Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

B.C. risks losing $1b in federal cash

with 3 comments

Vancouver Sun

Federal money in Canada does not come easily. It comes with conditions and a timetable.  In this case infrastructure spending intended to boost the economy was authorised for only  “shovel ready” projects that could start straight away and get the money spent, so that the stimulus could be felt quickly. But in  “in British Columbia, … less than 25 per cent of the estimated $1.04 billion in available matching federal-provincial funding [has been] committed to projects so far.” And the UBCM doubts that the province will get its act together in time to get the rest.

The BC Liberal Party ran its last election campaign on promises of spending – indeed much government money (not party funds) was spent on signs all over the province that appeared just before the start of the campaign to trumpet its pet projects – such as the Gateway. They also claimed that they were the only party that could be trusted to run the economy. Their earlier claims to be concerned about the environment being much muted.

What is striking about the present situation is how disorganised they are.  They try to claim that they were taken by surprise by the size of the deficit – orders of magnitude greater than what they claimed at election time. And as if to show how genuine that suprise is, announcements about cuts are made – and then countermanded. And ministers bluster to tv cameras about “tough decisions”.

This one should be really easy. Any child with a grasp of 1st grade arithmetic could do these sums.

Provincial officials, meanwhile, say they are working hard to find a way to match federal dollars in a year dominated by a dramatic economic decline.

I do not see what is hard about this. The rate of return on capital employed has always been very much higher for basic patch up jobs – like fixing holes in the road or repairing crumbling sewers – than new build. The main reasons being that repair is usually much more cost effective than new build, and it also eliminates that very high cost of making good after a catastrophic failure – such as the recent spate of floods in California due to ancient water mains failing.

All the BC liberals have to do is cancel some of their dafter pet projects. For a start, theres $100m set aside for gating Skytrain – a project not yet started, not likely to ever recover it costs and one that carries no downside if it is cancelled. Calling a halt to the SFPR and widening Highway #1 would be a bit more embarrassing, since somehow these got tagged with the “stimulus” fad too – but saves billions. Both will be white elephants once completed – since the previous economic model of running America on credit to buy cheap imported goods no longer works as their credit is no good now – and the cheap oil to run all that will not be around either. They were supposed to have been funded by P3s – and thus less of a drain on government – but that is not happening. So it should be simple to cancel them just by saying they were never budgetted in the first place.

But the greatest savings are simply to end the subsidies thrown at oil and gas. That way these important resources will still be there when prices recover and more government revenue can be earned from them. Trying to accelerate their development when prices are low is stupid.

The sheer level of incompetence on display in Victoria is maddening. How the wool was pulled over so many eyes seems now to be fairly obvious. What is less easy to see is what the rest of us can do about it. For we seem to be stuck with these clowns for another four years.

Written by Stephen Rees

September 14, 2009 at 9:54 pm

Posted in Economics, politics

3 Responses

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  1. Frustrating for sure, but a look at the alternatives does not yield great news. If the NDP were elected tomorrow, they would probably still continue with Gateway and the SkyTrain fare gates. NDP critics use every opportunity to criticize SkyTrain safety and sound the call for more staff no matter how unreasonable the argument….no doubt at the behest of their base union support. They’ve flip flopped on Gateway many times and seem perfectly content to go with mob rule on that one and give the people the freeways they so desperately think will save them from gridlock no matter what.

    The Greens? A fine bunch who could certainly do no worse than the current crop and have a lot of upside to do much better. They keep running up against a wall at election time however. Elections are really nothing but a formal popularity contest. Too many people look for names familar to them who play the best to the fears they have at the time. The populace does not give a great deal of thought as to whether the policies proposed make much sense or for electing someone who may come up with a “medicine approach”. There is little appetite to elect someone who is not terribly well known who proposes something that may not taste good although they know in the long run it may actually help cure the problem.

    Unfortunately the Federal system is in just as bad shape with the prospects of a fourth election in just six years being very real indeed. It is a virtual certainty that another Federal election at this juncture will garnet the exact same result as before….which was not much different than the result before that. Does that seem to change anything on Parliament Hill? Apparently not. Will the Conservatives ever ditch Steven Harper and moderate….maybe ditch some of their hard core right followers? Will the Federal Liberals ever get a clue and try and keep things going in Parliament until they actually come up with something for the public to sink their teeth into? Will the NDP ever shove off their core of union support, moderate a bit and maybe start being credible on the environment?

    Its easy to demand change until one is asked to come up with a workable solution that can actually be implemented. BC and Canada are headed for a deep political malaise until better ways are found to make democracy work for us. Heck, we had a once in a lifetime chance to vote in a version of progressive representation and we voted it out TWICE! With such ignorance, would it be safe to say that perhaps the BC taxpayer is getting exactly what they deserve?

    JJ

    September 14, 2009 at 11:10 pm

  2. Dear JJ:

    Yes, we just need to get rid of all the unions. That’ll solve everything.
    (Sarcasm off).

    The Greens are well aware that bashing unions translates into votes, though not nearly enough, it would appear.

    But keep banging that drum. Maybe trade unionists could become the “next Jews” in this country thanks to your never-ending whining.

    Andrea C.

    September 16, 2009 at 1:46 pm

  3. I know that last comment was addressed to JJ, but as the Official Transportation spokesperson for the Green Party of BC, I wish to state that union bashing is not now and never has been part of our strategy.

    Stephen Rees

    September 16, 2009 at 2:12 pm


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