Election reform tap dance

By Dermod Travis

Last week, Premier Christy Clark heard the four letters that every politician dreads: RCMP.

Only five days after announcing its investigation into lobbyists who may have had personal donations to the BC Liberals and NDP reimbursed by unknown third-parties, Elections B.C. called in the cops.

The Sensitive Investigations Unit has been tasked with investigating the possible "cleansing" of political donations.

One gets a sense from their reaction that the Liberal party's initial damage control went out the window in favour of full-blown crisis management. 

Clark who has tried to ignore growing public anger over her fundraising practices – think $10,000 a plate cash-for-access dinners – may have finally blinked. 

She skipped question period two days in a row last week. Then, word began to leak the premier was preparing to go further than she had ever gone before on electoral finance reform.

The Diva of Deflection, as Independent MLA Vicki Huntington likes to call Clark, lived up to the billing on Monday.

Using the B.C. government's proposed real-time disclosure of political donations bill as a prop, Clark announced that if re-elected the Liberals will establish an independent panel to review B.C.'s Elections Act.

"What I'm proposing today is a process to take political parties and politicians out of the process," said Clark. "Regular review is important because there haven't been significant changes since 1995."

I guess that goes to how one defines “significant.”

Clark didn't see the need to establish a comparable panel when the government passed legislation to muzzle third-parties in what was once called the pre-campaign period – a move later overturned by the B.C. Court of Appeal – or when it amended the Elections Act so that all political parties would be given an electronic copy of everyone who votes.

Making her announcement, Clark was clear that members of the panel would have to be accepted by a unanimous vote of the legislature, which everyone knows is a regular occurrence in Victoria (mild sarcasm).

Clark added that any recommendations the panel might make four years later – or as the B.C. Liberal party prefers to say $60 million later – would have to be adopted unanimously as well. 

When pigs fly.

Meanwhile, in a remarkable display of decisiveness, B.C. NDP Leader John Horgan can be marked down as squarely undecided on real-time disclosure, telling CKNW: “Take it as a yes or no, however you like it. We disclose annually, as does the Conservative party, the Marijuana Party, Libertarian Party, and the Liberal Party.”

Clark's legislation came with a couple of unexpected and positive add-ons: the threshold for reporting political contributions will be lowered to $100 annually from $250. And we may get to find out who attends those elite cash-for-access dinners, albeit not retroactively.

Clark's office was quick to point out that she had misspoken on that retroactive thing. Call it the premier's foxtrot week: one step forward, two steps back, then sidestep the real issue. 

– Dermod Travis is the executive director of IntegrityBC.

How to fight the OD crisis

By Marshall Smith

When Prime Minister Justin Trudeau came to Vancouver recently to meet with first responders and health-care workers to tell them the entire country must work together to solve the opioid crisis, the doorway to healing and recovery was opened a little wider.

Recognizing the problem is not isolated to Vancouver’s Downtown Eastside or major urban centres is a big step in solving this national crisis.

At the time of Trudeau’s round-table meeting and conference, he told listeners, “This is a crisis that seems, for most Canadians, to be very far away. Something that’s limited to certain tougher parts of town, to the West Coast, but we are seeing a spread of opioids across the country and we’re seeing it spread far and wide across socio-economic levels, across communities. We need to come together as a country to help our most vulnerable.”

Most importantly, Trudeau made a clear statement that to solve this crisis we must go far beyond “band aid solutions” and focus on long-term strategies. With this recognition comes a need to focus on recovery and not just short-term fixes.

Harm-reduction can be a necessary first step toward establishing a long-term answer.  We must all look to how we can build upon public health approaches so as to be able to best help people out of a life of addiction.

If we’ve learned anything from the overdose crisis in BC, it is that when harm reduction is relied upon without the additional tools, it does not address perhaps the most important aspect of a long-term solution – ensuring that those suffering from addiction have access to treatment programs and facilities that offer the kind of psychological and emotional support they need for recovery. 

We cannot lose sight of the fact addiction is an illness that requires a broad evidence-based response.

The National Institute on Drug Abuse tells us addiction changes the brain in fundamental ways that result in normal needs and desires being replaced with compulsive behaviours, which override the ability to control what can be dangerous impulses. You would not expect someone suffering from a mental illness to get control of his or her life without any professional intervention, so why would we expect a drug addicted person to recover without medical assistance? 

There is much more that we can and must do to build a long-term approach to this crisis. It can start with reducing the stigma of recovery and advocating for better services, health assessments and referrals for people with addiction.  

Alongside the public health and acute treatment services that must be established, we also need comprehensive recovery services.  This should include establishment of recovery community centres across BC and at colleges and even high schools. 

Every mayor in this province should have a recovery working group, made up of people in recovery, to measure and build their community’s recovery capital and resilience to addiction.

Not until we begin to take a long-term, multi-levelled approach will we be able to resolve this crisis.

– Marshall Smith is chair of the BC Recovery Council 

Log ban would be bad news

By Joel Wood

With the B.C. provincial election two months away, the contentious issue of log exports has emerged again.

Some politicians, policy analysts and unions have argued for a ban. While the current government has allowed limited exports of logs, it has imposed an overly complex export approval process.

Banning log exports would be an economically harmful policy. There are better options that could benefit the forestry sector and B.C. businesses.

By preventing access to the higher log prices available in other countries, a ban would further suppress local log prices, hurting producers and those employed in logging. And while it would benefit mill owners and mill workers with cheaper logs, this benefit is less than the negative impact on the logging sector.

In a 2014 study, I evaluated three options to reform B.C.'s log export policies: A ban on log exports, a streamlined export quota system, and a policy of free-trade in logs. The results clearly indicate the latter two policies have much higher net-benefits. 

Banning a product from export is also inconsistent with how we treat other goods and services. Should we ban exports of salmon and only export prepared, frozen salmon meals and other salmon products? Should we ban the export of gold and only export jewelry? Rather than falling victim to the value-added fallacy of supporting jobs in manufacturing over jobs in primary sectors, B.C. could focus on getting the best prices for our resources by reforming and streamlining the current log export process. 

To export logs from B.C., a company must obtain approval from the federal government and, in many instances, the province. To apply for an export permit, a log must be first offered for sale to domestic buyers. A government-appointed committee then decides whether any domestic offers were "fair" and whether they deem the log "surplus" to domestic needs. Only then can the log be exported. 

This process results in delays that increase handling costs and prevent logging companies from securing long-term contracts with foreign buyers.

Taking advice from the Commission on Tax Competitiveness would be a better option. Currently, businesses pay Provincial Sales Tax on capital expenditures and on many of inputs of production, e.g., software, energy, telecom services. PST is also embedded in many of the prices of these inputs that were produced by another firm since that firm payed PST on the inputs they used. The result: consumers aren't just hit with the PST at time of purchase, but also accumulated PST hidden in the purchase price. The 2016-17 B.C. budget exempted electricity from PST, but did not exempt the other inputs. Reforming the PST is a good place to start.

Simply put, streamlining the log export process and reforming the PST are both better options than banning log exports if we want to ensure a prosperous province.

Joel Wood is an assistant professor in the School of Business and Economics at Thompson Rivers University and a senior fellow at the Fraser Institute.

– Troy Media


Follow the money trail

By Dermod Travis

Last week, the Globe and Mail reported that lobbyists in B.C. have been making political donations on behalf of their clients, effectively camouflaging the identity of the real donors and breaking B.C.'s Elections Act.

Elections B.C. then announced it was conducting an investigation, and five days later, the entire matter was referred to the RCMP.

To think it was only in January that Advanced Education Minister Andrew Wilkinson was boasting to CKNW's Jon McComb that British Columbia has the “most transparent disclosure system in the world.” 

B.C. doesn't even have the most transparent system in Canada. Five Canadian provinces have lower reporting thresholds than the $250 set by B.C.

And even then it's predicated on the donor being up front with the party and the party with Elections B.C.

The B.C. Liberal party tried to wave-off the Globe's report by calling the whole thing a "misunderstanding of the rules around political contributions.”

Lobbyists aren't the first group that comes to mind when you're thinking of individuals who might grapple with the intricacies of election legislation. Some of those caught up in the Globe's investigation may include a former solicitor general, a former deputy minister, a former assistant deputy minister and immediate family members to two prominent political families.

One of the lobbyists featured in the Globe's report is Woodfibre LNG's vice-president of corporate affairs, Byng Giraud.

In 2015, Giraud is quoted as saying the company “supports both political parties (financially).” Mighty fine people.

Search Elections B.C.'s database of party donors, and Woodfibre LNG has donated $30,500 to the Liberals and $15,500 to the NDP (2005 to 2015). 

Check the five other names Woodfibre uses – including Giraud's – and the spread between the two parties grows from $15,000 to $72,109. Nothing to sneeze at.

It's tough to imagine this has been going on for so long and no one in officialdom noticed.

Financial agents, 11 years of tax receipts, 11 years of audits, 11 years of training, 11 years of Elections B.C.'s all-party election advisory committee meetings, a fine upstanding lobbyist calling in to explain that the donation wasn't from him, but his client. Nothing.

According to minutes from Elections B.C.'s election advisory committee in November 2008 – when online donations by credit card were first permitted under the Elections Act – the Liberal party was represented at the meeting by Vancouver lawyer Hector MacKay-Dunn and then-party executive director Kelly Reichert. 

Deputy chief electoral officer Nola Western – then-electoral finance and corporate administration director – updated the assembled on changes to the Elections Act in regard to political financing, noting that: “Political contributions over $100 are allowed to be made via the internet ... as long as the political contribution is made with a credit card in the name of the contributor.”

Not a word about their lobbyist's credit card being used as a substitute.

It's not like the Liberal party has thousands of donors to keep track of either. It only took 285 donors for the party to raise $52.3 million between 2005 and 2015. Many of those who will have some 'splaining to do' with Elections B.C. are among the 285. So why do it at all?

One other shock? The sense from some lobbyists that they didn't think they were doing anything wrong by allegedly making donations in their name instead of their clients.

With the RCMP now involved, they may be in for a rude-awakening.

– Dermod Travis is the executive director of IntegrityBC.

Making small biz bigger

By Jock Finlayson

The B.C. government recently published its annual Small Business Profile, highlighting the role and impact of the small business sector in our economy – and showing a pressing need.

The list below summarizes the distribution of B.C. businesses by size category in 2015, according to the profile.

  • Businesses with no paid employees: 204,000
  • Other micro businesses (one to four employees): 109,500
  • Businesses with five to 19 employees: 60,300
  • Businesses with 20 to 49 employees: 14,800
  • Businesses with 50-plus employees: 7,700
  • Businesses with 100 plus employees: 1,500 to 1,750 (Business Council of B.C. estimate)

British Columbia would gain from the presence of a greater number of larger-scale firms as well as more rapidly growing medium-sized businesses.

Fast-growing firms, in particular, play a disproportionate role in driving job creation and economic dynamism. American research has found that the fastest growing one per cent of companies account for two-fifths of net new jobs. The picture is similar in Canada.

It should be noted that only a sliver of startups ever become growth firms. To begin with, half of all new businesses in Canada disappear within five years. Of those that survive, only four to five per cent ever reach the point where they employ 50 people.

Developing more significant-sized, locally based companies would bring a number of benefits.

Worker earnings: In B.C., average weekly earnings are 25 per cent higher at large companies than at firms with fewer than 50 staff. When non-wage benefits are added, the overall compensation gap is wider still.

Productivity: The principal reason larger businesses, on average, pay their employees more is that productivity generally increases as a company expands. This reflects the greater capital intensity and technological and management sophistication that's characteristic of bigger enterprises. 

Focus on outside markets: As companies grow, they're more likely to engage in international commerce. In most countries, companies with 500-plus workers directly supply 50 to 60 per cent of exports, a pattern also found in Canada. For small regional economies like B.C., a solid base of exporting firms is critical to increasing prosperity.

Investments in innovation: International evidence shows that larger companies invest more in research and development, up-to-date machinery and equipment, advanced technologies, and employee training. In Canada, 75 companies are responsible for more than half of private sector research and development.

Fostering business growth has been identified as a priority by policy-makers. Yet taxation, regulatory and industrial development policies have long been geared to nurturing entrepreneurial startups. Less thought has been given to how to encourage smaller ventures to become larger ones.

The 2017 B.C. budget is the latest example of that orientation, with the decision to trim the already-low provincial small business income tax rate from 2.5 to 2.0 per cent. This compares to the 11 per cent general B.C. business tax rate. Once again, B.C. is making it incrementally more attractive for some businesses not to grow.

Absent a surge in the ranks of larger and fast-growing businesses, boosting real wages and incomes for many employees in the private sector will remain a challenge.

If British Columbians want to build a high-productivity, high-wage economy, what we really need is an expansion in the number of large companies and a stronger base of growth-oriented medium-sized firms.

Jock Finlayson is executive vice-president of the Business Council of British Columbia.

– Troy Media

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