Mired in hopeless red tape

By Gwyn Morgan

For the second time in two years, three judges with the Federal Court of Appeal struck down a crucially important oil export pipeline project that had undergone years of regulatory review.

The approval of Northern Gateway by the former federal government of Conservative Stephen Harper was struck down in 2016. That was after Enbridge spent half-a-billion dollars on a massive six-year review and Indigenous consultation process.

Now the Trans Mountain expansion, approved after a billion-dollar expenditure by Kinder Morgan and since purchased by the federal government, has met the same fate.

The federal government announced it would not appeal that decision to the Supreme Court of Canada.

It's bad enough that a private company can't get a fully approved infrastructure project done. But can you think of another country in the world where three judges can overrule the ability of a national government to exercise its constitutional right to build its own project?

And, in both cases, those judges based their decision on dubious conclusions that veer from objective legal analysis into nuanced opinions seemingly designed to justify their preconceived biases.
At the heart of both decisions, the panels concluded that the government's consultations with First Nations had been "inadequate."

Here is a summary of the consultations that took place prior to the approval of the Trans Mountain expansion by the federal government:

During the period from project announcement in May 2012 until commencement of the National Energy Board (NEB) hearing in December 2013, Kinder Morgan engaged with some 130 Indigenous communities.
During the hearing, the company responded to seven rounds of information requests, including 400 from the NEB and 17,000 from intervenors.

In all, 131 Indigenous groups participated in the main hearing process. There was also a separate oral hearing of traditional Indigenous evidence, along with an oral argument about the project impact.

In May 2016, four years after project was announced, the NEB sent it to the governor-in-council for final approval. Citing a duty to "deepen" consultation, the government then proceeded with a direct consultation process that included several cabinet ministers and involved 117 Indigenous communities.

The government shared its assessments of Indigenous claims with affected communities and compiled a Crown consultation report that provided a summary of each group's concerns and proposals for accommodation.
Finally, a ministerial panel report was prepared and the prime minister announced his government's approval of the project. The NEB issued its certificate of Public Convenience and Necessity on Dec. 1, 2016.

All told, the project faced 18 legal challenges by the B.C. and local governments, indigenous bands and environmental groups. All were defeated but one.

The Federal Court of Appeal panel that struck down the Trans Mountain approval acknowledged that consultations had been extensive. But it decided that the government had not responded "meaningfully" to them, including offering potential accommodation measures.

How many accommodations can possibly be made for a pipeline following a route along roughly the same right of way as an operating one? And how do you "accommodate" those whose avowed purpose is simply to stop the project?

Ironically, this decision comes after the Trudeau government had specifically designed a consultation process to correct what they termed the Harper government's "mistakes" that led to the court's denial of Northern Gateway.
The court has now moved the already extremely difficult goal posts set by the previous panel to where the adequacy of any degree of Indigenous consultation is impossible to predict. This is sure to repel any company from pursuing resource projects near the so-called "traditional lands" that encompass virtually every square inch of B.C. and large parts of the rest of Canada.

The second reason cited by the judges for quashing the Trans Mountain approval was what they called the NEB's "critical error" in failing to include the impact of increased ship traffic on the 75 southern resident killer whales. Those particular orcas, unlike the tens of thousands of transient orcas that inhabit our local and international waters, are considered endangered.

Perhaps they are but not because of Trans Mountain tanker traffic.

Due to the proximity of Seattle to the Vancouver region - where Trans Mountain terminates - an analysis of tanker movements in the whales' habitat must include both Canadian and American traffic. Essentially all tankers must transit the Strait of Juan de Fuca bordered to the north by Vancouver Island and to the south by Washington State.

Every year, some 1,300 oil tankers, tug-pulled petroleum barges and industrial chemical carriers travel through the Strait of Juan de Fuca before entering the inland waters of the Salish Sea. The Canadian traffic turns north towards Vancouver and the American traffic goes south towards Seattle.

But that's just tanker traffic.

Orcas may be remarkably intelligent, but they can't detect the difference between tankers and other large ships. Each year, some 10,000 large commercial cargo ships travel those same waters, too.
And during the May-to-September tourist season, hundreds of huge cruise ships visit Vancouver. Adding to that are the thousands of BC Ferry vessels that travel the Salish Sea, plus tens of thousands of recreational boats.
Meanwhile, the Trans Mountain project would add one ship a day. One.

The NEB should instead be applauded for not wasting taxpayer money doing a major study of the obvious fact that one more ship among so many others will have no impact on the orcas. But without any consideration of that clear fact, the government had ordered the NEB to take 22 weeks to study the orca question.

How much will yet another six-month delay cost the Canadian economy?

Lack of access to offshore markets means U.S. refiners buy Canadian oil at a deep captive-market discount. That discount has long cost the industry and governments some $15 billion a year. It has now grown to more than $50 million a day.

Even in the unlikely event that construction restarts immediately after that 22-week delay, another $8 billion in price discounts will have been handed to Americans as they consume cheap Canadian oil and export their own production overseas at world prices.

The government has also announced it has appointed former Supreme Court justice Frank Iacobucci to oversee a whole new process of "meaningful consultation" with the 117 Indigenous groups that count themselves affected by the Trans Mountain expansion.

Rather than a useless study and another attempt to satisfy the court's endlessly amorphous standards of "adequate" consultations, the Liberals should have called back Parliament early to pass a bill implementing the federal government's constitutional right to carry out projects that are in the national interest.

Business capital investment is crucial to the jobs of the future. In the period since the Liberals took office, the proportion of capital investment in the economy has collapsed to a 40-year low. That was before this devastating court decision and the government's inept response.

Our country's international reputation has deteriorated from a credible nation that punches above it weight to one governed by lightweights more fixated on political correctness than on getting their own national projects built.
Canadians should be very worried.

Gwyn Morgan is a retired Canadian business leader who has been a director of five global corporations.

– Troy Media


Democratizing dairy

By Sylvain Charlebois

Nobody should be surprised, concessions on dairy access during the United States-Mexico-Canada Agreement negotiations were foreseeable.

Americans went from wanting to tweak the North American Free Trade Agreement last year to getting significant concessions from Canada in the USMCA, which replaces NAFTA.

It's a deal we needed, of course. But how will our supply management scheme fare and how will our dairy sector cope with its new global reality?

We conceded to Europe through the Comprehensive Economic and Trade Agreement (CETA) and then to Asia, a few months later, with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Concessions for both deals equalled the amount of milk produced by about 500 dairy farms in the country.

So it was only natural to concede to the United States, our closest and most important trading partner.
Ottawa was likely just waiting for Quebec election campaigning to conclude before making any announcements. Wise move on the federal government's part.

But now the dairy sector finds itself in a much weaker position, with no apparent plan or support. The new deal compounds pressure generated by the two other multilateral deals. And so the fundamental rationale for our supply management system is put to the test.

By allowing more Canadian market access to American producers - three to four per cent perhaps - the USMCA could compromise the livelihood of at least 300 to 400 Canadian dairy farms over the next few months.
Nonetheless, the end of the Class 7 dairy pricing system is good news for consumers. Dairy processors and food service sectors will benefit greatly as lower costs will surely enhance their competitiveness. And so we all should win.

In this new world of uncertainty, punctuated with bombastic, rhetorical statements, our supply management system will need to change. But it needs to change on our own terms.
Canada is the only industrialized country in the world where such a system still exists. Changes are necessary to leverage opportunities abroad.

Contrary to what Dairy Farmers of Canada wants Canadians to believe, countries like Australia have survived the end of supply management. The Australian system ended in 2000, after some hiccups. But the sector performs well today even in the face of several severe droughts and depressed world dairy prices.

Dairy farmers in Australia are surviving with barely any subsidies. A drought relief fund set up to support dairy farmers is heavily funded by grocers. For every litre of milk sold at retail, Australian farmers get 30 cents. Since one litre of milk cost roughly $1 and is used as a loss leader these days, this adds up to 30 per cent of sales made at retail going to farmers. It's an intriguing partnership.

It would be interesting to see Loblaws and Sobeys give 30 per cent of their milk sales directly back to dairy farmers. But with supply management, partnerships and relationships built on trust are highly unlikely.

A new deal on supply management would require the support of the entire value chain, not just dairy farmers. And given the fiscal baggage in supply management, financial institutions would also need to be engaged.
We're probably 20 years behind the rest of the world on the supply management front. The USMCA talks are a reminder of just how out of touch some of our agri-food sectors are with their international counterparts. 

Quarrels with the American administration have forced Canadians to discuss the whole issue of supply management openly, which was unheard of just a few years ago. It's now a matter for all Canadians to debate. 
Supply management is mostly about food security and how we develop our economy in rural regions. It's not just about a small group of highly privileged farmers.

Canadians are starting to recognize that access to quality, affordable food doesn't solely depend on safeguarding supply management. These two dimensions are mutually exclusive and Ottawa understood that. That's why in the end conceding on market access was the easiest of options.

But what was surprising was the arrogance of Ottawa - and the support from Canadians - when refusing to give in to the U.S. to make the deal work. Many have praised how the government of Justin Trudeau stood firm against the American administration, as if we actually matter to them.

That's a foolish, innocent view of the world.

Anyone visiting the U.S. quickly realizes how insignificant Canada is to them. They know very little about us and like it that way.

The economics of USMCA just don't allow for Canada to be snooty. Who are we kidding? The U.S. is the largest economy in the world.

If Canada starts to act like it really cares about trade and wants to transform its agri-food economy into a trade-focused force, Americans will probably start paying attention to what we have to offer. But until then, egotistical attitudes should be curbed.

We should in fact be grateful to the American administration for getting Canadians to talk more about supply management. Most Canadians may not yet understand the system, but at least they've heard of it now, which is a huge gain for all of us.

Sylvain Charlebois is senior fellow with the Atlantic Institute for Market Studies.

– Troy Media

More affordable for who?

By Niels Veldhuis and Milagros Palacios

"Making your life more affordable" has been a dominant rhetorical theme of British Columbia's government - so much so that its 2018 budget uses the word "affordable" 76 times. Finance Minister Carole James mentioned "affordable" 26 times in her latest budget speech.

While making life more affordable is a terrific goal, the government of Premier John Horgan has substantially increased taxes on middle-class families. It's hard to see what's affordable about that.

Before this government's tax increases, the average B.C. family's total tax bill (federal, provincial and local taxes) was $47,868 - nearly 42 per cent of its income. This includes income, payroll, sales, property, carbon, health, fuel and alcohol taxes, to name but a few.

Given the tremendous tax burden that B.C. families face, it's no wonder James said her government's elimination of Medical Services Plan (MSP) premiums will take "some pressure off people's pocket books." 

That would, of course, be nice. Unfortunately, it's not the case.

Since assuming power in July 2017, this government has enacted or announced several significant tax increases that more than offset its elimination of MSP premiums.

The government raised taxes on British Columbians earning more than $150,000 to a rate of 16.8 per cent from 14.7 per cent under the previous government. 

It also increased the general business income tax rate from 11 per cent to 12 per cent (while maintaining the previous government's pledge to reduce the small business tax rate from 2.5 per cent to 2.0 per cent). And substantially increased the carbon tax from $30 per tonne when it took office to $50 per tonne by 2022. What's more, it has completely abandoned a commitment to making the carbon tax revenue neutral.

Then there's the MSP premiums switch. The previous Liberal government said it would cut MSP premiums in half, a plan the new NDP government adopted and implemented on Jan. 1, 2018, while also planning to eliminate the remaining half on Jan. 1, 2020. To replace the forgone revenue, the government will levy a new Employer Health Tax (EHT) starting in January 2019. 

While the EHT will be levied on employers, don't be fooled - it will very quickly be paid by workers. A recent empirical study of Canada by economists based at HEC Montréal, the graduate business school of the Université de Montréal, found that "payroll taxes are passed almost entirely to workers in the form of lower wages."
All told, these tax increases will add an expected $1.9 billion to the tax burden of British Columbians once fully implemented.

But what do these tax hikes mean for average families?

As noted in a recent Fraser Institute study, the average B.C. family will pay $959 more in taxes, led mainly by a $498 increase in fuel and carbon taxes. And while the government has tried to protect lower-income families by increasing the Low Income Climate Action Tax Credit, families with household incomes ranging from $20,000 to $50,000 will, on average, still pay nearly $200 more in taxes.

This calculation does not include several tax increases on residential property (increased property transfer taxes, speculation tax and increased school tax), which total more than $500 million. 

There's no question that these tax hikes will hit some middle-income familie,s including families who experience substantial appreciation in home values, or where property tax hikes result in higher rental prices for renters in an already-tight rental market.

Higher carbon, personal income, payroll, business and residential property taxes will not only hit the wallets of B.C. families, it will also make the province less attractive for business investment and entrepreneurs. And it will make it more difficult to attract and retain top talent, with ripple effects throughout the economy.

'B.C. - less affordable for families and less attractive for business,' is not exactly a slogan for success. 

Niels Veldhuis and Milagros Palacios are economists with the Fraser Institute.

– Troy Media


Social media as a weapon

By Peter Menzies

The Internet may very well be the innovation that liberated access to ideas, but the social media it spawned is swiftly evolving into the jackboot that suppresses them.

To put what's happening today to an increasing number of editors into perspective - Ian Buruma of the New York Review of Books is just the latest victim - one has to go back to the pre-Internet days, when those of us within newsrooms were pretty much the only ones who knew what was and wasn't in the paper or on the TV. 

We spent our days scanning news wires for the information we thought was important and/or useful to our readers. We controlled the flow of information and people trusted us to do so in a responsible manner.

There were all kinds of interesting little decisions made every day that, in general, people didn't know about. We never reported on suicides, for instance, because they inspired others to do the same. The editorial pages of one newspaper I worked for had, as many still likely do, banned commentary from anti-abortion perspectives. Others declared that the debate on global warming was over and skeptical perspectives would no longer be presented.

This ensured that ideas within the 'contentious social issues' category didn't inflame or divide public opinion as if, provided they didn't appear in the paper, they didn't exist.

We kept the gates. We did our best, or so we said, to ensure the mob was not inflamed. When it was and we were at fault, we would beg and usually be granted forgiveness. But when we were right, we and our advertisers would defend our principles, chief among them freedom of speech.

And then the Internet came along and everyone we had excluded got a voice again. Many of us saw it as the dawn of a new age - one that would leave little room for prejudicial behaviours and that would apply more pressure on professional media to behave even more professionally. This, surely, was a chance for people from all perspectives to become exposed to alternative and fresh points of view, inspiring a richer intellectual tapestry within the public square. The world would be a better place.

Well, not so much.

No one expected that people would attempt to express complex ideas within 140 characters and that others would be willing to respond without even a millisecond set aside for pondering and politeness.

Yes, liberty flourished, but the Eden-like public square many envisioned was swiftly overrun by a collection of cacophonic rabble dedicated to crushing ideas to which they're opposed. This post-modern neo-puritanism is far more threatening to the polity than the soft paternalism practised in most 'back in the day' newsrooms. 

Social media is now fully weaponized. What happened in New York is similar to what happened to former editors Hal Niedzviecki at Write (the Writers' Union of Canada magazine) and Jonathan Kay at The Walrus. 

Buruma resigned under pressure after publishing a personal essay by Jian Ghomeshi, the once wildly-popular CBC host accused of sexual assault only to be found not guilty in March 2016. According to Canadian Press, "critics swiftly denounced the piece as a self-serving bid for public rehabilitation" - as if people found not guilty in the courts are forbidden to do so.

"It is rather ironic: as editor of the New York Review of Books I published a theme issue about #MeToo offenders who had not been convicted in a court of law but by social media," Buruma told the Dutch magazine Vrij Nederland. "And now I myself am publicly pilloried."

This is certainly not a defence of Ghomeshi or, for that matter, any other particular point of view.
It's merely a plea for civility and liberal order - a world in which people who wish to influence opinion should shoulder the responsibility to at the very least engage in an argument before winning it.

Peter Menzies is a former newspaper publisher and Canadian Radio-television and Telecommunications Commission vice-chair.

– Troy Media

Local politics gets messy

By Dermod Travis

Judging by the mud flying, it would seem – splat – local elections are well underway across B.C.

If the campaign turns out anything like the opening acts, there's going to be some hefty dry cleaning bills this October.

This spring, two of Vancouver's civic parties proved that money doesn't always buy you political smarts.

Vancouver's oldest party – the Non-Partisan Association – is clearly vying for the Messiest Nomination Meeting of the Year award. 

It started last summer when Coun. Geoff Meggs quit and became Premier John Horgan's chief of staff, forcing a byelection. 

Former 2011 Cedar party mayoral – and then councillor hopeful – Glen Chernen sought the NPA nomination, as did former political staffer Hector Bremner. Bremner took the nomination and went on to win the byelection. The duel was not over, however. 

Both had their sights on the NPA's mayoral nomination, but Chernen managed to outfox Bremner at the party's annual general meeting in November and successfully elected a majority of his supporters to the party's board of directors. 

For a good chunk of the year Russia's honorary counsel in Vancouver, Erin Chutter, was even among its members, but I digress.

It was the stacked NPA board that denied Bremner the right to run for the party's mayoral nomination last May, clearing the path for Chernen, or so he sought. Two other candidates had been 'greenlighted' to seek the nomination and one, Ken Sim, went on to win.

Bremner and Chernen have both since bolted the NPA. Bremner is now running for mayor with his new Yes Vancouver party, and Chernen is running for council under former Conservative MP Wai Young's Coalition Vancouver party.

Not to be outdone, Vision Vancouver announced last spring that it wouldn't run a candidate for mayor, leaving one possible hopeful, Shauna Sylvester, in the lurch. Sylvester announced that she would run for mayor as an independent instead. 

Vision then reversed course and decided to run a candidate for mayor after all. At a June nomination meeting, Squamish hereditary chief Ian Campbell won the nod. But, Campbell bowed out of the race shortly before nominations closed, leaving Vision exactly where it was last spring.

Confused? Imagine what it must be like for Vancouver voters.

At least three mayoral candidates in B.C. are facing possible citations by the Law Society of B.C. What are the odds? 

Richmond hopeful Hong Guo is facing a citation “relating to millions of dollars that are alleged to have gone missing from her company’s trust account;” former West Vancouver mayor Mark Sager – seeking the top job again – is alleged to have “accepted gifts totalling more than $100,000 from a client;” and Pitt Meadows mayor John Becker is alleged to have misappropriated money from client trust funds.

Out in Chilliwack, councillor Sam Waddington – now running for mayor – has had his 2017 expenses referred to the RCMP by the outgoing council.

The timing of the decision adds to a disturbing number of complaints being filed against candidates this election cycle. One can only hope that such filings are not a political tactic and that the complaints have some substance.

– Dermod Travis is the executive director of IntegrityBC

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