B.C. Liberal leader Andrew Wilkinson starts his day with tea at his legislature office, Dec. 11, 2019. (Tom Fletcher/Black Press)

OUTLOOK 2020: Andrew Wilkinson on forest industry, taxes and CleanBC

B.C. Liberal leader has party renewal plans for 2020

Black Press legislature reporter Tom Fletcher sat down with B.C. Liberal leader Andrew Wilkinson for a year-end interview to discuss the B.C. government’s 2019 record and his expectations for the coming year. An edited transcript follows:

TF: You’ve been focused on the troubles of the forest industry, and I’ll start with the B.C. Interior. What practically can a provincial government do in this situation?

AW: Talking to forest workers in Quesnel and Williams Lake and Prince George, they are pretty frustrated that this government is paying no attention whatsoever to their concerns, with thousands of people facing Christmas with no income.

The obvious question that comes from forest workers throughout B.C. is, why do we have the highest log costs in North America? The stumpage rates are set in a one-year delay, whereas in Alberta they’re set every month. So the story comes back that the forest workers are busy in Alberta, and they’re facing an idle and impoverished Christmas here in B.C.

We’re seeing massive slowdowns, at least 90 curtailments and permanent shutdowns across the province this year, a six-month-long strike at Western Forest Products on Vancouver Island, and the provincial government has done nothing.

People are wondering what’s going to happen to their livelihood, because their houses are declining in value and they’ve got bank loans.

TF: We’ve had constant warnings from the NDP government about provoking the Americans by lowering stumpage. Is that still valid? [U.S. currently has a roughly 20 per cent border tariff on Canadian lumber.]

AW: It’s a concern when our government said they don’t want to provoke the Americans by adjusting stumpage, but they’ve already adjusted it in Alberta with no adverse effects. So what’s going on with our forests minister? He’s reluctant to meet with forest communities because he knows he’ll get told off. Unemployed people don’t want to hear excuses, they want answers.

[Since this interview, Forests Minister Doug Donaldson has announced a substantial reduction and formula change to stumpage on coastal Crown timber, effective Jan 1.]

TF: The employer health tax is in effect, with payments due on March 31, 2020, and Medical Services Plan payments are ending Jan. 1. Premier John Horgan says calls this one of the biggest tax cuts in B.C. history.

AW: He seems to have forgotten about the 25 per cent income tax cut that Gordon Campbell brought in in 2001.

TF: And revenues did recover?

AW: Yes, because the economy recovered after a decade of the NDP’s catastrophic economic policy.

TF: At this stage, nobody’s defending the collection of MSP, are they?

AW: There’s no prospect of MSP premiums coming back. The problem we’ve got now is that the NDP has now piled on 19 new or increased taxes, most of which hit small business. And small business is by far the biggest economic driver in B.C., with 98 per cent of employment.

Combined with property taxes [raised to cover employer health tax on municipal payrolls], they’re driving people out of retail, they’re driving employment outside B.C. Because of the heavy taxation here, a lot of manufacturers are saying they’re going to move out of B.C.

TF: They did reduce the small business income tax [as of April 2017, from 2.5 to 2 per cent], but the large corporate tax went up [from 11 to 12 per cent as of Jan. 1, 2018]. Meanwhile the U.S. cut corporate taxes substantially. We hear the premier talking about big forest companies reducing operations here and buying mills in the southern U.S. Part of that is timber supply and market, but there has to be an effect, as businesses ask how much tax they have to pay to function and employ people.

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AW: It’s pretty obvious that John Horgan doesn’t get it. We have the highest log costs in North America, new taxes and a 40% drop in corporate income taxes in the U.S., so businesses look at leaving B.C., particularly in the forest industry.

TF: So is that going in your 2021 platform, reduce corporate taxes?

AW: We’re going to be pushing the NDP hard to figure out what they’re going to do, if anything, in the forest industry, and to try to make B.C. genuinely more affordable. They ran on the promise of affordability. There’s no improvement in the cost of housing, they’ve driven up costs for just about everybody with ICBC premiums, and they’ve made it very tough for people under 35, who are probably the first generation of British Columbians who are going to see a decline in their standard of living.

TF: In urban areas, we’re starting to see a decline in housing prices. Was the empty homes tax not the right thing to do?

AW: B.C. has a major problem in that about 60,000 people arrive here every year. That’s been true since the 1960s. The population grows predictably, but the supply of housing is not growing. Whether you’re in Fernie or Revelstoke or Kelowna or Metro Vancouver or parts of Victoria, there’s a major shortage of housing, particularly rental housing. The NDP’s approach is to destroy the value of housing to try and drive down the cost. That doesn’t do anything about supply. We need to build more housing in B.C. Households are smaller, more people are arriving, and there’s nowhere for them to live.

TF: When the B.C. Liberals were in government, you talked about the difficulty of getting municipal zoning and paying development charges and all of that. Is anything being done, and what would you propose there?

AW: We’ve seen no movement at all from John Horgan and the NDP on making it easier to get things done in municipalities. The existing rules, which are written by the provincial government, are way too onerous, so you get this extended permit process and things take years before you can get anything done on the ground. We need to streamline that.

TF: One of the taxes that’s going up is carbon tax, and there is no more corresponding reduction in personal or business income tax. And now we have what’s being advertised on TV as CleanBC. Parts of that are OK, aren’t they?

AW: The carbon tax when it came in [2008] was supposed to be revenue neutral. Now we find it’s just become a tax grab. The NDP say, don’t worry, we use the money we grab from you at the gas pump and your heating bill, and we’ll use it for CleanBC. But it turns out only a small proportion of the money is going to this CleanBC thing [electric vehicle, grants for home efficiency upgrades etc.]. We have no idea what difference it’s going to make to daily life, and so we have to wonder if they’re really serious about this or if it’s just greenwashing the NDP agenda.

TF: They talk about energy efficient buildings, and that includes phasing out natural gas for home heating. It’s OK to sell it to Korea and China but not to use it here. Is that realistic?

AW: B.C. has a major asset in high-quality gas fields in the Peace River country. We have a very efficient existing pipeline system that works flawlessly, and we have millions of clean-burning furnaces and barbecues all over B.C. that people rely upon and enjoy. If someone’s going to tell them that individual homeowners have to spend thousands of dollars to convert their heating systems, there had better be a good answer about who’s going to pay for that.

TF: The plan is to subsidize the purchase of electric heat pumps to replace natural gas furnaces.

AW: This reminds me of a federal program in 2004, when my family spent $9,000 on a high-efficiency furnace and got $1,500 back. You’ve got to have a lot of money sitting in your pocket to invest in these fancy programs, and we have other opportunities to improve our carbon emissions in this province, including in transportation.

B.C. is in a funny place because we have super-clean electricity generation, unlike most of the world. And that means opportunities to reduce greenhouse gases have to focus on building transportation, but you’ve got to be careful about kicking the homeowner in the shins and telling them they’ve got to convert their furnace. A lot of them have already done it, and it cost them a pile of money to do so.

TF: The CleanBC plan also talks about running more transmission lines, particularly in the northeast. Fort Nelson is not on the B.C. Hydro grid at all, and that goes for that whole corner of the province. I’m looking for something in this you might support.

AW: There will be more electrification of B.C., but it’s got to be done in a way that works for consumers. We’re going to see more electric cars, but that means you’ve got to put in more power grid and more 240-volt charging stations, including in people’s homes. That all costs a lot of money, and so we’re looking for a credible plan from the NDP to talk about how they’re going to do this without breaking the bank of the taxpayer, or the individual vehicle owner or homeowner. And they seem to have forgotten that those three are the same person.

TF: What’s your priority for 2020?

AW: We’re looking at a very exciting round of nomination races in B.C. We have a huge interest in people running for this party, especially in ridings that are currently held by the NDP that used to be held by the B.C. Liberals. We’ve opened up that nomination process for 11 ridings already, and we expect to have some exciting contests in the first half of 2020. We’ll have another batch in the latter half of 2020.

TF: Public construction, large projects with a monopoly of selected unions. The government insists that the Pattullo Bridge project is on budget, and things are looking wonderful on the Highway 1 widening projects east of Kamloops. Is this going to be limited to roads and bridges?

AW: The NDP’s union-friendly approach to exclude 85 per cent of construction workers from major projects seems to be proceeding, and a great example is Highway 1 east of Revelstoke, where the extra money allocated for two km of highway to cover their union friends exceeds the entire budget of the Ministry of Mental Health and Addictions – $22 million in cost overruns in Rogers Pass as against $20 million for mental health and addictions, when 5,000 British Columbians have died of drug overdoses in the last three years. This is a huge problem, and the NDP don’t seem to have their priorities right.

TF: Do you think the union public construction will go to projects other than roads and bridges?

AW: We’re seeing how much the NDP are under the thumb of big labour on the Western Forest Products labour dispute, where the United Steelworkers are telling them what to do. If that continues into the construction sector, we’re going to see all kinds of public projects coming under the thumb of their 19 favoured union locals. We’re going to run out of money to pay these fancy prices on projects that could be done more cost-efficiently.

And secondly, it’s hard to point to anything the NDP government has actually built in the last two years. They’re good at talk, and very poor at actual construction.


@tomfletcherbc
tfletcher@blackpress.ca

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