Black Press legislature reporter Tom Fletcher sat down with Premier John Horgan to discuss the B.C. government’s 2019 record and his expectations for the coming year. An edited transcript follows:
TF: Let’s start with the forest industry. On Vancouver Island, no one expected the Western Forest Products strike to go six months. It’s a private sector labour dispute and it’s not the government’s job to fix those, correct?
JH: That’s my view. But it’s also the government’s responsibility to make sure that the unintended consequences, those innocent victims of the labour dispute, whether they be contractors or small businesses in communities like Port Alberni, Port Hardy, Campbell River, are not adversely affected.
— Tom Fletcher (@tomfletcherbc) December 20, 2019
The biggest challenge of course was trying to make sure that when we put in place programs, that they’re comprehensive enough to capture the people who are affected, but not so large that they really mean nothing at the end of the day.
TF: Contractors are not getting strike pay, they’re mostly not in unions. They’re the ones who are getting their trucks repossessed, right?
JH: That’s right, and it’s the contractors I’m thinking about primarily. They can’t work, but they can’t collect EI, they can’t find other ways to move forward. In the Interior where we’ve had significant curtailments, contractors are at least able to do brush clearing and the other work that needs to be done, because the industry is still operating. But it’s literally shut down here on the coast. Mosaic, the other major company on the coast, is also curtailed over the Christmas break, and I met with the CEO to hear from him on what ideas he has, what policy initiatives the government could put in place to help his employees.
TF: There’s something coming to assist contractors. Can you tell me about that?
JH: Well, I can’t. We’ve been working on that for the past month or so. There were contractors here at the legislature, they met with Minister Donaldson and parliamentary secretary Ravi Kahlon to express their concerns. My sense of the meeting, obviously they want the dispute resolved and people back to work, but they also understand that the government is trying to put in place a program that will help them bridge the gap so they’re not seeing their trucks get repossessed.
TF: In the Interior, I understand the loss of timber from beetles and fires, but you have large companies shutting down operations in B.C. and investing in the U.S. and in some cases in Alberta.
JH: And Sweden.
TF: When you were opposition leader, you talked about a “capital strike” against NDP governments. Is there political pressure being applied to you by these companies?
JH: I don’t think so. In the case of Canfor for example, it’s a publicly traded company and Jimmy Pattison said, look, forestry’s not a quarterly business. You’ve got analysts with publicly traded companies saying every quarter you’ve got to shave something off your bottom line. In forestry you’re looking at a long-term future. So to have someone of Jimmy Pattison’s calibre purchase the shares and take it private, I think is a signal to the industry that there is a long-term future.
[Canfor shareholders rejected Pattison’s offer on Dec. 16. His company already owns 51 per cent of Canfor shares and it’s not yet clear if he will make a new offer in 2020.]
JH: I think that’s the opposite of a capital strike. Canfor’s got a long-term future, its head office is here, it’s now an international company, and I think that’s good news for everybody. I don’t believe this is about capital, it’s about trying to figure out what we do after the end of the beetle kill and two of the worst fire seasons in B.C. history. And the softwood lumber dispute continues to linger.
TF: Yes. We hear a lot that our stumpage formula can’t change because the U.S. industry will use that against Canada. But I’m told that Alberta manages to make monthly adjustments on their stumpage and there are no consequences that I’m aware of.
JH: Volumes are far greater here. There are adjustments to stumpage on the Coast and in the Interior. It happened in October, it’s going to happen again in January. I believe industry knows full well that we have to be very sensitive to how the U.S. interprets any action we take on our publicly owned land and the tenure operators who work on it.
The issues are not stumpage, the issues are supply and markets, and we’re working as hard as we can to fix all of those things at the same time.
TF: Another issue is taxes. A 40 per cent decrease in corporate taxes in the U.S., corporate tax up here, albeit slightly, carbon tax up and no longer offset, employer health tax with the bills due in March. That can’t be good for investment, can it?
JH: Major forest companies would have been paying Medical Services Plan premiums for their employees anyway, so the employer health tax will be a benefit to them, as they’ll be paying less. I don’t believe the employers’ health tax is the problem that the B.C. Liberals make it out to be. What’s more important is that small business operators who had to pay MSP premiums whether they were profitable or not, no longer have to pay those. Those companies that are not above the [$500,000 payroll] threshold will benefit from the absence of MSP, and most of the noise we’ve heard about this is B.C. Liberal posturing.
TF: The Business Council of B.C. might beg to differ with that.
JH: I speak regularly with the Business Council, and they’ve not expressed those concerns directly to me on the employer health tax. On the carbon tax, they are also signatories to a memorandum of understanding with the government to work cooperatively to ensure that we meet our objectives of reducing emissions in a way that makes sense. Energy-intensive, trade-exposed industries have exemptions that they can apply for, for the incremental increases above $30 per tonne. That will lead to more investment, not less.
TF: On public construction projects, the industry talks about bidders reduced on the Highway 1 projects. One contractor wrote a letter detailing why he was not going to bid. The sub-trades he works with on things like rock scaling won’t bid because they don’t want to have their crews dispersed by a union hiring hall.
JH: I know that there are elements in the construction sector that believe they can do whatever they want in a time of low unemployment and scarcity of skilled workers. I respect that. We believe that the best way to ensure that we have apprenticeship programs in place [is] through community benefit agreements.
And the issue here is completion of those apprenticeships. And the B.C. Building Trades have an outstanding record with respect to completion, and that means we’re going to be training the next generation of workers so that we can meet the challenges of building infrastructure in every corner of the province.
— Tom Fletcher (@tomfletcherbc) December 20, 2019
I will remind you, only three projects [Highway 1, Pattullo bridge, Broadway subway] out of the dozens of public sector projects are community benefit agreements. And at the same time we have private sector projects like LNG Canada, and potentially the Trans Mountain pipeline, that are going to be taking a whole bunch of workers out of play when it comes to public contracts, and that’s a challenge for government.
There are always examples of contractors saying I’m not going to bid on that because it doesn’t make sense to me. If the Independent Contractors and Businesses Association want to make it a partisan question every time someone chooses not to bid, that’s their business. I think there’s plenty of work to go around, and not enough people to do the work. That means prices will go up and that’s a challenge for taxpayers, because we need to build this infrastructure, and we need to do it in a way that adds something other than the final product. That’s why we focused on the community benefits agreements, because that will get us the workers we need 10 and 20 years from now.
TF: I imagine you’ve seen the figures from the B.C. government’s Industry Training Authority that show the vast majority of apprentices working for non-union companies. In some trades it’s more than 90 per cent.
JH: Are they completing apprenticeships? The completion rate’s not 90 per cent. That’s the issue.
TF: Kicking Horse phase four, costs are up $35 million for the union deal, including $8 million for B.C. Infrastructure Benefits Corporation itself, which didn’t exist until a few months ago. Opposition leader Andrew Wilkinson notes that the budget for your Ministry of Mental Health and Addictions is $20 million. What is achieved by this extra expense?
JH: That is the most difficult construction project we have on the horizon, and costs are going to be going up as a result. We have numerous initiatives around the province. It’s going to take more people to get it done. A time of scarcity means prices go up. I thought Mr. Wilkinson would be able to understand that.
TF: Your government has opted to replace the Massey tunnel with an eight-lane tunnel. Isn’t that solution to B.C.’s worst traffic bottleneck going to take 10 years?
JH: No, I think it’s going to be much faster than that. We’ve got resolution, first and foremost, on the mechanism to move people, unanimously supported by the Metro Vancouver Mayors’ Council, unlike the previous [bridge] project that was only supported by two mayors. It was going to be a tolled crossing, which meant the federal government would not participate. We just had a federal election where all of the major parties said that they were in, to put their share of money into that project, so that will move it up our capital plan significantly. I’m looking forward to announcements about the Massey crossing in the months ahead.
TF: If you’re restricted by the federal fisheries window for dredging out massive amounts of the river bed, it’s salt-contaminated soil that has to go somewhere. That’s got to increase the length of time and potentially the cost, doesn’t it?
JH: I’ll leave that up to the people planning the project, rather than me doing the engineering work. What I know is that the previous project was not without its environmental challenges, was not without its fisheries windows. And it wasn’t supported by Richmond, Vancouver or the majority of mayors in the Lower Mainland.
Our first priority is the Pattullo because it’s falling into the river. It was TransLink infrastructure, and TransLink was neglecting it. We took it over, we’re going to complete it, and that will improve traffic back and forth across the Fraser. It will take some pressure off other crossings and it will be safer for the public.
Massey’s a challenge, no question, but I think we’re in a better place today than we were a year and a half ago.
TF: And Pattullo will be on budget?
JH: Pattullo will begin shortly, and it will be as close to budget as we can.
TF: Looking ahead to 2020, what are your main priorities?
JH: We want to continue to get affordable public auto insurance here in B.C. The former government wasn’t as up-front about the state of ICBC as they could have been, and we’ve been trying to fill those gaps ever since. Our solution about the rules of court that would have reduced the legal costs to the corporation were rejected by the B.C. Supreme Court, and now we’re back to the drawing board.
Attorney General David Eby is going to be bringing forward legislation in the spring session, and we’ll be looking at other options to try to bring costs down for the travelling public.
We want to continue to build on the child care program that has created opportunities for families right across the province, putting money back in their pockets, and continue to improve the quality of health care.
Health Minister Adrian Dix has done a whole bunch of work to try to improve seniors’ care. We’ve had the ministry takeover of some of the care homes on Vancouver Island that were not meeting the test. We’ve seen increased diagnostics in hospitals, running 24/7 MRI services that reduces wait times, and also accelerating hip and knee replacements, which opens up surgical units for other pressing needs. We’ve got hospitals in Terrace, Richmond, Burnaby, Surrey.
We want to continue to have a balanced budget, to see low unemployment in B.C. We’ve seen the lowest unemployment in the country for the past two years.
I think there are a lot of positives on the horizon, but for me the biggest challenge is addressing forestry issues, in the Interior and also on the Coast. We’re not without our problems here, but they’ve been masked because of this disruption between the union and Western Forest Products.
We need to something about what was an unsustainable amount of exporting raw logs. We need to find new opportunities for the industry. Cross-laminated timber is a good example of that. Mass timber construction is something we’re going to be promoting in our municipalities. People are lining up to participate in tall wood buildings.
I heard clearly from the industry when I was first sworn in, help us create markets by creating a domestic market, and then we can start exporting this stuff. And I hope we continue to have a bright future in forestry, so that rural B.C. can have confidence they are contributing to the vibrancy of our economy and the state of happiness in British Columbia.