Crown corporations

[maryjane48]

So you're in favour of income taxes subsidizing BC Hydro rates?

How on earth does Fortis survive compared to BC Hydro? Fortis does really well, Hydro is always embroiled in some stupid scandal, and rate increases are little different between the two.

Your example points out the exact opposite of what you're saying

. utilities should not make a profit if they are private, it is a essential service

[Smurf]

I agree with you both and just have to mention how well competition is working out with the oil companies. But hey private industry and competition is the answer to everything right. I will say the theory is great but Canadian big business has only figured out how to make it work for themselves.

[Rwede]

utilities should not make a profit if they are private, it is a essential service

Doctors shouldn't make a profit.

Teachers shouldn't make a profit.

Policemen shouldn't make a profit.

Everyone should work for free.

Shareholders who provide utility companies with billions of dollars to build dams and power lines should never get one red cent of return on their money. They should just give it to the utility company out of the goodness of their heart. It is, after all, an essential service.

[NAB]

Frankly, In many cases (such as these overpriced independent power producers contracts for power we cannot use efficiently) I would sooner see revenue from personal and corporate income taxes going toward subsidization of vital BC Hydro upgrades than into the pockets of private sector for profit special interests. Then again, I don't support private sector involvement in something so fundamental and universal to the vast majority of BC's citizens at all.

Nab

[Rwede]

I'm not surprised, as pure socialists shun any type of private enterprise.

I need a good reason why owners of companies would invest their money into power production and not be allowed to make some sort of return on that money.

[hobbyguy]

Smurf - you start with the notion that somehow the "government" isn't us. If that is the case, then then the solution is improving our democracy and quality of governance. I don't think that is really the case, although there is room for improvement in some areas - especially federally.

That being the case, Crown Corporations are owned by "us". The dividends from those Crown Corps do go to "us" in the form of government revenues. Dividends from those crowns help to pay for the services we receive.

The notion of having Crown corporations stems from the fact that there are indeed things that government does well, and in some cases better than private corporations. For example, it is very hard to argue that the government of WAC Bennett did not do a better job of developing affordable energy infrastructure than a private corporation could have. Today, that is BC Hydro.

The idea behind a Crown corporation is to have an entity that focus on a specific economic purpose and benefit "us" within the economy. BC Hydro, despite many complainers, provides electricity where we need it, when we want it, and at very reasonable prices - in fact, "world class" low rates. At the same time BC Hydro provides dividends to "us" that help to keep out taxes down. To me. that is a win-win-win.

There are "shenanigans" that go on with political stuff, like separating Crown corporation debt etc., but that isn't a problem with the crown corporations, it is a problem with the representatives that "we" elect. So it is "us" that is the problem. "We" chose to elect a few doofus characters that couldn't resist playing games.

So you really can't separate crown corporations from "us". "We" tolerate the political characters that foul things up by electing them, and continuing to elect them.

The alternative is privatization, and that will simply cost "us" more in the long run as the 1% that take over will simply see the entities as a way to pick our pockets with high prices - and probably would find a way to siphon off the profits to somewhere like Ireland to avoid contributing to government revenues - which would mean "we" lose again.

Just for reference, with private utilities in Germany the retail price of electricity is about $.45/kwh. FIVE times what we pay. In Australia, where they have been going the "privatization" route, electricity prices have risen to $.26/kwh. THREE times what we pay.

There is no "free lunch", but at least with crown corporations like BC Hydro, you can have lunch at a reasonable price. And BC Hydro will never hide its profits in Bermuda.

[Rwede]

The alternative is privatization, and that will simply cost "us" more in the long run as the 1% that take over will simply see the entities as a way to pick our pockets with high prices - and probably would find a way to siphon off the profits to somewhere like Ireland to avoid contributing to government revenues - which would mean "we" lose again.

That makes you a 1%er, since you are a member of the CPP and likely RRSPs that own power utilities, from which you do or will draw profits.

[maryjane48]

Shareholders who provide utility companies with billions of dollars to build dams and power lines should never get one red cent of return on their money. They should just give it to the utility company out of the goodness of their heart. It is, after all, an essential service.

that is flat out a fallacy. everytime any powercompany wants to upgrade, they add more to the rate

[Hassel99]

that is flat out a fallacy. everytime any powercompany wants to upgrade, they add more to the rate

I don't think you know how the utility rating structure works in BC.

[Smurf]

I see where you are coming from HG. I just differ in that I figure they should keep the money to perform maintenance, upgrades and to stabilize and control rates. I don't believe we should now be facing large rate increases because the government has taken the money that would have allowed them to keep things up to date, or at least required a much smaller increase. Isn't that just a tax increase in a roundabout hidden way? I realize that it is the same person benefiting and or paying but it would make it much plainer where and why the money is going. As it is now, Hydro gets blamed because the government has taken their money. I do not think that is right. If they make enough money they can cut rates, it would be no different than cutting taxes and we'd know who was running their business properly.

EDIT TO ADD:

We'd be able to put the credit or blame where it is deserved without having to try to go through the freedom of information and piles of garbage.

[Smurf]

Rwede wrote:

That makes you a 1%er, since you are a member of the CPP and likely RRSPs that own power utilities, from which you do or will draw profits.

Possibly true, but how many people can actually afford RRSP's and investments. There are many who can't. At least when the money is in a Crown Corporation all the citizens of BC benefit from it, not just companies and shareholders, many of whom are not even Canadian citizens, let alone citizens of BC.

[GenesisGT]

utilities should not make a profit if they are private, it is a essential service

One of the most successful companies and companies looked upon world wide is a not for profit company in Canada that operates the air navigation service, NAV CANADA. In 1996 Transport Canada sold the ANS to this private company and since then it has been providing ANS to Canada, including ATC, FSS, weather reporting, technical services, etc.. During that time it has reduced staff by 30%, kept fees to the airlines the same and look at their record they have improved service.

The key is that the company reports to the people who pay the bills, with the gov't as the regulator.

Crown corporations, government run businesses, essential services should be not for profit corporations.

[Captain Awesome]

If I was asked to make a choice between:

- Keeping income taxes low, and increasing user fees such as park fees, BC Hydro rates, BC Ferry rates and others to create surplus that goes to the government to make up for low income taxes

and

- Upping income taxes and giving crown corporations a break-even mandate to keep rates as low as possible

...I would choose the first scenario many times over the second simply because I (and everyone else) at least will have control over spending as opposed to higher income taxes just disappearing into the financial black hole we call "government".

[GenesisGT]

The problem with crown corporations is like government they believe there is a never ending pot of money or debt that is available to them. They do not have to worry about doing business better or looking for efficiencies or getting rid of dead wood.

Having worked for private industry, government and not for profit, there are a lot of benefits to be said for not for profit when providing essential services.

[hobbyguy]

Actually, the problems - if you want to call it that - with crown corporations generally come from the politicians.

BC Hydro and BC Ferries are good examples.

BC Hydro didn't make the decision to build the megamillion $ power line to service potential mines in the north west corner of the province. Politicians made that decision. That put a hole in BC Hydro's capital budget. Personally, I think that was a good decision by the politicians - a bit high risk, and perhaps a higher risk than private industry might have taken on - but a decision that builds a better province with more good jobs available. So from my perspective, that isn't a problem, it is a good investment for "us" in providing a prosperous future.

BC Ferries didn't up and decide to give every little hamlet on the coast "cadillac" ferry service. Correct me if I'm wrong, but politicians made those decisions as a vote buying exercise.

Historically, the reason that BC Ferries became a government service - it was private before and went bust - was that it is an essential element in building a better province, and needed subsidies. That crazy left wing wacko WAC Bennett did that.