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Labour + Industry

Wooing Business Leaders Is Futile for New Dems

Under NDP in 1990s, BC's corporate profits and GDP soared. But hallucinating captains of industry still see scary 'socialists.'

Will McMartin 9 Aug

Tyee contributing editor Will McMartin is a veteran political advisor and analyst. Read his previous columns here.

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Glen Clark served as NDP premier. Now he helps run a business empire.

It's been said that New Democrats -- and, generally, most people on the political "left" -- don't read the business pages in our daily newspapers. Why this is so is a mystery to those of us who do, yet one readily confessed to by many NDP activists and supporters.

Be that as it may, most B.C. New Democrats probably are unaware of an interview that appeared on July 19 in the Report on Business section of The Globe and Mail. The subject was Jim Shepard, chief executive officer at Canfor Corporation.

Shepard, who 10 years ago retired after a three decades with Finning International Inc. -- where he served as CEO from 1993 until 2000 -- was lured back to the business world in 2007 by Jimmy Pattison, Canfor's biggest shareholder.

It's a captivating interview. His mother died when he was a child, and his father, a hard-drinking, ex-NHL hockey player, towed around two young sons as he would (in Shepard's words) "bounce in and out of beer parlours and construction camps."

Rendered homeless in his early teens, Shepard nonetheless managed to graduate from the University of British Columbia with a degree in civil engineering, and went on to have a stellar career in business. In November, at 71, he will run a marathon.

Yet the final two paragraphs of The Globe's interview with Shepard are, to those who closely follow B.C. politics, more than a little disconcerting. Jarring, even.

Asked what he lost sleep over, Shepard replied: "As long as I'm running, I can sleep soundly. But my major concern isn't just the lumber business -- it's the global economy. I'm just hopeful we are going to have sensible leadership of all economies out there.

"It worries me about leadership in the U.S. right now and the direction it is going. You know, we lived through socialism in B.C. for 10 years. I know what it looks like and it is not pretty."


The only possible interpretation is that in the 1990s, when Shepard was CEO at Finning, he saw B.C.'s New Democratic Party government impose "socialism" on our province with disastrous -- "it is not pretty" -- results.

Now he looks to the south and sees a similar attempt to inflict "socialism" on the United States, presumably by the administration of President Barack Obama.

Myth of the lost decade

Among the myriad questions raised by Shepard's observations is this one: what, exactly, did "socialism" in B.C. look like in the 1990s? Let's do a quick review of the empirical evidence.

In 1991, the year the NDP won election to government, British Columbia's population was 3,292,111. Ten years later, after thousands upon thousands of people had fled the province to escape the clutches of their socialist masters, the 2001 population stood at 4,076,264.

Hmmm. That's odd. B.C. in the 1990s seems to have added more than 784,000 residents -- an increase of 23.8 per cent -- notwithstanding the provincial government's radical, misguided and tyrannical policies.

But the province's economy surely must have suffered as a result of Victoria's socialistic edicts, no?

Absolutely. In 1991, before socialism took root in the Pacific province, B.C.'s annual gross domestic product was a robust $81.8 billion.

By 2001, after a decade of ideological mismanagement of the provincial economy, our GDP was a ruinous $133.5 billion. That's a miserable increase of just $51.7 billion (63.1 per cent).

What about corporate profits? Didn't Victoria's socialist overlords drive the business community to ruin and despair?

Of course they did. In 1991, B.C. corporations reported pre-tax profits that added-up to a healthy $2.9 billion.

In 2001, after the socialists had screwed B.C. businesses into the ground for 10 long years, the comparable number was a dismal $10.3 billion -- a confidence-destroying increase of only $7.4 billion (251.6 per cent).

Even worse, the provincial government exploded in size and became completely unaffordable.

In fiscal 1990/91, the last full-year of Social Credit government, Victoria's consolidated revenue fund (CRF) expenditures represented 18.9 per cent of GDP. The following year, 1991/92, when the Socreds and NDP shared the reins, the comparable number jumped to 20.9 per cent.

By 1999/2000, the last full fiscal-year the New Democrats were in power, CRF spending had shrunk to 17.1 per cent of the provincial economy. That's weird: the socialists actually seemed to have made government, er, less costly.

Strangely, public-sector employment actually fell under B.C.'s version of socialism. In 1991, 97 of every 1,000 provincial residents were employed in the public sector (compared to 109 for Canada as a whole).

A decade later, that number had dropped to 88 per one-thousand in B.C. (compared to 91 across Canada).

Gawd. Under B.C.'s New Democratic Party government in the 1990s, corporate profits, the province's population and GDP all soared heavenward, while the size of the public sector and government expenditures grew ever-smaller. Can't those socialists get anything right?

Shepard's NDP-hating flock

Consider for a moment that Canfor's sales revenue in 2009 totaled $2.1 billion. According to the Financial Post magazine's latest annual rankings, that was good enough to make the forest company Canada's 152nd biggest in terms of revenue. In B.C., the forestry giant -- which also employs 5,150 people -- stood as our 14th largest company.

Moreover, Shepard's previous employer, Finning, ranks as Canada's 80th largest company (with sales of $4.7 billion in 2009), and the fifth-biggest in British Columbia.

Listed ahead of both firms is The Jim Pattison Group, the eponymously-named enterprise owned by the man who personally asked Shepard to run Canfor. In 2009, The Pattison Group was the nation's 53rd biggest corporate entity (with annual revenues estimated at $7.1 billion), and the third-largest in B.C. (The first- and second-ranked companies in British Columbia were Telus Corp. and Teck Resources Ltd.)

Clearly, Shepard must be regarded as one of our province's -- indeed, Canada's -- leading business people. He is a "Captain of Industry" not only in B.C., but for the entire country.

His views on B.C. in the 1990's and the perils of "socialism," therefore, ought not be mistaken for the ramblings of some nincompoop who just wandered in off the street and consented to be interviewed by The Globe and Mail.

No, Jim Shepard is someone whose opinion carries some weight, and he must be taken seriously by those interested in B.C. politics -- and especially by New Democrats who hope to be elected to government in British Columbia some day in the future.

How, then, to explain the seeming incongruity between Shepard's view of B.C. in the 1990s as a wasteland ruined by "socialism," while empirical evidence from the same decade shows the province with positive economic growth, and a shrinking public-sector?

It's easy, actually. The facts don't matter.

This column opened with the deliberately-provocative statement that most NDP members and supporters seldom read the business pages. Here's another caustic observation:

New Democrats generally have -- and often evince -- a grudging admiration for those leading and working in B.C.'s private sector. While they fundamentally disagree with right-wingers' political views, they nonetheless acknowledge their ideological opponents' innovation, tenacity, risk-taking and capacity for hard work.

That sentiment is unreciprocated by those on the right. Far from holding or expressing any kind of respect for New Democrats, most B.C. business people have nothing but contempt (which appears at times to border on hatred) for their political opponents -- and that includes organized labour.

For B.C.'s captains of industry, then, the province's economic and fiscal record in the 1990s simply is irrelevant. A 251.6 per cent increase in corporate profits over the decade? Meaningless, so long as a New Democratic Party government reigned in Victoria.

Job creation up by 21.8 per cent under the NDP in the 1990s? Capital investment up 34.8 per cent? Product exports more than doubling, up by 107.7 per cent?

None of it mattered. British Columbia had a government that espoused "socialism" and "it was not pretty." End of story.

The futility of wooing 'business'

By coincidence, on July 19, the same day that Jim Shepard's interview appeared in The Globe and Mail, Rafe Mair’s fortnightly Tyee column ran under the headline: "Can NDP Tiptoe to Victory?"

Rafe, as always, offered several pithy observations of British Columbia's public affairs. Here is what he wrote of the New Democrats' leader, Carole James: "Her present policy, evidently, is to avoid the arena but to tiptoe around the spectators, telling chambers of commerce that she and her party are safe to vote for. I believe that's a naive approach."

It seems unbelievable, but it's true. The New Democrats this year are actively courting B.C.'s corporate sector and chambers of commerce, promising in the future to deliver balanced budgets, and -- incredibly -- seeking input from business representatives on policy development.

One might have thought that NDP strategists would target, say, new Canadians and young British Columbians leading up to the next general election -- on top of the 784,000 people added to the provincial population in the 1990s, we've grown by about another 450,000 in the last decade -- but apparently that's not the case.

Instead, it's the business community the New Democrats seek to woo. Perhaps their efforts will be rewarded with success; but that seems highly doubtful. Indeed, while recent polls suggest that Gordon Campbell and his B.C. Liberals are mortally wounded, it's far from certain that the NDP can or will win the 2013 general election. They'll have to overcome the business community's hatred of "socialism" to do so.

Here's the thing: Jim Shepard's views are not unusual among B.C. business leaders; they're the norm. Never -- ever -- should New Democrats underestimate the business community's enmity for their party and the "left." Yet, somehow, today's NDP seems to believe, as Rafe says, that it can tiptoe to victory.

Do New Democrats not understand that B.C. business leaders will do everything in their power to keep the province free of "socialism"? They would, but only if they read the business pages.

A footnote: So great was Shepard's dislike for the NDP government that in 1999 he moved Finning's Canadian head-office from B.C. to Edmonton. (The head office for Finning International remained in Vancouver.)

An ironical footnote: Glen Clark, former NDP finance minister (1991-1993), employment and investment minister (1993-1996) and premier (1996-1999), was hired by Jimmy Pattison in 2001. Last year, Pattison put Clark on Canfor's board of directors, which means that Shepard now reports to, among others, his former political nemesis.  [Tyee]

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