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Vaughn Palmer: 'It's not a slush fund,' says B.C. NDP

Opinion: The New Democrats last week passed legislation to give the cabinet open-ended authority to support favoured businesses with loans and grants from a $400 million strategic investment fund

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VICTORIA — The B.C. New Democrats last week passed legislation to give cabinet open-ended authority to support favoured businesses with loans and grants from a $400 million strategic investment fund.

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The B.C. Conservatives branded it a “slush fund,” drawing protests from the government side.

“A slush fund doesn’t come with public reporting requirements, independent oversight, measurable performance targets,” huffed NDP back-bencher Darlene Rotchford. “This fund does.”

None of those details are spelled out in Bill 3, the enabling legislation for the fund.

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Even such concepts as “strategic investment” and “eligible recipient” are left to be defined at a later date by treasury board, the Cabinet committee that oversees withdrawals from the fund.

The Opposition spent much of the debate on Bill 3 trying to determine what restrictions, if any, would apply to funding decisions.

Jobs Minister Ravi Kahlon insisted the screening process would be rigorous when the regulations are drafted and released later this year.

“Proponents should expect the fundamentals of their projects to be scrutinized and tested, to be the subject of detailed financial and business case analysis and stress testing,” said Kahlon. “In short, proponents should expect us to look closely under the hood.”

But when Conservative and Green MLAs tried to look under the hood of Bill 3, they were met again and again by Kahlon saying they should wait for the regulations.

“The minister said that, of course, we’ll have the ability to ask all the questions we like under this new fund,” said B.C. Conservative MLA Peter Milobar. “Questions are the easy part. It’s the answering part that the government has problems with.”

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Few institutions in government are less responsive to questions than treasury board, said Milobar, who summarized a typical exchange with the secretive Cabinet committee:

Q: Well, what was on the agenda? A: We can’t talk about the treasury board agenda.

Q: Well, what was the vote? A: We can’t talk about treasury board votes.

Q: Can we see the minutes of the decision? A: We can’t talk about what happens at treasury board.

Besides, as Milobar also noted, the real decisions are made in the premier’s office.

“Let’s just admit how the real world works in this building,” said Milobar, who is also a candidate for the leadership of his party. “Treasury board will do exactly as the premier’s office advises with this $400 million, or you will not be on treasury board any longer.”

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Vaughn Palmer: 'It's not a slush fund,' says B.C. NDP Columnists

Vaughn Palmer: 'It's not a slush fund,' says B.C. NDP

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The Opposition asked about a retroactivity provision that would allow treasury board to go back as far as eight years in redefining previous NDP government deals as strategic investments.

“Why would expenditures from 2018 until now suddenly be eligible under Bill 3?” asked Milobar. “What grants have been given out that shouldn’t have? What paperwork is being caught up right now that the government said: ‘Oopsie, I guess we better cover it?’”

Kahlon replied, in effect, “trust us.”

Overall, the legislation would allow B.C. to partner up quickly with federal government investments in strategic industries, the New Democrats argued.

Other provinces were doing that and B.C. needed to do the same.

“Do you know Ontario has this?” one of the New Democrats challenged the Opposition at one point.

“Did you know Alberta doesn’t have any provincial sales tax?” Milobar fired back.

As the debate continued, Kahlon showed signs of impatience, at one point suggesting Milobar should pose his questions directly to the minister of finance.

The bill in question was introduced by Finance Minister Brenda Bailey, Milobar conceded. But it was the New Democrats who decided that Kahlon would steer it through the house, with Bailey’s staff backing him up in answering questions.

But if Kahlon didn’t feel up to the challenge, Milobar offered to pause the debate until a more knowledgeable minister was available.

His bluff called, Kahlon backed off and went back to giving answers, as vague as they were.

One of the NDP’s big selling points on the legislation was that it gives the government a piece of the action on strategic investments.

“We can now make direct equity investments. We can take ownership stakes,” as cabinet minister Rick Glumac put it. “We become a financial partner. If a company succeeds, B.C. shares in that success.”

And if the company fails, won’t British Columbians be on the hook for treasury board having bet on a losing horse with public money?

The possibility never seems to have occurred to the NDP cabinet and caucus.

“Apparently, the government is going to be the only angel investor out there that always gets a return on their investment and never sees their fund diminish,” said Milobar. “But that’s not the real world, if you’re talking about high-risk venture capital schemes that the government is talking about.”

The Greens initially supported the bill but voted against on third reading after hearing the inadequate answers from the government.

Still, the NDP majority was enough to carry the day. The bill passed, clearing the way for the most secretive committee in government to write blank cheques for preferred industries on terms to be defined later — if at all.

vpalmer@postmedia.com

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