BC VIEWS: Horgan faces big test in 2017
Tom Fletcher’s year-end interview with NDP leader John Horgan.
TF: You're at odds with Alberta's NDP government on the approval of the Trans-Mountain oil pipeline expansion. Does that affect your co-operation with them?
JH: No, I don't think so. In fact, quite the contrary. Rachel Notley was here [in early December]. We had a dinner meeting, we talked about the Trans Mountain pipeline. We agreed to disagree. She put forward her position of the government of Alberta, and I put forward my view that this was not in the interests of the B.C. economy or the B.C. environment, and then we moved on to talk about other things.
And I'm quite confident that in the future, should we be in a position to be working government to government, it will be a cordial and cooperative relationship on a whole host of issues.
TF: I asked Rachel Notley this, obviously there is a big benefit from a construction project like that, and now there's talk of additional benefits being worked out between Kinder Morgan and the province. Obviously provincial resource revenues are off the table.
JH: It was odd, I thought, for one premier to say to another, this was two premiers ago, Alison Redford … it was rather like Alberta asking us for a levy if we move two-by-fours across the border.
If Kinder Morgan finds money in the kitty to give B.C. a dividend, we'll deal with that when we see it, but at this point in time there is no constitutional reason for revenues to be shared, and only risk on the B.C. side that I can see.
TF: How does this pending pipeline construction and protests play in the 2017 election?
JH: I think we're still a long way from a final result on this question. There are still First Nations issues in the Burrard Inlet area. I don't know how we can overlook the Tsleil-Waututh, the Musqueam and the Squamish opposition.
I do know in my own community, the Beecher Bay First Nation or Scia'new has signed an agreement, because their view is that there is an inevitability to this, and if it goes forward, they want to make sure as a coastal First Nation on the Strait of Juan de Fuca that they want to be in a position that they're able to respond if there's an accident. And they didn't do that because they support the project. It was quite clear when I spoke to the chief, they did that as a protective measure.
I think we're going to see a lot of court action, we're going to see a lot of protests, and it will be an issue in the coming campaign without any doubt. But I've said, and it's been characterized in different ways, I don't want this issue to consume the entire debate when we come to the polls next year. There are many other issues that are really important today, and I don't think they should be pushed to one side to have a debate about a pipeline that is a long way away from completion.
TF: But we are going to be bombarded with ads that you're the "party of no," and this is the perfect example, this and the Site C dam. How do you counteract that?
JH: With respect to Site C, we're going to do what the head of the environment assessment process, Dr. Harry Swain suggested, and we're going to put it to the B.C. Utilities Commission. The only people who have said we should proceed with this project are BC Liberals or BC Liberal appointees. And every project of this magnitude, going back to the creation of the Utilities Commission by the Social Credit government in its day, was there to protect the public interest. And I think we need to make sure this project is in the public interest. There is overwhelming evidence to the contrary, and I want to make sure before we get down too far in a John Horgan mandate, that we have a clear understanding of what the consequences of these BC Liberal decisions will be.
TF: I just came from a briefing with BC Hydro executives. Obviously it's quite well advanced, a year an a half in, roads, bridges. Is it possible to stop this project now?
JH: The day after the election, should I be elected to lead a government, will be to sit down with BC Hydro and have them explain to me how we got here. I remember the premier saying that her objective was to get past the point of no return. I don't see that as a criterion for the public good, to say I want to make sure that no one can overturn what I'm doing.
TF: Announced at former premier Bill Bennett's memorial service.
JH: Put aside the classlessness of that, I think you make public policy decisions that are always in the public interest. And if you have to declare that you're doing it to get it past the point of no return, you're signing contracts years before their time for that purpose. I think you're not in it for the public, you're in it for yourself.
TF: So suspend it, review it, and then figure out if it will proceed? Is that practical?
JH: The first order of business will be to get a direct briefing from BC Hydro, and then what I see what they've done, where they are, get access to the contracts, get a briefing on the legalities of it, then we'll go from there.
TF: On liquefied natural gas, minister Rich Coleman has hinted that there might be an announcement on the Petronas project, say April?
JH: I bet there will be.
TF: What do you expect there?
JH: I absolutely believe that Rich Coleman will ask his colleagues at Petronas to give him something he can say during an election campaign. Will that be in the interest of actually moving along on one of these projects, I rather doubt it.
Just before the BC Liberal convention a few weeks back, they made an announcement around Woodfibre [LNG near Squamish]. I support that. I believe it's well-placed in terms of a brownfield site, they've been working with First Nations, with the community.
But what surprised me about the announcement was the First Nations had not completed their process, and I know that Woodfibre was working hand in hand with them. And none of the Squamish councillors who were supportive of it knew. They heard about it on the news, which tells me that Christy Clark and Rich Coleman were looking for an announcement rather than a positive statement about an initiative that's supported by the First Nation and the community, broadly.
TF: But you're against the Petronas proposal.
JH: I'm against the location, absolutely. There were half a dozen companies that were reviewing Prince Rupert as a potential location, and every one of them came to a location that would probably have been acceptable to most of the people in the region, except Petronas, which took the only available site, which was Lelu Island, right beside Ridley Island, which is controlled by Shell now.
Shell has announced their Kitimat project is going to be delayed, and they're not proceeding with tenders. What would a responsible government have done?
Maybe this is something [LNG business advisor] Gordon Wilson could have done for his pay, gone up and tried to negotiate an agreement whereby the Lelu site could have been moved to the Ridley site.
TF: What's the potential for a change to make the Petronas project more acceptable?
JH: I've talked to officials from Prince Rupert. Now this is in Port Edward so there's a divide there. Port Edward wants it to stay at Lelu and Prince Rupert wants it to move to Ridley.
But I do know that there is significant opposition to the Lelu site. And you'll remember the noise that came from First Nations when Mr. Trudeau announced [federal approval]. There is another one that is a long way from conclusion.
And why the Woodfibre site is an illustration of how you can make progress. They talked to the community, they talked to the First Nations and they went above and beyond environmental assessment. They created an assessment that was driven by the First Nation, and they are as close to success as any of the initiatives.
TF: Medical Services Plan premiums. I have called for their elimination, and I'm not the only one. Are you expecting a move in the pre-election budget?
JH: They're going to make some changes Jan. 1, 2017, to split the families, so you're going to claim as individuals. It's tinkering. [Charge for children are eliminated, and the low-income threshold for reduced rates goes from $30,000 annual income to $42,000 for single adults. The overall rate goes up again.]
TF: Green Party leader Andrew Weaver has said, put it into the income tax system and make it equal that way. That was my argument too.
JH: It is more complicated than that. For example, many people working under contracts bargained for relief from MSP, and it's paid for by the employer.
It would be a savings for school districts, for example. I've talked to school trustees, and I've said I want to move away from the current MSP system. They're delighted, because it's a saving for them because they're paying it now.
I'm committed to making significant changes and we're going to phase it out over time. But it is a $2 billion-plus [revenue] figure in the budget, and I want to see what exactly the Liberals are up to in the February budget. We'll put in place our program after that.
TF: Your $10-a-day daycare program is a rate that's maybe a quarter or a fifth of market rates. In general, where does that money come from?
JH: It comes from growing the economy. And what the B.C. Business Council and the boards of trade have said in support of moving to accessible, affordable child care is that it makes their workforce more productive, it creates more economic opportunity. You're building the spaces, you're training the providers of the service, and the economy grows as a result of that.
And so over time it pays for itself, academic literature shows that without any doubt. You look at examples like Quebec, where they have a lower fee [$7 a day] and there has been a benefit over time. But it doesn't happen instantaneously, and it won't be phased in instantaneously.
TF: It's mainly higher-income people in Quebec who have benefited.
JH: The benefit is to the children, and to the economy. It's not social program in my opinion. It's an economic driver. What brought this home for me was visiting an individual who's on the board of a child care provider. He's a lawyer, a young guy. His spouse became pregnant, they approached the child care provider in their neighbourhood and said we need a space, and we'd like it on this day.
And they were told, that's so cute. You're on a list, it'll take 18 months at best.
That engaged this young fellow, he did more work on it, and determined that it would cost him more to take care of his first child than it would to educate him through a higher degree and graduate work as well. That's the cost of child care, when you're at your lowest earning period as a parent.
When you're at your highest earning period, when you're pushing kids through university, they have access to employment, they have access to revenue. So it's an impact on families, and it has an impact on the economy. Families often times make the choice, rather than seek out child care, to have only one parent earning an income.
TF: We've already got a shrinking workforce, so you're looking at this as more of a workforce measure?
JH: Absolutely. Now there is a social benefit to it, no doubt. It creates better rounded kids, they socialize earlier, they're better prepared to get into K-to-12 schooling, and the outcomes, one assumes, are going to be better as a result.
What motivated me on this was the economic question, not that it's babysitting, because it's not.
TF: On the 15 per cent foreign home buyers' tax in Metro Vancouver, my understanding is the super-heated market has slowed down, and we might even be seeing some price correction.
JH: I haven't seen a price correction. I've seen a decline in activity, and I've talked to realtors here in Victoria who are seeing an increase in activity because of the slowing of the market in Vancouver.
TF: Is it working, what the B.C. Liberals are doing?
JH: What I would have preferred and we proposed long before they came up with this tax in the summer, was to focus on income. If you're not paying income tax, the chances are pretty good that your revenues for a multi-million-dollar home came from another jurisdiction. So rather than penalizing people for their passports, we wanted to make sure that if you weren't participating in the economy, then you were speculating with money from offshore.
The start of this was when Bloomberg News said get out of gold and get into condos in Vancouver. There was an understanding that Vancouver was becoming a speculative marketplace. We should have attacked that then, and we waited and waited.
The premier and the minister said, oh, the prices are really quite affordable, and if you don't like it, move to the north, and continued to say everything is fine, while their funders continued to make money and continued to transfer much of that to the BC Liberal Party. So everyone was winning except the people of B.C.
We proposed a formula that would not just tax it one time at purchase, but over a number of years, if someone was on the rolls as owning a home and not paying income taxes for multiple years, they would have been taxed each year. And so the revenue stream would have been longer, the revenue would have been able to drive back into affordable housing and programs.
I thought it was a pretty good idea. We tested it with economists at UBC and SFU, and they agreed it was a reasonable approach. And then the Liberals did the shock and awe instead. And we're still seeing the ramifications from that.
I've had people from ethnic communities saying this is racist, and you're going to be apologizing for this 10 years from now, as we have for Komagata Maru, the Chinese head tax and so on. I think it was a knee-jerk reaction by the government.
TF: You could still examine the situation next year and bring in a different system?
JH: Absolutely. We're going to look at whether it's been effective, what the consequences are, and it's always the unintended consequences that I think opposition should be looking for.
One area where we have seen an impact has been foreign worker permits. People who have been asked to come to Canada to participate in a gap in our labour market, and then they find that not only are they getting Canadian dollars, not U.S. dollars, but they're having to pay 15 per cent more for houses that are already over the value that they would find south of the border.
I've met with the CEO of a software firm who's been trying to keep engineers that we produce at UBC in British Columbia, but it's a lot more appealing to go to Redmond [Wash., home of Microsoft] because it's cheaper.
TF: Election finance, your position is well known, get corporate and union donations out. There has always been a big disadvantage for the NDP with corporate donations. Is it going to be bigger than ever this time?
JH: I'm not sure. We've seen an uptick in contributions, 80 per cent of our contributions come from individuals. But we're closer to an election campaign, and I think some of the corporate backers of the BC Liberals are seeing how they can hedge their bets should we be successful.
But for me, none of that matters. What matters is forming a government and changing the election law. We should put people back in the centre of our politics, and they're not there right now.