The B.C. route to economic disaster

Diane Francis November 23 1998

The B.C. route to economic disaster

Diane Francis November 23 1998

The B.C. route to economic disaster


Diane Francis

British Columbia used to be a ranking member of Canada’s “have” provinces-along with Ontario and Alberta. Enter the scourge of economic mismanagement: the New Democratic Party, which was first elected seven years ago. The province now is falling badly behind its “have” peers and is headed towards “have not” status. Alberta has become the most dynamic, innovative and important province in Western Canada, and in a handful of years Vancouver’s importance as a business capital will pale in comparison with Calgary’s. The joke in Alberta these days is that Calgary’s new economic development officer is B.C. Premier Glen Clark. The problem is that even though the party was elected twice with-

out majority popular approval, its leaders have continued to impose their wacky economic policies and personnel on the hapless province. The latest insult to the electorate is the resurrection last month of Moe Sihota, a former NDP minister who was twice removed from cabinet over various indiscretions. As tenacious an ideologue as Glen Clark, Sihota now has ministerial responsibilities for the public service and the B.C.

Treasury Board. This despite the fact that his misdeeds should earn him a continuing pink slip. First, he was found guilty of professional misconduct as a lawyer and was forced out of the cabinet in 1995. After reinstatement less than four months later, he was booted out again in 1996 for trying to arm-twist civil servants into helping a limousine company owned by a friend.

Being talent-challenged, the NDP has delivered demonstrably poor government.

The result is a current popularity rating of 11

per cent for Clark’s government and predictably negative results for the province as a whole. The party’s platform provides a primer on how not to govern. It is slavishly anti-business, antiwealth, pro-union, rabidly environmental and believes in the voodoo economics that subscribe to the theology that governments can overspend without ever visiting deleterious effects upon society. In these five characteristics, the B.C. situation is similar to what occurred under Ontario’s New Democrats, or Quebec’s Parti Québécois, or Social Democrats in France.

• Anti-business policies: Red tape strangles and costs enterprises real dollars because compliance requires expenditures and manpower to implement. In recent years, British Columbia has imposed 3,000 new regulations on businesses—totalling almost 10,000 pages. Now having created the problem, the government recently launched a task force to eliminate its own red tape.

• Forestry: The province’s engine of growth has been sandbagged by taxes that are higher than in any other province. Forestry taxes (called stumpage) in Alberta average $45 per thousand board feet

Under the NDP, British Columbia is falling badly behind the ‘have’ provinces and is on its way to ‘have not’ status

and $130 in British Columbia. Taxes have remained high despite the fact that lumber prices have dropped in the past year from more than $400 (U.S.) per thousand board feet to $285. In fact, this is the most punitive taxation in this sector in the world. Overall, the province’s resource mismanagement has contributed more towards the elimination of 4,500 forestry jobs than any other factor, including Asia’s recession and U.S. lumber quotas. Indeed, the forestry industry has gone from profits of $1.4 billion in 1994 to a collective loss of $132 million last year.

• Anti-wealth policies:

—Taxes on B.C. businesses are up by 150 per cent since 1992, according to the conservative Fraser Institute in Vancouver, which gave the province an F as part of its annual provincial report card


—The average tax bill for a B.C. family is up by $803.

—The province’s highest personal income tax rate is 54.17 per cent, compared with Ontario’s 50.9 per cent and Alberta’s 45.6 per cent. Senior citizens are starting to move east from Vancouver Island retirement communities and working people are moving to Alberta or Washington state.

• Pro-union bias:

—Since 1992, B.C. labor costs have increased faster than in the rest of Canada, thanks to increased unionization, says the Fraser Institute. This is seen as a victory by NDPers, but added costs affect job creation. By contrast, tax-cutting provinces have increased both the number of workers and their take-home pay.

—The right to secret ballots for unionization votes has been eliminated. Obviously, a show of hands—banned in most developed

countries—enhances peer-group pressure and bullyboy organizing tactics.

—The use of replacement workers is banned, as is the case in other labor-controlled provinces such as Saskatchewan, Quebec and, under the NDP, in Ontario.

• Environmentalism:

—NDP policies appear aimed at eventually shutting down the mining and forestry industries and turning the place into an ecopark.

—In the past year, mining employment has declined by four per cent and profits by 26 per cent. The number of claims staked in 1990—the year before the NDP was elected—totalled 100,484. In 1997, only 28,457 were staked.

• Voodoo economics:

—Spending is up by 36 per cent since 1991 when the NDP took power.

—Debt is up by $11.4 billion.

Good work, boys.