Last week (Editors note: this is part two of a letter to the editor that started in last weeks July 18th issue) I ended by implying that some of your readers tax dollars have been, and will continue to be, sucked up by the Jumbo Project.Below I will explain an insidious avenue that few see for what it really is, a subsidy for Glacier Resorts Ltd. (GRL).
In 2011, the provincial governments Select Standing Committee on Finance and Government Services was touring the province seeking suggestions on how they could put their financial house in order. I gave a formal presentation to this body on October 12th, 2011 when they were in Cranbrook. My document was titled The Financial Implications of Licences of Occupation and other Provincial Land Use Agreements (see F-1 at http://goo.gl/6qbxla). It explained the concept of full cost recovery using, as an example, the mishandling of the GRL Farnham Licence of Occupation.
As full cost recovery could apply to pipelines and other large projects, there was attention during my presentation.With the document before him, sitting at the front table was Bill Bennett.The Q&A time was short and knowingly Bill quickly started a long rambling prologue, which seemed to have no purpose other than to prevent any members of the panel from asking more pertinent questions. However, during his ramblings he did say that he supported the full cost recovery concept. I do have a witness. The event was also recorded, so the archives now hold his words.
Governments cant expect self-reporting to work without unannounced inspections. For the Jumbo Project, a single inspector, stationed in Kamloops, couldnt do even a two-hour inspection without costing the province $500 or more. When complaints are made about a remote project that isnt being properly inspected, the province pleads they dont have enough staff, which means they arent bringing in enough cash to fund the staff they need. The remedy that full cost recovery brings is that fees (ie. annual rental) could be set so that monitoring a project properly, responding to public concerns and all the required administrative computer work doesnt put the province in the hole. Another full cost recovery tool is to set a security deposit high enough that it actually covers clean-up costs when a corporation pulls out or goes belly up.
In the Jumbo example for the GRL Farnham licence I suggested that an annual licence of $50,000 be used. Later I learned I was off by ten times. Areas of the same size on U.S. Forest Service lands leased to a ski area in Colorado, have had an annual lease fee of $500,000. You ask, what did GRL actually pay while under the Farnham Licence of Occupation? Annual lease $500; security deposit $0 (nothing).
Is it desirable that limited provincial budgets lead to diminishing inspector and compliance officer effectiveness, a widening use of self-reporting, and an apparent phase out of environmental protection? Does Bill Bennett still support full cost recovery? Or does he support the trickle UP effect, namely tax the many and give it to the one per cent?