B.C. Premier John Horgan | File photo, courtesy BC NDP

Nearly $300,000 in taxpayers’ money was spent on Premier John Horgan’s transition to power in July, the BC NDP government said October 17.

The government released the figure after the Liberal Opposition attacked Horgan in the legislature for awarding lucrative no-bid contracts to “his longtime NDP friends and supporters.”

The maximum value of the 35 direct-award contracts was $812,800, but the government said the contractors billed for less than half that amount at $295,479.40. Most of the contracts began the first week of July and expired July 21.

“Transition costs are a normal expense by any incoming government, and our new government had a lot of work to do after 16 years of B.C. Liberal neglect,” Jen Holmwood, deputy communications director in the premier’s office, said in a statement.

“Our highly qualified transition team helped us hit the ground running on key initiatives like removing tolls, cutting MSP, and working to get our schools ready for kids in September.”

The contractors included failed NDP candidates, an ex-Manitoba NDP cabinet minister and a number of former NDP advisors, ministerial assistants, communications officers and party officials.

The Canadian Union of Public Employees received a contract worth up to $25,000, but did not bill for any work, the government said.

The Liberals derided the contracts in the legislature, referring to them as Horgan’s “summer works” program for friends and insiders.

“In the absence of any concrete jobs plan — we certainly haven’t seen one — is rewarding his friends with contracts and salaries the NDP version of a jobs plan?” asked Liberal MLA Shirley Bond, a former jobs minister.

Horgan deflected the attacks, arguing that the previous Liberal government hired a transition team when it took power 16 years ago.

“This is standard procedure,” he said “Nothing to see here.”

He added that anyone watching question period at home would understand the need to transition from “one hostile group to a new group.”

“We’ve had nothing but support from those on the other side,” he said. “We’ve had nothing but goodwill and best wishes from the B.C. Liberals as we try to clean up the mess that they left for British Columbians after 16 years.”

Times Colonist

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OSFI sets new mortgage rules beginning January 1, 2018

New rules could drive homebuyers to unregulated lenders, says RBC
Shutterstock

Starting January 1, 2018, Canadian homebuyers will need to meet stiffer guidelines in order to qualify for a mortgage with a federally regulated mortgage lender.

As expected, Canada’s banking watchdog, the Office of the Superintendent of Financial Institutions Canada (OSFI), confirmed October 17 that starting next year, all borrowers – even those who have down payments of 20% or higher and do not require mortgage insurance – will need to qualify for mortgages that are two percentage points higher than the rates at which they are applying.

The rules were proposed as a measure to decrease the risks for households with high levels of indebtedness as interest rates rise. RBC said these risks will likely decline long-term as a result of the measures, but in the short term, the new rules have the potential to “rock the market,” because non-insured mortgages represent a high percentage of the total mortgage market; the bank said 45% of mortgages at domestic banks are currently uninsured.

“Nonetheless, the ultimate impact on the housing market will depend on the extent to which borrowers will ‘migrate’ to non-federally regulated mortgage lenders that will not be subject to the new OSFI rule,” the bank said in a press release. “These lenders include provincially regulated credit unions and caisses populaires.

“Our view is that such migration is likely to be material.”

RBC it expects there to be a “brief run-up in activity” until the end of this year as homebuyers rush to qualify for mortgages before the new rules come into effect; after January 1, 2018, activity in the housing market is expected to drop. The bank still expects a soft landing for Canada’s housing market.

“We expect that, at the margin, the higher qualifying rate will drive some buyers out of the market and reduce the budget of others next year – both factors adding downward pressure on prices,” RBC said. “Yet the odds of a crash-landing are still low.”

The move comes a week after the Fraser Institute released a study that said these new rules will do more harm than good, as loan pricing will likely increase while fewer people will be able to access mortgages.

ecrawford@biv.com

@EmmaHampelBIV

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Double-decker buses, other capacity boosts coming to TransLink

CEO also says that TransLink is on-track for getting procurements next year for West Broadway SkyTrain extension, Surrey LRT projects

TransLink will be looking at a number of ways to boost capacity on Metro Vancouver’s transit system – and may also be focusing more attention on programs to help local companies with employees’ commutes – in an effort to support the regional economy.

That was the message from TransLink CEO Kevin Desmond at a Greater Vancouver Board of Trade meeting on Tuesday, in which the top transit official in the region touted a number of new items including the likelihood that double-decker buses will soon frequent local thoroughfares.

 “In addition to adding more buses and service, it’s also about how we can improve [the transit system’s] capacity,” Desmond said. “We will be demoing some double-decker buses here in just a few weeks, and I have every expectation that the demo will go very well… I think it’s a no-brainer we are going to start procuring double-decker buses.”

In addition, Desmond said 80 new SkyTrain cars – equivalent to 12 train sets for the Canada Line, or eight for the Expo/Millennium Lines – are coming into the system between late 2018 and 2019. New Seabuses are also under construction and are slated for delivery in the next two years.

 “We should end this year with 400 million [passenger] boardings… and of course, there’s a double-edged sword to all of that,” Desmond said. “As successful as we’ve been so far in generating that ridership and helping to support demand, the system is crowded, and it’s going to remain crowded. Improving service attracts more riders, and as we attract more riders, we have to figure out ways to continue to grow the system.”

Statistics show the degree of growth - and the relative increase on demand - of Metro Vancouver’s public transit system. Ridership rose 4.5% in 2016, and numbers through September this year shows a 6.2% increase. Currently, commuters make more than 150,000 journeys through the Commercial-Broadway station each day. In August, TransLink’s Compass Card program, which launched almost two years ago after a number of delays, hit one billion taps by passengers using the system. 

 “We’re experiencing – unlike virtually every metropolitan region in all of North America – a surge in ridership,” Desmond said, attributing the growth to a strong local economy and new services like the Evergreen extension on the SkyTrain system. “We hit the wave at the right time; as demand was coming back and people were coming back to the system, we were able to start fuelling the demand.”

Desmond also said the group is making progress on TransLink’s 10-year plan, which includes the much-discussed Millennium Line extension on West Broadway. According to Desmond, if all discussions progress as planned, TransLink should be able to get the procurement for the six-kilometre, six-station extension, from VCC-Clark to Arbutus Street, next year, with completion slated for 2025.

Meanwhile, a light-rail system in Surrey could also receive procurement next year, with a 10.5-kilometre “L-line” connecting Guildford Exchange to Newton slated for operation in 2024. (An extension to Langley is also planned, although funding still has to be assembled for that project, Desmond said.)

 “What we are trying to do at TransLink … is preserving, if not improving, the quality of life in this region moving forward,” he said. “How do we preserve the economy and allowing it to grow? Connecting jobs and housing is such a big issue; there’s such a huge intersection between transit and housing. We are aware of that, and we are on it.”

Desmond also noted, however, that TransLink will look to maintain the efficiency on current systems such as Expo Line’s 31-year-old tracks in addition to service and capacity expansions to ensure transit plays its proper role of moving people around the region quickly, for the benefit of both the economy and society at large.

 “Fortunately, those disruptions don’t happen very often at all. When they happen, particularly during rush-hour periods, it is pretty impactful… We don’t want to end up like New York City or Washington, D.C., where not enough money and attention was put into keeping the exiting system operational, only to find crisis after the fact. That means rail replacements, switch replacements and electrical replacements. That’s the type of work we need to do.”

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Did the NEB miss the boat on Trans Mountain?

Northern Gateway could have implications for Kinder Morgan pipeline project: Appeal Court
The NEB confined its review to the pipeline expansion on the basis that marine traffic is not in its purview. | Submitted

When Enbridge (TSX:ENB) volunteered to improve oil tanker safety measures for its doomed Northern Gateway pipeline project, it might have set a precedent of expectations – and obligations – for the Kinder Morgan Canada (TSX:KML) Trans Mountain pipeline expansion.

The spectre of one pipeline project setting a precedent, and adding regulatory scope, for another was raised by a Federal Court of Appeal judge last week.

Five First Nations, two environmental organizations and the cities of Burnaby and Vancouver are part of a consolidated appeal of the federal government’s approval of the $7.4 billion pipeline expansion project.

In an eight-day hearing that began October 2, they have argued that the National Energy Board (NEB) failed to properly consider the environmental impacts of increased oil tanker traffic, contrary to the Canadian Environmental Assessment Act (CEAA).

The expanded pipeline would increase monthly oil tanker traffic through Burrard Inlet to 34 from five. Environmental groups have raised concerns that noise from that increase could have a deleterious impact on resident southern killer whales.

But Kinder Morgan Canada neither owns nor controls oil tankers. Nor is the NEB responsible for marine shipping, which is regulated by Transport Canada, the Canadian Coast Guard and the Canada Shipping Act. In both the Northern Gateway and Trans Mountain environmental reviews, the NEB restricted its scope to the pipeline and terminal operations.

But in Northern Gateway’s case, a voluntary commitment became obligatory when Enbridge agreed to go above and beyond what was required. It also agreed to additional marine shipping safety measures.

A joint NEB and Environment Canada review panel took those voluntary commitments and made them part of the 209 conditions when the project was approved.

The question now is whether the NEB should have taken that as a template for the Trans Mountain expansion project and included marine shipping as part of its environmental review of the expansion project.

During Trans Mountain’s October 10 submissions, Justice Eleanor Dawson said the NEB had been “far more proactive” on the tanker traffic issue in the Northern Gateway pipeline project than it had been on the Trans Mountain expansion.

“We have the board declining jurisdiction and relying, at least in part, on its inability to impose conditions and on the fact Trans Mountain didn’t own the tankers,” Dawson said of the NEB’s assessment of the Trans Mountain pipeline expansion.

And yet, as she pointed out, in the Northern Gateway case, the NEB, as part of the joint review panel, agreed to conditions that were supposedly outside its scope when the joint review panel decided to make Enbridge’s voluntary commitments actual conditions.

“The point is: to what extent is the position of the NEB in that project relevant to the marine shipping issues that are raised in this case?” Dawson asked.

Trans Mountain’s lawyer, Maureen Killoran, answered that the scoping of the two reviews were different.

Whereas the joint review panel was just that – a joint process involving the NEB and Environment Canada – the NEB alone was responsible for the Trans Mountain expansion environmental assessment, thanks to a streamlining of the CEAA in 2012 that allowed a single regulatory body to conduct environmental reviews.

“The scoping at that point, when [the] joint review panel was populated by other government [responsible authorities], that scoping may have made more sense in that setting,” Killoran said.

But Dawson concluded by suggesting the NEB did have the discretion to consider marine shipping as “incidental” to the pipeline project.

The Appeal Court also took up a point raised by the City of Burnaby, which questioned why, as part of its assessment, the NEB never considered alternative routes and terminus locations to the one chosen by Kinder Morgan.

It has been suggested, for example, that, as part of the review, alternative sites for a terminus – including Kitimat and Roberts Bank – should have at least been considered as part of the environmental assessment.

It has been argued that, because it is less densely populated than Burnaby, Delta’s Roberts Bank might be a better location for a marine terminal.

Although alternatives were not considered as part of the NEB review, Killoran said the company did explore Roberts Bank as an alternative, although the study it did was not part of the application or NEB review.

Killoran said a study of the Roberts Bank option determined that it would require a new marine terminal to be built (in addition to the existing Westridge Marine Terminal), 100 acres of land, a seven-kilometre trestle and 14 kilometres of additional pipeline – all of which would have added $1.2 billion to the project’s cost.

The study also identified issues over Tsawwassen First Nation treaty rights and environmental impacts. Ultimately, the company determined that option wasn’t economically feasible. 

nbennett@biv.com

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2017 BC Export Awards finalists announced

Annual honours celebrate achievements of province's export companies

Finalists for the annual BC Export Award have been announced.

Presented by Business in Vancouver in partnership with Canadian Manufacturers & Exporters and the B.C. Ministry of International Trade, the awards are the province’s most prestigious honours paying tribute to the success and innovative approaches of B.C.’s export companies.

Extending across multiple industries, the BC Export Awards recognize achievements in nine different categories and are a celebration of the contributions exporters have made to both the provincial and national economies.

Launched in 1982, the awards have recognized over 300 companies since their inception, reflecting the growth and diversity of B.C.’s economy over the past three and a half decades.

To check out the list of this year’s finalists, click here .

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