The
Provincial Government of British Columbia is abolishing the
Working Opportunity Fund 10-year monopoly to manage
labour-sponsored funds in the province.
That is a positive change, long overdue. The Working
Opportunity Fund model does not meet the standards expected from
a modem democratic mixed economy.
It is also good democracy that the members, taxpayers and
government has asked the provincial auditor-general to
investigate whether there was undue political involvement in the
operation of the Working Opportunity Fund.
In
that respect, the auditor-general should be busy looking into
many past government intervention and deals.
Who benefited and who lost?
Where did the money go in projects such as the Fast Ferry
project, Forest Renewal BC, allied organizations and in the
healthcare system? Without
prudent aftermath analysis, of why crashes happen, unsolved
systemic problems will cause new crashes.
Further,
when a problem shows up in the Auditor General’s reports, it
is too late to prevent the adversity, which follows, and just
because the decision and action is legal, does not mean the
decision and action is morally and ethically in the best
interest of the community.
That raises moral and ethical questions.
Shouldn’t the community expect the same or greater
accountability to apply to the government institution that
approves use of tax and to the corporations and social
establishment that receives tax transfers or corporate welfare,
as it does to individual community members who seek forms of
social assistance?
The
Working Opportunity Fund is a form of government intervention in
the economy through tax credit transfers; when one person gets a
tax credit, someone else must pay.
It is Government’s task in a democratic mixed economy
to provide such service that the private sector fails to
provide. Such task is to correct allocation problems before
the problems cause adversity. That is not something that the
private sector can, or will ever be able to do.
In the Working Opportunity intervention case, it is
unclear what issues the private sector was unable to solve. It
is also unclear how the BC community has benefited from the
intervention, and what issues in the allocation and pricing
mechanism the Working Opportunity intervention has repaired --
or perhaps worsened and who lost.
What
is clear is that the management and Board of the Working
Opportunity Fund are not the losers.
The contrivance of having Growth Works Capital Ltd.
managing the Working Opportunity Fund combined with a rich
incentive agreement has made the management millions of dollars.
There
is nothing wrong with making money. The problem is when money is
made from Government intervention and tax transfers that do not
meet recognized standards for government intervention in a mixed
economy. Further,
our constitution states; government is committed to reducing
disparities in opportunities. When government intervention
increases disparities in opportunities, there is not only an
economic and constitutional problem – there is a democratic
failure.
In
that respect, small and midsize business crying out for
financing, and workers losing their jobs in the forest sectors,
should have lots to talk about with the people in the former
government and the union management.
The previous government failed in its monitoring and
intervening accountability. Decades of old problems in the
allocation and market mechanisms in the economy were unsolved
and allowed to escalate in to adversity, such as in the Forest
and healthcare sectors.
Would you feel comfortable flying an aircraft in an
airspace where the air control system is out of date, and where
the airline with the best contacts get the concessions, rather
than the airline with best pilots, equipment and organization?
The
government’s decision to purge the Working Opportunity Fund’s
intervention is an important correction. While this a positive
signal to investors at home and abroad, the core concern
remains. Cost cutting and reducing legislation is easy, but
stimulating investment in economic production and generating
revenue and real income is more difficult.
For serious investors, the question remains: Does our
government have the monitoring and intervening methods and
systems to repair the faults in the allocation mechanism in
order to stimulate investment and liquidity into economic
production, and jobs in BC?
That is not within the private sector’s ability, nor is
it something that cost-cutting, fiscal and legislative measures
can compensate for.
Residential
homes, tourism, and ski hills are important. However, BC is in
desperate need of long-term investment into forests, IT and
sectors that are critical for jobs and real income growth in BC.
Before
investing in other than residential homes, tourism and ski
hills, investors need to know that the government’s monitoring
and intervention system is in order and that the government has
the knowledge and instruments to manage and repair faults in the
allocation mechanism. At the very least, that the government
recognizes the issues. Unfortunately, so far, that is unclear.
OISD
Inc. Okanagan Institute for Strategic Development
