Saturday, August 29, 2009

BC fiscal cupboard is bare

The B.C. government said in its Throne Speech that it will review its health authorities, boards of education and Crown corporations in an effort to find cost savings.

"Shrinking revenues will by necessity curtail our discretionary spending," the government said. "The fiscal cupboard is bare and currently hangs on a wall of deficit spending."

Shrinking revenues: Only three weeks ago the government reduced its revenues by giving royalty breaks to the oil and gas industry, of all businesses.

Is the government of Gordon Campbell merely incompetent or is it determined at any cost to give money to very profitable industries?

Friday, August 28, 2009

Stephen Harper's Senate appointments

Integrity or expedience?

Prime Minister Stephen Harper will name eight new Senators. These appointments will give the Conservatives 46 of the 105 seats in the Senate. The Liberals have 53 and the rest are independent.

Stephen Harper,
January 15, 2004:

"... the Upper House remains a dumping ground for the favoured cronies of the Prime Minister."

Conservative Party website during 2006 election:

"A conservative government will not appoint to the senate anyone who does not have a mandate from the people."

Yet, the government has "now made 27 Senate appointments of his Conservative cronies in less then a year."

And what a lucrative "job" it is! It pays $ 132,000.- for working
, on average, 70 days a year sitting in the Senate. However, this didn't stop some of the new appointees wanting to keep their current jobs as well.

Tuesday, August 25, 2009

It's not about Khadr. It's about us.

CTV News reported:

Omar Khadr's lawyer says his client is being unfairly punished by the Conservative government, which has steadfastly refused to request his repatriation from Guantanamo Bay despite court rulings ordering it to do so.

Earlier this month, the Federal Court of Appeal upheld a lower court ruling in Khadr's favour and ruled the government must move to bring Khadr home.

On Tuesday, Ottawa confirmed it will fight the decision and take the case all the way to the Supreme Court of Canada.

Khadr's Canadian lawyer Denis Edney said he is mystified by the government's continued refusal to bring Khadr home.

"Every Western country that has had a detainee in Guantanamo Bay has simply requested that their detainees come home, and that has happened," Edney told CTV News Channel
emphasis is mine].

Khadr is accused of lobbing a grenade that killed a U.S. soldier in Afghanistan in 2002, when he was 15. In seven years in Guantanamo Bay, he has not gone through a trial.

Edney said his client should be treated as a child soldier, noting that Canada donates millions to help rehabilitate child soldiers from countries like Sierra Leone, because it considers them to be victims.

"And yet Omar Khadr is not afforded any protection from Canada. It boggles my mind, I just see it as a mean-spirited government that selects what type of Canadian it wishes to assist," he said.
The Government of Canada is saying justice should take its course.

Justice Conservative style.

Even some Conservatives privately admit they have been taken aback by Harper’s utter indifference to pleas about Khadr’s plight."

Besides it's a move which is likely to waste a lot of taxpayers' money. I'd be willing to give odds that the Supreme Court of Canada will uphold the judgments of the lower courts.

Most importantly, it's not primarily about Khadr.

Above all it's about us and the kind of country and society we wish to live in.

Sunday, August 16, 2009

Canadian Pork

Agriculture Minister Gerry Ritz announced that the federal government's is offering $75 million to struggling pork producers as well as $17 million for marketing pork to consumers. "We need to reduce our current over-supply," he said. Ottawa's combination of loans, buyouts and marketing cash isn't enough for the industry. They had asked for $800 million.

This is another example of latter-day-capitalism: Profits are privatized, losses socialized.

Friday, August 14, 2009

Taser Lawsuit against Braidwood Inquiry

Taser International is filing a lawsuit against the Braidwood Inquiry, which ruled Tasers can be fatal and should be severely restricted.

"The Arizona-based company says the inquiry into the death of Polish immigrant Robert Dziekanski at Vancouver International Airport, led by Justice Thomas Braidwood, was biased and neglected to enter evidence brought forward by Taser.

Taser claims "the commission breached basic principles of fairness and fundamental justice... both in its procedure and in the manner in which the report and its conclusions were reached ...

Taser International also alleges that the inquiry's findings were unsupported by medical science ...

Taser will be asking the court to quash large portions of the 19 recommendations made by the commission. It will also be asking for an injunction that would bar Braidwood from using the findings in any future rulings."

Others say the company is using the lawsuit to intimidate its critics and protect its profits.

The use of Tasers has been restricted by police forces across Canada in response to the inquiry.

Thursday, August 13, 2009

BC Minimum Wage

"It’s expensive to live in BC—we have some of the highest prices anywhere for housing, food, transportation and tuition fees. In fact, when you take living costs into account, we actually have the lowest minimum wage level in the country." Some facts about low income earners in BC.

B.C.’s minimum wage is $8 per hour unless you are a worker without much experience when it is only $6 per hour. Moreover, the minimum wage has been frozen since 2001.

Since September 2008 BC has been tied with New Brunswick and PEI for the lowest minimum wage in Canada while having one of the highest cost of living in the country. "In Vancouver a minimum wage earner working full time would have about $240 left in their pocket after paying the rent."

We also have one of the highest transit fares in the country. For example, somebody living in Surrey and working in Vancouver would have $ 166.75 left after paying for the monthly bus pass ($73.25).
Even a single person couldn't possibly live on $ 42.- per week.

If that person is a single parent it would literally be a losing proposition to go to work because of the cost of daycare.

Wednesday, August 12, 2009

RCMP watchdog: The force shouldn't investigate itself

"RCMP officers should not be allowed to investigate their fellow Mounties for serious offenses, because such a system fails to inspire confidence in the investigative process and raises conflict of interest questions, concludes a new report from the RCMP watchdog.

The Commission for Public Complaints Against the RCMP [CPC] has concluded that the Mounties' current strategy of having police investigate police for cases involving sexual assault, serious injury, or death, is "flawed and inconsistent" and needs to be updated and improved. ...

In its investigation, the CPC reviewed 28 sample RCMP cases that took place over a five-year period between April 1, 2002 and March 31, 2007. Six of the cases involved deaths.

And while the CPC found "no instances of actual bias by actual members" and that the Mounties acted professionally in all the sample cases, there were some noteworthy problems."

"No instances of actual bias by actual members": Isn't that amazing! Colleagues investigating colleagues without any bias.

Who can believe that? Especially considering that:

"Twenty-five per cent of the primary investigators in the sample cases personally knew the officers they were investigating.
A lone investigator was assigned in 60 per cent of the sample cases.
In nearly one-third of the sample cases, the investigating officer was at the same rank or lower rank as the officer he was investigating, leaving open the possibility of intimidation.
There was a "significant disparity" in the level of qualifications of the investigating officers."

It would appear obvious to any intelligent 14 year old that this is a flawed system. The only question remaining in my mind is why did it take so long for the CPC to come to that conclusion given the history of RCMP wrongdoing. (Some links at that page do not work anymore but you can always check the accuracy of my contentions by using Google).

The RCMP has rejected a watchdog report that argues that Mounties have to stop investigating their own colleagues in every serious incident involving a killing.

Commissioner William Elliott said there can be further changes to the RCMP's internal investigations policy, but he insisted the situation is “not as bleak” as was laid out by the Commission for Public Complaints Against the RCMP.

Also, consider, for example, the case of Ian Bush, who was shot in the back of his head on October 29th, 2005 by RCMP officer Koester while in custody. Twenty minutes later he was dead. Assistant RCMP Commissioner Al Macintyre said the use of lethal force was necessary to ensure the officer's safety.

Officer Koester claimed that he was being choked from behind [!] to unconsciousness and acted in self defence. He was cleared of any wrongdoing.

Even if that is true,
how does one shoot somebody in the back of the head when that person is behind you?

Many shootings by RCMP officers violated RCMP policy and did not meet force's own standards for the use of deadly force, according to an internal RCMP report obtained by The Vancouver Sun. (July 28, 2008)

"According to the report, of the 30 RCMP shootings nationwide in 2006 (the most recent year for which data was available), only 10 met the RCMP's test for using lethal force -- namely, to protect someone from death or "grievous bodily harm." Another two were outside the officer's control, such as a gun going off in a struggle with a suspect.

Nine violated RCMP policy -- such as an officer firing at a car to try to stop it -- and another nine were accidental, resulting from a member handling a firearm in an unsafe manner.

The internal RCMP report, completed in early 2008 and obtained by The Vancouver Sun through the Access to Information Act, says the number of shootings that violate RCMP policy is troubling.

"If the number of [non-compliant] incidents does not significantly decrease in future years, this would be cause for concern and clearly point to the need for additional initiatives to ensure that members are complying with the law and with policy when they resort to lethal force," the report states.

According to the report, both accidental discharges and non-compliant shootings had tripled over the past two years -- there were just three of each in 2004 -- though it notes this may be a result of RCMP divisions doing a better job of reporting mistakes. The internal report also highlights some stark regional differences in how often officers use their guns. ... In B.C., the number of police shootings has dropped dramatically in recent years, from 27 in 2002 to just nine in 2006. In contrast to B.C., the report notes the number of shootings in Alberta has skyrocketed from just one in 2002 to eight in 2006 (peaking at 12 in 2005). ...Alberta now
[i.e. 2006] accounts for nearly one-third of all RCMP shootings, despite the fact fewer than 15 per cent of its members are stationed there. [That province] is still reporting almost twice as many incidents as would be projected based on member population. ...

B.C.'s relatively low rate of police shootings is in stark contrast to the province's record on in-custody deaths. A separate RCMP report made public earlier this year found that 56 per cent of RCMP in-custody deaths over the past five years occurred in B.C., even though only one-third of the force's officers are stationed here. ...

Some of the report's other findings include [that] less than one-quarter (23 per cent) of the bullets RCMP officers fired at suspects in 2006 actually hit their target."

Here is a list of some incidents from January 2006 to March 2007, which are definitely not the finest moments of the Mounties.

"An internal RCMP report obtained by CBC News shows 80 people died while in police custody between 2002 to 2006, the majority due to alcohol intoxication or drug overdoses, according to the RCMP."

Death in custody
Some examples:

Neil Stonechild, Kevin Geldart, Kevin St. Arnaud

Then there is the sad case of Robert Dziekanski, who
"armed with a stapler" [sic] could not be subdued by four RCMP officers - according to their testimony - without tasering him several times, which killed him. (These officers did not speak the truth - under oath - as they had decided beforehand to use the taser.)

A website with links to major Canadian newspapers about abuse by Mounties (among other things) is here.

There are many subject headings including, Mounties Investigating Mounties, Attempted Cover Up, Excessive use of Force, Mounties Charged.

Sunday, August 9, 2009

The only state-owned bank in the USA is doing very well

It is a rare event these days to find a sound bank in the USA and given American attitudes towards public ownership it is really surprising that it is the only government-owned bank. The Bank of North Dakota has a sound financial basis and is profitable. (Puerto Rico's Government Development Bank is also publicly owned but Puerto Rico is a US territory not a state.) It was created 90 years ago and is "what Republicans might call an idiosyncratic bastion of socialism. It earned a record profit last year even as its private-sector corollaries lost billions."

The bank plays an important role in the economic development of North Dakota, which has a population of only 600,000. Currently the State of North Dakota does not have any budgetary problems, unlike most other states. (California, for instance, can't even pay its bills and uses IOUs - which the State itself refuses to accept as payment!) North Dakota, on the other hand, has the largest surplus in its history. The Bank pays dividends to the State and in difficult times such as 2001 and 2002 when there was a budget deficit the bank increased the dividend on the orders of the governor.


Miracle on the Hudson

Do you remember US Airways Flight 1549 touching down in the Hudson River
after Canada Geese disabled both engines of the plane on January 15, 2009? Captain Sullenberger is not only a very skilfull pilot but also a real Captain. He was the last one to leave the plane and only AFTER he went up and down the aisles in the cabin twice to make sure everybody was off the plane.

"Chesley “Sully” Sullenberger, the pilot who landed US Airways Flight 1549 in the Hudson River last January, was justly celebrated for his skill and courage. Less has been revealed about other players in the drama: those enigmatic geese, the engines they struck, a pioneering French engineer, and an unsung hero—the Airbus A320 itself."

A fascinating article by William Langewiesche is here.

Saturday, August 8, 2009

Donald Marshall Jr. dies at age 55

Donald Marshall Jr. with his mother Caroline Marshall in 2003

Donald Marshall Jr.
was wrongly imprisoned for murder at age 17 and spent 11 years in jail. He was convicted, after a three-day trial, less than six months after his arrest. Even when the Court of Appeal finally acquitted Mr. Marshall in 1983, the judgment blamed him in part, absolving the police of any responsibility, saying that Mr. Marshall had contributed in large measure to his own conviction and that there wasn't really any miscarriage of justice.

It was not until Jan. 26, 1990 that he was completely exonerated when a royal commission released its final report. The inquiry concluded that far from being guilty Marshall was the victim of racism and incompetence on the part of the police, judges, lawyers and bureaucrats. “The criminal justice system failed Donald Marshall Jr. at virtually every turn from his arrest and wrongful conviction for murder in 1971 up to and even beyond his acquittal by the Court of Appeal in 1983,” the commissioners declared.

"Mr. Marshall's father was the Grand Chief of the Mi'kmaq nation, a position for which Mr. Marshall would have been a likely successor. Being wrenched as a young teen from the cocoon-like environment of his reserve, and slapped into a maximum security prison for 11 years, likely prevented him from becoming grand chief when his father died eight years ago."

Justice Denied is an excellent film about his ordeal based on a book by the same title. The CBC characterized him this way: "The name Donald Marshall is almost synonymous with 'wrongful conviction' and the fight for native justice in Canada."

He had another fight with the justice system when he was convicted of "fishing eels out of season, fishing without a license, and fishing with an illegal net. Marshall had been convicted on all three counts in Provincial Court. The conviction was upheld by the Nova Scotia Court of Appeal. He then took his case to the Supreme Court, arguing treaties from the 1760s gave him the right to catch fish for sale and excused him from current fisheries regulations.

The Supreme Court agreed" on September 17, 1999.

In early August 2009, Mr. Marshall was admitted to hospital in Sydney, suffering from kidney failure, probably as a consequence of the anti-rejection drugs he had been taking since his double lung transplant six years ago. He died, aged 55, at 1:30 a.m. Thursday in the intensive care unit, surrounded by relatives."

Rest in Peace Donald.

Natives who went to Day Schools want compensation

When Prime Minister Stephen Harper and the Canadian Parliament apologized to First Nations people for the abuse they suffered at residential schools the people who went to day school (i.e. they went home for the night) were excluded.

Mr. Harper said "The government now recognizes that the consequences of the Indian residential schools policy were profoundly negative and that this policy has had a lasting and damaging impact on aboriginal culture, heritage and language."

The people who went to day school say they suffered the same kind of abuse and are suing the government for compensation. Gary McLean, for example, says when he was 7 years old and could not speak English, he was often punished for speaking Ojibwa. He also claims that he was repeatedly sexually assaulted by a nun until he left the school in 1965.

One student says he had his mouth washed out with soap every time he spoke his own language, says Mason, who is chairman of Spirit Wind Survivors.

If the consequences of destroying people's culture were, in the words of Mr. Harper, "profoundly negative" why were those who went to day schools with the same kind of policies of ethnocide treated differently? Was the apology insincere?

There were about 70,000 aboriginal children across Canada who went home for the night. Now the survivors will sue if the government refuses to negotiate a settlement. If that turns out to be the case they are hoping that their suit will be accepted as a class action suit.

Joan Jack, the lawyer representing day school survivors, says those who went home should be treated the same as students who were kept in residence away from their families. "Whether you went to a school where you slept at night or you went home at night is not relevant to you ending up not being able to speak your language, feeling ashamed of who you are, being abused spiritually. People want to be able to feel that they belong here, that this is our country. We are the indigenous people of this country and Canada is slowly waking up to that fact." The $15 billion the lawsuit is seeking in damages is based on the ratio sought by residential school survivors in their claim, she says.

So far the Government of Canada has not responded and unless it does the Day School survivors will have to sue. Although the group doesn't have a lot of money, Mason says the fight won't stop until the federal government acknowledges the day school residents.

Friday, August 7, 2009

BC Government: Higher personal taxes are good

It is strange what contradictory messages we heard from the BC government within the last couple of days: We were told that higher personal taxes are good for job creation and so are give-aways to profitable corporations in the name of stimulating economic growth.

Energy, Mines and Petroleum Resources Minister Blair Lekstrom announced a lucrative royalties break for oil and gas companies operating in the province
yesterday. We were told on the one hand that it's a very competitive industry but, on the other hand, it needs to be stimulated. (Of course this isn't logical.)

Today Finance Minister Colin Hansen claims that increasing taxes - which the HST (provincial sales tax, PST, harmonized with the GST) will do for consumers by subjecting presently exempt items from provincial sales tax to the HST - is good for job creation. In other words, tax increases are said to be good for the economy. (That's not the song the right wing is normally singing but Mr Hansen insists that tax receipts will fall; see below.)

Mr Hansen said
"by shifting to the HST model, it takes the roughly $1.9 billion of embedded PST costs out of the cost of producing goods and services in the province. That will make us much more competitive." What he didn't mention is that our purchasing power will be reduced through this tax increase. Therefore demand will fall. How can this be good for job creation? Only if the total receipts under the HST are less than what the government presently takes in the form of the PST would this be the case. However, this is highly doubtful since the taxation will affect a broader range of goods.

Mr. Hansen said the implementation will result in a drop in revenues to the province initially, moving to a slight net increase in later years. Many of us still remember Prime Minister Mulroney's claim that the GST will be revenue-neutral, i.e. not be higher than the Manufacturing Sales Tax it replaced. It was just another lie coming from Mr. Mulroney and the tax increase was horrendous.

And this is NOT what Mr. Hansen's source states. (See below)

The PST is charged every time there is a transaction . The GST or the HST is paid by consumers because it is a system that includes credits for GST or HST paid by businesses. GST and HST are so-called value-added taxes and this is essentially a shift of taxation from business to consumers.

Mr. Hansen claims "harmonization will have little impact with respect to the purchase of goods and services currently subject to PST but will mean paying tax on services that are not subject to PST and on some goods that are currently exempt from PST. However, as the current PST embedded in the price of goods and services is removed, it is anticipated that consumers will benefit from a reduction in prices or smaller price increases."

This statement is full of holes.

First of all, taxing goods that are presently exempt from PST inevitably means that their prices will increase. (Does the BC Ministry of Finance propose to rewrite the "law" of supply and demand?)

Secondly, "it is anticipated" that there will be reduction of prices because of the removal of the PST does not mean that this will happen. It didn't happen when the GST was introduced, as far as I remember. (It didn't happened in the UK either when the VAT was introduced.)

And, oops Mr Hansen, your own source (the right wing C. D. Howe Institute) not only states the contrary but also illustrates perfectly the shift of the tax burden. BC consumers are estimated to pay $1,624 billion more and businesses $1,401 billion less for a net increase of 224 million. The latter sum (if this is what will in fact happen) is trivial in terms of the total taxes collected but note the shift in who pays: "Burdens on business would decline substantially with harmonization to the GST base (Table 1 note i) but if such a reform were to be revenue-neutral ... the statutory tax burdens on consumer expenditures would necessarily rise." (p.10) (Nevertheless, on p.14 the author claims: "Overall, consumer prices in the harmonizing provinces fell with the reform, although prices rose somewhat for shelter and clothing and footwear, and that fact tended to make the reform slightly regressive": Oh, the marvels of economics!)

The BC Ministry of Finance makes it quite clear what is really behind this: "Eliminating the PST and moving to an HST will remove a significant tax burden on businesses" and "British Columbia’s decision to move to a harmonized value-added sales tax, together with its previously announced decision to reduce its general corporate income tax rate to 10 per cent by 2011, will demonstrate to the world that B.C. is a good place to invest and do business." (Job creation is the all-time tool for politicians to sell unpopular decisions. Former Premier Bourassa of Quebec, for instance, earned the nickname "Bob Le Job" for the employment he promised the building of the James Bay power plants would create. His claims were lies, or at the very least, a huge exaggeration.)

It's demonstrated not just to the rest of the world but to residents of this province too. Tax relief for corporations and rich individuals
have been hallmarks of Gordon Campbell's governments. In the meantime, people with low incomes have seen their incomes go down in real terms. (That is because prices have risen in the last nine years, incomes have not.)

B.C.’s minimum wage is $8 per hour unless you are a worker with not much experience when it is only $6 per hour. Moreover, the minimum wage has been frozen since 2001.

Legal aid for the poor has decreased by about 25 percent since 2001.

Campbell passed a law that allows landlords to increase rents by a percentage equal to the rate of inflation plus 2 % without the tenant's ability to go to arbitration.

These examples are not the only ones demonstrating the business friendly nature of the BC Liberals and their hostility towards the poor.

HST means a tax increase of 7% for those goods and services which are PST exempt at the moment. (The PST is 7% except for liquor and some passenger vehicles which are taxed at higher rates. It remains to be seen if those rates will come down.)

We are told by Mr Lekstrom that giving money to profitable and allegedly competitive corporations is a good thing and - I kid you not - taking money out of our pockets through new taxes is also a good thing according to Mr. Hansen.

Logic contradicts this and in my opinion neither is a good thing. (However, one has to admire most politicians for being able to say illogical and outright wrong things with a straight face. It takes skill and a certain personality.) The former is said to stimulate the oil and gas industry and therefore economic growth. The latter obviously does the opposite if it reduces our after-tax incomes, which I think will happen.

The new harmonized sales tax or HST will extend provincial sales tax not just to restaurants but a wide range of previously exempt services. It will also add seven per cent to utility bills, funerals, hair care, dry cleaning, real estate fees, movie tickets, accounting, photography, home care and domestic airline fares.

Some goods are taxable at a zero rate with respect to the GST. (It takes a bureaucrat in Ottawa to come up with that idea; or maybe they just want to leave the door open to tax them in the future.) Very few goods are exempt from the GST, some of them only under certain circumstances. For instance, books are exempt from GST if they are bought by various organisations (and do not include a CD-ROM) but individuals have to pay. (Presently books are exempt from the PST if they contain no advertising.) Under the HST books will not be taxable, we are told. I have my doubts based on my experience doing accounting for years and thus having been exposed to the way things work in practise. Do you remember Mr. Mulroeney's promise before the introduction of the GST that food would be exempt? Not if you buy lunch or a sandwich it turned out. There are also a large number of other goods and services - relative to the GST - that are exempt from the PST but will become taxable under the HST.

Some items, e.g. motor fuels, which are subject to the escalating carbon tax will be eligible for a partial rebate under the HST regime. (So much for "harmonised".) Isn't it nice of the government not to hit us twice?

BC is getting $1.6 billion from Ottawa to cover transition costs and there has been speculation that Victoria is going this way to cover the looming deficit. Indeed Mr. Hansen stated that this transfer payment will reduce the deficit. Say what? During the May election, Premier Gordon Campbell insisted this year's deficit will be "$495 million maximum." I wouldn't be surprised if Mr. Hansen includes the entire $ 1.6 billion next September when he presents his budget even though the HST won't be adopted until July 2010. (Strictly speaking this would not be wrong as it falls into the same fiscal period but it smells of manipulating the figures to me.)

Mr Lekstrom can try as much as he wants to convince us that giving money to profitable corporations is a good thing and Mr Hansen can try to convince us that paying higher taxes is a good thing.

I think not many people will agree with them.

Problems in Attawapiskat and Kashechewan

If stimulating the economy in a fairer way was really the intention of the recent massive give-aways to corporations the Canadian federal government, for example, could help the people in Attawapiskat whose sewage system failed recently. 52 people had to be evacuated because Health Canada said it is unsafe to live in houses while basements are flooded with raw sewage. Indian Affairs has so far refused to pay for the emergency evacuation. Or build badly needed infrastructure in other First nations communities. This is not the first time the federal government refused to address problems in Attawapiskat in a timely manner.

The federal government is responsible for First Nations, a duty it has mostly shirked.

Deputy Chief Theresa Spence said: "It is very disgusting that, today, we still have to fight for basic humane living conditions. We have bed-ridden Elders and young children living in sewage contaminated homes. There are no local alternatives as we are already suffering from lack of housing and overcrowding in our community."

Six days after the contamination, the community declared a state of emergency. This prompted the July 25, 2009 evacuation of all affected. The residents are staying in a hotel in Cochrane, Ont. where they will remain for six to eight weeks while trailers are renovated in the community before the families return home. This will take three or four months before the contaminated homes can be repaired. While INAC will help pay for the renovations of the trailers, it will not contribute toward the evacuation cost.

I think the bureaucrats who made this decision should be moved into the houses contaminated with sewage and left to their own devices.

In Kashechewan, Ontario there were two major evacuations in 2005 as a result of floods. The community's problems have not really been solved in a permanent way. Originally they were even created by the Government of Canada when - in order to save money - they built the sewage lagoon UPSTREAM - from the intake pipe for the water treatment plant to produce drinking water. I don't think you need to be an expert to anticipate problems with such an arrangement.

(The previous is to a CBC page. It worked on Aug.7, 2009. However, the CBC has a bad habit of deleting some links after some time. So if it does not work anymore when you click on it please accept my apologies.)

Stimulus package for B. C. oil and gas industry

The government of British Columbia announced a "stimulus package" for oil and gas, of all industries. (What's next? A stimulus package for Walmart?) It clearly shows what's really behind all this free money for (supposedly) capitalist corporations. Billions are given away to private businesses in the name of economic growth. The just announced program is an addition to many existing subsidies like it as well as expenses like building access roads, for instance. (Compare B.C. Health Services Minister Kevin Falcon's tough stand with respect to rising health care costs: "The province won't be providing any bailout money as costs continue to climb.")

If stimulating economic growth was really the intention the government could raise individual (as opposed to corporate) welfare levels. People would surely spend all the increase in their meagre incomes and that would really stimulate the economy.

Energy, Mines and Petroleum Resources Minister
Blair Lekstrom said in a statement that the package of incentives includes a 2% royalty rate on gas and oil extracted from wells drilled from September 2009 through June 2010 and an increase of 15% in the existing royalty deductions for natural gas deep drilling. According to the government this is to attract investment.

The province is also offering to expand its deep-gas discounted royalties to encompass horizontal wells drilled between 1,900 and 2,300 metres.

As well, it's increasing by $50 million its Infrastructure Royalty Credit Program to stimulate investment in oil and gas roads and pipelines.

The Minister claimed that
"B.C. is one of the most competitive oil and gas jurisdictions in North America, and this stimulus package will further strengthen the sector while increasing provincial revenues. In this day and age capital investment is very fluid and we want to encourage the oil and gas sector to invest in British Columbia."

No Minister!

You are giving public money to private corporations. Nobel Laureate Paul Krugman called this kind of stimulus "lemon socialism", i.e. profits are privatised and losses are socialised.

This latest give-away is going even further than socialising losses: It provides some of the funds (albeit indirectly) to invest. The Soviets weren't particularly successful acting this way but at least when there were positive returns they went to the state, not private shareholders.

When times are good for the industry the government increases its take somewhat because royalty rates are related to the price of natural gas.

The top 10 BC natural gas production companies made about $1 billion in profits in 2001. (Scroll down a bit.)

The government of BC announced on March 26, 2009 that British Columbia received a record $2.4 billion in oil and gas land rights sales for the 2008-09 fiscal year. This beat last year's record-breaking sum of $1.2 billion and underscores the "unprecedented growth" of B.C.'s energy sector, according to a statement released by the government Thursday morning. That was only a little over 4 months ago! And now we're told that the industry needs to be stimulated. (It's more of a game between Saskatchewan, Alberta and BC to attract companies. The corporations win and the people lose.)

The B.C. oil and gas industry is forecast to drill 900 new wells in the next four years and increase revenues by $2 billion, Lekstrom said.

It doesn't seem like an industry in need of stimulus.

While this is a provincial endeavour it fits most of the other stimulus packages in Canada, the USA and elsewhere. It is nothing but a shameful give-away to corporations and is a step beyond the saving of jobs in the automobile industry through the injection of billions of dollars of taxpayers' money into private corporations. Capital has been dirt cheap since the financial meltdown last year. Now some of it is totally free, it seems. I doubt it will create many jobs or improve most people's lives.

If the latter was really the intention the BC government, as mentioned above, could increase welfare rates. The Canadian federal government could help the people in Attawapiskat whose sewage system failed recently. 52 people had to be evacuated because Health Canada said it is unsafe to live in these houses with the basements flooded with raw sewage. Indian Affairs has so far refused to pay for the emergency evacuation. Or build badly needed infrastructure in other First nations communities.

The federal government is responsible for First Nations, a duty it has mostly shirked. For more information see here.