November 25, 2009

Zeroing in on British Columbia

An interview with economist Marc Lee

by Dawn Paley

The Dominion - http://www.dominionpaper.ca

VANCOUVER—Marc Lee’s job as an economist at the Canadian Centre for Policy Alternatives used to leave him feeling like a voice in the wilderness. But over the years, by making one accurate economic prediction after another, Lee has proven that his voice is worth listening to. One year ago, his small team of economists was the first to raise the alarm about the effects of the US recession in BC.

The Liberal government tabled a budget update last month that is billions of dollars in the red, after predicting a minuscule deficit months before. Lee and his team stand out as a success story amid the doom and gloom. He is a scientist amid a pack of speculators and spinners; an economist who cares about the environment, and BC’s future. Instead of resting on his laurels and saying, “I told you so,” Lee is working to make his economic vision for BC known far and wide.

I met Lee in his small office on the edge of Vancouver’s Downtown Eastside to ask him what’s wrong with BC’s economy, and what it might take to fix it.

Marc Lee on who saw the recession coming:

Well, we saw it coming, and we put out a budget brief last fall—it came out in October—that basically said we know something’s coming and here’s a few scenarios of what that might look like based on different projections of economic growth.

Our forecasting has generally been way better than the government’s anyways. They put so much emphasis on these budgets and forecasts and all that stuff [which] get reported in the media the next day, and most of the time they’re just totally wrong. Like, they’re off by billions, consistently.

...on BC’s budget process:

We just came from presenting at the finance committee, for the Budget 2010 consultations, which you know, by and large, is a fairly cynical exercise in my opinion… The cynic in me says that no-one is actually listening, that pretty much [the budget is] decided between the Premier’s office and the Minister of Finance...

...on the role of BC’s Economic Forecasting Council in crafting the budget:

They just sit around the table and throw darts at the board, and say, "Ah, I think GDP is gonna grow 2.4 per cent next year," and a few of them have models [by which] they can enter what they think housing starts are going to be... other people are literally just guessing.

It’s a group that basically, a year ago, had no clue that there was even a recession coming. It seemed pretty clear at the time that there was something coming, and yet they’re all off in their own dream world, which, of course, fed a desire of the government’s to want to have some rosy forecasts going into the budget, 'cause they were coming up to an election. So to the extent that they could say, oh, look, BC’s doing better than everybody else, then [the optimistic budget] plays into their messaging. But it’s not necessarily true.

...on politics:

There is a profound lack of vision coming from any political party, federally, provincially, municipally.

We’ve just come through this period where the dominant politics has been about reducing the size of government, and tax cuts, and that kind of thing. There’s no, you know, counter-set of ideas... There is sort of disparate ideas across all of the left.

The party you’d expect to pick those up would be the NDP, but they’ve been very conservative in what they’re willing to go out on. I think very afraid of saying things that are going to affect certain groups based on where they live or what industry they’re in.

...on how resource extraction is still King:

The resource extraction mindset in BC that we’ve had since the very beginning, since the gold rushes, still dominates public policy today, to a huge extent.

The attitude is basically, open it up to foreign investment, and to attract foreign investment we cut our taxes and deregulate and you know, have low royalties for companies who are coming in. They extract the resource; they ship it generally south of the border, sometimes to China, and other parts; and you know we get something. Historically the bargain has been a number of good-paying union jobs... Even that took several decades to accomplish.

Now, in a world faced with these massive constraints like the climate, it seems we’re still kind of rushing head-long into this, in this field, it’s like, "Oh, we’ve got to create jobs," but how many jobs does the oil and gas sector create? Two thousand jobs, maybe, in a province of four million people. Yet [oil and gas is] responsible for a fifth to a quarter of our total greenhouse gas emissions.

...on BC’s “green” economy:

We’re sort of lacking in any coherent vision about how we handle the resource sector and then how BC would actually transition to a low- or zero-carbon economy.

[Oil and gas] and highway expansion are two major contradictions [to the green economy], even when the government was trying to present a more green face to the public. I do think there was some good things that were brought in [at that time]... Most of those have now been thrown by the wayside, now that the election’s over and the deficit is looming. They’ve cut the few programs that they brought into place.

In the summer the government announced that they were going to be cutting the royalties on oil and gas to attract new investment in that area… During the election campaign I saw a video of a speech from the premier in the northeast; he was like, "I want to quadruple production." This is massively polluting in terms of greenhouse gas emissions.

Unless you find some way of capturing all the emissions associated with the extraction of that resource and combusting it, whether that’s here or in the United States, then yeah, it’s devastating for the planet. Not that we individually are, as a province, responsible for what’s going on, but you know, we have to do our share along with everybody else, and yeah: basically, we’re not.

...on the three pillars of an alternative economy for BC:

Security, sustainability and equality are the three broad themes, I think, that we want to build on in terms of what we want overall.

We need sustainability, [a concept] which is kind of thrown around...

[There are] other aspects of environment as well in terms of toxic chemicals and other forms of pollution that you would want to be concerned about.

Equity [is], you know, the growing gap we’ve seen over the past few decades between the rich and the poor and how we can right that. Which isn’t to say that everyone needs to be equal all the time. But certainly the grotesque inequalities from the poorest of the poor to the richest of the rich is pretty staggering, and probably rivals anything you’d see in any country in the world.

And then some notion of security, I think, especially when we think about climate issues, we need to be thinking about... Do we have a secure food system? Are our water supplies secure? What does this mean in terms of energy and electricity generation? What does this mean in terms of housing or transportation?

The onus is on us to be able to articulate that in a way that says to people,...these are things that are desirable, morally, but that are also going to improve your quality of life.

They’re going to improve your quality of life 'cause you’re going to be eating better food, that’s locally sourced and not contributing to greenhouse gas emissions, or because you’re not going to be spending an hour a half or two hours a day commuting back and forth to work.

...on making the environment a political must:

We put [these ideas] out there to engage the public, engage activists of various stripes, and, hopefully, gain enough momentum with that that any political party has to move in that direction, whether it’s the NDP or the Liberals or what have you.

Look at health care. There’s an example. Even though there’s probably lots of people in the Liberal party who would just like to privatize the whole fuckin’ thing, they can’t, because there’s so much public support behind it.

Now, they can do sly little things on the side... But they can’t fundamentally transform that thing in a really righ- wing, free-market revolutionary way.

So we need to get some of these bigger issues out in a way that has enough popular support that makes it hard for any government to go against it. We’ll see. Time is of the essence.

...on climate change and not giving up on the future:

The challenge we have is that we are facing the mother of all collective action problems. It’s not just BC that needs to act, but the Canadian government, Alberta, United States, China, Europe, Japan. I mean everyone needs to get on this agenda, and if we don’t then we do face a fairly gloomy future.

But you can’t live your life thinking that the world is going to end... You have to have hope that people can wake up and make the change that needs to happen.

Dawn Paley is a journalist and contributing editor with The Dominion.

Comments