Wednesday, October 21, 2009

 

The sale of BC Rail was a huge blow to economic development in this province

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It is unfortunate that the big forest companies are only now realizing that the sale of BC Rail was a huge blow to economic development in this province. If they, along with the Business Council of BC, had opposed the sale back in 2003 – 2004, it would not have gone ahead. Other than a handful of Interior mayors who acted as shills, no one else would have supported it.

Critique of Business Council of BC discussion paper on forestry - Part 1
By Peter Ewart
OPINION 250 - Prince George, B.C.
Oct. 21, 2009

To see the full essay, click HERE. Another excerpt:

... One of the most glaring examples of inconsistent logic in the discussion paper is found when it addresses the issue of “monopoly.” Back in 2003 - 2004, when the provincial government was in the process of selling BC Rail to CN Rail, there was substantial opposition across the province to this privatization. Nonetheless, the Business Council of BC and the big forest companies saw fit to support this sale, despite the fact that the “Committee to Save BC Rail,” labour unions, commentators like Ben Meisner and Ron East, and others, repeatedly warned that a giant rail monopoly was being created that would cause problems for industries like forestry and mining, as well as for communities in the Interior.

So, if we fast forward to 2009, what is the Business Council of BC discussion paper saying now about the rail service? It is now making the confession that “BC’s rail monopoly … is a long-term strategic and competitive weakness for the industry” (p. 73).

This rail monopoly, which includes CN and CP, is a “particularly serious” problem resulting in “rising” costs and “declining” services. It constitutes “a formidable hurdle not only for the forest industry but also mining, other extractive industries and a wide variety of manufacturing activities.”

According to the discussion paper, “Some forest industry CEOs have said that, for current investors in BC’s existing industry, and potential investors in new innovative future products which BC could manufacture, BC’s rail monopoly is even more debilitating to the industry’s global competitiveness than the province’s labour unions were historically” (p. 73).

Indeed, the situation for the big forest companies has been so dire that they have been pushing the federal government to allow them to operate a “third party rail service” and pay a fee to CN or CP.

It is unfortunate that the big forest companies are only now realizing that the sale of BC Rail was a huge blow to economic development in this province. If they, along with the Business Council of BC, had opposed the sale back in 2003 – 2004, it would not have gone ahead. Other than a handful of Interior mayors who acted as shills, no one else would have supported it.

In addition to the criticism of the railway monopoly in the province, the Business Council of BC discussion paper also takes a shot at the “increased concentration of buying power among distributors (e.g., pro-dealers and big-box retailers).” This further monopolization “has resulted in the decline in the leverage of forest product manufacturers” and “transferred pricing power” into the hands of the big dealer and retail monopolies, especially in the U.S. (p. 73).

After all these criticisms of “monopoly power”, you would expect that perhaps the BC Business Council would be championing anti-monopoly ...

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Sincere thanks to Peter Ewart for his work on this story and for sharing it with us.

That BC Rail issue, it isn't over, is it? It's nowhere near being over. - BC Mary.

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Comments:
Question is...are the citizens of the cities/towns where mayors were nothing more than shills for the Libs, going to correct that in the next municipal election? I doubt it.
 
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That's an important question, Anon 9:31,

I hope that British Columbians north, south, east, and west have learned to analyze the facts, the lies, and the silences for what they are these days.

I do believe that some quiet work can be done by citizens (like you) who are willing to "have your say" in some of the genuine small-town newspapers online where people try to get their teeth into the issues.

One of my favourites is OPINION 250 in Prince George. That's where the item by Peter Ewart came from yesterday. They're very alert to issues like BC Rail, too.

It's also where CanWest can be exposed for the terrible damage it does.
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That's a new site to me Mary, but I will be watching in the future for sure. Maybe if enough of US stir the pot - things might change. Maybe.
 
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