Phil Hochstein and municipal spending – the pot calling the kettle black

Friday, September 23, 2011 03:44 AM

By Peter Ewart

Phil Hochstein and the Independent Contractors and Businesses Association, a construction industry lobby group, have just issued a report in which municipal workers are slammed as being the main problem in municipal spending around the province.

According to Hochstein and the ICBA, “grossly inflated wages and benefits [of municipal workers] are burdening taxpayers with high costs,” and this is why municipalities are deeply in debt, taxes are going up, and so on. The solution, so their argument goes, is for municipal politicians to slash the wages and benefits of city employees.

But what is really happening with this report? Are things as simple as it claims or is there more going on here that is not being revealed? Is some kind of “sleight of hand” taking place?

Now, the term “sleight of hand” is sometimes used to describe the activities of a magician who is performing a card trick, and who diverts the audience’s attention away from what he or she is actually doing. And so it is with Hochstein and the ICBA who appear to want to divert people away from the fact that, for the last ten years, certain sections of the construction industry in this province have been very much attached to the teat of government spending and have played a big role in running up municipal and provincial debt.

Indeed, the government of British Columbia could give ancient Egypt a good run for its money in terms of the palaces, monuments and edifices it has built over the last decade, whether it has been the massive spending on Olympic infrastructure, the Sea to Sky Highway, the Richmond Skating Oval, the Port Mann Bridge, the Vancouver Convention Centre, the BC Stadium roof, and so on.

In some ways, this massive spending over the last ten years is reminiscent of the Trudeau and Mulroney years in Canada, when it seemed no “mega-project” could be turned down by the federal government, and, as a result, an unprecedented debt was amassed that has still not been paid off.

Every step of the way, the ICBA and Hochstein, a close confidante of former Premier Gordon Campbell, have lobbied for more and more “infrastructure” spending and “P3 projects”, which have funnelled tens of billions of public dollars into the pockets of the big construction companies, developers, and others who dominate the non-residential construction industry, and which has also driven up the provincial debt to unprecedented levels.

Hochstein, who was a big campaigner for the HST, appears to have no shame in crying about how municipal spending is “out of control” while at the same time demanding more government spending on infrastructure projects. In an article written recently, he lectured government officials that they should “avoid the temptation to scale back their capital spending on these projects in tough budgetary times. It may look like the easiest way to balance the budget is to slash spending on infrastructure. The truth is it is the worst place for government to find money” (Construction Business – July/August 2011).

He further goes on to argue that “For the good of our province B.C. must continue with an aggressive economic and social infrastructure program to meet our urgent needs.” It is an interesting turn of phrase “our urgent needs”. Just who does “our” refer to? Some would argue it sounds very much like Hochstein and the ICBA’s “needs” more than anything else.

Now it is true that, as a result of this huge expenditure on “palaces, monuments and edifices”, a kind of “mega-project” psychology has been created at the provincial level that has seeped down to the municipal level. Thus, for example, in Prince George and other jurisdictions across the province, it is not difficult to spot such questionable construction projects and related commercial real estate deals, ones that an increasing number of people feel we can ill afford and which trump more needed spending on basic and essential services.

The point is that runaway “lobbying” by non-residential construction and real estate developer interests in this province have been very effective at ramping up government spending to obscene levels at both provincial and municipal levels. Such lobbying poses serious problems. For example, we have seen in the U.S. how much damage has been done to the economy by the banks who lobbied for de-regulation and then, after crashing the financial system, massive bailouts from government.

It is also interesting to note that these same banks, like the non-residential construction and development industry in BC, which have gorged themselves at the public trough, are now calling for big attacks on the “little guy” whether it be the health and social security payments of ordinary Americans or wages and benefits of municipal workers in BC.

So, before anyone starts attacking the “little guy” in this province, why don’t we take a long and hard look at the endless “mega project” spending at all levels of government? And, while we are at it, also take a look at how lobbying by big business construction and developer interests has skewed the finances and priorities of both the province and certain municipalities.

Peter Ewart is a columnist and writer based in Prince George, British Columbia. He can be reached at: peter.ewart@shaw.ca

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