This morning, Ind. Cariboo-North MLA Bob Simpson spoke on the Speech from the Throne as follows:
I did get a chuckle out of the Finance Minister Government House Leader's comment about taxes in nirvana. I don't think anybody would buy that any tax comes anywhere close to nirvana, never mind the PST.Yeah, I guess it's January every year that we meet with them. They said to us: "Look, that announcement…." Not only did the B.C. Teachers Federation renounce it, but what the trustees said to us is that undermines the legitimacy of their role in the co-governance structure of our education system in this province.
I also chuckled yesterday when the member from Vancouver-Quilchena, during introductions, remarked that there's a lot of job insecurity in this building just now, and there always is before elections. But I do want to thank all of the members who have already indicated that they are going on to a different future than standing for election. I thank them all for their public service, and I hope that as we get closer to the end of the session, that people who have dedicated themselves to the public, regardless of where they sit in this House, are duly recognized and honoured. Thank you all for your service, and I wish you well in your future.
Now, of course, as an independent, I would argue with the member from Vancouver-Quilchena that my electoral chances are more insecure than some others in the House. I do believe that we're going to be giving people in Cariboo North a historical choice, and it will be an interesting election.
When I ran in 2005, one of the things I committed to myself and my constituents is that I would only run if I felt I had a meaningful contribution. Really, at the end of the day, and it's the beauty of democracy, it is the voters' choice. So whatever happens after this election will be what the voters decide, and that's what democracy is about.
One of the things about being an independent, though, over the last couple of years — and it happened in my initial comments to the budget, on-line — is that people have an expectation that as an independent you are free to be positive. I got quite a bit of feedback from some folks about the fact that my initial appraisal of the budget seemed to be in NDP language — that is, solely negative — and that as an independent, I should free myself from that oppositional trap and be more positive.
One of the things I note — and I reflected it back to some folks who were saying to me that I do have that freedom — is that not even the government members could rouse themselves to applaud this throne speech. So it's a little bit much to ask me to applaud something that the government could not bring itself to applaud.
That's a telling statement. I've been in this House…. I think I've had nine throne speeches. It's the first throne speech that I recall — and I don't have too many seniors moments yet — that there hasn't been a response from government in the positive. In fact, when Mr. Campbell was Premier there were often pauses within the throne speech where we would get a standing ovation. I think if there was any realism to the prosperity fund, which I'll speak to in a moment, that was one of those moments for government members to show their support for that, by way of applause.
However, the lack of applause at the end does show that some dynamic exists within the government caucus that isn't reflecting an overwhelming approval of the throne speech. I will speak to some of the things that are in the throne speech that may or may not be positive, depending on how they come about.
The seniors advocate. Apparently we're going to get legislation to that effect. That is a positive move. It is eight years late.
We've been asking for a seniors advocate for a long time. There are a lot of seniors, I think, that have been disadvantaged in this province because they did not have a place to go with their concerns.
It does remain to be seen how the government will introduce that legislation, because if it's a function of government and a function of the minister, then it is not a true seniors advocate. So yes, it's good that that's going to come forward. Maybe it's good that it will be put in position, but it has to have the strength of independence. That remains to be seen.
The promise of an integrated organization to seize the opportunity that Asia presents. I think that might be positive. Again, no details in the throne speech and no details forthcoming from government. But yes, we need to be in a position with Canada, with the business community, with educational institutions to seize the opportunity that Asia brings. But I would add to that, that that integrated organization also has to look at the social and environmental implications of our mad dash into the Asian marketplace.
If we don't do that — if we don't take a look at what the implications are of feeding unfettered development — then I believe that we are culpable for a lot of the social and environmental ills that are occurring in some of those nations. That's the lens
I think we need to put on coal and coal exports. That's the lens we need to put on LNG exports from the province. Yes, we should have a coordinated approach. It has to be more robust, however, than just the economic lens.
There was a commitment to renew the commitment to small business owners. Great. I think our small business owners are the lifeblood of many of our communities in our province. But again, a statement as generic as that is very hard to get very excited about. This statement, again, shows the, sort of, lack of depth and thought in the throne speech. It's a direct quote from the throne speech: "Your government will begin work to create the environment for a school of traditional Chinese medicine at a British Columbian post-secondary institution."
Now, that may be laudable. That may be something that honours and respects an alternative approach to medicine, honours and respects the growing Chinese community in our province. But, really, the looseness of this language — you know: "We're going to begin work. We're going to create an environment. We might pick an institution." Again, I think it's really just difficult for us as legislators to take a statement like that seriously. At face value, maybe this is something that is worthwhile. In the language used, it's not real. So the government has to prove that they're actually doing something here.
Health care — again, very loose language: "Outline improvements for patients in rural and urban areas." Okay. "Outline improvements for patients in rural and urban areas as well as improvements to primary health care that will have lasting benefits…throughout the province." I mean, I think it's laudable. I don't know what it means. Do we need to improve the health care system? Absolutely. How we improve that health care system is a subject for debate. We need to understand what it is that the government has in mind. This gives us no clarity whatsoever.
And then the comment on the balanced budget, quite frankly, drives me a bit crazy because it is the language going into the election. And the language going into the election is: "Please pick a B.C. Liberal government because we're the fiscal champions of the province, and you can trust us." The language of the throne speech says — and again it's a direct quote: "Your government is determined to balance B.C.'s budget year after year after year so our children can make their own choices when it is their time to lead."
Well, what we've seen in this entire last parliament, the one we're winding up, is year-after-year-after-year deficits. That's the fiscal reality — an increase to the debt of billions of dollars. That's the fiscal reality that occurred, and of course, now we're supposed to be getting a budget next week that says: "But don't worry. Be happy. The budgets going forward will be year-over-year-over-year balanced."
And because the Finance Minister knows that public will not trust them after what happened in the '09 election, when the promise was a deficit of less than half a billion and a deficit that, really, was almost five times that and an HST that wasn't in the promise…. In fact, it was, "We aren't going to do it," and an HST that was in. The Finance Minister has publicly admitted that the public are right to be cynical of any promises this government makes year-over-year-over-year balanced budgets that he's hired an independent economist to sign off on the revenue side of the government's budget and was explicit in saying it will be the revenue side of the government's budget.
Well, I think that the reality is that we need to get out of a pre-election budget cycle. We need to move the fixed election date to the fall. We've asked, as independents, that that be done in this session. No independent economist's stamp on a budget, saying, "Yeah, I think this is okay," is going to meet the sniff test in the public domain. It's just not going to.
We had an independent assessment of the HST from an Alberta economist. What did the British Columbians do? They rejected the HST. An economist signing off on the revenue side of the budget does not satisfy what British Columbians want, which is a budget debated, passed, reviewed by the Auditor General, reviewed by the comptroller general and in the works for the six months leading up to the election. So the only way to fix the budget, the only way for a government to claim with any kind of credibility that they are going to balance the budget, is to actually have the election in the fall with a budget that's actually in play.
Then the final comment in terms of things that may or may not be positive in this throne speech is this statement the government wants a ten-year agreement that would allow children entering grade two next year to graduate high school without a single labour disruption. Now, I find the insertion of that into the throne speech quite disturbing, because that announcement, when the Premier made it, died the minute she made the announcement. It's not real. It's not credible. It's an idea floated out for political purposes.
The members of the government caucus from Prince George, the Minister of Jobs and the Solicitor General, and I met with the northern school trustees in our annual meeting — very productive meetings. We meet with them every year in January
The announcement of $11.6 billion — that makes politicians happy. No politician in sight when the company decided to just shut the thing down, not continue building it and take a $1.5 billion write-down. So $6 billion invested already? No. Announcements for pipelines, plants, etc., already? Yes.
The ten-year pronouncement of this government in the throne speech has already been rejected, and yet it's still in the throne speech. I find, quite frankly, Mr. Speaker, that's disingenuous to the public of British Columbia. It isn't giving them a sense of what really is possible and achievable, and it diminishes the throne speech quite dramatically.
That's the best I can do in terms of offering some things that are in the throne speech that might be positive. But I want to come to the centrepiece of the throne speech, which was the LNG and the B.C. prosperity fund.
Now, I have long been a proponent of a rainy-day fund for British Columbia, even before I was elected, when I worked for a forest products company and saw how much money the company was putting into the provincial coffers. If you look at the history of the province and mining and forestry development and fisheries, we have had a lot of money flow through this province, and unlike Alberta, we have never got our arms around: how do we mitigate the boom and bust of the natural resource cycle so that we can maintain some certainty in the delivery of public services in the bust times. Alberta has their heritage fund. I believe we are long overdue in doing something to that effect.
I think a rainy-day fund — call it what you will: Alberta, the heritage fund, in British Columbia, the B.C. prosperity fund — as a concept is not a bad concept. It's something that we should look at. Can you pay done the debt with it? Can you balance the budget in the down-cycle of your natural resource economy — all of those things? Absolutely. We should be having those conversations.
The problem I have with this fund is it's a single-resource fund in a resource area of this province that we are not guaranteed at all will realize anything. There may be no pipelines; there may be no plants — and I'll get into that momentarily. To pin it all on that, to not have the conversation writ large — about: do we have the pricing right for all of our natural resources? Can we use all of our natural resources to build a fund that buffers us in the boom-and-bust cycle of the economy — I think, again, is questionable.
To do it in the way of a pre-election promise, that if you vote us in, in 2013, and you vote us in again in 2017, then we'll start to realize this fund, I think, again is treating British Columbians as if they are fools. I think it's a disservice to British Columbians that then that becomes the focus of whatever election we are going to go into.
Now, the Minister of Community said that Alberta has built their economy around a fund like this, and he said that Alberta is the most economically comfortable province in the Confederation. I guess the Minister for Community isn't staying up to date with what's happening in Alberta. As we all know, Alberta has gone back to debt financing, they have a deficit, and they just lost $6 billion in revenue from the tar sands. They're talking now about a value-added tax. So while the Premier is projecting, post-2017, that we may get away from a sales tax, Alberta is actually looking at maybe having a conversation about some kind of value-added tax on their sales.
This is how quickly things can turn around — either way. It can go to the positive and make LNG absolutely work, or it can go to the negative and make it disappear. In May 2011 a 2½-year study finished. David Emerson, whom we all know in here was part of that study. It indicated that Alberta was in for a long-term rosy future from its oil and gas revenues. From 2011, to today they have plummeted in pricing, they have plummeted in revenue to government, and they are now looking at deficit financing. That's how fast this can turn.
The government's response to critique about the 2017 time frame is to suggest two things: (1) that they are taking the long-term view; and (2) that what they are attempting to do is show leadership to position ourselves to capture about the 2017 time frame is to suggest two things: (1) that they are taking the long-term view; and (2) that what they are attempting to do is show leadership to position ourselves to capture what is an emerging market. They give two examples. They give the example of the Olympics, and they give the example of lumber to China.
In the case of the Olympics, there is no comparison whatsoever. There's actually a thing called the Olympics that actually does occur. There is actually a process by which you apply for that and you compete. The only decision the government had to make — and it was the NDP government at the time — was: would we or would we not support a B.C. bid? Then Vancouver led the way on the bid. So to suggest that somehow the Olympics is a corollary for what we're talking about in LNG is just nonsensical.
Lumber to China is the other one that's been thrown at us. The Minister of Jobs raised that yesterday in the House. I have admitted in this House that I was wrong in what I thought was happening in China. I applauded the government members — three successive Ministers of Forests who drove that agenda, went after that.
My community is benefiting from government leadership in China developing a market that there were lot of questions about, and I have mills operating in my riding explicitly because they're producing lumber for China, so that's terrific. But does lumber for China equate to what we're saying about LNG?
Here's where it falls down. We had the mills; we had the wood. The market development wasn't there, so we went and developed a market. We knew, without a doubt, we could be price-competitive, because we had a long history of being price-competitive. We didn't need the infrastructure. We didn't worry about the supply side. We knew we could get into the market if we could develop it in a price-competitive fashion. So the leadership, if you will, was to grow an existing industry that we knew we were already world-class and leaders in. That's the fundamental difference in what we are talking about with LNG.
What is it we're talking about with LNG? One of the things I really did not like, and I found it disdainful, is the language that's used around investment, and the throne speech gives the impression to British Columbians that $6 billion has already been invested in LNG.
Well, let me give a news flash to British Columbians and to government members. Announcements do not constitute investments.
They're promissory notes. They're signals to shareholders that companies are moving in a certain direction and they're going to get into a certain game. To say that we have already had $6 billion investment in this province, again, is treating the public with disdain because it's not true.
I want to give an example. In 2005 there was a press release from this government, on November 7, 2005: "Local Economies to Benefit from Beetle Wood." It targeted my riding and the riding of Prince George and Williams Lake. It said that two large forest licences were awarded to Ainsworth Lumber that will see innovative new uses…750 jobs, $400 million investment in those jobs, two OSB plants and up to six pellet plants.
This was an ironclad announcement from government with job numbers, with investment numbers. What was realized on the OSB side? Zero. Was there a retraction from government? Was there a press release issued saying that those licences didn't work, the $400 million wasn't invested, the jobs weren't created? No. No retraction from the government.
One of the problems we have with our politics is that we'll show up on the announcements and the ribbon-cutting and we disappear when the thing doesn't work. I think there need to be a responsibility on the part of all of us that if you are there for the ribbon-cutting or the announcement and the thing doesn't work, you're there to tell the community that it didn't work and why.
In the case of natural gas, a classic is that no politician showed up for the announcement when Enbridge stated that even though it had built its Cabin gas plant, phase 1, in the Fort Nelson area — even though it was built, even though they invested in it — it's mothballed. It's not going to run. They've walked away from it, and they are actually writing it down on their books.
They're making money off of the write-down because they bought it, from EnCana.
A gas processing plant shut down. Where are the government members standing there, explaining to the community what this means with respect to natural resource extraction in this province? There is a Suncor Energy Voyageur upgrader in Fort McMurray, announced as $11.6 billion project, mothballed. The Globe and Mail" called it a giant tombstone to the future of the tar sands.
But — a huge but — now, one of the government's things they have to straighten out for the public is: how many plants are they talking about? They keep talking about five plants. Seriously? No one — and I mean no one who knows anything about the industry — believes that we will get five plants. Most industry analysts would say we'll be lucky to get one and very, very lucky to get two. But it is fraught with problems.
Here's the CEO from Chevron corp, one of the partners in a $10 billion potential LNG plant in B.C. He has expressed concern that they need substantial prices from the Asian market to be able to continue with their project. It is in the concept phase. None of these projects are board-approved. He needs a substantial price difference from the Asian market to achieve that. And he expressed concern that they are having difficulty being competitive under the current regime in British Columbia. Not a new tax regime, not an LNG tax, not super-royalties — under the current regime.
Today gas production in the Peace occurs because we as taxpayers subsidize it. We subsidize the extraction. That's why it occurs. So how are we supposed to believe that somehow at the end of all of this, we are not going to be subsidizing it, we are going to be making super-royalties or super taxes off of it? That's what the Canadian Association of Petroleum Producers and others are now publicly asking the government to explain.
On the extraction side of this, of course, in order to get into LNG, we have to discount all of the environmental costs. I want British Columbians to clearly understand that we get this gas from deep shale fracking, which uses trillions of litres of fresh water every year, permanently toxifies it and permanently removes it from the water cycle. We're talking about taking where we're at now, with trillions of litres of fresh water and toxifying it, and increasing that 10,000-fold , or whatever that number is, to get from one to five plants.
The industry in Alberta has said that their biggest challenge is water. They know it's a problem. They know they have to figure out other ways than water. The independent member for Delta South and I have asked the government to go and figure that out — figure out what the issue is in British Columbia. We're not doing that.
So water, greenhouse gas emissions, the use of toxic chemicals, the fragmentation of the land base…. We're doing a health and safety impact study because the cumulative health impacts, the cumulative safety concerns in that area are accruing with the industry effectively in hold mode. And we're talking about ramping it up.
In order for the government to sell this to British Columbians, they have to discount all of the environmental, social, health and safety concerns. This is important to understand. The cost of extraction in British Columbia for the North Peace area, around the Fort Nelson area, is anywhere between $5 and $7 to get the gas out of the ground. It's $3 to $5 to get the gas out of the ground in the Dawson Creek south area.
The reason that basin is being developed is because they get liquids out of that that help us to move bitumen. They make money off the liquids, but that's the only reason it is developing.
The price differential between $5 and $7 to extract in the North Peace and $3 to $5 to extract in the South Peace with a North American market that is $3 means we're subsidizing the industry to make it work, as taxpayers. Now, you have to take the extraction cost and you've got to add the pipeline costs in the South Peace with a North American market that's $3 means we're subsidizing the industry to make it work, as taxpayers. Now, you've got to take that extraction cost, and you've got to add the pipeline costs. Again, there are no pipelines.
This government said that they've added a First Nations requirement. You must address First Nations concerns to the Enbridge pipeline. I wonder if they're going to apply the same principle to the pipelines that will have to be built for LNG, because we already know First Nations have chased the surveyors off their land. So no pipelines, but you've got to include the pipeline costs.
Then you have to build the plants. All of the proposed plants' owners, those who've made the announcement, say they are worried about two major things about plants in British Columbia — energy and labour. They believe that the energy costs and the labour costs of these plants are going to create an uncompetitive situation in British Columbia. The pricing potential to the market from B.C. is up to $12 — up to $12 to get it onto ships to get it over to Asia. The Asian market just now is around $13. That's why the industry is saying to the government: "You can't compare us to Australia, because their delivered cost is not the same as ours. There's no room to make your fund off of the industry." That's why they're going to Ottawa.
At the same time this government is saying, "We're going to get trillions of dollars and hundreds of billions of dollars in the fund," the industry is going to Ottawa and saying: "In order for us to even contemplate doing this, we need $2 billion in tax relief."
B.C. simply is not going to be competitive. If the government wants to create a prosperity fund from this industry, then it's most likely going to drive the pipelines to the south, and the LNG plants are going to be south of the border. That's the reality of this government's announcement.
But I would like to just speak to the fact that while that's unreal, while that's magic, while that's fantasy, and it is…. It's not a matter of a long-time planning horizon. It's just fantastical to believe that a government would pin all of its hopes out to 2017 in a province where we may not get one LNG plant the way that things are going.
But the other thing the throne speech said was that we are at a historic crossroads. But the crossroads that the government is talking about is the political crossroads in May of this year, 2013. I think that that's shortsighted, because I do think that we need a real plan for climate change. We're not getting that from this government. We need a real plan to address systemic poverty and the pressures on the middle class. We need a real plan for a sustainable economy that gives pre-eminence to renewable resources, not non-renewable ones. We need a real plan for health care and education.
Unfortunately for British Columbians, that crossroad on May 14…. Neither political party is putting those plans forward. I think it's going to be a very difficult choice for British Columbians to make. So again, I restate, my preference would be fall elections, pass budgets, real plans from governments, not a throne speech that points to an uncertain future that is, quite frankly, unrealistic
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