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Miscellany, News

Bob Mackin

Police in Metro Vancouver have been warned that a notorious Los Angeles-centred organized crime group with Salvadoran roots could set-up shop in the region, as a result of Trump administration policies. 

theBreaker obtained an April-issued, Canada-wide alert from Criminal Intelligence Service Canada under the headline “Mara Salvatrucha (MS-13) in Canada.”

MS-13 is is estimated to have 50,000 to 70,000 members in Central America and the U.S. The memo states that there are no known MS-13 cells in Canada at this time, but cautions that Vancouver, Burnaby, Toronto and Montreal are the “the most susceptible communities” for northern expansion.

Canadian officials are girding for an influx of asylum-seeking Salvadoran migrants after the U.S. decided to end the temporary protected status for 200,000 Salvadorans by September 2019. When the U.S. removed similar protection for Haitian immigrants in 2017, an influx of Haitians showed up at the Canadian border. 

The alert warned MS-13 members would likely exploit the migration of Salvadorans to Canada and set up new cells in Canada’s biggest three cities, plus Burnaby.

MS-13 is notorious for extortion, low-level drug trafficking and theft. The group is believed to be responsible for “thousands of homicides a year in the U.S.” the alert states. 

“Violence linked to the MS-13 is often described as brutal, from senseless beatings to dismemberment, and should be considered as the group’s trademark. Other manifestations of MS-13 presence could include gang-related graffiti or, less common nowadays, MS-13 tattoos.” 

Vancouver Police spokesman Const. Jason Doucette said the force does not have any current information about the presence of MS-13 in Vancouver. 

“The VPD has experts in organized crime who are in regular contact with our local, national, and international partners,” Doucette said. “We will continue to monitor organized crime groups in Vancouver, regardless of their origins, and take appropriate actions to ensure our city remains a safe place to live, work, and visit.”

Coincidentally, Latin American criminal groups are part of what Australian criminology expert John Langdale called the “Vancouver model” of casinon and drug money laundering. theBreaker was first to report that Langdale coined the term. 

“Chinese underground banks are at the heart of Chinese criminal activity. Money [is] laundered from Vancouver into/out of China and to other locations (Mexico, Colombia),” according to Langdale’s November 2017 presentation to an Australian policing conference. 

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Bob Mackin Police in Metro Vancouver have been

Miscellany, News

Bob Mackin

When Yihao Wang strode out of the North Vancouver Provincial Courthouse on May 8, the 23-year-old’s black baseball cap, sunglasses and surgical mask disguise captured the attention of reporters and cameramen. 

Wang’s Christian Louboutin spiked loafers retail for $1,200.

He had just been fined $750 for driving a $300,000 Ferrari 210 kilometres-an-hour over the Lions Gate Bridge after midnight last July 4. The shoes he was wearing — black flannel Christian Louboutin Harvanna Spikes loafers — retail for more than the penalty that was imposed by Judge Eugene Jamieson.

Just like the Salvatore Ferragamo velvet gold-monogrammed loafers he wore April 24, the day he pleaded guilty and led reporters on a similar bizarre walk along 23rd Street. 

“The type of driving that was done in this case seems to be quite reckless, showing a significant disregard for the safety of those using the road,” Jamieson told the court.

“It’s only out of some great luck that nothing worse happened, that no one was hurt or killed by what occurred.” 

How fast is 210 km-h? When Ontario’s Paul Tracy took the checkered flag in the last Molson Indy Vancouver in 2004, the average speed on the roads around False Creek was 95.9 miles per hour. That is 154.34 km-h in metric, or 55 km-h less than Wang’s speed. 

But, Jamieson conceded, Wang was guilty under the Motor Vehicle Act, rather than the Criminal Code of Canada. Both the Crown and defence agreed on the fine. 

“A sentencing judge does not lightly depart from what’s seen as a joint submission between Crown and defence,” Jamieson said.

Wang has no criminal record. His record of driving fines seems to indicate the reward — racing on public streets for fun — outweighs the risk — a traffic fine costing less than the price of a pair of loafers.  

Wang disguised his face but showed-off his fancy shoes (Mackin)

He was banned from driving for two months in 2014. He had three prior excessive speed convictions. On the night of the latest incident, there were no drugs or alcohol detected and no other drivers or pedestrians on the bridge. The West Vancouver Police officer that caught him recognized him from a previous stop. 

Wang’s lawyer, David Baker, said the 16-month driving ban ordered a week after the incident was longer than the minimum one-year ban for drunk driving. The 2015 Ferrari 458 supercar, he said, has been sold.

In the effort to obtain a light sentence for his client, Baker claimed his client had been “harassed” by media. In Baker’s mind, asking questions about the source of Wang’s wealth and the nature of his parents’ profession qualify as harassment. (Wang lives with his wife and their 22-month old boy in a $6.29 million British Properties mansion that is registered in the name of Xinghui Wang. Fuerdai is a Mandarin term meaning “rich second generation.”) 

“This case has nothing to do with money laundering or wealth,” Baker said. “Really, it has to do with a young man who shouldn’t have been driving such a powerful vehicle, it was a mistake to have that vehicle in the first place.” 

Wang can breathe a sigh of relief that B.C. doesn’t have fines like Finland, which uses a complicated day-fine system that means the more disposable income a speeding driver has, the bigger the fine for speeding.

Toronto Maple Leaf Leo Komarov was slapped with $51,000 in fines for driving too fast in 2014 in Finland. Komarov, who had inked a $2.95 million a year contract with the Buds, drove 77 km-h in a 50 km-h zone and 131 km-h in a 100 km-h zone. 

Baker told Jamieson that his client came to Canada in 2012 from China, has studied post-secondary ecnonomics and mathematics, and started a small business.

Wang was a passenger in a Porsche SUV (Mackin)

Baker did not offer details inside or outside court about the nature or name of Wang’s business or that of his parents. 

Near the end of the hearing, Wang stood-up next to Baker, to address the court. He is tall with spiky hair, partially shaved on the sides, and wears swanky-style eyeglasses with black rims. The only words Wang spoke in court, translated to English by a Mandarin interpreter, were “I’m really sorry for what I did in the speeding incident. I promise I will not do that again.” 

Attorney General David Eby, who is responsible for auto insurance and driver regulation, is pondering higher penalties and premiums for drivers that cause the most damage and rack-up the most speeding tickets.

There is some science to justify connecting penalties to wealth. Paul Piff, a professor of psychology and social behaviour at University of California Irvine, led a 2012 report for the Proceedings of the National Academy of Sciences called “Higher social class predicts increased unethical behavior.”

Piff’s team found that “upper-class individuals were more likely to break the law while driving, relative to lower-class individuals.” Researchers observed drivers of luxury cars yielded right-of-way less frequently to drivers of cheaper vehicles and they also yielded right-of-way to pedestrians less frequently than did the drivers of cheaper vehicles. 

Wang said nothing to reporters as he made his way around the corner of 23rd Street to his friend’s waiting white Porsche SUV on St. Georges. He will be eligible to drive again in November, unless the Superintendent of Motor Vehicles feels like extending the temporary ban. 

Until then, Wang is free to move about as he pleases. In shoes worth more than he was fined. 

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Bob Mackin When Yihao Wang strode out of

Miscellany, News

Bob Mackin

An internal audit found BC Hydro personnel enjoy reading menus more than the Crown corporation’s policies.

BC Hydro directors, executives and employees racked-up $30.56 million in business and travel expenses during the year ended March 31, 2017, according to the first audit of its kind since 2015. 

The audit report, obtained by theBreaker under the freedom of information law, said employee meals were reimbursed $7.9 million through payroll and $5.4 million through expense claims during the last fiscal year of CEO Jessica McDonald, chair Brad Bennett and Premier Christy Clark. During Clark’s six years in office, more than 150,000 B.C. children lived in poverty, according to First Call.

Christy Clark (left), Brad Bennett, Bill Bennett (no relation) and Jessica McDonald. (BC Gov)

“Even though responsibilities are fully documented, testing identified that some employees and approving managers do not always comply with their responsibilities to fully document, review and challenge potential non-compliances to keep expenses reasonable,” the audit said. 

Employees are eligible for a so-called living out allowance of $130 a day for accommodation and three meals and missed meals payments in lieu of meal breaks, both of which are paid through payroll. Rather than claiming receipted meal expenses, employees have the option to claim per diems or cooking out allowances of $75 a day for remote locations. 

Auditors combined expense and payroll data and found $1.56 million in meal expenses for the top 50 employees, who each claimed meal expenses for “an equivalent of well over 240 days in [the 2017 fiscal year].”

“Most employees work approximately 240 days a year. One employee claimed 293 days of all-day per diems. Another employee claimed 253 missed meals and 21 all-day meal per diems,” the audit said. “Thirteen instances of employees claiming over four meals per day. Human Resources advised that more than four meals per day may be claimed in exceptional circumstances however, these should be rare and reviewed individually to verify validity and ensure employee safety.”

The audit also found catering expenses exceeded per diem guidelines for executive meetings. 

“Catering meals were often expensed by assistants for executive team meetings. These expenses were approved by executive team members who also attended the meetings which results in self-approval.”

Auditors found employee expenses had inadequate business reasons and miscoding, which impacted the ability to demonstrate prudent spending. Managers often approved expenses for group events they attended and costs were greater than they should have been.

“Receipted meals often exceed per diems, monitoring of overall meal expenses is not in place, and there is little guidance on recognition events and team building activities.”

The BC Hydro per diem for dinner is $26, but auditors found the rationale for non-compliance with the guideline is “seldom provided.” Overtime meals capped at $42, based on the collective agreement. 

“Controls are not in place to enforce the limit resulting in inconsistent application across the company. Some managers flag the overages while others do not identify the recoveries. Management is working on an initiative to introduce payroll deductions for meals that exceed this limit.”

Auditors tested 14 meal expenses over $750 and found “non-compliances including insufficient business reasons, 12 group meal expenses were not accompanied by a list of attendee names, and two employee recognition events were attended by spouses.” 

Nobody from BC Hydro was available for comment on May 7. Watchdog Dermod Travis of IntegrityBC said he is not surprised. 

“When the Clerk of the B.C. Legislature rewrites a travel policy at Elections BC to take his wife to Kenya, it sets a culture for everyone else across government,” Travis said, referring to Craig James’s $43,000-plus spending in 2010 when he headed the electoral agency. 

“While BC Hydro’s statements of financial information provide a helpful overlook of supplier payments, it fails miserably at disclosing discretionary spending on such things as personal expenses and hospitality, unlike what is found at the provincial level.”

McDonald charged $43,379 in expenses on top of her $429,232 pay package as CEO. The NDP fired the Clark-appointee when it came to power last July. The federal Liberal government hired McDonald to chair Canada Post. She recently became interim CEO.

BC Hydro is carrying a $22 billion debt and building the $10.7 billion Site C dam. The B.C. Utilities Commission rejected the NDP government’s promised rate freeze. The cost of electricity rose 3% on April 1. 

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Bob Mackin An internal audit found BC Hydro

Miscellany, News, Opinion

With 23 weeks to go before Vancouver chooses a new mayor and council, the guessing game continues. 

Will anyone be brave enough to run under the damaged Vision Vancouver brand? Which of the five men running for the NPA will be chosen by the party at the end of May? Will Green councillor Adriane Carr try to parlay her council seat, and the Green Party’s increased profile, into a run for the top job? A poll by Mario Canseco’s ResearchCo found 35% of respondents think Carr is a good choice for the mayoralty. 

But will changing the faces really change city hall? 

On this edition of theBreaker.news Podcast, host Bob Mackin interviews Randy Helten of CityHallWatch for his insight and solutions to the transparency and accountability deficit at 12th and Cambie. 

Plus commentaries and the regular scan of Pacific Rim and Pacific Northwest headlines. Listen to theBreaker.news Podcast. 

Click below or go to iTunes and subscribe.

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

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theBreaker.news Podcast: Keeping an eye on city hall with an election on the horizon
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With 23 weeks to go before Vancouver

Miscellany, News

Bob Mackin

The Alberta government has bought pro-Kinder Morgan ads on billboards at the reserves of a First Nation that is vehemently opposed to the Trans Mountain Pipeline expansion. 

The Keep Canada Working campaign that broke April 30 is on rotation at the Squamish Nation’s digital billboards near major Metro Vancouver bridges, such as the Lions Gate Bridge and Burrard Bridge. 

Alberta’s pro-Kinder Morgan ad on a Squamish Nation billboard near the Lions Gate Bridge (Mackin)

“Trans Mountain Pipeline means more money for roads, schools and hospitals” says one of the bright, red ads, which features the campaign website and a doodle of buildings and flowers. 

The three-metre by nine-metre LED billboards were erected before the Vancouver 2010 Winter Olympics. They are managed by Allvision Canada Co. and operated by Bell-owned Astral Media. A 2010 news release quoted Squamish Nation chief Bill Williams saying the billboards would generate $50 million for the tribe. 

Cheryl Oates, spokeswoman for Alberta NDP Premier Rachel Notley, told theBreaker that $1.29 million of taxpayers’ money has been spent so far on advertising to counter the B.C. NDP government’s opposition to the project. More than $707,000 of that has been spent in British Columbia.

On April 8, Kinder Morgan announced suspension of federally approved work to expand the pipeline. It blamed continued opposition from the B.C. government, which is unlikely to meet the company’s May 31 deadline to change course. On April 26, Premier John Horgan formally asked the B.C. Court of Appeal to rule whether B.C. has jurisdiction to regulate the environmental and economic impacts of oil transport in the province. 

Oates said the Know the Facts campaign in February and March cost $365,000, of which $233,000 was spent in B.C. She said the $474,325 of the $925,000 Keep Canada Working campaign was dedicated to reaching B.C. audiences. 

Squamish Nation Coun. Khelsilem (aka Dustin Rivers)

Newly elected Squamish Nation councillor Khelsilem (aka Dustin Rivers) is among the regular protesters outside the Burnaby Mountain tank farm where a watch house was erected to oppose the project. Squamish Nation and neighbouring Tsleil-Waututh First Nation are waiting for the verdict of their Federal Court of Appeal challenge of the project. 

At a May 2 news conference during the Assembly of First Nations meeting in Ottawa, Khelsilem said Prime Minister Justin Trudeau “has failed to respect the indigenous rights of the Squamish people, has failed to consult my nation when it comes to the expansion of the Kinder Morgan pipeline and increased oil tankers through our territory.” 

Khelsilem did not respond to theBreaker’s request for comment about the Alberta government ads on the Squamish Nation billboards. 

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Bob Mackin The Alberta government has bought pro-Kinder

Miscellany, News, Sports

Bob Mackin

Vancouver will be on the professional video gaming map in late August when Rogers Arena hosts the $27 million International Dota 2 Championships. 

But a local e-sports company with two venues, competitive teams and plans to become a player agency, has collapsed.  

While the MLGB E-Sports Club website says its Vancouver and Richmond locations were closed for equipment upgrades, documents from a B.C. Supreme Court case say otherwise. 

Company website on May 2 doesn’t match the words in a court filing (MLGBesports.com)

May 1 reasons for judgment say that the club’s general manager was hired last summer for $10,000 a month, but is owed $40,000 in back pay and $36,000 in expenses. On March 5, he complained to the province’s Director of Employment Standards and continued to work until March 7.

“On that day, he had arranged to meet with [MLGB owner Zhiheng] Zhou to obtain $10,000 toward partial payment of his outstanding salary,” said Justice Barbara Norell’s written verdict. “Shortly prior to the meeting, Zhou left him a voicemail message stating that: (a) the company’s assets were frozen; (b) he wouldn’t be meeting with him to give him a cheque; (c) MLGB was closing its business; and (d) he would be permanently leaving for China.”

As of May 2, the website for MLGB E-Sports still reads, in bold red letters, “due to upgrading the equipments, we are closing the stores for maintainance (sic) until the end of March.” 

Calls to the Vancouver number listed on the website go to a generic voice mail system. The Richmond number is out of service. 

In the verdict, Norell also awarded $500,000 plus interest to three plaintiffs who sued Zhou and the company for failing to repay a loan connected with the Richmond store.

Between November 2015 and December 2016, Chao Bai, Bai Wang, and Wenwei Zhu gave Zhou $1.01 million to finance a new location in Richmond. The plaintiffs demanded their money back when it did not open as planned, but reached a settlement agreement for repayment. On May 24, 2017, Zhou and his company delivered cheques for $100,000 to the plaintiffs’ lawyer and $600,000 from a numbered company to the plaintiffs’ lawyer’s trust account.  

“Shortly thereafter Zhou advised Bai that MLGB did not have the funds to honour the $600,000 cheque and advised him not to deposit the cheque,” Norell wrote.

MLGB’s Richmond location (MLGB)

Zhou gave the plaintiffs’ lawyer $200,000 on July 23 and agreed to pay the remaining $500,000 by Nov. 23. He did not deliver the first instalment of the $500,000, so the plaintiffs filed a lawsuit last Sept. 13. 

“The defendants deny they breached the settlement agreement and deny that any amounts are owing under it,” according to Norell. “They do not plead any facts as to how they met the terms of the settlement agreement or did not breach it.”

Norell held a one-day hearing on March 27. No lawyers appeared for Zhou. 

Zhou filed a counterclaim last October, alleging that Bai defamed him to new potential investors. Zhou argued that any damages granted the plaintiffs should be offset by damages for defamation. 

He alleged Bai told potential investors that Zhou stole a million dollars from the plaintiffs, used it to open the Richmond location and refuses to hand over the store or the stolen money. Bai’s lawyer demanded proof of the investors, the words spoken or published, and where they were published. 

Zhou’s lawyer named the potential investors as Fei Gao, Shuai Xiao, Shan He and Zihao Zhou and claimed the statements were made last fall in Richmond. 

The judge struck the defamation counterclaim, because the date, time, exact location and persons to whom the statements were made were not indicated in the pleadings or particulars. 

MLGB’s website says it owns competitive teams in League of Legends and Playerunknown’s Battlegrounds and was developing a pro player agency. “Local gaming internet café clubs will provide a foundation for the infrastructure that we are eager to build,” it says.

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Bob Mackin Vancouver will be on the professional

Miscellany, News

Bob Mackin

A B.C. Supreme Court judge ordered a real estate licensing tutor to stop training students in Vancouver, Burnaby and Richmond because he was violating a no-competition agreement with his former employer. 

In a May 1 written decision, Justice Nitya Iyer said Quick Pass Master Tutorial School Ltd. owner Benson Min Hung Wang alleged that Li Min (Richard) Zhao opened his own competing tutorial school in Burnaby the day after Zhao terminated his contract early with Quick Pass. Quick Pass prepares Mandarin-speakers for the University of British Columbia’s real estate licence exam. 

(GetRealEstateLicences.com)

Zhao worked for Wang on a two-year contract that prohibited Zhao from soliciting Quick Pass students and from competing with it for specified period. “It also provided that Quick Pass owned all material relating to its business, including any material created by Mr. Zhao while under contract to Quick Pass, whether or not he created it at Quick Pass’s direction,” Iyer wrote. 

“(Zhao) has advertised and marketed his school to the Mandarin-speaking community, including to students of Quick Pass. He uses materials that he says he developed for use in his own program, but which he must have developed while working for Quick Pass since he opened his school the next day. Mr. Zhao does not really dispute these facts. He says that these contractual terms are unenforceable.”

Wang opened Quick Pass in July 2015 as the sole director, offering tutorials for real estate, mortgage broker and rental property management exams at locations in Vancouver, Richmond, Burnaby, Coquitlam and Surrey. The real estate program is based on the University of B.C.’s real estate licensing course and examination. 

Zhao immigrated to Canada in 2013 and passed the real estate exam in 2016. He signed two contracts in June 2017 with Quick Pass, agreeing to teach for two years, until June 2019. The contracts said Zhao was barred from competing with Quick Pass for 18 months following termination. On top of his $35 an hour rate, he would receive a $15 per hour bonus while the non-competition agreement was in effect. 

On Sept. 21, 2017, Zhao incorporated the Richard Zhao Real Estate School Ltd. while under contract with Quick Pass. He informed Wang two days later, on Sept. 23, 2017, that he would resign and open his own school. 

In an uncontradicted affidavit, Wang testified: “I reminded him of his contractual obligations to return all tutorial handouts, power point slides and notes, and to destroy any copies. He said I had no control over that. He said if I take legal action, he will retaliate by spending a whole month recreating the plaintiff’s teaching materials and posting them on YouTube for free, which he suggested would destroy the market.”

Zhao opened his company on Nov. 1, 2017, the day after his contracts ended, and advertised on WeChat, among other places. He claimed he did not use any of the Quick Pass course materials, but instead developed his own. 

(Facebook)

The judge granted the injunction over the non-compete clause, to restrain Zhao from competing “in any aspect of the business of providing pre-licensing real estate training anywhere in Vancouver, Burnaby and Richmond until April 30, 2019, or until the trial or other disposition of this action, or until further order of this court.”

The judge did not agree to issue the two other restraining orders. Iyer wrote that the non-solicitation clause did not contain an express geographic restriction and the confidential information clause was too broad. It would have had a severe impact on Zhao’s ability to carry-on business. 

On his website, GetRealEstateLicences.com, Wang says he has been a real estate agent since 2010 who has helped more than 800 students at UBC pass their real estate, mortgage and rental property management classes since 2011. He charges $360 to $1,100 for courses and claims a 90% pass rate, ambitiously guaranteeing that students will pass the courses and exams on their first try “as long as they keep their noses to the grindstone (or their textbooks), work hard and follow all of Benson Wang’s guidelines for success.”

There is, however, small print on the website that that requires $100 payment to qualify for Wang’s five-point “guarantee to pass policy.” 

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Bob Mackin A B.C. Supreme Court judge ordered

News

Bob Mackin

When Lions Gate Hospital began the mammoth task to move from paper charts to electronic patient records on April 28, Vancouver Coastal Health asked ambulance drivers to consider taking patients to other hospitals. 

A patient at LGH told theBreaker that a paramedic who tended his injury advised him that LGH was changing software systems and suggested delivery to Vancouver General instead. The patient, who did not want his name published, said he refused the advice because Lions Gate is close to his home. 

A spokeswoman for VCH told theBreaker that B.C. Emergency Health Services is counselling patients about the situation at LGH, “but it is always a patient’s choice as to which hospital they choose,” said Caeli Turner. 

Clinical and Systems Transformation video on a monitor in LGH lobby (Mackin)

“We proactively reached out to the ambulance service and other hospitals in the region to help support us by reducing the number of patients transferred to our hospitals,” said Turner, director of public affairs. “We cannot speak to individual patient cases, but no one is being turned away from our hospitals.”

Turner claimed hospitals supporting LGH during the transition were not experiencing significant impacts and there had been fewer than 15 patient diversions. 

When theBreaker visited LGH on April 30 in the early evening, there were staff meetings in part of the main lobby and training sessions in a makeshift classroom. Doctors and nurses were conferring with staff from the project IT department and software contractor Cerner. Signs about the “go live” launch at LGH and Squamish General Hospital were posted throughout the lobby and in elevators. 

The transition from paper to digital is officially called Clinical and Systems Transformation, an $842 million collaboration between VCH, Providence Health Care and Provincial Health Services Authority. LGH was supposed to be the first of 40 facilities to go live a year ago. 

In March 2017, the BC Liberal government and IBM parted ways over the bungled rollout. Troubles were mounting years earlier. An April 2015 presentation to the VCH board, based on a scathing report by PricewaterhouseCoopers, suggested that weaknesses could be fixed. 

“We tried to compare your current state with your future state to assess the degree of change and complexity. Unfortunately, your plans are not sufficiently detailed to allow us to do that,” the PWC report said. “Instead we compared our interview findings with leading practice.”

A similarly ambitious records digitization concept caused upheaval at Nanaimo Regional General Hospital.

Last November, theBreaker reported on the toxic culture that overcame the facility amid the changeover to iHealth. Doctors complained the $174 million system was error-prone and time consuming. An Ernst and Young report on the project found it was $54 million over budget. 

A Denver consultant called NRGH rife with bullying, coercion, harassment, intimidation, lack of trust, nepotism and favouritism. “From all indications Nanaimo Regional General Hospital is failing significantly in regard to managing people,” said the Vector Group report.

B.C. Nurses’ Union president Christine Sorensen said the union is pleased with the effort to upgrade the records system, but conceded that the transition would have its ups and downs. 

“It was made known to BCNU that some IT glitches were experienced at implementation, but they were reported to an Emergency Command Center and were quickly addressed,” Sorensen said in a prepared statement. “We have also learned that the employer continues to provide multiple types of support at Lions Gate Hospital and Squamish sites around the clock. The new clinical system is not intuitive in nature to learn.”

She said that in eight weeks, 1,100 people were trained before the system went live. The lessons learned from Island Health’s iHealth would help with CST’s rollout.

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Bob Mackin When Lions Gate Hospital began the

Miscellany, News

Bob Mackin

Twenty-five years after his government bowed to public pressure and withdrew a proposed surtax on expensive houses, a former NDP Premier is suggesting Premier John Horgan do the same.  

In an interview with theBreaker, Mike Harcourt said the additional school tax in finance minister Carole James’s February budget would cause hardship for widows and pensioners. 

“I hope they have a second look at it, because a lot of people on the Westside are not speculators, they’re not people that are flipping properties,” said Harcourt, B.C.’s premier from 1991 to 1996. “They’ve been living in their properties for a long time and bought, in a lot of cases, 30 to 40 years ago, when they were a lot less valuable.”

Mike Harcourt, B.C.’s 30th premier (True Leaf)

Harcourt, 75, owns a house in Vancouver near the stretch of Point Grey Road that was closed for a bike lane and nicknamed the Golden Mile. The 2012-built house was assessed last year at $3.391 million. Based on the NDP governmenet’s proposed 0.2% levy on the value of property over $3 million, he would pay $782 in school taxes, in addition to the civic levy. Last year, $3,245.99 of Harcourt’s $8,690.78 civic tax bill went to schools.  

“There’s already the expensive properties on the Westside that have already been carrying a pretty substantial part of the school tax, particularly over the last decade or so,” Harcourt said. “It seems to be a tax on a tax.” 

For those owning property worth $4 million and up, the surtax would be 0.4%. Tax deferrals would be available for seniors and families with children at home. 

James estimated the measure would bring $250 million to the treasury over three years, but it has put Vancouver-Point Grey NDP MLA and Attorney General David Eby on the defensive 

“When, and if, people fortunate enough to own a home in this price range decide to sell, they will benefit from a great windfall,” Eby wrote in a March letter to constituents. “This is a windfall that I know a number of us in this community – including a number of you who have written to me about this tax – agree is the product of a pernicious and corrosive housing affordability crisis that has badly hurt the sustainability of our community, and Vancouver as a city.”

Attorney General David Eby (BC Gov)

Eby cited safety reasons when he cancelled a May 1 public meeting at the St. James Community Hall after ads by two real estate agencies and an open letter from BC Liberal leader Andrew Wilkinson encouraged opponents go to the hall, whether they have tickets or not. theBreaker has seen evidence that the anti-tax campaign is orchestrated at BC Liberal headquarters by the party’s operations director, Kavi Bal.  

In the 1993 budget, Harcourt-appointed finance minister Glen Clark proposed an additional tax to fund schools, beginning at $5 for each $1,000 assessed value on a house worth $500,000. 

It sparked a week-long tax revolt, as letters and phone calls from angry taxpayers flooded the riding offices of Harcourt and fellow Westside NDP MLAs Darlene Marzari and Tom Perry. Under the measure, Harcourt faced a $695 bill on his $639,000-assessed house. Out of an abundance of caution, he left it to Clark to axe the tax. 

A headline on a Globe and Mail story said it all: “B.C. backs down on plan for heavy property surtax; too many house rich, cash poor.” 

“The people who are not rich who were captured by this, that was never our intent,” Clark told the Vancouver Sun. “And I certainly apologize for the problems it’s caused them over the past week.”

Fast forward to 2018, and the Westside and West Vancouver have become magnets for wealthy Chinese real estate investors and sites of some of Canada’s most-expensive mansions. Harcourt said measures are already in place to dampen demand, such as the tax on vacant houses and foreign buyers. He said the best solution is to increase supply.

“A tremendous expansion of supply of affordable housing in particular,” Harcourt said. “I hope the government succeeds with its goal of 11,000 new affordable housing units a year, mostly rental, all multifamily townhouse and apartments and some sort of starter home program for younger families. That’s what we need to do is have a substantial increase in supply, not just the measures to dampen down on demand or to do the tax on a tax.”

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Bob Mackin Twenty-five years after his government bowed

Miscellany, News, Opinion

Bob Mackin 

Told ya so. 

For the last two years, TransLink’s board of directors, executives, Mayors Council and the provincial government (BC Liberal, then NDP) hid massive cost increases from the public for their next rapid transit megaprojects.

Instead of providing quarterly or annual updates on the task of refining the costs, the dollar figures for the Broadway Subway and Surrey LRT were steadfastly censored from every document released to me under freedom of information. Not to mention thousands of pages of reports by engineers and designers that were withheld in their entirety. Whenever I asked, anyone involved in the operation, whether elected or appointed, the weasel words began to flow. The cost estimates weren’t “finalized” or they hadn’t been “approved,” they said. But at no time did anyone say the numbers were what they used to be. 

Sany Zein (left) and Kevin Desmond (Mackin)

Chief financial officer Cathy McLay was first to blame high real estate costs and the low Canadian loonie, compared to the U.S. greenback, when I asked her at a March 2016 news conference. McLay, also the acting CEO, knew the numbers were climbing, and she knew by how much. Either she chose silence or was following orders. Just like her permanent replacement, Kevin Desmond. As recently as March 16, when asked about the costs by another reporter, Desmond replied: “Project business cases are still, um, at the province.” Yes, Desmond did say “um.” 

When the Mayors’ Council released its “Vision” in 2014, the Broadway Subway was estimated to cost $1.98 billion. Now it’s $2.83 billion. 

Likewise for the Surrey-Newton-Guildford LRT. Was: $920 million. Now: $1.65 billion.

The difference is $1.58 billion. The way TransLink counts, under a “year of expenditure” cost formula, it’s $1.17 billion. 

Any way you count it, the costs skyrocketed so much, that there is no guarantee the 2014-estimated, $1.22 billion Surrey-Langley LRT line will be built.

All three rapid transit megaprojects were estimated at $4.12 billion in 2014. Mayors got closed door updates on costs from TransLink-contracted experts in 2016 and 2017, but the public had to wait until the last day of April in 2018 when it found out that two projects will cost almost $4.5 billion. 

With construction set to begin in 2020, higher costs are inevitable en route to scheduled completion in 2024 (Surrey) and 2025 (Broadway). 

Just in case you’re wondering, Desmond wouldn’t comment on the new estimate for the Surrey-Langley line, because it needs more studying, he said. Not to mention more taxpayer funding. 

All of this, after the Port Mann and Golden Ears toll-slaying NDP government stepped-in and took over the $1.3 billion Pattullo Bridge replacement in February. That project ballooned by almost $300 million since 2014. 

TransLink had been sitting on the rapid transit numbers for quite a while and had the good fortune of being overshadowed on April 30. The media briefing at TransLink’s New Westminster headquarters coincided with a bigger, flashier photo op in downtown Vancouver, where Prime Minister Justin Trudeau announced Seattle-based online retail juggernaut Amazon would open an office in the old Canada Post mail-sorting plant on Georgia Street.

TransLink said the federal government has committed $2.01 billion and the province $2.55 billion for its $7.3 billion, Phase Two plan. TransLink needs to raise $2.71 billion to pay for its share. So brace yourself for higher transit fares, higher property taxes and higher parking lot taxes. 

Fares will increase 10 to 15 cents per ticket in 2020 and 2021 and monthly passes will cost 50 cents to a dollar extra. Average households will be hit with another $5.50 in property taxes and the sales tax on parking will rise 3%. That would be 12 cents per hour at a parkade that charges $5 an hour. A regional development fee is also in the works, so new condominium buyers will feel the pain. 

Afforda-bull?

When it revealed the numbers April 30, TransLink also kicked-off a fast-track public consultation program. The agency will set-up “pop-up” displays at malls and farmers markets around the Lower Mainland until May 11. There will also be limited time for citizens to “pop-off” before the June 28 meeting to express their opinion. 

By comparison, in 2015, the public had two-and-a-half months to vote by mail in a plebiscite on a sales tax increase to fund TransLink expansion. Almost 62% of voters rejected the proposal. Opinion polls indicated the public lacked trust in TransLink. 

Mayors’ Council 2014 “Vision” and the original cost estimates.

So Desmond and company have their collective foot on the pedal, intent on leaving overtaxed citizens at the station. TransLink wants the early summer rubber stamp to avoid becoming an issue in the fall’s local government elections and next year’s federal election. All the price hikes don’t correspond with the NDP’s mantra of making life more affordable for British Columbians. Higher BC Hydro bills, higher ICBC rates, higher TransLink costs. There is only one place to go.

An April 2, 2017 email from Sany Zein, TransLink’s infrastructure management and engineering vice-president, to Desmond indicates that the cost will continue to be a moving target and likely to go higher. 

“The project inflation numbers are higher than recent GDP growth and higher than general recent inflationary growth; so some level of ‘hot market’ inflation is accounted for,” according to documents obtained under freedom of information. “The contingency percentages have been getting lower as the design definition improves. If interest during construction and internal labour charges are excluded from the gross total, the contingency value would represent a higher percentage.”

Megaproject cost underestimation is not unusual, according to a 2002 Journal of American Planning Association  article co-authored by Bent Flyvberg, an Oxford University business professor and megaproject analyst. 

“Based on the available evidence, we conclude that rail promoters appear to be particularly prone to cost underestimation, followed by promoters of fixed links… The average difference between actual and estimated costs for rail projects is substantially and significantly higher than that for roads… The average inaccuracy for rail projects is more than twice that for roads, resulting in average cost escalations for rail more than double that for roads.”

Flyvberg’s research indicates megaprojects are prone to cost overruns, time delays and benefit shortfalls. “Overruns up to 50% in real terms are common, and over 50% overruns are not uncommon.” In fact, nine out of 10 have cost overruns. 

“Political, technological, economical and aesthetic drivers seduce decision makers to underestimate hidden risks, and to overestimate benefits.”

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Bob Mackin  Told ya so.  For the last two

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