Obituary: Harmonized Sales Tax of British Columbia

HARMONIZED SALES TAX OF BRITISH COLUMBIA (born: July 1, 2010-died: March 31, 2013): The Harmonized Sales Tax died peacefully across the Province of British Columbia at the end of March 31, 2013.

HST, as it was better known, was a long-term resident of a public policy hospice since the loss of a province-wide, mail-in referendum on Aug. 26, 2011 left it immobilized. The events of Aug. 26, 2011 also bruised the collective ego of the ruling B.C. Liberal Party, which will be long remembered for helping prolong HST's life to the detriment of its popularity.  

The victim of death-by-democracy was originally announced July 23, 2009 by Premier Gordon Campbell and Finance Minister Colin Hansen, who jointly claimed the tax reform measure would boost investment and job creation. It would be the “single-biggest” thing to improve B.C.’s economy, they said -- but they said it just 10 weeks after winning a provincial election in which their campaign pledged not to harmonize.

The HST Stickman, in happier days.

The value-added tax was a multi-stage merger of the 1948-established, 7% Provincial Sales Tax (also known as the social services tax) and 5% federal Goods and Services Tax. 
Born July 1, 2010, HST was never widely welcomed nor respected by the majority of citizens. 

HST increased the prices of airline tickets within Canada, funeral services, real estate fees, health club memberships, dry cleaning, haircuts, tickets for movies, concerts and sporting events, plumbing repairs, and professional services. 

Besides the 2010 Winter Olympics, the revenue HST brought in helped pay for the $514 million renovation of B.C. Place Stadium, the $17 million B.C. Jobs Plan advertising campaign, the $11 million-plus Times of India Film Awards, the Premier's Office's $475,000 credit card bill, her $201,000-plus charter flights to news conferences and programs such as the B.C. Liberals' Multicultural Outreach Strategy and the Pacific Carbon Trust's purchase of carbon offsets -- which the Auditor General called a waste of taxpayers' money. 

The film industry and manufacturers loved it, because they said it simplified paperwork and reduced the cost of doing business. The Liberal-allied Smart Tax Alliance was its biggest booster. But real estate agents, restaurateurs and publicans (among many) hated it. The HST (coupled with a more powerful Canadian dollar) stimulated a newfound passion for cross-border shopping. It plunged Gordon Campbell’s approval rating fell to 9% and he resigned Nov. 3, 2010. 

HST was the product of the stubborn realization by Campbell that British Columbia’s deficit was understated during the 2009 provincial election and the financial risks of hosting the 2010 Winter Olympics were far greater than anticipated. While insisting the idea was hatched after the election, documents released via Freedom of Information proved B.C. officials were talking with federal counterparts early in 2009. Hansen was even briefed about the HST in March 2009.

The Fight HST campaign led by ex-Social Credit Premier Bill Vander Zalm and organized by NDP strategist Bill Tieleman successfully pointed out that the HST was a shift of the tax burden from business to individuals. Their pivotal Sept. 19, 2009 rally on the site of the future Olympic cauldron at Jack Poole Plaza led to a petition that met the threshold of 10% of registered voters across the province. The 700,000-plus signature petition was delivered to Elections B.C. in June 2010 and it withstood an August 2010 B.C. Supreme Court legal challenge in  brought by six Liberal-allied business groups. 

After Christy Clark won the B.C. Liberal leadership in February 2011 and came to power as Campbell’s successor, she dangled a carrot at voters, hoping they'd agree to vote to keep the HST in exchange for her pledge to cut the tax by 2% in 2014. The province’s $5 million stickman ad campaign that was supposed to be informative, not persuasive. Advertising, by its very nature, is persuasive. For the HST, however, not enough people were persuaded to support the HST. 

The referendum received 1,610,125 votes, of which 881,198 (54.73%) were against the HST. It was hailed as a triumph for democracy by the Canadian Taxpayers' Federation, despite the confusing wording of the referendum question (yes meant no). The result forced Clark to cancel her planned early election call for fall 2011. At the time, Clark was more popular than her party and could have won an election. Now, polls say 62% of British Columbians want a new government.

On April 1, 2013, the HST was finally replaced by the resurrected PST -- which had been called “better-stupid” by ex-Finance Minister Kevin Falcon -- and the returned GST.

The HST is survived by Gordon Campbell, Colin Hansen, Christy Clark, Kevin Falcon and his successor Mike de Jong, along with Prime Minister Stephen Harper. Harper played a special role, by enticing B.C. to sign up for the HST with a $1.6 billion lump sum transition payment to help pay the cost of the Olympics. 

Campbell won three terms as B.C. Premier, but failed to finish his last one. He is now Canada’s High Commissioner to the United Kingdom and Northern Ireland, thanks to an appointment from Harper. Hansen is a retiring Vancouver-Quilchena MLA who remains on Treasury Board and the Planning and Priorities Committee. 

No memorial service will be held, but the HST will no doubt be remembered when British Columbians vote in the May 14 provincial election. 

Donations and sympathy cards, in lieu of flowers, can be sent to the Christy Clark fund, ℅ Today's B.C. Liberals. 

Hot Tub Time Machine, B.C. politics-style

Join me, as I hop into my Hot Tub Time Machine and go back to a time when life was simpler.

Winter was turning to spring in 2001. Phones weren't smart yet. The world didn't know what a Bieber was. The Canucks wore ugly uniforms. The Vancouver Olympics were only an idea. U2 was on tour with P.J. Harvey. Joey Ramone was dying of cancer. Paul Martin was Canada's Prime Minister. Al Gore should've been President of the United States. The World Trade Center stood tall in New York City. 

In British Columbia, the exhausted, drunk-on-power ruling party of the day was facing a throw-the-bums out election. On that year’s Pi Day, the last Legislative session under the second NDP era (1991-2001) began. The BC Liberals were on a roll, they could taste victory in the upcoming election. It was time for a new era. 

Officially known as the "5th Session of the 36th Parliament of British Columbia," it commenced with pomp and circumstance on March 14, 2001 with the Throne Speech read by Lt. Gov. Garde Gardom. 

It was the year after a Summer Olympics (B.C. wrestler Daniel Igali and triathlete Simon Whitfield came home with gold medals from Sydney 2000). The Premier had been in office a short time (Ujjal Dosanjh, just over a year). The government was claiming a balanced budget. Its themes were similar: Jobs, tourism, trade, apprenticeship training, prosperity for families.

The session wrapped up on April 11, 2001, before Easter weekend. Jenny Kwan, Harry Lali, Mike Farnworth and Sue Hammell were on the NDP government side. Today they're in the opposition benches. 

The opposition ranks in 2001 included such members of Today’s BC Liberals as Ida Chong, Linda Reid, Mike de Jong, Christy Clark, Rich Coleman, Kevin Krueger, Murray Coell, George Abbott, Colin Hansen, Gordon Hogg and Bill Barisoff.

Clark is now, of course, the Premier. Barisoff the speaker. John van Dongen was in the Liberal caucus back then. He split on March 26, 2012 to become an independent and has done yeoman's work to seek the truth in the BC Rail scandal.

Only two topics were included in Question Period on April 11, 2001. SkyTrain expansion costs and school district funding. 

De Jong and Geoff Plant grilled Farnworth, who was the Minister of Social Development and Economic Security (whey wasn't it economic development and social security?), about Millennium Line cost overruns. 

de Jong: In November the government received its project management report from Gannett Fleming and that report says that each additional month beyond the current completion date would add approximately $6 million in accumulated interest during construction costs. The report from February says that date is now five months behind.Since it's five months behind, that would add at least $30 million to the cost of the project. Will the minister responsible confirm that estimate, based on the NDP government's own documentation? 

Hon. M. Farnworth: One of the interesting things I think the opposition needs to realize is that when you have reports done and you have the project monitored in the way we are monitoring it and in the way it's being monitored by an outside independent agency on a quarterly basis, you're in a position to take measures to ensure that if there are unanticipated costs going to occur, you can mitigate those costs. You make decisions to ensure that they don't happen. 

The real question is: what would that side of the House do if they were on this side of the House? Would they continue with SkyTrain? Would they extend it to Coquitlam Centre? Those are the questions that Port Coquitlam, Port Moody and Coquitlam have been asking, and they don't get any answers from that side of the House when they're asked. 

G. Plant: There are still a few more questions that we'd like to ask. 

As of the end of December the SkyTrain expansion project had just over $44 million left in its contingency fund. But according to the February quarterly review prepared by the Gannett Fleming firm, all but $200,000 of that $44 million is already expected to be allocated. That means that with 40 percent of the project left to complete, there's only $200,000 left for non-forecasted items. 

Will the minister responsible tell us how on earth he expects anyone to believe that there won't be cost overruns for the project when they've already maxed out on the contingency fund, and they're barely halfway finished? 

Hon. M. Farnworth: I guess it's appropriate for that member, being from Richmond, to ask that question, because clearly he doesn't go to that part of the lower mainland. If he did, he'd see that it's nearly built. He'd know that most of the costs in the budget have already been committed, that it's there in concrete and cement. It's there going all the way into Vancouver. It's there going to Lougheed Mall. The costs have been allocated.He'd also know that the reason why -- and I'll repeat the answer for him again -- is that we have quarterly updates that are posted on the Internet. If he doesn't know how to use it, it's www.skytrain.com, and he can find them there. He'll know that the project is being built. It's being built to Lougheed Mall, and it's going to go to Coquitlam Centre.

The last question asked to the NDP government? It was by future education minister and premier Clark. 

Clark

C. Clark: On to more commitments that the government doesn't intend to keep, and maybe on to more questions that the government doesn't intend to answer -- well, let's try it anyway. The School Act requires that this government give its budgets to school boards by February 1 of the fiscal year. And guess what. They missed the deadline. So they extended it by two months. And guess what. They missed the deadline again. And so now they're in contravention of the law. The minister says, when she's asked by school boards: "Oh, don't worry about it. The budget's in the mail." Yeah, right. And the dog ate your briefing notes -- right? 

MacPhail 

My question for the minister is this: why does the government even bother making statutory rules about deadlines when it has absolutely no intention of keeping them? 

Hon. Joy MacPhail: Well, let me begin by saying that I hope the red light doesn't go on, so the hon. member can ask another question. 

Actually, the letter to the school boards telling them the allocation for funds went out on March 30. So the school boards are well aware. And later this week there will be another letter going out, detailing the increases that school boards will receive. 

It will be the tenth year in a row that each and every school district in this province gets more money for education. It will be the tenth year in a row that our government will continue to build a school once every 19 days. It will continue the funding for the fourth year to reduce class sizes so that our youngest kids have the best possible success. It will be the ninth year in a row that we make a commitment to teach our children in languages other than the English language. It will be the fourth year in a row that we make a commitment to put 700 more teachers in classrooms in this province. And it will be about the sixth year that we make a commitment to fund education for aboriginal children in this province, who deserve the best possible chance. 

What I fear is that if there is a year when this government is not in charge, there will be a dramatic tax cut and a cut in education funding. 

The Speaker: The bell ends question period.

And so it ended. The NDP was turfed out of office on May 16, 2001. Gone was the party of the Nanaimo bingo scandal, North Burnaby Inn casino scandal and Fast Ferries. Gordon Campbell and the BC Liberals won 100% of the power with a landslide 77 of 79 seats, although they garnered almost 58% of the popular vote. Only MacPhail and Kwan made it from the government side to the opposition side -- just two NDP members from a party that got almost 22% of the popular vote. 

Back to 2013. The more things change, the more they stay the same. The government hired scandal-plagued SNC-Lavalin to build the SkyTrain Evergreen Line to the Tri-Cities. Education funding remains a hot-button, as Clark made a futile attempt to sign the NDP-allied B.C. Teachers’ Federation to a decade-long contract. 

The voters are angry and impatient again. This time (in no particular order) it's the HST, BC Rail scandal mystery, B.C. Place Stadium cost overruns, "Quick Wins" Multicultural Outreach Strategy scandal, Jobs Plan advertising campaign, Times of India Film Awards, Prince George plyscraper tendering, BC Hydro Smart Meters... All polls point to the NDP returning to power in the May 14, 2013 election. 

Will the pattern repeat in a decade? 

The Fudgsicle Cometh? (updated)

Finance Minister on ice + fudge = Fudgsicle Budget '13

History says you should not believe BC Liberal Finance Minister Mike de Jong when he stands up and delivers his budget speech in the Legislature on Feb. 19.

De Jong was the Attorney General when ex-Liberal aides Dave Basi and Bob Virk copped a plea bargain in the BC Rail corruption trial and got their $6 million legal bill paid by taxpayers after maintaining their innocence for so many years... but let’s put that aside. 

Also, put aside that he’s a BC Liberal, the ruling party that appears to be on the way out of power under the style-over-substance Premiership of Christy Clark. 

It’s just that de Jong is delivering a pre-election budget. British Columbia governments, regardless of ideology, have had serious trouble telling the truth about finances en route to election day. This is the Land of the Fudge-It Budget. This time around, will it be a Fudgsicle?

Former Junior B hockey player and current shareholder in the inactive MSA Fundamental Hockey School de Jong laced up his skates in Victoria and hit the ice at the Save-On-Foods Memorial Centre for the cameras on Feb. 18, instead of buying a new pair of shoes, the tradition among finance ministers. He donned a Victoria Royals Western Hockey League jersey and donated $1,000 afterwards to KidSport.

Turn back the clock to March 24, 1988 when Social Credit Finance Minister Mel Couvelier gave birth to the Budget Stabilization fund -- $450 million of goodness to "help us absorb fiscal shocks." 

That was the 1980s and the Socreds evidently didn’t have the best spin doctors in their corner. The media instantly branded Couvelier’s plan the “B.S. Fund." It was the best knee-slapper since Socred Agnes Kripps proposed "BOLT" (Biology on Life Today) replace the word "sex" in 1970 (during the sexual revolution). It was surpassed in June 1996 by the nicknaming of the NDP's Cabinet Policy and Communications Secretariat (CPCS) as "cupcakes." But I digress.

“Due to the boom-or-bust nature of the B.C. economy, government revenues have been difficult to predict," Couvelier said. "In years when revenues peak sharply, transfers will be made to the fund. In years of revenue shortfall, transfers will be made from the fund.” 

Vaughn Palmer weighed-in with a March 25, 1988 column in the Vancouver Sun headlined “Mel’s Mirage: the $450 million jiggle.”

The fund does not exist in the sense that it can easily be turned into cash tomorrow, the way your bank account can. At the extremes, accounts can be manipulated to present a horn of plenty to the stockholders or a deathbed scene to the taxman.Similarly, the government slants its accounts to produce certain effects.Before an election, it wants the balance sheet to look as healthy as possible.

Couvelier sat down for a 90-minute session with the Vancouver Sun’s editorial board, which produced a story on March 29, 1988 in which Couvelier admitted it was an election ploy!

Couvelier said the fund, which amounts to a promise by the government to pay itself $450 million at some point, could be used "to support social programs or lower taxes or whatever the government decides to do with it - build highways, get themselves re-elected, whatever they want. . . "When it was suggested that re- election might be the so-called Budget Stabilization Fund's primary purpose, Couvelier replied: "Okay, that deals with motive. I'm saying the fund is there to be used for a rainy day."Now, my definition of a rainy day is not an election. But that's not to say we won't have a need to spend it in an election year."

On March 28, 1995, Finance Minister Elizabeth Cull heralded a balanced budget. NDP’s Mike Harcourt resigned from the Premiership on Nov. 15, 1995 and Glen Clark won leadership of the NDP in early 1996.

Cull tabled another allegedly balanced budget on April 30, 1996, but the Legislature was dissolved before it could be passed. New Finance Minister Andrew Petter reintroduced the budget on June 26, 1996, after the NDP won re-election. The NDP claimed “Jobs Up, Taxes Down, Debt Reduced, Budget Balanced.”

A July 4, 1996 Vancouver Sun story was headlined “B.C. finance minister admits budget ‘goof."

Glen Clark's NDP government is fighting to contain a mounting controversy over allegations it misled the public by campaigning on a balanced budget that turned out to be a $235-million deficit. Clark campaigned during May boasting that the NDP had brought in a balanced budget for the 1995-96 fiscal year. 

The Province reported on March 17, 1999: “Fudge-it budget led to premier's office: The auditor-general calls actions of two finance ministers ‘inappropriate.'

Auditor-General George Morfitt criticized both Cull and Petter for “inappropriate” actions. Morfitt criticized (Elizabeth Cull) particularly for injecting "$156 million of optimism" into forecasts for how the 1995-96 fiscal year would end up, optimism even above her own staff's most optimistic forecasts. Morfitt's report shows that Cull was frequently uncomfortable with the optimistic figures that were being urged upon her, mainly through the actions of (Glen Clark)'s confidante and top aide, Tom Gunton.

Fast forward to 2009 when the BC Liberals were aiming to get Premier Gordon Campbell his three-peat so that he could soak-up all the glory as B.C.’s Olympic Premier in 2010. 

On Feb. 17, 2009, amid the Great Recession, Finance Minister Colin Hansen tabled a budget with a forecast deficit under half-a-billion dollars. After the election and after the announcement of the Harmonized Sales Tax, Hansen tabled an update. The amount of red ink more than quintupled!

The Sept. 1, 2009 headline in The Tyee said it all: "B.C. budget includes record $2.8 billion deficit, cuts, optimism." 

British Columbia will have a record deficit of $2.8 billion, according to a budget update Finance Minister Colin Hansen presented today. That's five times greater than the $495 million projected in February and insisted upon by Premier Gordon Campbell during the election campaign.Back to de Jong and 2013. 

The Liberals are trying to make it look like they’re more fiscally responsible than the 1988 Socreds, 1996 NDP and 2009 Liberals. They even hired an expert! Tim O’Neill, a former BMO economist from the Maritimes! He’s independent! Shhh, don’t pay attention to the $25,000 he’s pocketing for less than a month’s work that resulted in a 22-page report, B.C. Budget 2013: Economic & Revenue Forecasts -- Review and Assessment. Don’t dare suggest it’s just spin. Gosh, no. The government would never do that. Perish that thought!

Well, it’s 20 pages after the title page and disclaimer. The first and last pages are half each, so that’s really 19. The margins are wide and the print is big. The word count is 4,520. Hey, that’s better than $5.50 per word. Not a bad gig, eh?

The word expenditure is mentioned just once. The word expense is nowhere to be found. 

The government paid for a report on what it will be taking in, not on what it will be paying out. A report on revenue only tells half the story. 

Surprise, surprise, O’Neill has nothing really bad to say, except, perhaps the government is too bullish on natural gas. (A degree isn’t necessary to arrive at that conclusion; one need only have watched the throne speech).

“I have concluded that there are no glaring problems or inadequacies that need to be addressed," wrote O'Neill. "There is ample evidence of professional competence, analytical rigour and appropriate caution applied in the work that goes into producing the revenue projections.”

There you have it. Voters beware! 

Budget tidbit: Will any ex-convicts be on the guest list for this year’s budget speech at the Legislature in Victoria? Just wondering! Last year there was one that we know of: Jaspal Atwal. Both Bill Tieleman and Alex Tsakumis wrote about that scandal. 

UPDATE (Feb. 22): The nearly $44 billion budget did nothing, zip, nada to tame the debt! The debt goes higher: it’s $56.1 billion this year, forecast to grow to $62.7 billion next year and, by 2015, $69 billion. A make-believe scenario to tame the deficit now without anything demonstrative to address the ballooning debt only shifts the burden from today’s families to families of the future. 

How can the Liberals spend more than $16 million of your money on an advertising campaign, which includes a brief image of debt-crushed Greece at the 2-second mark in the famous dominos ad, and claim that it is being frugal and responsible with the province’s finances? Was it really necessary to give B.C. Pavilion Corporation $2.7 million to make a bid to buy the rights for the 2014 Grey Cup for B.C. Place Stadium? Certainly B.C. Lions' owner Sen. David Braley has a large enough bank account to avoid needing a taxpayer-subsidy from a government that really can't afford such discretionary spending.

The best line of de Jong's budget speech? 

"Starting today, as British Columbians travel to other parts of Canada, they will be able to say with pride, “I come from B.C. where the government doesn’t spend more money than I send it. Where the government doesn’t burden future generations with the cost of programs being delivered today.”

Comedy gold. Who writes this stuff? 

Most British Columbians do not belong to the Liberals or any political party, for that matter. They’re not worried about those "socialist hordes at the gate" once feared by Premier W.A.C. Bennett. They’re actually worried about the persistent bill collectors and impatient bankers showing up at the door. 

The budget was skimpy on details. There was no detailed list of real estate for sale, nor was there a recap of major cost-cutting. 

The budget contains tax increases targeted at anyone who uses B.C.'s medical system, smokers, corporations and the perceived wealthy, those who earn $150,000 and up. All, except the health insurance premium hike, are things the NDP would have done. You could just tell that de Jong had practiced his lines. They were repeated over and over in the media. 

“I’d prefer not to have (raised taxes), clearly the guiding principle here was to achieve balance, a whole series of decisions flow from that, some of them very difficult,” he told reporters in a pre-budget briefing. “Those making more than $150,000, we're asking them to contribute a little more.” 

The budget was the bookend to the previous week’s throne speech, which included Clark’s unicorns and rainbows vision (delusion?) of a future in which we’ll be swimming in profits from the export of liquefied natural gas (meanwhile, Russia, Arab states, China, U.S. and even Australia are ahead of B.C.). 

An indication of how the Liberals (aka the Natural Gas Party) have lost the trust of the public is that the first major poll released after the budget, by Ipsos-Reid, indicated 72% of respondents didn’t 

believe the budget would be balanced and 47% of respondents disagreed with the budget. 

Cartoonist and video satirist Dan Murphy (who the Province will someday realize was a mistake to let go) weighed in with his subtle and hilarious Budget Highlights Closed Captioned for the Truth Impaired.

While the NDP called the balanced budget “bogus," independent MLA John van Dongen used more flowery language to blow the whistle on de Jong's misconduct for dealing a bodycheck to the concept of truthful budgeting. Abbotsford South MLA Van Dongen did nothing to flatter Abbotsford West MLA Liberal de Jong with his speech, archived here. 

van Dongen

“This so-called balanced budget,” van Dongen said in the Legislature on Feb. 21, “is designed to manage and manipulate perceptions. As such, it is imaginary, a mirage, a facsimile of the real thing. The facts don't back up the perceptions being left with the public in saying that this is a balanced budget.”

“Madam Speaker, think for a moment of the apparent sleight of hand that occurred Tuesday. Did we loot the treasury as may have happened in Shakespearean days? Did we rob Peter to pay Paul? Or did we bank on selling millions of dollars in taxpayer assets and depend on reaching deeper into the pockets of families and business people as government spending on advertising itself continues to escalate?

“I've been asking questions about the spending of millions of dollars by government, missed revenue opportunities and missed investment opportunities, and my search for the most basic answers has been blocked at every turn. I probably don't have to tell you what those questions are, Madam Speaker, but I can tell you my efforts to pursue those answers have led me to a continued search for good government...

"This budget is a pre-election document that can change quickly after the votes are counted on May 14. The budget faces none of the normal scrutiny of this Legislature, which again emphasizes the need to move to a fixed fall election date to remove the obvious politicizing, regardless of political party, of election year budgets.

“I have always strongly agreed with the objective of a real balanced budget, but I do not believe it is achievable in this fiscal year based on current economic conditions and the measures presented on Tuesday by the Minister of Finance.”

Should you trust the Pacific Carbon Trust?

Get ready for Premier Christy Clark to tell you sometime before the May 14 election day about how her BC Liberal Party is committed to openness. She might even say it's the most open in British Columbia history.

Don't believe her. It's just not true. 

Here is evidence of yet another public body in B.C. that just refuses to respect that government information belongs to the people who pay for government. Public bodies, like Pacific Carbon Trust, prefer to be inefficient and resist the simplicity of transparency, for fear of uncomfortable questions that might (gasp!) embarrass the ruling Liberal politicians.

I made a Freedom of Information request on Oct. 19, 2012 to PCT for a list of its suppliers and contractors, $25,000 or more. I wanted to find out how much it was paying for carbon offsets, the modern version of the 16th century sin-absolving scam dreamed up by the Catholic Church. Today's indulgences allow polluters to voluntarily pay for their planet-staining sins. 

PCT is a B.C. Crown corporation dreamed-up by Gordon Campbell when he was premier, to force government to go "carbon neutral." Whether it's school boards or hospital authorities, if they don't meet targets for reducing carbon emissions, they pay a $25 per tonne penalty to PCT. PCT then funds private sector projects. Canadian Centre for Policy Alternatives did a good job of deconstructing this government scheme.

PCT responded on Nov. 28, 2012 with a list of contractors and suppliers. But many names and dollar values were missing. The 16 amounts paid in 2011 and 2012 for carbon offsets were censored. PCT tried claiming it could withhold names and dollar amounts under section 3 (outside the scope), 14 (solicitor-client privilege) or 17 (risk of harm to financial interests) of the Freedom of Information and Privacy Act. 

I complained to the Office of the Information and Privacy Commissioner. On Feb. 13, 2013, I received all the information that had been withheld from me.PCT's original use of sec. 3, 14 and 17 was, for lack of a better word, bogus. 

My colleague from Business in Vancouver, Nelson Bennett, also received his information from PCT. His quest was a year-long and he wrote about it in this story on BIV.com.

What do we know now? 

Over the last two years, a whopping $17,497,877 was spent by PCT under the guise of offsets.

TimberWest Forest Co. $5,721,250

Nature Conservancy of Canada $4,500,000

Encana $1,617,716

Offsetters Clean Technology $1,613,957

Blue Source $1,228,173

International Forest Products $601,240

Westcoast Energy $555,965

Green Municipal Corp. $487,113

Canfor Pulp Ltd. $329,910

Krueger Products $277,847

South Coast B.C. Transportation (TransLink) $213,564

B.C. Transit $29,289

Sempa Power Systems $29,220

PCT also spent money on lawyers and accountants.

Fasken Martineau DuMoulin $240,795

Bull Housser and Tupper $55,461 

Lawyer Kai Alderson $27,019

Office of the Auditor General $90,000

PricewaterhouseCoopers $199,242

Money, into thin air by

Roof rip 6 years ago caused costly domino reaction

B.C. Place's roof ripped and collapsed Jan. 5, 2007

UPDATE (Jan. 14): NDP Critic Spencer Chandra Herbert complained to Auditor General John Doyle on Jan. 11, seeking an investigation of the cost of B.C. Place Stadium renovations. Read my story in The Tyee here and see the letter to the Auditor General at the end of this blog post.

UPDATE (Jan. 18): Auditor General John Doyle responded to Chandra Herbert on Jan. 16 and will conduct a fact-finding exercise. A very important first step. See his letter at the end of this post. Here's my latest story in Business in Vancouver. 

Was the skyrocketing cost of B.C. Place Stadium renovations the product of simple scope change or its evil twin, scope creep?

Government has refused to release a business plan or cost/benefit analysis for the renovation of B.C. Place Stadium, begging the question: does one exist? 

When it comes to B.C. Place, there are always more questions than answers. 

Ultimately, there is one question about B.C. Place that needs to be answered, after the half-billion-dollar project. It is this: did taxpayers get value for their money? 

The only hope may be for the Office of the Auditor General to step-in and investigate the blizzard of spending that happened at the 1983-opened stadium after its roof ripped and collapsed on Jan. 5, 2007 in a disaster that was deemed preventable. (It happened, whether by coincidence or convenience, after a drastically censored, 15-page, June 20, 2006 report to the Tourism Ministry by B.C. Pavilion Corporation that proposed major improvements at the stadium because it had "worn out assets which are critical to basic tenant operations.")

John Doyle’s predecessors investigated the NDP’s controversial Fast Ferries project (which was supposed to cost $210 million but rose to $462 million) and the Liberals' Vancouver Convention Centre expansion (which was supposed to cost $495 million but rose to $883.2 million). So why not put B.C. Place under similar official scrutiny? Why not before voters go to the polls to elect a new provincial government on May 14, 2013? 

In a Sept. 28, 2012 interview with Bill Good on CKNW AM 980, outgoing B.C. Pavilion Corporation chairman Podmore maintained “there’s only one budget, that’s the $563 million.”

"What government did is they authorized an expenditure of $12 million to allow us to completely design and engineer the building. To go out and obtain firm prices from contractors and subtrades. 

“And then we bundled all that together and went back to government and said OK, we completed the engineering, this is going to cost $563 million, we can get a fixed price contract to cover that work, do you want to proceed?”

Podmore also maintained the final price tag was $514 million. His math and chronology are a tad too simple for both you and me. 

What is now known is that he told Vancouver city manager Judy Rogers in a Jan. 22, 2008 letter that the cost was “in the order of $100 million, which includes replacement of the roof.” Podmore did not use modifiers, qualifiers or asterisks in his confidential letter. He didn’t mention whether the roofing cost for the stadium "rehabilitation" included an updated inflatable top or a new retractable system. 

By late April 2008, PavCo internal documents estimated the cost of a renovation with a "spoke-wheel" Frankfurt-style retractable roof would be $253 million. Application of such a roof before the Vancouver 2010 Winter Olympics was nixed, because the best estimate for completion was less than two weeks before the Feb. 12, 2010 opening ceremony.

Podmore and Premier Gordon Campbell announced the project in a May 16, 2008 news conference at B.C. Place, but both steered clear of telling taxpayers how much it would cost for that Frankfurt-style retractable roof. 

On Jan. 9, 2009, PavCo issued a news release announcing a $365 million funding envelope for top-to-bottom renovations. 

The budget was updated to $458 million on Oct. 23, 2009. Government eventually admitted the all-in price would be $563 million. On Aug. 15, 2012, the ruling BC Liberals claimed it was $514 million -- or $49 million under budget. (Still, that’s $414 million more than what Podmore said in his 2008 letter to Rogers.)

Along the way, Podmore said the sale or lease of PavCo lands around the stadium and a naming rights sponsorship would help lessen the burden on taxpayers. The sale option was tossed and the name remains the same. 

Paragon Gaming’s proposed casino/hotel complex west of the stadium was put on hold indefinitely when Vancouver city council denied an expansion bid in April 2011. Edgewater Casino is staying put at the Plaza of Nations until at least 2015, but Paragon is talking to PavCo about using city council authority to move the existing licence to a scaled-down complex. 

Telus had a $35 million to $40 million, 20-year deal to rename the stadium Telus Park, but government cancelled the agreement in February 2012. Evidence suggests the sponsorship was scuttled because of ongoing complaints and legal threats by competitors Bell, Rogers and Shaw over the June 2011 direct award of a $1 billion, 10-year government-wide telecommunications contract to Telus. 

Instead of giving Telus a second tier, official or exclusive supplier designation in exchange for goods and services already provided, government did a straight supply-without-recognition deal with Telus in August for an undisclosed sum. Yes, the government doesn’t want to tell us how much it paid Telus for goods and services that were supposed to be provided under the sponsorship. 

And, finally, the trial of the year is scheduled to begin in B.C. Supreme Court on Oct. 21, 2013 and it's all about the roof. Cable installer Freyssinet Canada sued steel contractor Canam Group for nearly $6.5 million. Canam fought back with a $26.15 million countersuit. PavCo and general contractor PCL are listed as defendants. The legal battle has been complicated by the grease that leaked from the Geobrugg-supplied cables which stained the fabric roof. The next procedural hearing is Jan. 10 and will involve applications to add more defendants and third-parties. (Meanwhile, B.C. Place workers represented by B.C. Government and Service Employees' Union local 1703 voted 96% in favour of striking. Contracting out and scheduling are the big issues.)

Recent legal filings by a lawyer for Canam suggest the cost of damage to the roof from leaking grease may be worth $15 million and it may not be covered by insurance. PavCo knew the leaks existed more than six months before roof fabric installation.

Apologists for PavCo and those desperately hoping to keep the B.C. Liberals in power and the NDP out of power after May's election will try to play-down any concerns about B.C. Place costs by claiming stadium-related economic activity rose from $58 million to more than $100 million after the renovation. But they have no real evidence to show you or me. This is par for the course around North America, according to The Stadium Gambit and Local Economic Development by sports economists Dennis Coates and Brad Humphreys. They say that stadium and arena developments never do for a local economy what the boosters say. 

“A stadium is a public investment in real capital, as such, the rules for sensible public investment apply to stadium finance as much as they apply to public provision of highways, schools and airports... 

“Unlike most studies commissioned by stadium advocates, the consensus in the academic literature has been that the sports environment has no measurable effect on the level of real income in metropolitan areas.”

The money that’s spent on B.C. Place is spent. It’s like toothpaste that cannot be stuffed back into the tube. But now is the time to analyze what went right and what went wrong. The public has a right to know how its money was spent and whether it was spent properly. Look what happened to Quebec’s construction industry because of opaque government tendering and spending. Revelations of Mafia involvement and resignations of mayors have been among the results so far of the Charbonneau Commission inquiry into that province's construction corruption.

Lessons can be learned which can be applied to future government mega-projects in B.C. New ideas can and should be floated to make the stadium a daily revenue generator, so that it can deliver dividends to government instead of rely on annual subsidies. It is a building with great potential. 

NDP complains to Auditor General to investigate B.C. Place renovation costs by BobMackin

Auditor General agrees to examine B.C. Place renovation costs by