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Falcon's Edge With Business Backers

Some supporters see a free enterprise stalwart, others praise his role in pushing through taxpayer funded megaprojects.

By Andrew MacLeod 25 Feb 2011 | TheTyee.ca

Andrew MacLeod is The Tyee's legislative bureau chief in Victoria. Reach him here.

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Falcon: Raised by far the most money from business.

Early in the campaign to pick a replacement for Gordon Campbell as leader of the BC Liberal Party, a person who will become premier of British Columbia, a business group released a series of announcements supporting Kevin Falcon's bid.

Those announcements from Falcon 20/20 talk about Falcon's record, his support of innovation, his decisiveness and his energy. But they offer little specifics about what business owners might want from a Falcon government.

Certainly business has made an investment. Falcon's campaign had raised over $700,000, much of it from businesses, outstripping the next best fundraising campaign, Christy Clark's, by nearly $200,000. What is that money expected to yield, should Falcon win his party's leadership on Saturday?

In interviews with The Tyee, several Falcon 20/20 supporters said what they really want is stability and business as usual. Other observers suggest that any of the four candidates to lead the Liberals will keep the status quo, and that with government debt ballooning that might not be a good thing.

"My vested interest is that we get a free enterprise government elected, and I believe the best person to lead a free enterprise government is Kevin," said Joe Segal, the founder of Kingswood Capital Corporation, a venture capital and real estate development company. "I think Kevin Falcon has the ability to run a major province. This is a major province and this is a major budget."

Asked for specifics, he said, "Overall fiduciary responsibility, spending, balancing a budget. Putting our money where it's valuable, not where people want it to go."

He believes Falcon would do that, he said. "Kevin has the best qualifications to run it as a business, to make decisions," he said. "You can't govern by consensus."

Recall that a common criticism of Campbell was that he centralized decision-making in his office and listened to few people. The style gets things done, but at a cost, critics point out.

More megaprojects

Peter Brown, the founder and chairman of the investment firm Canaccord, said he supports "The one that is most likely to hold the coalition together, the centre-right coalition, which is fragile."

Despite his name appearing on a Falcon 20/20 press release as a supporter, Brown said his preference is private and declined to speak in anything but general terms. "I'm more interested in the candidate who wants to build on the achievements of the Liberal Party, not tear them down," he said.

Brown named hosting the 2010 Olympic Winter Games, the billions spent on infrastructure, the Vancouver Convention Centre and extending light rail to Richmond as government successes that helped businesses.

Those achievements, it's worth noting, are blacktop politics and the kind of megaprojects that has the government spending money and pushing up the province's debt for things that arguably benefit businesses more than average British Columbians.

Brown also pointed to B.C. having the lowest taxes in Canada for people who earn less than $120,000 and the lowest small business tax. He mentioned the Site C hydroelectric plan as something that should be completed.

"It's that kind of positive record I'd like to see someone build on, not tear apart," he said.

Consistency brings stability

Peter Armstrong, the executive chairman, founder and a principal of the Armstrong Group, which owns the Rocky Mountaineer rail tour company, said businesses need stability from the government and that's what Falcon will deliver.

"I think government sets a tone, it doesn't matter who's in power," he said. "Having a consistent, well-thought-out approach is stabilizing for the economy."

That means a need for a leader who will articulate a position and deliver on it rather than flip-flopping on decisions, he said. "This whole process is about deciding who's going to be best leading the province for the next five to 10 years," he said. "I'm excited but also worried about what the decisions will be."

Asked which of the candidates worry him, Armstrong paused for a few seconds before saying, "The ones that impress me would be Kevin, Mike de Jong and George Abbott."

At the time of the interview there were six candidates in the race. Aside from the three Armstrong named, the only one remaining in the race is Christy Clark, who polls have said enjoys the greatest public approval and best chance to beat the NDP in the next election.

But as Armstrong points out, again without naming Clark, "This is not a popularity contest. It's about finding the right leader."

The leader will need to make calm, rational decisions on policies that allow the economy to expand, encourage investment and create the kind of meaningful jobs that keep people in the province, he said.

"It's not always about being popular," he said.

Career politician

As Will McMartin noted in a Tyee profile of Falcon, the candidate has little direct business experience himself and is more of a career politician having first gotten involved in student politics and the young Socreds at Simon Fraser University.

After the first Campbell government was elected in 2001, Falcon was a junior cabinet minister for deregulation. The position gave him opportunities to claim to have reduced red tape, presented as a barrier to business, even if it was not altogether clear which or how many regulations were cut.

Later as transportation minister, Falcon presided over some high-profile announcements including ending tolls on the Coquihalla Highway and committing taxpayer money to numerous road and other infrastructure projects.

As health minister, a job he left to run for the leadership, he rolled out patient-based funding announcements and mused about engaging B.C. in surgical tourism. People working in private clinics saw him as an ally, even as his ministry took steps to investigate and audit some of them.

In his campaign to lead the party Falcon has outlined various economic policies. They include eliminating the HST if that's what people vote for, but reducing it by one and possibly two per cent if it is kept. He would also "reduce onerous [Agricultural Land Reserve] processes on North Eastern farm land" and find ways to reduce "unnecessary burdens on growth in the province."

Growing debt Taxpayers concern

In the final days before the vote, the Canadian Taxpayers Federation's B.C. director Gregory Thomas was putting together a report on the various candidates.

"The general thing is we're finding Falcon is more of a hawk on taxes," he said. He wants to lower the HST immediately and has pledged to keep other taxes low.

By comparison, the CTF found, Clark has talked stronger about controlling deficits and Abbott is seen as having a more collaborative approach than any of the others.

"[Abbott uses] all that very, extremely, respectful language you're not accustomed to hearing out of the government side of the legislature very much," he said. "After 10 years of Campbell, typically when there's a leadership change the public likes to change up the attributes of the leader a bit."

If Falcon represents the status quo, that's not necessarily in his favour as far as Thomas is concerned.

Fraser Institute graphs track provincial spending compared to the size of the economy, he said. "It turns after the first mandate," he said, referring to a shift in how the Liberals governed after the 2005 election. "Debt's just hockey-sticking straight up now. There's never been anything like it in the history of the province."

The province's total debt was $34 billion in 2001 when Campbell came to power, he said. This year it's up to $47 billion and is projected to hit $60 billion within the next few years.

That debt includes money for roads, hospitals, BC Hydro commitments, the Canada Line and other projects, he said. "Some of that has Falcon all over it."

Falcon will spend to benefit biz: NDP

Liberals have argued that the debt is for capital projects that have lasting value and improve the lives of British Columbians. Thomas laughs at the idea, saying governments always argue that everything they do is an "investment" in the future.

Nor does the big spending fit with a traditional right-left spectrum that has free enterprise at one end, he said. "It's not socialism, it's not capitalism. What is it?"

Certainly the NDP has already started portraying Falcon as a Campbell clone. "I think he represents as much as any of them do, probably more so, the continuation of the policies of Gordon Campbell as it relates to business," said opposition finance critic Bruce Ralston. "The Gordon Campbell recipe was low taxes, loose regulation and privatization."

All the candidates would likely stay that course, said Ralston, but added, "I think he's probably the most fervent."

Added to that recipe is a willingness to spend government money on things of interest to business, he said. "Clearly they're prepared to use the powerful levers of state investment to benefit business in British Columbia," he said.

"That's not all bad," he added, but in some cases it can mean the public interest is badly served. Ralston raises the example of deals to buy private power through BC Hydro at rates that far exceed what the market for electricity says it should cost. The companies become viable, he said, but ratepayers are stuck with higher bills.

All candidates have business support: Hochstein

The Independent Contractors and Businesses Association's president Phil Hochstein said that he expects any of the candidates will maintain a good climate for business. He stressed that he and the ICBA is staying out of the leadership race.

"We support the party and will support the party whoever the leader is," he said.

The donation lists the campaigns released this week all included business donors and several companies gave to more than one campaign, he said. "All the candidates have business support," he said. "Each of the leadership campaigns spins things the way they spin them."

While the lists do show businesses contributed significant amounts of money to all four of the remaining candidates, the fact that Falcon has outraised the others suggests he enjoys the most support from business.

"All of the candidates, including Kevin, have an appreciation that for British Columbia to prosper and grow you need sound business policies," said Hochstein.

Falcon has a reputation for getting things done, he acknowledged, but quickly added that the others also have similar effort and drive. "They've all shown it. If you don't have it, nothing gets done in Victoria. There's so much inertia." He added, "If they don't have it they shouldn't be running."

There are always naysayers whenever the government does anything, he said, suggesting that even if the province were paving the streets with gold someone would be complaining that the gold wasn't pure enough.

Liberal Party members will vote Feb. 26.  [Tyee]

Read more: Politics, Elections

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