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For the week of Feb. 27, 2022:

Big deficits, bigger debt and bigger government: the B.C. NDP way

Bob Mackin

Budget documents presented this week demonstrate a strong increase in the size and spending of the BC NDP government.

NDP finance minister Selina Robinson on Feb. 22, 2022 (BC Gov)

Premier John Horgan government’s own projections forecast a 93% increase in government debt by the end of the 2025 fiscal year since it assumed power in 2018. And by this time next year, the public service will have added 10,000 full-time equivalent jobs, an expansion of nearly 25%.

Finance Minister Selina Robinson’s three-year economic blueprint forecasts more than $13.3 billion in deficits by the end of 2025 when B.C.’s debt is expected to reach $125.77 billion.

One of the reasons the BC NDP is spending more is because it is hiring more, to expand the size of government.

In 2017-18, the government employed 32,865 full-time equivalents at ministries, special offices and service delivery agencies. Over the next 12 months, the government will have boosted that number to an estimated total 42,508.

A statement from the Ministry of Finance omitted numbers and costs, but offered year-by-year categories in which employment increased. The 2020 budget was the only year that FTEs remained static.

“Broadly, these staffing increases have been in priority areas like child care, wildfire response, COVID-19 response, mental health services, CleanBC implementation, and reconciliation with Indigenous peoples,” said the statement.

Since coming to power, the BC NDP opened the first Ministry of Mental Health and Addictions, which has steadily grown in budget, but not, its critics say, in effectiveness. It’s getting more than $3 million extra to spend on crafting policy and research, for $24.6 million in 2022-23. Services are actually delivered via the Ministry of Health, which is growing 6.5% to $25.45 billion.

Horgan created the new B.C. Infrastructure Benefits Crown corporation in 2018 to prioritize union hiring for major infrastructure projects, like the Pattullo Bridge and Broadway subway. BCIB is expected to triple annual spending to $244.4 million in 2022-23 and increase further to $318.4 million a year later.

Premier John Horgan (BC Gov)

New in this year’s budget is a $3.2 million secretariat to implement recommendations from the United Nations Declaration on the Rights of Indigenous Peoples.

The Ministry of Forests, Land, Resource Operations and Rural Development is split in two, with Forests going one way with a $832.5 million budget and the rest becoming Land, Water and Resource Stewardship at $92 million this year. (Plus, the awkward acronym, Land WARS).

Last August, the BC NDP announced it would hire back 4,000 cleaners and food service workers at hospitals. The jobs were privatized 20 years ago under the BC Liberals.

Sooner than later, there will also be more MLAs. As many as six could be added after the next election, for a total 93 under amendments to the Electoral Boundaries Commission Act.

Even before that happens, the Legislative Assembly receives another $6 million budget boost to $92 million for 2022-23. That’s $10 million more than in 2017-18.

The government is also doing away with the 10% salary penalty for ministers who exceed annual budgets.

The end of the holdback provision, which effectively amounts to a pay increase for cabinet, “sent the wrong message,” Robinson said Feb. 23 in Question Period. “What it says is that it prioritizes austerity and cuts over investment, even in an emergency. It forces government to balance books on the backs of British Columbians.”

Despite the spending scandal that led to Clerk Craig James being charged and tried for fraud and breach of trust, Horgan did not deliver on BC NDP house leader Mike Farnworth’s 2019 promise to add the seat of government to B.C.’s freedom of information law. That move would have given citizens a full spending picture, rather than the periodic reports that the Legislative Assembly Management Committee deem suitable for public consumption.

Horgan voted the Office of the Premier a $3.3 million annual hike last year, to $14.68 million per year. When she was asked on budget day in April 2021, Robinson hinted that Horgan would use some of the new funds for post-pandemic travel around the province. Until he won a majority in the October 2020 snap election, Horgan had to stay close to the legislature for fear that the minority government might fall.

“We’re attempting to make sure that he has access to British Columbians,” Robinson said last year.

By comparison, in the last budget under Christy Clark’s BC Liberals, the premier’s office was allotted $9 million. Back then, Horgan was a harsh critic of Clark’s spending on a staff videographer and charter flights to travel the province. So much so, that the BC NDP turned the “Air Christy” scandal into an animated campaign ad.

Horgan has a bigger trip on the horizon. Last year, Horgan told several B.C.-based diplomats that his first post-pandemic trade mission would be to European Union nations.

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Bob Mackin Budget documents presented this week demonstrate

Putin’s Ukraine invasion prompts B.C.’s rep for Russia to quit

Bob Mackin

Russia’s honorary consul general for British Columbia suddenly resigned.

Venture capital and mining executive Erin Campbell said Vladimir Putin’s invasion of Ukraine was the reason.

In 2016, Russian Ambassador Alexander Darchiev (left) with Ltd. Gov. Judith Guichon and honorary consul Erin Campbell (Government House)

Campbell declined an interview request, but said by email: “This is a very sad day for those who tried to bridge the divide.”

Campbell is the CEO and founding partner of ECMB Capital, mergers and acquisitions and corporate restructuring partner with Raiven Capital and vice-chair and co-founder of Kanata Clean, a First Nations-led natural gas-powered electricity plant in Alberta.

She is also well known in B.C. politics, as a strategist on several federal Conservative, BC Liberal and Vancouver Non-Partisan Association election campaigns.

In December 2016, Russia’s Ambassador to Canada, Alexander Darchiev, introduced Campbell to Lt. Gov. Judith Guichon and told a Vancouver Club ceremony that her “extensive business background both in Russia and Canada would contribute to enhancing bilateral trade and investment, as well as regional and people-to-people contacts, especially between British Columbia and Russian Far East.

“This will surely benefit Russian Canadians as a vibrant and important community in multicultural Canada,” Darchiev said.

At the time, Campbell was president of Rare Capital Corp., chair of Global Energy Metals Corp. and director of Khot Infrastructure.

Oleg Stepanov, the current ambassador to Canada, assumed his position last September. Nobody from the embassy responded for comment.

The honorary consul of Ukraine in B.C. is lawyer Lubomyr Huculak.

B.C. Investment Management Corp., the province’s public sector pension fund, won’t comment on the status of Russian investments in its $66.6 billion public equities portfolio.

The inventory of holdings through March 31, 2021 showed $103.25 million worth of shares in state-owned bank Sberbank, $83.85 million in Lukoil, $32.2 million Rosneft Oil, and $19.16 million in Gazprom.

Photo from the Feb. 26 pro-Ukraine protest in Vancouver (Twitter)

“We’re respectfully declining to comment as we do not publicly discuss our investment strategy or specific holdings,” said Gwen-Ann Chittenden, BCI’s vice-president of corporate stakeholder engagement.

Paul Finch, who is the treasurer for the B.C. General Employees Union and a director of BCI, declined comment.

A statement from the Ministry of Finance said BCI “by design” operates independent of government to avoid conflict of interest. “BCI is accountable to its clients for investment returns and the investment of each client’s funds.”

The NDP cabinet appointed three of the seven members of the board, including former BC Liberal deputy finance minister Peter Milburn as chair, University of Victoria vice-president Gayle Gorrill and retired former Ministry of Finance chief operating officer Sheila Taylor.

The other four are appointed by the College Pension Plan, Public Service Pension Plan, Municipal Pension Plan and Teachers Pension Plan.

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Bob Mackin Russia’s honorary consul general for British

Business, News, Sports

FIFA Women’s World Cup stadium contract finally revealed

Bob Mackin

After almost seven years, the contract that shows how British Columbia taxpayers subsidized one of the world’s richest, most controversial sports organizations is finally revealed.

British Columbia and FIFA flags in 2015 outside the Westin Bayshore host hotel (Mackin)

An adjudicator with the Office of the Information and Privacy Commissioner ruled in July 2021 that the B.C. Pavilion Corp. (PavCo), must release its agreement with Canadian Soccer Association Inc. (CSA) for hosting the FIFA Women’s World Cup Canada 2015 at BC Place stadium. CSA dropped its court challenge earlier this month and disclosed the contract to this reporter.

The agreement called for total payments between $1.725 million and $1.975 million to PavCo.

The maximum amount in the contract was just under the $2 million earmarked by BC Liberal tourism and sport minister Ida Chong in April 2012. Chong did not specifically say at the time how FIFA would spend taxpayers’ money.

The agreement gave the FIFA event exclusive use of the stadium from May 31, 2015, through July 7, 2015, two days after the United States beat Japan in the final.

CSA had control of the stadium – even lounges and every private suite, save for the BC Place Suite and one other. There were clauses to remove all advertising, so that FIFA could display its own sponsors’ logos and messages, and a ban on the stadium hosting any other event during the period. The B.C. Sports Hall of Fame, which features exhibits on B.C.’s soccer history, was prohibited from opening on match days. The stadium kept food and beverage revenue, but FIFA decided the menu.

CSA agreed to pay a $50,000 deposit upon execution of the contract and the balance seven days after the conclusion of the exclusive use period. The rent was $75,000 per match day, for a total $525,000, plus a lump $625,000 sum for exclusive use of the stadium and a $400,000 contribution to the new artificial turf pitch. The CSA also guaranteed between $300,000 and $400,000 in per-ticket facility fees.

Sepp Blatter’s video greeting to Canada 2015 (Mackin)

The contract shows CSA officials didn’t actually sign the Stadium Use Agreement until June 10, 2015, two days after BC Place hosted its first tournament doubleheader. Canada was awarded the tournament by default when the only other bidder, Zimbabwe, withdrew in March 2011 and Vancouver named one of six host cities in May 2012.

FIFA took over exclusive use of BC Place just four days after Swiss and American police arrested senior FIFA officials in Zurich for corruption related to awarding the 2018 World Cup to Russia and 2022 World Cup to Qatar. An office had been created for embattled FIFA president Sepp Blatter at BC Place, but he did not travel to Canada for fear of arrest.

The ripple effects of that scandal influenced the BC NDP government’s March 2018 disagreement over a proposal to co-host matches during the 2026 World Cup at BC Place.

In correspondence with the U.S.-led bid, PavCo CEO Ken Cretney had flagged FIFA’s list of demands that B.C. agree to pay unknown costs of host city security, secure land near the stadium for related events, pay for a temporary grass pitch and backup field, absorb inflation and face the possibility of FIFA and CSA unilaterally amending the contract. FIFA’s hosting requirements for 2026 also demanded governments provide it a tax holiday, exemptions from labour laws and permit the import and export of foreign currency.

In late 2020, lawyers for the CSA told an OIPC adjudicator that release of the Canada 2015 contract would threaten Toronto, Montreal and Edmonton bids to co-host 2026 World Cup matches with the U.S. and Mexico. The OIPC adjudicator rejected the argument as speculative. Before the August 2021 deadline to disclose the contract, the CSA’s lawyer with the Lawson Lundell firm filed for a BC Supreme Court judicial review aimed at overturning the decision or having it kicked back to the OIPC for a new inquiry.

The CSA based the application on fresh evidence, specifically Montreal’s July 6, 2021, withdrawal and Premier John Horgan’s July 13 announcement that the B.C. government had reopened talks with CSA about 2026.

B.C. Place Stadium’s Polytan Ligaturf synthetic pitch installed for the Canada 2015 Women’s World Cup (Mackin)

In a Feb. 7 appearance on CHEK TV, Horgan said that matches in 2026 could be part of B.C.’s long-term, pandemic recovery strategy. “This is, again, not a done deal, it’s still not a blank cheque,” Horgan said.

Besides B.C.’s $2 million payment for Canada 2015, the City of Vancouver spent $1.2 million on a FIFA Fan Zone at the Larwill Park parking lot and the Government of Canada contributed $15 million.

The Canadian Sport Tourism Alliance’s estimate claimed Canada 2015 matches in Vancouver generated $20.1 million in federal, B.C. and municipal taxes. Research by sports economist Victor Matheson, a professor at the College of the Holy Cross in Massachusetts, has consistently cautioned that mega-event promoters and industry lobbyists rely on input-output modelling in order to attract or defend public subsidies.

In one of Matheson’s reports, Mega-Events: The Effect of the World’s Biggest Sporting Events on Local, Regional, and National Economies, he found that many large sporting events “simply supplant, rather than supplement the regular tourist economy.”

“In other words, the economic impact of a mega-event may be large in a gross sense but the net impact may be small,” Matheson concluded.

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Bob Mackin After almost seven years, the contract

A peek inside Crown service plans: what’s up with B.C. betting, booze, utilities and bums in seats

Bob Mackin

Last summer’s legalization of single-event sports gambling in Canada is turning into a good news, bad news story for B.C. Lottery Corp. (BCLC).

According to its three-year service plan, published Feb. 22 with the provincial budget, the Crown gambling monopoly predicts seven per cent revenue growth in the 2022-23 fiscal year through its PlayNow branded division. However, competition from elsewhere will pose a challenge.

(BCLC)

“While we are projecting continued growth, online gambling sites that operate illegally in B.C. (characterized as ‘grey market’) are increasing their investments in sponsorships and advertising here and across the country,” said the BCLC service plan. “As a result, it is becoming more costly for PlayNow.com to compete for advertising and sponsorship opportunities that enhance the brand’s presence and draw players to the only legal option in our province – the only one that delivers profits to fund healthcare, education and community programs.”

BCLC specifically pointed to Ontario, where that province’s regulator, the Alcohol and Gaming Commission, is licensing online gambling companies. One of those companies, BetRivers, was a heavy advertiser on CBC’s Beijing 2022 Winter Olympics coverage.

“In preparation for their legal entry into the Ontario gambling market, some operators are developing national partnerships with media companies and sports leagues, resulting in further competition and challenges for PlayNow.com when it comes to B.C.-based media and marketing partnerships,” the service plan said.

At casinos, BCLC forecasts 3,906 reports of potential crimes by the end of the current fiscal year, as per internal reporting on its iTrak database. BCLC market research found only 54% of British Columbians perceive gambling at BCLC-partnered casinos to be safe and secure.

BCLC said it had insufficient data to assess the impact of the omicron variant on casino operations, but it does forecast a 2022-23 decrease of lottery revenue by seven per cent at a time when it is replacing 3,500 lottery terminals across the province.

BC Hydro headquarters (BC Hydro)

BCLC reported $430 million net income in 2020-21, but hopes to improve to $1.225 billion this year and $1.452 billion by the next.

Meanwhile, B.C. Pavilion Corp., which operates B.C. Place Stadium and the Vancouver Convention Centre, is eager for international business travel to return, but it admits the recovery won’t begin until the second half of 2022-23. It is facing a major new competitor for corporate bookings: the computer screen.

“As a response to the pandemic, the global meetings industry has seen an increase in virtually hosted events. PavCo will need to balance the expectations of its clients to incorporate virtual, hybrid and live events; however, it is unknown how much of an influence this trend will continue to have as the sector stabilizes.”

PavCo forecasts $77.5 million in losses through 2024-25. The deficits are mainly due to B.C. Place Stadium and the debt from the 2011 renovation. The 2024-25 tally assumes $15 million in net proceeds from the potential sale of land on the east side of B.C. Place Stadium.

The province’s biggest infrastructure project cost $8.4 billion through Dec. 31.

BC Hydro’s three-year plan said Site C would cost a further $7.64 billion to complete by the end of 2024.

On Feb. 26, 2021, the BC NDP government admitted the dam would cost $16 billion and take longer to build. In 2014, the BC Liberal government set a $8.775 billion budget. The NDP blamed cost overruns on pandemic slowdowns and geotechnical challenges.

The BC Hydro report estimates $2.52 billion will be spent in the fiscal year beginning April 1, $2.56 billion in 2023-24 and $1.13 billion in 2024-25.

From ICBC’s $3.3 million ad campaign by PSDDB (ICBC)

Auto insurer ICBC is forecasting $1.9 billion in net income by the end of March, substantially higher than the $154 million forecast and an improvement on the $1.54 billion for the previous year.

“The forecasted net income for 2021/22 is $1.75 billion favourable to plan, mainly as a result of higher investment income and lower claims costs; in addition to a lesser extent higher premium revenue and lower operating expenses also contributed to the favourable net income,” said ICBC’s service plan.

The Liquor Distribution Branch is expecting $1.15 billion net income for this fiscal year and $1.66 billion for the next.

The number of private retail cannabis stores supplied by LDB’s wholesale division grew by 101 during this fiscal year. As of last Nov. 24, the province had licensed 384 stores and 370 of them had registered and placed orders for non-medical pot.

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Bob Mackin Last summer’s legalization of single-event sports

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Ex-B.C. Legislature clerk won’t testify at his B.C. Supreme Court trial

Bob Mackin

The former BC Liberal-appointed clerk of the B.C. Legislature will not testify at his B.C. Supreme Court fraud and breach of trust trial.

Portrait of Craig James outside the Clerk’s Office at the Parliament Buildings (Mackin)

On Feb. 22, Associate Chief Justice Heather Holmes heard another half hour of testimony from the final Crown witness, the Legislature’s chief financial officer Hilary Woodward, before adjourning the case four hours.

Craig James’s lawyer, Gavin Cameron, said more time was needed to decide the defence’s next steps.

After the trial resumed from lunch break, Cameron simply said: “Having taken instructions, Mr. Westell and I have met with Mr. James. The defence is not calling a case.”

Special prosecutors David Butcher and Brock Martland will begin closing submissions March 1. Cameron and Kevin Westell for James will respond during the two-day hearing. It is expected that Holmes will reserve her verdict, though it is not known how many weeks she will ponder her decision.

When the trial opened Jan. 24, James pleaded not guilty to three charges of breach of public trust and two charges of fraud over $5,000.

“Mr. James was no ordinary employee,” Butcher told the court on Jan. 24. “As the parliamentary equivalent of the CEO, he had responsibility to the institution, the people of British Columbia to manage the affairs and resources of the legislature in an exemplary manner. The Crown alleges that Mr. James’s conduct at different times, and in different ways, was a marked departure from the standard of responsible management expected of a person occupying one of the highest offices in the province.”

The infamous wood splitter, photographed on the Legislature grounds on Nov. 20, 2019. (Mackin)

James, but not Lenz, was charged criminally in December 2020.

Butcher said the case against James has three facets, because the Crown alleges he broke the law by:

Making a claim for more than $250,000 in February 2012 for a retirement allowance to which he was not entitled;

Filing travel expense claims throughout his tenure for clothing and souvenir purchases to which he was not entitled, and;

The 2017 purchase of a woodsplitter and trailer that he stored at his home in Saanich for a year.

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February 22, 2022

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Bob Mackin The former BC Liberal-appointed clerk of

Business, News, Opinion, Sports

theBreaker.news Podcast: Pondering the legacy of Beijing 2022, the “Genocide Games”

For the week of Feb. 20, 2022:

Beijing 2022 is over, the most-controversial Olympics since 1936.

Human rights activists concerned about the Chinese Communist Party’s treatment of Uyghurs, Tibetans and Hong Kongers boycotted NBC and CBC’s coverage of the Winter Olympics. The TV ratings were a disappointment.

David Mulroney, former Canadian ambassador to China (Mackin)

On this edition of theBreaker.news Podcast, special guest David Mulroney, a former Canadian ambassador to China, says China was the dream host for the International Olympic Committee, which cares only about running the Games on time and being paid on time.

“[The Chinese government will] literally move mountains, cut down forests, pump water into a desert — wastewater in a desert — to create snow,” Mulroney said. “Because they will suppress any rights to make sure that the city is quiescent, the people, there are no protests.”

What was Xi Jinping’s message to the world?

“We can be committing a genocide, and you’re still going to come because we’re that powerful,” Mulroney said. “We’re so big, that if we have these Games, everybody better turn out and everybody will turn up.”

Plus Pacific Rim and Pacific Northwest headlines and commentary.

CLICK BELOW to listen or go to TuneIn or Apple Podcasts.

Have you missed an edition of theBreaker.news Podcast? Go to the archive.

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theBreaker.news Podcast

theBreaker.news Podcast: Pondering the legacy of Beijing 2022, the "Genocide Games"

00:00 / 00:27:51

February 20, 2022

For the week of Feb. 20, 2022:

Business, News, Sports

Spirit of Trudeau’s Beijing Olympics diplomatic boycott not followed at home

Bob Mackin

In early December, Prime Minister Justin Trudeau said the Canadian government would follow allies and not send politicians or diplomats to the Beijing 2022 Winter Olympics, because of “repeated human rights violations by the Chinese government.”

Wilson Miao (left), Parm Bains, Tong Xiaoling, Lam Siu Ngai, Taleeb Noormohamed and Michael Lee. (PRC consulate)

But Liberal MPs and other politicians in Metro Vancouver are continuing to engage with officials of the Chinese Communist Party (CCP) government on Canadian soil. Two Richmond politicians even expressed support for the Games and told a state-affiliated TV outlet that politics and sport should not mix.

David Mulroney, who was Canada’s ambassador to China from 2009 to 2012, called it a “blot on the record” of those politicians disregarding the diplomatic boycott.

“The fact that local politicians are really dancing to the tune of China’s senior official in the region is, to my mind, just unconscionable and it should not happen,” Mulroney said in an interview. “There should be Canadian solidarity on issues around human rights.”

The annual Chinatown parade was cancelled due to the pandemic, but Consul General Tong Xiaoling, People’s Republic of China’s top diplomat in B.C., attended a private Jan. 30 Lunar New Year of the Tiger ceremony Chinatown. She wore a Beijing 2022 scarf and delivered a speech about the Games and the CCP’s centennial.

The Jan. 30 Lunar New Year of the Tiger event featured an Olympic-style parade of flags led by China (Phoenix TV/YouTube)

Tong also posed for photos with 2021-elected Liberal MPs Taleeb Noormohamed (Vancouver Granville), Parm Bains (Steveston-Richmond East) and Wilson Miao (Richmond Centre), Richmond Mayor Malcolm Brodie, Vancouver city councillor Pete Fry, and BC Liberal MLA Michael Lee. Also in attendance were NDP Minister of State for Trade George Chow and Burnaby Coun. James Wang.

A Phoenix TV clip shows an Olympic-style parade of national flags led by a large Chinese flag. Smaller Canadian flags were carried behind it. The official Government of Canada protocol states: “When flown or paraded, the National Flag of Canada takes priority over all other national flags.”

Miao and Noormohamed did not respond to interview requests.

Bains was seated to Tong’s right during the ceremony. According to a statement attributed to him: “While Canada and China have differences with one another, I believe that open dialogue is more helpful in how we approach our diplomatic relations with China. I will continue to share and promote Canadian values and be a vocal advocate for human rights with all diplomats that are stationed here in Canada.”

Xi Jinping’s top Vancouver diplomat, Tong Xiaoling, wearing a Beijing 2022 scarf (PRC consulate)

Bains subsequently admitted he did not actually discuss human rights with Tong, but “I did indicate to the CG that it was very important to continue dialogue to discuss our differences.”

Fry said that he attended in his role as deputy mayor and did not know that Tong would attend or be a speaker.

“I support Canada’s diplomatic boycott of the Olympics, but there is no boycott of Vancouver’s Chinatown that I am aware of or that I would support,” Fry said.

Ivy Li of Canadian Friends of Hong Kong said the event organizers, the Chinese Benevolent Association and Guangdong Community Association of Canada, have close ties to the consulate, which represents a foreign government rather than B.C.’s diverse ethnic Chinese community.

“There’s no way those politicians didn’t know about the nature of these two groups, and that this event would be propaganda for CCP,” she said.

Mayor Kennedy Stewart’s only publicized Lunar New Year ceremony was the launch of Lunarfest Vancouver, a Taiwan government-sponsored Lunar New Year lantern festival.

In November, Tong made international headlines when she publicly opposed Vancouver city hall exploring a friendship city arrangement with Taiwan’s second-largest city, Kaohsiung.

Last April, Stewart turned down meetings with Chinese diplomats when Beijing sanctioned friend and Conservative MP Michael Chong after the House of Commons condemned the mass-detention of Uyghur Muslims as genocide.

Richmond Mayor Malcolm Brodie and Coun. Alexa Loo starred on an edition of Phoenix TV’s Talk With World Leaders program titled “Political Differences Cannot Hinder the Beijing Winter Olympics!” (Fengshows/YouTube)

On Jan. 24, Tong headlined a 10-day countdown to the Games ceremony that included guests Brodie, Richmond Coun. Alexa Loo, and ex-Vancouver mayor Sam Sullivan.

Brodie told Phoenix TV that he hoped politics “doesn’t get in the way of a very successful Olympic Games.”

Said Loo on the same broadcast: “It shouldn’t be the athletes’ job to tell other governments how they should run their country. And it’s not, you know, the politicians’ job to tell us whether or not we get to compete.”

Brodie did not respond to an interview request. Loo said she did not have time to answer questions.

Human rights activist Li said it is disingenuous for politicians to suggest politics and the Games should be separate, especially when it is the same politicians whose careers have benefitted from their attachment to the Games. Brodie has enjoyed 20 years in office and was re-elected twice since Richmond hosted Olympic speed skating in 2010. Loo was first elected in 2014 on a campaign that promoted her past as a Canadian snowboarder at Vancouver 2010.

“They’re essentially helping the regime to sugarcoat their brutal behaviour, and their genocidal behaviour in East Turkestan (aka Xinjiang), as well as to the majority of the people in China and also their aggression to us,” Li said. “I mean, we have to remember the two Michaels and as well as there’s two other Canadians on death row.”

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February 19, 2022

Bob Mackin In early December, Prime Minister Justin

Government grog shop managers too busy to count potentially dirty money

Bob Mackin

B.C. government liquor store managers were too busy last November during the annual high-end spirits promotion to report potential money laundering to head office, as they had been directed.

The Premium Spirit Release last Nov. 13 offered a $200,000 Dalmore Decades No. 4 Collection Set 19, $38,000 bottle of GlenDronach 50-year-old and many other rare and pricy potent potables for sale.

B.C. Liquor Stores CEO Blain Lawson (LDB)

In a Nov. 12 email, obtained via the freedom of information law, the Liquor Distribution Branch (LDB) director of store operations told managers at three stores in Vancouver, West Vancouver and Richmond that all cash transactions above $10,000 must be witnessed and documented by the manager on duty. Under provincial policy, B.C. Liquor Stores had no limit on the amount of cash they would accept.

Jonathan Castaneto ordered managers of the Cambie and 39th outlet in Vancouver, Park Royal outlet in North Vancouver and Brighouse outlet in Richmond to email the executive director of corporate services if and when processing a large cash transaction during the Nov. 13 promotion.

“With the upcoming Spirit Release and holiday season, stores may encounter large cash transactions,” warned Castaneto. “Please be reminded that, as per the large cash transactions policy, all cash transactions in excess of $10,000 (or a group of sequential transactions from the same customer totalling in excess of $10,000 in cash) must be counted twice: First, in front of the customer and then, immediately upon completion of the sale, in the cash room.”

But the plan fizzled out.

Three suspicious transactions under $10,000 were under review, according to a censored Nov. 16 briefing note from LDB CEO Blain Lawson to Finance Minister Selina Robinson.

“On Monday morning it was discovered that the real-time alert notification process was not followed during the event,” said the Lawson briefing note. “Store managers explained they were busy with the Premium Spirit Release and assumed that they could update on Monday if they were following the established policy process.”

A day later, on Nov. 17, Deputy Minister Doug Scott sent a memo to Lawson to immediately ban all cash transactions above $5,000 during a review by the Crown Agencies Secretariat. Scott cited “several large transactions in excess of $10,000.”

Details of the suspicious transactions were withheld by LDB. Lawson did not respond for comment.

A statement from LDB said the agency continues to review the policy and intends to make permanent changes to strengthen the policy.

According to the briefing note to Robinson, in 2018 LDB explored reporting large cash transactions to the Financial Transactions and Reports Analysis Centre (FINTRAC). However, LDB’s information and privacy and legal departments “indicated at that time there was no clear legal authority for the LDB to lawfully collect and disclose the information FINTRAC requires from designated reporting entities.”

Trade-based money laundering expert John Zdanowicz, who testified in December 2020 at the Cullen Commission on money laundering in B.C., said governments can print money, but they can’t make additional bottles of rare wine or liquor.

“There would be some rational reasons to purchase these things as an investment, consumption, and inflation hedge, but also can be used to launder money,” Zdanowicz said in an interview.

He said criminals use liquor to disguise the proceeds of crime by under-invoicing or over-invoicing.

Trade-based money laundering expert John Zdanowicz (MVCC)

“It’s selling something for nothing, or buying nothing for something,” explained Zdanowicz, professor emeritus at Florida International University. “Selling a rare bottle of bourbon that’s worth $15,000, and then invoicing it at $5, is a way to move the money out of the country, because once it’s in the foreign country, it can be resold for its true market value. You do just the opposite, if you want to move money into the country, you overvalue your exports and you sell something that’s only worth 50 cents, you sell it for $500.”

Zdanowicz’s analysis of Statistics Canada trade figures for 2019 found $90 billion Canadian worth of all types of goods moved out of Canada and $44.4 billion moved in. U.S., China, Germany, Mexico and Japan were the top five countries by dollar amounts.

Zdanowicz’s trade analysis for the same year found $16.5 billion was moved into B.C. and $8.5 billion moved out of B.C. by price manipulation.

The NDP government has long known that B.C. Liquor Stores were at risk of money laundering.

A manager at the Cambie and 39th Vancouver location in May 2015 contacted head office after workers became concerned about suspicious large transactions over $10,000. An LDB senior investigator told the workers to report concerns to management, not to police or FINTRAC, according to email leaked to the then-opposition NDP.

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February 19, 2022