Dear America

Dear America:

Do you remember how we use to see each other on a regular basis? We had such great times and always left knowing it wouldn’t be long before we saw each other again.

You were so beautiful back then but I’ve noticed a change. We don’t see each other that often anymore and the last few times we met, it was different, almost awkward. Normally so positive and ready to set the world on fire with your unbridled enthusiasm and can-do attitude, you began to look at yourself and others differently.

I saw that always-optimistic glimmer of hope you had for everything and everybody, gradually evolve into suspicion, even fear. It was a new and growing wariness and mistrust, not just of outsiders but from within as well.

I miss those eyes that once sparkled with anticipation. I remember how you could once dream of great things, like travelling to the moon and turn it into reality. You once said, “Ask not what your country can do for you but what you can do for your country”. It was that quintessential American character that built your country and it seems to be slipping away.

Remember how you once welcomed everyone? How your Statue of Liberty greeted newcomers as they arrived by boat from every corner of the planet and every country of the world. You were the land of the free and the home of the brave.

You and I use to brag that we had the largest undefended border in the world and how the relationship between the two of us was so special. Damn we were good weren’t we? A perfect pair and the world knew and admired that we could work so well together.

We played together, argued on occasion, because we didn’t always agree but if one of us was challenged, we would stand united. We even fought beside each other through two world wars and sadly at times, we died together. Such strong memories but you’ve changed and I have to admit the change does not suit you well

I and your other friends have watched these changes build up over time and it is difficult to see such a good friend stumble. It’s like you know these things are happening to you but with your loss of spirit has come a lethargy and malaise that has darkened your mood and stolen your will.

Even your bold, proud name is failing you. You began as the “United” States of America, the ‘land of the free’ but have allowed divisiveness to erode our once shared confidence and common purpose. You are allowing open and free discussion and healthy debate, something you once called democracy and freedom, to deteriorate to the point of a distrust that now borders on open hostility.

I so admired your ability to once defend and champion freedom of religion and speech. You challenged racial discrimination, suffering through some terrible times as a result but like everything you took on, you survived and grew. You were so beautiful in those days, irresistible, confident and boldly determined to do what you could to make the world a better place. Sure, you weren’t perfect but your heart seemed to be in the right place.

But what happened and when did your natural love for freedom begin this decline? You started to fear other religions and races, even going to war with those who didn’t share in your beliefs.

Your cherished faith in the value of freedom of speech is now under attack and not by outsiders but by you. You along with your many friends fought so hard for these freedoms. In fact, for many it is why your ancestors first came to you. They were refugees, persecuted for the beliefs they held, so they came to you my friend, to established a new world founded on the concept of freedom of choice.

And now I see the once light of my life agreeing to the need to round up, detain and deport those not of your faith or colour. The excuses are the same heard in Germany during the 1930’s, “They are stealing our jobs”.

When do those implementing these plans come face to face with the numbing Nuremburg reality of the worst imaginable quote ever? “I was only following orders.”  Deportation and willingness to torture is a path you must not follow.

Remember, our blood was spilled in world wars so that others could regain the same freedoms you and I enjoyed? We sacrificed our lives for that future by defeating a tyranny founded upon fear and hate. We went after those who would kill innocents and murder millions simply because of their religion.

But now my dear friend you toy with the idea and willingness to commit the wrongs you once fought so hard to abolish.

You think the world is different now and that it is naive to not recognize that times have changed. But times always change and we’ve seen it again and again. What I haven’t seen before though is your growing despair.

America, you’re a good friend and I hate to see you stricken by this hate and fear.

 

The Fallacy of Carbon Tax

In this column I’ll be talking about British Columbia’s carbon tax.  But wait.  Don’t close this tab quite yet, as the next 600 or so words won’t necessarily be as boring as you might imagine.

You see I believe BC’s version of the carbon tax is ill thought out and wrong.  It makes me feel like I’m being tricked into thinking I have bought my way into carbon emission happiness…a greenhouse gas nirvana of sunshine and lollypops.

In particular, I’m bothered by the concept of revenue neutrality that states all revenue generated through the taxation of carbon will be offset by an equal reduction in our income tax.  Think about that for a moment and hopefully the foolishness of this being a credible tax policy will start to jell.

We acknowledge that carbon emissions are a huge problem and introduce a carbon tax as a way to attach a financial consequence to our continued practice and reliance on fossil fuels.  There is a cost attached and so far so good as people seem more responsive, aware and careful when their actions cost them money.

However, this revenue neutral shenanigans that promises no consequence, turns carbon tax into a meaningless, feel good PR stunt by government.  We are being duped in a number of ways and with our own money.

You are not helping climate change at the gas pump because the extra you pay in carbon tax goes nowhere but to general revenue.  Why does it go to general revenue?  It has to because our government promised to reduce taxes and as a result needs that carbon tax money to cover expenses those real tax dollars once paid for.  

Revenue neutrality has by its very nature made sure climate change is not a priority to this government. So, what is the answer or for that matter is there an answer?  

When carbon tax was first brought in, the BC government of the time (Gordon Campbell’s Liberals) introduced a new fund called, the Innovative Clean Energy Fund or ICE.  Using the income from the carbon tax, ICE was to fund academic and private sector research and development in the field of alternative energy solutions and CO2 mitigation.  In other words, use the tax to reduce current emissions and look at new ways to develop alternatives.  

Unfortunately, in just a few short years, the amount going to ICE dwindled, R&D is going nowhere and mitigation is not happening. ICE still exists, is underfunded and has gone several years since it last called for ideas and submissions.  This concept of revenue neutrality combined with a cash starved government has pretty much killed it.

Personally I feel there is an answer and frankly, it is staring us in the face, already exists and is called carbon tax.  Weird eh?  The only missing component is a government with enough courage to make it do what it is suppose to do.

Forget this make believe game of a revenue neutral tax and let me honestly contribute towards a solution.  Don’t give it back to me in the guise of lower personal taxes but instead use that new money for what it was meant to do.  Make you and me responsible.

To those who selfishly whine of the economic doom and gloom that would result from an honest carbon tax?  I say, tough luck as I think it’s time you start thinking about how much your current in-action and irrational economic fears are going to cost your children.  Not someone else’s children, or those a few generations from now but your kids.  The ones who are already frightened about their future and are asking you…What are you going to do about it?

Political Transparency Would Silence Media Criticism

There’s an easy way to silence the press.

Almost all politicians will at some point in their career blame the media for the ills that are befalling them. With raised voice and fingers pointing, they cry out about unfair coverage, biased reporting and slanted editorials.

Those who find criticism difficult, cry foul more often or at least louder than those with thicker skins. They complain aloud about the brazen effrontery of those in the press who challenge or question their actions and judgment.

Yet a politician holds within his or her grasp the ability to easily silence the press. It’s called transparency.

Almost all who run for office do so on the keywords of “openness and transparency.” The norm is to portray the incumbent or opposing party as anything but transparent. This is quickly followed by a solemn promise of sweeping changes based on the publics right to unfettered access.

Of course once elected, transparency immediately morphs into a kind of selective opacity that eventually degrades into complete secrecy. And for a politician not ready to leave office, secrecy is usually the express bus to a shortened political career.

Imagine for a moment, what would happen if government were actually open and transparent. It is the lack of openness that quite often provides me with endless choices for column topics. It is secrecy that provides those first warning signals that something may not be right. It is the fog of political spin, that opacity I mentioned earlier, that creates distrust.

If those we elected kept that promise of transparency, I and many other pundits would have little to write about. More importantly, the public would have no cause for distrust, as everything that happens is out in the open for all to see.

I’m not so naive as to suggest there is not a role for secrecy in government. There are contracts, negotiations and privacy issues where the details must remain secret until they are concluded. That’s a given. However, transparency would accommodate acknowledging the existence of, and updating the public on, those issues that must remain temporarily secret.

or instance: Informing the public in a timely manner with an update explaining that progress is or isn’t being made does not harm negotiations. Advising that most key items have or have not been resolved. Forecasting a timetable and steps required to bring the process/project to a conclusion. Explaining that stakeholders are being kept up to date and are actively facilitating a process that will hopefully lead to cooperative and beneficial conclusion.

Specific details are not required. All that is needed is a progress update and confirmation that once completed, a full disclosure will be provided.  To ignore such basic courtesies and respect to those who elected you invites suspicion and distrust.

If you take the time to look at failed political careers, most come about as a result of the abuse or at least the taking for granted of political power and authority. Pierre Trudeau, Brian Mulroney, Stephen Harper and Gordon Campbell are just a few who decided they were smarter and more important than the citizens who elected them.

Secrecy became paramount as they came to believe their constituents could not be trusted with or were even capable of understanding the truth. Using the authority of their office, they took on those who dared to challenge their knowledge and their authority. Get mad, get even and get careless. Blame the press, blame outside global influences, blame the opposition, tout conspiracy theories but never would they acknowledge or accept personal responsibility. Perhaps that is why they all came to be known as ex-prime ministers and premiers.

NAFTA – The Sucker Punch

With talk of NAFTA and America’s return to a 1930’s style of isolationism, I’m wondering if we are missing something.  Something, if you will pardon the pun, that trumps our oil, pipelines, natural gas, forestry and yes, even copper and gold.

It represents undreamed of national wealth yet holds the potential for unimaginable controversy and conflict.  It is an economic resource and we own close to 20% of the world’s supply.  And unlike oil and gas, it is impossible for humans and most of the planet to survive without it.

Recognizing the lucrative business case, the American biotech giant, Monsanto, in polite business-speak, proclaimed, “There are markets in which there are predictable sustainability challenges and therefore opportunities to create business value.” The untapped economic resource and opportunity Monsanto refers to is Canada’s fresh water.

The business case being put forward recognizes that seven per cent of the world’s population does not have access to an adequate supply of water and survival for many is increasingly questionable. According to Christopher Maravilla (The Canadian Bulk Water Moratorium and Its Implications for NAFTA), somewhere between two and five million people a year die due to a lack of water.  And Ismael Serageldin, retired VP of the World Bank predicted back in 1997 that, “the wars of the next century will be over water.”

For some like Monsanto, the shortage and resulting hardships and deaths are simply an indicator of a business opportunity. And with one fifth of the world’s freshwater supply in our hands, of which seven per cent is renewable, it is an opportunity that would need Canadian participation.

The irresistible siren’s call of wealth is real. For example: In 2008 the Montreal Economic Institute determined Quebec could earn $6.5 billion a year exporting just 10% of its freshwater resources. And the Frontier Centre for Public Policy estimated an annual income for Manitoba of $1.33 billion if that province were to export just 1% of its freshwater.

Obviously our nation’s fresh water supply is staggering in both volume and value, and this brings us back to NAFTA and President Trump.

The United States has 10 times our population but only one-tenth the amount of water we have.  One example of the consequences of these numbers can be seen in the American Southwest, where satisfying its unquenchable thirst is in jeopardy.

As Scott Gordon wrote in the Dalhousie Journal of Legal Studies, “…America has become reliant on unsustainable means to meet its current water demands”.  He explains, “Water is currently being pumped from subterranean aquifers at a rate eight times faster than it is replenished”.

The prosperity of the American Southwest and California appears to have been built on a false assumption of a continued and affordable supply of domestic fresh water.  As a result of management practices, demand and drought, the water supply is nearing a critical stage and Canada and British Columbia in particular, are looking more and more like their savior and a way out of this water shortage.

Do we want to sell our water?  If we don’t sell it, will it be taken from us through NAFTA or other means? Do we have any idea of the environmental impacts that would result from diverting water from our rivers?

The value of our fresh water can be measured in many ways and economic opportunity is not the only way. The late Joseph Sax, a professor at the Berkeley School of Law and an expert on environmental law once suggested, “water is more than just a common natural resource,” explaining it had a special and unique status, a “heritage resource” that could not be grouped in the same product category as oil, gas and forestry.

It’s a unique way of looking at our fresh water, yet trade experts have identified Chapters 3 and 11 of our current NAFTA treaty as, “potentially constraining Canada’s discretion over its water policy.”

It is Canada’s water, but in this current political climate and NAFTA uncertainty, do we commodify it and bargain it away in return for national security and economic prosperity?  Some legal experts fear that we have already done so and lost our ability to, “exert sovereign control over our water resources.”

Tax Break or Disguised LNG Subsidy

Bill McQuarrie – In an earlier blog, I mistakenly described BC Hydro’s eDrive rate as being dissimilar from their Industrial rate. In fact,  Jennifer Siddon, Associate Vice President, Corporate Communications of Woodfibre LNG, correctly pointed out that they are both the same and available to all large industrial users.

I agree with Ms. Siddon, but does that mean LNG proponents will be treated the same as all other industrial rate users?  That is a ‘taxing’ question but for the most part, the answers can be found in a report prepared by the Canadian Petroleum Tax Journal.

In that report, the journal details the specifics of the tax relationship between British Columbia and LNG producers. In their introduction, the Tax Journal summarizes those changes, writing:

“In October 2014, the BC government released Bill 6 – 2014: Liquefied Natural Gas Income Tax Act (“Bill 6”) and Bill 2 – 2014: Greenhouse Gas Industrial Reporting and Control Act (“Bill 2” or the “GGIR”), both of which received royal assent on November 27, 2014. Bill 6 introduced legislation (the “LNG Act”) for a new BC provincial income tax on natural gas liquefaction activities (the “LNG Tax”), as well as a related BC provincial corporate income tax credit (the “Gas Credit”). In recognition of Canada’s challenges in competing in the global LNG industry, Bill 6 included a number of substantial revisions from BC’s initial February 2014 Budget proposals for the LNG Tax to make the tax less costly for proponents, including a reduction of the tier two tax rate and the introduction of the Gas Credit. Bill 2 addresses the management of greenhouse gas emissions from the point when gas enters a facility to where it is loaded on to ship or rail for market.”

The LNG Tax Act also allows LNG producers an accelerated method for deducting capital investment cost and states,  “…a taxpayer is entitled to deduct up to the full amount of its CIA (Capital Investment Allowance) balance in computing net income subject to tier two tax. Thus, an LNG taxpayer should not be subject to tier two tax on income from an LNG source until such time that the taxpayer has claimed the full amount of its CIA balance for that source.”

Bill 6 seems to be saying no tax until all costs have been written off as opposed to the depreciation method all other businesses must use.

The two-tiered system offers other advantages, with Tier One rates set at 1.5 per cent of net operating income and Tier Two set at 3.5 per cent of net income. The legislation goes on to state, “Tier One tax is creditable against Tier Two tax, such that the maximum aggregate LNG Tax payable will be at the tier two tax rate (3.5 per cent).”  This rate is locked in through to 2037.

The Act offers an additional credit (Natural Gas Credit) of 0.5 per cent for all “eligible costs of natural gas”.

The journal’s report was prepared in 2014 and it states, “As proponents continue to work with the BC Government on details of the LNG Tax, it is anticipated that amendments to the existing legislation will be proposed in 2015.”     

The standard business income tax rate in BC is 11 per cent and so it would appear the province is offering a tax inducement of 7.5 per cent.

So is it fair to say that LNG operations and industrial users are getting the same deal?  Special legislation was enacted to restructure the tax relationship with LNG proponents that has not been offered to industrial users, so is the playing field as level as Ms. Siddon implies?

It would appear that the cost to purchase power is indeed the same but tilted when it comes to contributing tax dollars to the province, giving the advantage to LNG as opposed to say, a pulp mill.

Is it a subsidy? It’s your call but we know that provincial shortfalls in taxes have to be made up somewhere and historically that is the regular taxpayer.