The Nation's Business

An unlikely effort to soothe B.C. business

Peter C. Newman March 23 1998
The Nation's Business

An unlikely effort to soothe B.C. business

Peter C. Newman March 23 1998

An unlikely effort to soothe B.C. business

The Nation's Business

Peter C. Newman

British Columbia politics has always been a swamp. In most jurisdictions, provincial politicians ride the hurricane of changing public opinion by tailoring policy and legislation to solidify their hold on some sort of middle ground. Not in British Columbia. There is no middle ground. Local academics speculate that it’s because the province’s farming population is too small to cast an ameliorating influence on the politics of confrontation. A more likely explanation is that the polarization was imported from other places. An inordinate number of the province’s early union leaders emigrated from Scotland and brought their Clydeside mentality with them. Their agendas—there and here—were pegged on waging class warfare. Moneyed industrialists were exploiters whose power had to be destroyed; the working stiffs, meanwhile, were meant to be revolutionaries and overthrow the system.

Glen Clark’s NDP government will bring in a budget that will maintain the polarization in the Pacific province

Instead of creating a workers’ paradise,

Canada’s militant unions spawned the NDP, which in British Columbia has been in power since 1991 and presided over the disintegration of the provincial economy. There was a time, not so long ago, when B.C. business was based almost entirely on the sea and the woods.

Harvesting fish and timber provided most of the activity and nearly all of the employment.

This year, out of a working population of 1.8 million, only 95,000 still find jobs in the forest industries; the number of fishers is no more than 7,000—and that includes part-timers.

Those figures, when compared with such a non-essential industry as making Hollywood films, show the extent of the drop in traditional employment. Last year, film-makers spent $615 million in the province, employing 19,000 people in the process. The tourist industry, which is where the province’s only major real growth has been, employs nearly 225,000, but many of the jobs are strictly minimum wage.

At a conference last week attended by the CEOs of the province’s leading forest companies, they agreed that sales will drop another $1 billion this year to $15.1 billion, following a similar decline in 1997. George Richards of Weldwood of Canada made the point that none of his fellow CEOs are willing to try to convince their boards of directors to invest any more money in British Columbia. Total capital investment in the province will increase by a paltry 1.3 per cent this year, compared with a national average of 6.2 per cent. Jack Munro, speaking for the management-friendly Forest Alliance, put it more succinctly: “Business isn’t even investing their goddamn depreciation, for Christ’s sake.”

This is the context for Premier Glen Clark’s current crusade to defang the business community’s criticism of his anti-business regime. The inside story is that Andrew Petter, Clark’s original minister of finance, got religion and began to agree with emissaries from

the Vancouver business community, who were urging him to balance the books. Clark disagreed and replaced Petter with loyalist Joy MacPhail. The premier has been meeting with such members of the local establishment as Tom Stephens, the Memphis good oT boy brought in to run MacMillan Bloedel, Wendy McDonald, the feisty lady who heads B.C. Bearing Engineers, Youssef Nasr, the new CEO at the Hongkong Bank of Canada, and Jimmy Pattison, easily Vancouver’s most influential business presence. The conversation is always the same: the premier says he is looking for “validation.” That’s his fancy word for asking the business community to either praise his government or at least to shut up when MacPhail brings in its budget next month. The expectation is that Clark will bring in measures that will please but not satisfy them.

The business community’s reply is that you must earn our praise or silence, and that means action in three areas:

1) reduce high-bracket personal taxes and drop the province’s controversial 0.3-per-cent capital tax on corporations.

2) reduce government spending in a meaningful way. (Your fellow NDPers in Saskatchewan have closed 53 hospitals—you haven’t closed any.)

3) reduce the deficit. British Columbia now is one of five provinces (the others are Ontario, Quebec, Newfoundland and P.E.I.) that are spending more than they’re taking in.

‘The business community in Vancouver,” I was told last week by Bob Fairweather, chair of the Vancouver Board of Trade, “is in complete agreement that the government must balance the budget, cut expenses and reduce taxes.”

A significant factor in the B.C. slowdown is the absence of new Asian investment. The Oriental presence in Vancouver has been overwhelming—a highquality eyeglass boutique on Robson, the main shopping street, has a small sign in its window that boasts, “We speak English!” The dramatic drop in Asian economic activity is being blamed on the fact that most of that region’s economies are in a free fall. But it was Ottawa’s insistence on assessing overseas trusts that really drove out the money. It has left a big hole.

Glen Clark’s problems with the business community aren’t unique. One of his predecessors, Bill Bennett, when he was Social Credit premier in the early 1980s, established something called the Top 20 Club to try to bring Vancouver’s business elite onside. This was a curious and not very effective undertaking, especially when the 60 CEOs who attended discovered that the “20” in the group’s title referred to the number of swing ridings Bennett figured he had to win in the election.

Clark has the same problem. Politics and business don’t mix in this Pacific province. And the civil war that divides them is not about to be resolved.