Ready for a Slump?
As BC's economy cools, how well are we prepared?
British Columbia and the BC Liberal government have enjoyed the benefits of a strong economy for several years. But now the United States is possibly in recession and at least some Canadian provinces are following it down. It's too soon to say whether B.C. will follow too, but observers and the Finance Ministry are at least predicting slower growth.
The downturn raises questions. Where should the government spend money to buffer the decline? Are the Liberals budgeting more for areas like education, welfare and housing that will likely see more demand? When they've let these areas slide in a hot economy, can they be relied on to fund them when times are tough?
"It's obviously a rapidly changing economic environment we're finding ourselves in," said Jock Finlayson, vice-president of the Business Council of B.C. and an advisor to the finance minister through the B.C. Economic Forecast Council.
Things have been good in recent years, he said. The economy has performed well, the job market has been strong with very low unemployment numbers and the province has consistently had surplus money left over at the end of each year. "It would be easy to grow complacent," he said.
There are, however, several threats to the provincial economy. The rise in the Canadian dollar, which has hovered around parity with the U.S. dollar in recent months, the shortage of labour in the province, and even the new carbon tax add to the difficulties for B.C. businesses, he said. "If you add them all up it paints a picture I wouldn't call black, but it shows some of the things businesses are grappling with."
Quarterly warning
Finance Minister Carole Taylor noted the province's softening economy in November while delivering the quarterly update. The economy was still growing, but not as fast as expected. The prediction had been pulled back from 3.3 per cent growth to 3.1 per cent. Manufacturing shipments were down by 2.1 per cent. Exports had dropped by 4.1 per cent, the worst performance in Canada, she said.
"Our export numbers are showing something is happening in terms of our relationship with the United States," Taylor said. The high Canadian dollar was affecting lumber, tourism and manufacturing. Natural gas revenue had fallen $164 million since the February 2007 budget. Forest revenue was down $88 million.
The high dollar, the low demand for B.C. resources and low prices all conspired against the provincial economy, Taylor said. The housing index in the United States, a major user of B.C. wood, was at a record low. "This isn't a story that's going to very quickly change."
That appearance, however, was Taylor's first since she announced she was leaving provincial politics. Stories about economic foreboding were overshadowed by questions about the minister's sunny future and what was then a possible Vancouver mayoral bid.
Budget day blues
Plod ahead to budget day, Feb. 19, 2008. Again Taylor offered a cautious outlook, though it was largely ignored in stories about the "green" budget with its centre piece carbon tax that will raise the price of gas by a couple cents a litre this year.
"We are not completely insulated from the world around us," that day's Hansard recorded Taylor saying. "We do expect B.C.'s economic growth to slow somewhat this year. For 2008 we are forecasting growth of 2.4 per cent. That is somewhat less than in recent years."
The province would fare better in bad times than the United States and the rest of Canada, she said, but it was worth being cautious. She kept a $750 million "forecast allowance." Along with spending and capital contingencies and the planned surplus, the budget had over $1 billion of what she characterized as "prudence" and others might call wiggle room.
"The budget that was brought down was a good one," said BCBC's Finlayson. The economic forecast was cautious and there is room in the budget for things to slide a bit. "I think that was a sound strategy."
As the economy slows, he added, some areas of the province will be affected worse than others. Urban areas of the Lower Mainland, Southern Vancouver Island and the Okanagan are more shielded from problems in the United States and the rest of Canada. Areas in rural B.C., where jobs depend more on extracting resources for export, will be hit much harder, he said.
Finlayson said most business owners would agree the provincial government has done a good job, but he'd like to see more focus on the economy. "The government's agenda has had a strong focus on non-economic issues over the last couple years," he said.
Boom not shared
NDP finance critic Bruce Ralston said the Liberals need to do more to warn people of the coming hard times.
"I'm sure they're not going to accept responsibility for the downturn," he said. "I think the premier wants to continue the boosterism theme."
The Liberals campaigned in 2005 on the strong economy, for which they claimed credit. That makes it hard for Premier Gordon Campbell to admit things are going sideways, said Ralston. "I think it's a deliberate strategy. I don't think he wants to give any credence to that idea, because rightly or wrongly he thinks it will be politically damaging."
Even during the boom, he said, little was done to share the benefits. Top earners have seen large jumps in their earnings, but most people have not, he said even as the government fees for many things have gone up, as have the prices for goods and services.
"People may be employed, which is a good thing, but their real capacity to get ahead hasn't increased," he said. "I think if you ask the average person, 'have the fruits of the boom been shared equally,' I think lots of people would say, 'no,' and I think for good reason."
Now that the economy is cooling, he said, B.C.'s Liberals appear to have few ideas to offer. Aside from the 2010 Winter Olympics, little is being done to boost economic activity in the province, he said. "Once the crowds go home, what is there?"
There is any number of things the government could do to address the faltering economy, he said. More money could be spent helping municipalities already devastated by the failing forestry industry, he said. As local economies shrink, local governments will need help maintaining services.
More could also be spent encouraging regional economic development. Construction is one of the strongest parts of the B.C. economy right now, but it too is expected to slow. As it does, Ralston said, people could be moved to public infrastructure projects.
Finally, he added, much more could be done to reduce poverty.
Cuts follow cuts
Finance Minister Taylor has acknowledged the coming downturn, but there is little in the budget to suggest the government is preparing for it.
One might, for example, expect that as people lose their jobs there will be higher spending for welfare. In fact the numbers of "employables" receiving "temporary assistance" benefits is already increasing after years of decline.
And yet February's budget predicts the government will spend $6.3 million less on temporary assistance in 2008-2009 than it did this year, with a further $4.8 million drop the next year. It's not until the 2010-2011 fiscal year that they predict a slight increase in spending in the area.
Similarly, as the economy slows, many people will likely choose to return to school. But instead of increasing spending on post-secondary education, Advanced Education Minister Murray Coell recently announced he's saving $16 million by cutting college and university budgets by 2.6 per cent.
Even in the boom times, B.C. has developed a huge housing crisis with 15,000 or more people homeless. Yet BC Housing's budgets for public, non-profit and co-operative housing will receive a slight bump for 2008-2009 before declining again in each of the two following years.
The Health Ministry's performance measure for the "number of people with a mental disorder and/or substance addiction receiving housing with supports" says it is setting a baseline in 2007-2008, meaning it is figuring out how much housing it is already providing. The plan for the next two years calls for nothing more than an "increase over previous year" culminating in a 20 per cent total increase by 2010-2011.
"What one would expect during a period of economic growth is that the government would lay the basis for future prosperity using the financial resources made available to it during good times," Ralston said in his Feb. 20 response in the legislature to the budget, according to the day's Hansard.
"As things shift downwards, the degree to which the government will be tested is the degree to which the government has prepared for the inevitable downturn and built upon the natural and human assets of the province, in order to provide some protection from that downturn."
He concluded, "We haven't seen that kind of leadership from the government. This budget, as we head into an economic downturn, doesn't have much to offer."
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Ruben
3 years ago
Let's talk reality
We all intuitively understand that nothing can grow forever, so why do we keep pretending the economy can? It is well past time to plan for a steady-state economy. The only people who really think we can de-couple the economy from real resources live in the economist's fairy tale, and it will be sad to watch them try to eat their rhetoric. We have less timber, fish, steel, copper, iron, oil, coal than ever before and we need to start planning. If you don't have a strategy, you have a strategy of tragedy.
Please do not bother slagging me with growthist fantasies until you have watched this video.
Dungeness_Crab
3 years ago
Well ya know
if it was anything, anything other than RealMedia (.ram) I might just do that.
Luke Skywalker
3 years ago
Always Err On the Side of Caution
Natural gas revenue had fallen $164 million since the February 2007 budget.
Interesting to note that natural gas prices were static over the past couple of years... roughly $6 - $7 MMBTu. Since February, prices have spiked to around $10 MMBtu. If they stay in that upper range this year, the treasury could receive an additional windfall of roughly between $600 - $700 million.
And then there is the financial windfall from the sale of gas leases that are occurring in the Horn River basin in northeast BC.
It seems, on the face of it, that the government has a financial cushion to rely on during the current fiscal year.
On top of that, only 4.9% of provincial revenue goes towards debt servicing (compared to 11.3% in Ontario for example) and the provincial debt represents 14.1% of GDP, the lowest after Alberta.
http://www.fin.gov.bc.ca/OCG/pa/06_07/PA_2007_ProvDebt.pdf
That somewhat belies StatsCan's March 7 Canadian Labour Force Survey with BC's near record low unemployment rate of 4.1% and a near record high employment rate of 63.7%.
http://www.statcan.ca/english/Subjects/Labour/LFS/lfs-en.htm
It also appears that the domestic economy remains firing on all cylinders and other sectors such as mineral exploration/prices still remaining strong.
Obviously the forestry sector is weathering a perfect storm with the dollar at par, the US sub-prime mortgage market heavily disaffecting demand with the foreclosure situation, low US housing starts, and the export tax.
That said, the BC economy has historically suffered severely from high interest rates, with 1982 and 1990 being prime examples. Rates have been again recently been trending downward.
As for BC's future economic outlook, the BC Central Credit Union released its 5-year outlook for BC over one month ago and they foresee the best 5-year outlook since 1985.
http://www.cucbc.com/displayjob.php?sp=35&type=SB&jid=2
Notwithstanding the foregoing, it's always best to be prudent and err on the side of caution.
doggone
3 years ago
been there
Wore out the tee-shirt.
This has got to be the best forcasted "downturn" ever
Remember when Bill Bennet (early '80s) admitted that B.C. might be in for some difficult time economicaly? I had been logging and by 1979 we could not sell the wood. Bill took notice at least 2 years later so I don't take Taylor too seriously: while the working person notices quite soon after the pink slip arrives the government has the enviable position of not seeing,hearing or speaking "evil"
Maybe this time that policy will keep the wolf from the door
jimmy_laroux
3 years ago
Luke
Luke Skywalker:
No. This number considers only "taxpayer-supported" debt, but does not consider Crown corporation debt, for which taxpayers are also liable. From
http://www.canada.com/vancouversun/columnists/story.html?id=0214b873-cd4b-41c2-90d6-b7c2584527d8
When Crown corporation is included, the debt to GDP ratio is 18.4%.
Finlayson seems to disagree.
http://www.theglobeandmail.com/servlet/Page/document/v5/content/subscribe?user_URL=http://www.theglobeandmail.com%2Fservlet%2Fstory%2FLAC.20071116.RBRETHOUR16%2FTPStory%2FTPBusiness%2FBritishColumbia%2F&ord=90325603&brand=theglobeandmail&force_login=true
Growth is being driven by domestic demand (in other words, construction).
And this industry is ~25 % of B.C.'s economy, and accounts for one out of every five jobs.
snert
3 years ago
BC Bud
Is the other 75%. We should be OK
jimmy_laroux
3 years ago
Surplus? Not really.
Well, first of all, it depends how you define surplus. Only a (fairly small) fraction of the "surplus", as defined by the government, is used to pay down the debt.
http://thetyee.ca/Views/2006/03/20/TaylorFudge/
It also depends on how you define capital costs. BC has implemented GAAP, which amortizes the cost of capital projects over their expected lifespan. With this system you can magically turn a deficit of $856 million into a "$220 million surplus with a $400 million 'forecast allowance'" as the BC Liberals did in the 2005-06 budget:
http://thetyee.ca/Views/2005/09/26/BizBCLibs/
Also, further debt is hidden as "contractual obligations", totalling some $55 billion in 2006-07 (p.64):
http://www.fin.gov.bc.ca/OCG/pa/06_07/PublicAccounts.pdf
P3s are an example of "contractual obligations":
http://www.canada.com/vancouversun/columnists/story.html?id=be4c05c2-444b-4624-afbb-fb98ac8b799e
Luke Skywalker
3 years ago
Jimmy...
No. This number considers only "taxpayer-supported" debt, but does not consider Crown corporation debt, for which taxpayers are also liable.
Yeah, I should have clarified the "tax-payer supported" debt, which is what Moody's looks at when it provided its triple "A" credit rating.
Crown corp. debt is self-financing and BC Hydro/ Columbia River Power Projects represents $7.38 billion of that $7.47 billion crown debt. FWIW, BC Hydro provides the provincial government with an annual dividend.
And this industry is ~25 % of B.C.'s economy, and accounts for one out of every five jobs.
Not exactly. BC's employment by industry for 2007, as prepared by BC Stats, shows total employment at 2,226,000.
Regarding foresty employment:
Forestry and Logging with support activities: 24,300;
Wood Product Manufacturing: 44,700;
Paper Manufacturing: 15,200;
http://www.bcstats.gov.bc.ca/DATA/dd/handout/naicsann.pdf
Well, first of all, it depends how you define surplus. Only a (fairly small) fraction of the "surplus", as defined by the government, is used to pay down the debt.
Over the past four fiscal years, total cumulative budget surpluses have totalled ~$13 billion. I've never seen that before.
My under standing of surplus fund allocation is as follows:
1/3 tax reduction;
1/3 debt reduction;
1/3 infrastructure investment;
In terms of "taxpayer supported" debt, the figure has decreased from $29.982 billion in fiscal year 2003/04 to $25.874 billion in fiscal year 2006/07 and that does not include the decrease for 2007/08, the past fiscal year.
Frank
3 years ago
Interesting article Andrew
Depends on what you wanna call debt. According to this article in the Sun our "obligations" are more like 55 billion. However, that's counting some things that others would not count.
http://www.canada.com/vancouversun/columnists/story.html?id=be4c05c2-444b-4624-afbb-fb98ac8b799e
There were other articles in the MSM about the debt back when the budget came down and the general attitude was we owe a lot more money but it doesn't show up on the books the way it used to.
Anyway, the key point in this article by Andrew is I believe this passage
Considering the Libs are getting worse results in health care when they've had a money tree in the form of transfers from the federal gov't I have some concern that their management skills are not up to handling health and social services when there's less money.
Skywalker
3 years ago
And I thought...
..we were in this booming economy because of the liberal policies. Do you mean to say that even with our great financial leader Campbell at the helm we still are heading toward a downturn? That can't be true. Jock Findlayson admitting it? I am as shattered as the myth that Campbell saved BC from the ruin brought on by the NDP. Life will never be the same again.
O.K. now Carole, say something.
Van Isle
3 years ago
We all have been told by our
We all have been told by our politians and mass-media that we're a fianacial success. Other words for success are "delayed failure". This government is/has mismanaging BC from day 1 and when the bubble bursts we're going to go down burning and crashing in flames. Bill Tielman reported a couple of months ago; Abbotsford hospital and cancer clinic, orginal cost $211 mil and to open 2005, to date $355 mil and still isn't open. Bill Bennet bridge, priced $100 mil, now estimated at $170 mil. Canada Line budgeted $1.55 bil, will now cost $2 bil. Vancouver Convention Centre is $388 mil overrun and it still isn't finished. And to top it all off we haven't even talked about the biggest boondogle of them all, the Olympics.
Skookum1
3 years ago
the last time this happened.....
....BC business leaders and their media pals and all the rightwing hacks that spin truths for the NeoLiberals blamed the economic troubles on the NDP, even though it was a world-markets thing. Who are they going to blame this time? George Bush and the GOP??
Skookum1
3 years ago
"How the markets really work"
I subscribed to www.brasschecktv.com - this was in my inbox this morning, or rather I found it through what was in my mailbox this morning.
http://www.brasschecktv.com/page/187.html
It's right in the same ballpark as Monty Python, including the John Cleese-ish behaviour of the host; if only it weren't all true....
The Katrina item that comes up after it plays was interesting, too.....
Fiat lux
3 years ago
All economies built on
All economies built on exports will, sooner or later, burn out and collapse.
The best protection against slump is the highest degree of self sufficiency in overlapping circles, from the individual up.
This is why economists and bought politicians get convulsions when they hear the word. No profits for the carpetbagger mafia!!!!!
Self sufficiency and locally based industries and economic systems are the strongest, most sustainable and ultimately the lowest cost, because they use less energy and more individual talents and brains.
Products imported from China are not "cheap", because of the resource waste and environmental damage caused both by their production methods and distribution.
The only economic efficiency is the long standing law of physical efficiency: Products and services made with the lowest resource/energy inputs.
BC and Canada were doing very well 50 years ago, when the Canadian dollar was .05 cents higher than the US. But we had thousands of production facilities, making just about everything we needed and paying people decent wages, with the benefits staying in the country and not syphoned abroad to fill the fraudulent economic statistics of the GDP, growth and productivity nonsense.
Canada is one of the countries on Earth best suited for the highest degree of innovative self sufficiency, instead of remaining under the oppression and control of the carpetbagger, corporate mafia encouraged to rob and exploit, by brainwashed economists and bought politicians.
30 years ago we had hundreds of independent logging and lumber facilities, now we have 6. Who benefited? The BC public ?
Like hell. But it jacked up the phoney GDP and now we'll pay for it in a big way.
Ed Deak.
Skookum1
3 years ago
Fiat lux said....
And in more ways than that. There's the cost to human dignity and freedom and all that which is implicitly part of doing business with China, not only in current conditions but in the endorsement and retrenchment of the social and political system perpetrating these abuses.
That's one of the moral costs, and moral costs always, inevitably, have a financial price, though paid in generations and "lost productivity" of those either demoralized....or killed or imprisoned.
But on a purely financial costs basis re economic self-interest, Chinese products are not "cheap" because in importing and buying them we are undermining our own economy, destroying jobs and companies back home here, ultimately robbing ourselves of a livelihood so that all we have left to sell are.....our houses, our lands, and our persons. We sell our persons, by the way, when we sign onto 30-year mortgages or longer; in Asia 100-year mortgages are common, i.e. your children are born into debt, and you're legally obliged to have them.....otherwise known as indentured servitude but the banks have trendier euphemisms for that now; even allowing people they own into thinking they have some kind of real assets, instead of themselves being assets....
Oh well, it doesn't matter,
. You get what you pay for; and "cheap" is usually, in reality, expensive. Especially when you've outsourced nearly your whole economy (other than entertainment/media sectors...).
brian gough
3 years ago
now you see it now you don`t
can you say (bubblicious ) gvrd will fall,not if , WHEN if you look at what happened south -its happened here big time! everone and their dog has borrowed on equity and spec - inventory is growing and soft money has dired up -without that engine of (new money) price flattens,people go upside down! there`s no buffer here in bc -you can`t go lean, the expense of HOME ownership is 3/4 of all -monies, affordability index off the chart! THE PROVINCE HAS GOTTEN USED TO A BILLION DOLLAR (BUMP) FROM --from property transfer fees - bc WILL FALL (HARD ,HARDER THAN MOST) sorry ........ozzie j a perfect storm ----exports to china -down, tourism down-forestry dead-and a sunami of debt (rearing up from behind) health! housing-education- human welfare- children-seniors! we blew our surplus on CRAP-LAWYERS-BIGGER GOVERMENT -MUCH BIGGER! WE SPENT BILLIONS TO -make things worse- now we need billions to make things right and we don`t have it --yea
Skookum1
3 years ago
and yeah, personal guilt
I bought a $1 set of headphones yesterday, from a Canadian-owned dollar store; for now I can't afford even $10-$15 ones but even they would have been made in China, if perhaps packaged in Canada so as to say "made in Canada" (it should say "packaging made in Canada" but that's one of the wonders of loose regulations....). It felt very odd and I've been having one of those moment-of-truth things going on about it since; especially since I'd just been on CBC Halifax's noon show as a call-in guest about the Tibetan crisis and "what to do about the Olympics".
Boycotting Chinese goods is something maybe we should all do, or might like to do, given Tibet and what's been done to Xinjiang and the Falun Dafa and Tienanmen.....but what's not made in China? The only meaningful trade boycotts/embargos are going to be things that hurt their industrial expansion, such as tightening the coal supply so as to raise steel production costs; but anything like that and China, as the petulant adolescent superpower that it is, would be very recriminatory, even against a united front.
Similarly, any attempt to call the Chinese banks on their lack of proper assets behind their massively out-loaned system would precipitate a mutual crisis, the world's financial system tottering because 1/3 of its population have a government which allows banks to loan money based on 1% hard assets, instead of the customary (if still questionable) 10%. But just try and call the banker to the table, just try....
So what's to be done? Would it have helped to not buy those headphones, if only to make a moral point? Would it affect the Chinese supplier, or the Canadian retailer? The answer is obvious, no?
The answer, to me, is that there are hungry times coming......(I've been hungry for a long time, it won't hurt me that bad; I don't like to think what it will do to others I know who think mall-culture and cable is some kind of birthright...)
Canis Latrans
3 years ago
The steady state economy and dependency on US...
"It is well past time to plan for a steady-state economy. The only people who really think we can de-couple the economy from real resources live in the economist's fairy tale..." wrote Ruben.
In case it isn't clear from my comments all along here on Tyee, I'm with Ruben, who said it best today. There is no place left to run or migrate to. It is well past time to view the raison d'etre notion of the economy as something which needs to or can grow forever as a harmful anachronism, as well as the no limit populations that typically grow up alongside that never ending expansion of our exploitation of nature. The economy needs to be seen as being there to meet the life sustaining needs of all the people, not for the obscene enrichment of the few. Indeed this latter ruling class component of self-enrichment grafted on to the "natural economy" thousands of years ago, needs to be seen as a slow growing malignacy now needing to be excised from from the body human politic, if it is to survive.
We are at a place and time in our relationship with the planet and its life sustaining natural systems, as Ruben so well put it, where we need to develop a more egalitarian, I would add, steady-state economy along with the maintenance of a more or less steady-state human population level. Indeed, certainly places like the US and much of Europe, which are so over-developed and populated they cannot live without parasitically leeching off the likes of our resources and, for example, those of the Middle East, will need to radically downsize their appetites, economic activity and population levels-, not suicidally continue to grow them.
Continued next post...
Canis Latrans
3 years ago
2. The steady state economy and dependancy...
From Previous Post...
And if we don't come to quickly see that in this country as well, and continue madly with our "export capitalism" economic assumptions for much longer, the life sustaining potential these natural resources we feed upon ourselves, will be dragged down with the insatiable appetites of this US Empire.
For Fait Lux is also entirely right when he says:
To which I might only add, along with their parasitical host.
For the steady state economy that needs to be rapidly evolved here as the new Green and Egalitarian model is also dependant on something else that Fait said:
It is a self-reliant as well as steady-state economy that is the screaming need of this country, as the US economy slides into a deepening crises and drags us down and along with it. The objective social and political conditions are being created here over the coming short and long term, in my view, where these ideas will finally find some real traction amongst people thrashing about looking for alternatives to the diminished status quo of their lives.
Like I've said often here, keep it up you neocon wingnuts, you are doing a great work only you folks can do for those of us who would transform society and its economy. Thank you for bringing us this newly emerging opportunity. (Of course it is true that every negative brings an opportunity along with it. We need only to see and seize it.:-)
Well said Ruben and Fait Lux.
jimmy_laroux
3 years ago
Always with the surpluses...
Luke Skywalker:
My source was the Vancouver Sun, from an unsigned editorial a few months ago. But the Sun is wrong often enough, so...
Wrong. They're not really surpluses. I quoted an article above by Will McMartin that discusses the issue further. From dictionary.com:
Why is infrastructure not considered expenses and the (pretend) surplus decremented by this amount? The way the government uses the word "surplus" does not agree with the dictionary definition. So no, we've not had 13 billion $ in cumulative surpluses.
And between 2005-06 and 2006-07 the total value of BC government and Crown corporation contractual obligations rose 21 billion $. In one year.
As for the decrease in "taxpayer-supported" debt, this is no doubt due in large part to the switch to GAAP accounting, which occurred in (gasp!) 2004.
Skywalker
3 years ago
Hey jimmy.
If we ever manage to get rid of this bunch of spinmeisters, I can see a whole new structural deficit deficit coming on. This one will be real just like that 2 and 1/2 billion in 1991. That would be a little poetic justice don't you think?
Luke Skywalker
3 years ago
Jimmy...
www.fin.gov.bc.ca/OCG/pa/06_07/PublicAccounts
P3s are an example of "contractual obligations"
Yeah, I remember reading that $55 billion figure regarding future contractual obligations and admit that I was taken aback.
But remember the BC government also had future financial contractual obligations in the '80's and '90's.
Those include long-term leases for office space for government employees all over the province, long-term contracts for highway maintenance, long-term contracts for assisted care living, etc.
These have always been quasi-P3's.
After looking more closely at that $55 billion future contractual obligation figure from Public Accounts, this is what I ascertain:
Here are those annual contractual obligations commencing from the current fiscal year:
1. 2008 - $3.32 billion; 8.6% of provincial budget
($38.49 billion - revenue estimate for 2008/'09)
2. 2009 - $2.114 billion;
3. 2010 - $1.875 billion;
4. 2011 - $1.743 billion;
5. 2012 - $1.708 billion;
That represents a total sum of $10.8 billion and the bulk of that relates to transportation and health.
Then there are similar crown corp. contractual obligations (likely mostly BC Hydro through power purchase in BC rather than out of province).
1. 2008 - $5.4 billion
2. 2009 - $3.37 billion
3. 2010 - $3.15 billion
4. 2011 - $3.07 billion
5. 2012 - $3.12 billion
That's another $15 billion for a total of $25.8 billion in contractual obligations.
From the same Public Accounts that you referred to regarding infrastructure (capital stock):
Well, according to the link you provided above, Public Accounts showed, for just two fiscal years, surpluses as follows:
ending March 31, 2006: $3.09 billion
ending March 31, 2007: $4.06 billion
You do understand that GAAP is the preferred accounting method of Moody's, Standard & Poors and DBRS and is more transparent than provincial government accounting practices of the '80's and '90's? But I digress.
Frank
3 years ago
Luke
On the other thread you mentioned the NDP debt rising while they ran a surplus (and changed the method of accounting). Its the same with the Libs, I don't see a difference.
You may say its more "transparent" but it looks to me that it isn't. People aren't really aware that their debt is increasing rapidly.
Frank
3 years ago
The article
But again, getting back to the article, there is no hope, based on the way the Libs have governed so far, that they will manage services better when there is less money.
Skookum1
3 years ago
Hi Frank...
As with my jibe about blaming Georgie Bush above, there is a similar connector here. Since Reagan's triumphalism (over puff'n'stuff) the rightist rhetoric has been "cut government spending, cut government waste, end corruption". But from the Reagan and Thatcher regimes down through (Bennett and Vander Zalm and) Mulroney and harper and the Bush White House and more, the press releases keep on coming out about reducing debt, while the debts get out of control; mouthings about corruption and waste get louder the more corruption and waste is turned up that's their fault. Deny, deny, deny, and pay p.r. firms (using public money) to get the public to believe the denial.
Maybe David Icke IS right. Maybe "they" ARE aliens; a friend sent me his 23rd March newsletter which puts all the cats in the bag rather nicely, but is too lengthy to quote here; instead here's the relevant George Carlin monologue, which he links to:
http://www.youtube.com/watch?v=kJ4SSvVbhLw
Skookum1
3 years ago
Comedians and economic analysis
Just as I hit "post" on that last one I remembered seeing some Robin Williams political comedy lately; might have been the "credit crunch" but given Robin it probably had a much wider scope. Why is it comedians are the only ones who can make short work of the situation? I guess because it's so painful all you can do is laugh, or try to.....
I read Remarque's ''The Black Obelisk'', about life in the Weimar Republic and how people still paid for things even though money was only a fraction of what it was worth by noon than what it was at daybreak. Think I'm going to have to read it again, just to brush up on how to survive in a major currency collapse.....think it had something to do with sucking up to friends in the bureaucracy. But waitaminit - that's how yhou survive even if there's NOT a major currency collapse......whuh?
jimmy_laroux
3 years ago
Surplus surplus surplus
Luke Skywalker:
I'm glad to see you were able to copy and paste (mostly irrelevant) information from the link I posted. High five!
It also includes P3s like the Sea-to-Sky highway and the RAV line. Before the Liberal government began aggressively pushing P3s (now all public capital projects worth more than 20 million $ must give a P3 model priority), these projects would have been publicly funded, and the money borrowed by the Province to build them would have been considered "taxpayer-supported" debt. Instead they are "contractual obligations". BC taxpayers are still paying for them. They're just recorded in a different column of the provincial ledger, so to speak. The Province is hiding debt from these capital projects by building them as P3s and calling them "contractual obligations".
Quote:
Net annual investment increased by $1.870 billion in 2006/07 and by $4.920 billion since 2003/04.
Thank you. That is precisely my point. Infrastructure investments are expenses. Review the definition of "surplus" I gave above.
ending March 31, 2006: $3.09 billion
ending March 31, 2007: $4.06 billion
Again, they are not surpluses in any meaningful sense, as you've indirectly pointed out with your comment on infrastructure. You can learn more about the semantic games played concerning BC's finances here:
http://thetyee.ca/Views/2006/07/19/PublicAccounts/
jimmy_laroux
3 years ago
GAAP
Luke Skywalker:
There are many good things about GAAP, but there are problems with it as well. GAAP allows the cost of capital projects to be amortized over their expected life. This makes capital cost appear dramatically lower than they really are, especially immediately after GAAP is first implemented (2004). So much for transparency.
Luke Skywalker
3 years ago
Jimmy...
GAAP was recommended by the BC Auditor General.
Rather than referring to some internet article and semantic games, I would think that the final arbiters on these fiscal matters would be those who are independent and have their necks on the line.
This marks the first time British Columbia has ever held an AA (high) rating from DBRS. This places B.C. second in DBRS’s provincial rankings next to Alberta which, along with the Government of Canada, is rated AAA.
http://www2.news.gov.bc.ca/news_releases_2005-2009/2007FIN0018-000576.htm
Currently, only the Province of Alberta and the Government of Canada hold Aaa ratings among Canada’s senior governments. British Columbia has not held an Aaa rating from Moody’s since July 1983.
http://www2.news.gov.bc.ca/news_releases_2005-2009/2006FIN0203-001201.htm
Anyhoo, back to the economy...
G West
3 years ago
RIGHTTTTT
Standard and Poors and Moody's used to be pretty bullish on Bears Stearns...just check back 5 or 6 months....
Yeh! Let's get back to the economy.
I see Penner has knuckled to pressure on the Pitt.
Time for more people to push back a lot harder.
These guys are vulnerable AND incompetent.
jimmy_laroux
3 years ago
Quote:GAAP was recommended
This is a red herring. But to toss one of my own, isn't the auditor general appointed by the government?
On what fiscal matters exactly? These are credit rating agencies. I'm sure that the debt affects the credit rating to some degree, but it's certainly not everything. For example,according to the government link you posted, "DBRS upgraded B.C.’s credit rating to AA from AA (low) in March 2005". But in September 2005 DBRS wrote that BC
http://thetyee.ca/Views/2005/09/26/BizBCLibs/
They calculated a deficit of $856 million while upgrading BC's credit rating.
jimmy_laroux
3 years ago
Skywalker: Quote:This one
Skywalker:
What happened in 1991? A bit before my time :)
jimmy_laroux
3 years ago
In re P3s, here's a fun
In re P3s, here's a fun excerpt from a public policy paper by two researchers at UBC:
http://www.carleton.ca/spa/News%20and%20Events/Ross-public-private.pdf
I really like that last sentence.
Luke Skywalker
3 years ago
Hmmmmmm...
jimmy_laroux:
This is a red herring. But to toss one of my own, isn't the auditor general appointed by the government?
Well, in past history it appears that everyone looks to the Auditor-General as the last authority regarding BC's financial matters.
BTW, the A-G is an independent officer of the legislature and, IIRC, all parties must approve his appointment.
You're right.
I would assume that DBRS is utilizing other tests in determining the validity of BC's credit, such as a cash-based accounting test and various assumptions behind that.
I guess that if BC has received DBRS's highest rating ever over 1 1/2 years later, that's gotta say somethin'.
realisticman
3 years ago
What Better?
What more could one want from a Minister that has been a park ranger, than to have him weigh up a proposal and deny it's implementation if he feels that it's unsuitable, and the people don't want it? Isn't that what we hope our Ministers do? He responded to the wishes of the constituents. That's what I want and good for him that he did.
As for P3s, well, the private sector has to take the risk of any cost overruns. Better than the public purse. That's good, isn't it? The private sector also arranges, and provides, the financing and by so doing allows the government to devote more of its budget to health, education and social programmes. I could change the oil in my car but it's better to leave that to the experts who can do it quicker and take on the risks.
G West
3 years ago
Yes R/man
The Campbell forces are starting to see the writing on the wall. Almost seven years of lies and obfuscation are finally catching up with them.
Penner and Campbell have NO credibility on the Hydro issue, among others...as for P3s not affecting the privy purse, you must be joking - who do you think is paying the bills in order for private firms to profit? Instead of financing and paying for these things publicly, Campbell prefers to simply pay off his friends in that long list of lobbyists starting with the Road Builders Association...many of which firms aren't even Canadian.
The risks, alas, remain with the public - the rewards go south, or east, or to Germany.
If the government were actually doing anything substantive in the areas you mention you might have a fleeting case, they aren't and you don't. Even the universities are going to be running deficits.
G West
3 years ago
And further, Why?
Why would I give Penner any credit? The credit goes to the citizens who threw the cold water on Penner and Campbell's parade.
Frank
3 years ago
Canucks lose
Meanwhile the same policy goes ahead in places where there's no people.
The issue at hand is that just because you got a garage to do your oil change it shouldn't mean you get to tell your wife the oil change didn't cost a thing.
Grumpy
3 years ago
B.S. baffles brains.
The B.C. economy has been in a bit of a shambles for the past decade, only being kept afloat by Northern Gas exports, B.C. bud exports, and a massive public spending works by Campbell & Co.
This is the same crowd that claims that SkyTrain makes an operating profit, yet it is subsidized by over $200 million annually! "Oh no, claims TransLink and its new Board of professional unprofressionals, we don't include debt servicing charges!!"
Nice trick, if you can get away with it but others certainly have figured that out. Funny, no one buys with SkyTrain and not one SkyTain system of the 5 sold since the late 70's, has been ever allowed any kind of public scrutiny!
The Liberal loving BC media have allowed this story to go unnoticed!
When BC's economy collapses, just watch the captain and crew of this Titanic to man the lifeboats first with their fancy pensions!
Grumpy
3 years ago
Just a minute R/man
No bank would back the RAV P-3, so Campbell & Co. had to raid the BC public service pension plan to find the funds, to launder through In Transit BC, to SNC Lavalin to give an appearance of a P-3?
Only Rafe Mair and through his Monday articles has shed light on this flim-flam. where is Bill Boring; Vaughn Palmer; Micheal Smith, the Asper press on this one?
Where is Carole James and the NDP?
Should not the RCMP Commercial Crimes unit be informed about this?
Frank
3 years ago
Grumpy
There's always the slim chance she's being smart and doesn't want to take over as captain of a ship taking on water.
No doubt Mr Campbell's office staff are already figuring out how to blame everything from the problems in the credit sector to the forest industry on Glen Clark.
Luke Skywalker
3 years ago
I Dunno...
G West:
The Revelstoke Dam was constructed with room for an additional 2 generating units, (an additional 1,000 MW of capacity with the penstock nubs in place).
The application for the first 500 MW generating unit was made by BC Hydro at the Environmental Assessment Office in 1995. Yet the CPCN was not granted until 12 years later on July, 2007 and it won't be completed ~2011.
Capital costs for the 5th generating unit will be ~$320 million or $640,000/megawatt.
As for the Site C dam v. the small scale run-of-the-river projects?
Hydro’s Site C budget is now ~$6 billion for 900 MW, or ~$6.7 million per megawatt. IPP’s build these small facilities at no more than $3 million per megawatt.
Which of the latter two will be more costly to the end BC Hydro consumer?
Frank
3 years ago
Luke
Wouldn't it be cheaper to not build either and simply cut back our consumption?
Because unless we change our ways won't we have to build both and many others besides?
Let's say the population of BC eventually hits 10 million in our lifetimes, how would we supply that population with power without wrecking more of the environment?
How about 20 million? Or 30 million?
At some point growth has to stop and saying it doesn't while not saying how we can afford it just isn't being honest.
Although its possible the new tax on gas is already making the world safe for generations to come.
ubiquitous
3 years ago
r/man
Having your oil changed by experts is an interesting analogy, but you forgot one important point - it will still cost you more than if you did it yourself.
G West
3 years ago
Furthermore, Luke
Building more dams of any kind to service the US market is insane; BC is capable of being self-sufficient in power now...this is not rocket-science and it's not necessary to turn hundreds of streams into unconscionable profit centres for the Premier's friends to do it.
At the cost of the BC consumer, bothe individual and business.
realisticman
3 years ago
Never said it was free
Of course, changing the oil in my car will cost something and I could do it cheaper but I'm not set up for it. My time is better spent doing what I know best. Around a hundred years ago clothes were made at home, then ready-made clothing came along and pretty well has all the market today. Do you still make your clothes ubiquitous? Does the government own garages where all its vehicles are serviced? In some cases some departments do in others they don't. Another analogy could be building something. I could organise building with concrete but why not leave that to the people that do it all day, every day? Remember the cucumber plant that the government of Newfoundland financed? Or the De Lorean cars? Or the Fast Ferries?
I don't know exactly where on a balance sheet the future obligations of P3s should go, or where the future assets, when that project reverts to the government should go either. But in a P3 the risk is shifted to the private sector and away from the taxpayers and the costs to the taxpayers are fixed. The argument one repeatedly hears is that P3s are often done using non-union labour but that's a separate issue. If BC needs aircraft for servicing remote communities and for medical evacuations does anyone really think the BC Government should build an aircraft factory and make 'em?
Canis Latrans
3 years ago
Quote:"At some point growth
I'm busy as a kitty covering poop, but still took the time before heading out to enjoy some of these comments that Frank and GWest are making-, as well as others who see further than the stultified, locked down in time "market think" of the paleo-conservatives here.
There is one positive thing to be said about these times that these market true believers have brought down upon us. They are forcing a widespread rethink of these market blinded assumptions of theirs to which too many have unthinkingly genuflected for well past too long. (Even many so-called socialists and greens.) What we see here coming from green and working class progressives with some foresight is, the beginning ideas product of this process-, that is always the precursor of action to come.
And the idea of the steady-state economy and steady-state population levels, in parallel with the as old as time understanding of the value of simple individual and national self-sufficiency, is an idea/concept whose time has finally come. Yet ahead of it though is still this paleo-conservative mindset and think that is STILL the ruling system view of the world, desperately working to preserve itself. (It even infects some of the so-called "official" green thinking view we find much here in "official" Tyee material. :-)
Good stuff. Keep it up. The shallow thinking, locked down in time propensities of these wingers ARE being exposed.
Fiat lux
3 years ago
All P3s are still public
All P3s are still public debt, just as the repayment of any investment must come out of the public's pocket.
When I started a business, the payments for everything came out of the pockets of my customers, who in turn had to take it from others.
In short, the claim of "paid by the users" is a bloody lie and nonsense, because ultimately the costs will trickle down the whole system and everybody pays for everything.
The cheapest is still the lowest energy and resource inputs into any project and service. Which means that present monetary figures mean absolutely nothing.
Lies,damn lies and statistics!
When will the public wake up to the lies told them by ideologically brainwashed politicians and miseducated economists?
Ed Deak.
realisticman
3 years ago
Slowgrowth Frank and Canis
I suppose you've noted that the Federal Liberals and the Federal NDP are fighting to keep immigration and refugee claimants levels just as they are:
But critics say the proposals will gut the Immigration and Refugee Protection Act and remove transparency from the system...
Andrew Telegdi, a Liberal MP from Kitchener, Ont., said, "It shouldn't be passed into law," with respect to the proposals that Immigration Minister Diane Finley describes as necessary to attract the types of immigrants that are being demanded by Canadian employers.
"Immigration will continue to be the lifeblood of this country," Mr. Telegdi said. "If we have this kind of legislation, it's going to give those people who want to apply to ... Canada a chill."
The Liberal Party will have to make this issue a line in the sand, he said, "or we have to campaign on changing it as soon as we get in. One of the two."..
Meanwhile, the New Democrats say they will introduce an amendment to the budget bill that would remove the immigration changes.
Fiat lux
3 years ago
What all parties and
What all parties and governments should do is prevent the immigration of some of the corporate mafia, with miles long of hundreds of fines, charges and convictions on their records, then giving them immediate "national status", so they can buy politicians and force laws giving them unlimited extortion privileges.
How on Earth outfits with record of Wal-Mart are permitted to enter is not only a mystery, but a crime in itself.
Ed Deak.
Grumpy
3 years ago
R/Man..........
......the phony RAV P-3, the risk is transferred from the taxpayer, to the tax payer, because the Public Service Pension Plan is insured by the government, the taxpayer! If RAV fails or SNC Lavalin walk away from the deal, the P-3 monies came from the BC government (the taxpayer), not the banks!
This sort of flim flam is illegal in the real world, why is it legal in the political world? This is why I ask, "Where is the RCMP Commercial Crimes Unit on this one?
Van Isle
3 years ago
Did you ever here the story
Did you ever here the story about the mathmatian, philosopher, and the accountant discussing the equation that 2+2=4. The mathmation said that the equation is true and cannot be any different. The philosopher said it dependeds on how one sees things in life and can be different things to different people. The accountant closed the door, drew the curtains and asked "what do you want it to be?"
Luke Skywalker
3 years ago
Um ... Huh?
G West:
Who said anything about building dams to service the US market?
This gap between demand and supply is expected to widen as demand increases a projected 25-45% in B.C. over the next two decades.
http://www.bchydro.com/policies/index/index3196.html
Grumpy
3 years ago
If we need more power............
.........why are we exporting electricity to the USA? Is this just more BC Hydro/Gordon Campbell flim-flam?
A simple question and after just visiting the Nevada desert, why don't we have simple wind turbines/solar panel, to give individual home owners electric power, to be supplemented by Hydro's power when needed. It could save us much expense for a small investment.
Many homes in the Cali/Nevada desert regions have solar panels to provide selected electrical power for the household, (example, enough power to operate a fridge or freezer) and a few have wind turbines. Certainly the HWY's Dept. have solar powered emergency phones and the railways have solar powered signals. Even the highway info signs are solar powered.
Creative 'small' thinking is needed, not grand dams and alike. We must think out of the box or out of the 'dam'.
Frank
3 years ago
realisticman
Did you know brontosauruses are thin at one end, much thicker in the middle and thin again at the other end? That knowledge is as apropos as saying we don't make our own clothes anymore.
Being as the discussion is about hiding debt, the point is thus that you pay for that oil change, and you pay for those clothes. You don't get to declare that they fell from the sky and you don't have to pay for them.
In the old days if the gov't built anything such as ferries or a highway we hired people to do it and the cost of doing so showed up as debt. Now the same people do it and although we're on the hook for the same amount of money, or more, the gov't does not declare it as debt. Instead they declare the new highway or hospital or whatever fell from the sky.
Yet its a good topic for discussion, no?
Saying "I don't know" is at least a much more honest statement than declaring the rest of us think in the past we'd see Gordon Campbell driving the bulldozer himself.
Luke Skywalker
3 years ago
Grumpy: Quote:If we need
Grumpy:
That's through BC Hydro's Powerex arm as power is exported during low-peak usage periods here in BC. Makes common sense.
But BC also imports power and according to BC Hydro that represents 15% of BC's power usage.
realisticman
3 years ago
Frank
Are 'they', the government listing them as assets? If you lease a car it's not an asset. You have an obligation to pay a regular price for usage and you never have ownership. There are probably many kinds of P3s, and Grumpy seems to know the details related to the Canada Line, but with some of the P3s the ownership of the asset is transfered to the state at no cost.
As I said, why would taxpayers want to take the risk of financial overexposures if private businesses, are prepared to? I can assure you that there are construction projects underway where the private sector is not making money due to escalated material and labour costs, and they will sometimes have to swallow it instead of the taxpayers.
Grumpy
3 years ago
Luke, wandering in the Sky
Quote:
That's through BC Hydro's Powerex arm as power is exported during low-peak usage periods here in BC. Makes common sense.
The majority of power is from water turning turbines, why then, during times of low power usage, Hydro just "turn off the taps", so to speak and save the water for peak times? Is it just too simple? Me thinks that Hydro/Powerex is pulling a fast one.
Has anyone said to the consumer - CONSERVE?
In the lower 49, CONSERVE is a word everyone uses, though not yet practicing.
Budd Campbell
3 years ago
HOUSING SECTOR
The biggest risk to BC's economy is any disturbance in the housing construction sector. Construction has added over 75,000 jobs in the last four years, almost as big a gain as the employment base in the integrated forest sector (logging, wood products and pulp). A large part of that employment gain has come from the increase in housing starts from a late 1990s low of 15,000 to over 30,000.
If the housing price bubble bursts because of international financial disturbances, new starts will tumble back down till a new stable price to rent relationship has been realized in the resale market. In the meantime, losses of construction employment would have a larger impact on the BC job market than anything coming out of forest products.
So the question becomes how to either avoid an adjustment, or failing that, to make that adjustment quickly and with minimal losses in new housing construction.
As a Seattle PI article put it recently in a review of similar risks to the Washington State economy, quoting an investment analyst, it's hard to have an interest rate that will encourage people to buy an asset that is going down.
Budd Campbell
3 years ago
INTERESTING FIGURES, LUKE SKYWALKER
Hydro’s Site C budget is now ~$6 billion for 900 MW, or ~$6.7 million per megawatt. IPP’s build these small facilities at no more than $3 million per megawatt.
I saw this very same statement, almost word for word, on a CBC comments page, offered by someone called BENTNAIL.
Grumpy
3 years ago
R Man
I am not against P-3's, in fact they could be a useful tool, but RAV was never a P-3, it was more like a ponzi scheme. The SNC/Lavalin - CONEX bid could not get the international financing (around $200 million) to fund the project, so Campbell & Co. panicked and raided the BC Public Sector Pension Plan to fund the project. That alone makes RAV publicly funded, not privately funded, hence it is not a P-3.
Again I ask, where is the RCMP Commercial Crimes Unit?
Just a note: The Dublin Luas and Nottingham LRT projects are true P-3's, even making an operating profit after debt servicing is factored in. Not so for SkyTrain.
A transit specialist in the UK told me some years ago that RAV would never be a P-3 simply because it was a 'metro' type system and the ridership wasn't there to support it. The international banks are well aware of P-3 transit projects and the financing there of. They saw RAV for what it was, a politically motivated transit project, building with an obsolete proprietary metro system, operating on a route that didn't have the ridership to sustain it. The international banks ran from the project, leaving Campbell and Co. two alternatives: 1) abandon the SkyTrain/metro RAV or 2) let the BC taxpayer fund it.
They choose the latter and the inept Sun and Province never reported this, yet Rafe Mair, knew all about it 3 or 4 years ago.
The truth is RAV is not and I repeat not, a P-3.
realisticman
3 years ago
Grumpy
Private investments in P3s are usually partially paid from operating earnings. It seems inconceivable that a private company would become involved to the point of financial exposure in any Vancouver transit scheme, since the riders are not obliged to pay.
Luke Skywalker
3 years ago
Budd...
Good point... and that filters down to house furnishings. If interest rates remain stable and consumer confidence/ demand remains stable then our market shouldn't suffer.
On the opposite end of the spectrum, there is Phoenix, where ~5,000 listings existed on MLS well over a year ago and now there are ~50,000 as reported by CNN.
There are also two trends to consider vis-a-vis BC:
1. The large number of Albertans, flush with cash, buying recreational/ second homes in the Southern Interior and Vancouver Island areas;
2. The Boomer Bulge will start retiring circa 2010 and, if the past is any indication, many from the Prairies/Ontario will move to BC;
I saw this very same statement, almost word for word, on a CBC comments page, offered by someone called BENTNAIL.
Good eyes Budd! I knew that Site C was projected from anywhere around $5 billion - $6.6 billion with its 900 megawatts.
I didn't have a firm grasp (and was too lazy at night) to do an analysis from the numerous applications on the EAO website regarding R-O-R's.
Since Bentail purported to be a civil engineer working on R-O-R projects and had a good detailed analysis, I had no reason to disregard his stats.
In any event, one recently EAO certified R-O-R project with 196 MW and an estimated $300 million cost comes in at ~$1.53 million/ megawatt.
http://www.eao.gov.bc.ca/epic/output/documents/p245/d21140/1137450647962_b7dd8f3030bb42d387e2f97e6d52e977.pdf
I'm now starting to doubt the financial viability of Site C.
Canis Latrans
3 years ago
Unrealisticman...
Suffice it, in reply to your comment above re Frank and myself, to again quote Frank's very astutue observation, which appropriately suits no one better than yourself.
Your honesty is legitimately in serious question here, Unrealisticman. Especially couched in all the so-called "free market" assumptions gibberish as it is. My view.
Budd Campbell
3 years ago
GOOD POINT, LUKE
In any event, one recently EAO certified R-O-R project with 196 MW and an estimated $300 million cost comes in at ~$1.53 million/ megawatt.
It's a good point, Luke. Perhaps you should contact BC Citizens for Public Power and Prof John Calvert of SFU and ask them what their reaction is.
NoLeftNutter
3 years ago
Canis
I calculate that growth will have to stop in 137,912 years, 68 days and 15 minutes. Start preparing now.....
Budd Campbell
3 years ago
RELAX, FRANK. IT'S NOT THAT URGENT.
Let's say the population of BC eventually hits 10 million in our lifetimes, how would we supply that population with power without wrecking more of the environment?
How about 20 million? Or 30 million?
You know, Frank, I don't think you need to worry about a ten or twenty million person population in BC anytime soon. BCStats projects a figure of 5.7 million for 2036.
http://www.bcstats.gov.bc.ca/data/pop/pop/project/bctab1.asp
Canis Latrans
3 years ago
Figuring, lies and liars..
Well, noleftnut, I guess it depends on whose and what figures we are going to accept here: those of a collapsing global fishery, a collapsing glacial ice and global warming reality, increasing competition amongst global powers vs weaker nations for scarce resources such as oil etc, and a collapsing global financial system and a declining quality of even North American working class life and rising homelessness and poverty, or your ad hoc guessing game based on paleo-conservative whimsy.
It has been said that one doesn't have to be a weatherman to know which way the wind blows-, nor do we have to await even a 10, 20 or 30 million population level in BC. The indicators are there now already, save for those as will not see and do really need a weatherman up the side of the head, in the plans for the disease and slum breeding grounds that will be urban so-called "eco-densification" Tyee has been on so much about, in the increased rates of joblessness of former forestry workers, due to a collapsing US, the increased hauling distances from timber source to mills and timber overcut etc, as forest lands are devastated and shrink, and in the pine beetle devastation of our forests, in large part driven by global warming as well as fire suppression and other short-sighted forestry, including log export practises etc. (A consequence of Forestry's, the provinces and the nations suicidal dependance on quasi-colonial export capitalism.)
We are now well short of even the 10 million Frank alluded to, in the making of his really very good point, and already the ecology, economic and people strains are already showing and approaching crisis proportions. Nor are we anywhere near your insincerely and incompetently calculated 137,912 years, 68 days and 15 minutes
Already now, in addition to increasing water quantity and quality problems already, amidst talk of diverting Canadian rivers to flow south to supply the over-developed and over-populated US, with its growing litany of water shortage woes in California and elsewhere, we are also going to dam for power generation, virtually every goddamn BC river, salmon spawning producing or not, to produce power for our burgeoning selves, even presuming you are fractionally right, and hopefully, to recreate a surplus for the Empire heartland to our south. (Remember the Columbia River, one of our mightiest systems, which for our own potential self-development, we have already virtually handed over to them?)
Continued next post...
Canis Latrans
3 years ago
2. Figuring, lies and liars...
From previous post...
So noleftnut, and the rest of your kind here, you will have to excuse me if I remain unimpressed by your never-ending growth capitalism logic or figuring. The main reason we are where we are now in our relationship with nature, over-population, poverty and homelessness, a declining forest base and global warming etc., is that we have for too long forgotten that while figures don't lie, liars certainly so figure. An oversight that needs to be quickly corrected and acted upon the the populace-, especially its working class. (The ruling class cannot really see beyond its next dividend cheque, and has to presume that everything will go on forever, exactly as it is. So do those as would be their apologists. Until their own collapsing financial system reality up and slaps at least some of them in the pocketbook side of their head.)
jimmy_laroux
3 years ago
Luke Skywalker: Quote:Well,
Luke Skywalker:
It's still a red herring. It does not bear on my point about amortization.
They calculated that BC had a deficit that year of 850 million $, not an inconsequential sum. And yet the same year they increased BC's credit rating. My point is that debt is clearly not the only factor in determining credit rating, and apparently isn't even that important.
Sure it says something. But nothing relevant to the points I've made.
jimmy_laroux
3 years ago
realisticman: Quote:As for
realisticman:
Britain has far more experience with P3s than Canada. They recently tried to privatize the London Underground. It didn't work well:
http://www.timesonline.co.uk/tol/news/politics/article3321667.ece
From the economist:
From a UBC study:
http://csgb.ubc.ca/files/p3/2006_04_vining.pdf
Wrong. Very, very wrong. In the end, the taxpayers still have to pay the cost of project. And in the end it costs more:
http://thetyee.ca/Views/2005/10/26/hiddenhugecosts/
A false analogy. The issue is in how the project is financed, not how it's built.
jimmy_laroux
3 years ago
Quote:...in a P3 the risk is
To reiterate, this is totally false in practice. The reality of P3s is that they cost more and, in general, do not shift risk from the taxpayer.
Ha ha! How is this even remotely related to P3s?
ME2
3 years ago
AHH, to be a Liberal cost accountant.
It seems to me something's missing here (or else I've missed it.)
The ONLY tangible benefit for a Province (us, that is) to receive a Triple A rating is because this signals to the bond provider that we are a good risk and being so, warrant a lower interest rate than for other borrowers.
So if we borrow to build a power generating facility, we benefit first from a lower cost of capital than is available to a private builder, then from savings from not having to provide profit for someone else in the sale of the energy, and then again not being subject to rising energy costs which do not reflect the cost of production, but merely what "The Market" will bear - or can be forced to bear.
I cannot see, then, how PPP results in a better deal for the taxpayer - regardless of how the accounting is structured.
It is claimed that the "inefficiencies" of government inflates the cost of any venture, as compared to the "efficiency" of free enterprise. However, in virtually all construction, for example, gov't contracts out the actual building of the project, and in virtually every case, cost overruns are the direct result of deliberate oversights which favour the business friends of Right Wing governments.
On one of these recent Tyee threads someone listed the many capital projects the present government has embarked upon. not one of which is within its budget, with most being wildly outside of their initially projected cost.
And remmber, this is a government endorsed by the theoretically penny-pinching BC businessman !!
Does anyone know if the Libs somehow back the Bonds of their PPP partners ?
Canis Latrans
3 years ago
Re Jimmy's review of P3s
Excellent comments and research re P3s above, Jimmy-Laroux.
P3s are, in fact, a betrayal of the public interest and trust, and you help make that very clear. These paleo-con artists don't have a fact to stand on-, only their child like blind faith in the greed instincts of "the market" Gods they would have us prostrate ourselves before.
One has but to read the shallowness and jingoism of their analyses and understanding here, to understand why we, society, the economy, the nation, the increasingly war threatened global community and nature are where we are, in terms of the risk of chaos they are creating. It is past time to re-engage our natural disbelief instincts and distrust of these ruling class serving folks, and to sharpen our own skills of critical judgement and analysis. Out of that will arise our own independent analyses and solutions.
These folks are but panderers to and seekers of crumbs from the ruling class table.
Luke Skywalker
3 years ago
Jimmy...
You've piqued my interest further, so let's analyze this matter in a li'l more detail. ;)
On February 15, 2005, the provincial budget was released for fiscal year 2005/06 commencing April 1, 2005.
The budget estimated the surplus to be $220 million, under GAAP, for fiscal year 2005/06.
http://www.bcbudget.gov.bc.ca/2005/summary/default.htm
Remember that during the previous fiscal year the budget surplus was estimated to be $100 million. The actual surplus was $2.575 billion.
http://www.fin.gov.bc.ca/ocg/pa/04_05/PA_2005.pdf
DBRS prepares a report that states that the estimated $200 million surplus for fiscal year 2005/06, based upon GAAP, is actually a deficit of $856 million based upon their cash-based accounting analysis based upon the estimates.
http://thetyee.ca/Views/2005/09/26/BizBCLibs/
That $856 deficit estimate is confirmed by DBRS in its December 21, 2005 outlook.
http://www.dbrs.com/intnlweb/openpdf?fileName=1135186896141.pdf&docid=206756
The estimated surplus under GAAP of $200 million has an actual surplus of $3.06 billion.
http://www.fin.gov.bc.ca/ocg/pa/05_06/PA_2006.pdf
On February 16, 2006, the Canadian Centre For Policy Alternatives accuses the provincial government of being ueber conservative in its budget revenue estimates.
The government’s current “three-year fiscal plan” projects surpluses of just over $1 billion in the next two years. But more realistic estimates, using the Ministry of Finance’s own economic growth forecasts, show that the province can expect surpluses of $2.8 billion in 2006/07 and $3.9 billion in 2007/08.
http://www.policyalternatives.ca/News/2006/02/PressRelease1294/index.cfm?pa=4B59033D
Budd Campbell
3 years ago
THANKS, JIMMY
In re P3s, here's a fun excerpt from a public policy paper by two researchers at UBC:
www.carleton.ca/spa/News%20and%20Events/Ross-
Thanks for this link, Jimmy. I have printed it off, and it's a decent read.
jimmy_laroux
3 years ago
Luke Skywalker: Mea culpa,
Luke Skywalker:
Mea culpa, I should have written "DBRS calculated that BC would have a deficit that year of 850 million $."
The gap between these estimates illustrates the effect of amortization under GAAP (pardon the pun).
Sure. Even though the "actual surplus" is not an actual surplus. If these were surpluses in the literal sense of the word, our debt would be much lower. Our total debt in 2001 (the last year under the NDP) was 33.238 billion.
http://www.fin.gov.bc.ca/OCG/cfa/PA/00-01/PA%202001%20Debt.pdf
Our debt in 2004 was 36.938 billion.
http://www.fin.gov.bc.ca/ocg/pa/03_04/PA_2004_Debt.pdf
Our debt in 2007 was 36.738 billion.
http://www.fin.gov.bc.ca/OCG/pa/06_07/PA_2007_ProvDebt.pdf
BC's debt has increased 3.5 billion $ over the last 7 years. And the figures from 2004 to 2007 do not take into the effects of amortization of capital costs under GAAP, nor do they take into account debt hidden as "contractual obligations".
I remember when, in 2004 (or was it 2003?) the federal Liberals pulled the same nonsense, estimating a 1.9 billion $ surplus and getting 9.1 billion instead, Stephen Harper said that the Liberals were, and I quote, "lying".
jimmy_laroux
3 years ago
No problem, Budd :)
No problem, Budd :)
jimmy_laroux
3 years ago
...if the taxpayers can be so fooled.
In Britain, the Labour (ha!) government has committed itself to between 90 and 170 billion pounds for P3s (depending on who you ask) over the next ~25 years:
http://www.guardian.co.uk/uk/2007/nov/27/politics.economy1
http://business.timesonline.co.uk/tol/business/industry_sectors/support_services/article402564.ece
They are changing their accounting rules to reflect the equivalence of P3 "contractual obligations" and public debt:
http://www.guardian.co.uk/business/2008/feb/10/businesscomment.northernrock
Patiently Waiting
3 years ago
Housing sector
"So the question becomes how to either avoid an adjustment, or failing that, to make that adjustment quickly and with minimal losses in new housing construction."
Once housing is overbuilt, we will have a painful adjustment. There is no avoiding it. The problem is our economy is now based on condo construction.
If we do end up with half-built condo buildings everywhere, the government could buy them, hire unemployed construction workers to finish them, and make them affordable co-op housing.
The upside to overbuilding is the housing market will crash, finally making it possible for young educated workers to stay in Vancouver. Lower cost real estate means better economic development.
NoLeftNutter
3 years ago
Canis
Ah, so eloquent and so empty all at the same time. The left has always based its arguments in fear, fear of individuality, fear of competitiveness, fear of success......you’ve got nothing, and worse, you likely do less.
I’ve never claimed that capitalism will go forever, just the opposite, you’ve got 137,912 years, 67 days and 31 minutes left, got your plan on?
Canis Latrans
3 years ago
Passing observation...
Whilst reading some of the comments here, especially from the right wingers, and others who are simply locked into "the system's think" on matters of the economy especially, it becomes clear to me that going forward, we are also going to have to develop a whole new language by way of thinking and talking about the economy, in the coming struggle for the "steady-state economy" that will hopefully replace sooner rather than later "never ending growth capitalism"-, before the planet and we burn out. Especially needing to be replaced and challenged is a whole bunch of ruling system assumptions about the absolute necessity for growth, development (though fine tuning will always be needed), expansion, even never ending, especially frivilous technological change-, especially when it harms people's lives, and only serves to further enrich the already rich.
Economic activity will, of course, always have to be it's most efficient and least wasteful, but the object of it all, as well as maintaining a sustainable balance with nature, especially with its ability to recover our predations, is the well-being of all people, not just ruling class elites, (for so long as such will continue to be able to exert a power influence into the new socio-economic order).
And the importance of this new language of economics, in which "sustainability" and "diversity", "common interest" and "equality" must come to assume pride of place over such concepts as "profit" and self-serving "wealth creation", for examples, is the old "expediance political reality" known even, or especially to ruling class interests, that he/she or that side which gets to frame a discussion or struggle, and create its language of discourse, wins. Not an entirely true notion of course, but no doubt extremely important.
We must not allow these paleo-conservatives, otherwise known as neoconazis, this "economics" field of discourse unchallenged, ever. Ditto notions of what constitutes real democracy. They have already enjoyed their monopoly too long, to the great harm of nature and society. (Read the drivel of Rupp elsewhere here on Tyee.)
bebedamour64
3 years ago
"Did you ever here the story
"Did you ever here the story about the mathmatian, philosopher, and the accountant discussing the equation that 2+2=4. The mathmation said that the equation is true and cannot be any different. The philosopher said it dependeds on how one sees things in life and can be different things to different people. The accountant closed the door, drew the curtains and asked "what do you want it to be?"
LMAO
@VanIsle
...if all the spelling mistakes are intended irony, I applaud you
Canis Latrans
3 years ago
Zeitgeist Plug
Though it may seem unrelated to this discussion, which it certainly is not, I just had a DVD copy, titled Zeitgeist, laid on me by the guy my daughter is shacking with. :-) (I ain't gonna lie. It's not like me.:-)
Anyway, though many of you non-believers in the new Bush-Harper Fascist Axis, and its truthfulness in all things, will be familiar with much of what this documentary deals with already, especially if you have been around Tyee from the beginning, it is an excellent documaentary work, well done, and will rock your sox the way it is put together nonetheless. (Which doesn't mean you have to agree with every dotted i and crossed t.)
Zeitgeist. If you can secure a copy of this DVD anywhere, or download it online for free somewhere, do so. (Available below. Not short in duration.)
http://www.metacafe.com/watch/956553/zeitgeist/