Abolishing the Working Opportunity fund 10-year monopoly, a good move. 

The Provincial Government of British Columbia is abolishing the Working Opportunity Fund 10-year monopoly to manage labour-sponsored funds in the province.  That is a positive change, long overdue. The Working Opportunity Fund model does not meet the standards expected from a modem democratic mixed economy.  It is also good democracy that the members, taxpayers and government has asked the provincial auditor-general to investigate whether there was undue political involvement in the operation of the Working Opportunity Fund. 

In that respect, the auditor-general should be busy looking into many past government intervention and deals.  Who benefited and who lost?  Where did the money go in projects such as the Fast Ferry project, Forest Renewal BC, allied organizations and in the healthcare system?  Without prudent aftermath analysis, of why crashes happen, unsolved systemic problems will cause new crashes.    

Further, when a problem shows up in the Auditor General’s reports, it is too late to prevent the adversity, which follows, and just because the decision and action is legal, does not mean the decision and action is morally and ethically in the best interest of the community.   That raises moral and ethical questions.  Shouldn’t the community expect the same or greater accountability to apply to the government institution that approves use of tax and to the corporations and social establishment that receives tax transfers or corporate welfare, as it does to individual community members who seek forms of social assistance?  

The Working Opportunity Fund is a form of government intervention in the economy through tax credit transfers; when one person gets a tax credit, someone else must pay.  It is Government’s task in a democratic mixed economy to provide such service that the private sector fails to provide. Such task is to correct allocation problems before the problems cause adversity. That is not something that the private sector can, or will ever be able to do.  In the Working Opportunity intervention case, it is unclear what issues the private sector was unable to solve. It is also unclear how the BC community has benefited from the intervention, and what issues in the allocation and pricing mechanism the Working Opportunity intervention has repaired -- or perhaps worsened and who lost.   

What is clear is that the management and Board of the Working Opportunity Fund are not the losers.  The contrivance of having Growth Works Capital Ltd. managing the Working Opportunity Fund combined with a rich incentive agreement has made the management millions of dollars.   

There is nothing wrong with making money. The problem is when money is made from Government intervention and tax transfers that do not meet recognized standards for government intervention in a mixed economy.  Further, our constitution states; government is committed to reducing disparities in opportunities. When government intervention increases disparities in opportunities, there is not only an economic and constitutional problem – there is a democratic failure.

 In that respect, small and midsize business crying out for financing, and workers losing their jobs in the forest sectors, should have lots to talk about with the people in the former government and the union management.  The previous government failed in its monitoring and intervening accountability. Decades of old problems in the allocation and market mechanisms in the economy were unsolved and allowed to escalate in to adversity, such as in the Forest and healthcare sectors.   Would you feel comfortable flying an aircraft in an airspace where the air control system is out of date, and where the airline with the best contacts get the concessions, rather than the airline with best pilots, equipment and organization?  

The government’s decision to purge the Working Opportunity Fund’s intervention is an important correction. While this a positive signal to investors at home and abroad, the core concern remains. Cost cutting and reducing legislation is easy, but stimulating investment in economic production and generating revenue and real income is more difficult.  For serious investors, the question remains: Does our government have the monitoring and intervening methods and systems to repair the faults in the allocation mechanism in order to stimulate investment and liquidity into economic production, and jobs in BC?  That is not within the private sector’s ability, nor is it something that cost-cutting, fiscal and legislative measures can compensate for.  

Residential homes, tourism, and ski hills are important. However, BC is in desperate need of long-term investment into forests, IT and sectors that are critical for jobs and real income growth in BC.  

Before investing in other than residential homes, tourism and ski hills, investors need to know that the government’s monitoring and intervention system is in order and that the government has the knowledge and instruments to manage and repair faults in the allocation mechanism. At the very least, that the government recognizes the issues. Unfortunately, so far, that is unclear.   

OISD