC Hydro. On June 8, Dr. Swain appeared on CFAX with Pamela McCall (audio is linked below). In most jurisdiction, the allegation of “accounting chicanery” at a multi-billion dollar crown corporation, made by a highly respected professional, would draw attention of corporate media’s political pundits. However, this is British Columbia and BC Liberals and business friends have put great effort into buying media silence.
Citizens should be astonished by Richard McCandless’ statement that BC Hydro’s “net income is almost fully insulated from the vagaries of actual revenue and expenditures.” Indeed, the utility books revenues not received or owing to it and treats incurred expenses as if they are assets.
BC’s Minister of Energy said in mid October that the $7.9 billion budget for Site C had been examined by top international experts and was assuredly “reliable.” Two months later, Premier Clark revealed the dam budget had jumped to $8.5 billion. Days passed and when project approval was announced, the budget had jumped to $8.775 billion. Once again, the British Columbia Liberals demonstrate practiced mendacity. They are consistent though since mega-projects of the past five years typically doubled between first announcement and completion but were invariably pronounced to be on-time and on-budget. The mantra will be used again…
In a 2104 Supreme Court decision, there is a REQUIREMENT that all contracts, to be valid, can only be agreed upon if all parties are acting in Good Faith. Justice Thomas Cromwell wrote “In my view, it is time to take two incremental steps in order to make the common law less unsettled and piecemeal, more coherent and more just. The first step is to acknowledge that good faith contractual performance is a general organizing principle of the common law of contract which underpins and informs the various rules in which the common law, in various situations and types of relationships, recognizes obligations of good faith contractual performance. The second is to recognize, as a further manifestation of this organizing principle of good faith, that there is a common law duty which applies to all contracts to act honestly in the performance of contractual obligations.”
Politically connected individuals took advantage of citizens’ desire for clean, renewable energy and the Liberals wrote contracts with “lucky firms” that bore no relationship to market prices and guaranteed massive private profits and ensured all financial risks were carried by the public. The contracts in British Columbia last as long as sixty years and involve prices that are now as much as 5x market value. In addition, the contracts have annual inflation escalators.
The mismanagement of BC Hydro is a financial scandal unprecedented in BC’s history. Unfortunately, the corporate media refuses to report these facts. Their loyalty is to not to citizens and taxpayers but to the vested interests that have hands firmly in our pockets.
Mr. Carney’s Speech clarifies Politics https://www.youtube.com/shorts/koRRSIUv_Kk?feature=share CUSMA? A trade deal authored by DJ Trump? Mr. Frum vs Mr. Trump https://www.youtube.com/shorts/aRNX5clKxwM?feature=share…
I have long held the belief that the US dollar holds its high place as a reserve currency is because…
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Reading between the lines of this speech, I can make out letters that spell Gripen.
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