Compared to other provinces, BC ranked dead last in 2009, with the largest gap between the top 20% and the bottom 20% of income earners.

The report starts by looking at how Canada ranks in international comparisons (badly) and then goes on to look at British Columbia.  It points out that BC does much worse at using its tax and social programs to mitigate inequality than other provinces.  BC ranks 5^th on income inequality just looking at market income (excluding government transfers and before taxes) but last after transfers and taxes. As BC Stats notes, this indicates that other provinces:

have had more success in terms of redistributing income through tax and benefit systems than have British Columbia and Alberta.

The report concludes:

In a free market society like Canada there will always be some that are better off than others, but the challenge is figuring out how large a gap between the highest and lowest earners should be considered acceptable. Given the size and vehemence of the Occupy protests, one would suspect that the current income gap is too large.

And one would hope the government itself would begin to acknowledge the problem. BC remains one of the few provinces without a poverty reduction strategy.

New Brunswick Auditor General Kim MacPherson joins public auditors in Nova Scotia, Quebec, Ontario, and British Columbia who have previously issued reports critical of P3 projects.  With P3 private partners put in all or part of the money for construction and in return get multi decade contracts to manage the projects with guaranteed inflation protection.

MacPherson’s report was critical of the process undertaken by the previous Liberal government.  She declared that a Value for Money report that had claimed the province would save money on the schools was in error.

The project involved schools in the communities of Moncton and Rexton.  The government committed to pay a private partner $5.1 million annually for 30 years to construct the schools and to manage operations, maintenance and rehabilitation.

The New Brunswick auditor found that the province had decided to proceed with a P3 despite the fact there had been no analysis justifying the decision. MacPherson said:

Neither the Department of Supply and Services, which executed the design, nor the Department of Education, which manages the Agreement after the schools open, were officially involved in the decision making process.

The transfer of risk is one of the reasons traditionally given to use public private partnerships.  MacPherson said,

We did not find evidence that the Department compared the total amount of quantified risk with the actual experience from prior school construction projects to assess the reasonableness. In our view, historical cost information is an important tool to validate project costs including estimated risks.

For the bottom line the Auditor General found that instead of saving the province $12.5 million by using a P3, it had actually spent $1.7 more than it would have with traditional procurement.

In British Columbia public private partnerships remain the default model for large provincial projects.  All new hospital projects in particular have been subjected to P3s with their multi-decade contracts.

But there is one idea to promote jobs in communities we won’t be hearing about from the province. It is an idea that is creating thousands of jobs in communities across the United States. The idea is simple. Local governments should support small businesses in their communities by giving them an advantage when bidding on government work.

Here in BC, thanks to interprovincial trade agreements, it is forbidden for local governments and school boards to give a price advantage to local businesses. And if Canada signs the Canada European Union Trade Agreement (CETA) with support from BC, the situation will get worse.

One example of how a local preference program works is in the City of Los Angeles. The City instructed its lawyers to create a bylaw that would give local businesses an eight percent advantage when it came to bidding on projects. According to a study by Charles Swenson of the University Of Southern California Marshall School Of Business, this move by itself will create 10,000 jobs locally.

According to news reports:

When Mayor Antonio Villaraigosa unveiled the proposed ordinance in September, he said the city “spends approximately 84 percent of its procurement dollars with businesses that are located outside of the city of Los Angeles; therefore, out of $1 billion allocated for governmental contracts, only $180 million goes back to local businesses.”

The City also allows a bidding advantage for local businesses that are certified as minority, women, disabled veteran or disadvantaged-owned business.

This idea is not unique to Los Angeles.  In the US dozens of cities and states have local preference programs for local business. According to the Institute for Local Self Reliance:

A 2007 survey by the National Association of State Purchasing Officials, found that 26 states have preferences for in-state bidders or products grown or manufactured in-state.  These policies may apply broadly or only to certain types of goods and services or in certain situations.  They may be absolute preferences or, more commonly, percentage preferences  (i.e., if a bid from a local business is within a certain percentage of the lowest non-local bid, usually 5 percent but as high as 15 percent, then the contract goes to the local business).

Ironically, the government has acknowledged the value of local purchasing at the same time it has prevented local governments from doing it.  In December 2006 the then Minister for Small Business Rick Thorpe expressed the idea eloquently in the Fort Nelson News when he said:

I’d like all British Columbians to consider the direct, positive impact you can have, on your neighbours, your local businesses, and your community’s growth – simply by supporting local small businesses. By shopping at home, you show that you value your friends and neighbours and the investment they’ve made to keep your community vibrant and growing. Most retailers I know are interested in meeting your needs and earning your business. However, one retailer summed up his dilemma this way:

 ”I’d love to expand my selection – but if it’s not going to leave the shelves, it just becomes a liability for my business.”

 When you buy from sellers outside British Columbia, you just help retailers elsewhere to keep their stores well-stocked at the expense of local businesses. Shopping at home also supports local hospitals, schools and important public services. Provincial sales tax revenues totalled almost $4.2 billion last year. When you choose to shop locally and pay the provincial sales tax on your purchases, you know you’re helping to pay for services of importance to patients, students, seniors, people in need and, in fact, all British Columbians. I’d like all British Columbians to consider the direct, positive impact you can have, on your neighbours, your local businesses, and your community’s growth – simply by supporting local small businesses. By shopping at home, you show that you value your friends and neighbours and the investment they’ve made to keep your community vibrant and growing.

If this is such a good idea for individuals you would think it would be a good idea for our local governments. However, BC’s Trade Investment and Mobility Agreement and the New West Partnership Trade agreement specifically forbid measures that provide for any “preferential treatment of a province’s people, investments and goods, except for justified actual cost-of-service differences.”

Canada is now in the process of negotiating an international agreement with the European Union and one thing the Europeans are pushing hard for is access to local government procurement.  Because local governments fall under provincial jurisdiction, however, the provinces get a say in this. But British Columbia refuses to say what they are putting on the table. If past agreements are any example, BC will give up far more than anyone else will. 

What are the arguments against this? Some people argue that taxes will be higher but the investment in the community will create far more economic value than it will take out in taxes. The government argues we need to give up these rights to get access to trade deals, but the US has managed both to get trade deals and to leave their states and cities with the right to local procurement policies. And yes there are no communities in BC the size of Los Angeles but surely the program could work at a regional or provincial level and in many less urban communities as well.

We now have a situation where American cities and states can give preferential treatment to their local businesses and we cannot.  Soon, under CETA, the Europeans may have access to our local procurement.

Perhaps we should be asking the premier just how that builds jobs in British Columbia.

In the United States Michael Shuman has written extensively on buy local campaigns.

Here in BC this website discusses the value of shifting some of our consumer spending to local businesses.

The report shows progress, but often in the wrong direction. You can find the whole report here but it will take patience. It weighs in at a hefty 20 MB in PDF format.

The report shows a decline in BC’s standing in Canada in many important areas in the last 10 years. We have gone from 4^th to 5^th place in the economy, from 3^rd to 4^th in personal income and from 5^th to 7^th in jobs.

In terms of social conditions BC sits in 9^th place among the 10 provinces. BC sits in last place in terms of people in poverty (below the low income cut-offs). We are second worst in terms of long term unemployment.

Some of the information is an eye opener given 10 years of very business friendly government. Business productivity grew by 6.3% between 1997 and 2000 and by about 3% in the next ten years. More surprising was that BC ranks 25^th out of 34 OECD jurisdictions when it comes to exports per capita. We ranked 4^th in Canada on per capita spending on research and development.

We did better on items like the environment, university completion and business investment.

In its final press release the Board says:

The provincial government demonstrated great vision and courage when it established the BC Progress Board in 2001 to monitor British Columbia’s performance and advise on ways to improve it. What was remarkable, and what remains unmatched, was the board’s dedication to transparency and independence.

As well as great “vision and courage” the government showed great caution. The Board was made up entirely of captains of industry supported by a few academics and consultants. This may explain why it took the Board several years to publish its first report on social conditions in the province. A more representative group might have noticed people were hurting earlier.

Despite that, over the years the Board has produced reports that shone a critical spotlight on many issues, particularly social issues, in BC.

The Vancouver Sun’s Craig McInnes was moved to tweet:

No wonder Clark’s shutting down Progress Board, no progress to report.

The business dominated Board will now be replaced by the new Jobs and Investment Board.

According to a government press release:

The BC Jobs and Investment Board will provide advice and direction to government on policies and programs to help attract sustainable investment, foster economic development and support job creation. It will focus on the eight key sectors in the BC Jobs Plan – forestry, mining, natural gas, agri-foods, technology, tourism, transportation (ports, marine and aerospace) and international education.

Presumably the awkward issues of poverty and unemployment will no longer be considered.

The government has promised the new board will be more broadly representative. The first two appointments this month have included as co-chairs a business boss and a First Nations Chief.  I guess we will just have to wait and see if the other appointed members are more than the usual suspects.

That did not stop me from having an opinion about the federal takeover at Attawapiskat.  My first reaction was that the Chief and Council should have thrown the keys to the federal government and said, “Buster, you broke it, you bought it.”

I have come to think, however, that I had it 180 degrees in the wrong direction.

I am beginning to think that perhaps what the First Nations should be doing is putting Canada under trusteeship.

Think about it. We have a government that was found guilty of contempt of Parliament. By their actions on Kyoto they have shown they are unable and unwilling to live up to international treaties.  The Conservatives lied to people in Montreal about the possibility of their Liberal MP resigning. Even the Conservative Speaker of the House of Commons called that action “reprehensible.”  They broke election laws that allowed them to outspend their opposition so clearly their commitment to democracy is pretty minimal.

And don’t get me started on financial propriety. Year after year the Auditor General raises a litany of issues about that.

So after 400 years of trying to work with our governments I think First Nations might be getting a little impatient. I’m thinking that maybe we should hope to see a First Nations consultant walking up the steps of the House of Commons with instructions to take the thing over.

But the consultant should take doughnuts. After all, that’s what Harpers takeover guy did when he showed up unannounced at the Council offices at Attawapiskat. I hear Harper likes the ones with sprinkles.

In one community voters rejected the use of a P3 water system. In another community the federal government refused a P3 after the city had spent $3 million on the proposal.  And as a colleague of mine put it, the federal government succeeded in making voters furious in what are probably two of the most Conservative areas of Canada.

In Abbotsford citizens rejected a P3 water project being pushed by the city and the federal government by a 75% margin in a referendum held during municipal elections. Abbotsford Mayor George Perry, most of his council and local Tory MP Ed Fast had been promoting the P3 which would have handed control of a new proposed water system over to a private company for decades. Ed Fast told the Abbotsford Times that the community didn’t have to use a P3 but there were no alternative sources of federal funding due to restraint.

On November 19^th Abbotsford voters proved the mantra of TINA (There Is No Alternative) wrong when they voted down the P3 and replaced the mayor with an opponent who had opposed the project.

The other community was Calgary which was an enthusiastic booster of the privatizing projects. The City was looking for federal money for four recreation centres and had their eye on the $1.25 billion PPP Canada Fund.  So Calgary Mayor Naheed Nenshi was furious during the federal election last spring when the Liberal Party said in their platform document that they were going to get rid of PPP Canada.

The Mayor told the Calgary Herald in April that the rec centres might never be built if a Liberal government scrapped the fund because cities simply don’t have other pools of long-term federal cash to tap. According to the Herald article, City council voted in January 2011 to review a public-private partnership to build the four facilities, and Nenshi said the financial lifeline from the federal agency was a “huge” factor in the decision.

In April Nenshi said the city had received some “positive noise” about accessing the P3 dollars and expected a decision within the past few weeks, although that would  likely be postponed by the federal election campaign.

Unfortunately for Nenshi and Calgary this slagging of the Liberals during the election did not pay off for them.  Just last week the City got a letter from PPP Canada refusing funding and saying that recreation centres were really not eligible under the program. This was followed by some awkward twisting and turning and editing of the PPP Canada web site which had previously said the centres were eligible.

On Thursday, November 29^th, however, the Calgary Herald reported that in fact:

Greg Melchin, the board chairman of federal funding agency PPP Canada Inc., said federal Finance Minister Jim Flaherty cut recreation centres from eligibility just last week.

Melchin maintained that up until that point, recreation centres were included in Crown corporation’s conditions and terms of references, and PPP Canada backed Calgary’s bid before it was made ineligible.

Even so, he said it’s the prerogative of the federal government to change policy and criteria if it wishes.

If Mayor Nenshi had fumed at Michael Ignatieff’s plan to axe the program in the spring he is now fit to be tied. “The real challenge here is a giant game of bait and switch,” Nenshi told several hundred people at a chamber of commerce luncheon, the Herald reported.

The Mayor’s web page now carries a featured story blasting the Conservative government and demanding the city be repaid for the $3 million it spent developing the proposal for the P3. And he is encouraging Calgarians to call their local Conservative MPs to tell them what they think.

Honestly, think what you will of the idea of P3s, can anything managed this poorly really be a good idea?

In 2010 a legislative committee undertook a review of Freedom of Information and Protection of Privacy Act (FOIPPA). In these reviews normally you would expect the government to protest any possible changes to make information more accessible. Not this time. Last year instead the Province delivered a 95 page report asking for dramatically increased rights to share and manipulate your information.

The government was pretty anxious to get the legislative committee’s approval for more power over your personal information. It was a big ticket item. A month earlier in the 2010 Throne Speech the government announced:

A new $180‑million integrated case management information technology system will deliver better front-line services and supports to women, children, income assistance recipients and those most vulnerable.

To make that new $180 million system work the government needed a lot more power to manipulate your information than it was allowed under FOIPPA.

However, the then Information and Privacy Commissioner had misgivings. He told the legislative committee:

Privacy is often, and wrongly, in our view, seen as a “barrier” by government entities to “efficient and effective” service delivery. Government agencies often suggest that the privacy protections contained in FIPPA be weakened to allow for liberal sharing of citizen personal information, within and across government entities. We are adamant that no legislative amendments to FIPPA are needed to authorize data sharing and data matching activities within government, and would strongly oppose any weakening of the existing right to privacy.

Most important, he recommended:

Government should not proceed with any more data sharing initiatives until a meaningful public consultation process has occurred, and the outcome of that process is an enforceable code of practice for data sharing programs.

The committee largely bought the provincial government arguments that it needed more power over our information, hook, line and sinker. But they did at least agree to “consider holding public hearings on data sharing initiatives.”

The calendar moved forward 18 months and these discussions played out with the introduction of Bill 3, The Freedom of Information and Protection of Privacy Amendment Act, 2011. The legislation widens the scope of personal information that can be released inside or outside Canada including personal information found on social media sites and information obtained about someone commenting on public issues. While there are protections in the legislation, health care entities are exempted from those protections regarding data linking.

Most important, the new law permits the government to link its databases to “mine” information. The databases can come from different public bodies and agencies. It creates a powerful and wide collection of personal information that is permitted broad uses.

Just how broad are the possibilities. Here are the definitions outlined in the legislation:

“data linking” means the linking or combining of personal information in one database with personal information in one or more other databases if the purpose of the linking or combining is different from

(a) the purpose for which the information in each database was originally obtained or compiled, and

(b) every purpose that is consistent with each purpose referred to in paragraph (a);

“data-linking initiative” means a new or newly revised enactment, system, project, program or activity that has, as a component, data linking between

(a) two or more public bodies, or

(b) one or more public bodies and one or more agencies;

 All this was done with none of the public consultation called for by the Information Commissioner. But we have a new Information Commissioner who it seems was not willing to press the issue. Even new Commissioner Elizabeth Denham acknowledged, however, that:

The devil is in the details. Some of these changes need more prescriptive rules. There is much work yet to be done.

So the government has a whole new amusement park of our data to play in. The public had no say about it.

These changes were rushed through. In contrast, recommendations to reduce the culture of secrecy by improving freedom of information provisions were ignored. Well, not completely ignored. Section 13 of the legislation that allows the government to refuse to release any “advice of government” actually had its scope widened.

Last July Christy Clark talked about her open government plans in a column in the Vancouver Sun. What we got instead was legislation broadening the government’s power over our personal information without public input.

Does the government need these powers? Will the creation of massive personal information banks be useful? Maybe. But what would have been far more useful would be a public consultation process that allowed us to fully understand and comment on what the government was doing.

That was what the old Information Commissioner wanted. That would have been open government.

The following are just a few of the issues that hit the convention floor.

The RCMP and public private partnerships

There was a lot of coverage in the media about the breakdown in negotiations over a new RCMP contract between British Columbia and the federal government. A side bar issue that got no coverage dealt with the new RCMP Division Headquarters in Surrey.

Solicitor General Shirley Bond complained to a UBCM panel about the province’s inability to control rising RCMP costs. The example she gave was the RCMP’s new Division E headquarters that saw costs balloon from $300 million to $1 billion.

However, it turns out that the new headquarters is a federal public private partnerships and that so far the province’s privatization agency, Partnerships BC, has billed $2.5 million in consulting fees on the project. Remember when the government argued that P3s offered fixed costs and price stability?

The Municipal Auditor General

Mayors and councilors were not happy about the province’s decision to impose a Municipal Auditor General on them. Councilors argued from the convention floor that they were already forbidden by law to run a deficit and had many of their major projects subject to referendum.

However, the province backed down on most of the issues promising to pay for the new office (but not for the cost of audits) as well as swearing that new MAG would not have the power to second guess local policies, including tax policy.

The big issue that still remains is governance. The UBCM wants the same model the province enjoys in its relationship with its own AGM. That would mean an MAG would report to an accounting board made up of local government representatives. No dice Communities Minister Ida Chong told the convention. Apparently local governments will make up only a minority of the board. The business community has been promised its own chair at the table.

The business community (primarily the Canadian Federation of Independent Business) is on a full-court press to see business property taxes cut with the cost being shifted to homeowners. Of course business, unlike homeowners, can write off their property taxes against federal and provincial taxes.

Government downloading and rural areas

Every UBCM convention holds individual forums for different sized communities. My favorite is always the Electoral Area Directors’ forum made up of mainly people representing spread out rural areas. While diplomacy is the order of the day when big communities talk to the provincial government, with Area Directors you get a lot more down-to-earth candor.

Over the years Area directors have had a continuing complaint about downloading of costs. This year the complaint was over diking policy. As a Central Kootenay Director told the provincial officials at the forum, “One of the reasons you are downloading is that you lack resources. If you can’t handle it, we sure can’t.” The chair of the presentation on diking sent the provincial officials away with this message:

We don’t have the expertise, equipment or money. Flood mitigation needs more funding. Send the message back.

Extended Producer Responsibility (EPR)

Over the years residents, particularly in urban areas, have become used to a growing level of recycling. Blue boxes take away our newspapers, cans and plastics. For many of us there will soon be recycling of kitchen scraps.

It turns out there is some risk of things going the other direction. The Area Directors heard a presentation on Extended Producer Responsibility. Under this program producers and consumers or products will have responsibility for them. It sounds attractive but what will it actually mean?

A Director from the Sunshine Coast told the panel they were planning to extend their blue box program and asked for advice considering the EPR policy. An industry spokesman advised the Director that they couldn’t give practical advice but that it would be “prudent to wait.”  An industry spokesman reported that some governments were putting a pause on such projects. “Remain nimble” she advised.

It turns out we may all have to be more nimble if we have to start taking our newspapers to depots rather than having them picked up in blue boxes.

Wages for public employees

It appears Christy Clark’s government is determined to make public employees pay for the government’s ineptitude on the HST. In a panel on the economy Finance Minister Kevin Falcon told the audience:

With respect to the wage mandate for the whole public service at net zero for two years – that tough mandate is likely to continue.

Public sector wages have already fallen due to inflation and the two year wage freeze. The Finance Minister appears determined to push them down further. Meanwhile, at least for now, wages in the private sector are going up.

Ferries

At the forum on the economy an Island Trust Trustee told the panel of Ministers:

Ferry fares are killing our communities. We are losing jobs because of the ferry fares.  If government isn’t willing to put money into ferry infrastructure we are going to continue to lose jobs.

Transportation Minister Blair Lekstrum said they were cutting 400 sailings but that it would not likely affect fares. Finance Minister Falcon suggested fares really didn’t make much difference because when they cut fares temporarily during the recession, ridership didn’t go up. The Island Trustee disagreed.

Open government

I went to one of the 7:30 am “clinics” on Thursday morning on “open government.” I had hoped it might deal with the government’s poor record on access to information but instead it dealt with the governments new web sites.

It wasn’t a total loss though. The government’s data website that now contains more than 2,400 data sets looks pretty interesting. And the open information site that publishes the government’s FOI releases is certainly worth reading on a rainy Sunday afternoon. Too bad their policy of releasing the information only 72 hours after it goes to the FOI requestor will probably discourage media from using FOI.

Workshop on market housing

Thursday afternoon there was a workshop on market housing that was much more interesting than last year’s all day workshop. Last year was mainly taken up by how little the province could or would do. This year instead focused on how much was actually being done in communities like Vernon, Langford and Surrey.

 There were dozens of other policy issues addressed in the week long convention. Paul Willcocks has an interesting column on the debate about smart meters here. It is remarkable just how much information flows in a meeting like this.

The most illustrative part for me was the announcement that there was going to be a review of BC’s tax system.  The CCPA has called for a Fair Tax Commission but the review promised by Christy Clark promises to be anything but fair.  Instead, as the government backgrounder states:

The panel of business leaders and experts will be asked to:

• Develop recommendations to help support a globally competitive, diverse economy that supports jobs and innovation with the Province’s balanced budget framework.
• Develop recommendations to simplify and streamline the sales tax system to make common-sense improvements to reduce administration for government and business
• Develop recommendations for closing tax loopholes

The point here is that, once again, our tax policy will be made by “business leaders and experts” – the same people who gave us the HST.

So that is who the government will be listening to. Who did they present their plan to? Not the legislature. Not the people we elect to represent us. On Wednesday the Premier’s speech was to the Surrey Board of Trade.  Thursday the Vancouver Board of Trade got to see the plan. Friday it was a speech to the BC Business Council.  Some people have called this the Liberal Party’s annual report to donors.

Now business plays a vital role in British Columbia. Their voice needs to be heard. But for ten years it is the only voice that has been heard. The result has been cuts in taxes for business and the wealthy, increases in fees we all pay and cuts in services for those who need them most. And for the government the result last month was a humiliating defeat of their centerpiece tax policy.

If the government had been just a little less deaf to the concerns of ordinary people we might have seen a tax change that worked for all of us.  Ontario implemented an HST after a year of consultations. As a result of those consultations the Ontario HST looked different than ours and there was much less hostility than we saw in BC.

Eric Reguly had a very good column in the Globe and Mail last month when he addressed this question in the context of Italy’s decision to kill a minimal wealth tax.  He concluded:

The point is that austerity programs will fail if they hurt, or are merely thought to hurt, the poor and middle classes more than the rich. If the average taxpayer knows that the rich are feeling no pain while he or she is, rebellions are almost certain and history shows that they can end badly for the privileged. Afflicting the rich and the unrich together is the way to go. It would also help build trust in governments at a time when they, like Italy’s, suffer a severe trust deficit.

There is no doubt in BC when it comes to government there is a trust deficit. The process by which the Jobs Plan was rolled out and a continuation of having “business leaders and experts” make tax law will make it worse.

Martin Luther King speaking in 1961

On Labour Day 2011 unions in North America are facing historic challenges. Governments and corporations are increasingly disputing the right of unions to exist and to represent working people. This is true not just in the United States. Here in Canada the president of the Canadian Federation of Independent Business, Catherine Swift, told the London Free Press:

What would be ideal is getting rid of public-sector unions entirely.

Not that long ago such a view would have been considered extremist. Now it is common in both much of the business community and the main stream media.

So Labour Day is a good time to review both what unions have given us and what has been lost in much of the world as governments reduce the rights of working people to democratically choose to act collectively.

Most people will acknowledge some of the legacy we have from unions. Unionized workplace pioneered the eight hour day and the five day week. They introduced health and safety rules and the ending of child labour. An Australian video encapsulated it rather well here.

But unions do much more. They help level the playing field both in the workplace and in society as a whole. In fact, as Dr. King suggested above, the argument can be made that since the end of WWII it was unions that were responsible for us having a prosperous middle class.

At the workplace level there is an enormous power imbalance between an individual employee and the boss. Acting with other workers through a union, that employee has a say on issues like wages, hours of work, schedules and working conditions.

Unions have promoted the rights of women and opposed racial discrimination. In unionized workplaces, the gap in pay between these groups and white men is smaller than is true for society as a whole. There are grievance procedures to protect their rights.

While some would stoutly deny it, many employers benefit from unions. Union employers tend to be more productive. Most union contracts contain education and training provisions. Better compensation and more respectful workplaces reduce the cost of employee turnover.

The benefits of unions reach beyond union workplaces. Non-union employers will often raise wages either to keep unions out or to compete with union shops for employees.

In society as a whole unions have played an important role in promoting social and economic equality.

Last autumn three international organizations published reports linking the decline of unions with growing economic inequality and the recent economic crisis.  UNICEF made among the most powerful statements saying:

The only sustainable way to reduce inequality…is to stop the underlying widening of wages and income from capital.  In particular we have to make sure people are capable of being in employment and earning wages that keep them and their families out of poverty.

The International Labour Organization called for more effective collective bargaining and for higher minimum wages. 

And the International Monetary Fund, no radical left wing organization, called for a restoration of bargaining power for low and middle income workers.

The common theme here is that for 30 years the influence of unions has been falling and for 30 years wages have been stagnant and profits have risen.

Unions have exercised an influence that goes beyond the economics of the workplace. Historically, unions were among the strongest advocates for Medicare and the Canada Pension Plan. The Canadian Labour Congress and its affiliates continue to be the most powerful voice for better public pensions for everyone. More recently, and closer to home, it was the unremitting campaign of the BC Federation of Labour that finally forced the government to end its 10 year freeze of the minimum wage.

Politically, unions have provided a balance to the power of money. This is something that the moneyed powerful cannot stand. That is why in the United States Republicans are working to destroy collective bargaining rights for unions. That is why in Canada grandees like Catherine Swift call for the elimination of public sector unions.

So this Labour Day spend a minute to think about what Canada would look like today if unions had not been there. And spend a minute thinking about what our future would look like with no balance at all to the power of money.

We have not seen clear evidence of savings and benefits in other areas of PFI projects which are sufficient to offset this significantly higher cost of finance. Evidence we studied suggests that the out-turn costs of construction and service provision are broadly similar between PFI and traditional procured projects, although in some areas PFI seems to perform more poorly. For example we heard that design innovation was worse in PFI projects and we have seen reports which found out that building quality was of a lower standard in PFI buildings. PFI is also inherently inflexible, especially for NHS (National Health Service)projects. This is in large part due to the financing structure and its costly and complex procurement procedure.

In the UK public private partnerships are called private finance initiative (PFI).

The Guardian newspaper reports that MPs found using P3s cost 1.7 times more than using public money for projects.

“The difference in finance costs means that PFI projects are significantly more expensive to fund over the life of a project. This represents a significant cost to taxpayers,” the report finds.

The Conservative chair of the Committee said:

instead of transferring risk to the private sector and cutting costs for the taxpayer, PFI had fooled the public – and Whitehall officials – into thinking they could get shiny new public services “on the never-never”.

While in the UK P3s have been under skeptical review, here in Canada, and particularly in BC, the government still refuses to make critical information public. The information is, the government says, a Cabinet Secret.

The business community in the UK continues to defend the lucrative projects with their guaranteed profits.

Here in BC we have billions  of dollars invested in P3s for 30 years or more.  Every new hospital built in the last decade is a P3.  Roads, bridges, sewage plants and now a prison have all gone the P3 route. There is no sign the government and its privatization agency, Partnerships BC, are slowing down. There is no sign they are prepared to even have a public review of the costly projects.

Charlie Smith had a good article in the Georgia Straight outlining reasons why a municipal AG would be a good idea. Some people, in some municipalities have had problems with transparency.  And while the Province does have an “Inspector of Municipalities” this position is useless when someone has an actual problem with local government actions.

But the issue is trickier than it looks.  Are we really talking about a mechanism to increase transparency and accountability in local governments? Or are we talking about a mechanism to allow the province and corporations to impose their agenda on local governments?

Under the Canadian Constitution the Province has the power to make laws that govern local governments. But the Community Charter, the provincial law that governs municipalities, has some pretty explicit language on the relationship between municipalities and the Province.

Clause 1 of the Community Charter says, “Municipalities and their councils are recognized as an order of government within their jurisdiction that…is democratically elected, autonomous, responsible and accountable”.  Clause 2 explicitly calls for consultation on local government legislation.

Christy Clark’s unilateral announcement that she would be imposing a local Auditor General was neither respectful of municipalities as an “order of government” nor did it involve any consultation.

The Union of BC Municipalities is usually pretty cautious when it comes to criticizing the provincial government. Their response to the AG plan goes further than they are usually willing to go.  The UBCM pointed out they had offered to participate in a joint Provincial/UBCM policy development process related to the MAG. but that “To date the Province has not agreed to such a joint process.”

The UBCM asked just what problem the government was trying to solve with the proposal.  They asked if it was tied into other commitments made by the Premier on municipal tax reform.

Following a meeting with the Minister, the UBCM reported:

The Ministry noted that AGs are usually precluded from a review of policy decisions of elected officials; no assurances were given that the design of a BC MAG would ensure this; the Minister indicated the MAG would initially be responsible for value for money auditing and best practices, but that further roles, including a municipal tax review, if suggested by the MAG, might be considered

The Provincial Auditor General is forbidden to comment on the policy decisions of the Province. It also reports to the legislature and gives the government copies in advance. There are no guarantees any of these protections would be offered to local governments.

It is not surprising that the Minister’s response makes local governments twitchy.  They have seen what happens when the province imposes an outside auditor who has the power to second guess their policy decisions. That is what happened to the Vancouver Board of Education when the Province sent in its Comptroller to review the Board’s budget. The Board had been critical of the Province and the Comptroller’s report was a hatchet job.

Municipalities are worried they could face the same thing especially since the Province has said this might include a municipal tax review. Christy Clark promised a municipal auditor general when she was running for Liberal leader. It was an odd promise and not one likely to resonate with the average voter. Who then was the audience she was addressing with the promise? 

The Canadian Federation of Independent Business and other business organizations have been pushing for a cut in local business taxes and all of this looks like part of the same agenda.

It is enough to make municipalities, justifiably, very, very nervous.

Hochstein is president of the Independent Contractors and Business Association of BC – representing non union construction corporations. He is the public face of the hard right in British Columbia and has a long history attacking unions. He opposed raising the minimum wage and supports, through the HST, shifting taxes off corporations and on to working people.

While the views in his op-ed come as no surprise it is worth having a look at their validity and perhaps speculating on the makeup of the growing chorus supporting his views.

Hochstein complains that local government taxes have been rising faster than the cost of living. He is not the first to make this complaint. The Canadian Federation of Independent Business makes this complaint so regularly that last May the Union of BC Municipalities (UBCM) was finally moved to respond.

The UBCM acknowledged that local taxes had gone up faster than the Consumer Price Index. They then showed the reasons why. The fastest areas of growth were protective services, parks and recreation. These are areas where the public has demanded more services from local governments. Whether you agree with it or not, the demand from the public for more police on the streets is almost unlimited. As a percentage of total costs, general government expenditures – the cost of running local governments – has actually declined.

 Downloading of costs from the federal and provincial governments to municipalities had also raised the cost of delivering local services. New environmental mandates have been a big part of this. As well in many provinces municipalities get more in provincial grants than BC municipalities do.

One other thing is worth noting here. Based on the most recent Stats Can figures available, local taxation in BC is significantly lower than the national average.

Hochstein’s next complaint is twofold. First, public workers are paid better than private sector work, and second, municipal wages went up during the recession.

Both accusations are correct. How does this come to be? One of the most important reasons why average wages are higher in the public sector is that there is less discrimination in wages.

CLC Economist Andrew Jackson has published some excellent work on this.  He quotes one report saying:

While now somewhat dated, the best independent Canadian empirical studies show that a modest public sector pay advantage is mainly the product of higher pay for women in lower paid occupations, offset by lower pay for mainly male workers in managerial jobs.

He cites another study finding:

Based on the 2006 census data, this study shows that visible minorities and Whites receive similar pay for similar jobs in the public sector. By contrast, in the private sector visible minority men earn significantly less than observationally comparable Whites.

Discrimination against women and minorities does not appear to rank highly in Hochstein’s priorities.

And yes, because of long term contracts signed prior to the Olympics, wages for government workers did go up faster than inflation during the recession. But over the last ten years they have gone up more slowly than those for unionized private sector workers.

Now Hochstein is no fool. He is aware of all these things yet he continues to make arguments that do not stand up to scrutiny.

In this he is not alone. These are the same arguments made by the Canadian Federation of Independent Business, the Fraser Institute and the many Fraser Institute clones such as the Frontier Centre.

And these are exactly the same arguments we are hearing by the Tea Party Republicans in the United States and the billionaires who back them. Their goal is not just the reduction of taxes; it is the undermining of progressive forces that oppose their view of the world. For them attacking unions is not just about driving wages down, though that is important to them, it is about undermining one of the only forces left today pushing a progressive agenda.

Make no mistake, Philip Hochstein and the people like him look admiringly to Governor Scott Walker and his agenda for Wisconsin. Their policy agenda is low wages and high taxes for workers and a monopoly on power for corporations.

That seems to be the question the BC government is posing with its announcement Monday that it has “expanded its orthotics supplement for income assistance clients to ensure basic mobility needs are addressed.”

Minister Harry Bloy said:

It’s important that people on income assistance are supported so they can maximize their involvement in community life and perform the day-to-day tasks of living.

This all sounds very high minded and is quite a contrast to a different announcement in March 2010. Back then the government cut millions of dollars in social assistance spending. The government cut spending on medical equipment and supplies. They said they would no longer cover items like orthotics, contraceptives, glucometers, some diabetic supplies and manual breast pumps. They also planned to save $3 million in cuts to dental benefits. The cuts went on and on.

At the time Housing and Social Development Minister Rich Coleman said he thought “we struck a balance,” given the tight budget. The balance apparently was to cut benefits for the poorest and continue to cut taxes for corporations and the most well off.

Community agencies complained at the time that the cuts would be very damaging, including the cuts in support for orthotics.

Now the government press release quotes a podiatrist as saying about the change in direction by the Ministry that:

Orthotics and orthopaedic footwear can significantly increase a patient’s quality of life by releaving pain, increasing mobility and preventing potential foot complications, including amputation.

Restored funding on orthotics is nice to see, but it would be nice to see the other cuts restored as well. Orthotics are not the only “cost effective” way of making lives livable for people.

And of course, the the question that needs to be asked is just how many people faced pain and even amputations because of the loss of orthotics for a year. 

The other question that needs to be asked is this. Is this really all about making lives better for people on social assistance or is it one more sign of a possible fall election?

These contracts don’t go on the books as debt, but just like debt we will be responsible for it for the next 30 or 40 years.

The lions share of these payments will go to independent power producers.  Last year the future cost of these payments jumped from $23.8 billion to $45.3 billion. This is the cost of privatizing BC’s power system. Marvin Shaffer writes about this process here and here.

Future costs for hopsital public private partnerships jumped more than $2 billion to $9.1 billion.

The government reports on these “Contingencies and Contractual Obligations” in the Public Accounts in limited detail. Fortunately, they now also make more detailed information available on a website here.