Adrian Dix in the Hot Seat

The early polls have spoken: the BC NDP is closer to forming a government than it has been in over a decade, and Opposition leader Adrian Dix is confident he’ll be the next premier. But what would an NDP government mean for business in our province? BCBusiness sat down with Dix for an exclusive interview, armed with reader questions harvested from our social channels.

Adrian Dix, BC NDP | BCBusiness
The NDP’s Adrian Dix, who in september told the Vancouver Board of Trade that business tax increases are “a reality.”

The early polls have spoken: the BC NDP is closer to forming a government than it has been in over a decade, and Opposition leader Adrian Dix is confident he’ll be the next premier. But what would an NDP government mean for business in our province? BCBusiness sat down with Dix for an exclusive interview, armed with reader questions harvested from our social channels.

Public-sector unions have tolerated “net-zero” wage controls in recent years, but tolerance seems to be wearing thin. Would you be in favour of substantial “catch-up” wage hikes?
You negotiate at the bargaining table and what we’ve had over the last period was real inconsistency from the current government in the way they’ve treated public-sector unions. You’ve had, contrary to specific promises, the tearing up of contracts. Can you imagine engaging in that practice on the business side and that being good for the economy? The [current] government’s bills 27, 28 and 29, which were singularly important in health and education bargaining, were found to be illegal in the courts. That’s their approach. We had to pay for those actions. So I think you need to be balanced in these things.

These are difficult fiscal times and I expect negotiations to be difficult and challenging. Remember, the government at the bargaining table right now is offering wage increases. Should they be offering wage increases? I think the Liberals have answered yes. In order to get agreements in these next two years they’re offering wage increases right now as we speak. So they’re no longer at net zero. You only have one government at a time and they’re negotiating right now. My recommendation to all parties is that they negotiate at the bargaining table.

The agreement that ensured B.C. teachers would be in the classroom this fall expires within a month of the upcoming election. What would be your prescription for a better relationship with the BCTF?
You have to be respectful and you have to negotiate. We’ve had two agreements in the last number of years. One was by Mr. Campbell’s government in 2006; it was quite an expensive agreement. It should be said [the parties settled for a] bonus, plus I think four years of wage increases, all of them I believe above the rate of inflation. That was the Carole Taylor round of negotiations. And then there was the round of negotiations in 1998, when the NDP government and the BCTF agreed to zero, zero and two [per cent wage increases over three years] in exchange for improvements in the classroom. So you have to start from a position of respect. Part of the problem with the government with bills 27 and 28 in January 2002 – aside from the fact they broke their word – was that they introduced the bills on Friday and passed them on a Sunday, using a mass of work that was done that wasn’t compensated as a part of that agreement. So they had things other than salary to negotiate, and they came to an agreement with CUPE in that case. So I think in the case of the BCTF, you’ve got to negotiate seriously and come to an agreement consistent with the fiscal capacity of the government that favours public education. But when you say to people you can’t negotiate salary and you can’t negotiate working conditions, well, that’s kind of collective bargaining by Franz Kafka.

So you would put salary and wages on the table?
No, I would put working conditions on the bargaining table. Remember, they can effectively negotiate salaries now, but when you get into a period of wage controls, which they had, that’s what you’re doing as well. I’m talking about working conditions. Because what they said was that they took class size and composition out of collective bargaining this year. And now, even they’ve admitted that their catastrophic labour strategy over 10 years wasn’t the right approach. And they’re changing that approach. In fact, they’re supposed to make an announcement today [Sept. 25] about a complete change in approach to teacher bargaining, but they’ve cancelled it. I don’t know why, but presumably the premier didn’t want to make a public announcement today.

So working conditions and class size would be an important part of the bargaining with teachers?
I think so, and the government has finally agreed to that because they’ve changed their position. They’ve argued that their 12-year position is wrong, and they’ve come to my position. And I love it when that happens.

The current Liberal government has announced a wage and hiring freeze over the next three years in an effort to balance the budget. Would you be committed to a balanced budget, and if so, how would you get there?
You have to balance with the business cycle. We have kind of an absurd situation, almost a carnival, with the Liberal government. It has, for example, attacked me about the balanced-budget legislation. They have balanced-budget legislation and no balanced budgets. We’ve gone through this period where we have had four years now of deficit budget, four years of missing targets. I would expect us to be inheriting a very difficult financial situation from the Liberals, because even though they’re announcing austerity, on the off days – so on Mondays, Wednesdays and Fridays – they keep announcing substantial new spending. On the days around that they’re announcing they’ve missed their budget targets, that natural gas revenues have dropped and they’re well beyond their deficit targets as a result. Meanwhile, they’re announcing a $15- million soccer field in the premier’s riding. So what you have is a government that isn’t really governing; it’s more of a committee to re-elect the premier right now. So the problem is that we’re going to inherit a very difficult financial situation. And what that says to me, as an Opposition leader, is that we have to be modest in our agenda. We have to do important things, but we can’t do all the things we’d like to do because the fiscal times place real limits on us.

Image: Paul Joseph

Balancing Budgets

Would a balanced budget be one of your goals?
Of course. You have to balance over the business cycle. Take this year as an example. [NDP MLA] Bruce Ralston predicted that the Liberals had overstated natural gas revenues. We made that case all through the spring session and Bruce Ralston made that case to Mr. Falcon all through the spring session. He said this is wrong, and it turned out Bruce was right and the government was wrong on that. But you see what happens: when you see that dramatic decline in revenue in a single year, it makes it very challenging to balance because you don’t want to chase that decline in revenue, making cuts in the short term. So what you need is – when times are good and revenues are coming in – to be properly in balance and/or running surpluses to deal with circumstances when revenues drop dramatically. We’ve seen this on several occasions. In the last two weeks of the 2009 campaign the premier said that even though the Lehman Brothers thing had happened in September the previous year, the deficit was only $495 million. They knew that wasn’t the case. In fact, that was the lead-in to the HST debacle. The deficit wasn’t $495 million. The status quo deficit before the HST payment was $2.8 billion.

In broad terms, a balanced budget would require some combination of less spending and more income. Where would you adjust?
We’re going to say what we’re going to do and we’re going to say how we’re going to pay for it. And I have been specific. So in Feb. of 2011 I said that we had to return the corporate income tax rate – the big business tax rate – to 2008 levels, so leave in place the 37 per cent tax cut between 2001 and 2008 from big business so that we return to 2008 levels. At the time, the Liberal party of course attacked me with some ferocity. Now, as you know, Mr. Falcon in 2013/2014 – he’s no longer the finance minister, but his fiscal plan is still there – is doing what I said, which is raising the corporate tax rate by one point.

A common criticism is that you’re promising no substantial tax hikes while at the same time promising to put money into schools; where is the money going to come from?
There’s a real debate as to where corporate tax levels should be set, whether Mr. Falcon’s increase to 11 per cent or mine to 12 per cent is the right policy. But that’s not the difference between free enterprise, and not especially when a few years ago they were 16.5 per cent. So I think we should have more serious debate in our public policy, and that’s why I don’t give different speeches when I’m talking to community groups or business groups or labour unions, because I think it’s more important for us to be straightforward. And you need a mandate.

I think the lesson from the HST is that you need a mandate, and you need to say what you’re going to do, especially on the tax side, before an election. And that’s what I intend to do. What we’ve seen over the Liberal period, over those years, is increases in debt and the net deficit over time. You’ve got to deal with those issues. It’s challenging because a lot of people have been excluded from the political decision-making process because, unlike us, the Liberal party doesn’t talk to people who don’t support it that much. I’ve had hundreds of meetings with the business community this year. So you have people who have been excluded from the process and will have high expectations of our government.

What do you see as the key sectors for economic growth in the interior of the province?
One of the key issues is obviously forestry, and managing the situation in light of the impact of the mountain pine beetle will be a crucial question for government because of our ownership, subject to First Nations claim, of the land, and the challenges facing the interior economy. So those questions will be key to economic growth, key to the economy of the region: ensuring that we have a proper inventory of our forest resources, working with the industry to the extent that we can.

NDP economic policies were devastating in the ’90s; why should we believe they’ll be less so now?
I think we need to have a fact-based debate. The Liberal party routinely says that under the NDP people left for other provinces. Here are the facts: in 1991, when the NDP took office, 129,000 more people came to B.C. from other provinces than left B.C. Since the Liberals took office, 59,000 more people, net, have come to B.C. than gone to other provinces. One doesn’t want to overstate that, because there are other factors involved in provincial government, but isn’t that the point? There are other factors involved other than the provincial government.

Average economic growth was higher under the NDP than it has been under the Liberals. I understand political spin, and that the Liberal party and some of its allies have been pounding this message for a long time, but it doesn’t make it so.

I know I tend to give long, discursive answers to straightforward, simple questions, but issues are complicated and you have to give some context. The NDP in the 1990s tried to do too much. There’s only so much change an economy, a society, can absorb at any one time. In 1992 we introduced and passed in the neighbourhood of 90 bills, and that’s too much change. We’ve got to be disciplined about what we want to do. We still have to do bold things, but we can’t do everything. I’ve set priorities, such as addressing the skills shortage and education, and I think the human capital side is the key part of the government’s contribution to making B.C. a good place to invest. That’s one priority. Another is ensuring that when government does things, it supports local economies. And I was glad to see the prime minister [in late September] support that view with respect to defense spending, saying it had to support a local economy. I think we have to address issues of inequality and sustainability. And we have to do that primarily by providing opportunity.

You’re on record as opposing the Enbridge pipeline. Why won’t you take a clear stand on the Kinder Morgan pipeline?
Because there is no application. Enbridge applied to the National Energy Board in May of 2010. So here’s what I’ve said: you could have two parallel approaches or you can have one process that’s the federal-provincial. Both appoint people and then the report goes to both cabinets, essentially. Or you can do what [the current Liberal government] did, which is hand over jurisdiction to federal government because they were afraid of the issue. They didn’t want any part; they didn’t even provide evidence to the process. So I said, and this applies to Kinder Morgan as well, that we’re not in support of that equivalency agreement, and that there will be a made-in-B.C. response to Enbridge, Kinder Morgan and to other pipelines with that kind of economic and environmental impact on the province. The Kinder Morgan pipeline may well be a different proposal by the time the application is actually made. It’s important we see the application before we oppose it. That said, everyone here, including many people in the business community I’ve met in Vancouver, express concerns about increased tanker traffic here. I have serious concerns about those things. But you have to have an application before you can oppose an application, and in the case of Enbridge it had been in place for two years.