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September 27, 2012 - No. 121 Nation-Building or Nation-Wrecking? The Case of Natural Gas and British
Columbia's
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 Vancouver protest against construction of Pacific Trails pipeline, December 9, 2011. The pipeline will transport liquid natural gas produced by fracking of deposits located in the BC interior to Kitimat. |
The discussion goes on behind closed doors and pronouncements are made rather than discussion amongst the people in their regions throughout the province and then in the legislature. The people are handed a fait accompli and have to scramble to make sense of all the "announcements."
The fact the people have no say or control in these matters is of concern for the workers and people of BC and Canada. It is important that we are informed and able to discuss these matters of the economy and the direction of the economy. How the natural resources are developed is of utmost concern.
Matters of concern related to natural gas extraction and development include:
1. The standard of living in BC including social programs and public services rose with the development of secondary and tertiary industries, away from shipping out raw resources. Can transporting out natural gas raise the standard of living of British Columbians and bring about a stable economy?
2. The low royalty rates (income from and control over leases for a resource that belongs first to the First Nations, workers and others in BC and Canada) need to be known, discussed and decided by the people.
3. Regulatory options from other jurisdictions need to be explored. Other models include state owned development and control or majority state ownership and/or royalties that provide a source of revenue when the resources are depleted.
4. What are the environmental and
other impacts of hydraulic fracturing of deep underground shale
deposits (fracking)? Are these practices environmentally and otherwise
safe? Do the impacts need mitigation and, if so, who will guarantee
this is done and how?
5. Is gas from deep underground shale deposits clean and does its removal leave a safe and stable environment, including wastewater, which has been found to be highly radioactive according to a report of the United States Geological Survey?
6. Who pays for the infrastructure? Who uses the infrastructure?
7. Industry in BC pays a lower rate for Hydro-electricity. "Fracking" is energy intensive. There are no transmission lines to the shale plays in northeastern BC. Who will pay for the transmission lines and the development of more electricity potential? What will be the hydro rate for the "fracking" industry?
8. An oversupply of natural gas in North America exists in part because of new technology that permits development of natural gas from sources such as shale gas and, in part from the recent wrecking of manufacturing and industry that requires energy. What problems do shipping natural gas to Asia solve in the Canadian economic base and what problems do they pose?
9. What are the regulatory requirements? When were the Environmental Reviews conducted? Who conducted the Environmental Reviews and what did they entail? Were the First Nations consulted on all aspects of natural gas development in their territories; were the people of BC?
The Crucial Questions: Who Decides?
Who Controls the Decision-Making Process?
A February BC Liberal government pronouncement declared that with "the development of a brand-new LNG sector ... long- term economic prosperity" would result. There was no outline of how or why this "economic prosperity" would come about, just a bald statement. The announcement continued:
"A vibrant, diverse natural gas sector will create more opportunities for BC -- jobs, investment, and opportunity -- and will support a clean, safe and secure energy future for all British Columbians.... BC also has a vision of becoming a global leader in secure and sustainable natural gas investment, development and export."
Jobs
The jobs in natural gas
extraction are few and
short-term. The resource at this point is not used as the seed to build
thriving communities with public services, social programs, other
cultural, urban and industrial infrastructure and manufacturing
facilities.
The BC government website A Guide to BC Economy states: "Most of the jobs are in primary mining ... but most of the industry's value added comes from oil and gas extraction.... Oil & gas extraction employs just 2,200 people. In terms of GDP, however, the oil & gas extraction industry generates about two-thirds of the industry's total value added.... The discrepancy between GDP and employment shares is a reflection of the way outputs are produced. Oil & gas extraction requires a huge investment in capital equipment, and labour is a less important input used in production."
Note that the government item distorts the economic reality that "labour" produces the "capital equipment." The working class produces all "inputs used in production," including itself the human factor. The large GDP or total value of oil & gas extraction comes from the work-time required to produce the transferred-value (the "huge investment") plus the work-time of the oil & gas and transportation workers.
"Natural gas is mechanically pumped out of the ground, processed, and then distributed to customers via a pipeline system. This does not require a lot of hands-on work. Most of the people employed in this industry are there to set up, monitor, and maintain the equipment that does this and to keep things operating smoothly."
Investment in a Brand-New LNG Sector
The February pronouncement promised, "A vibrant, diverse natural gas sector will create more opportunities for BC -- jobs, investment, and opportunity."
From the government's own website, the "brand-new LNG sector" is not a "job creation program" unless all the "capital equipment" is manufactured in BC, which it is not. But what about the promised "investment and opportunity"?
As presented by the BC Liberals, the natural gas/LNG sector is capital intensive and creates few BC jobs and limited added-value in the province. Natural gas is a finite resource and extraction requires a huge infrastructure and a continuous massive supply of energy. Infrastructure, energy and some active work-time are necessary to produce and deliver more energy in the form of natural gas. Hydro electricity and the transmission lines necessary for the "brand-new LNG sector" create value and this value goes into the newly produced natural gas. Whether that value is returned in full to BC Hydro will depend on the price the natural gas companies pay for the electricity.
According to the BC Hydro website, it made an "Application for a Certificate of Public Convenience and Necessity for the Dawson Creek/Chetwynd Area Transmission Project" in July 2011 and anticipates approval by the fall of 2012. BC Hydro also notes, "The proposed project does not trigger assessment under the BC Environmental Assessment Act and, at this time, it does not appear to trigger assessment under the Canadian Environmental Assessment Act."
Under the "Financial Capacity" section of the Application, it is made clear that the people of BC will be expected to finance the delivery of electricity to the natural gas extractors: "[BC Hydro] has the financial capacity to undertake the Project and other large projects by means of:
"borrowing guaranteed by the Province; borrowing directly from the Province; and by funds generated internally from the operation of its business."
However, it is not clear whether the price for the electricity sold to the natural gas producers will fully recoup the price of production for constructing the infrastructure and delivering the electricity, which includes financing and claims of the lenders, enterprise profit for BC Hydro, wages and benefits for the work-time involved in construction and constant production, salaries, all government claims through taxation, any transferred-value directly consumed in construction and production, and transferred-value through depreciation of equipment and machinery.
Development of shale-gas in BC and whether to commit public resources to this adventure is a matter for the BC polity to decide. The central issues regarding resources and their development including financing are "Who decides" and "Who controls the decision-making process" -- the people or private monopoly interests and their government representatives. Yet, no information, discussion or debate have been officially organized amongst the polity or in the legislature. Information is provided mostly within the arena of a regulatory hearing on a transmission line proposal. But even knowing that this regulatory hearing took place, and well after important issues had been decided, would not have happened without the concern of other businesses and industry. The Globe and Mail in an item entitled "Booming natural-gas sector ignites debate over BC Hydro service," reported on May 20:
"The Commercial Energy Consumers Association argued that natural-gas producers should be encouraged to provide their own energy rather than drive up costs for all BC Hydro's customers. 'We are concerned with the logic of a mass of strategic investment in natural gas in the province, resulting in export of very significant quantities of natural gas to be used for power supply in other countries,' said the association's lawyer, Chris Weafer, 'while the BC Hydro ratepayers may end up with very significant rate increases to facilitate that.'
"Matthew Keen of the Association of Major Power Customers raised the allocation of costs between old and new customers on the system, prompting BC Hydro to suspend the hearing for four months. By the time the hearing resumed, the ranks of interveners had swelled, with 16 lawyers representing local first nations, gas producers, the Old Age Pensioners' Organization, the Sierra Club of B.C. and others.
"Don Davies, representing Murphy Oil, Encana and Arc Resources, said his clients are entitled to the same service as any other customer of BC Hydro. 'And my clients have made and are making decisions and investments based on that expectation'."
If BC Hydro receives from its industrial consumers an equivalent to its prices of production, including the servicing of debt, then it can thrive and be a great contributor of value to the province. If this is not the case and the value it produces is mostly seized by certain industrial consumers through prices lower than the price of hydro-electric production, and this value flows into the private coffers of privileged global monopolies, then BC Hydro becomes a burden on the people, businesses and public treasury.
BC Teachers' Federation Charter Challenge of Education Improvement Act
Act in Violation of Charter Right to
Free Collective Bargaining
The BC Teachers' Federation (BCTF) filed a Notice of Civil Claim in BC Supreme Court June 27, challenging provisions of the Education Improvement Act, formerly Bill 22. The teachers' organization claims the Act violates the Charter right to free collective bargaining.
The BCTF says the Act gives the BC Public School Education Association (BCPSEA, the employer) the power to deny any increase in compensation for teachers or any restriction on management rights, which negates the teachers' right to bargain. The BCTF further claims that this government direction has led to bad faith bargaining on the part of BCPSEA.
Further, the complaint asserts that the Education Improvement Act violates teachers' Charter rights by reintroducing provisions which have been previously struck down by the Courts as violating the Charter. These provisions prevent teachers from bargaining over class size and composition, and staffing levels. Directly contravening the right to bargain in good faith, the legislation continues the practice of deleting hundreds of provisions agreed to by both the BCTF and BCPSEA, provisions that benefit teachers, students and public education.
The Civil Claim also challenges regulations through which the government purports to compensate teachers without going through collective bargaining, while directing the BCPSEA not to bargain compensation.
Finally, the Civil Claim asserts that the government has failed to establish a fair dispute resolution mechanism and instead has unconstitutionally legislated that government solely will determine the content of the collective agreement. No date for the hearing of the claim has yet been set.
On June 28, Justice Hyslop dismissed the BCTF's application for Judicial Review concerning the appointment of Dr. Jago as the "mediator" under the Education Improvement Act. The Court found it was within the "discretion" of government to make the appointment.[1]
Background to the Charter Challenge
The background to this Charter challenge has its origins in the time of the teachers' resistance in 2001-2002 to the government's dictate to exclude bargaining over a range of subject matter including classroom size and composition.
On May 30, 2002 the teachers' union challenged Bills 27 and 28 under the Charter, advancing the claim that they violated the Section 2b freedom of association provisions of the Charter. Health care workers brought a parallel challenge to Bill 29, challenging the government's dictate and violation of their collective bargaining rights.
As the judge who heard the teachers' Charter challenge in 2011 stated, all three pieces of legislation were founded on the government's theory that it could impose legislation which overrode terms of existing collective agreements and prohibited negotiation over those subjects in the future.[2]
The teachers' Charter challenge was held in abeyance pending the determination of the health care workers claim, which was decided by the Supreme Court of Canada in 2007.[3][4]
The teachers' Charter challenge came before Justice Susan Griffin in November 2010, and the decision was rendered on April 13, 2011.[5] Justice Griffin found as unconstitutional and invalid sections 8 and 15 of the Public Education Flexibility and Choice Act (PEFCA) and Section 5 of the Amendment Act. As a result of the constitutional infringement, she found Section 9 of the PEFCA no longer in force.
The provisions struck down in the PEFCA provided as follows:
* Section 8 amended the School Act to prohibit restricting management rights concerning class size, staffing levels or maximum or minimum case loads, staffing or teaching loads and declaring void any provision in a collective agreement which is inconsistent with the Act or required the employers' association to negotiate over or the Labour Relations Board or an Arbitrator to amend or modify a provision.
* Section 9: Appointing an Arbitrator who would make final decisions whether a provision violated the legislation.
* Section 15: If a school board is satisfied that a provision in a collective agreement limits the board's power to set the school calendar it can declare it void. This includes the schedule of delivery of school programs, the hours, days, weeks and months of the year on which educational programs are provided, and the days on which teachers are scheduled to provide same. The issue regarding Section 5 of the Amendment Act arose as a result of the decision of the Arbitrator acting under Section 9 of the 2002 legislation. The Arbitrator removed extensive provisions of the Collective Agreement declaring them "inconsistent" with the Act. The BCTF was successful in obtaining Judicial Review of the decision in 2004. Justice Shaw of the BC Supreme Court struck down the Arbitrator's decision as wrong in law in that it violated the principle of "harmonization" in ruling that the subject matter of the struck provisions violated the Act and restored the provisions.[6]
The BC government then introduced the Amendment Act (2004) which, in Section 5, provided for the deletion of various Memorandums of Understanding which form part of the Collective Agreement and repealed provisions of the Educational Services Collective Agreement Act, and did so retroactive to July 1, 2002.
In striking down Section 5 of the Amendment Act, Justice Griffin restored the previously deleted provisions of the Collective Agreement, however she suspended her Declaration for one year, which meant it came into effect on April 13, 2012.
The BC government did not appeal the Griffin decision. Instead, it introduced Bill 22, the Education Improvement Act, which not only reintroduced provisions which had been previously struck down by the Courts, but made provision for compensating teachers outside of the collective agreement regarding class size, while banning the employers' association from negotiating with teachers over class size and imposing significant fines and penalties for any strike action.[7]
Notes
1. BCTF v BC 2012 BCSC 960.
2. See Justice Griffin para 8, BCTF v BC 2011 BCSC 469
3. Health Care Services v
BC 2007 SCC 22.
4. This Supreme Court of
Canada decision overturned the previous high court precedent in Professional Institute of the Public
Service v Northwest Territories (Commissioner) [1990] 2 S.C.R.
367 that held that collective bargaining was not protected under the
Charter
5. BCTF v BC 2011 BCSC 469
6. BCTF v BCPSEA 2004 BCSC 86
7. Introduced February 28,
2012; Royal Assent March 15, 2012.
Prosperity Mine Proposal
Direct Assault on First Nations' Hereditary Rights
Protest against Taseko Mines by Tsilqhot'in First Nation, Vancouver, June 16, 2010.
The second Prosperity Mine proposal is for a 20-year open pit operation for copper and gold with a daily production rate of 70,000 tonnes. The property is located southwest of Williams Lake near Taseko Lake right in the middle of the traditional territory of the Tsilqhot'in. Taseko Mines, owned by Hunter Dickinson, is promoting this second proposal for a gold and copper mine. The Tsilqhot'in First Nations and its many allies amongst the BC population oppose the mine development on its territory and demand the decisive say.
The original company proposal was turned down by the Federal government cabinet through the Minister of the Environment in November 2010. The Canadian Environmental Assessment Agency (CEAA) had delivered a negative report on the project mainly due to its plan to drain Fish Lake and place waste rock, low grade ore and overburden into it, and as a replacement, to form an artificial lake nearby.
The decision to reject the Taseko Mines' proposal was similar to another one turning down the Kemess North mine due to the planned destruction of a lake important to the local First Nations in that area. The natural destruction of the two mines would give a limited operating and construction time of between 14 to 20 years. Evidence in the two cases was reviewed and carefully considered by First Nations and their allies and by professionals involved in CEAA and the mining industry including university mining professors. A broad consensus and public opinion led by the First Nations and supported by CEAA concluded that the two proposals were not viable and should not be permitted to proceed.
Jim Prentice, the Minister of Environment at the time, made the announcement rejecting the Prosperity Mine. Shortly afterward, Prentice, who came from the ranks of the Progressive Conservative Party not Harper's Reform Party, resigned from Harper's cabinet for "family reasons." He has since emerged as senior executive vice-president and vice-chairman of the Canadian Imperial Bank of Commerce. This year, in his CIBC role, he wrote an article warning the federal government to pay serious attention in its negotiations with First Nations over the shipment of bitumen and oil across BC to Kitimat and Vancouver in the proposed Enbridge Northern Gateway and Kinder Morgan pipeline expansion projects.[1]
However, recent legislation brought in by the Harper Conservatives will limit the ability of the Canadian Environmental Assessment Agency to carry out its mandate. More ominous are explicit amendments to the Fisheries Act that allow turning lakes into tailing ponds.
"A regulation created under the federal Fisheries Act allows for the reclassification of natural water bodies as 'tailings impoundment areas.' Such a classification means that protection of fish and fish habitat ordinarily provided by the Fisheries Act, does not apply and the water body may be used as a disposal site for mine tailings. This article briefly describes the history of this regulatory provision, the purpose for its inclusion under the Fisheries Act and the process through which such reclassifications are made."[2]
A further justification to limit the extent and decision making power of any review is to "streamline" such review processes. This facilitates the power of monopoly capital to arrange directly the extraction of Canadian resources in its advantage. The very fact that the provincial and federal governments connived together to reopen the Prosperity Mine proposal indicates the political shift with the 2011 election of a Harper "majority" government. This parliamentary majority "won" with massive amounts of money, mass media coverage to disinform Canadians and manipulation of the electoral system gave Harper 24 per cent of Canadian eligible votes but a majority of seats in Parliament. Harper has now assumed dictatorial power to act directly on behalf of mining capitalists without any due regard for the public interest, environment or First Nations' hereditary rights.
Mining projects, especially open pits can profoundly change the natural environment and need to be carefully considered. All the consequences both positive and negative need to be weighed. Agreement has to be obtained from the Native community if the lands lie on traditional First Nations' territory. In addition, the local non-Native community must not be bulldozed into accepting such projects under continuous pressure about "creating jobs" and "prosperity." Modern mining methods include relatively few jobs as the operations are highly capitalized using machinery and employed workers are more often than not professional miners brought in from other projects or even from overseas. As one long-time Canadian prospector put it, mining projects need to be "community driven" not "driven into the community."
Taseko Mines has submitted
its second proposal for
consideration by the CEAA. Under this proposal, Fish Lake will be
preserved and a different location will be found for placing the waste
rock, low grade ore and overburden. The tailings will still be disposed
of in Little Fish Lake and the discharge will be
collected in seepage ponds in an attempt to prevent the contamination
of Fish Creek. The open pit will be only 500 meters from Fish Lake, a
very short distance considering the toxicity of the waste, and the
ongoing negative record of tailing ponds leaking or seeping into fresh
water. Sloughing or over-digging could
also reduce this distance, significantly increasing the hazard.
Complicating matters is an unresolved land claims case brought by the Tsilqhot'in. The Tsilqhot'in people are on record saying they will do everything in their power to stop the project from going forward at least until their land claims case is settled. A major lands claim case to decide aboriginal title took place in the BC Supreme Court between 2002 and 2007. The court ruled that evidence showed definite aboriginal title existed. Extensive evidence from the fields of archaeology, anthropology, history, cartography, hydrology, wildlife ecology, ethno-ecology, biology, linguistics, forestry and forest ecology was presented by the First Nations. All this evidence pointed to the undeniable ownership and long term First Nations use of the land for living, building habitations, hunting, fishing, berry and other edible food and medicinal plant gathering, , making a network of trails, etc. The land sought for the mine is in this traditional territory.
Final decision has yet to be made in a federal court whether aboriginal title exists or not. The Tsilqhot'in people have filed for such a court case to decide finally on their title, but the process is presently stalled.
At present, a Strategic 2010 Engagement Agreement exists between the First Nations in the Tsilqhot'in territory and the BC Government. Any proposed logging, mining or hunting activities within their area must be approved by the First Nations before proceeding. Roger Williams of the Xeni Gwet'in community of the Tsilqhot'in people considers this process beneficial to the First Nations. At the same time Marilyn Baptiste, a chief and strong advocate for the Tsilqhot'in Nations, told a special program of DISCUSSION on Vancouver Co-Op Radio on September 15, that she and her people were adamant that the Prosperity Mine project will not be allowed on their traditional territory. She said her people highly value the clean water, access to salmon, hunting and other food procurement rather than the very short-lived corporate mining project that will enrich the owners of capital but bring environmental disaster to the community and very few real or sustainable economic benefits and jobs.
Given the direction of the Harper government's politics favouring resource extraction and exportation over development of Canadian manufacturing, it seems likely the second Prosperity Mine proposal will be given a green light by the CEAA and final approval by Harper's cabinet. Moreover, the Harper dictatorship pays little heed to either public or First Nations' interests.
Development of the Prosperity mine would also meet the political agenda of BC Premier Christy Clark. She is pushing mining investment very hard, calling for the opening of another eight to ten mines in BC in the next few years, including Prosperity. Presently, the BC mining sector has about 9,500 jobs while more than 160,000 workers are unemployed. The reality of modern mining underlines that development of Prosperity and other mines is not about reducing mass unemployment as claimed by politicians and media alike. The aim of mining BC's mineral resources is to enrich the private interests that control mining capital and those private interests dominate both the BC Legislature and Parliament. The public and First Nations' interests are not represented within the government authority.
The politics of the Tsilqhot'in people are the politics of nation-building, of defending their title rights, and ensuring the integrity of the environment. They favour development but development that is long term and sustainable, which does not directly contradict their traditional way of life, as the Prosperity mine would do. The perspective of the Tsilqhot'in people is consistent with a human-centred approach to the development of the economy in BC because it focuses on meeting the needs and fulfilling the rights of the people who have lived forever in this beautiful and rich territory on the plateau of central British Columbia, and sharing that abundance with the rest of the BC population.
Notes
1. See:
http://www.straight.com/article-723126/vancouver/former-conservative-cabinet-minister-jim-prentice-issues-veiled-warning-
stephen-harper.
2.
http://www.elc.ab.ca/pages/Publications/NewsBrief.aspx?id=820.
2012 Okanagan Valley Cherry Crop
Optimism Turns to Despair
A heavy blossom on cherry trees in BC's Okanagan Valley this past spring caused tree fruit farmers to be optimistic that there would be a huge cherry crop this year. An official with BC Tree Fruits, the marketing agency for some 550 growers, predicted the agency would handle 8 million pounds of cherries, double that of last year.[1]
But the early hopes turned to despair as the orchards were hit with set-backs from nature and then the capitalist marketplace. Rain and wind conditions damaged the crops. But far more destructive was the dictate of the capitalist marketplace that the orchardists would only be paid about twenty cents per pound for their produce. The breakeven point is about seventy cents per pound. Faced with this grim news, many growers left the fruit on the trees to rot and fall to the ground. One grower who farms about 60 acres of cherries near Penticton estimated he left 100,000 pounds of cherries on the trees.[2] Such a colossal waste of a precious fruit is irrational and must be addressed.
Besides the loss of income to the orchardists, "no picking" severely affects the incomes of the many seasonal farm workers who travel through the Okanagan, working their way from crop to crop. The lost livelihoods of hundreds more workers involved in sorting, packing and shipping fruit contribute to the unemployment rolls. Unemployment overall in the province was 7 percent in July 2012 with an increase of 2.8 per cent unemployment in the agricultural sector from the previous year.
An orchardist blamed low prices on cheap, lower quality fruit from the US state of Washington being dumped onto the Canadian market. This is permitted under terms of the Canada-US free trade agreement and would be strengthened as an economic factor in the agricultural sector if the proposed free trade agreement with Europe goes ahead.
Canadian agriculture is under assault from all sides. The Canadian Wheat Board's public monopoly was liquidated at the dictate of the global grain monopolies in December 2011. Threats to supply-side marketing boards in poultry, eggs and dairy are coming from the looming Trans Pacific Partnership Agreement. Already the existing free trade agreements cause serious problems to orchardists and other farmers such as the cherry producers. Canada clearly needs a new direction for agriculture production, one that ensures food security for the Canadian people, and is not subordinate to Monsanto, the grain, retail and other monopolies that dominate not only Canadian but global food production and distribution.
Canada is increasingly dependent on food production in the United States, Mexico and elsewhere. A consensus is developing that Canadians have lost control of their economy including agricultural production. Global monopolies have seized control of the basic sectors and their private interests are upheld as primary within the BC Legislature and Parliament.
The economy requires self-reliance and diversity in all sectors and harmony between agricultural production and manufacturing and the service sectors. Without security in food production then manufacturing and other non-agricultural sectors are at risk. Without manufacturing of farm machinery and other non-farm products then agricultural workers cannot fulfill their production responsibilities. To bring this nation-building project into reality a new direction for the economy is required centred on decision-making and control by the actual producers.
Notes
1. Kelowna Capital News,
May
17,
2012.
2. Penticton Western
News, August 10, 2012.
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