British Columbia is giving away lumber at .50 cents an acre and the Green Party holds the balance of power at a tipping point on energy policy says Michael Hudson
Dimitri Lascari: This is Dimitri Lascaris for The Real News. On Tuesday of this week the Canadian Province of British Colombia held an election and the result was a nail biter. BC’s legislature consists of 87 seats and in order to command a majority, a party must hold a minimum of 44 seats. The provisional results are that the right wing incumbent liberal party, led by BC premier Christy Clark, won 43 seats. The Social Democratic NDP won 41 seats, and the BC Green party, led by climate scientist Andrew Weaver won three seats.
This means that no party commands a majority and that with about 4% of the seats, the BC Greens have an extraordinary opportunity to determine whether the liberals will continue to govern British Colombia or whether they will be supplanted by the NDP.
However, as I mentioned, these results are not final. In particular in riding of Courtney Comox, the NDP candidate leads the liberal candidate by a mere nine votes and absentee ballots have yet to be counted. There’s a Canadian military base in that riding, which means that the number of absentee ballots could easily be sufficient to change the preliminary outcome in that riding.
The liberals won the riding of Courtney Comox in the prior election. So, all that stands in the way of another liberal majority is a mere 9 votes. When the final count is done the people of BC could be faced with another liberal majority, even though over 55% of voters selected a more progressive alternative than the liberals. But even if the current results stand, there’s a good chance, depending upon how the BC Green party deals with the hand that it’s been dealt, that the liberals will remain in government and be the dominant force within the BC government.
Now here to discuss all of this with us, and particularly the role that energy issues played in this election campaign, is Michael Hudson. Michael Hudson is a distinguished research professor of economics at the University of Missouri Kansas City, is the author of many books including “The Bubble and Beyond” and “Finance Capitalism and Discontents”, Killing the Host: How Financial Parasites and Debt Destroy the Global Economy, and most recently, J is for Junk Economics: A Survivors Guide to Economic Vocabulary in an Age of Deception.
Thanks for joining us today, Michael.
Michael Hudson: It’s good to be here. You mentioned the absentee ballots and of course that’s going to sway the election. In the past election the NDP got most of the absentee ballots – not only the 176,000 absentee’s, but you mentioned the military base and that’s 6,600 ballots that also went for the NDP in the last election. The NDP looks like at least it will have the 42 seats.
The problem is the role of the provinces generally in Canada. The voting was very largely about energy, not only the Kinder Morgan pipeline, but the dam, the Site C dam that has already begun for 12 billion dollars in Vancouver. None of this is going to generate money for the province itself. The province of Vancouver, like other Canadian provinces, are pretty much looted by the federal government – that is, as you said, the liberal part. It is very right wing. Justin Trudeau’s father was Tony Blair before there was a Tony Blair, and the present Justin Trudeau is sort of a cross between Tony Blair and Hillary Clinton, but a little bit more to the right. He’s appointed a ultra right wing Ukrainian nationalist whose grandfather was a Gauleiter killing Ukrainian Jews.
Dimitri Lascari: That’s Chrystia Freeland, you’re referring to the Foreign Minister I take it?
Michael Hudson: Yes, Foreign Minister Chrystia Freeland, extremely right wing. In the past people have called Canada’s Prime Minister a puppet of the Americans, but certainly Trudeau is not Trump’s puppet. If anything, he’s Hillary’s puppet. The way that Vancouver’s been in the news for the past month hasn’t been about the election so much as Trump’s levy of a soft wood tariff on Canada, saying that Canada has an unfair advantage against American soft wood producers. And its advantage is the degree of corruption that you have in the giveaway of natural resources in Canada. I’m told that they’ve given it to the forestry for cutting down Vancouver’s forests.
Dimitri Lascari: You mentioned Vancouver, I think you were referring to British Colombia.
Michael Hudson: That’s right. British Colombia’s forests are only a half cent per, I think it’s per acre or something like that. It’s so trivial that Trump is absolutely correct in saying that the degree of corruption in Canada, in the federal party, in the give away of wood gives Canada an advantage over American soft woods.
The retaliation threatened by the Prime Minister Trudeau is to block American exports of thermal coal through Vancouver’s shipping. It all comes down to shipping. The energy question is also very largely an issue of shipping. The Kinder Morgan pipeline, which was the major issue in this election, is going to involve an enormous amount of tanker ships going between Vancouver island and the mainland of Vancouver. There’s something like 36 ships per month. You can imagine what that is on a yearly basis, and the chance of oil spills not only in the pipeline but by the shipping is very high.
Dimitri Lascari: And as I understand it, shipping volume is expected to increase to something in the range of 400 tankers per year, so almost a seven fold increase, if the Kinder Morgan expansion actually goes through.
Michael Hudson: That’s right. And most of the dam that’s being built for 13 million, I was told up there by the former Premiere of British Colombia, they said it would create jobs. He looked at the calculations. It’ll create seven janitor jobs in British Colombia. So that’s the helping of British Colombian labor that there’s supposed to be.
The NDP was pretty pessimistic before the election because the politics in Canada are pretty backward. You know that they’re backward when they’re voting essentially against their self-interest to give away the natural resources to other provinces and to, essentially, the pipeline companies, the finance companies and the high energy companies.
So the question is, a party with three votes, the Green Party, is supposed to be holding the balance of power. You would think that the Green Party’s platform that they go to the people would be the same platform, in terms of the environment, as the NDP. Except the liberals are saying, “Wait a minute. If you vote for us, the anti-environment party, we will classify you, the Greens, as a national party, so you’ll get a huge amount of funding. We can really give you a lot of money if you vote for us. Who are you going to vote for: money or your ideals?”
Well, being Canadians, they’re probably going to vote for the money. The whole history of Canada is essentially making money by emptying out the earth and creating holes in the ground and getting rich on it, and then going on to the next hole in the ground or forest to be carved down.
If there’s any province in Canada that has a natural resource curse, it’s British Colombia. The fact that the dam’s power is going to be to fund anti-environmental causes of the pipeline and also sent to Alberta for the tar sands, to help them at a concessionary fee. That is not going to be able to yield much to Vancouver at all, given the way that Canadian politics is structured. That means that Vancouver people will almost as screwed in natural resources as they’ve been screwed in the real estate boom they’ve had.
In the last 10 years, real estate prices have tripled in Vancouver. There’s not a single house in Vancouver – they drove me around a month ago to see for myself – that sells for less than a million dollars. So you can imagine, if you’re in Vancouver and you have to work at a real job, you have to borrow enough money from the bank to carry the mortgage on a million-dollar house. The Vancouverites are being forced out of their own city to the suburbs. So the city is now saying, well let’s build public transportation. But the transportation is to be funded by a tax on consumers and an income tax on workers instead of on the real estate developers that are going to end up the beneficiaries.
So Vancouver is being screwed in natural resources, screwed in the real estate, is not able to get a tax revenue from either the real estate, or from the dam and the electric power, or from the pipeline. All of the risks are being put onto the population there, and that’s why there was such a turnout in the election, and why there are so many absentee ballots in this by people who are concerned.
If so many people are concerned, it must be because of the environment. Probably the expectation is for them to come out with firm control of the 42 seats they have. The problem is that in Canada, in the provinces, one of the parliamentarians is a speaker, who doesn’t have a vote except to break a tie. So they may very well be willing to appoint a Green party as speaker of the parliament there, which will take one of its votes away and leave f a divided parliament. We won’t know really until I think May 28th.
Dimitri Lascari: I’d just like to go back a little bit to environmental policy. Certainly the NDP and the Greens, their platform position on Kinder Morgan pipeline expansion is essentially the same. They oppose it. Although there’s a really interesting question of what they, as a provisional government, can do to stop it, given Justin Trudeau’s approval of the project. But putting that aside, there do seem to be significant differences in terms of their receptivity to the fracking industry and also the NDP undertook, as I understand it, to subject the Site C Dam to a much more intensive level of scrutiny, but hasn’t committed to stopping the project from going forward, whereas the Green seem to be committed to that.
One thing is for sure, the two platforms of the NDP and the Greens seem to be much more closely aligned than the Green platform is to the Liberal platform. One would think that from the grassroots of the party at least, and I’ve seen indications of this myself, significant pressure on Andrew Weaver, the leader of the Green party, to do a deal with the NDP. If he doesn’t do that deal, what do you think the implications are going to be if he ends up going down the road of cooperating with the Liberal government in some form? What do you think the implications will be for the Green party in British Colombia and nationally in Canada?
Michael Hudson: This situation has occurred in British Colombia in the past. Usually if a third party joins a majority government and doublecrosses everything that the third party has done to make its political deal – in this case for the money – that third party is absolutely crushed in future elections. People think, okay, we understand that you only have a public relations talk about better ideals, but you’re really in it for the money. If the Greens back the liberals in this, that finishes them off. They will lose all credibility in British Colombia.
Dimitri Lascari: There’s also a precedent for this in the United Kingdom. Obviously a different culture, different system to some degree, but nonetheless the liberal democrats there were eviscerated after either a close relationship in parliament with the conservatives so there is some precedent for this outside of the country, in another parliament.
Michael Hudson: That’s the position the Greens are in today.
Dimitri Lascari: Right. So I just want to close by focusing a little bit on the hydroelectric industry and this whole issue of IPP’s, Independent Power Producers, and how that’s affected BC hydro, which is in very difficult financial position. What can you tell us about that and what the parties positions are with respect to these Independent Power Producers, which are really private power producers that have got major contracts with BC hydro that have had a devastating impact on its finances?
Michael Hudson: Behind the power producers are the banks. You’re right, energy really means finance. There’s a symbiosis between the banks, the bond holders and the energy industry. The bondholders and the banks want whatever is very expensive, and nothing is more expensive than a $12 billion dollar dam or a big hydro project. The ideal of the banks and the hydro project is not to give anything at all to the government. In this case the government to be cut out is British Colombia. Almost any hydro project or energy project in Canada is going to screw the domestic province that it’s in.
This fight has been going on, and I think 40 years ago when I was a financial adviser to the Canadian government, there was talk of the western provinces withdrawing from Canada because the whole of Canada is really being run by Ontario, and Ontario is being run by the banks. All this was taking place in World War II. When you had the World War II industrialization and the Canadian politics centered on C.D. Howe in Ontario running the federal government. That deprives the provinces of really much say at all in their environmental laws, their tax laws or what they’re doing.
Canada is a malstructured. You could almost call it a failed economy, except that its natural resources are so rich that everybody can get wealthy off making holes in the ground and digging up the oil and polluting the environment.
The worst thing about the tar sands by the way, is that its energy is all about water. Not only the water for the dam, but it takes 10 gallons of water to make every gallon of oil from the tar sands. The water is being given to the tar sands for nothing, just like the water in the dam is counted as nothing. All this is just like the forests are being given away and the natural resources of Canada are given away for nothing, they’re all counted at a zero cost in all of the equations that are done. The reason they do that is to leave all the money to pay interest to the banks for advancing the money to build other dams and build this very expensive energy, which is not needed at all by British Colombia. It’s all for the pipeline and for the tar sands and other provinces.
Dimitri Lascari: Right. Well, I guess in a couple of weeks time we’re going to find out just how happy the Canadian banks are going to be when the final results come in for this election. I hope, Michael, we’ll have an opportunity at that point to revisit the lay of the land and talk about the future of British Colombia.
Michael Hudson: We’ll see what compromises are made.
This is a transcript of an interview on The Real News Network.