Revenue Like the Fraser, Flows South

By Peter Ewart

A longstanding fundamental problem for the Interior and North of British Columbia is that huge revenues leave this region every year and flow down  to governments in Victoria and Ottawa, and corporate head offices.  Indeed, an estimated $5.4 billion a year in stumpage and taxes goes to the provincial government from the forest industry alone, which is mainly based in the rural areas of the province.

Although our region, along with other rural and remote areas, generates this colossal amount of forestry revenue, we have no control over it.  In effect, we act as a colony to the “mother country” based in the Lower Mainland, and it is the “mother country” which decides how and where this revenue should be allocated, e.g., the 2010 Olympics and other projects that have little or no value for our region. 

Northerners are acutely aware of this unfair colonial type of relationship and, over the years, have called upon successive provincial governments to change it by giving back a percentage of the revenue to the regions that produce it (most recently the issue was raised at the Stand Up for the North Conference in November).  But the provincial governments have refused to do so, and instead have put in place other kinds of structures that keep the revenue control in the hands of the province.  When the NDP was in office during the 1990s, it established Forest Renewal BC which appeared to be a step in the right direction, but still did not establish a permanent funding mechanism that gave our region control over a portion of the revenue it creates every year.

Since the Liberals have been in office provincially, they have put in place the Northern Development Initiative Trust, which, again, appears to be a step in the right direction.  However, ultimately, it is the provincial government which decides how much will go into this Trust, and there is no permanent funding mechanism that automatically ensures that a percentage of the revenue generated here by forestry returns to our region.

Why has no provincial government brought in such a forestry revenue sharing mechanism that would allow our region more latitude in charting its own course?  It is a question that comes down to who has the power: the “Mother Country” or the “colony”?  The government in Victoria, irrespective of which party wins the election, wants to keep absolute control over forest revenue because this allows it to direct this revenue wherever it is most advantageous to the government and its supporters, whether this be the Olympics, fast ferries, or other schemes.  It also keeps our region in a permanent “cap in hand” relationship with Victoria, thus giving the government of the day political and economic leverage over us and allowing it to play “divide and conquer” with rural regions and communities. 

One recent example of this divide and conquer approach was the sale of BC Rail.  The provincial government was able to get certain mayors in the region on board to support this sale even though it was strongly opposed by people throughout the region.  And the government did this by, lo and behold, pledging that it would hand over some funds for the establishment of the Northern Development Initiative Trust (with these same Mayors ultimately being appointed, along with others, to sit on the Board of the Trust).  In return, despite the opposition in their communities, certain mayors became loud supporters of the sale, thus allowing the provincial government to claim that it had “support” in the North for its controversial rail deal.

On Friday, NDP MLA Bob Simpson proposed that the provincial portion of the export tax that has been imposed as part of the Canada / U.S. Softwood Lumber Agreement be used “to make rural communities economically stronger” (Citizen, December 16, 2006).    This is only a partial step towards more regional control and revenue sharing, but at least it is in the right direction.

However, the provincial Liberals have been quick – perhaps too quick for some - to quash such an idea.  John Rustad, Prince George – Omineca Liberal MLA equates the NDP proposal to that of the old Forest Renewal BC tax scheme, and suggests that “pouring money onto the problem is not a solution.”  There is some irony in this latter statement in that the Liberals, on the one hand, seem to be saying that more money coming back into our region is not the answer; yet on the other hand, they are quite alright with “pouring money” from our region down into the bottomless pockets of the government in Victoria, as is going on at this time.  It is a strange logic.

Whatever the governments and political parties propose or do not propose, the glaring fact remains that our region produces a tremendous amount of revenue for the province and it should and must have control over a portion of the revenue so as to be able to plan and build a future for the communities of today, as well as those of tomorrow. 

Thus the people of our region need to come together, irrespective of political affiliation, and develop proposals for revenue sharing mechanisms with the province that everyone and every community can get behind.  If we do not do this, we will remain permanently divided and helpless, as the revenue, like the rolling waters of the mighty Fraser, continues to flow South, and the government in Victoria, like an autocratic colonial ruler, picks and chooses to which court “favourites” and schemes it will bequeath its “gifts.”

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