RAISER STEEL
REAL WINNER

The Editor:

When the offer was made, I applied for my
five free shares in BCRIC and, in due course,
received them.

I did more than that. I followed up on the
offer to pick up additional shares at $6.00
each. I purchased a substantial number. I
consulted by NDP MLA colleagues and told
them that I intended to follow this course of
action. They agreed that there would be some
value in at least one member of Caucus being
a shareholder in his own right, thereby
having the opportunity to attend annual
meetings of the corporation or to attend
shareholder meetings from time to time and
to keep a shareholder’s eye on what was
happening in this corporation.

It must be remembered that the whole
BCRIC operation was possible only because
the NDP administration had acquired assets
worth some $160 million which had cost the
taxpayers of the province $40 million. This
“surplus” made it possible for the govern-
ment to give away shares with a market
value of approximately $75 million. The NDP
opposed this giveaway of resources owned by
all of the people. However, once the decision
had been made, we accepted the fact that it
was irreversible.

Apart from the reasons mentioned above, I
invested in BCRIC because I felt this corpora-
tion, owned almost entirely by many people
scattered all over the province of British
Columbia, would be a corporation that would
invest in job opportunities in British Colum-
bia and in the development of B.C: resources

for British Columbians. Of the 160,000 who
purchased a minimum of 100 shares, and

thereby qualified to be voting shareholders,
many probably felt the same way.

Many thought that such a corporation
would be profitable, and no doubt these peo-
ple invested with a view to getting dividends
or making capital gains on their share pur-
chases, but most of all they felt they were
investing their money in British Columbia
for the benefit of British Columbians.

Along with many of these people, I was
disappointed when I heard that BCRIC
was going to direct its attention to oil and
gas exploration in the United States. Sucha
move might be profitable and eventually
earn dividends for shareholders, but it was
doing nothing for the development of
British Columbia.

Along with many of these people, I was
somewhat heartened when BCRIC bought
into MacMillan Bloedel. At least this was
bringing ownership and substantial control
of this B.C. corporation back into B.C. I
would have been much more pleased if
BCRIC had acquired the American-owned
MacMillan Bloedel shares, but told myself
such a move would come later.

Many of the shareholders must have joined
me in a feeling of concern when BCRIC
offered $44.00 per share for Kaiser Corpora-
tion shares some months ago. This offer was
made after Kaiser had sold off some very
good oil and gas assets and there was a feel-
ing that the price of $44.00 was too high. That
feeling was reinforced when the BCRIC direc-
tors decided not to pick up the option but to
acquire a 25 per cent interest in Kaiser Corpo-
ration from Kaiser Steel in the U.S.A. It was
generally felt that the BCRIC directors had
come to the conclusion that their offer was
too generous and hence they were backing
off.

As a BCRIC shareholder and as a
British Columbian I was nothing less than
astounded, as well as shocked and dismayed,
when I found out that the BCRIC directors
had decided not to exercise the option

because they felt Kaiser Steel U.S.A. was
being too generous and that it should receive
$55.00 instead of $44.00 per share. It is said
that our consideration for this American cor-
poration kept it from going under and saved
thousands of jobs for Americans. That is
charitable but is it really why we established
BCRIC?

The President of BCRIC now says that
$55.00 per share to acquire control is much
better than $44.00 per share to acquire a 25
per cent interest. However, to the best of my
knowledge, he has never denied that BCRIC
could have picked up a 25 per cent interest at
$44.00 per share and then could have gone on
to pick up further shares at the same price
when the market was approximately the
same price when the market was approxi-
mately $32.00 per share.

It has since been revealed that three of the
six directors did not vote on the Kaiser deci-
sion because they owned Kaiser shares in
their own name. Mr. Helliwell, one of the per-
sons who owns Kaiser shares, did not vote on
the proposal but he did recommend to the
directors that they support this offer. By
doing so, he exerted more influence on the
decision than had he voted without persuad-
ing anyone else.

It is argued that the Kaiser shares are
worth $55.00 on the basis of the assets owned
by the corporation. On that basis MacMillan
Bloedel shares would probably be worth in
excess of $100.00 each.

The point is that BCRIC will pay far too
much in cash and in borrowed money — more
than half a billion dollars — to pick up a
controlling interest in Kaiser.

The point is that Mr. Kaiser has been
offered a very lucrative management con-
tract which will give him three and a half per
cent of the income of Kaiser Corporation
from coal sales. In addition to the $49 million
this will give him at least $10 million per year
he will make from selling his own shares.

The point is that BCRIC earnings will
suffer substantially from the loss of revenue
on funds that were invested, albeit only in
bank deposits, and from the relatively high
interest rate that will be paid when money is
borrowed to complete the Kaiser Corporation
purchase.

The point is that this move on the part of
BCRIC will add not one single job in the pro-
vince of British Columbia and will create no
new economic effort.

The point is that it would appear as though
some people had advance information and
profited enormously from this particular
effort.

The point is that the six directors of
BCRIC, each one of them hand-picked by the
Premier of the province, have used funds con-
tributed in good faith by people all over the
province of British Columbia in the hope of
earning income ‘or in the hope of making
some contribution to the economic develop-
ment of British Columbia. These people have
been sold down the river by Premier Ben-
nett’s hand-picked directors.

The establishment of BCRIC and the nam-
ing of the directors was Premier Bennett’s
idea. He has to accept the responsibility for
explaining to the people of the province what
went wrong with this instrument which was
supposed to be so good for the people of
British Columbia. Premier Bennett may try
to wash his hands of the whole affair, but the
peRIO directors are Bennett’s hand-picked

oys.

The government of British Columbia still
holds approximately four million shares
which it holds on behalf of the people of this
province. As the major shareholder, the
government of British Columbia, led by Pre-
mier Bennett, has a responsibility to those
people all over the province of British Colum-
bia who were persuaded to invest in BCRIC
shares.

The man who took credit for conceiving
BCRIC cannot deny paternity at this critical
time in the development of his creation.

The point is that the real winner in this
deal are Kaiser Steel, who will have made
half a billion dollars from Kaiser Resources
in the last year.

David Stupich
NDP-MLA

A PRINCIPLE
WORTH
HONOURING

The Editor:

The great architecture of democracy rests
on a very simple foundation: one person, one
vote. It rests on the presumption that we are
all equal in voice and vote.

The argument of one person, one vote took
a long time to win. Only with the abolition of
‘rotten boroughs’ and of the poll tax, and
with universal suffrage finally won but
sixty years ago in Canada did that argu-
ment finally succeed in western democra-
cies.

Some people still believe in privilege.
Some people still believe that property
deserves a vote. Social Credit has now
passed the highly controversial Bill 54,
which actually gives office space a vote.

When the Barrett administration ex-
tended the municipal franchise to tenants,
the reason was clear. Citizenship, not
ownership, was the basis of entitlement.
Persons, not property, were thus enfran-
chised.

Giving the vote to office space has
nothing to do with citizenship. It has alot to
do with politics.

Everyone knows that gerrymandering
usually means rigging the electoral boun-
daries in your own favour. Everyone has
heard about the Eckardt report, the Vogel
report, and Gracie’s Finger.

Bill 54 creates a new kind of gerrymander-
ing. Bill 54 adds a whole new class of
electors, created articially. This new busi-
ness vote could seriously alter the ordinary
outcome of a local election.

Bill 54 is clearly designed to aid Socred
supporters in their campaigns for local
office. Giving multi-votes to business in
local elections has obvious political con-
notations.

Why has this happened? It is well known
that the Socred machine, never labelled but
always active, has long dominated civic
politics in B.C. Lately, though, their munici-
pal efforts have run into the same trouble
that their provincial machine has.

Representatives of neighbourhoods, of
ethnic groups, of conservation and other
non-Socred constituencies have begun win-
ning local office across B.C.

The Socred reaction? Bill 54, a new class
of privilege, and a system of multi-votes for
their friends.

Mr. Bennett’s legislation is a sad attempt
to shore up the tottering Socred organiza-
tion. But worse, it creates a special class of
privilege, an alien philosophy not part of the
Canadian democratic tradition.

The Mayor of Vancouver, the Mayor of
New Westminster, the Mayor of Kamloops,
the Official Opposition, the editorial pages
of most newspapers, and many civic offi-
cials are united in their opposition to Bill 54.

I thank you for printing this letter, and
urge your readers to lend us their support on
this issue.

One person, one vote is a principle worth
honouring.

Yours sincerely,

Charles Barber, MLA
Official Oposition Critic
on Municipal Affairs
Legislative Buildings
Victoria, British Columbia

Lumber Worker/September, 1980/9