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Opinion  

How grassroots is that?

By Dermod Travis

Mere hours before the New York Times went to press with its look at the B.C. Liberal party's ethical scorecard, the party chose to get its 2016 fundraising results out ahead of the storm.

One last chance at political counter-spin – and what a marvel of spin it was. 

The Liberal party reported that individual donors had outnumbered its corporate donors by a four-to-one margin in 2016, with 9,324 individuals and 1,876 corporations making donations. 

The party may want to check the auto-correct function on its computers, because it seems to have arbitrarily replaced donations with donors.

It would have been quite the year-to-year jump. Just the year before, the Liberals reported 2,084 individual and 1,124 corporate donors giving in excess of $250. The 2016 report posted to the party's website on Friday has 15,941 donations, but not from 15,941 unique donors.

There are 7,582 donations for $100 or less in the 2016 report and 8,359 donations from $100.36 to $200,000.

Party donations over $100 accounted for $11.7 million of the party's $12.15 million total. 

The party reported 15 six-figure cheques from 11 unique donors totalling $1.7 million, including Dennis – better known as Chip – Wilson, luxury car dealer MCL Motors, Arizona-based RPMG Holdings (ONNI Construction) and Teck Resources.

Their generosity wasn't limited to the 15 cheques, either. Ten of the 11 kicked in another $200,000 in smaller donations.

Three others – including the New Car Dealers Association of B.C. and the Independent Contractors & Businesses Association – gave a total of $341,550.

Effectively, 14 donors gave close to 20 per cent of the party's total haul.

The donations for $100 or less would normally pass by unnoticed, except for the big deal the party made of them just hours before that New York Times article.

In its statement last week, the party boasted that “Since Christy Clark became party leader, we’ve made a focused effort to grow our base of grassroots donors, including individuals and small businesses.” 

The 2016 report includes 7,582 donations – from $5 to $100 – totalling $449,384 (for context, Wall Financial gave $403,250 through four companies).

But what a grassroots crowd it is. 

Canadian Forest Products Ltd. cut a cheque for $84.73. Their total donations came in at $63,285.

London Drugs made a $98 contribution. The company donated $16,098 to the Liberals.

The Canadian Association of Petroleum Producers gave $50, as part of its $11,225 total.

Mercedes-Benz Canada was in for $20 and that was it. 

Gateway Casinos and Entertainment made three donations for less than $100 towards their $84,118 contribution. 

Gibsons/Sechelt Coin Laundry gave $100, possibly in loonies and quarters.

Vancouver lawyer Larry Lien Kuan Yen gave $20 on one occasion and $10,000 on another. 

The Big 5 Canadian banks donated $47,505, B.C. credit unions ($45,085), HSBC Bank Canada ($5,050) and South Korea's Keb Hana Bank ($300).

Recipients of government funding also appear on the list, including Playhouse Child Developments Centre ($210), the Steveston Harbour Authority ($150) and the University of B.C.'s Centre for Drug Research and Development ($250).

The grassroots spin to the party's statement may have seemed the way to go in light of the New York Times article, but when donations under $100 account for less than 3.7 per cent of the party's haul and 14 donors nearly 20 per cent, you're not really left with a warm and fuzzy grassroots feeling.

– Dermod Travis is the executive director of IntegrityBC.





Gov't pay out of whack

By Charles Lammam and Milagros Palacios

With many governments across Canada mired in red ink, B.C. Finance Minister Mike de Jong's plan to balance the budget this year is a laudable goal.

But there are significant risks on the horizon – a major slowdown in the housing sector, a court-mandated reopening of negotiations with B.C. teachers, and expiration of our softwood lumber agreement with the U.S. to name a few – that could put B.C.'s balanced budget in peril.

With pay and benefits for government employees comprising half of provincial program spending, controlling these costs is essential to prudent fiscal management.

Decades of research has shown that wages and benefits of government employees tend to eclipse those for comparable private-sector workers. This is more than just an economics issue. It's unfair that government workers receive a premium paid for by private-sector workers who receive less for similar positions.

Using Statistics Canada data from 2015, a new Fraser Institute study finds that government employees (federal, provincial and local) receive, on average, 7.4 per cent higher wages than comparable workers in the private sector. 

But, wages are just one component of total compensation, which includes pensions, early retirement and job security. As any business-owner or manager will tell you, it's the total cost of compensation that matters rather than the individual components.

First, consider the imbalance on pensions, one of the costliest benefits provided to workers in both sectors. In 2015, nine of 10 government workers in B.C. (87.9 per cent) were covered by a defined benefit pension plan – which guarantees a level of benefits in retirement – compared to just one of 10 workers in the private sector (8.7 per cent).

Government-sector workers in B.C. also retire 2.5 years earlier, on average, than private-sector workers and they are away from their jobs for personal reasons 55 per cent more days per year (12.4 days vs. 8 days in the private sector).

When it comes to job security, another non-wage benefit, government workers have a distinct advantage. In 2015, three per cent of private-sector employment in B.C. experienced job loss – almost eight times higher than the 0.4 per cent of government-sector employment.

Of course, governments need to provide competitive compensation to attract qualified employees, but the fact is wages and benefits in the government sector are out of step with the private sector.

Unfortunately, rather than work toward reducing the gap, de Jong is taking B.C. in the other direction. He recently announced that 310,000 employees of the provincial government will receive an extra pay increase of 0.35 per cent starting next year – on top of a 5.5 per cent wage increase over five years.

As he prepares next month's provincial budget, better control of spending will be key for delivering on his balanced budget commitment. 

Charles Lammam and Milagros Palacios are co-authors of the Fraser Institute study Comparing Government and Private Sector Compensation in British Columbia.

– Troy Media



Money talks, literally

By Dermod Travis

After 15 months on the job, Prime Minister Justin Trudeau is embarking on a cross-Canada tour, ostensibly to reconnect with Canadians – or at least those who can't afford $1,525 to bend his ear in private. 

It seems Trudeau – and other federal cabinet ministers – have a fondness for political fundraising events held behind closed doors, far away from prying eyes. 

In political slang, it's better known as cash-for-access, not to be confused with its kissing cousin, pay-to-play.

When news of Trudeau's private dinners broke in November, the prime minister assured Canadians that nothing untoward was taking place. 

Everything was peachy-keen as far as the prime minister was concerned, until one host spilled the beans.

In November, when Trudeau was in the Lower Mainland to announce his five-year, $1.5-billion ocean protection plan, there was a $1,525 cash-for-access event on his private itinerary.

Unpublicized at the time, Trudeau broke bread at the home of Miaofei Pan, a Vancouver property developer.

Shock of all shocks, some of the 80 guests saw the dinner as an opportunity to talk shop with the prime minister. 

Up for discussion that night was the proposed acquisition of Vancouver-based Retirement Concepts, a chain of retirement homes believed to be worth more than $1 billion, by China’s Anbang Insurance Group. If Anbang's bid is approved by the federal government it would become a major service provider to B.C.'s health ministry.

It wasn't long before calls for an investigation by federal ethics commissioner Mary Dawson – who had already called cash-for-access “not very savoury” – started flying across Ottawa. 

Last month – still labouring under the mistaken impression that everything is on the up-and-up  – Trudeau told the Vancouver Sun editorial board that one just had to use Google to find a list of names of those in attendance.

Not so. Both The Tyee and Globe and Mail have requested the names from the prime minister's office and the Liberal party of Canada without success.

Paradoxically, the federal Liberal party returned donations from the Cannabis Friendly Business Association after representatives of the group attended a reception last spring with Trudeau's point person on pot, Bill Blair. 

All to avoid any misconceptions that the event violated the government's own ethics guidelines that advise cabinet ministers and parliamentary secretaries to avoid an “appearance of preferential access.” 

But then it is easier to refund a handful of $150 tickets, than it is to return $1,525 to each of 80 ticket holders.

Lost in the federal kerfuffle are some upcoming cash-for-access events in B.C. with Premier Christy Clark.

At three times his going rate, the prime minister would still be a bargain compared to Clark.

In December, Agriculture Minister Norm Letnick sent out a private email to what he called “leaders such as yourself,” offering 21 individuals “an outstanding dinner experience” with Clark on Jan. 26 for $5,000 a plate.

Too rich for your blood? Letnick had another “outstanding dinner experience” to offer with backbench MLA Linda Larson for a mere $2,500.

B.C. NDP Leader John Horgan isn't immune to intimate evenings with well-heeled donors, either.

In November, the party charged up to $10,000 a head at its resource industry dinner.

Only B.C. Green party Leader Andrew Weaver refuses to attend or host cash-for-access events.

The B.C. Liberal party held 142 fundraising events in 2015, the NDP 46, and the Greens one.

But there's a far cry between the Green party's $10 film screening in Kelowna, the NDP's $50 belt it out for equality karaoke night and the $10,000 that 10 guests paid to share dinner with Clark at the home of Simon Fraser University chancellor Anne Giardini. 

– Dermod Travis is the executive director of IntegrityBC.





Hurting new homebuyers?

By Steve Lafleur and Josef Filipowicz

Due to Vancouver's sky-high housing prices, many residents worry they might never be able to climb the property ladder.

A recent survey found that housing issues ranked as British Columbians' greatest concern heading into this spring's election. So it should come as no surprise the Clark government has taken action to allay those concerns.

Unfortunately, it chose the wrong approach.

The latest provincial intervention in the housing market – interest-free loans to first-time homebuyers – aims to help new buyers with their down payments, ostensibly making B.C.'s red-hot housing market more affordable.

However, stoking demand for housing without a significant increase in housing stock will likely do more harm than good, rendering Vancouver housing even less affordable.

Why? The answer can be found in a first-year economics textbook.

Boosting demand for a good without also boosting its supply puts upward pressure on prices. In the case of housing in Metro Vancouver, encouraging first-time buyers means that more (and higher) bids will be placed on listed homes. If the number of listed homes does not increase in response to this new demand, the growing pool of buyers will push prices up.

So why not build more homes? Because red tape at city hall is holding up tens of thousands of new units from entering the market.

Fraser Institute research measured the effect of local regulations on homebuilding, including how long it takes developers to acquire building permits, how much it costs to comply with regulation, how often rezoning is required, uncertainty, and the opposition homebuilders face from local council and community groups.

It takes more than 15 months to gain approval on typical projects in Vancouver, five months longer than in Burnaby. This is exacerbated by the uncertainty of these timelines, which presents a stronger deterrent to developers in Vancouver than in most of its suburbs. It also costs more than twice as much to comply with regulatory requirements in Vancouver than in Abbotsford. These costs include building permit application fees, legal expenses, and other costs associated with compliance.

Cranes may dot the Downtown Vancouver skyline, and new towers may be springing up near SkyTrain stations, but what matters for affordability is the rate at which new housing enters the market. Further research suggests that, were Vancouver's regulations on new homebuilding in line with more housing-friendly cities in the metro area, many more units would have already been built in its most desirable and accessible neighbourhoods in recent years, taking pressure off the city's razor-thin vacancy rates.

Housing markets are complex, reflecting many factors on both the demand and supply sides of the equation. However, boosting first-time buyer demand without addressing Metro Vancouver's underlying housing supply issues will likely have the opposite effect on affordability.

Steve Lafleur and Josef Filipowicz are analysts at the Fraser Institute.

– Troy Media



Unfinished business

By Dermod Travis

Hate to be the bearer of bad tidings, but 2017 is an election year in British Columbia. 

On the presumption they're not the same thing, government and election ads should be over by the Stanley Cup semi-finals. There's a bit of unfinished business the B.C. government could attend to in the meantime, though.

Just as there are debt clocks to track the growth in public debt, perhaps there should be a “not forthcoming clock” to track the amount of time it takes for the government to come clean on the 2012 health ministry firings.

It's been more than 225 weeks since British Columbians first learned of the firings and the second general election where we still may not know who ordered them and why.

The latest in a long line of investigators – B.C. Ombudsperson Jay Chalke – was to have released his final report two months ago, but that was before the government dumped another four million documents on his team this summer.

Chalke's investigation is going to come in north of $2 million – with no guarantee that it will satisfy the public – and that's on top of the $4.1 million tab to date for earlier investigations, severance payments and out-of-court settlements.

The Missing Women Commission of Inquiry, headed-up by former B.C. attorney-general Wally Oppal, came in at $10 million and was wrapped up in half the time. 

It would have been tougher to play document dump under B.C.'s Public Inquiry Act as well.

On the Site C file, disclaimers still abound in BC Hydro's so-called independent reviews of the project.

In its report this past summer, Ernst & Young and BTY Group noted that they “relied upon information provided by their client (BC Hydro). EY and BTY have not audited, reviewed or otherwise attempted to verify the accuracy or completeness of such information.” Comforting.

It's unfortunate the government didn't place a similar condition on Hydro that the federal government is placing on Kinder Morgan for its proposed pipeline expansion.

Kinder Morgan must have signed deals in place with companies for at least 60 per cent of the pipeline’s capacity, at least three months before construction. 

Instead British Columbians are served up rhetoric, like being told to “keep our eye on the long game,” as B.C. Hydro president and CEO Jessica McDonald said recently.

When the government announced in November that B.C. families “in need of affordable rental housing will soon have access to close to 2,900 new units of housing,” they left a not insignificant matter out of their news release.

They overlooked mentioning that not all of the 68 projects are fully funded.

Shortly after the announcement, the Terrace Standard reported that the Ksan House Society's project still needs a further $5.5 million – and that's after the government's $8 million contribution. 

ICBC is about to undergo its second government review in five years. 

Premier Christy Clark has already taken off the table the one thing that leaves Canada's three other public auto insurers in decent financial shape: no-fault insurance.

Makes one wonder who is so strongly opposed to the idea.

Perhaps Clark and company can clear some of it up before May 9.

– Dermod Travis is the executive director of IntergrityBC.



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