finally

It is about time I have read a truthful article about the continual lying the BC Liberals have been doing concerning BC Rail! Thank you, Will McMartin.

"She said the railway was "bankrupt" when the BC Liberals first won election to government. Hardly. In 2000, BC Rail was a thriving concern that owned nearly $1.4 billion in assets -- including 129 locomotives and 9,500 freight cars -- employed 2,000 British Columbians, and had more than 184,000 car loadings."

One of the saddest things about losing our sovereignty over one railway is the fact that many of those high paying (highly taxed) BC Railway jobs were lost when when CN took over. Not only did these jobs include local engineers and service personnel, they included a corporate headquarters with employees who kept track of more than 40 km of railroad. So, BC also lost other revenue to other provinces and to American Stockholders. CN (and, therefore, Bill Gates, holder of about 1/3 of CN stock) has had a nice black bottom line ever since they purchased BC Rail.

Even when the Socreds gave grants to BC Rail those many years ago, it was understood that the railway was needed for servicing distant communities employing BC Citizens in the mining, logging, farming and ranching sectors. It was the roadway for the transport of money-making, people-employing commodities for export. It was also used to take supplies to distant communities. Now, if CN finds it cheaper to discontinue service to any area of the province, that is what they do. They don't care if the distant communities have to truck milk, eggs and other staples over bouncy, hard to maintain, winter roads for hundreds of miles.

For that reason, asphalt and gravel roads have seen much greater use, with associated higher over-all costs in shipping, polluting and road maintenance! Rather than having BC Rail looked upon as part of the provincial transportation system, the province can now only look to its highways; the Liberals have given away control of our railway at a time when they have been selling northern mining and mineral rights. International corporations have been buying up those mineral rights. It is their intent to extract as much money from the province as they can. Now, those mineral extraction companies will be paying CN for BC railroad service (quite possibly through banks in places like the Cayman Islands or even the US where it gets fuzzy trying to keep tabs on just how much money was paid by whom and for what). Further, with the BC Liberals giving preferential tax rates to corporations over individuals, our once very profitable and very financially healthy BC Rail takes even more of what used to be our money out of the province and out of the country!

Thank you!

What a relief ... I hope it's OK by Will McMartin and The Tyee if I show a bit of this column, plus URL, on my blog.

On the day she made those dumb remarks, I posted Shirley Bond's comments (from the Hansard record of debates). Someone who had been a BC "Liberal" M.L.A. circa 2001 said later he was stunned by the level of deceit (See "Treachery! Downright Treachery!" at http:bctrialofbasi-virk.blogspot.com/ ... Paul Nettleton's comments are recorded there.

BC Rail is so important EVERYWHICHWAY ... and today March 29, 2010 is the final pre-trial hearing in BC Supreme Court, Vancouver, before the actual BC Rail corruption trial (otherwise known as the Basi-Virk trial) begins on May 3.

It's the most important trial in BC history. And it's very possible that we'll never hear or see all the evidence unless we're actually in the public gallery ... or (faint hope!) ... the judge allows TV cameras to be switched ON during the courtroom sessions.

Well done Will

Now maybe the naysayers will understand how Campbell twists truths to suit his agenda. I agree fully with A Guenther on the NDP's lack of rebuttal on this matter in the House. But maybe the Liberals rules in question period don't allow rebuttals?

Also by my reckoning this province didn't see one dime of the sale of the railway. In fact I allege that they paid upwards of $150 Million with grants and tax write offs to take our railway.

Speak Up

I am so frustrated waiting for the NDP to speak up and out! Where are they? As far as Bond, Campbell, Hansen, etc....RECALL!! I am sure, by the way, that the NDP could work with Pivot...there must be some way to charge Liberal MLA's with fraud...election fraud...in the courts. ??

next chapter

Ok now about the sale itself.

I understand CN basically got Canadian taxpayers to buy BCRail for them using BCRail's deferred tax credits. In essence we sold BCRail for nothing.

Secondly, the railway was sold at the beginning of the biggest resource boom in BC history. How much profit did the citizens lose by not keeping this asset through to the present day?

Waiting for Chapter 2?

The BC NDP could have commissioned somebody to do this and maybe would have won a few elections. Many commentators have suggested exactly that to Carol James and on numerous occasions but nothing gets through her thick skull. The NDP is run by folks too stupid to manage a school girls koolaid stand. Crooks or Cretins why are those our only choices.

Since BC Rail was given away

Since BC Rail was given away to our "wealth creating foreign investors", Hwy 97 has a long line of Diesel semi-trucks, with trailers, taking lumber and plywood hundreds of km. to the docks.

The pollution and road damage caused by these trucks alone is far more costly than any railway.

Sometimes there are 2-3 of these trucks parked at the Williams Lake Tim Hortons alone, at any given time.

There must be hundreds of them .

Now they want to open up the Prosperity copper mine 125 km from WL, which will add more overloaded ore trucks, breaking up our roads, to the already long lines from the Gibraltar and Polley Mtn. mines.

But all this idiocy is jacking up the GDP and that's all our braindead economists and bought politicians care about.

Ed Deak, Big Lake.

Panties on Fire

Ignorant or dishonest? I actually hope it's the latter. The notion that our government is being managed by people who can't comprehend basic financial information is just too scary to contemplate.

Besides, there is always a chance that we could put a dishonest politician in jail. What can we do with a stupid one? (yeah, I know, probably re-elect her).

A suggestion for Ms James

Perhaps the leader of the opposition should photocopy Will McMartin's column from the Tyee, highlight in florescent orange or yellow the passages that describe Shirley Bond's lies, and hand out a copy to each member of the caucus before question period. The woman deserves to be attacked from every angle if she has the temerity to even show up for the next session.

A number of us have been badgering the opposition for months to get on top of this pathetic story and start to beat the government mercilessly with facts like these.

The Campbell government's ethical, moral and financial well is dry. There is no excuse fro failing to make these arguments in bold at every opportunity.

It appears there are no members of this government with more than a passing familiarity with the analysis of financial statements.

Just having this article in the Tyee is not enough.

Thanks Will, thanks David Beers.

The muted uproar is deafening!

Do any NDPer's read Will McMartin?

Or are the NDP waiting for the target on the Liberals back to get bigger?

Why would I vote for the provincial NDP (No Difference Party) when they apparently can't get their shite together, when handed 'opposition' on a platter?

If I launched a new political party I would call it the None of the Above Party!

House Rules

The Opposition cannot respond in QP under house rules and is called out of order if a question is not asked quickly.

More importantly they have 30 minutes to ask questions in QP and need to use that time to raise issues - it goes by quickly and many issues would fall off the table if they used the opportunity to defend the record.

And the arguments have been made in debate. But that doesn't get covered, even by the tyee.

Do the Liberals have any pants left?

After setting so many on fire!

archer2006

The rules don't prevent the real questions from being asked...when things fall off the table they make a noise.

The opposition hasn't been making much noise since Joy and Jenny were running it.

There are ways of getting even the most compromised news media's attention...

Get yourself dragged out of the house for breaking the stupid 'rules' if nothing else works.

The point simply is that the opposition aren't really IN THE MATCH unless they're drawing blood.

Will McMartin draws more blood in one Tyee article than Carole James does in a whole session.

I wish it weren't true. But, sadly it is.

“If you tell a lie big

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”

Herr Joespg Gobels, Nazi propaganda minister.

This is exactly what Gordo and the mainstream media re doing with BC Rail.

Verrry interesting

Will has credibility here. His article reads that he poured through filing documents, annual reports and so forth. BC Rail had a trucking operation, but it was sold off because it was not overly profitable.

But the sale of BC Rail was not because of the perceived financial losss of the railway, but rather an asset sale (minus the railbed), so CN esentially received the running rights, and the rolling stock, plus associated infrastructure. If there was a perceived loss with BCR, CP Rail wouldn't have entered the bid process which it did early on until they found out the background antics of a few people, and backed out.

Would BCR still be viable today? I would gather it would be running at a loss owing to BCR's reliance on forest product movements. The passenger train service was a bit of a money loser as are most passenger train services in North America.

But this was a sale for an injection of cash into the provincial treasure box, and not much else.

Too bad though, Even with the working of a parternership with Great Cdn. Railtours, BCR could have made a better go at passenger service, and could have explored better intermodal connections from Prince George to the ships in Vancouver.

Agree with GW here about the NDP. They aren't as a strong Opposition as they once were, and are not biting hard into the government as the old classic 1980's NDP used to be.

All we seem to hear now from commentators is the same old tired "drunk Premier", "lies", and references to 1940's Germany. Kind of pathetic when real constructive and factual debates used to take place.

Some Quibbles

Long-term debt during the 2000 fiscal year was $562.2 million, which was carried over into the 2001 fiscal year.

Page 27:

http://bcrco.com/2001report.pdf

As for "Net Operating Income", one must first deduct "Finance Charges & Income Tax" to arrive at a Net Income figure prior to the deduction of any Special Charges.

2000:

Net Operating Income: $44.27 million
Finance Charges & Income Tax: ($38 million)
Net Income Before Special Charges: $6.27 million
Special Charges: $13 million
Loss: ($6.721 million)

2001

Net Operating Income: $28.57 million
Finance Charges & Income Tax: ($35.48 million)
Net Income Before Special Charges: ($6.9 million)
Special Charges: $100 million
Loss: ($106.907 million)

After May 31, 2002 and to date the impact of the imposition of U.S. Softwood Lumber duties, in conjunction with the dramatic softening of softwood lumber prices, would have had BC Rail bleeding red ink esp. considering that forest products represented ~78% of its traffic.

BC's current idling forest industry is tangible evidence of that fact.

If you put lipstick on a pig it's still a pig.

Wow

Only in the Tyee can you read a story about a railway that for decades had huge amounts of public investment (billions) written off time after time -- described as a glowing success with operating profits. And it makes me feel warm all over that successive governments -- Socred, NDP, whatever -- kept forgiving huge debt loads for this money-making success story.

Maybe I can get the NDP, when it next comes to power, to forgive my mortgage for me. If I could just lose the mortgage, I'd have a great operating profit.

This piece keeps castigating those who argue (despite all those operating profits) that the thing lost money, conveniently dismissing as irrelevant all the debt that was forgiven time after time ($850 million just since 1989). Truth is, they should have sold the damn thing decades ago and saved a whole whack of public money.

And how disingenuous to cite CN's and CP's much higher debt numbers without the rather important context of the debt/equity ratio. At the time this was being debated, BC Rail’s debt-to equity ratio of 1.76 was substantially higher than CN’s 0.67 and CPR’s 0.98 -- and that's after all the bailouts.

If you want a modern-example for this interesting phenomenon, look at Intrawest, which also makes an operating profit, but is sinking out of sight because it can't pay off all the folks who threw money at it with an expectation of a return. All those who like the province's investments in railroads should be eager for us to pull Intrawest's (AKA Fortress) coals out of the fire too.

And there's no discussion here of -- never mind the glorious past history of operating profits -- what BC Rail's future prospects were as a small, locked-in, regional railroad surrounded by big nasty federal railroads like CP and CN. Ask shippers in Prince George what it was like getting shipments transferred from BC Rail to CN, or vice-versa -- and at what price.

And finally, there's no mention here of why CN was the logical big nasty to take this albatross from around the taxpayer's neck -- the new Prince Rupert container port and the corresponding reload facility in Prince George. CN made it clear that without the BC Rail piece, the container port was a no-go.

It's one thing to focus on Campbell and a possible rigged deal that ensured CN was the winner. Wouldn't surprise me a bit if that happened, and maybe that will emerge from the Basi-Virk trial. But to argue now that BC Rail was a going concern is revisionist history of the worst kind. And if this economic drag still belonged to the people? Add a few more hundred millions to the province's debt picture.

Funny -- it was the NDP I believe that first looked at the idea of selling BC Rail. Elizabeth Cull was all for it in 1995. I guess it's only a good idea if the NDP pulls it off.

Way to go Will.

You've done it again, proving the liberals are still lying about BC Rail. The frustrating thing about watching the opposition is that all of them seem to be ignorant about what really was the score on BC Rail. They bought into the notion that the NDP were soooo bad in the 90's that the Liberals could not possibly be so corrupt an devious about assets like BC Rail. Most of them still are completely out of touch with the reality. They have been instructed to not defend any government of the past hoping that people will forget the 90's. That won't happen for anyone and they would be better off fighting back with a vengeance. Carole just isn't up to the job nor are quite a few on her team.

selling of public assets like BC Rail, CNR, Air Canada, etc.

If anyone really wanted to discern the truth about BC Ril, CNR, etc., he could find it easily. But most people are content to get their McNews from the Province, the Sun and other purveyors of private corporate propaganda. Most men restrict themselves to the gambling (stock market)and gladiatorial(male sports) pages. Most women are content with more feminine drek, but just as distracting from REAL current issues as the male drek. As Keith Spicer said, we are an ignorant lot, and stubborn in our refusal to learn. Alas, the few who actually think and care are overwhelmed by the majority who don't. The New Feudalism is here, heralded in by the serfs themselves. The astute along with the dense will be enchained and neither group will have access to an ipod, never mind a flush toilet. We'll all be 3rd world slaves.

It's as if we humans had the Garden of Eden, but let the devil rule it;))Maybe the planet will rearrange its continental plates and drown us idiot humans, so at least other species could survive.

BC Boy...

Thanks for the help. We BCLibs need all help we can get. We owe it to Mary, Kevvy, Gordo and the rest.

To save, or not to save

First, and foremost, thanks for a great article Will. Also, thanks to the other Will for the inspiration for my title.

“Truth is, they should have sold the damn thing decades ago and saved a whole whack of public money.”

Just think of how much “public” money we could save if we sold off all of the highways in BC, and all of the public subsidized public transport systems, and all of the hospitals, and all of the schools, and all of the government subsidized sports venues, and all of the public utilities, etc.

Just curious, how many people really think the citizens of BC would be paying less for things if they were all in the hands of private companies?

thank you

Thank you for exposing another lie. I suppose there must be a few members of the liberal govt. in BC that are not totally corrupt. Suppose that they may be persuaded to start questioning their leaders. Maybe a list of the honest members could be started, or is it like the Mafia?

Polakite didn't get the message

"Thanks for the help. We BCLibs need all help we can get. We owe it to Mary, Kevvy, Gordo and the rest."

What help? I was analysing from a transportation asset sale prespective, not from a Liberal supporter prepective. While assets can be sold, these types of sales are questionable, since the underlying reasoning is just for an injection of cash for a cash strapped government.

I am also not in support in any way of how this sale was handled. There's deceit, deception and
more power plays than you'd see during a Canucks
Oilers game.

An alternative would have been to have BC Rail work in partnership with with either CP or CN rail
perhaps with shared or leased running rights for CP or CN to effect better profitabilty for BC Rail if need be.

Shared running rights exist on the Fraser Canyon sections of both railways for geographic and logistical reasons, and it may have been an option for CP Rail or CN to do the same with BCR.

Virk and Basi represent a real good example as to why these "expert" appointments are junk. Niether of them had any academic or occupational background in transportation or finance, and the appointments were just made for political reasons.

The same reason why "Kevvy" somehow managed to make yet another 'home' for his friend, this time in Fraser Health.

Polakite needs to get a handle on political reality. Something he has never been able to do.

BC Rail - Lies from Liberals

To Grania and the legal community: How about a class action suit? There must be something in our legislation/Constitution that says government may not lie to the people?
Two issues in brief:
1.The people of B.C. had a right to believe they were being told the truth when Campbell said over and over that his government would not sell BC Rail.

2. The people of B.C. had a right to believe they were being told the truth when Campbell/Hansen said over and over that their government had no plans to change to a Harmonized Sales Tax.

The people of B.C. were - twice - scammed. In the real world there's a penalty for scams. How about we try it on for size in the courts?

Not going to work

"To Grania and the legal community: How about a class action suit? There must be something in our legislation/Constitution that says government may not lie to the people?"

There isn't. A class action lawsuit will only work if approved by The Courts, and prior to that there
has to be some sense of injuryor damage inflicted
upon the Petitioners, individually, such as a class
action lawsuit against a car company or a drug company, and there has to be evidence of negligence on part of the defending party against the plaintiffs (petitioners).

A politician can make statements, but there's no legal obligation for them to be legally held to those statements (otherwise Glen Clark would have been sued for his misrepentation of the FastCats
and Bill Bennett for his misrepresentation of the
North East Coal Project's revenue projections).

Two issues in brief:

"1.The people of B.C. had a right to believe they were being told the truth when Campbell said over and over that his government would not sell BC Rail."

That was true at the time he said it, but changes
do occur. In opposite, the people had the right to believe that the Fastcats were $125 million each including the toliet paper as stated by Clark.

"2. The people of B.C. had a right to believe they were being told the truth when Campbell/Hansen said over and over that their government had no plans to change to a Harmonized Sales Tax."

There is no inherent right to believe. If people
are that trusting of politicians, there's something wrong. Never ever trust any politician no matter what party they come from.

"The people of B.C. were - twice - scammed. In the real world there's a penalty for scams. How about we try it on for size in the courts?"

Pay for the filing of the petition and see what happens.

People have to simply learn not to trust politicians. Listen to what they say, and then do the research. If you like what they deliver, vote for them, but that vote always always comes at some risk.

sea to sky highway

So, hardly a stick of lumber nor a truckload of minerals travels the sea to sky highway, but the BC Liberals spent $600,000,000 to make it a little nicer for the skiers and condo owners to drive cars rather than wisely spend our money to improve passenger rail service to Whistler. Vancouverites and Whistler/Squamish commuters could have had a truly restful viable green option instead of driving their SUVs etc. on dangerous wet and icy winter roads.
www.th.gov.bc.ca/seatosky/reports/High-Speed_Passenger_Rail.pdf

As for the pro-Liberal cheerleaders continuing to hike their skirts for their team, I wonder, do they honestly believe that Bill Gates would be involved in investing heavily into CN at the time CN was purchasing BC Rail? The world wants BC's and the Yukon's commodities, Gates knows this, he gave CN's BC Rail purchase the go-ahead. He is not the second richest man in the world because he is a fool with his money! You cheerleaders need to settle down and get your knickers out of their knot. Take a lesson from one of your boys and... recalibrate; your cheers are no longer working. Your team has fumbled the economic ball over and over again, and the score is adding up against you.

Class ACTIONS - Not exactly

In fact, a single person can commence a class proceeding on behalf of hundreds or even thousands of people.

Ontario, British Columbia, Alberta, Quebec, Saskatchewan, Manitoba, New Brunswick, Nova Scotia and Newfoundland and Labrador permit class proceedings according to provincail legislation currently in effect.

Further, the Supreme Court of Canada has ruled that court procedures allowing representative actions can be interpreted so as to allow for class proceedings.

Class proceedings legislation allows greater access to justice by permitting groups of people who are similarly affected to join together in commencing legal action.

However, the most productive route for overturning the sale of BC Rail is unlikely to be a class action suit.

In fact, it is far more likely that the sale could be overturned as a result of a action in Contract for non-compliance with the requirements of the Statute of Frauds.

Not on your best day.

"Nice of you to admit that the sale was a deliberate lie from Campbell,a shady deal,broken election promise."

Well onme has to think back to 1996. Campbell said during that election that he would in fact sell BC Rail if elected. That cost him the 1996 election because the Interior voters would have nothing of it, so he turned around.

"Nice to see you coming around to our side."

Not on your best day, pal.

I am opposed to the course of events, but that doesn't mean I support the left wing in their quest to become government.

Pleasure to read

Well done, Tyee.

An excellent article by Will McMartin.

Thanks, Mr. McMartin, for explaining so well the financial intricacies of BC Rail - and why it was such a profitable and valuable asset to BC.

The sale of BC Rail has been obscured in deceit from the beginning days, but one of the reasons BC Rail is once again being smeared by the resurrection of those oh-so-familiar and oh-so-false, not to mention highly "crafted" visions of "bankruptcy and disarray" is, I think, more calculated foreplay to set the stage for the upcoming BC Rail court case.

This is an attempt by the present government to trivialize the splendid assets of a once splendid public railway called BC Rail, and by doing so, thus, trivialize the consequences of its devious privatization - the immense losses to our province that were incurred as a result - losses not only in a financial terms but in terms of the common good of this province as well.

Ms. Bond, you are not fooling anyone as you try to intentionally craft a molehill of misinformation out of your government's mountainous betrayal of the people of BC.

Will McMartin - an honest right-winger - at last

Congratulations to my friend Will McMartin - this is a first rate job demolishing the house of cards Shirley Bond and other have set up since Day One with BC Rail.

The BC Liberal shills who populate this site are probably too young to know that McMartin is a former Social Credit government staffer, a former Social Credit Party candidate and a former federal Progressive Conservative candidate.

I don't agree with Will on everything but he is exceedingly honest and whipsmart - two things I doubt you can find today among BC Liberal caucus staff or electeds.

The sale of BC Rail was a massive giveaway to CN Rail - that's why then-CN CEO Hunter Harrison was cracking the champagne after taking it over.

"Purchasing the BC Rail franchise is a strategically important initiative for CN, one that will strengthen our forest products business and that has significant scope for shareholder value creation," CN president and CEO Hunter Harrison said in 2003.

No kidding!

McMartin spells out why right here - the railway made money - not lost it - and the previous Socred governments eliminated the debt load. That left CN to pick up a fully functional railway with customers and income - but without massive debt to service like every other North American railroad!

Unbelievable. And all the more so that charlatans like Bond and her colleagues keep pushing the same line that is so obviously untrue.

Thank goodness once again for Will McMartin and the Tyee!

Right Bill

""Congratulations to my friend Will McMartin - this is a first rate job demolishing the house of cards Shirley Bond and other have set up since Day One with BC Rail."

Agree there.

"The BC Liberal shills who populate this site are probably too young to know that McMartin is a former Social Credit government staffer, a former Social Credit Party candidate and a former federal Progressive Conservative candidate. "

Yeah so? I know that and more about him, but let's balance this out by stating BT's NDP roots as a political operative, shall we?

"I don't agree with Will on everything but he is exceedingly honest and whipsmart - two things I doubt you can find today among BC Liberal caucus staff or electeds."

and the NDP?

"The sale of BC Rail was a massive giveaway to CN Rail - that's why then-CN CEO Hunter Harrison was cracking the champagne after taking it over."

Agree there, except the champagne part.

"Purchasing the BC Rail franchise is a strategically important initiative for CN, one that will strengthen our forest products business and that has significant scope for shareholder value creation," CN president and CEO Hunter Harrison said in 2003."

Uh huh.

No kidding!

"McMartin spells out why right here - the railway made money - not lost it - and the previous Socred governments eliminated the debt load. That left CN to pick up a fully functional railway with customers and income - but without massive debt to service like every other North American railroad!"

Um a bit of a time line there, the sale was within the scope of the BC Liberals, not the Social Credit government.

"Unbelievable. And all the more so that charlatans like Bond and her colleagues keep pushing the same line that is so obviously untrue."

Agree there.

"Thank goodness once again for Will McMartin and the Tyee!"

Certainly a class act, compared to some 'contributors' who pass themselves off as 'journalists'.

Stop Lying Why?

Party Elected Vote Share (%)

LIB 49 46.02
NDP 36 42.06
GRN 0 8.10

@ BCBOY

"There is no inherent right to believe. If people
are that trusting of politicians, there's something wrong. Never ever trust any politician no matter what party they come from."

Nice to see a Liberal apologist admit what I think is the truth. That is that BC Liberals care nothing about truthfulness and believe that British Columbians are fools to believe anything they say.

Trouble is. . . when a Liberal says that truth matters not, can we believe him?

BC Rail

Excellent information and discussion. Left out has been the effect of the loss of the railroads have had on smaller communities and the cost in loss of jobs and human suffering that caused

Also missing is mention of the need for an clean, efficient rail system as the price of fossil fuels rise.

Public investment in rail would reduce the incentive to privatize rivers for energy production - maybe that is one reason BC Rail was sold?

And the railroad is only HALF the story !

As folks in the interior have been attempting to get the urban messes to "hear" for 7 long years: The railroad is only HALF of it! What you don't know, or really seem to care is that CN has abdicated ANY responsibility for rail freight and forced the forest producers to ship by truck, INCREASING the tax-payer funded highway maintenance and reducing maintenance on the railroad! IN ADDITION, CN now holds a HUGE chunk of BC REAL ESTATE THAT "CAME WITH" BC RAIL.

Same can be said for the NDP

"Nice to see a Liberal apologist admit what I think is the truth. That is that BC Liberals care nothing about truthfulness and believe that British Columbians are fools to believe anything they say."

The NDP did that in the past.

"Trouble is. . . when a Liberal says that truth matters not, can we believe him?"

Did we believe Clark and the NDP?

"Did we believe Clark and the NDP?"

Never lied to us as much as these guys. Let's see, BC Rail, HST, fudged budget prior to election, Olympic costs, Olympic benefits, Vancouver convention center costs, special deals for friends in business in private car sales taxes and stonewalled Basi/Virk. The problem for all you liberal fans is that a court ruled Clark didn't.

What constitutes a" lie" vs fraud?

As I read the article and the numerous posts, I am struck by the way, that the whole issue has been that of one of integrity. It would appear that when one "lie" becomes countless others, and that when proof is offered that refutes the lies,it is not accepted, our politico's refuse to validate their position and still maintain the lies.

Strange behavior indeed. A series of lies that seems to cover up, an ongoing fraud is even more serious.

Obviously our system is broken and I would think some sort of class action on the part of the electorate is in order. I don't mean an election. (Why get into an election situation that seems to bring on more lies, makes no sense eg...the HST)

If our electoral bodies, all of them included, commit fraud...or "lie" to the electorate as it were, perhaps the parties should be sued as in a class action. If as private citizens we commit such acts as lying in our businesses, or daily lives there are consequences. Obviously, the threat of being thrown out of power, does not sway these people from lying to stay in power.

Another means must be found to deal with this.

Belief...there is none where doubt exists. Its time people chose a different path, to deal with this type of "fraudulent behavior".

cboo44 makes a very important point

.
Shirley Bond was stirring up a crock of lies in Legislature debate last week,

but cboo44 points to the other important half of the BC Rail topic ...

namely the Real Estate still owned by BCR (presumably by us). There's a fortune in lands around towns, villages, and even North Vancouver waterfront which is still held by BCRail. There's Roberts Bank and the 40 km. of railway connecting to it. There's the BCR-CN lease itself which, in case of default, could be re-possessed by this very BCRail entity ...

and so Shirley Bond says "Look away!" Ms Bond talks about anything and everything else except the priceless Asset BC Rail is even today. Ms Bond will only talk about how much money they will "save" by sweeping the current BC Rail under the carpet known as her Ministry of Transportation.

As for the impending BC Rail trial, there a draconian publication ban in effect ... an almost unbelievable denial of the public's right to know what actually happened to the large, important railway we once owned ...

a mere co-incidence, of course.

Request

Could someone, preferably Will McMartin, respond to blackie's comments re writing off the debt and then pretending that everything is fine and a going concern. Does he have a point that others choose to ignore? If he is correct, this issue needs to be addressed!

BC Rail Profits

BC Rail profits would have soared had they continued with the linkup with Alaska Rail. In 1972 when the oil rush was on in Alaska, the NDP under Dave Barrett had aggressively lobbied the US government to ship the oil from Alaska to Cherry Point Washington State via the Alaska Railway and BC Rail. The government in Washington was willing to sign the deal. The US government was also willing to finance the infrastructure from Deas Lake into Alaska. At the same time would provide the financing for the equipment necessary to do the job. There was even talk of double tracking where possible to speed the flow of trains.

BN at the time had under bid a oil pipe line to move oil to Los Angeles, I don't recall from where. It was felt that an overland route would pose less danger to the environment than shipping it through the inland passage. The NDP government of the day had the deal nearly signed but lost the 1975 election. When transitioning with the Socreds, Barrett said that all that was needed was for the Socreds to sign the papers.

Bennett turned it down. Something to the effect that he wouldn't sign something the NDP negotiated. Hmmmm, sounds familiar doesn't it? Tearing up contracts, canceling ferries that would have given BC the leg up on the technology for marine shipping. Selling off a profitable railway.

With any foresight the current government and previous governments would have pushed hard to have a link up with the Alaska Railway rather then give away BC jobs!

History is sometimes irrelevant

Blackie tosses irrelevancies into the mix. It is pointless to look at early days of BCR because politicians used it a development tool for opening up areas of the province to commerce. It played a vital role in British Columbia's development. WAC Bennett (Mr. not necessarily socialist but socialist if necessary) invested in the railway aiming to stimulate new industry. The private sector doesn't have that aim.

Bennett and his bunch were found to have committed civil fraud when they pushed ahead on expansion with dishonest estimates and engineering data. Costly errors by government. Bennett, (as do the Campbell Liberals) preferred to hide public debt where it could be left uncounted so BCR was creating and operating a transportation corridor deemed necessary by the government but not paid for out of the government's current budget. The debts, camping on the books of BCR, were guaranteed by the Province and were 'written off' by moving the debt to where it belonged, in the hands of government.

In the developmental days, BCR was not profitable but it was achieving its goals. By the late nineties, under professional management, the railway improved efficiencies, expanded in other business areas such as trucking and was doing a good job. However, the accumulated deficits from early years and from political decisions (blunders) of expansion into uneconomic runs, had to be addressed.

Those debt/deficit writeoffs were paper entries reflecting historical situations outside the control of the then management or their political superiors.

Sort of like one of the wind energy companies blessed with a purchase contract by BC Hydro, despite having huge historical deficits from earlier discontinued operations. Same with Naikun Wind Energy. It used to be called Silver Butte Mines and had an accumulated deficit of $35 million according to 2009 financials.

Now why do the Liberals find energy companies with deficits OK to promise billions to while trying to make the dishonest case they do with BCR.

Go back and look at the three years operations of the public railway before it was fraudulently converted to friends of Liberals.

BTW, if you want more about Naikun:

http://northerninsights.blogspot.com/search/label/Naikun%20Wind

One more thing

BC Rail, under public ownership, had a real estate subsidiary that was making long term plans to develop, in cooperation with adjoining owners, part of the extremely valuable landbank that the railway owned.

Getting this land into friendly private hands was the Premier's initial motivation for selling BCR. Campbell and private friends had their eyes particularly on the Howe Sound corridor but there was much else too.

That CN's board chair had close ties to the Premier provided a wonderful cover. While some critics were focused on the railway operations, the insiders were aiming at the land bank.

Reminds me of an old story about the sawmill worker who went home every night pushing a wheel barrow full of sawdust. Security guards searched through the sawdust regularly, convinced he was stealing something. Never found a thing buried in sawdust.

Well, you probably know the rest. He was stealing wheel barrows.

"All truth passes through

"All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."
--Arthur Schopenhauer

McMartin does well to move the BC Rail truth toward the end of stage one, but there's a long way to before the public will "understand that a write-off is a non-cash transaction that occurs when an asset is reduced in value or entirely removed from a company's books." I honestly don't believe Bond even understands this, hence the "moronic" statements durng QP. She couldn't keep the education accounts in proper order as schools minister, how can I have confidence in her basic accounting skills regarding a railway? At best, I put her in the willfully ignorant category, someone who likely knows, in her gut, the truth, but hasn't the economic training or courage to question her spin doctor advisers, her cabinet colleagues or the Premier.

The NDP needs to find a way to put this truth and its corresponding lies in even simpler terms than McMartin has, which is easier said than done. You publish this McMartin article on every op-ed page of every single newspaper in BC tomorrow, and the collective eyes of the province will glaze over before they drift over to the sports or lifestyle section.

Yes, lies repeated take on the appearance of truth. But the converse is also the case. Repeat the truth over and over and it will, usually, reach that third stage - unfortunately in politics, this stage is often reached long after anything can be done.

Kudos Mr. McMartin

Thank you for doing what the MSM is either incapable or reluctant to do, research and report the facts. The sad fact is that unless some reporter and or editor grows some backbone and exposes this information via the MSM, only a select few of us will be privvy to the facts.

Maybe it's time that a good number of our fourth estate was stripped of it's privileges and relegated to the unemployment line. If they can't or won't do the job they are paid to do then step aside and make way for those that will. Who knows, if the papers and electronic media actually started doing their jobs again, their financial problems could be over. The taxpayers are paying enough for government approved spindoctors, read Public Affairs Bureau. Maybe if we got some real factual information, we'd be willing to buy and/or listen/watch that what you are selling.

Greengreen re: Blackie

Let's be clear about one thing: from at least the 1970s (and possibly going back to the 1950s) until 2000, BC Rail was profitable running trains on tracks.

The reason — the only reason — that the company failed to show consistent profitability was because it (a) incurred massive construction costs to extend the rail line in the 1950s, 1960s and 1970s, and (b) had significant interest charges on the monies it borrowed for construction.

And here we get to the nub of the issue: what is a fair and accurate way to assess the B.C. government's huge investment in transportation infrastructure?

From Confederation to 2000, Victoria spent more than $9.3 billion to build our transportation system — highways ($6.1 billion), rail ($1.8 billion) and ferries ($1.4 billion).

Unlike the latter two, the cost of our highways is subsumed in the province's general accounts. That is, expenditures on construction were (until the late 1990s) included in the Ministry of Transportation's budget (which was part of Victoria's overall fiscal plan) and the debt associated with building highways was part of the province's "taxpayer-supported" debt.

No one expects our highways to be profitable; they serve the greater public good by facilitating commerce. No one checks every year to see if our roads, bridges and tunnels "made money."

If the railway and ferry systems were treated the same way as are our highways, their construction and interest charges (and debt) also would be subsumed in the province's general accounts, and few people would know (or care) whether or not they were profitable.

But, instead, both were stand-alone corporations, and British Columbians each year could quickly assess their profitability (or lack thereof).

On a few occasions, the province has opted to assume (write-off) the stand-alone companies' debts — which almost entirely were capital and interest charges associated with construction or the acquisition of assets.

In that way, they were treating both rail and ferries in exactly the same way as the Ministry of Transportation did with the construction of B.C.'s highways, roads, tunnels and bridges.

Will

Thanks Will

I'd prepared a bit of an answer for greengreen if you hadn't done the chores yourself...

Here's what I'd have posted:
The majority of the debt that was written off was owed to the province - that was why the Socreds could write it off without any further consequences. It's a different matter when the financing is owed to another entity. The province held the bonds...

Furthermore, it's important not to confuse writing off with writing down...writing down, as McMartin explains, is an accounting exercise that reduces the 'accounting' or book value of certain assets. It has no effect on operations.

As Mc Martin reports:
BC Rail would have posted net income in all 21 years between 1980 and the turn of the century were it not for three accounting decisions.

In 1989, the company wrote off the northern section of the moribund Dease Lake extension. A charge of $80.6 million transformed a record operating profit into a loss of $16.1 million.

(Readers should understand that a write-off is a non-cash transaction that occurs when an asset is reduced in value or entirely removed from a company's books. BC Rail did not actually lose $80.6 million on the Dease Lake line in 1989 -- after all, the monies invested in the road had been expended in the 1970s. Rather, the Dease Lake assets were taken off the books, and a commensurate non-cash charge was recorded in the operating statement.)

Ten years later -- after the northeast coal mines had been closed and coal shipments stopped -- BC Rail wrote off $616.6 million for the Tumbler Ridge spur line. As in 1989, the charge meant that an operating profit was converted into a net loss, this one totaling $582.5 million. (To repeat, it was a non-cash transaction; all of the construction costs associated with Tumbler Ridge had been incurred two decades' earlier.)

Finally, in 2000, the company set aside $13 million in anticipation of future expenditures for environmental remediation. Once again the charge transformed an operating profit into a net loss.

Hope that helps.

None of this meant that BC Rail was:
a) bankrupt;
b) not a going concern; or
c) a huge ‘charge’ on the economy.
In fact, as McMartin also shows, the company’s position, as the third largest railway in Canada, compares very nicely with other operations:
By 1998, the railway's long-term debt peaked at $620.7 million. When Campbell's Liberals won election to government, the debt had dipped to $562.2 million.
(To put BC Rail's long-term debt into perspective, in 2004 when the Crown corporation was privatized, CN had long-term debt of US$4.6 billion; Canadian Pacific, US$3.1 billion; and Burlington Northern, US$6.5 billion.)

In fact, it was successful, it was making money and it was providing jobs and services to British Columbians – especially those of us who don’t live in the Lower Mainland.

Not that Shirley Bond seems to care.

What could have been done, Will?

Nope, you guys — and most people — are too smart for that. So why did Campbell and crew slag BC Rail before and after privatizing it, instead of talking it up as a wonderful, profitable venture? And as for the deal itself, let's recall the words of one Bay Street analyst who said the Campbell "Liberals sold the railway "for a song and a prayer."

Surely you guys don't think that Campbell got the best possible deal (price) for BC taxpayers, do you?"

They didn't. In fact they shouldn't have sold off BC Rail in the first place. BCR was heavily reliant on forestry, but railways being what they are, they can be moved into other diversified aspects of service, such as intermodal (providing a
second line to the Port of Vancouver from the interlock at Prince George, and providing in concert with Great Cdn. Railtours, an afforable passenger service during the summer (rather than the overly expensive option that was put forward and didn't last very long before the Mountaineer came along and esablished itself).

Will, it wouldn not have mattered at the constituency level with the Campbell Liberals. As you know they do not operate the same way that the NDP does or Social Credit did, they aren't interested in what the local politico volunteers think, and never did. The Campbell Liberals hate those who oppose them. This is why I don't spend any of my time volunteering within the party.

And you are correct with the origins of the massive debt. The last major upgrade of the BCR was the Tumbler Ridge electrified line, and before that was the infamous Deas Lake Extension which was never completed. The Railway didn't invest much in rolling stock, much of the locomotive equipment was early 1960's vintage. Engines last quite a long time, but they do wear out. The famous Budd cars were never really upgraded or enhanced.

It is rather unusual to slag an asset like that when selling it.Even the Fastcats had positive points written about them in the auction and sales materials, even though the points were a bit over the top.

But the sale is one thing, The antics of Basi and Virk are quite another. Will be quite a story when all said and done.

Keep writing those columns there Will.

Just part of the planned sell-off

"But, instead, both were stand-alone corporations, and British Columbians each year could quickly assess their profitability (or lack thereof)."

That is what they do - make a good investment appear to be a bad one; which blowers the value; then sell it to the corporate cronies; who surprisingly make it profitable again!

Except maybe BC Ferries as I can't imagine a Minister of Highways earning a million bucks a year!

Will

OK -- let's see if I can get through all of these.

1. I was saying the same things back in 2003 -- when the province was faced with the prospect of taking that $500m in debt and adding to it to keep the line and rolling stock in good shape in the face of declining revenues. There is an estimate somewhere (don't have time to dig it out) made about that time projecting just how much capital would be needed, and where it might come from. It wasn't pretty.

2.Why did Campbell slag the rail line before trying to sell it? Come on Will, you're more politically astute than that. The major battle in this province is getting around the loonie-left's complete aversion to getting millstones (like BC Rail) from around the government's neck. Furthermore, he's not going to talk about those operating profits you're so keen on because he knows (as does anyone who can read a bottom line) that ANY FOOL can turn an operating profit if the huge investment mistakes/miscalculations are foregiven every few years. And just what was the total of that for BC Rail? Well over a billion, I suspect.

3. your analogy with the roads is useful -- except that to make it complete, the government would have to own all the cars and trucks that run on the roads (yours and mine) for a proper comparison. Interestingly, the privatization of BC Rail has in fact now made it comparable to the roads -- the government still owns the tracks.

4. Best possible price? Hindsight is always 20-20 on that -- but keep in mind that what CN Rail bought included that $500 million in debt which is no longer on the province's books. And why hasn't anyone factored in what to me are the two overwhelming reasons why the right deal was done -- the development of the Rupert container port and the Prince George reload centre -- neither of which would have happened without CN on board. Ask the folks along that Northwest corridor if they'd like to turn the clock back and ditch those two assets.

5. One last nugget (there's lots more but I've got to run). Part of the province's requirement was to force CN to spend about a million bucks to refurbish an abandoned rail link between Dawson Creek and Hythe Alberta. Despite contrary advice, the govt. was convinced it would open up a whole slew of agricultural shipments from Alberta to Rupert -- and of course it was another political sop to the locals. CN did it, and to date not a single train has yet run over that spiffy new line. Now -- if the government retained BC Rail -- what do you want to bet that the money spent on that useless reno would have been our money?

Gotta run

Pesky re-appearing debt

Disappearing DEBT - don't think so. You need to check that contract with CN again. The contingent liability for tax losses remains on the province's books - in fact it grows with time.

CN promises - what about 600 new units of rolling stock - another promise which hasn't been kept. Not to mention the accidents, spills and deaths which have occurred because CN simply didn’t know how to run the railway properly.

As for your comparison between highways and rail - in terms of it being a public asset - the problem is that the public pays for the upkeep of the highways and the users (trucking companies) which beat the shit out of them - don't.

Without even mentioning the fact that a real green government (unlike the phony green Campbell government) could actually have promoted increasing transportation by rail as a part of their investment decisions - as opposed to building bridges and highways which are both environmentally damaging and inefficient.

Dease Lake and Tumbler Ridge Subdivisions

BC Rails's 663 km Dease Lake extension during the 1970's turned into such a financial boondoggle that the McKenzie Royal Commission was set up in 1977 to investigate BC Rail.

The McKenzie Royal Commission recommendations included the discontinuation of the Dease Lake line, the abandonment of the Fort Nelson subdivision and the discontinuation of other uneconomic operations such as the passenger Budd cars.

Again in the early 1980's, the very expensive Tumbler Ridge subdivision was also essentially uneconomic and much of that was abandoned circa 2000.

The Dease Lake subdivision and the Tumbler Ridge subdivision were mostly politically motivated decisions - not necessarily economically motivated.

Had BC Rail not had big brother, ie. the BC Government, to bail them out in terms of directly covering their debt, BC Rail would have been insolvent long ago.

Selective reading

G West, my first read through the article, I knew exactly how the counter spin would play out from readers like Cool Hand, who tend to selectively read, searching for bits and bites out of context to suit their ideological slant.

To Luke, ahem.. I mean 'Cool Hand', I urge you to re-read more thoroughly, and pay special attention to these following points:

"A stunning transformation of BC Rail's finances took place over the last two decades of the 20th century, with the company recording net income in 18 of the 21 years between 1980 and the election to government of Gordon Campbell's BC Liberals in 2001."

McMartin's mention of debt due to capital borrowing and expansion, not due to operating losses. Very critical difference.

Contrast BC Rail's long-term debt at the time with that of other rail empires (along with other factors, including total assets, long-term debt due to write-offs), and Cool Hand - your insolvency logic crumbles like a cheap cookie.

"a write-off is a non-cash transaction that occurs when an asset is reduced in value or entirely removed from a company's books." This one will confuse, but try and get your head around it because its confusion will be the seized and used as a cornerstone of the Liberal spin/lie strategy from here on out.

"the persistent falsehoods and untruths regarding BC Rail that have been propagated by Gordon Campbell's BC Liberals in recent years are easily refuted by an examination of the railway's financial statements." Easily refuted by McMartin, perhaps, but much more difficult to explain those findings to to a public that generally knows or cares little about corporate financial statements or issues that require an attention span to think back a few decades and analyze.

Will McMartin, excellent work. I really feel that this article has the seeds of corrupt-government downfall if those seeds are nurtured and grown properly by the opposition.

debt

"McMartin's mention of debt due to capital borrowing and expansion, not due to operating losses. Very critical difference."

Not critical at all. Most private companies get in trouble for the same reasons -- they expand, launch new ventures, add new product lines; all with borrowed capital raised usually on financial markets or by selling equity.

The difference is that there's no big daddy behind it all (unless you're GM of course) to bail them out when they can't generate enough revenue to pay their costs, generate an operating profit AND pay interest on the debt (let alone retire it).

What troubles me about the attitude I see on these grandiose public projects that go bust (like BC Rail) is that, because it's taxpayer dollars that funded it, it's not a problem. So what if the public gets fleeced paying for a bad idea -- let's fix it by throwing even more of that inconsequential money at it and presto -- it will make an operating profit and won't that be wonderful.

It's that cavalier attitude towards tax money that drives me nuts -- it's like an endless cup of coffee. BC Rail has over its entire life sucked a billion or more out of unsuspecting taxpayers who had no choice in the matter and got no benefit from it. And you guys want to keep it, so they can throw even more money at it.

" - the problem is that the public pays for the upkeep of the highways and the users (trucking companies) which beat the shit out of them - don't."

What kind of convoluted logic is that? Are you saying trucking companies don't pay taxes? Are you saying other users (us folks with cars) aren't users? and don't pay taxes?

"A stunning transformation of BC Rail's finances took place over the last two decades of the 20th century…."

Of course it's stunning! They didn't have to deal with a mountain of taxpayer-funded debt they'd accumulated over the decades. What would your individual balance sheet look like if someone magically removed your mortgage and the monthly payments you are making. It would look wonderful, wouldn't it.

"Contrast BC Rail's long-term debt at the time with that of other rail empires (along with other factors, including total assets, long-term debt due to write-offs)."

As I pointed out earlier, BC Rail's debt-to-equity ratio level was more than double that of CN -- 1.76 to 0.67.

No I'm saying that trucking companies use the highways for free

The rate of corporate tax in this province is a bad joke and has no relation whatever to the damage they do to either the roads or the environment - nor to the public funds devoted to building more stupid roads to run them on when there was already a rail system which should be utilized for the purpose.

Those debt/equite ratios are comparable and, in a going concern, which BC Rail clearly was, nothing to set your hair on fire about - which was the point both McMartin and I were making.

Campbell threw away the 3rd largest railway in the country - just at the moment when all of those investments in infrastructure (Vancouver Wharves etc and Roberts Bank) were about to apy off.

Now they're all owned by foreigners.

THANKS

Thanks Will and Gwest for answering my request for clarification...I still don't get it but I will ponder over this til I do.
By the way, I think the title for the article could appropriately be shortened to just three words and made into a poster: Liberals, stop lying!

There is no more credibility from this government.

Since the gigantic lie about the HST one wonders who could possibly believe this government anymore. What advantage could we get in engaging these people any further. We as the citizens of this province should be looking for a replacement. This government lacks any credibility what so ever. I'm sure that before the HST lie there were people who would give them the benefit of the doubt. But now we have no reason to believe them. They've lied to us before and they will do it again.

So now the truth. The truth is that the government would rather get their money through taxes then by running a business like BC rail. Why? because its easier to rip the public off then drum up business through a crown corporation. They don't want the responsibility of running such businesses. Well if they don't want the responsibility I say then they shouldn't have run for office because such responsibility comes with the job.

For the most part however this is a systematic problem we face here in BC. The weakness of the mechanisms in place to keep the government honest is starting to show. What do we need then to keep them honest? Simple, Looser recall legislation. It shouldn't be so hard to throw the premier out of office. The premier shouldn't be protected from the people who put him there. This one thing is the biggest failure of our political system. And its more then evident the lack of this simple principle in our government is hurting every single person in this country.

The premiers actions have undermined the confidence that the people of this province have in the political system. That much is clear. What isn't clear is whether the people will stand together and try to change the system so it can't happen again.

blackie- debt to equity

"As I [Blackie] pointed out earlier, BC Rail's debt-to-equity ratio level was more than double that of CN -- 1.76 to 0.67."

Yes, it costs money to acquire assets:

"It is important to understand that the railway's debt increased not because it had operating losses -- BC Rail posted operating profits in each and every year -- but because the company was borrowing capital (primarily from the province) to purchase (and expand) marine-transportation assets such as Vancouver Wharves and Canadian Stevedoring, as well as other entities."

BC Rail was able to find synergies between the new acquisitions and the existing railroad and make a profit while servicing their debt. Sounds like good business to me. Particularly since every BC Rail employee gets tsxed right here in BC,

BC Ferries v. BC Rail...

BC Ferries has had unprecedented and substantial capital investments in both terminal improvements as well as replacement ships over the past few years.

As with Will McMartin's article, here are the Operating Income figures over the past three years:

2007: $67.9 million
2008: $71.1 million
2009: $57.6 million

And BC Ferries is a marine highway with a captive market in terms of Vancouver Island's and the Lower Mainland's population. Furthermore, that captive market is experiencing continued population growth.

Yet the same posters here who state that BC Ferries is "bankrupt" state that BC Rail is a viable proposition. Funny how one's politics clouds one's perspective.

OTOH, the forest industry in BC is essentially a financial basket case with mills closed/reduced shifts all down the line from Fort Nelson southward.

Economics 101 would dictate that the tariff revenue derived from the forest products sector by BC Rail's successor, CN, would now also be in the dumps.

The forest products sector represented about 75% of BC Rail's revenues. Ergo, CN is likely bleedng alot of red ink along the former BC Rail mainline right now.

So which company of the two, BC Rail or BC Ferries, could be categorized as the proverbial goose that laid the golden egg?

I'd bank my money on BC Ferries. :D

NO matter what ...

.Luke says, the finacial statements of BC Rail in the years leading up to the sale and CN subsequent to buying BC rail show that BC rail was a profitable business. In CN's finacial statements after the purchase, they creditied their improved dividends and profits to purchasing BC Rail and another railway in the United States. CN has been rolling in dough ever since it purchased BC Rail.

Forestry and BC Rail and CNR

First of all yes the forest industry is dire straits but we can thank Gordon Campbell and Stephen Harper for that. In 2001 Gordon Campbell got a DUI in Hawaii and since then he has been selling off all of BC to the Americans. Then Stephen Harper and Chrietan before him came up with a forestry cut throat of an agreement with the Americans Government called the NAFTA which gave away all of or resources the only country that helped was the American government and the down fall of forestry or any other industry in Canada. As for BC Rail when I worked up in Mackenzie we never had to wait for a lumber carrying car from BC Rail but we sure had too wait weeks sometimes months for the cars and then it was only one or two delivered by CNR. I don't know if any of the readers know what it is like up north when your waiting for cars too take the product away but it is hard for the companies who depend on those cars since they don't get paid until the product is where it is supposed too be.

Blackie

I don't get your point. Are you saying that the BC government should not be responsible for transportation rights of way at all... unless they're roads? That tremendous debt due to BC Rail came because they had to build their own roadbeds as the government's behest in order to open up hinterlands to resource extraction that CN or CP were not willing to service.

There is no business case that could ever support what amounts to a privatized transportation policy. Even the best of intentions, such as the Bullmoose mine, still only served 3 years service running full out, and then limped along another 7 years before it closed, years ahead of when its reserves ran out due to poor Japanese steel markets. Should BC Rail have to carry the can for that political decision to run a $200 million spur line to serve that corporation for not much more than 3 years? Well, if you believe in subsidies to support jobs and profits in BC, I suppose you'd have to make sure someone should.

That's why the BC Government is building a 200km long road from the Red Chris mine and the various goldfields there down to Stewart so that the gold concentrate can get out to markets. Here, the taxpayers are supplying the roadbed and the shippers only have to supply the road equipment. With BC Rail, the corporation had to supply both.

I can think of half a dozen mills and mines besides Red Chris that required access to markets through BC Rail that wouldn't have ever become economical any other way, from Mackenzie Pulp to Dease Lake and elsewhere, and I'm not even trying. Should these sources of jobs and dividends have been forced into bankruptcy years before due to lack of transportation to markets? Because CN or CP certainly wouldn't have served them - too little profit, especially if they had to pay the going price for a roadbed.

Last, don't forget that some of the accumulated deficit was due to accumulated recaptured depreciation - until the mid-80s, crown corporations were not permitted to set any money aside to replace capital assets under depreciation rules, but the still had to account for it under accounting rules. All corporations account for depreciation of assets and set money aside to pay for replacement...if they can. Those that don't, go out of business eventually. But until fairly recently most Crown corporations received no compensation for setting aside money for depreciation asset replacement, and in fact were sometimes specifically told to use funds for depreciation as operating funds for future years.

Which just goes to show how often that governments of any stripes which interfere with the running of businesses too much usually end up owning them as they fall into bankruptcy. Just waiting for the shoes to drop on some of the Canadian aerospace firms now....

BC Rail gave us power

Consider these few things while you decide if BC Rail made money or was propped up by the people.

The whiner truckers in the interior complained that BC Rail added trucks to haul chips from mills to rail to supplement their service, much like the add ons they could add with the wharf and stevedoring businesses. Many of their customers probably wantd single source service. I don't think they lost money on their trucking division as it was run very efficiently from my view as a carrier.
The capital that was borrowed to build the Tumbler Ridge line in turn created a windfall of jobs and development in that area and countless spin-offs to the region and the province. No value can be attatched to that. The community of TR is still creating opportunity and sending income taxes south. They even had the foresight to use electricity generated locally to run it.I don't think CN had to pay extra for it either since NE Coal was considered dead when the giveaway occurred. Some track and the electrical had already been removed. Just a nice bonus I guess. And don't tell me CN maybe outsmarted the liberals.
Part of why BC Rail was held to the level of profit it did make was due to pressure from the likes of CN, BNSF,and CP who could get together and effectively box it in with restricitve re-tracking agreements. And deals like limiting travel on the Dawson Creek to Hythe, Alberta line thereby making BC Rail transport goods 500 kms further to get to an easterly outlet, then another 500 or so to get from Prince George to Jasper. So lets tie one arm behind your back and see how you make out against a gang of thugs. Oh by the way any railway does not own all the cars on its tracks, which was suggested by one poster in comparing highway infrastructure to rail.
How about airports? Any public funding there? Do all make money? Are they necessary? Do they assist development?
Since it is now considered more than politically correct, but necessary to subsidize IPP companies and natural gas producers, why is it so imprudent and distasteful for a publicly owned railroad to recieve some of the same, although it looks like through Mr. McMartin's research that it didn't really happen?
Now every major project and resource shipper is at the mercy of CN who operates like Minister Bond and could care less.
Didn't we just decide that building a power line to the same place the Dease Lake Extension goes would be a great boost to the economy? Would rail do the same? Are we talking to Alaska about it? Any deja vu here? Will it make money? Does anyone care?
Don't forget how much CN recieved for the sale of all of the Trailer On Flat Car equipment that was sold to an Australian railway. This was the best intermodal system available as containers could actually be delivered anywhere that had a trailer ramp(every whistle stop). Now add 500 to 800 km of truck to ship/recieve a container in the north.
Great decision making.

At the Merey of!

Boy you sure got that right and a very, very good reason BC rail should have never been sold. You know whats funny all this talk about money from the Liberals and folks are broke and business sucks for many as nobody seems to have any money and BC doesn't either. The BC Government have the poor on their knees I wonder what will bring British Colombians down to their reality? Bankruptcy,foreclosure, eviction, moving away? Many British Colombians will have their own little story about how they got taken for a ride and yes Rail Cars are involved.

A real stand up guy

Thank you Will McMartin and the Tyee for bringing the truth forward which exposes the lies from Campbell.

Will McMartin has once again proven that the “real truth” is nether right or left.

Will, you are one stand up guy.

I’m wondering if Will and the Tyee would be interested in writing a story on:

What did we British Columbians really receive for BC Rail from CN?

Most would agree that it wasn’t a billion dollars.

Of course maybe there is still too much secrecy surrounding the deal to make an informed opinion.

And all that land that could be worth many millions or even billions.

Thank you again Will and the Tyee

Blackie

Are you aware of how much money was poured into CN prior to its privatization? CN was a conglomerate of bankrupt railways that were taken over during the great Depression. Would you have said back then let em eat bread? I think not. In fact the federal government funded the the takeover of all the bankrupt railways and the end result was CN. They ran it as a Crown Corporation like Air Canada. Had the Federal Government not done that, we, particularly in the west, would still be paying exorbitant freight rates until this day.

I worked for CN from 1965 until 1972. I then went to BC Rail in Prince George. I worked on the local NDP candidates election team and we were successful in having him elected. That was at the beginning of the oil rush in Alaska. Dave Barrett had a deal already worked out with the Federal Government of the US to extend the BC Rail line to link up with the Alaska railway. I have said this in a earlier post. If that linkup had occurred there would be no doubt of BC Rail profitability. Would you still be saying it was a waste of Taxpayers money?

Instead Bill Bennett opted for the Tumbler Ridge line. At the time coal prices were at a all time low and Tumbler Ridge had at best a 20 year life span and was in direct competition with the South Eastern coal hauled by CP rail. A very poor judgment call by a right wing conservative (Social Credit)government. In fact most of the wrong decisions were made by this very same government and other right wing governments that followed (so called LIBERALS).

Had the line been extended to Alaska it would have provided many jobs in the North and opened up the Northwest of BC.

BC Rail

Hope I am not to late to reply.

My friend worked at BC Rail and I was advised that the liberals sold this entity to commence the breakup of unions.

Liberals are still trying to break unions to increase poverty like we have not seen since the 1700's. Yes people of BC we have a total wrecking machine in place and it won't stop until we get them out.

People of BC must understand that what you have elected is a bunch of incompetent people who waon't even give a listen to people more intelligent than themselves.

People if you are angry get mean and hold these people accountable.

In fact run for all levels of Gov in Canada and you can take control and do it right.

Think about that and quit complaning it does nothing to solve the problem.

BC wake up please.