The Politics of Post-Gordo BC

The BC NDP should not bet on the Liberal government disintegrating under Premier Christy Clark.

Sure, there are tensions within the Liberal centre-right coalition.  (What coalition hasn’t gone through that?)  Sure, Clark has been known to engage her mouth faster than her brain from time to time.  (Who hasn’t?)  But the Official Opposition will have to adapt to the new situation, and realize that it can’t win by sparring with the ghost of Gordon Campbell.

That being said, Clark and her Liberal government face difficult challenges on the way to winning a fourth term in office.

(For an astute synopsis of the situation see David Schreck’s blog.)

I want to focus on four of the large problems confronting Clark; how she handles them will have a large impact on the health of her party’s coalition and on its standing with the public.

First, the HST. 

The Liberals cannot win this issue.  They are counting on squeaking out a victory for the tax in the upcoming referendum, but even that long-shot scenario is loaded with political downside for them.

The pitch by government and its corporate backers is that, yes, the HST is good for you, but more acutely, the cost of getting out of it would be disastrous – not only having to refund the $1.6 billion participation-bribe from Ottawa, but also the cost to government and to business of re-constructing the old Provincial Sales Tax and its collection system.

If by some fluke the yes-to-HST side wins the referendum, all that will mean is that large numbers of British Columbians feel that the government has trapped them into a bad and deceptive tax to the point that they can’t get out without inflicting even more harm.  Hardly a vote of confidence in the Liberals – in fact, in essence even a more dismal condemnation of their policies.

As I have opined before, Clark’s best move is to cut the Liberals’ losses and kill the HST.  This at least gives some credibility to the message that this is a new government that has shed Gordon Campbell’s skin (sort of like a molting reptile).  But that move would bring large political challenges, alienating her corporate backers and stirring dissention within her own party.  Even if she favoured killing the HST prior to the referendum, it may be politically impossible for her, especially during her first few months in office, when she is busy re-uniting her divided ranks and has no seat in the legislature.

Second, the budget.

Here the story line is simple.  Corporate tax cuts have flooded the government with red ink. Even natural gas royalties, where huge reserves are being exploited in the northeast, are way down because the market is glutted with cheap, environmentally-devastating shale gas extraction. Health care, education, child protection, and all other government services are starved for money, and Clark has promised various enhancements in the usual glib campaigning style.

(This one also presents a problem for the NDP: will they support higher corporate taxation to maintain and expand government services? If not, the difference between an NDP and a Liberal administration would be more a matter of the fine details than the overall picture.)

Killing the HST would exacerbate this problem for Clark, but she’d be wiser to get in front of the parade before the referendum, than to wait and get trampled by the voters.

Third, Hydro bills.

Gordon Campbell’s energy policies are a large part of the story behind huge electricity rate increases. Forcing us to buy a huge surplus of intermittent power from corporate power producers at high prices and then to dump it on the export spot market for huge losses will cost BC Hydro customers about $600 million per year.  That’s what happens when you buy at $120 per MWh and sell at $45.

Squandering $1 billion of Hydro bill revenues on computerized electrical meters (so-called “smart meters”) is another huge hit.  These devices do little or nothing to reduce electricity consumption.  See my commentaries here  and here.

The net result of this and other strategies to use our household energy bills as a source of corporate profit is that rates will rise by about 10% a year for at least the next decade, unless these policies are reversed.  With compounding, that means that bills will double about every eight years.  BC Hydro and the government are taking a pounding right now, with Hydro’s announced application, to be filed later this week, to raise rates by more than 30% over the next three years, with the first hit on April 1.  (The third of these hits is scheduled for April 1, 2013, about 6 weeks before the next pre-set election).

Clark can boost her chances of winning the next election by reversing Campbell’s policies in terms of electricity “self-sufficiency” (a.k.a. surplus) and smart meters.  Nobody but the companies who sell and install the meters will miss that part of the equation (though we may all have to pay hefty penalties to back out of supplier contracts by that point, especially if she delays).  But “self-sufficiency”, a policy designed to turn us into a feeding trough for Independent Power Producers, cements a political love-affair between the Liberals and the IPPs. Could be tricky, and Clark’s coterie includes heavies from the private energy sector.

Fourth, election timing.

Which leads to the last of my issues for today, the timing of the next election.  During her campaign for the Liberal leadership, Clark proposed a quick election.  She quickly retracted this promise. Timing the next vote is one of her tougher issues.

As I have noted, the HST referendum is a political blow to the government no matter how that vote goes.  They cannot risk going to the polls until the undertow from that shipwreck has cleared.  That will not occur the day after the referendum is held.  It will take time.

The more time passes, and the closer we get to the non-binding legislated fixed election date, the more difficult it gets for the government to justify tinkering with the date. And the longer they wait, the more time for the huge political challenges facing the Liberals to catch up with them.  A true dilemma.

The NDP’s best course.

As I commented at the outset, the NDP can’t stake the next election on the Libs failing to meet the various challenges, or at least to meet them sufficiently to regain their historical edge in one-on-one election contests with social democracy.  They need the courage to stake out clear alternatives and present a meaningfully different choice for the electorate.  Giving in to the usual temptation to crowd the centre would not increase the pressure on the Liberals but would give them more scope to finesse a fourth term.

Time to get off the fence on the HST (under Carole James, the NDP avoided any commitment to kill the tax:  that position will be untenable if and when the referendum calls for an end to the HST).  Time to call for the restoration of the corporate tax base and the resourcing and restoration of government programs and services.  The NDP should hold fast to the demand to reverse Campbell’s electricity “self-sufficiency” policy – a promise to re-define the phrase so that it means what it sounds like, and not perpetual surplus, would go most of the way – and call for axing the smart meter program.

But the NDP won’t win the next election by default.