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CAMPBELL RIVER
JOBLESS HIT
TORY POLICIES

Arch right-winger and former finance
minister in the Joe Clark government,
John Crosbie, received an unantici-
pated welcome in Campbell River Sat-
urday. Demonstrators, members of the
Campbell River and Comox Valley
unemployed committees, brought the
harsh reality of Canada’s two million
jobless to the attention of Crosbie, who
gained recent infamy when he called
for the discontinuance of family allow-
ance and other federal social services.
Also reminded of the jobless situation
was local Progressive Conservative
candidate Mike Hicks, and the party
faithful — reportedly sparse — who
attended the Tory rally at the city’s
Foreshore Park. The riding, held by
NDP MP Ray Skelly, is considered
highly unlikely to go Tory in the upcom-
ing federal election.

a

Sellout haunts Bennett's coal train

The B.C. Federation of Labor last week
demanded a full public disclosure of the
financing of the Northeast coal project as
Premier Bill Bennett launched an extrava-
gant $500,000 grand ceremony to open offi-

cially the Socred megaproject.

And federation president Art Kube

charged that Bennett had deliberately

vO ae re?

scuttled an agreement with the federal
government which would have extended the
rail line into the coal fields at federal
expense, thus forcing the cost on to provin-
cial taxpayers,

“Despite the hoopla and the unrestrained
celebrations, there are a number of serious
questions regarding finances that have not

_been answered,” Kube said in a statement.

“We still have absolutely no idea how,
when or if the province will ever recover the
massive public expenditures that under-
wrote the Northeast coal development.”

The federation’s demand for disclosure
came as Bennett together with provincial
and federal government officials and execu-
tives of Teck Corporation and Denison
Mines began a four-day extravaganza of
banquets, receptions and ribbon-cutting
ceremonies at a total cost of half a million,
$150,000 of which will come from the public
purse.

In a speech to government officials and
business executives gathered at a “celebra-
tion luncheon” in Vancouver June 5, Ben-
nett said that there were “‘no critics in this
audience. There are only those who are
builders and doers and not those who say
‘dont?

Ironically, it was an echo of a speech
W.A.C. Bennett made 20 years earlier when
he announced the final signing of the
Columbia River deal, a deal which he said
“would silence all his critics” because the
deal would involve no cost to taxpayers.
Ten years later, in 1974, the public would be
saddled with a $720 million bill, the cost to
the public purse of the Socreds’ sellout.

And it is a virtual certainty that the public
will again be forced to pick up the tab for
the Northeast coal — even apart from the
fact that a major energy resource has been
contracted to the Japanese for a generation
without any prospect for the development
of secondary industry.

Throughout the costly celebrations, the
provincial government has refused to pro-
vide a cost analysis of the northeast coal
project and has refused to discuss the

|

impact that Japanese renegotiation in price
or volume would have on provincial
government revenues.

A cost benefit analysis that the govern-
ment did release in 1982 revealed that at
current contract volumes of some eight mil-.
lion tonnes per year, the return to the pro-
vince would be approximately $464
million — only enough to cover the cost of
the B.C. Rail spur line, not counting inter-
est. The public would still have to pay for

Bill Bennett's speech was an echo
of W.A.C. Bennett’s speech on
the Columbia River deal — which
cost B.C. taxpayers more than
$720 million.

Tumbler Ridge development and other
infrastructure required for the project.
Economic Development Minister Don
Phillips has also acknowledged that it
would require additional volume increases —
to some 11 million tonnes annually — to
return the province’s costs on the project.
“If the tonnage we have in these initial
contracts was all that we could look for-
ward to, the development would not be
economically viable,” he told reporters in
1982. “But that isn’t the case. ..” he insisted,
“you'll see those export contracts grow each
year.” ;
Those contracts have not grown — in
fact, they have remained at the same level as
they were in 1982. If anything, they are
likely to decrease in the future. —
Every coal-producing nation in the capi-
talist world is sitting on a massive surplus of
coal, estimated at between 40 and 60 million
tonnes, according to a special coal report
commissioned by the British shipbrokers
firm, Simpson, Spence and Young.
Significantly, the exports required to
make NE coal pay, according to Phillips’
figures, were 11 million tonnes — yet there
were only 11.6 million tonnes of coal
shipped to Japan last year from mines all
across the country, including those in
Alberta and in southwestern B.C.
Moreover, the Japanese steel industry
has already exacted price and volume
reductions from Westar Mining and Ford-
ing Coal in southwestern B.C., forcing the
price per tonne down to $69.09. And the
same steel producers have repeatedly

’ demanded price reductions from the north-

east coal mines, to cut the current contract
price of approximately $97 by $14.

Teck and Denison have so far invoked
the letter of their contracts to block any
price cuts but the Japanese have made it
clear that there will be cuts when the price
review provided for comes up in 1987.

Minoru Kanao, president of one of
Japan’s main steel producers, Nippon
Kokan, told reporters in Price George June
7 that the contract provided for price reduc-
tions in 1987 if the world price declined and
confirmed that cuts would be demanded at
that time.

The difference between contract price
and world price is dramatic: northeast coal
contracts call for the price to increase from
$97 to $128 in 1987 unless world price

’ reductions force a review; the current world

price is around $70 a tonne.

If prices fall, surcharges to the province
would theoretically remain intact. But the
mining companies would inevitably put
pressure on Victoria for further breaks.

The Japanese are likely to seek reduc-
tions in volume in 1987 or even sooner,
given the world coal glut. Even at current
volumes, the province will not recover its
investment for upwards of 30 years; if
volumes are reduced, it may never be reco-
vered at all.

NDP MLA Frank Howard stated May
23 that the Tumbler Ridge rail line alone
would lose between $30 and $50 million
annually, the difference between the
revenues available from coal surcharges and

“The financial commitment to
northeast coal is one reason that
the severe cutbacks have come in
essential programs such as
education.”

the cost of financing the railway’s capital
expenditures. In fact, it was to bury those
losses that the provincial government res-
tructured B.C. Rail, he charged.

(Again the historical parallel appears: the
government of W.A.C. Bennett qeated a
special committee of B.C. Hydro in an
effort to hide the losses on the Columbia
River.)

As for the Quintette and Bullmoose
mines themselves, executives for both Teck

_and Denison have stated that if contract

price is forced down to $70 per tonne — the
current world price — the mines would
simply close.

Even now, there is no question that the

northeast production has contributed to the
world coal surplus which in turn has forced
price and volume reductions — and mas-
sive layoffs — in the southeast coal mines.

“At the same time as Premier Bennett is
celebrating in the northeast, we see continu-
ing high unemployment in Dawson Creek,
Prince George, Chetwynd and other north-
ern communities that were supposed to see
economic benefits,” B.C. Fed president Art
Kube said June 6. “In the southeast com-

‘munities that also produce coal, we have

seen more layoffs and closures announced.

“The coal surplus arranged by the Japa-
nese buyers has northeast, southeast and
Alberta mines all competing against each
other,” he charged.

Citing the Japanese demands for cuts in
price and volume, Kube asked: “Will the
provincial government ever reclaim the tax-
payers’ investment?

“The financial commitment to northeast
coal is one reason that the severe cutbacks
have come in essential programs such as
education, reforestation, consumer protec-
tion, human resources services and legal
aid.”

The federation president also charged
that Premier Bennett had vetoed an agree-
ment with the federal government which
would have provided for extension of the
rail line to Tumbler Ridge at federal rather
than provincial expense.

The federation president had informa-
tion from federal government sources indi-
cating that an agreement had been.reached
between the federal government and B.C.
Economic Development Minister Don Phil-
lips which would have provided for exten-
sion of the rail line from Prince George to
Tumbler Ridge by CN at federal govern-
ment expense. But according to those
sources, Bennett vetoed the deal, insisting
that the line be built by B.C. Rail.

Although the $455 million cost of the line
was nominally paid by for BCR, the cost
was effectively covered by the $470 million
provincial grant to B.C. Rail’s sinking fund
provided for in the February, 1984 budget.
Had that grant not been made, all of the
cuts in education and other services would
have been eliminated.

In a press conference in Prince George
June 7, Operation Solidarity repeated the
charge that Bennett had vetoed the federal
agreement. Although the premier and his
entourage were in the city the same night, he
made no attempt to deny it.

PACIFIC TRIBUNE, JUNE 13, 1984 e 3

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