The not often talked about downside to foreign investment in British Columbia.

A little something for you to digest while I finish up the Port Mann story, something very relevent to my ongoing interest in how much of British Columbia is being bought and sold by foreign interests.

First up, let’s take a trip down memory lane to the emotional little moment Pat Bell had last year when he announced that a subsidiary of an Asian( Indonesian) forestry giant had bought the disaster known as the Mackenzie Pulp Mill. Don’t get me wrong, that community badly needed the jobs that mill provided – still does, matter of fact-  however all is not well for the new owners and Pat Bell knows it.

The mill underwent a routine shutdown last fall to perform maintenance work and for unknown reasons, simply did not pay many contractors who have been left holding the bag. For all intents and purposes, the work performed and supplies provided were completely satisfactory to mill owners,the mill was back up and running as it should have been, however payment has not been forthcoming and sources indicate some contractors were left owing amounts of $ 700,000.00 plus!

Sources close to Pat Bells office also indicate that Bell himself is completely aware that the new owners of Mackenzie Mill did not pay these contractors after the shutdown and that  Bell has stated that “they were encouraging the new owners to pay the bills, because that is how it works here.”

Indeed it does – most of the time. And one would hope that with Clarks gosh darn amazing Job Plan, this government would want to make sure new investors in BC understand that before they step up to the plate. And that leads us to number two interesting tidbit about how some foreign companies do business in BC.

Sources indicated as well, that a similar situation has occurred in Kitimat, where the new Chinese owners of the closed Methanex plant ( Ko Yo Development) abruptly terminated the contract with Blue Horizon Industries who had been in the final stages of dismantling the plant which will be shipped to China. The Methanex plant site will be the future location of none other than Shells LNG plant often heralded by Christy Clark.

Although it was reported that as of November 2011, Ko Yo Developments had paid Blue Horizon approximately $15 million of the $20 million contract, sources have confirmed to me that other contractors and suppliers on site remain unpaid as a result of the main contractor being taken off site. Calls to Blue Horizons CEO were not returned at the time of this posting, nor were calls to the other parties mentioned in both instances.

This kind of questionable business behavior poses some troubling questions, because pursuing legal remedies against foreign-owned companies is more often than not a cost prohibitive t remedy to all but the largest unpaid companies. Smaller companies will simply have to absorb the loss or place the debt into corporate collections where no fee is paid unless recovery of the debt is achieved.  And while a larger company might be able to still pay their employees and keep jobs after non-payment of a large contract, mid size or small, growing companies are at risk of lay-offs and the trickle down implications of lack of expected revenue. Let me be clear, these unpaid contracts and invoices are not insignificant to the bottom line of every company involved.

My source laid it out best when he said:

 ” Our various governments spend a lot of time in China, which has bothered me a lot when we were talking about shipping raw logs, raw minerals and then some of the mills that were sent, but if we wind up with a lot of investment from companies who are discovering that they don’t have to pay their contractors, I’m even more alarmed.”

Now what would the Gosh Darn Amazing Christy Clark have to say about this?

 

12 thoughts on “The not often talked about downside to foreign investment in British Columbia.

  1. Oceantor

    Not to worry.? Our Premier Ms. Clark with her Botox smile with her Gee and Gosh and yep were gonna get to the bottom of this. Oh did the, Chinese Corporations pay their HST? So there you have it.. Christie’s promise of new jobs. Christie says; But Gee, Gosh, Darn, Ah, Um, listen, I promised jobs – not pay. Um next question please? Oh how does my side profile look?

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  2. Annonymous

    I have not done corporate taxes for more than a few years, but I remember very well how companies had to pay tax on receivables even if they did not have those receivables. I don’t think much has changed about that, which will ready kick the old cash account into the ditch.

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  3. katharina heitzmann

    what is with all this promises of new jobs. we have lots of jobs in bc. we are getting folks from mexico to work here. re the Enbridge pipeline., from what i understand we will not have enough canadians to build this damn thing (if it were to go thru which i don’tthink it will) and will have to import people from other countries to build it.

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  4. Ken Paisley

    Asia Pulp and Paper owns two Mills in BC. The McKenzie Pulp Mill and Howe Sound Pulp and Paper. It also owns three other mills in Canada. APP is carrying $10 Billion in Debt.
    http://www.greenpeace.org/canada/en/campaigns/More/Resources/Background-documents/Asia-Pulp-and-Paper-in-Canada/
    APP has a long history of environmental destruction, thuggery and illegal logging. APP is in the business of replacing rainforests with plantations.
    http://www.pulpmillwatch.org/companies/app/
    APP has just constructed the largest Pulp Mill in China adding capacity to it’s other Pulp Mills in China and South East Asia.
    Raw Log exports from coastal rainforests of BC to China have jumped in recent years to well over a million cubic meters per year. One hundred and ten sawmills in BC have closed down in the last decade.
    Up until recently the Ministry of Forests use to cover it operational costs with stumpage fees and licensing fees, the cost to operate MOF is now subsidized by taxpayers. In other words we taxpayers are now subsidizing raw log exports.
    Christy must be talking about corporate families.

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    1. Laila

      Corporate welfare. Great term!
      Ken, this kind of thing really pisses me off, because I have always been a huge supporter of BC business, growing BC business, and keeping money in BC where these businesses can grow and expand.. how the hell can a business do that taking this kind of hit? And according to my source,$700,000.00 is nothing- some companies lost a lot more.

      I have no issues with exporting…FINISHED PRODUCT.But offloading all this onto other shores leaving our men,women and mills without the work they need is sheer stupidity. Someone asked me why I get so mad about all of this, and you know what my response was? I’m not mad enough yet to be able to inspire others to get off their asses and hold this government,heck, all politicians accountable for turning this ship around. It’s not too late, and the way this government relies on China, and Asia in general as the only solution for growing our economic status and position in the world, frankly makes me sick to my stomach.

      Katherina, there are so many Mexican workers in this province already, it is quite remarkable. In Surrey, there are many mexican farm workers and construction workers,and I hear that they bring them up to work the orchards in the interior as well. Apparently we BC’ers are not interested in doing that kind of work, because it is physical with long days.

      Anonymous, great point. Ouch.

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  5. @katharina heitzmann
    “from what i understand we will not have enough canadians to build this damn thing (if it were to go thru which i don’tthink it will) and will have to import people from other countries to build it.

    They are not saying we don’t have enough workers here to do the jobs, they (the foreign companies and government parties) are saying we don’t have enough “SKILLED” workers (which, to most construction companies, is grunts following their Supervisors orders who in turn gets his/hers from the site coordinator and planners/engineers) to fill the positions they need.
    This is where I thought Crusty and her “gosh darn families first” plan were going to make sure that the training and job options were going to be for BC’ers, not Albertans or imported Asian workers.
    It would be cheaper to train and fill the positions here (not to mention financially and fiscally more feasible) with the result in keeping the jobs here, than SUBSIDIZING the migratory workers which is in the “new” BC Jobs plan… I’m trying hard to find that subsidy link, here’s one although not as definitive as the one link I read: http://oilsandstruth.org/bc-shortage-skilled-workers-continue {from 4 years ago}.. another from the immigration workers site http://www.pnpimmigration.com/province_british-columbia/index.php .
    I just read it and others saying that the BC Govt will help these foreign companies with subsidies (read: from taxpayer pockets) and such to bring over THEIR skilled workers) while keeping our own population/communities unemployed. They’re claiming that our population is too old and not skilled enough (could this be because 3/4 of seats at UVIC and other educational schools are now going to foreign students first, not home-grown kids/families?)
    Yeah Christy, jobs and families first, just not of this province or country.
    Someone please turf her ass out of office fast before she ruins what little’s left after GC decimated our provincial assets and respect.

    @ Laila, I’m sure you good folks have better links and contacts who can provide more solid information, I wish I could find that page again about BC government subsidizing the migratory workers. When I do I’ll post it.

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    1. Laila

      A good example was this Chinese mine… the feds had no issue with this. https://lailayuile.com/2011/10/04/if-you-build-them-mines-they-will-come-workers-from-china/

      That was the biggest BS story I have seen in a long time. All the company had to do was show they advertised and come up with reasons why they are not suitable and the goverment allowed these workers to come over. I doubt very much that with the efforts being made at this mine for the foreign workers, that we will see any Canadians appearing there. Time to read this post again as well, if you haven’t already. https://lailayuile.com/2012/01/29/when-all-resources-food-wildlife-trees-fuel-are-destroyed-man-will-not-be-able-to-eat-money-native-american-proverb/

      I’m making some more calls on this unpaid bills story today. Doesnt seem right to have this happening when the work was done in good faith at that shutdown.

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  6. Gloria

    Don’t forget. Harper said, he will protect China’s company’s in Canada.

    So, China is bringing their own people to work the coal mines, for their cheap labor. If the Chinese own any of the seven mines going into Northern BC, they will bring their own miners.

    Harper is permitting China, to buy up the dirty tar sands. Perhaps, China will start bringing their own citizens, to work their tar sands projects.

    As was said, Campbell sent some of our mills to China, along with our raw logs. Campbell gave our mill industry to China for very cheap labor, and even more cheap, are the Chinese children working for pennies a day.

    Harper has the gall to talk about, human rights in China. Meanwhile, Harper is exploiting China’s workers, and the Chinese children. Campbell did the exact same thing. He was more than willing to exploit, the Chinese workers for, their very cheap child labor. That didn’t bother Campbell….He had the highest number of children living in poverty, in all of Canada. And, Campbell didn’t give a $#!t.

    Mexican workers are very cheap labor. Anyone, say from Vancouver coming to the Okanagan to pick fruit…Unless they are housed on the orchard property….Pickers could never afford the high rent in the Okanagan. The work is seasonal, there would be no point in furnishing an apartment. No-one wants to rent to them because, they are there for a very short time. Then they have the problem of transportation, to even get to the orchard. Very few of those people can afford a car. I think it was said, Kelowna is one of the most expensive cities to live in, as Vancouver is.

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  7. Curt

    http://www.vancouversun.com/business/China+been+behaving+like+friend/6214538/story.html

    And our government(s) are too stupid to realize they’re being taken. But then again, a seat on a corporate board, or government appointment is their pay off I guess. Who cares about the citizens of this country, or this country, for that matter. I can go where ever I want, whenever I want. (look at Gordo the corrupt liar and Stevie’s best bud)

    If people would only wake up and leave their own backyards to realize what is really going on. (They are also part of the 99% whether they like it or not. )

    Like

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