olumbia Fiasco: Story of Bennett’s $250 million hoax at B.C.’s expense

PT SPECIAL This is the story of Premier Bennett’s $250 million hoax at the expense of B.C, taxpayers.

The story begins on the first

of’ October 1964, when with great.

fanfare, U.S, President Lyndon B, Johnson paid us a brief visit. He had come to the Peace Arch at Blaine to put the U.S, Govern- ment’s signature to the Columbia River Tréaty, originally nego- tiated three years earlier.

The main technical features of the Treaty were drawn up by the U.S. Army Corps of Engin- eers, but the financial arrange- ments were the “brainchild” of Premier W, A. C. Bennett,

The latter was all smiles as he received the $275 million down payment for his efforts. And of course L, B, J. was more than pleased with this deal which absolutely guaranteed cheap hydro power, flood control bene- fits and vast quantities of water

LABOR SCENE

by

BRUCE MAGNUSON

As usual the complicated pro- cesses and procedures that gov- ern railway workers’ negotia- tions for new wage and working agreements drag on, This year there are three conciliation boards instead of one for the *non-ops.” (All workers con- nected with railways operations who are not running trdins are called “non-ops,” Those who are running the trains are referred to as the “running trades.”)

Among the unions that com- prise the workers who do not operate trains there is one con- ciliation board for the federated shop crafts, another for the mem- bers of the Canadian Brotherhood

of Railway, Transport and Gen-_

eral Workers, and yet another for the non-ops belonging in the main to the Brotherhood of Rail- way and Steamship Clerks, Freight Handlers, Express and Station Employees, an inter- national union, The running trades, comprising firemen and engineers, conductors, dining car employees and porters, conduct separate negotiations,

In view of present-day condi- tions, whatis most clearly needed now is a _ streamlining of the union negotiating structure if the full strength of organized labor on the railways is to be brought to bear in these negotiations, In fact it should go beyond that into other fields of transport, Certainly as a step towards such unity, the non-ops and the run- ning trades ought to combine their forces and conduct joint negotiations,

Present federal legislation makes a farce of collective bar- gaining processes, Dragged out negotiations demanded by the complex legal processes result in growing indifference, cynicism and lack of confidence among workers, Even when the major- ity vote for strike action, they feel that in the final showdown their views may be thwarted, It is like fighting with both hands tied behind one’s back,

The leaders of the unions have proposed legislative amendments and changes. But too little has

“been done to mobilize the mem- bership for action and, if need ‘be, an all-out fight to compel

'

changes in what has become an impossible situation.

What has been said above bears out the need for one Can- adian Railway Workers’ Fed- eration open to all railway work- ers’ unions as a step toward an all-Canadian Transport Work- ers’ Union, with appropriate di- visions of workers employed in railways, trucking, air, marine and pipelines,

While such an aim isobviously the thing to work for, its real- ization is not possible in the present negotiations, The most that can be expected in the cur- rent negotiations, and consistent with the above aim is:

(a) that a higher degree of democracy be practised within the unions so as to draw the membership closer to the leader- ship at each stage of the battle as it develops, done in the case of some shop crafts, and by the CBRT&GW strike vote prior to conclusion of conciliation procedures, arming the officers with a strong man- date for action),

(b) improved liaison between the negotiating committees of each union and their respective memberships ought to include the convening of special confer- ences called by the joint pro- tective boards of each union, where all local chairmen could hear and discuss reports by the general ehairmen on the progress of negotiations. If all locals and lodges began to work for such conferences now, the ob- stacles to the convening of such meetings could be overcome,

(c) that any newcontract must be ratified and fully accepted by the membership before it can be signed by the union negotiators.

Another extremely important step towards co-operation of all the unions in the transport field may be to extend the idea of

local railway councils, set upin -

some areas, to include alltrans- port workers in joint local trans- port councils to deal with ques- tions of common concern and to promote the idea of mutual aid as between workers in re- lated industries and occupations,

(This is being .

for United States agriculture and — industry.

Under the Treaty B.C, is to build three storage dams on the Columbia in Canada, The $275. million down payment plus anoth- er $70 millicn to be paid when the dams are completed was sup- posed to meet the entire costs of construction and leave enough over to pay for half the cost of installing generators at the Mica Creek site.

Swindle

The Texan cowboy is no doubt still smirking about this swindle, Because with the passage oftime it has become evident that thenet cost to B.C, taxpayers will be at least $100 million (based on today’s construction costs) and probably another $50 million by the time the dams are built. And then in 1973 if B.C. decides it can use some hydro power of its own and as a result installs. generators at Mica, the total bill for this Treaty will be a whopping $250 million!

No wonder the famous Bennett smile has turned into a heavy scowl. His notorious pro U.S, orientation plus poor business judgement has landed him in a first class political crisis.

Let’s review the facts of the financing as they have been ex- plained by Larratt Higgins, in a feature article in the May 28th issue of the Financial Post. Hig- gins, who is an economist for the

Ontario Hydro, was one of the

most vigorous opponents of the Columbia River Treaty and bril- liantly exposed its short-coming before the External Affairs Com- mittee of the House of Commons,

Higgins notes that Canada isto receive a total of $318 million U.S. dollars between Oct, 1, 1964 and the anticipated completion of the Mica Dam in April 1973. If this money is invested at 5%

it will accumulate of $501.1 mil- lion in Canadian funds: by.*April 1551973;

On the other hand, the B.C. Hydro in January 1964, estimat- ed that the cost of constructing the three dams (including inter- est during construction) would be $410.7 million, Capitalizing the costs of the various dams at 5% to April 1, 1973 for comparable purposes with the income re- ceived, the figure of $447.7 results, there

Thus, - theoretically,

would be $53.4 million left over, .

which would meet half the cost of installing generators at Mica. (It should be pointed out that the generators are not a condi- tion of the Treaty, but their installation is the only way by which B.C. will get any power from the three dams.)

Higgins points out that in his original haste to sell the project to the B.C, public Premier Ben- nett neglected to mention the costs of operating the dams to provide the benefits to the U.S. The April 1973 value of these operating costs, was later ad-

questions concerning the ade- quacy of the engineering esti- mates themselves andthe related standards to be used for clearing the dam sites, but also there are the known increase in costs that have occured since 1964.

Cost estimates Provincial Works Minister Chant has publically stated that construction costs on government public works projects are coming in 25% higher than anticipated. It is reasonable to assume that

‘this increase will apply to the

Columbia dams as well, If this 25% increase is applied on the $447.7 million capitalized cost of construction an additional $112 million are added, resulting in a net deficit of $106 million. If the increase in costs from all factors reaches 35%, and this is not likely since the major expen- ditures lie quite a bit away, then the deficit will be $150 million, with the $100 million cost for Mica generators on top of that, ‘ Hence, it is becoming obvious that L.B.J.’s little visit will cost B.C. taxpayers close to $250 million. This is a mighty expen- sive subsidy to the same govern-

Worried Premier

A worried Premier Bennett is pondering over his fate in the next provincial election once the facts on the Columbia scandal come. to light. This is reported to be one of the main reasons why an election date has not yet been sef,

mitted by Hydro officials to be $47.2 million.

Subtracting the $47.2 million from the anticipated $53.4 million surplus, leaves but a scant $6.2

margin.

But all of this is predicated on the basis of the cost estimates made by B.C, Hydro in January 1964, Not only are there serious

ment that day after day unloads its deadly cargo of bombs on the heroic people of Vietnam.

' And finally let us remember that it was the Bennett govern- ment, strongly supported by both the provincial and federal Liber- als, who arranged this enormous subsidy to the U.S. Yes, let us not. forget this when B.C, once again goes to the polls,

INCOME

$254.4 million payment in U.S, funds — October 1, 1964

$11.1 million payment-in U.S. funds — April 1, 1968 (completion of Duncan Dam)

$52.1 million payment in U.S. funds — April 1, 1969 (completion of High Arrow Dam)

$1.2 million payment in U,S,- funds — April 1, 1973 (completion of Mica Creek Dam)

Grand Total of INCOME

Total

US, benefits Grant Total of costs . Expected surplus

*A 25% increase in the $447.7 million Capitalized construction the $6.1 million surplus into a $106 million deficit,

Columbia River Treaty Financing

COLUMBIA RIVER (millions)

Canadian Interest at 5% equivalent - to April 1/73 Total 274.8 141.3 416.1 12.0 3.3 15.3 : 56,3 12.1 68.4 9 = 1,3

EXPENSES (as originally estimated by B.C. Hydro, January 1964)

Construction Interest During Capitalization ‘Total Cost. sss «Construction _at 5% to April 1/73, Duncan Dam 29,8 3.5 9.2 mt42, 0 High Arrow Dam 116.2 13.4 27.8. 157.4 Mica Storage Dam 216.8 28.4 — 245.2 General Studies 2.6 = _ 2.6

ADD; 1973 value of the cost of operating dams to provide

costs adds $112 millions, turning

$501.1 million.

“$447.7 million* 47.2 494.9

6.2 million,

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June 10, 1966—PACIFIC TRIBUNE—Page 2

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