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B.C. Hydro is a major institutional force in extending and intensifying staples dependence Froschauer, Karl 1986-12-31

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B.C.HYDRO IS A MAJOR INSTITUTIONAL FORCE IN EXTENDING AND INTENSIFYING STAPLES DEPENDENCE By KARL FROSCHAUER B.A.,  University of B r i t i s h  Columbia, 1984  A THESIS SUBMITTED IN PARTIAL FULFILLMENT THE REQUIREMENT FOR  OF  THE DEGREE OF  MASTER OF ARTS in THE FACULTY OF GRADUATE (Department, Of A n t h r o p o l o g y  We  accept t h i s the  and-Sociology)  t h e s i s as c o n f o r m i n g  required  THE UNIVERSITY  STUDIES  standard  OF BRITISH COLUMBIA  September 1 9 8 6 ©  K a r l Johann F r o s c h a u e r , 1986  In  presenting  requirements  this for  an  of  British  it  freely available  agree for  that  I  by  understood  that  his  or  be  her or  shall  Date  be  / /  /PSS  the  University shall  and  study.  I  copying by  allowed  Columbia  of  Library  publication  of  cfi^/  the  the  of  of  this  It  this  without  make  further  head  representatives.  not  The U n i v e r s i t y o f B r i t i s h 1956 Main M a l l Vancouver, Canada V6T 1Y3  at  granted  permission.  Department  fulfilment  the  extensive  may  copying  f i n a n c i a l gain  that  reference  for  purposes  or  degree  agree  for  permission  scholarly  in partial  advanced  Columbia,  department  for  thesis  thesis  of  my  is  thesis my  written  ABSTRACT  Diversified British  i n d u s t r i a l development  Columbia with  supply.  But  surplus"  expected i n  the expansion of the public  B.C.Hydro, under  government's  was  the d i r e c t i o n of the p r o v i n c i a l  i n d u s t r i a l p o l i c y , produced  o f power and  an  "unplanned  intensified British  Columbia's  resource processing  (staples  dependence on  natural  production).  Four a s p e c t s of t h i s problem are  the  provincial state's  hydro power, the use extend  staples  needs,  and  power  intervention  i n the development  of the hydroelectric  production,  the planning  the surplus-induced  investigated: of  infrastructure  to  f o r i n d u s t r i a l power  i n t e n s i f i c a t i o n of  staples  dependence.  Government, B.C.Hydro, and increased  intervention  of  hydro power and  public  1986). plants and to  The and  first  related  i n t h e r e l a t i o n s h i p between staples  intervention  production  emphasized  industrial electrification,  "industrialization-by-invitation," b u i l d f o r e x p o r t and  Expanding industry political provided  surplus  the hydroelectric which  production.  B.C.Hydro and  building  and  discounts  to  rural  regional,  planning  industry.  r e s o u r c e s and  economic,  the  power  mega-dams  the t h i r d , to  supply  ( f r o m 1945  the second,  During t h i s period,  access to natural  the  an  i n f r a s t r u c t u r e became i t s e l f  brought temporary  benefits.  documents r e v e a l  an  and  infrastructure  expanded  staples  t h e p r o v i n c i a l government  were  unable the  to plan  unreliable  Nevertheless, resulted  theory  the  " s u r p l u s and  explanatory  This  the  of  repetition  which as  as  the  to  unstable  shock" of  U.S.  electricity  thesis  Offe's  draws on  theory  i s a contribution to  historical  of  1980s  i n t e r v e n t i o n s by  the  of  p u b l i c hydro power d i v e r s i f i e s  the  an  market.  staples state  patterns  provincial  dreams t h a t  and  understanding  staples-dependent  the  the  staples producers  this  Marchak) and  because  producers.  debt-load  a d e - m y s t i f i c a t i o n of  development of base.  the  thesis  resurface i n the  well  staples  framework of  Watkins,  intervention.  comprehensively,  electricity  d e p e n d e n c e on  (Innis,  loads  c o m m i t m e n t s by  i n discounted  increased  The  industrial  state,  the industrial  iv  TABLE OF CONTENTS CHAPTER I. INTRODUCTION H i s t o r y of the Problem Argument: B r i e f Statement Theoretical Analysis Methods The Boundaries of t h i s Study D e f i n i t i o n s and Concepts Other S t u d i e s of Hydro Chapter Content Summary II.  III.  THEORY The C e n t r a l Question S t a p l e s Theory ( I n n i s , Watkins, Marchak) Structural Conditions Theory of the C a p i t a l i s t S t a t e (Offe) State Interventionism A l l o c a t i o n and P r o d u c t i o n A l l o c a t i v e Mode of I n t e r v e n t i o n P r o d u c t i v e Mode of I n t e r v e n t i o n . . . . . Concept of the C a p i t a l i s t S t a t e P o l i c y Formation P e r c e p t i o n of the Problem by the S t a t e C o n t r a d i c t i o n (Planning) Application STATE INTERVENTION Introduction A l l o c a t i o n of Resources P r o d u c t i o n of E l e c t r i c i t y ( F i r s t I n t e r v e n t i o n , 1945) Rural E l e c t r i f i c a t i o n P o l i c y The B . C . Power Commission P r o d u c t i o n of E l e c t r i c i t y (Second I n t e r v e n t i o n , 1962) Recession and I n f r a s t r u c t u r e Dual R i v e r P o l i c y B . C . Hydro B . C . H y d r o ' s I n s t i t u t i o n a l Force Conclusion  PAGE 1 2 8 9 10 12 14 16 20 22 22 25 27 28 29 30 32 33 36 39 40 44 44 51 53 56 56 58 59 62 69  V TABLE OF CONTENTS (continued)  IV.  V.  B . C . H Y D R O ' S LINK TO THE EXTENSION OF STAPLES DEPENDENCE Infrastructure Manufacturing Wood, P u l p , C h e m i c a l , P r i m . M e t a l s Diversification E x t e n s i o n o f t h e S t a p l e s Economy Conclusion PLANNING THE "UNPLANNED SURPLUS" Government and B . C . H y d r o S o l u t i o n s Forecasting S i z e of the H y d r o e l e c t r i c I n f r a s t r u c t u r e . . . T i m i n g and t h e S i z e o f t h e P r o j e c t s Financing Projects P r i c e of E l e c t r i c i t y Solutions C l e a r Goal Requirement S t a b i l i t y Requirement. The P l a n n i n g D e n i e d i n S t a p l e s - D e p e n d e n t E c o n . . I n d u s t r i a l Customers i n B . C . . . . S i z e of the Surplus Conclusion .  71 75 79 92 93 97 100 102 102 105 106 107 108 110 Ill 113 146 119 124 126  VI.  INTENSIFICATION (CAUSED BY THE "UNPLANNED SURPLUS") 127 T h i r d I n t e r v e n t i o n (1980s) 130 Government and B . C . H y d r o 134 ( R e s t r u c t u r i n g and P o l i c i e s ) Backward P l a n n i n g 136 Discount Power.(Mining, Chemic., Pulp) 137 Stand-by Staple 141 F o r w a r d P l a n n i n g ( E x p o r t Power) 142 B u i l d i n g Dams f o r E x p o r t ...145 F o r e i g n Environment A n a l y s i s 149 Futures 154 Conclusion 164 VII.CONCLUSION S u m m a r y . ( A d d i t i o n , E x t e n s i o n , S u r p l u s , I n t e n s . ) 166 New M a t e r i a l 172 U t i l i t y of Results 172 Limitation 173 VII.  BIBLIOGRAPHY APPENDIX  176 187  vi LIST OF TABLES  I II III IV V  Comparison o f Average Annual  VII  VIII  77  Wood and E l e c t r i c i t y Requirement  84  The Increase i n 'Purchased' versus 'Self-generated' Electricity  96  The Consumption o f Purchased Fuel by the Mining, Logging, and Manufacturing I n d u s t r i e s B.C.  in  1975-1982  B.C.Hydro S a l e s , C l a s s i f i e d Analysis, 1 9 6 5 - 1 9 7 6  X XI XII  113  i n Industrial 190  Composition o f T r a n s m i s s i o n Rate S a l e s , H i s t o r i c & Probable P r o j e c t i o n s , "Pulp & Paper," "Wood Manufacturing," "Chemicals," 1 9 7 4 / 7 5 - 1 9 8 4 / 8 5 , 1 9 8 5 / 8 6 - 1 9 9 5 / 9 6  1 9 1  Composition o f T r a n s m i s s i o n Rate S a l e s , H i s t o r i c & Probable P r o j e c t i o n s , "Metal Mining," M i n e r a l F u e l s , " "Other Ind.," 1974/75-1984/85,  IX  57  A c t u a l E l e c t r i c a l Sales f o r 1 9 8 4 / 8 5 by Standard I n d u s t r i a l C l a s s i f i c a t i o n  in  VI  Unemployment  1985/86-1995/96  Composition of T r a n s m i s s i o n Rate H i s t o r i c & Probable P r o j e c t i o n s , "Commercial," " T o t a l S a l e s "  192  Sales, 193  P r o v i n c i a l Summary, T o t a l E l e c t r i c i t y Generated w i t h i n B.C, 1 9 4 5 - 1 9 6 5  194  P r o v i n c i a l Summary, T o t a l E l e c t r i c i t y Generated w i t h i n B.C., 1 9 6 6 - 1 9 8 4  195  Manufacturing Industry i n B.C., L a r g e s t Purchasers of E l e c t r i c i t y , 1 9 6 2 - 1 9 8 3  196  vii  LIST OF FIGURES  PAGE 1.  Developmental Scenario, Intensification  2. G l o s s a r y  3.  of E l e c t r i c a l  Imported Generators, E l e c t r i c a l Gear  Dream,  Extension, 187  Terms  Turbines,  188  and 189  1  Chapter  I  INTRODUCTION British  Columbia  hydro-power s i t e s resources,  timber  100  economy o f B r i t i s h  and  years  have d e v e l o p e d a s t r o n g  (semi-processed  ample e n e r g y  resources,  i n mountainous v a l l e y s ,  such as  expect t h a t over  has  of  resource  One  has  resources  private  industry f o r primary processing, at various  i n d u s t r i e s and  by  a l l o c a t e d by  rivers  Columbia  corporation.  However,  the  staples-dependent economy.  provincial and  would  the  d e v e l o p e d by  Most  state large  the  to hydro  smelting  B.C.Hydro.  This t h e s i s focuses British  are  the  therefore  i t s people  dependent) e x p o r t i n g  natural  power s i t e s  would  economy.  remained a  as  natural  i t s settlement,  diversified  Columbia  are  minerals.  and  such  on  since the  B.C.Hydro, a c e n t r a l a g e n c y 1960s when i t became a Crown  I t s h i s t o r y and  development of the  in  p r a c t i c e s are p i v o t a l  provincial  to  the  economy.  The B r i t i s h C o l u m b i a H y d r o and Power A u t h o r i t y ("B.C.Hydro") i s t h e f i f t h l a r g e s t c o r p o r a t i o n i n Canada i n t e r m s o f n e t a s s e t s . I t was c r e a t e d a s a Crown c o r p o r a t i o n by an A c t o f t h e P r o v i n c i a l L e g i s l a t u r e on M a r c h 30, 1962, a s t h e s u c c e s s o r , by amalgamation, of the B r i t i s h Columbia E l e c t r i c Company L i m i t e d and t h e B r i t i s h C o l u m b i a Power C o m m i s s i o n w h i c h had b e e n t h e two m a j o r s u p p l i e r s o f e l e c t r i c i t y i n the Province of B r i t i s h Columbia p r i o r to that time. 1  1 The B.C. U t i l i t i e s C o m m i s s i o n , In the Matter of Applications by British Columbia Hydro and Power Decision, May 9, 1986, p . 1.  Authority:  Introduction  This  t h e s i s i s c o n c e r n e d w i t h how  corporation  has c o n t r i b u t e d  2  t h e development o f  t o the strengthening  of a  economy and t h e l a c k o f e c o n o m i c d i v e r s i f i c a t i o n . chapter provides  the h i s t o r i c a l  this  staples  This  b a c k g r o u n d and t h e a n a l y t i c a l  approach taken t o the problem.  H i s t o r y o f t h e Problem D u r i n g t h e 1940s appropriated its  and 50s, t h e B.C.  the assets  s e r v i c e areas  use o f e l e c t r i c i t y  of smaller  in rural by  hydroelectric provincial  British  had  t o expand  C o l u m b i a and t o p r o m o t e resource  and 1970s,  d e v e l o p m e n t was  government  private u t i l i t i e s  large natural  c o m p a n i e s . D u r i n g t h e 1960s  Power C o m m i s s i o n  the  processing  the course of  mapped o u t by B.C.Hydro and t h e  f o l l o w i n g the dual  river  policy,  2  which  p r o p o s e d t h e b u i l d i n g o f a s e r i e s o f dams on t h e C o l u m b i a and the  Peace  Rivers.  As a r e s u l t o f t h e c o m p l e t i o n o f t h e infrastructure, secondary  British  industry  Williston, government,  Columbians expected t h e development o f  to diversify  their  the Education M i n i s t e r predicted  development d u r i n g  electrical  "...that  staples  economy.  of the S o c i a l  Ray  Credit  a dramatic explosion  i n power  t h e 1960s w o u l d draw t h e a t t e n t i o n o f t h e  2 G o r d o n M. Shrum, Report on the Columbia and Peace Power Projects, B r i t i s h C o l u m b i a E n e r g y B o a r d ( V i c t o r i a : J u l y 31, 1 9 6 1 ) , p . 28.  Introduction entire  i n d u s t r i a l i z e d world to B . C . "  himself,  3  3  Premier W . A . C .  Bennett,  was s i m i l a r l y convinced of the dual r i v e r p o l i c y ' s  beneficial  economic i n f l u e n c e .  developed t o g e t h e r , enterprisers  He p r e d i c t e d :  i t w i l l c a t c h the i m a g i n a t i o n of  everywhere.  I t would open an era of  u n r i v a l e d i n North A m e r i c a ' s dynamic h i s t o r y " 1966:245).  "If the two are  expansion  (Sherman  In a d d i t i o n , the p r o v i n c i a l government  publication,  Facts  and Statistics  (1956), p r e d i c t e d the  development  of secondary i n d u s t r y as a consequence  development  by c o n c l u d i n g t h a t  of hydro  " B . C . has many r i v e r s which  o f f e r o p p o r t u n i t y f o r power development and  consequent  secondary i n d u s t r y . " E x p e c t a t i o n s of p r o s p e r i t y and s u b s t a n t i a l  economic  d i v e r s i f i c a t i o n had a l s o captured the minds of many engineers and  public o f f i c i a l s  Ontario.  at the c l o s e of the n i n e t e e n t h  The p r o f e s s i o n a l  engineer  T . C . Keefer, i n his  address to the Royal S o c i e t y of Canada on May 23, entitled  century i n  "Canadian Water Power and I t s  Electrical  1899, Product i n  R e l a t i o n to the Undeveloped Resources of the Dominion," i l l u s t r a t e d the c r e a t i o n of v a l u e through e l e c t r i c i t y - a i d e d manufacturing of resources  and h i s v i s i o n of independence  of  Canadian i n d u s t r y i n the f o l l o w i n g way: ' H e r e t o f o r e we have c u t our spruce i n t o d e a l s and exported i t to Europe, and more r e c e n t l y i n t o p u l p wood and exported t h a t to the United S t a t e s ; but manufactured by our water power i n t o paper, the raw m a t e r i a l would y i e l d t h i s country ten times the 3 Paddy Sherman, Bennett 1966), p . 226.  (Toronto: M c C l e l l a n d and Stewart,  4  Introduction  v a l u e i t i s now e x p o r t e d f o r . ' I n t h e f u t u r e C a n a d a ' s own " w h i t e c o a l " o f f a l l i n g w a t e r would d e l i v e r t h e d o m i n i o n f r o m i t s "hewer o f wood" s e r v i t u d e t o American i n d u s t r y and i t s bondage t o American c o a l ; i t would speed smokeless, silent t r a i n s o v e r v a s t d i s t a n c e s ; mine and e l e c t r o l y t i c a l l y r e f i n e t h e complex o r e s of t h e Shield.... The a p p l i c a t i o n o f modern e l e c t r i c a l s c i e n c e t o Canada's unique c o m b i n a t i o n o f n a t u r a l r e s o u r c e s p r a c t i c a l l y guaranteed the coming, Keefer proclaimed, of a second i n d u s t r i a l revolution. 4  Reefer's  vision typically  Columbians addition  during  of  a  steady  Columbia's  flooded  industrial  energy  which produce for  domestic  the  described  1960s and supply  advantage  oversee  infrastructure Board  was  chairman,  the  i n the  created Dr.  orderly  by  Gordon  to  provide  for  bring  Social  Shrum,  view,  was  and  such  regional  of  British  Credit asked  British  the  from  them w i t h  export  development  province, the the  his  electricity  Furthermore,  d e v e l o p m e n t s were e x p e c t e d  To  In  many  develop d i v e r s i f i e d  goods  consumption.  Canada.  cheap  to  dreams o f  1970s.  v a l l e y s would  value-added  central  of  the  British  an industries  consumer  goods  hydroelectric independence  the  hydroelectrical  Columbia  government. to pursue  from  an  Energy Its  first  independent  4 T.C. K e e f e r , " C a n a d i a n W a t e r Power and I t s E l e c t r i c a l Product i n R e l a t i o n to the Undeveloped Resources of the D o m i n i o n , " May 2 3 , 1899, Royal S o c i e t y of Canada, Proceedings and Transactions, 2nd S e r i e s , V o l . V., 1 8 9 9 , pp. 3-40. This s p e e c h was r e p r i n t e d i n c o n s e c u t i v e i s s u e s o f t h e Canadian Engineer, August 1899, pp. 91-4, and September, pp. 1 2 4 - 7 . For a b r i e f s u r v e y o f h i s i d e a s and c a r e e r , see N e l l e s ' i n t r o d u c t i o n t o T . C . K e e f e r , The Philosophy of Railroads (Toronto, 1972). A s q u o t e d b y H.V. N e l l e s , The Politics of Development: Forests, Mines & Hydro-Electric Power in Ontario, 1849-1941 ( T o r o n t o : M a c m i l l a n Company o f C a n a d a L t d . , 1 9 7 4 ) , p . 216.  5  Introduction  advisory  role  development, other  uses  foresaw  "on a l l m a t t e r s o f p o l i c y generation  o f water  several  economic  of  British the  surplus  Columbia.  This  and Peace  July  His report 31,  1961  and d i s t r i b u t i o n , and  1979:196-197).  (Swainson  the resource-access  which,  benefits  as a r e s u l t o f  Power Projects export  was s u b m i t t e d  could  n e i t h e r be  n o r by t h e p o p u l a t i o n o f  foresight i sevident  and included  the possibility  i nthe interim,  industry  Shrum  benefits, the  - - b u t h e saw a l s o  b e n e f i t s , a n d power  policy. on  things:  by t h e r e s o u r c e  Columbia  costs,  resources"  development  a temporary  absorbed  of transmission,  b e n e f i t s , a n d employment  hydroelectric  p e r t a i n i n g t o power  which  i n h i s Report described the  p o t e n t i a l of t h e dual to theProvincial  the following  on  river  Secretary  considerations:  The Peace R i v e r p r o j e c t i s i n a r e g i o n o f low economic development.... The r e s e r v o i r area w i l l a c t as a n i n l a n d waterway which w i l l open up t h e T r e n c h area f o r timber removal, mineral e x p l o r a t i o n , and perhaps create a r e c r e a t i o n a l opportunity i n time.  (Shrum  1961:28)  Under f a v o r a b l e c i r c u m s t a n c e s , economic and employment c o n d i t i o n s i n B r i t i s h C o l u m b i a would be g r e a t l y improved by t h e development o f b o t h t h e Peace a n d C o l u m b i a p r o j e c t s more o r l e s s simultaneously, b u t s i n c e t h e minimum e f f i c i e n t development o f e i t h e r t h e Peace o r Columbia w i l l p r o v i d e more power t h a n B r i t i s h C o l u m b i a c a n a b s o r b in t h e e a r l y years o f t h e project, i t i s not economic t o d e v e l o p t h e two s i m u l t a n e o u s l y without f i n d i n g a very l a r g e market a t renumerative p r i c e s o u t s i d e t h e P r o v i n c e f o r t h i s a d d i t i o n a l power. The only p o t e n t i a l markets f o r B r i t i s h Columbia surplus power a r e i n t h e U n i t e d S t a t e s P a c i f i c N o r t h w e s t , C a l i f o r n i a , a n d p o s s i b l y A l b e r t a . ( S h r u m 1961:6)  Since Bennett River  1961,  not only  dam a n d t h e P e a c e  Treaty  dams  (Duncan,  t h e Peace Canyon  River  dams  dam), b u t a l s o  Keenleyside,  ( t h e W.A.C. t h e Columbia  and Mica)  have  been  6  Introduction built.  Other e l e c t r i c i t y - g e n e r a t i n g  p r o j e c t s were added: t h e  B u r r a r d Thermal P l a n t , t h e Seven M i l e Dam, D i v e r s i o n P r o j e c t , and the R e v e l s t o k e a d d i t i o n of the R e v e l s t o k e  dam  Dam.  t h e Kootenay Even b e f o r e  i n August 1985,  the  i t became  e v i d e n t t h a t the B r i t i s h Columbia p o p u l a t i o n and  i t s resource  economy c o u l d not absorb t h e mounting s u r p l u s of power. B.C.Hydro's name-plate c a p a c i t y on March 31, 1985  was  10,503  Megawatts, i t s h i g h e s t one-hour demand ever r e c o r d e d t o t h e end of 1985  (on Hydro's i n t e g r a t e d system) was  Megawatts.  T h i s demand peak o c c u r r e d on November 26,  under e x t r e m e l y capacity.  c o l d weather and r e p r e s e n t s a 35%  I n 1983  5  6,816  t h e "unplanned s u r p l u s " was  1985  over-  a n t i c i p a t e d by  t h e p r e s i d e n t of B.C.Hydro, Norman O l s o n , as t h e e n t i r e c a p a c i t y of R e v e l s t o k e  dam  e x i s t e d b e f o r e t h i s dam)  ( p l u s t h e s u r p l u s which a l r e a d y  came on  line:  The s u r p l u s r e p r e s e n t s about 15 per cent of c u r r e n t l o a d , Mr. O l s o n [ t h e p r e s i d e n t of B.C.Hydro] s a i d . More i m p o r t a n t l y , a t c u r r e n t l o a d l e v e l s , the entire capacity  of  the  [$2  billion]  Revelstoke  hydro-  electric project, s e t t o s t a r t coming on l i n e next y e a r , will be surplus. [About t h e companies t h a t made f i r m i n q u i r i e s t o use the e l e c t r i c i t y , Mr. Olson asks:] ..."Where a r e they now?" 6  By 1986  B r i t i s h Columbia had not a t t r a c t e d f o r e i g n  c a p i t a l as a n t i c i p a t e d even w i t h cheap e l e c t r i c i t y , nor 5  S o u r c e s ; B.C.Hydro Annual Report  1984/85, p.5;  and  the  has 1986  B.C.Hydro i n f o r m a t i o n pamphlet, B.C.Hydro: The Background, p. 3. 6 Globe & Mail, "B.C. Hydro F o r e s e e s F u r t h e r Cuts i n C a p i t a l P r o j e c t s as Growth Slows," by A l b e r t S i g u r d s o n , September 26, 1983, p. B l , emphasis added and $2 b i l l i o n r e p l a c e d f o r 1.6 billion.  Introduction the  predicted  and  California  electricity  electrical  at  allowed  "power h u n g e r " o f  British  renumerative  transmission  to  a  export  only  lineup with surplus"  on  other  low  U.S.  i s therefore  discount-electricity forest  7  basis  putting to  pressure  Northwest  transmit  across  the  Bonneville  B.C.Hydro i s at  the  Northwest u t i l i t i e s .  scenarios  on  end  allowed  of  The  the  "unplanned  B.C.Hydro t o  u n c o m p e t i t i v e mines and  of can  "Dream S c e n a r i o "  hydroelectric engineered the  priority  exposition  developmental  The  lines.  U.S.  market  retooled  companies.  From t h e  1.  Columbia to  firm prices  Power A u t h o r i t y ' s  the  7  as  would d e l i v e r the to  American  2.  The  three  infrastructure. electricity  Keefer predicted, from  this  to  a  prewell  In  addition,  staples  industries. forward  i t s 'hewer o f  development  wood'  servitude  industry.  "Extension  hydroelectric electrical  i s e n h a n c e d by  manufacturing  Dominion  far,  1899), whereby the  production  a p p l i c a t i o n of  so  distinguished:  (Keefer  r e s u l t s i n new  Consequently,  problem  be  Canadian e l e c t r i c a l  scientific  production  staples  the  Scenario"  staples  (Shrum 1 9 6 1 ) , whereby t h e  production  i n f r a s t r u c t u r e (the  e n h a n c e d by b u i l d i n g of  the  dual  dams on  preriver  the  7 The B o n n e v i l l e Power A d m i n i s t r a t i o n i s an a g e n c y o f t h e U.S. Department o f E n e r g y . B o n n e v i l l e m a r k e t s and generates e l e c t r i c i t y i n the northwestern United States.  Introduction  8  Columbia and Peace R i v e r ) would open a new s t a p l e s r e g i o n v i a the r e s e r v o i r benefits;  and p r o v i d e economic growth and employment  the temporary s u r p l u s ,  the U . S . and l a t e r industry.  It  however, would be exported  recovered f o r use  i s assumed i n t h i s  to  i n B r i t i s h Columbia's  scenario  that  staples  p r o d u c t i o n may c o n t i n u e .  3. The " I n t e n s i f i c a t i o n  Scenario"  (1986), whereby continued  s t a p l e s p r o d u c t i o n , c l o s e d mines, infrastructure  electrical  e x i s t along with plans to b u i l d more dams  s o l e l y for export.  Under these c o n d i t i o n s e l e c t r i c i t y  becomes an exportable to s e l l  and an o v e r - b u i l t  energy product  (a s t a p l e ) and the need  i t the export market i n c r e a s e s .  This  export  dependence c o i n c i d e s w i t h the need to f i n a n c e f u t u r e e x p o r t i n g dams. They would be p a i d f o r through the income of v a r i a b l e for  variable  fluctuations). particular  U . S . e l e c t r i c i t y revenues  s i z e debt loads  long-term  and the payment  examine these s c e n a r i o s w i t h  a t t e n t i o n t o the r o l e s  Argument: B r i e f  power-  (induced by U . S . c u r r e n c y  This thesis w i l l  and the Crown c o r p o r a t i o n ,  itself  of the p r o v i n c i a l government  B.C.Hydro  (see  Appendix, F i g . l ) .  Statement  I argue here t h a t  (1)  the p r o v i n c i a l s t a t e has  allocated  r e s o u r c e s and i n t e r v e n e d i n such a way as to s u s t a i n a s t a p l e s r a t h e r than a d i v e r s i f i e d corporation,  economy,  (2)  B . C . H y d r o , a Crown  has been an instrument by which s t a p l e s  p r o d u c t i o n has been i n t e n s i f i e d ,  (3)  the s t a t e has been  9  Introduction  constrained by  the  i n i t s capacity  already  Theoretical  established  intervened  i n the  t h r o u g h B.C.Hydro, O f f e ' s (extended t o the  authority  production  theory of  state  of  These a s p e c t s are,  interventionist role in British  dependence.  o v e r - d e v e l o p m e n t , and Interventions  and  productive  Therefore, state,  the  treated  state within  the  capitalist  analyzed with  theories  society. respect  f o r m a t i o n and  draws on  staples  of  theory  of  state's  continued  B.C.Hydro t o t h e the  production  state a c t i v i t y .  The  staples way  of  provincial of  The  electricity  provincial  to the  "unplanned s u r p l u s " limits  of  T h e o r i e s of  planning the  state of  power  in a  peripheral  s t a g e s and  e a s i l y used to e x p l a i n  use  the  aspects  Columbia's  state  r e s o u r c e development i n B r i t i s h  Consequently, the  t o the  s t a t e o c c u r by  i n t h e i r developmental  c a n n o t be  electricity  a resource-dependent p e r i p h e r a l  staples-dependent periphery. Canada a r e  of  dams, and  a productive  i s r e g a r d e d as  the  develop  activity.  addition  b u i l d i n g of as  by  the  to  interventionisro  problem under study.  hydroelectric  in  the  economy) i s a p p l i e d  allocative  diversification  industries.  staples  productive  is  resource  p r o v i n c i a l s t a t e has  h y d r o power and  are  induce greater  Analysis  Since the  the  to  state  European policy  Columbia.  a blended t h e o r e t i c a l approach ( I n n i s , W a t k i n s , M a r c h a k ) and  which  Claus  10  Introduction  Offe's  interventionist  Problem o f P o l i c y  "Theory o f the C a p i t a l i s t  Formation"  was e x p l o r e d .  S t a t e and  the  8  Methods The  r e s e a r c h method employed  collecting  relevant historical  legislative  acts,  publications,  B.C.  evidence  government p o l i c y Utilities  documents, and s e l e c t persons.  i s one o f r e v i e w i n g and from  statements and  Commission t e s t i m o n y ,  examination  i s guided  working hypothesis  t h a t B.C.Hydro i s a m a j o r  force  and i n t e n s i f y i n g  A blended  theory o f the  hydroelectric production.  t o the accumulation power, and A variety  examined t o e s t a b l i s h  (implicit  i s used  i n the  working  B.C.Hydro's  p r o c e s s , the development o f  the d i v e r s i f i c a t i o n  of historical these  institutional  s t a p l e s dependence.  between g o v e r n m e n t p o l i c y ,  contribution  by t h e  s t a t e and s t a p l e s t h e o r y  t o examine t h e assumed r e l a t i o n s h i p s hypothesis)  B.C.Hydro  informal interviews with relevant  T h e s e l e c t i o n and  i n extending  books, r e p o r t s ,  data  relationships,  of staples  sources because  has  t o be  the  8 H a r o l d I n n i s , The Fur Trade in Canada ( T o r o n t o : T o r o n t o U n i v e r s i t y P r e s s [1930], 1956). Mel H. W a t k i n s , "A S t a p l e s T h e o r y o f E c o n o m i c G r o w t h . " Approaches to Canadian Economic History: A Selection of Essays e d . M.H. W a t k i n s & W.T. E a s t e r b r o o k ( T o r o n t o : M c C l e l l a n d and S t e w a r t , 1967) pp. 49-79. P a t r i c i a Marchak, Green Gold ( V a n c o u v e r : U n i v e r s i t y o f B r i t i s h C o l u m b i a , 1983). C l a u s O f f e , "The T h e o r y o f t h e C a p i t a l i s t S t a t e and t h e P r o b l e m o f P o l i c y F o r m a t i o n , " Stress and Contradictions in Modern Capitalism: Public Policy and the Theory of the State, e d . L i n d b e r g , A l f o r d , C r o u c h , and O f f e ( L e x i n g t o n , M a s s a c h u s s e t s ; T o r o n t o : L e x i n g t o n B o o k s , D.C. H e a t h and Company, 1975).  11  Introduction agencies  of the p r o v i n c i a l  d e p a r t m e n t s and  ministries,  regulatory agencies, undergoing political quality  internal and  and  The i n the  and  f e d e r a l s t a t e , such  advisory  bodies  of  information held  i n f o r m a t i o n may  allocation  they  a l s o be  evidence  i n these  for provincial and  acts, ministerial  research data  to analyze  the  of the  held  i n the  was  obtained  Marketing  publications,  informal unravel relevant  the  Statistics  planning  in  The  statistical  which  information  Columbia  C a n a d a . The  l i n k to the and  verification  information  "unplanned testimony  government r e p r e s e n t a t i v e s t o t h e  of  i s derived  The  o f dependence  from To  surplus,"  by  B.C.Hydro  B.C.  research data  and  Utilities  e x a m i n e d . I n a d d i t i o n , B.C.Hydro r e p o r t s ,  r e p o r t s are consulted.  of  government  s e l e c t e d department p e r s o n n e l .  submissions  intensification  in  The  B.C.Hydro's D e p a r t m e n t  supplementary  industrial  Commission a r e  the  British  interviews with  provincial  press  sources:  Planning,  p r i n t e d m a t e r i a l and  B.C.Hydro.  r o l e w h i c h B.C.Hydro p l a y e d  B.C.Hydro l i b r a r y .  and  evident  Development Department r e p o r t s  from t h r e e  and  as  of  s t a p l e s economy o r i g i n a t e s p r i m a r i l y f r o m  B.C.Hydro's I n d u s t r i a l are  agencies.  publications, scholarly  Power C o m m i s s i o n and the  agencies  production  legislative  B.C.  the  state intervention  o r i g i n a t e s f r o m government p o l i c i e s  the  changing  reorganize,  electricity  extension  frequently  moved t o o t h e r  of natural resources  publications,  as  policy,  Crown c o r p o r a t i o n s a r e  e c o n o m i c c o n d i t i o n s . As  historical  on  reorganization to adjust to  relevance  c h a n g e s and  and  and  w h i c h document  (on s t a p l e s p r o d u c t i o n  and  12  Introduction  power p r o d u c t i o n  f o r e x p o r t ) a r e o b t a i n e d from a v a r i e t y  of  s o u r c e s : t h e t e s t i m o n y o f B.C.Hydro e x e c u t i v e s b e f o r e t h e Utilities  Commission  (BCUC),  t h e summary r e p o r t s p r e p a r e d by  t h e BCUC, t h e r e p o r t s by t h e t h e N a t i o n a l federal  agency  of Canada),  Because  t h e 1980's and  ( r e l e a s e d by t h e U.S.  the "surplus  and  and  " G l o s s a r y " of terms  F i v e major problem:  1)  Columbians diversified British  i s not y e t  assumptions  ( F i g . 2).  u n d e r l i e the approach t o the that  the majority of  British  bring  about  t h a t t h e motor o f development  investment-dependent  d e v e l o p s no s u b s t a n t i a l the p r o v i n c i a l  units  t o the reader, a  i s n o t consumer goods m a n u f a c t u r i n g ,  foreign  instabilities  the e m p i r i c a l  t o the Appendix  t h o u g h t B.C.Hydro p o l i c i e s w o u l d economy, 2)  numerous  Columbia's  be u n f a m i l i a r added  officially  Study  the assumption  Columbia  e x p o r t and  may  has been  The B o u n d a r i e s o f t h i s  i s a phenomenon o f  Because  t e r m i n o l o g y which d e s c r i b e s B r i t i s h development  (a  Energy  accounts a r e taken from  Canadian press accounts.  hydroelectric  that  shock"  (much o f t h e i n f o r m a t i o n  documented) c i r c u m s t a n t i a l U.S.  Energy Board  and t h e p r e s s r e l e a s e s o f t h e  B o n n e v i l l e Power A u t h o r i t y Department).  B.C.  "backward"  state p o l i c i e s  and  staples  a  in 9  economy  but  an  which  "forward" linkages,  3)  developed out of the  o f t h e s t a p l e s economy w h i c h p e r i o d i c a l l y  needs  9 In the Canadian r e g i o n a l p e r i p h e r y , " . . . u n l i k e European c o u n t r i e s t h e motor o f growth i s not m a n u f a c t u r i n g but t h e e x p o r t l e d s e c t o r s : f u r s , f i s h , t i m b e r , wheat, i n d u s t r i a l m i n e r a l s and e n e r g y p r o d u c t s . " D a n i e l D r a c h e , " R e d i s c o v e r i n g C a n a d i a n P o l i t i c a l Economy" Journal of Canadian Studies ( A u g u s t 1976) 7.  Introduction state-entrepreneurial  13  B r i t i s h Columbia i s not governed by an i n s t r u m e n t a l which operates s o l e l y particular interest has b u i l t i n t o i t s the upper c l a s s ,  state  f o r the b e n e f i t s of a p a r t i c u l a r  a l t h o u g h , the s t a t e , functions  and  4 ) that  i n t e r v e n t i o n to be r e - b a l a n c e d ,  as Offe m a i n t a i n s ,  a s e l e c t i v e process which f a v o r s  5) t h a t h y d r o e l e c t r i c development  plans  f o r B r i t i s h Columbia were not j u s t the r e s u l t of one man (W.A.C. B e n n e t t ) , actions  but r a t h e r the combined r e s u l t of  the  by p l a n n e r s i n the s t a t e a p p a r a t u s , B . C . H y d r o , and  industry. Excluded from t h i s  approach a r e : the domestic and  commercial consumption of e l e c t r i c i t y buildings,  or r e t a i l s t o r e s ) ,  as f l o o d c o n t r o l ) , valleys,  f i s h and f o r e s t s ) .  r o l e i s examined f o r i t s  office  the environmental b e n e f i t s  and the environmental d e s t r u c t i o n  trap lines,  developmental  s t a p l e s economy and, t h e r e f o r e p o l i c y adherence,  (used i n houses,  (such  ( l o s s of  Rather, B.C.Hydro's influences  company p l a n n i n g ,  on the government  and i n d u s t r i a l development are emphasized.  The Columbia R i v e r T r e a t y has been e x t e n s i v e l y examined by other s c h o l a r s , this  thesis.  analysis,  and t h e r e f o r e  The t h e o r e t i c a l  s i n c e the a n a l y s i s  i s o n l y a p e r i p h e r a l p a r t of approach excludes a c l a s s s t r e s s e s the use of B . C . H y d r o by  the s t a t e i n p u r s u i t of b u i l d i n g dams f o r i n d u s t r y , not i n p u r s u i t of d i r e c t c l a s s i n t e r e s t s .  The approach i s  the examination of B . C . H y d r o as a c a t a l y s t developments  i n the s t a p l e s  economy.  l i m i t e d to  and i n t e n s i f i e r  of  14  Introduction  My  own  values are i m p l i c i t  analysis,  they are: that  developed  by  British  secondary  Columbia's  received  generous  produced  electrical  power.  resource  advantages  and  regions this  appear  The  and  provincial  which  has  political  t o have been  state:  abstract  to the  legal  and  conditioning go  state-  Columbia's  over  other  I therefore  approach  authoritative  I t s apparatus agencies,  e t c . , and  to administer  i s given the  the forests,  minerals,  and  state's  economy, f o r p u r p o s e s state  includes  advisory  When a p p r o a c h i n g t h e  staples  entity  i s employed  of  in a  analysis, more  way.  provincial  that  i s an  regulatory  of the p r o v i n c i a l  state  somewhat a b s t r a c t of  low-cost  perspective.  This state  resources.  concept  they  both B r i t i s h  squandered.  been  Concepts  authority  power  the  since  power advantages  Crown c o r p o r a t i o n s  relationship  The  hydro  departments,  commissions,  the  Instead,  and  to  s h o u l d have  corporations  t h e power t o i n t e r v e n e .  ministries,  water  industry  resource allocations  study from a c r i t i c a l  Definitions  i n the approach  on  structure  a p p a r a t u s : As  way,  described  i s a historically  institutional  by  accumulated  formalisms covering  ( a l m o s t ) a l l o f t h e p r o c e s s e s and  i n a society.  A capitalist  of those h i s t o r i c a l  staples  societies  Offe i n a  which  network  and interactions state  i s the  reproduce  15  Introduction themselves through commodity  The  production.  relationships.  i s designed  (again both  o f public  to help  despite  Best,  forecasts, include and  entirely "...the  planning  owners  Electrical  answered:  f o r export.  of additional generating  National  policies.  Operations,  f o r our system  any p r o v i s i o n f o r supply  which  by B.C.Hydro under t h e  i s b u i l d i n g f o r export,  on s e r v i c i n g  surplus  government development  on w h i c h p l a n n i n g  scheduling  investment  t o engage i n exchange  i s the electricity  vice president,  whether Hydro  infrastructure  by u s e o f  broad c a t e g o r i e s o f commodity  extensive  guidance of p r o v i n c i a l (Bill  of  x x  "Unplanned s u r p l u s " : T h i s resulted  t o the process  i s frequently maintained  l a b o r and c a p i t a l )  relationships."  staples  and g e n e r a l i z i n g t h e exchange  process  "...large category  which  Refers  maintaining, This  and e x p l o i t a t i v e  1 0  accumulation p r o c e s s :  reorganizing,  the  competition  "Our  load  i s b a s e d , do n o t The c o n s t r u c t i o n  facilities  f o r e c a s t requirements  asked  i n this  i s based province  Energy Board o f Canada r u l e d i n support  of  10 This i s a restatement of Offe's concept of the c a p i t a l i s t s t a t e t o f i t t h e s t a p l e s s t a t e . C l a u s O f f e , "Laws o f M o t i o n o f R e f o r m i s t S t a t e P o l i c i e s " Mimeo. O i l m a n , B e r t e l l , a n d E d w a r d V e r n o f f , The Left Academy (New Y o r k : M c G r a w H i l l , 1 9 8 2 ) , p.4; a l s o i n " T h e G e r m a n D e b a t e , " The State and P o l i t i c a l Thought ( P r i n c e t o n : P r i n c e t o n U n i v e r s i t y P r e s s , 1984) p.133. 11 C l a u s O f f e and V o l k e r Ronge, "Notes: Theses on t h e Theory o f t h e S t a t e " New German C r i t i q u e , 6 ( F a l l 1976) 143,144.  Introduction our  contention  only  that  f o r domestic  Staple: (e.g.  A  staple  export  we  needs."  is a  logs,  sector  Secondary industry  of  1 2  the  or  eventually  the  ingots,  for export  term  product  sequence:  linkage  and  the  innovation.  " I f the  economy w i l l  staples  staple  are  or  grow and  Other Studies Few  preceding  problems of political produced  of  economy" w i l l  staples  to  an of  no  generate  exploited to  longer  sector  even f o r e i g n markets w i l l  -  the  then  point  suffice.... serving  emerge." 3  3  Hydro i n v e s t i g a t i o n s have  energy p r o j e c t s  in British  economy p e r s p e c t i v e in  reference  diversify  secondary manufacturing  possibly  a  economy b e c a u s e  adequately  A  and  products,  Watkins o u t l i n e s i t s  "staples  domestic  system  resource  comprising  i s used with  of  e f f e c t s which  developed  natural  energy  where a p p e l a t i o n well  our  economy.  which develops out  developmental  constructed  semi-processed  metal  This  and  and  )  largely  industry:  diversification  strong  raw  pulp,  lumber...) produced leading  have p l a n n e d  16  but  studied Columbia  several  the  development  from  a  r e l a t e d works  were  Ontario.  12 R e p r i n t f r o m t h e May 16, 1980 i s s u e of B.C.Hydro's e m p l o y e e n e w s p a p e r . Intercom, p r i n t e d by B . C . H y d r o . 13 M e l H. W a t k i n s , "A S t a p l e s T h e o r y o f E c o n o m i c G r o w t h , " i n Approaches to Canadian Economic History, e d . W.T. Easterbrook and Mel W a t k i n s ( T o r o n t o : M c C l e l l a n d and S t e w a r t , 1967) p.64.  17  Introduction H.V.  N e l l e s i n "Hydro as Myth," a r e l a t e d  i n v e s t i g a t e s the mighty  rivers,  romanticism  t h e dreams o f  powered m a n u f a c t u r i n g , associated with  and  surrounding industrial  shape Fly  (e.g. the  e v o l u t i o n from  irrational  the  independence  interest  over-investment)  which  group) examines energy  to  Chose:  developmental  Canada's  Energy  characteristics  Options.  are  low-cost  electric  the  U.S.  e x p o r t market as  the  "unplanned o v e r s u p p l y "  identified  international with  debt,  international  and  which  i s not  S t a t e and  S t r a t e g y , " how policies  used  power s o u r c e s ,  Province Building:  needs,  for surplus capacity, eliminated until  from merging  documents i n h i s  1995  spiral  of  provincial  essay  A l b e r t a ' s Development  t h e A l b e r t a government t h r o u g h provincial  the  1 5  I n W e s t e r n Canada, L a r r y P r a t t "The  in Gatt-Fly's  damage, t h e u n e n d i n g  the t r a n s i t i o n  interests.  book,  power f o r p r o v i n c i a l  justification  ( i n O n t a r i o ) , the environmental  Gatt-  Several  book: t h e p r e f e r e n c e f o r l a r g e s i n g l e u n i t development of  gives  issues with  r e s p e c t t o p r o v i n c i a l l y - o w n e d power c o m p a n i e s i n t h e Power  The  1 4  "economically  ( e . g . mega p r o j e c t s ) t o t h e u n e v e n d e v e l o p m e n t .  (a s p e c i a l  of steam-  developments i n O n t a r i o .  "Hydro a s Myth" a p p r o a c h c a p t u r e s irrational"  the harnessing  the expectations of  hydroelectric  study,  institutions  a s an  resource  instrument  to  14 H.V. N e l l e s , The Politics of Development: Forests, Mines & Hydro-Electric Power in Ontario, 1849-1941 (Toronto: Macmillan Company o f Canada L t d . , 1 9 7 4 ) . 15 G a t t - F l y , Power to Choose ( T o r o n t o : Between The L i n e s , 1981).  Introduction  increase  i t s control  benefits  were t o accrue t o  elites  and  resource  over the accumulation process.  the growing  advantage  local  urban  would  be  petrochemical,  agricultural,  was  to occur.  In this  the  resource royalties  degree  of  applied  regional  the  provincial building  state  and  the rate  approach  Valley),  water  autonomy  of  river  regional  hydro-development  diversification  would  be  limited  When  1 6  to  the  from v a l l e y s  regulation  (e.g.  benefits,  formation around t h e t a x and Pratt  the  royalty-  focuses  whereas B r i t i s h  1980's  the  of the p r o v i n c e .  the province.  i n the  to  f o r m a t i o n and  the class  independence,  the  of accumulation from  resource rents  taxes,  to building  Before  industrial  The  government  a transition  o f e n e r g y - p r o d u c i n g dams, and  relationship growing  economic  River  depleted,  determines class  the c o l l e c t i o n  Columbia  r e s o u r c e and  middle class.  approach  t o B.C.Hydro t h i s  following:  18  on  Columbia's  i s characterized  by  increasing  dependence.  In about  British  Columbia,  the Columbia  River  comprehensive  historical  Columbia:  the  Canadian  describes  t h e complex  provincial, Columbia  federal  region  two  academic  development. case  books  were  Neil  Swainson's  s t u d y , Conflict  Background  to  an  over  Historic  process of negotiations  and  U.S.  i s the case  government.  written  the Treaty,  between  Similarly  the  set i n the  study f o r students i n f i e l d s  such  16 L a r r y P r a t t , "The S t a t e a n d P r o v i n c e - B u i l d i n g : A l b e r t a ' s D e v e l o p m e n t S t r a t e g y , " i n The Canadian State: Political Economy and P o l i t i c a l Power, ed. Leo P a n i t c h ( T o r o n t o : U n i v e r s i t y o f T o r o n t o P r e s s , 1977), p. 133-162.  Introduction as  engineering,  planning,  g e o g r a p h y and  by  J.W.  People  the  Wilson,  Columbia  River  Project.  c o m p e n s a t i o n , and A r r o w L a k e s who treaty  resettlement  relevant  She  electricity Tieleman,  Human Aspects  of  the  personal,  of the  people of  the  Hydro's development of  academic s t u d i e s  Industry  industry  from  in his thesis  C r e d i t and  the  provincial  state's  reference  leadership. Benefits  the  Dunsmuir  projects.  (1965) by  of Mary  the  In a d d i t i o n ,  British  the  an  Columbia  "example o f  William  on  B.C.  the  other  Electric a  exercised  historical  j u d i c i a r y and  the  in a  developments state  hand, i n t h e  Hydro C o n s t r u c t i o n  b e n e f i t a n a l y s i s of  S i t e C and  the  paper,  Projects," Cheekeye-  1 7  primary concern of  r e l a t i o n s h i p t o the  Columbia,"  autonomy b e i n g  analyses  Costs of  a cost  t h e s i s , "Development  1961.  t a k e o v e r as  Marvin Shaffer, and  to  the  " P o l i t i c a l Economy o f N a t i o n a l i z a t i o n :  to c l a s s , the  provides  The  1883  Takeover of  He  have a n a l y z e d  geographic expansion of  relative  dynamic s i t u a t i o n . "  the  in British  documents t h e  Company" a p p r o a c h e s t h e  "The  issues  B.C.Hydro, s u c h as  Electricity  Taylor.  with  The  W i l s o n examines the  were a f f e c t e d by  development of  Social  Way:  administration  dams.  Several  the  in  public  19  resource  this  t h e s i s i s with  economy and  the  use  B.C.Hydro's of  17 M a r v i n S h a f f e r , The Benefits and Costs of B.C.Hydro Construction Projects, a p u b l i c a t i o n from the B r i t i s h Columbia E c o n o m i c P o l i c y I n s t i t u t e , P a p e r No. P-86-01 ( V a n c o u v e r : U n i v e r s i t y of B r i t i s h Columbia, January 1986).  20  Introduction electricity  i n B r i t i s h Columbia's manufacturing i n d u s t r y .  Beside the r e s i d e n t i a l use (8,313 GW.h) of e l e c t r i c i t y , represents  the  largest  (9,793 GW.h), and commercial use the i n d u s t r i a l use  category of consumption  P r e v i o u s s t u d i e s have not s u f f i c i e n t l y electricity the focus  i s a c t u a l l y produced.  (13,568 GW.h) (see  Table  II).  separated f o r whom the  Therefore, i n t h i s  thesis  i s narrowed to the p r o d u c t i o n of e l e c t r i c i t y  B r i t i s h s t a p l e s i n d u s t r y and the a n t i c i p a t e d  for  secondary  industry.  Chapter Content Summary Chapter two c o n t a i n s a d i s c u s s i o n and framework of s t a p l e s theory  (Innis,  Watkins, Marchak) and O f f e ' s  the C a p i t a l i s t S t a t e and P o l i c y F o r m a t i o n . "  "Theory of  The t h e o r i e s  p r o v i d e a framework to understand the f u n c t i o n s of  state  i n t e r v e n t i o n i n order to m a i n t a i n the accumulation process a staples-dependent  region.  Chapter t h r e e p r o v i d e s  in  the  documentation of s t a t e i n t e r v e n t i o n i n the a l l o c a t i o n of natural resources, interventions  the formation of p o l i c y ,  and two  i n the p r o d u c t i o n of e l e c t r i c i t y  (by the B . C .  Power Commission 1945 and B . C . H y d r o 1962). In Chapter f o u r , the r e l a t i o n s h i p between B . C . H y d r o and the s t a p l e s economy will  be documented and a n a l y z e d .  The primary focus w i l l be on  B . C . H y d r o ' s promotion of s t a p l e s p r o d u c t i o n , the use of B . C . H y d r o ' s i n f r a s t r u c t u r e by s t a p l e s p r o d u c e r s , and the of  influence  five,  of e l e c t r i c i t y  on product i n n o v a t i o n .  the c o n t r a d i c t i o n s between s t a t e p l a n n i n g  lack  In chapter  (the  Introduction government's  and B.C.Hydro's) and t h e p l a n n i n g d i s a l l o w e d by  staples  producers  dynamic  i n f l u e n c e s o f t h e "power t r a p , "  restructuring  (and t h e s t a p l e s economy) a r e a n a l y z e d .  o f B.C.Hydro, t h e r i s i n g  and t h e f o r m a t i o n o f "backward" and discount  and e x p o r t  policies)  will  such  historical  industrial  rate of  "forward" be e x a m i n e d  statistics  The  as t h e  The A p p e n d i x c o n t a i n s a g l o s s a r y o f e l e c t r i c a l primarily  21  unemployment, policies (i.e. i n chapter s i x . terms  o f power  and purchases.  Theory  22  CHAPTER I I THEORY The  Central Why  public  Question  d i d the provincial  hydro power, intended  actually  intensify  approach t h i s the  nature  dependent  British  q u e s t i o n , we  to diversify  Columbia's  into  the nature  chapter  framework used concerned  s t a p l e s dependence?  society,  provides  and  throughout  a discussion of the the thesis.  with the staples theory,  The f i r s t  To  into  more  resource-  theoretical part i s  t h e second w i t h t h e theory Offe.  1  Theory  A s t a p l e i s a raw o r s e m i - p r o c e s s e d primarily  f o r export economy.  definition  A s t a p l e s economy t h e r e f o r e i s by  theory  the general  material extracted  and c o n s t i t u t e s t h e l e a d i n g edge o f a  not a d i v e r s i f i e d  Staples with  some i n s i g h t  of the state i n a  t h e s t a t e as p r o p o s e d by C l a u s  regional  base,  ( s t a p l e s ) economy.  This  Staples  the industrial  need t o d e v e l o p  of the state i n capitalist  specifically  of  state's intervention i n developing  manufacturing  as developed  impact  by H a r o l d  on t h e economy  economy.  Innis i s  concerned  and s o c i e t y o f s t a p l e s  1 C l a u s O f f e , "The T h e o r y o f t h e C a p i t a l i s t S t a t e a n d t h e P r o b l e m o f P o l i c y F o r m a t i o n , " i n Stress and Contradictions in Modern Capitalism, e d . L e o n N. L i n d b e r g , R o b e r t A l f o r d , C o l i n Crouch, and C l a u s O f f e ( L e x i n g t o n : L e x i n g t o n Books, 1975), pp. 125-44.  Theory production. its  2  Mel Watkins r e s t a t e d  23  s t a p l e s theory to  explain  d i s t i n c t k i n d of economic growth c h a r a c t e r i z e d by an  o v e r c o n c e n t r a t i o n on resources possible  development of the  i d e n t i f i e d the p e r s i s t e n t  i n the export s e c t o r  "staples t r a p . "  Pat Marchak  3  i n s t a b i l i t y caused by the  p r o d u c t i o n process which i s c o n t r o l l e d by c o r p o r a t e from o u t s i d e  the resource p e r i p h e r y .  4  and  staples directives  The major emphasis on  the use of s t a p l e s theory i n t h i s t h e s i s w i l l be on the r e l a t i o n s h i p between the p r o v i n c i a l s t a t e and the i n f r a s t r u c t u r e development  In  staples theory,  for staples production.  as Watkins r e s t a t e d  it,  the s t a t e  is  almost a by-product of the requirements of s t a p l e s p r o d u c t i o n (Watkins 1977:89). of  Harold I n n i s  the s t a t e ' s subordinate  i d e n t i f i e d the c o l o n i a l  roots  relationship:  Energy i n the Colony was drawn i n t o the p r o d u c t i o n of the s t a p l e commodity both d i r e c t l y and i n d i r e c t l y i n the p r o d u c t i o n f a c i l i t i e s promoting p r o d u c t i o n . Agriculture, industry, transportation, trade, f i n a n c e , and government a c t i v i t i e s tend t o become subordinate to the p r o d u c t i o n of the s t a p l e f o r a more h i g h l y s p e c i a l i z e d manufacturing community. (Innis [1930] 1954:385)  He p o i n t s out two l e v e l s of involvement by the government, d i r e c t promotion of s t a p l e s p r o d u c t i o n and the  the  indirect  2 Harold I n n i s , The Fur Trade in Canada [1930] (Toronto: U n i v e r s i t y of Toronto P r e s s , 1954) 3 M . H . Watkins, W.T. E a s t e r b r o o k , "A S t a p l e s Theory of Economic Growth," Approaches to Canadian Economic History: A Selection of Essays (Toronto: M c C l e l l a n d and Stewart, 1967), pp. 49-73. 4 Pat Marchak, Green Gold: The Forest Industry in British Columbia (Vancouver: U n i v e r s i t y of B . C . , 1983)  Theory government  activities.  such as t r a n s p o r t a t i o n , the  The development  of  24 infrastructure,  was subordinated t o the p r o d u c t i o n of  s t a p l e f o r a more s p e c i a l i z e d  r e c e n t decades, the h y d r o e l e c t r i c  manufacturing community. infrastructures  expanded by the p r o v i n c i a l s t a t e s to serve such production.  Hydroelectric f a c i l i t i e s  promote  staples  timber or m i n e r a l s and by p r o v i d i n g a source of  policies  for staples production.  have been  staples  p r o d u c t i o n by p r o v i d i n g water t r a n s p o r t access to  (electricity)  In  remove  energy  Watkins argues t h a t  to develop i n f r a s t r u c t u r e can ease the development  s t a p l e s p r o d u c t i o n and f o r e i g n  of  ownership.  The N a t i o n a l P o l i c y was a p o l i c y of i n d u s t r i a l i z a t i o n - b y - i n v i t a t i o n and a t t r a c t e d f o r e i g n c a p i t a l and thus f o r e i g n ownership under the a e g i s of the m u l t i n a t i o n a l c o r p o r a t i o n , r a t h e r than encouraging domestic c a p i t a l . . . . Railways were b u i l t to f a c i l i t a t e s t a p l e s p r o d u c t i o n and o n l y i n c i d e n t a l l y to c r e a t e i n d u s t r i a l i z a t i o n . . . 5  In a s i m i l a r way, the development infrastructure the development The  of the  hydroelectric  i n B r i t i s h Columbia was promoted t o g e t h e r with of f o r e s t r e s o u r c e s by the p r o v i n c i a l  q u a l i t y of the accompanying i n d u s t r i a l development  p r i m a r i l y c o n f i n e d to e s t a b l i s h i n g t h e i r chemical sequentially  suppliers.  exploited  saw m i l l s ,  state. was  pulp m i l l s ,  and  V a r i o u s s p e c i e s of t r e e s have been  d u r i n g the expansion  of  forest  processing.  5 Mel Watkins, "The S t a p l e s Theory R e v i s i t e d " Journal Canadian Studies 12 (Winter 1977), p . 88.  of  Theory  Structural Two  Conditions prominent  expansion demand  c o n d i t i o n s develop  around  the capitalist  of staples production: the overproduction or lack of  f o r the staple,  product  25  and t h e l a c k  o f secondary  industry or  innovation.  Under c o n d i t i o n s o f o v e r p r o d u c t i o n o f a s t a p l e timber,  coal,  population center  and o t h e r  energy  products)  can wait out the "bust"  indicates  overproducing  r e g i o n and not from  'boom  in  identifies  and bust'  the interest  worldwide order  manufacturing the  interest  competitive conditions  psychology."  competing  region.  leads t o overexpansion  interests  and  But Marchak p o i n t s o u t , i t i s center to direct  regions t o overdevelop  a low-cost  supply  their  relationship  resources i n between  foreign  and o v e r p r o d u c t i o n . E q u a l l y , i t i s i n  of p e r i p h e r i e s t o develop global  the  one p o s s i b l e cause o f o v e r p r o d u c t i o n ,  of the manufacturing  resource  t o assure  manufacturing  s u p p l i e s from t h e  another  namely, t h a t an e x c e s s i v e optimism a  the  renewed demand, o r i t c a n t r y t o c o n v i n c e  center t o obtain low-cost  as  the regional  until  manufacturing  Watkins  (such  market.  their  resources  Yet i n a region which  of overproduction, the implications  i n a  experiences  c a n be  very  serious.  Often  political  leaders accord  development of p a r t i c u l a r  staples.  much  emphasis t o t h e  At times  this  advances the  Theory overdevelopment  26  i n one export product at the expense of  d e v e l o p i n g the domestic  economy.  As argued by Watkins:  S t a p l e s e x p o r t e r s - s p e c i f i c a l l y those e x e r c i s i n g p o l i t i c a l c o n t r o l - w i l l develop an i n h i b i t i n g 'export m e n t a l i t y , ' r e s u l t i n g i n an o v e r c o n c e n t r a t i o n of resources i n the export s e c t o r and a r e l u c t a n c e to promote domestic development (Watkins 1967:62). Such a m e n t a l i t y has a s u b s t a n t i a l domestic economic development flexibility.  Instead,  dominant s t a p l e  on p l a n n i n g f o r  and does not generate  i t overemphasizes  the p r o d u c t i o n of a  which reduces the p o s s i b i l i t y to  with the needs of new markets. characteristics  influence  Watkins i n d i c a t e s  shift  easily  the  of such an event i n an underdeveloped  region:  The s e r i o u s p i t f a l l i s t h a t the economy may get caught i n a " s t a p l e s t r a p . " Sustained growth r e q u i r e s the c a p a c i t y to s h i f t a t t e n t i o n t o new f o r e i g n or domestic markets. . . . Both [markets] r e q u i r e i n s t i t u t i o n s and v a l u e s c o n s i s t e n t with t r a n s f o r m a t i o n , and that r e q u i r e s the good f o r t u n e of having avoided s p e c i a l i z a t i o n i n the wrong k i n d of s t a p l e . . . i f s t a g n a t i o n p e r s i s t s f o r any extended p e r i o d because of a weak resource base, the s t a p l e economy can take on the c h a r a c t e r of the t r a d i t i o n a l underdeveloped c o u n t r y . F i r s t l y , i n s t i t u t i o n s and v a l u e s can emerge which are i n i m i c a l to s u s t a i n e d growth . . . P e r s i s t e n t unemployment and underemployment w i l l become c h a r a c t e r i s t i c of the economy. Immigration may be r e p l a c e d by e m i g r a t i o n . . . In any event i n i t i a l o p p o r t u n i t i e s f o r easy growth w i l l no longer e x i s t (Watkins 1967:63). Such a p i t f a l l can be avoided by d i v e r s i f i c a t i o n , and s t r o n g l i n k a g e e f f e c t s . effects: linkage.  backward l i n k a g e ,  Watkins has i d e n t i f i e d t h r e e  of resources  such  forward l i n k a g e , and f i n a l demand  Backward l i n k a g e i s a measure to a s s e s s  development  innovation,  the  and t e c h n o l o g i e s which can  increase  Theory home-production.  27  Forward l i n k a g e s develop when i n d u s t r i e s  evolve which add v a l u e by way of f u r t h e r p r o c e s s i n g .  Final  demand l i n k a g e s are c h a r a c t e r i z e d by the development of  the  domestic p r o d u c t i o n of consumer goods (Watkins 1967:55). The staples-dependent  r e g i o n , however,  is  l e s s l i k e l y to  consumer goods p r o d u c t i o n and t e c h n o l o g i c a l expand the produce the  develop  i n n o v a t i o n than  development of i n f r a s t r u c t u r e needed to  help  staple.  Theory o f t h e C a p i t a l i s t S t a t e - S t a t e I n t e r v e n t i o n i s m O f f e ' s theory does not address the problem of staples-dependent  state.  But i t can be a p p l i e d to  development of i n f r a s t r u c t u r e i n such a s t a t e .  (Offe)  the the  I t p r o v i d e s an  e n r i c h e d e x p l a n a t i o n of p o l i c y formation and the c o n t r a d i c t i o n in  p l a n n i n g f o r a staples-dependent  economy.  O f f e ' s theory allows us to view the s t a t e ' s r o l e i n m a i n t a i n i n g exchange  relationships.  In a d d i t i o n , interventionist I t does t h i s by  a l l o c a t i n g resources and d e v e l o p i n g p u b l i c i n f r a s t r u c t u r e designed to h e l p broad c a t e g o r i e s  -State  of commodity o w n e r s .  6  Interventionism  Offe argues the s t a t e i n advanced c a p i t a l i s t  societies  has become i n c r e a s i n g l y interventionist.  Since few p e r i p h e r a l  r e g i o n s produce t h e i r own consumer goods,  having remained  s t a p l e s producing resource p e r i p h e r i e s , the nature of  the  6 Claus Offe and V o l k e r Ronge, "Notes: Theses on the Theory of the S t a t e , " New German Critique, Number 6, F a l l 1976, pp. 137147.  28  Theory  intervention  by t h e p r o v i n c i a l  s t a t e i s f r e q u e n t l y b y means o f  intensification  of infrastructure  infrastructure,  together  required  t o continue  with  development.  the allocation  staples production.  intervene  more t h a n  i n the previous  re-balance  the accumulation  capitalist  development.  -Allocation The  state intervenes Offe  "productive"  interventionist created  perceived the  Both  "... s o f a r a s t h e y  are linked  t o a changing  process  (Offe  and  order  that  threats,  emerge o u t o f  modes o f s t a t e  1975:128).  Mode o f i n t e r v e n t i o n i n t e r v e n t i o n by means o f t h e a l l o c a t i v e  an  and economic a c t i v i t y .  of social  economy u s e s  then  of  t w o modes o f  pattern of  and t o which these  a u t h o r i t a t i v e order  already  stages  and economic  problems,  imposes a c e r t a i n  are  i n order t o  impose a c e r t a i n  of social  c a n be seen a s r e s p o n s e s  -Allocative  area  need  c a t e g o r i z e s them as t h e " a l l o c a t i v e "  threats, or structural  State  i n advanced  states  mode o f s t a t e i n t e r v e n t i o n . B o t h m o d e s a r e  accumulation  activity  century,  p r i m a r i l y by u s i n g  by t h e s t a t e on an area  activity."  since  claims, the  and P r o d u c t i o n  intervention. the  process  of resources, i s  As O f f e  scope o f s t a t e i n t e r v e n t i o n has i n c r e a s e d , to  The b u i l d i n g o f  input  products  state property  the state only  created  mode  by t h e s t a t e on  When a  staples  such as n a t u r a l resources  which  a n d do n o t need t o be p r o d u c e d ,  needs t o a l l o c a t e  them.  As  Offe  Theory  indicates,  t h e method  is  authority.  on  a system o f l e g a l  various  This  kinds,  by which  authority  state  activity  o r on c o n s i d e r a t i o n  affiliations  following  three  mode o f s t a t e  of political  1975:128).  (Offe  distinctive  i s designed  c a n be based on a c o n s t i t u t i o n ,  norms, such a s l e g i s l a t i v e  political  allocative  such  29  conditions  action  takes  Offe  Acts of m a j o r i t i e s and outlines the  under which t h e place:  1) e c o n o m i c c o n d i t i o n s u n d e r w h i c h a s u i t a b l e environment f o ra c c u m u l a t i o n c a n be c r e a t e d and maintained merely by a u t h o r i t a t i v e a l l o c a t i o n o f resources and "things" that a r ealready "state property"; 2) t h e e l e m e n t s o f t h i s be p r o d u c e d t h e m s e l v e s ,  e n v i r o n m e n t d o not h a v e t o b u tmerely allocated;  3) p o l i t i c a l p o w e r , o r p o w e r i n a n d apparatus and i t s parts i s t h esole determinant o f a l l o c a t i o n , that i s , method o f p o l i c y making o t h e r t h a n p ( O f f e 1975:129) . When a p p l i e d of  state  action  allocation.  t o thestaples  should  can that  by n a t u r a l  Such r e s o u r c e s a r ep r o v i d e d  receive  bureaucracy  economy, t h e a l l o c a t i v e  i scharacterized  have t o be produced  by t h e s t a t e .  i srequired  allocation.  by n a t u r e ,  The d e c i s i o n s ,  I fconditions  be m a i n t a i n e d w i t h o u t p r o d u c t i v e of thestate  mode  resource  t h e m , c a n b e made b y p o l i t i c a l  o r by l e g i s l a t i o n .  over t h e state c r i t e r i o n and t h e r e i s no o l i t i c s needed  a n d don o t a s t o who  direction of the o f accumulation  intervention, then a l l  i sintervention  b y means o f  30  Theory  - P r o d u c t i v e Mode o f Offe fragile,  Intervention  points out, and  insufficient  the  allocative  mode o f  becomes preeminent." a  accumulative mode o f  to deal with the  " t h e productive  such  i f the  intervention  becomes  of the  identifies  too  is  threat to accumulation,  activity  He  process  capitalist  f o u r elements  then  state  which  make  up  situation:  1. I n o r d e r t o k e e p t h e a c c u m u l a t i o n p r o c e s s a l i v e ( e i t h e r on [ s i c ] a f i r m , i n d u s t r y , r e g i o n a l , o r n a t i o n a l l e v e l ) , t h e r e i s more and something d i f f e r e n t r e q u i r e d t h a n t h e a l l o c a t i o n o f r e s o u r c e s and t h i n g s t h a t t h e s t a t e has a l r e a d y under i t s c o n t r o l . I n a d d i t i o n t o t h e s t a t e - o r g a n i z e d framework of p r o d u c t i o n / a c c u m u l a t i o n , some p h y s i c a l i n p u t i n t o production i s required i n order to maintain accumulation ( O f f e 1975:129).  S u c h p r o d u c t i v e i n p u t s by staples  economy a t t i m e s  accumulation the  maintenance of  production needed.  and  At  ingredient, missing  such  times  either  levels  argues  well.  the  state  when i t i s n o t Under  such  are  around  the production of  firm,  that usually  such  staples  the  industry, a inputs are  input i s  missing  infrastructure,  i s required to maintain (in a  besides  some p h y s i c a l  production of  the  the  circumstances,  accumulation,  the  required i n  performing  economy o r g a n i z e d  capitalist  commodity  different Offe  process  the  or  accumulation region or provided  a at  nation). by  the  market. 2. U n d e r n o r m a l c i r c u m s t a n c e s , t h o s e i n p u t s a r e p r o v i d e d by m a r k e t s on w h i c h t h e y a p p e a r as c o m m o d i t i e s : Labor, or v a r i a b l e c a p i t a l , i s t o be f o u n d on t h e l a b o r m a r k e t , a n d raw m a t e r i a l s a n d m a c h i n e r y , o r c o n s t a n t c a p i t a l i s t o be f o u n d on t h e m a r k e t o f i n v e s t m e n t goods, p r o d u c e d f o r  Theory  31  t h i s market by c a p i t a l i s t s who s p e c i a l i z e i n investment goods i n d u s t r i e s . In the p a r t i c u l a r s i t u a t i o n t h a t we are d e s c r i b i n g . . . t h e q u a n t i t a t i v e l y and q u a l i t a t i v e l y s u f f i c i e n t supply of c a p i t a l f a i l s to appear on the market. 3 . . . . [ T h e t h i r d element i s ] the failure of some c a p i t a l i s t s to produce input commodities on which the accumulation of other c a p i t a l i s t s d e p e n d . . . . T h i s f a i l u r e can be due to e i t h e r of t h r e e f a c t s : E i t h e r the i n p u t commodities are so costly . . . or there are risks and uncertainties i n v o l v e d i n the buying of such i n p u t commodities (Offe 1975:130).  The c o s t s ,  r i s k s , and u n c e r t a i n t i e s  infrastructure,  of producing an  or an i n p u t commodity which does not appear on  the market are o f t e n absorbed by the s t a t e .  In such cases the  s t a t e needs to i n t e r v e n e and produce the m i s s i n g  input  commodity to m a i n t a i n the accumulation p r o c e s s .  But why  should a f i r m ,  i n d u s t r y , r e g i o n , or n a t i o n become dependent on  a state-produced  i n f r a s t r u c t u r e or i n p u t commodity?  Particularly,  such p r o d u c t i v e i n p u t s tend to be permanently  too c o s t l y  if  f o r them?  Offe proposes the f o l l o w i n g  answer:  4. . . . a c c u m u l a t i o n can only take p l a c e i f and to the extent t h a t i n d i v i d u a l accumulating u n i t s f i n d ways to p r o t e c t themselves a g a i n s t the constant competitive pressure coming from other accumulating u n i t s . . . . I f accumulation i n an i n d i v i d u a l e n t e r p r i s e i s going to continue at any given p o i n t i n t i m e , t h e r e must be c e r t a i n defensive mechanisms a v a i l a b l e to the e n t e r p r i s e t h a t allow i t to p r o t e c t i t s e l f (Offe 1975:130). Offe d i s c u s s e s two kinds of defense mechanisms to deal with competitive  pressures:  1) product i n n o v a t i o n ,  implementing of s t r a t e g i e s a t a " m e t a - l e v e l , "  namely a t a  l e v e l where "accumulating u n i t s g a i n a r e l a t i v e l y position vis-a-vis  2)  superior  other accumulating u n i t s " such as a f i r m ,  32  Theory an  i n d u s t r y a r e g i o n , or n a t i o n (Offe 1975:131). In p e r i p h e r a l  s t a t e s , product i n n o v a t i o n i s  r a r e l y used as a d e f e n s i v e  mechanism a g a i n s t  pressure.  "meta-level"  competitive  response  i s chosen,  On the c o n t r a r y ,  such as the development  ' i n f r a s t r u c t u r e as i n d u s t r y , ' or s u b s i d i z e d and  state-produced  inputs,  the of  state-allocated  so the s t a p l e s producer can compete  w i t h other r e g i o n s and o b t a i n maximum v a l u e .  Offe argues  the  main reason f o r s t a t e i n t e r v e n t i o n i s to m a i n t a i n the o v e r a l l accumulation process state,  society.  the to  process.  Concept o f t h e C a p i t a l i s t  State  O f f e ' s concept of the c a p i t a l i s t the  In d e f i n i n g  he s t r e s s e s the f u n c t i o n a l r e l a t i o n s h i p of the s t a t e  the accumulation  -The  in capitalist  s t a t e i s d e r i v e d from  " . . . r e l a t i o n s h i p between the s t a t e and the accumulation  process" that  (Offe 1975:125). He u n d e r l i n e s t h i s p o i n t by saying  " . . . c e n t r a l to our d e f i n i t i o n  [ i s ] . . . t h e way i t  is  f u n c t i o n a l l y r e l a t e d to and dependent upon the accumulation process" state,  (Offe 1975:125).  the accumulation process  exchange r e l a t i o n s h i p s revenues in The  In the staples-dependent  from i t s  terms of i t s  is  substantially  based on  (between c a p i t a l and l a b o u r ) , and  s t a p l e s p r o d u c t i o n . Offe d e f i n e s the  r e l a t i o n s h i p to such an accumulation  f o u r f u n c t i o n a l elements of O f f e ' s d e f i n i t i o n of  capitalist  peripheral  state  process. the  state are:  1. The s t a t e has no a u t h o r i t y to order production or to control it. P r o d u c t i o n / a c c u m u l a t i o n takes p l a c e i n [ p r i v a t e ] enterprises t h a t are s a i d to be free i n the  Theory sense of  "exempt from  2. The s t a t e does n o t mandate t o c r e a t e and  state  33  control."  o n l y have t h e a u t h o r i t y , b u t t h e s u s t a i n conditions of accumulation.  3. The [ c a p i t a l i s t s t a t e ' s ] power r e l a t i o n s h i p s , i t s v e r y d e c i s i o n - m a k i n g power depends ... upon t h e p r e s e n c e and c o n t i n u i t y of the accumulation process. In the absence o f a c c u m u l a t i o n , e v e r y t h i n g , and e s p e c i a l l y t h e power o f the s t a t e , tends to d i s i n t e g r a t e . We c a n c a l l t h e s e t h r e e e l e m e n t s o f t h e c o n c e p t o f t h e c a p i t a l i s t s t a t e the p r i n c i p l e s of "exclusion, maintenance and dependency," respectively. Exclusion means ... t h a t t h e s t a t e i s n o t a c a p i t a l i s t i t s e l f , t h a t i s , s o m e t h i n g t h a t has i t s e x i s t e n c e o u t s i d e t h e accumulation process. Maintenance implies that this p r o c e s s cannot perpetuate i t s e l f i n the absence of t h i s e x t e r n a l b e i n g , t h a t t h e r e a r e t h r e a t s and p o s s i b l e disturbances to the process of accumulation t h a t r e q u i r e some s t a t e - o r g a n i z e d p r o t e c t i o n o f t h e p r o c e s s . And dependency means t h a t t h i s p r o t e c t i v e d e v i c e i t s e l f w o u l d be t h r e a t e n e d i f i t engaged i n p o l i c i e s i n c o n s i s t e n t w i t h its protective functions.  4. L e g i t i m a t i o n , o r t h e need f o r l e g i t i m a c y , a d d s an i m p o r t a n t fourth element t o the concept of the c a p i t a l i s t state. . . . t h e s t a t e c a n o n l y function as a c a p i t a l i s t s t a t e by a p p e a l i n g t o symbols and and s o u r c e s o f s u p p o r t t h a t conceal i t s n a t u r e as a c a p i t a l i s t s t a t e ( O f f e 1975:126,127). When a p p l y i n g  the  f i r s t element  (namely  that  production/accumulation takes place  in private enterprises)  staples production,  i t i s generally  the  p r o d u c i n g companies  (pulp producers, metal  processors,  chemical  supply  companies) are  although production/accumulation overlapping  with  corporations). over  state  The  structures  structures (e.g.  staples-dependent  s t a p l e s p r o d u c i n g companies.  control  over  case t h a t  when t h e y p r o d u c e , how  staples  refiners,  wood  owned  privately,  are  increasingly  i n Crown  s t a t e has  For  to  limited  instance,  i t has  t h e y p r o d u c e , and  control little what  Theory  34  they produce. I t has no power to make them innovate or produce consumer  goods.  The second element, conditions  the mandate to "create and s u s t a i n  of accumulation" i s p a r t i c u l a r l y important a t  when the s t a t e f a c e s t h r e a t s to the c o n t i n u a t i o n of accumulation p r o c e s s .  Such t h r e a t s  with by the s t a t e a t d i f f e r e n t  a t the l e v e l  l e v e l s of a c c u m u l a t i o n : at  of i n d u s t r i e s  or at the r e g i o n a l l e v e l  (e.g.  t h i s way, the s t a t e f u l f i l l s  the  i n the s t a t e can be d e a l t  l e v e l of i n d i v i d u a l accumulation u n i t s firms),  times  (e.g.  (e.g.  the  companies,  f o r e s t r y or m i n i n g ) ,  northern B r i t i s h Columbia).  In  i t s mandate to c r e a t e and s u s t a i n  c o n d i t i o n s of accumulation which are e s s e n t i a l  to m a i n t a i n  its  power.  The s t a t e ' s power r e l a t i o n s h i p depends upon a t h i r d element  i n O f f e ' s theory - - the c o n t i n u a t i o n of  accumulation p r o c e s s . natural  resources,  the  The accumulation of r o y a l t i e s  from  of taxes from wages, and of p r o f i t s  from  the resource i n d u s t r i e s accumulate c a p i t a l and power f o r state.  the  P o l i t i c a l power i n the p e r i p h e r a l s t a t e , t h e r e f o r e ,  s u b s t a n t i a l l y dependent upon the accumulation process generated by the s t a p l e s p r o d u c t i o n . p r o t e c t and maintain  The s t a t e needs to  the process of accumulation a t  p r i v a t e s e c t o r and s t a t e l e v e l ,  since  on t h i s process f o r i t s s u r v i v a l .  it  is  itself  the dependent  is  35  Theory  The  state  coexistence through other  provides  between  the fourth  sources  common  "...the  can  element,  image  State  be p o r t r a y e d  diversification  functional  f o r harmonious elements  the legitimation  t o conceal  nature.  and general  1975:127).  these  of support  staples-dependent project  the condition  of  accumulation  by symbols and  i t s capitalist  To do t h i s ,  the state  needs t o  o f an o r g a n i z a t i o n o f power  interests  of society  - generated  catalyst  which  that  as a whole..."  infrastructure,  as a miraculous  and  economic  (Offe  f o rinstance,  and  i s beneficial  pursues  industrial  to a l lof  society.  P o l i c y Formation Productive policies. from  the  reason  require the formation of economies,  production generates  of acute  response  activities  In staples-dependent  staples  times  state  competition with  the state  needs  the accumulation  insufficient  other  regions.  t o develop  remedial  t o "a t w o f o l d weakness  capital Offe  argues,  policies  of competitive  during  i s  i n  accumulation  itself": . . . f i r s t , t h e economic weakness o f b e i n g unable t o produce the necessary inputs o f accumulation through a c c u m u l a t i o n i t s e l f ; and, second, t h e weakness t h a t t h e r u l i n g c l a s s , b e i n g made u p o f e s s e n t i a l l y competitive accumulating units, i s unable t o develop a c l a s s consciousness c o n t a i n i n g consented and workable d i r e c t i v e s a s t o how t h e s t a t e s h o u l d o p e r a t e . ( O f f e 1975:134)  He  maintains  that  i n an e f f o r t  deficiency,  the state  develops  supplements  the material input that  t o overcome  this  twofold  the productive activity i s needed  which  f o r accumulation  36  Theory  1975:134).  (Offe offers  incentives  revenues  from  are  for  made  it  cannot  i s more  the  the  -Perception Offe as  a  and  strategies forming Crown how  staples  economy.  ruling class  always  be  the of  than  gaining  concessions  producers,  conflict.  survival  process  policy  staples  with  state  continue  Special  ruling class  the  to  the  Obviously  ruling class, the  state  i t i s to  to  the  since  maintain  achieve  consent  of the Problem (by the State)  stresses  the  solver",  economic which  staples  state  importance but  also  problems  the  state  these  or  of  as  a  trigger  adopts.  bureaucracies  perceives  infrastructure, formulates  input  (e.g.  i n accord  for  weaknesses,  class.  corporations),  the  of  accumulation  "problem  Social  required  i n case  ruling  those  the  important  overall  among  overcome  and  the the  shareholders) state  To  or  expansion  the  "perceiver  of  changes  the  To  deal  in with  strategies  problems of  seeing  technocratic  formal  the  not  (e.g.  staples  state  problems". formal  them  planning also  lack  only  (e.g. in  determine  of  development)  and  policies. F o r what t h e s t a t e d o e s i f i t w o r k s on a p r o b l e m i s a dual process: It organizes certain a c t i v i t i e s and m e a s u r e s d i r e c t e d t o w a r d s t h e environment and i t a d o p t s f o r itself a certain organizational procedure leg. a l l o c a t i v e staples bureaucracy technocratic planning, or advisory bodies] from which the production and i m p l e m e n t a t i o n o f p o l i c y emerges. S o c i a l and e c o n o m i c p r o b l e m s , as i t e m s on t h e state a g e n d a may t r i g g e r o f f changes i n the formal strategies according to which the s t a t e operates, and c o n v e r s e l y t h e s e s t r a t e g i e s may substantially determine both the a b i l i t y of the s t a t e to perceive p r o b l e m s and t h e n a t u r e o f t h e e n s u i n g p o l i c i e s (Offe 1975:135)  Theory  When a n a t u r a l interventionist  resource  state  s t a t e employs a  "dual  "It  organizes  the  environment  and  i t a d o p t s f o r itself  process"  certain activities [the  Crown c o r p o r a t e  develops  subordinate to  its  (e.g.  region  natural,  production,  when w o r k i n g on  and  a  e c o n o m i c , and  a certain organizational structure, advisory  three  (Offe  "logics"  problem:  measures d i r e c t e d  social,  i m p l e m e n t a t i o n o f p o l i c y emerges"  delineates  an  i t s staples  departments, Commissions) from which the  Offe  37  used  toward  political]  procedure  bodies,  new  production  and  1975:135).  i n the  formal  d e c i s i o n making p r o c e s s which o p e r a t e  in public  administration.  of p o l i c y p r o d u c t i o n  These t h r e e  c o n s e n s u s , b u r e a u c r a c y , and Offe  argues that  bureaucracy are activity" t o the  neither  purposive action  p o l i c y production  sufficient  to  inefficient  or  purposive-rational  action  i s c o n t r o l l e d by  outcomes t h a n b u r e a u c r a t i c  Productive (such  as  bureaucracy  a d i f f e r e n t i m p e t u s and  nor  state  subversive is  state a c t i v i t y  i n planning).  are  1975:136).  consensus,  C o n s e n s u s becomes  s t r u c t u r e , and  incapable.  by  (Offe  " d e c i d e upon p r o d u c t i v e  ( O f f e 1975:136,140).  administration  activity  "logics"  requires  Such  state  different  activity:  A b u r e a u c r a c y i s c o n t r o l l e d by inputs - be i t w i l l o f a r u l e r o r t h e law. T h i s i n p u t i s t o be a p p l i e d s t r i c t l y , f a i t h f u l l y , and w i t h o u t e x c e p t i o n , and t h e r e s u l t i s s u p p o s e d t o be " o r d e r . " I n c o n t r a s t , what p r o d u c t i v e s t a t e a c t i v i t y p r e s u p p o s e s i s c o n t r o l by output: An a c t i v i t y i s " a d e q u a t e " n o t i f i t c o n f o r m s  38  Theory  t o c e r t a i n e s t a b l i s h e d r u l e s and p r o c e d u r e , b u t mainly i f i t leads t o c e r t a i n r e s u l t s (Offe  1975:136) .  Before productive  state activity  a b o u t t h e outcome o f t h e p r o d u c t i v e allocative Offe  state a c t i v i t i e s )  can begin,  input  (not r a i s e d i n  h a v e t o be a s k e d .  i n d i c a t e s , some o f t h e f o l l o w i n g q u e s t i o n s  considered  before  starting  questions  For  instance,  need t o be  production.:  What i s t h e f i n a l p r o d u c t , o r p u r p o s e o f s t a t e production? How much i s n e e d e d i n a p a r t i c u l a r situation? What i s t h e most e f f i c i e n t way o f p r o d u c i n g i t ? Who s h o u l d r e c e i v e i t ? A t what p o i n t i n t i m e and f o r what l e n g t h o f t i m e ? How s h o u l d i t be f i n a n c e d , a n d what p r i o r i t i e s s h o u l d be f o l l o w e d i n case o f c o s t i n c r e a s e s and/or revenue d e c r e a s e s ? ( O f f e 1975:136) I f t h e r e s u l t i s t o be b u i l d i n g an i n f r a s t r u c t u r e o r producing  a commodity, t h e o u t p u t d e t e r m i n e s t h e t y p e o f  institution project.  needed t o c a r r y o u t t h e c o m p l e t i o n o f such a  Since  organizations,  production  usually occurs  the organizational  i n private  s t r u c t u r e c h o s e n by t h e  s t a t e needs t o resemble a p r i v a t e s e c t o r  organization  Crown c o r p o r a t i o n s  partly do).  action perspective  ( c h a r a c t e r i z e d by p l a n n i n g ) ,  (e.g.  t h e b u i l d i n g o f dams) i s o f p r i m a r y  Offe  by p o l i t i c a l  s p e c i f i e s three  implemented  the output  importance i n  output contributes  more s t a b l e p r o v i n c i a l economy, o f t e n , overridden  (as  When s e e n f r o m t h e p u r p o s i v e  s h a p i n g t h e s t r u c t u r e . Whether t h i s  is  sector  to a  becomes s e c o n d a r y a n d  goals.  conditions  for political  successfully i n a purposive-rational  goals  manner:  t o be 1)  Theory  there  must be  "clear-cut goals,"  stability  of c o n d i t i o n s  production  c y c l e , " and  action  3)  i s applicable only  p r o c e s s can  be  (Offe  For  state to  the  producing  region  predictable.  substantially  least  "...there  f o r the  and  unlikely  production  set  (or compensated  implies  "clear-cut goals" that  to provide  courses of  the  state  i n the  region  (e.g.  and  i n North  are  during  is  political America, lack  of  very  the  planning  (Planning) lack of  diversification  s t a p l e s dependence,  inputs  organized  f o r the  by  i n other  innovation, the  planning this  combined  accumulation process  approach does not  with  words t h e  lack  of  "...extensive  s t a t e are  s o c i e t i e s to take place..."  technocratic  maintaining  staples  inputs.  growth or p r o d u c t s  technocratic  action  stability"  incremental  The  for a  secondary i n d u s t r y  of  capitalist  of  the  dependence, combined w i t h t h e  persistence  prerequisite  f o r ) by  economic, s o c i a l ,  "relative  c y c l e of  Because of the  productive  the  However, g r o w t h i n s t a p l e s p r o d u c t i o n  development of  -Contradiction  the  where s i d e - e f f e c t s o f  d e p e n d e n t on  or production  of  1975:138,139).  Europe). This  incremental  length  relative  type  environment of manufacturing centers Asia,  must be  "...the p u r p o s i v e - r a t i o n a l  s a f e l y ignored  organization"  are  at  2)  39  an  indispensable  i n advanced  (Offe,  work,  1975,  p.  142).  because  i n a s t a p l e s - d e p e n d e n t economy  and  economy t h r o u g h " i n d u s t r i a l i z a t i o n - b y -  40  Theory  invitation," held  outside  foreign  results  i n substantial  the province.  controlled  staples  instrumental-rational degree of  of control  amount the  of state  production  accumulating  Offe about  power  the relevant  units  state"  required  process  closes  producers  [staples]  i sdenied  themselves"  with  thecapitalist  for  b y means  state  variables (Offe  o f "...an  that  ... a i s atypical  1975:143).  comprehensive  (Offe  being  inputs f o r  presupposes  t o the state  the question:  control  productive  mode o f o p e r a t i o n  over  thecapitalist  Planning  decision  "...The  planning of  by t h e  1975:143). "what  a s i f i t were  entitles part  us t o t a l k  of social  reality"? He  gives  the following  answer:  What i s r e a l a b o u t i t [ t h e s t a t e ] i s t h e c o n s t a n t a t t e m p t t o r e c o n c i l e a n d make c o m p a t i b l e t h e s e v a r i o u s functions [related t o accumulation] with i t s internal structure o r mode o f o p e r a t i o n . B u t what i s e q u a l l y r e a l i s t h e f a c t t h a t t h e r e i s n e i t h e r v i s i b l e n o r t o be a n t i c i p a t e d a s t r a t e g y t h a t a c t u a l l y does r e c o n c i l e t h e s e f u n c t i o n s a n d thus achieve a balanced i n t e g r a t i o n o f t h e state and t h e accumulation process, that i s , a r e l i a b l e and workable s t r a t e g y o f " s y s t e m s m a i n t e n a n c e " ( a s many r a d i c a l s believe) ( O f f e 1975:144).  -Application The stages,  theory  of the state  linkages  between  the state  government,  i t s accumulation  still  established.  being  introduced  above,  i n Canada  7  i s i n its  complex  of  and l e g i t i m a t i o n  institutions, functions are  The use o f a blended  c a n be seen  developmental  as an exploration  theory,  as  of insights  7 Leo Panitch, "The r o l e a n d n a t u r e o f t h e C a n a d i a n The Canadian State (Toronto: University o f Toronto 1983) p p . 3-27.  state," Press,  Theory into the functions application  of the theory  change o f f u n c t i o n explore  o f t h e r e s o u r c e dependent s t a t e and t o  mode o f o p e r a t i o n  which t h e s t a t e natural  s t a t e . The p u r p o s e i n t h e  i s t o u n d e r s t a n d b o t h c o n t i n u i t y and  the contradictions  The  of  of the peripheral  41  intervenes  resources,  i n i t s mode o f  (allocative  operation.  a n d p r o d u c t i v e ) by  will.be applied  to the a l l o c a t i o n  and t h e i n t e r v e n t i o n  production  will  resources.  B.C.Hydro i s a p p r o a c h e d a s t h e p u r p o s i v e - r a t i o n a l  (planning, resource  and b u i l d i n g )  into production  secondary  The  be a p p l i e d  by means o f s t a t e -  t o the production  agency which b r i n g s  of energy  the energy  f o r t h e development o f p r i m a r y and  industry.  continuity of state  production  of staples  innovation  (the  will  functions  with  respect  tothe  be e x a m i n e d i n c o n t r a s t t o  development o f secondary  consumer goods m a n u f a c t u r i n g ) .  i n d u s t r y and  In p a r t i c u l a r , the  g o v e r n m e n t ' s a n d B.C.Hydro's r o l e i n t h e p r o d u c t i o n for of  staples  producers w i l l  diversified  Offe's  expectations  state  (derived  from i t s  t o t h e a c c u m u l a t i o n p r o c e s s ) and t h e f o u r  (exclusion,  legitimation)  with the  development.  concept of the c a p i t a l i s t  relationship principles  industrial  be c o n t r a s t e d  o f energy  will  maintenance, dependency, and  be e m p l o y e d t o a n a l y z e t h e i n s t i t u t i o n a l  f o r c e o f B.C.Hydro. I f B.C.Hydro i s t o be a m a j o r  42  Theory i n s t i t u t i o n a l f o r c e w i t h i n the (means) of the must f u l f i l l  s t a t e of p r o d u c t i v e  instrument  well.  the government need t o p l a n  interventions.  t o a major c o n t r a d i c t i o n . Offe,  the  i n t e r v e n t i o n , then Hydro  the accumulation f u n c t i o n s  B.C.Hydro and productive  s t a t e and  However, such p l a n n i n g The  examined with r e f e r e n c e a b i l i t y to p l a n and  i s subject  c o n t r a d i c t i o n , as i d e n t i f i e d  i s between the a b i l i t y t o p l a n and  by the accumulating u n i t s .  their  The  the p l a n n i n g  denied  "unplanned s u r p l u s " w i l l  to the government's and  the p l a n n i n g  denied by the  by  be  B.C.Hydro's staples  producers.  The  dynamic of change i n O f f e ' s  the p e r c e i v e d  and  real threats  theory o r i g i n a t e s from  (competition,  recession,  of development) i n the environment of the s t a t e . such a p e r s p e c t i v e ,  the s u r p l u s and  "power t r a p "  lack  Seen from conditions  l e a d t o the change of i n t e r n a l mode of o p e r a t i o n  of B.C.Hydro  (production  the  planning  t o a l l o c a t i o n planning) and  i n t e n s i f i c a t i o n of s t a p l e s dependence. f o r c e which stems from m a i n t a i n i n g accumulation through p r o d u c t i v e export) w i l l be  re-analyzed  Hydro's i n s t i t u t i o n a l  the f u n c t i o n s  intervention,  of  (production  i n i t s l a r g e r f o r e i g n environment.  What an a p p l i c a t i o n of t h i s t h e o r e t i c a l approach i s the e x t e n s i o n  of the s t a p l e s dependence, d e s p i t e  i n t e r n a l changes and  for  approaches the  reveals  the  s t a t e takes to overcome  43  Theory this  dependence.  The  peripheral  adopt an  'autonomous l o g i c '  repeated  staples  dependency  resource  state  appears  (Eigengesetzlichkeit within  s  to  ) of  i t s structures.  8 W e b e r , Economy and Society, V o l u m e 2, e d . G u e n t h e r R o t h Claus W i t t i c h (Berkeley: University of C a l i f o r n i a Press,  1978), p.1002.  and  State I n t e r v e n t i o n  44  CHAPTER I I I STATE  I N T E R V E N T I O N I N T H E A L L O C A T I O N O F N A T U R A L R E S O U R C E S AND I N T H E P R O D U C T I O N O F H Y D R O E L E C T R I C POWER  Introduction  In  B r i t i s h Columbia s t a p l e s producers need n a t u r a l  resources which are a l l o c a t e d by the s t a t e and energy resources which are e i t h e r s e l f - g e n e r a t e d T h i s chapter w i l l  or s t a t e - p r o d u c e d .  d e s c r i b e and analyze the development of  B . C . H y d r o i n the context of the s t r u c t u r a l c o n d i t i o n s example,  l a c k of economic development,  resource supply expansion)  (for  or need f o r n a t u r a l  d u r i n g the expansionary p e r i o d i n  B r i t i s h Columbia's staples-dependent  economy. I t w i l l  be  argued t h a t s t a t e a c t i v i t y occurs p r i m a r i l y by two modes of i n t e r v e n t i o n : the a l l o c a t i v e and the p r o d u c t i v e mode of i n t e r v e n t i o n . Both are employed t o m a i n t a i n the accumulation process  in its  staples-dependent  o r d e r . The a l l o c a t i v e mode of  i n t e r v e n t i o n i s used t o a l l o c a t e the s t a t e ' s n a t u r a l  resources  to s t a p l e s producers and thereby a staples-dependent  order  maintained. of  is  The p r o d u c t i v e mode of i n t e r v e n t i o n occurs by way  producing the h y d r o e l e c t r i c i n f r a s t r u c t u r e (and g e n e r a t i n g  electricity).  Such p r o d u c t i v e i n t e r v e n t i o n s are preceded by  policy formation.  Allocation  o f Resources  B r i t i s h Columbia has the r i g h t to a l l o c a t e sources, minerals,  its  having j u r i s d i c t i o n over the development of forests,  and f l o w i n g water.  own r e its  Two of the m i n i s t r i e s  State  which  allocate  Ministry  of Forests  Petroleum  The  natural  resources  and t h e M i n i s t r y o f Energy,  forests  by t h e s t a t e .  producers  of British They  rights,  and  t h e economy,  accumulation  acts,  a n d t h e management  way t h e y  areallocated such  Columbia  areallocated  b y way o f l e g i s l a t i v e  The  ership  Columbia's  are the  Mines and  Resources.  virgin  produced  special  British  45  Intervention  imposes  d i dn o t need  t o be  to staples  government  leases,  of theMinistry of Forests. a certain  order  on s o c i e t y  as the staples production, the  process,  t h e energy  structure of the forest  requirements,  a n d t h e own-  industry.  C u r r e n t l y 94 p e r c e n t o f t h e f o r e s t l a n d i n B r i t i s h C o l u m b i a i s owned a n d a d m i n i s t e r e d b y t h e p r o v i n c i a l government. R e t e n t i o n o f p u b l i c ownership o f f o r e s t l a n d b e g a n w i t h t h e L a n d O r d i n a n c e o f 1865. This a l lowed t h e government t o s e l l timber w h i l e retaining ownership o f t h e l a n d . 1  The timber  salient  considerations with  f o r industrial  Forests  A c t o f 1978  defined  mandate  productivity conserve  gave  of the forest  interest  resource;  establish  timber  1 Ministry of Industry  i n theMinistry of  encourage manage,  a vigorous,  processing  of t h e C r o w n  to selling the  theMinistry the clearly  t o do t h e f o l l o w i n g :  world-competitive financial  use a r e contained  which  the forest;  respect  maximum  p r o t e c t , and  e f f i c i e n t and  industry; and a s s e r t t h e  i n i t s Forest.  2  In line  with  and Small Business Development, British ( V i c t o r i a , 1984), p . 47. 2 Province o f B r i t i s h Columbia, M i n i s t r y o f P r o v i n c i a l S e c r e t a r y a n d G o v e r n m e n t S e r v i c e s Organization of the B.C. Public Service ( V i c t o r i a : Q u e e n ' s P r i n t e r , 1982), p . 119.  Columbia  Facts  and Statistics  State this  mandate t h e " p r i v a t e o p e r a t o r s "  replanting licenses.  of thetrees  that  and  t o M i n i s t r y regulations and  t h e number o f p r i v a t e o p e r a t o r s  and managing  t h e B.C. F o r e s t  forest  can time t h ec u t t i n g and  3  Over t h eyears licenses  subject  t h e f o r e s t have d e c l i n e d . Service  companies on t h eb a s i s  longer-term  therefore  harvesting  t o implement  supported "...that  rights  sustained  from  allocative  f o r e s t lands  holding  Marchak  found  arguments by l a r g e larger timber  would allow yield  holdings  them t o p l a n and  principles."  some f o r e s t z o n e s w e r e h e a v i l y o v e r c u t , yields  46  Intervention  others  were n o t s u s t a i n e d .  4  Instead,  undercut,  and  The u s e o f t h e  a u t h o r i t y o f t h e s t a t e was i n a d e q u a t e t o p r e v e n t  such p r a c t i c e s .  Over t h eyears  a smaller  c o m p a n i e s , many f r o m o u t s i d e right choice  t o c u tB r i t i s h  number o f f o r e s t t h eprovince,  have o b t a i n e d t h e  Columbia's t r e e s and have c o n t r o l l e d t h e  o f t h e wood e n d p r o d u c t .  allowable  processing  c u t 71.2 p e r c e n t  B y 1975, o f t h e c o m m i t t e d  o f t h ep r o v i n c i a l  17 l a r g e s t c o m p a n i e s . T h e y h a d g a i n e d  total  went t o t h e  substantial control  over  3 F o r management p u r p o s e s , t h e f o r e s t r e s o u r c e , i s d i v i d e d i n t o s u s t a i n e d y i e l d u n i t s known a s t i m b e r s u p p l y a r e a s (TSAs) a n d t r e e farm l i c e n s e s (TFLs). Timber h a r v e s t i n g i nthese u n i t s i s delegated t o p r i v a t e operators under a v a r i e t y o f l i c e n s i n g agreements. F o r e s t r y management r e s p o n s i b i l i t i e s i n TSAs a r e shared between t h eM i n i s t r y o f F o r e s t s and p r i v a t e o p e r a t o r s , w h i l e i n TFLs they a r et h e r e s p o n s i b i l i t y o f p r i v a t e o p e r a t o r s . M i n i s t r y o f F i n a n c e , Financial and Economic Review ( V i c t o r i a : Q u e e n ' s P r i n t e r , A u g u s t 1 9 8 5 ) , p . 73. 4 P a t r i c i a M a r c h a k Green Gold ( V a n c o u v e r : UBC P r e s s , 1 9 8 3 ) , p .  37.  State r i g h t s to f o r e s t  land.  overwhelming percentage 47.6  5  47  These l a r g e companies had an of the manufacturing c a p a c i t y :  per c e n t , p u l p 99.6,  71.1.  Intervention  paper 94.0,  By the end of 1981,  lumber  and Plywood and Veneer  only two of the p u l p and paper  companies o p e r a t i n g i n B r i t i s h Columbia were owned by residents, (assuming  one by the B . C . Resource Investment C o r p o r a t i o n its  shareholders  resided in B . C . ) ,  the P r e n t i c e and Bentley f a m i l i e s . 1980 B . C . had 24 p u l p m i l l s ) elsewhere.  and the other by  Nearly a l l twenty-two  were owned by " p r i v a t e  Marchak found the f o l l o w i n g ownership  (in  operators"  structure:  MacMillan B l o e d e l and Northwood are owned by Brascan-Noranda of T o r o n t o . Weyerhaeuser, S c o t t , Weldwood, and West F r a s e r have American p a r e n t s . Crown Z e l l e r b a c h s o l d i t s B . C . h o l d i n g s t o a New Zealand f i r m i n 1982. T a h s i s i s co-owned by Canadian P a c i f i c Investments of Toronto and the East A s i a t i c Company of Denmark. B . C . F o r e s t Products i s co-owned by the A l b e r t a Government's Energy c o r p o r a t i o n . Mead and S c o t t of the U n i t e d S t a t e s . Eurocan i s co-owned by E n z o - G u t z e i t of F i n l a n d and West F r a s e r of the United S t a t e s . Quesnel R i v e r Pulp i s co-owned by West F r a s e r and Daishowa-Marubeni of Japan. Cariboo Pulp and Paper i s co-owned by Weldwood and DaishowaMarubeni. Crestbrook F o r e s t I n d u s t r i e s i s co-owned by M i t s u b i s h i and Honshu of Japan. The major t i m b e r h o l d e r s are the p u l p and paper c o m p a n i e s . 6  The c o l o n i a l e x p l o i t a t i o n  of f o r e s t s ,  and  i n d u s t r i a l i z a t i o n by f o r e i g n s t a p l e s producers has a long t r a d i t i o n w i t h i n the staples-dependent s t a t e . the s o l i c i t i n g  of f o r e i g n investment  of f i n a n c i a l a s s i s t a n c e f o r t r a v e l while  i n c l u d e s the ($2000 g r a n t s ,  i n B . C . ) to those f i r m s and a s s o c i a t i o n s  5 Marchak 1983, 6 Marchak 1983,  p . 84. p p . 82,83.  In the 1980s availability and h e l p  whose  State Intervention "products  48  o r s e r v i c e s c o n t a i n s i g n i f i c a n t B r i t i s h Columbia  content."  The M i n i s t r y o f I n d u s t r y and Small  Business  Development extends s p e c i a l a s s i s t a n c e t o t h o s e who want t o s e l l t h e i r f i r m s t o a company which may want t o v e r t i c a l l y integrate i t s operation i n B r i t i s h Columbia.  7  The same  M i n i s t r y i s s u e s an annual update on t h e p u b l i c a t i o n , Columbia  Facts  (1956,  and Statistics  i n d i c a t e s t h a t wood p r o d u c t s  1964,  1983)  British  which  are l a r g e l y shipped t o the United  S t a t e s , t h e U n i t e d Kingdom, Europe and Japan ( i n 1956 71% U.S., 17% U.K.;  i n 1964 70% U.S., 12% U.K; and i n 1983 57%  U.S., 16.6% EEC, Japan 14%). f o r processing elsewhere.  The s t a p l e s p r o d u c t s  a r e shipped  The f a s t consumption o f t i m b e r by  f o r e s t companies r e q u i r e s t h e w o r k e r s , h i r e d t o p r o c e s s t h e t i m b e r , t o a d j u s t t o t h e changes caused by t h e p r o c e s s i n g o f a sequence o f t r e e s whose q u a l i t y i s d e c l i n i n g . The p r o v i n c i a l s t a t e not only a l l o c a t e s f o r e s t resources, but through i t s strategy of continuing " i n d u s t r i a l i z a t i o n - b y - i n v i t a t i o n "  helps  t o impose a f o r e i g n dependency o r d e r on t h e economy.  7 The Program i s c a l l e d "Incoming Buyers" and i s d e s c r i b e d a s foilows: 1. Designed t o a s s i s t f i r m s i n a t t r a c t i n g p o t e n t i a l buyers from o u t s i d e t h e p r o v i n c e . O f t e n b r i n g i n g p o t e n t i a l p u r c h a s e r s t o view a p l a n t i s a v a l u a b l e s a l e s t o o l f o r the f i r m concerned. 2. F i n a n c i a l support o f f e r e d c o n s i s t s o f r e t u r n economy e x c u r s i o n a i r f a r e f o r t h e p o t e n t i a l buyer, t o a maximum of  $2,000.  3 . The m i n i s t r y r e t a i n s t h e r i g h t t o encourage and a s s i s t t h e p r o s p e c t i v e p u r c h a s e r i n v i s i t i n g a s many l o c a l companies a s i s deemed a p p r o p r i a t e . M i n i s t r y o f I n d u s t r y and Small B u s i n e s s Development, "Incoming B u y e r s , " Program Directory, V o l . 10 ( V i c t o r i a : P r o v i n c e o f B.C., A p r i l 1 9 8 1 ) , p. 1 0 .  State The  Intervention  B r i t i s h Columbia government i n d i c a t e s  "...stewardship  49  that  its  r o l e i n c l u d e s p r o v i d i n g a healthy c l i m a t e  growth i n the mining s e c t o r while m a i n t a i n i n g s t r i c t on when, where and how such development p o l i t i c a l l y directed decisions  bureaucracy i n the m i n e r a l a l l o c a t i o n p r o c e s s . allocative  decisions  Resources D i v i s i o n .  This D i v i s i o n supervises  and  leases  the  Mineral  Titles  Since the s t a t e depends on  9  accumulation to m a i n t a i n i t s  collect,  The r o u t i n e  l o c a t i o n and work on m i n e r a l c l a i m s  (OBCPS 1 9 8 2 : 8 2 ) .  Revenue Branch f o l l o w s  Many  8  the  about m i n e r a l s are made i n the  Branch which records the  controls  is conducted."  are made to d i r e c t  for  varied functions,  established  legal  the M i n e r a l  norms to  assess,  and a u d i t m i n e r a l revenue as p r e s c r i b e d by the  f o l l o w i n g s t a t u t e s : the Mineral  Resource  Tax Act, the  Mineral  Land Tax Act, the Coal Act, and the Petrol euro and Natural ActlPart  The  Gas  XI) (OBCPS 1982:84).  M i n i s t r y of Mines i s p r i m a r i l y p r e o c c u p i e d w i t h  the  keeping of o r d e r l y r e g i s t e r e d c l a i m s , much as the Land R e g i s t r y O f f i c e does f o r p r i v a t e p r o p e r t y . Forests  The M i n i s t r y of  extends timber l i c e n s e s and s c a l e s the s t a n d s .  l a r g e l y p r e o c c u p i e d with the smooth f u n c t i o n i n g of exploitation,  not n e c e s s a r i l y  is  forest  i n the p u b l i c i n t e r e s t .  more l i k e l y t o serve p r i v a t e i n t e r e s t s .  It  This  The c o n t r a d i c t i o n  is is  8 The P r o v i n c e of B r i t i s h Columbia, Organization of the B.C. Public Service ( V i c t o r i a : Queen's P r i n t e r f o r B r i t i s h Columbia, 1982), p . 81. 9 OBCPS stands f o r the manual Organization of the B.C. Public Service, see f o o t n o t e above.  State that  private  forests  and mineral  Ministries natural  obtains  and tax  natural  resource million),  addition, resource  taxed  3  revenues  staples  t h ef o r e s t  industry,  concentration  this  integrated  pulp m i l l  industry The  resources  i nBritish  of the  dual  and therefore  role, t o intervene  has favored  support of large,  Many o f t h e m a r e v e r t i c a l l y  c o m p a n i e s w h i c h own t h e i r  Columbia,  i n the  resources.  paper-  elsewhere and u n l i k e l y t o develop  power o f t h e s t a t e  recurring  administrations  o f ownership by s t a t e  industries)  revenues  million); i n  a l l o c a t i o n process  corporations.  making  mineral  t o a l l o c a t e t h enatural  externally-owned (e.g.  (131.4  1984/85  year  form a s u b s t a n t i a l p o r t i o n o f  o f t h enatural  i norder  government  Columbia p r o v i n c i a l state i s  by t h enature o f t h i s  economy  for  0  summary, t h e B r i t i s h  required,  i nreturn  Columbia's  million),  employment i np r i v a t e  budget. -  units  I n thef i s c a l  ($726.5  and f o r e s t  interests.  o f i t s revenue d i r e c t l y o r  process.  revenues  owner a n d s u p p l i e r  the  British  extraction corporations  provincial  In  In  accumulating  benefits.  from t h i s  to public  handed over t h ee x t r a c t i o n o f  a substantial portion  indirectly  the  have t r a d i t i o n a l l y  50  a r et o d e v e l o p t h ep r o v i n c i a l  economy a c c o r d i n g  resources t o private  royalties  ($55.7  interests i nturn  Intervention  butcontinue  staples  secondary production.  has n o t been used t o a v o i d t h e  problems o f t h estaples-dependent  economy.  10 T h e P r o v i n c e o f B r i t i s h C o l u m b i a Financial and Review F o r t y - f i f t h E d i t i o n , August 1985, p. 11.  Economic  State  Production -Rural  of Electricity  Electrification  Early their  i n this  electricity  settlements nearby  (First  Policy  century,  many  from m u n i c i p a l  23  supplied electric  reductions intention geographic Columbia,  t o improve  and subsequent t o a Commission  Afterward, rural  t h e government  service.  of the e l e c t r i c a l  o w n e r s h i p was s t a t e d  formulated  some  1 2  i n this  i n her  industry i n British  i n the Progress  Committee.  indicated i t s  Mary T a y l o r ,  i n d i c a t e s t h a t no p r e f e r e n c e s  Electrification  agencies  i n 1 9 3 8 , t h e r a t e s were r e a p p r a i s e d a n d  followed.  study  had  a few c u s t o m e r s a n d a s a r e s u l t  rates varied widely,  appointed  by t h e  supplying  Many o f t h e s e  high..."  remote  w h i c h was g e n e r a t e d  t o 4 1 , a n d by 1 9 4 4 t o 6 5 . serving only  obtained  a n d some  By 1 9 3 0 t h i s  were s m a l l ,  being  utilities  power.  agencies  The  communities  a n d m u n i c i p a l i t i e s grew. " I n 1 9 0 9 ,  t o communities  r a t e s were  smaller  The number o f a g e n c i e s  1 1  electricity  increased  I n t e r v e n t i o n 1945)  would use e l e c t r i c i t y  industry.  51  Intervention  f o r government  Report o f the Rural  However, t h e s e  o b j e c t i v e s were  report:  T h e r e a r e i n Canada, t h e U n i t e d S t a t e s , and o t h e r c o u n t r i e s examples o f s e l f - s u s t a i n i n g electric u t i l i t i e s , d i s t i n g u i s h e d by p r o g r e s s i v e e x p a n s i o n o f f a c i l i t i e s , i n c r e a s e d p e r customer use o f e l e c t r i c i t y and reduced average c o s t t o t h e p u b l i c . 11 Mary D. T a y l o r , " D e v e l o p m e n t o f t h e E l e c t r i c i t y I n d u s t r y i n B r i t i s h C o l u m b i a , " M.A. T h e s i s ( V a n c o u v e r : UBC G e o g r a p h y A p r i l 1965),  12  p. 1 7 4 .  Taylor  1 9 6 5 , p.  168.  State  52  Intervention  ...the success o f a u t i l i t y does n o t depend upon a n y inherent q u a l i t i e s o f p u b l i c o r p r i v a t e c o n t r o l . The s u c c e s s o f a u t i l i t y depends upon t h e e f f i c i e n c y o f the a d m i n i s t r a t i o n and t h e zeal o f competent management,... . . . A l l r u r a l e l e c t r i f i c a t i o n i s i n some d e g r e e a n expansion o f the established central s t a t i o n i n d u s t r y [ p r o f i t a b l e e f f i c i e n c y ] a n d i s made p o s s i b l e only by t h e i n t e r n a l subsidy element operating within the u t i l i t y enterprise, s u p p l e m e n t e d i n some c a s e s b y g o v e r n m e n t . 1 3  From t h i s 1)  identified: increased  zeal  2)  accomplished understood within  a n d 3)  ofelectricity.  industrial  on p u b l i c  i n firms  t h e Crown c o r p o r a t e  customers.  or private control  over  The e f f i c i e n c y o f  a n d c o m p e t e n t management  i n an administrative  rural  the per customer  for public  t h e government decided  t ooccur  a need f o r  One way t o i n c r e a s e  not i n d i c a t i n g a preference  administration  cost o f  f o r efficiency of administration  was t o a t t r a c t l a r g e  rural production  average  t ooperate the unprofitable  process.  ofelectricity  administration, the  a striving  can be  expansion,  customer use, a n dreduced  utilities  electrification  Although  major p o l i c y o b j e c t i v e s  o f c o m p e t e n t management;  established  use  three  a combination o f progressive  per capita  electricity; and  report,  i s not r e a d i l y  bureaucracy  but i s  managed a s i n t h e p r i v a t e  sector,  form.  13 T h e B.C. R u r a l E l e c t r i f i c a t i o n ( V i c t o r i a : K i n g ' s P r i n t e r , 1944), 1965, p p . 170, 89.  C o m m i t t e e , Progress Report p p . 19,20, c i t e d b y T a y l o r  53  State Intervention  -The B . C . Power Commission The B.C. utility,  Power Commission, a p r o v i n c i a l Crown c o r p o r a t e  came i n t o e x i s t e n c e on A p r i l 17,  the " E l e c t r i c Power A c t . " * 1-  improving  T h i s was  the a v a i l a b i l i t y and  1945  as a r e s u l t of  an Act t o p r o v i d e f o r  supply of e l e c t r i c a l power.  It  a l s o empowered the government t o e x p r o p r i a t e any power s i t e , or power p l a n t needed i n order t o generate  and  supply power.  T h i s A c t brought about the f i r s t major p r o d u c t i v e i n t e r v e n t i o n by the p r o v i n c i a l s t a t e i n the g e n e r a t i o n and d i s t r i b u t i o n of electricity.  The main purpose of the a c t was  t o make  e l e c t r i c i t y a v a i l a b l e a t low p r i c e s i n most r e g i o n s of the p r o v i n c e where such s e r v i c e was  not p r o f i t a b l e f o r the p r i v a t e  sector.  The  government of the day a p p r o p r i a t e d the p r o p e r t i e s of  many small u t i l i t i e s into r u r a l areas.  -- they served as bases t o expand s e r v i c e  A s a r e s u l t , the Power Commission's  c a p a c i t y i n c r e a s e d from 14,700 t o 324,735 K i l o w a t t s between March 1948  and March 31, 1958.  range expanded and by 1956 of  the p r o v i n c e .  At the same time i t s s e r v i c e  i t served most of the r u r a l  areas  However, the l u c r a t i v e urban markets of the  more populated areas, namely the lower p a r t of Vancouver I s l a n d , G r e a t e r Vancouver, the west and southwest Kootenay areas, and P r i n c e Rupert were shared by the l a r g e r B.C.  utilities.  E l e c t r i c , the l a r g e s t , served the m e t r o p o l i t a n areas of  14 B.C. Government, " E l e c t r i c Power: An Act to Provide f o r Improving the A v a i l a b i l i t y and Supply of E l e c t r i c a l Power" [Assented to 28th March, 1945.], B.C. Statutes 1945, Chapter 27, p. 45.  State  the  southwestern mainland  East the  Kootenay East  the  acquisition for  Power companies  Kootenays.  utilities,  and  While  1 5  B.C.  but  of  an  industrialization In 1951  the  South Okanagan  sharing  the  market with  by  to the  means o f  B.C.  this  "New  link  Industry by  and  these  not  only  use.  Power  the  Whatshan  River,  between cheap e l e c t r i c i t y  f o r e s t resources  already  claiming  and  expand i t s  industrial  d e v e l o p m e n t , on link  to  facilities,  P o w e r C o m m i s s i o n ' s m a g a z i n e Progress,  article,  boosts  the  generating  automatic  West  served  reference  C o m m i s s i o n ' s W h a t s h a n dam  54  Island; the  also for increased  instance, with  assumptions  Vancouver  Power Commission c o n t i n u e d  b u i l d i n g of  residential,  For  and  Intervention  promised  were  the  promoted.  author  Arrow  and  of  the  Lakes,"  that:  ... a $ 7 5 , 0 0 0 , 0 0 0 i n d u s t r y u s i n g W h a t s h a n p o w e r a n d the f o r e s t resources of the Arrow Lakes, sharply p o i n t e d [ s i c ] the c o n t e n t i o n t h a t power, wherever i t i s d e v e l o p e d a n d made a v a i l a b l e a t r e a s o n a b l e cost, w o u l d be u t i l i z e d by i n d u s t r y f o r t h e a d v a n t a g e o f t h e c o u n t r y as a w h o l e . 1 6  Correspondingly, for the  pulp  mills,  costs  demand by  mines,  for plant the  the  pulp  and  Commission other  installation  and  paper  -  bulk and  began s e t t i n g users  while  operation.  i n d u s t r y on  Vancouver  low  rates  absorbing The  high  Island  gave  15 N e i l S w a i n s o n , Conflict over the Columbia (Montreal: McGi11-Queen's U n i v e r s i t y P r e s s , 1979), p. 33. 16 B.C. P o w e r C o m m i s s i o n , Progress, "New Industry Already P r o m i s e d A r r o w L a k e s , " J u l y 1951, p. 10. O t h e r r e f e r e n c e s : "Power Means P r o g r e s s " - d o m e s t i c f l o a t (Aug. 1952); E l k F a l l s Co. L t d news p r i n t m i l l , A l b e r n i P l y w o o d , (Aug. 1952:3).  State  r i s e to f u r t h e r h y d r o e l e c t r i c developments. " 1  nevertheless,  55  Intervention It  7  was,  soon n o t i c e d t h a t w h i l e the c o s t s to i n d u s t r i a l  customers dropped, the o p e r a t i n g c o s t s of the Power Commission climbed.  1 8  electricity  In f a c t many m i l l s gave up g e n e r a t i n g t h e i r own because i t was no longer p r o f i t a b l e f o r them to  produce t h e i r own e l e c t r i c a l  input.  Commission i n c r e a s i n g l y e s t a b l i s h e d  Furthermore, the Power the l i n k a g e s  between  p r o d u c t i o n of s t a p l e s from timber and the ready a v a i l a b i l i t y of  power to continue the process  of such s t a p l e s p r o d u c t i o n .  By 1956 the Commission developed r u r a l and  electrification  i n d u s t r i a l loads on Vancouver I s l a n d and promoted  expansion i n t o the c e n t r a l i n t e r i o r of the p r o v i n c e . C.W. Nash, the d i r e c t o r of  load development wrote i n the  remarks of the promotional study Pulp and Paper in Central  British  Columbia:  opening  Opportunities  "The C e n t r a l I n t e r i o r of  British  Columbia c o n t a i n s the elements of t i m b e r , power, water,  and  t r a n s p o r t a t i o n to support the p r o f i t a b l e o p e r a t i o n of the p u l p and  paper i n d u s t r y . "  The wastes of 450 small m i l l s  operating  around P r i n c e George and the 160 small m i l l s near Quesnel would support a 300 ton unbleached k r a f t p u l p m i l l . to assure p r o s p e c t i v e for  investors  the a d d i t i o n a l timber  source  p u l p p r o d u c t i o n , the promotional study i n d i c a t e d the  general o p i n i o n " . . . t h a t  the P r o v i n c i a l Government i s  to grant a l i c e n s e i n t h i s The  In order  area to p u l p and paper  anxious  interests."  r e p o r t went on to p r e d i c t , as loads would outgrow thermal  17 B . C . Power Commission, Annual Report, 18 Progress, August 1957, pp. 7 , 8 .  1956,  p.  63.  State p l a n t s and  Intervention  enormous w a t e r power r e s o u r c e s ,  g r o w i n g economy, w o u l d  i n c r e a s e the  not  be  first  The  study  long  before  then  electricity  the  itemized  the  56  combined w i t h  a  demand f o r power, i t w o u l d  hydro p r o j e c t i s advantages of  constructed.  state-generated  f o r p r i v a t e companies:  The c o n s t r u c t i o n and m a i n t e n a n c e o f h y d r o p r o j e c t s by t h e C o m m i s s i o n i s t o t h e a d v a n t a g e o f p r i v a t e enterprise. When t h i s i s d o n e , t h e p r i v a t e c o m p a n y w i l l r e a l i z e , through the Commission, the advantage of low i n t e r e s t r a t e s , low d e p r e c i a t i o n r a t e s , and n o n - l i a b i l i t y f o r c o r p o r a t i o n income t a x . A l s o t h e f a c t t h a t t h e company's i n v e s t m e n t i s h e l d t o a minimum i s an added a d v a n t a g e . . . . i t i s s u g g e s t e d t h a t p o t e n t i a l power i s a t r e m e n d o u s a s s e t t h a t c a n be d e v e l o p e d f o r i n d u s t r y i n t o low c o s t e l e c t r i c a l e n e r g y . T h i s c a n be done and w i l l be done. When? D e p e n d s o n i n d u s t r y . 1 9  Promoting the electricity  absorption  by  the  i n d u s t r y to the coincided with  provincial  northern the  and  state i n order  of E l e c t r i c i t y  -Recession  and  of  to a t t r a c t  central British  downturn i n t h e  Production  During  of u n p r o f i t a b l e generation  large  Columbia  economy  (Second I n t e r v e n t i o n  1962)  Infrastructure  the late  Columbia experienced  1950s t h e f o r e s t a recession.  since  A t t h e same t i m e R o b e r t B o n n e r , t h e M i n i s t e r  19 B r i t i s h  Opportunities Nash,  % i n 1958  I indicates the  rate  responsible  8.58  As T a b l e  in British  unemployment 1946.  reached  industry  w h i c h was  f o r the Department of I n d u s t r i a l  C o l u m b i a Power  a n d H.L.  in Central Briggs,  C o m m i s s i o n Pulp  British  pp.  Columbia,  1,14,15,16,17.  and  the  highest  Development,  paper  June 1956, by  C.W.  State  Intervention  57  p u b l i s h e d t h a t M i n e r a l p r o d u c t i o n i n 1959 had, a t the same time,  sunk below the l e v e l s of ten years  earlier.  2 0  Such p e r i o d s of economic i n s t a b i l i t y are times when the s t a t e o r g a n i z e d framework of p r o d u c t i o n and accumulation i n the s t a p l e s producing r e g i o n becomes i n s u f f i c i e n t accumulation. often  to m a i n t a i n  T h e r e f o r e , a d d i t i o n a l input ( i n B . C . i t  i n form of i n f r a s t r u c t u r e )  is  i n t o the s t a p l e s economy  is  required. TABLE I Comparison of Average Annual Unemployment Year  As  % of Labour Force B. C .  Canada  %  %  1957 1958 1959 1960 1961 1962 1963  5.04 8.58 6.47 8.50 8.52 6.61 6.39  4.61 7.03 5.95 6.95 7.15 5.90 5.53  Average  7.16  6.16  Source: S t a t i s t i c a l  A n a l y s i s Department Commercial S e r v i c e s  D i v i s i o n , B . C . H y d r o , Economic Goals for B r i t i s h Columbia a P a r a l l e l Study to the Economic Council of Canada's Economic Goals For Canada to 1970, 6 J u l y , 1965, p . 6.  When the s t a t e i s c o n f r o n t e d w i t h such u n c e r t a i n t i e s accumulation process substantial  and p l a n s to s o l v e them through  productive intervention,  new p o l i c i e s  20 Hon. R.W. Bonner ( M i n i s t e r ) , T . L . Sturgess Minister),  i n the  1959 Summary  of Business  Activity  need to be  (Deputy in  British  Columbia ( V i c t o r i a : Department of I n d u s t r i a l Development, T r a d e , Commerce; J a n . 1960), S t a t i s t i c a l Supplement, p . X I I .  State developed. Board  Shrum, t h e  (1961),  Columbia,  together  submitted  -Dual R i v e r  chairman of with  the  (1961),  ( t h e B.C.  Vancouver pointed  Energy  British  such a p o l i c y .  to the  i n the  to  was  serve to  the  build  northern  2 1  part  already  resource  the  and  solution to  Power C o m m i s s i o n had  capacity Island)  on the Columbia  argued t h a t the  development, p a r t i c u l a r l y  industrial  Columbia  Policy  Projects  province  British  government of  G o r d o n S h r u m , i n h i s Report Power  the  58  Intervention  Peace  stagnant  of  the  developed  the  industry on  Peace R i v e r  dam.  He  following benefits:  The P e a c e R i v e r p r o j e c t i s i n a r e g i o n o f l o w e c o n o m i c d e v e l o p m e n t . ... T h e r e s e r v o i r a r e a w i l l a c t a sa n i n l a n d waterway which w i l l open u p the T r e n c h a r e a f o r t i m b e r r e m o v a l , [and] mineral e x p l o r a t i o n ... i t i s f e l t b y t h e B o a r d t h a t a n e a r l y s t a r t one i t h e r p r o j e c t [the Columbia o r Peace] w i l l p r o v i d e t h e P r o v i n c e w i t h a much-needed economic s t i m u l u s and c o n t r i b u t e t o c u r b i n g unemployment. 2 2  The  perception  of  the  intervention  to build  construction  employment and  Columbia  resource  extra  economy.  p r o b l e m was  one  of  infrastructure, added growth  needed  provide  i n the  T o r e s p o n d b y way  of  British production  21 M a r c h a k c i t e s P r e m i e r W.A.C. B e n n e t t ' s a i m s i n " o p e n i n g t h e North": " I f there i s anything t h a t i s of b a s i c importance to the f u r t h e r development of B r i t i s h Columbia.... i t i s the d e v e l o p m e n t o f t h e r i c h r e s o u r c e s o f t h e n o r t h e r n and c e n t r a l r e g i o n s " ( B u d g e t S p e e c h , 17, 1954), Green Gold, p . 39. 22 G o r d o n M. S h r u m , Report on the Columbia and Peace Power Projects, ( V i c t o r i a : B r i t i s h C o l u m b i a E n e r g y B o a r d , J u l y 31,  1961), p . 28.  State  intervention, i n extending and  the the  productive).  physical  input  p r o v i n c i a l state increased resource  I t needed t o p r o v i d e  a l l o c a t i v e way.  To p r o v i d e  operating  the  Electric  skills  of  by t h i s  electricity  the  the  substantially extra  i n t e r v e n t i o n i n an  l a r g e s c a l e planning and  state apparatus.  The p r o v i n c i a l  a c t i o n t a k e n on a n e x t e n d e d  and  (allocative  p r o v i n c i a l government i n t e g r a t e d t h e B.C.  Company i n t o t h e  s t a t e has  i t s involvement  economy i n b o t h modes  i n a d d i t i o n t o the  59  Intervention  r o l e as producer  developer o f a region.  -B.C.Hydro The  British  Columbia  gave unanimous a p p r o v a l The  Act  provided  Company by t h e  f o r the  Province  l e g i s l a t u r e met o n A u g u s t 1, a n d  t o the  a c q u i s i t i o n o f the of British  million  Electric.  ( A u g u s t 5,  ( W o r l e y 1971:235).  1961) w r o t e o p t i m i s t i c a l l y :  whole e l e c t r i c  works,  government has  done more t h a n r e v e r s e  the  lock stock  Wenner-Gren f r a n c h i s e . "  and  as the the  An i s s u e o f 100  p a r i t y bonds a t 5% were b o u g h t f o r $38 and  newspapers responded f a v o r a b l y  2 3  Electric  Shrum became  2  b o a r d o f B.C.  B.C.  Columbia, as w e l l  P e a c e Power Power D e v e l o p m e n t Company. "* chairman o f the  1961.  Power D e v e l o p m e n t A c t ,  "by  taking  the T h e Sun over  b a r r e l , Premier  the  Bennett's  i t s e a r l i e r mistake i n  ( W o r l e y 1971:235).  The  23 B.C. Laws, s t a t u t e s , e t c . An a c t t o p r o v i d e f o r t h e r e o r g a n i z a t i o n o f o f t h e B r i t i s h C o l u m b i a E l e c t r i c Company L i m i t e d and t h e d e v e l o p m e n t o f power r e s o u r c e s . Statutes of B.C. 1961, 2nd s e s s i o n , c h a p t e r ' 4 . An a c t t o amend t h e Power D e v e l o p m e n t A c t , 1961. Statutes of B.C. 1962, c h a p t e r 50. 24 R o n a l d W o r l e y , The Wonderful World of JV.A.tT. Bennett ( T o r o n t o : M c C l e l l a n d and S t e w a r t L t d . , 1971), p . 233. s  State government  had reserved mineral  Swedish developer as  and f o r e s t r y  Wenner-Gren  Hope" p l u s  partial  "survey with  t h e "Watershed o f t h e K i t c h e k a  on making timber  surveys,  These  railway  o f hydro development."  Development  for the  2 5  defined above  River,"  rights  andt o  o f development  Wenner-Gren's  Company p r o d u c e d a r e p o r t w h i c h  f o r power  as B r i t i s h  Columbia and t h e P a c i f i c  Northwest,  y e t noted  a possible  export d i f f i c u l t y ,  Bonneville  preference  given  (U.S. f e d e r a l  B.C.Electric Development  takeover,  t o U.S. p u b l i c  u t i l i t y ) .  2  6  namely, t h e  a g e n c i e s by  At t h e time o f t h e  t h e shares o f t h e Peace  Company w e r e  Peace  identified  outlet  transmission  and a  were  surveys,  t h ewater sources o f t h e proposed area  theobject  Power  rights  and t r i b u t a r i e s  watershed of the Parsnip River.  conditional  60  ( i n November 1956)  t h e "watershed o f t h e Peace R i v e r  Hudson  the  Axel  Intervention  Power  bought by t h e government  of British  Columbia.  Although development, take-over fraction takeover, for  British  C o l u m b i a n s may s u p p o r t  substantial  opposition  o f B.C. E l e c t r i c )  when c o n t r o v e r s y  t h e B.C. E l e c t r i c  t o the intervention (the  by t h e government  o f t h e b u s i n e s s community.  economic  came f r o m a  A t t h e time of t h e  surrounded the fairness  shares,  Howard  T. M i t c h e l l ,  o f payment newly  25 " T e x t o f W e n n e r G r e n M e m o r a n d u m o f I n t e n t " Western Business and Industry V o l . 3 1 , March 1957, pp. 71,72. 26 P e a c e R i v e r D e v e l o p m e n t C o m p a n y Power Capabilities and Operating Aspects of the Peace River Project and a Pacific International Power Pool ( V a n c o u v e r , M a y 1 9 6 0 ) p p . i , 2 5 , 2 7 .  State elected  Intervention  61  n a t i o n a l v i c e - p r e s i d e n t of the Canadian Chamber of  Commerce, t o l d the Chamber [on September 21,  1961]:  'You see a s t i l l - d a z e d B r i t i s h Columbian p u b l i c l y on view t r y i n g to c o l l e c t h i s thoughts a f t e r d i s c o v e r i n g t h a t h i s beloved f r e e - e n t e r p r i s e p r o v i n c e , without even a vote to f a v o r such a c o u r s e , has a r r i v e d a t the p o s i t i o n of being the most h i g h l y - s o c i a l i z e d s o c i e t y i n Canada, c l e a r l y w e l l i n the l e a d of s o c i a l i s t i c a l l y b a c k s l i d Saskatchewan i n t h i s r e s p e c t . ' H e t i c k e d o f f the t h i n g s t h a t d i s t u r b e d him: the government was the b i g g e s t employer, ran i t s own r a i l w a y , a g i a n t power system, a t r a n s i t system, bought and s o l d n a t u r a l gas, c o n t r o l l e d the o p e r a t i n g p o l i c i e s of f o r e s t r y and mining companies to a c r u c i a l degree, and c o u l d punish and reward by patronage on a s c a l e p r e v i o u s l y unknown i n Canada. 'And remember,' he s a i d , ' a l l t h i s has happened i n a decade i n the name of f r e e enterprise.'"27  M i t c h e l l d i d not see t h a t the  "free-enterprise"  c o r p o r a t i o n s themselves needed an a l l o c a t i o n process to off  stave  the c h a o t i c scramble f o r resources which would have  occurred.  Furthermore, he f a i l e d to mention the  generous  a l l o c a t i o n of resources which were extended to the p r i v a t e sector,  as w e l l as the u n d e r w r i t i n g of a s u b s t a n t i a l p o r t i o n  of the g e n e r a t i n g c o s t f o r e l e c t r i c i t y which had been to i n d u s t r y .  extended  M i t c h e l l ' s p e r s p e c t i v e on the takeover i s  c o n t r a s t to the government's.  in  The government p e r c e i v e d the  need f o r i n c r e a s e d p r o d u c t i v e i n t e r v e n t i o n as a response  to  the u n c e r t a i n a n t i c i p a t e d dangers of economic downturn i n the s t a p l e s economy and l a c k of expansion of t h i s economy i n  27 Paddy Sherman, Bennett L i m i t e d , 1966), p . 255.  (Toronto: M c C l e l l a n d and Stewart  State Intervention  northern B r i t i s h  Columbia  and  62  wanted t o a v o i d f u t u r e e c o n o m i c  stagnation.  In the t r a n s i t i o n hydroelectric British  During  infrastructural mineral  was  approach  approach.  private  t o government  development, the nature of t h i s  Columbia  oriented  from  changed from  an  to a particular the expansion  investor-owned  hydroelectric  the expansion  and  s t a t e was  subject to certain  a major i n s t i t u t i o n a l overall  accumulation  force while process  t h a t B.C.Hydro 1) was private  i n d u s t r y and  fulfilled  technological  I will  argue  from d i r e c t i n g  industrial  production,  capital,  s t a t e w h i c h d e p e n d s on  4 ) has  legitimized  3)  2)  showing  the c o n t i n u a t i o n  images o f monumental  which suggest  has  the  s t a t e by a p p e a l i n g t o d e s i r e s  achievements  from  s t a t e ' s mandate t o c r e a t e  between l a b o u r and  p r o c e s s , and  industrialization.  Columbia.  the  profit  the p r o v i n c i a l  autonomy and  became  extracting  staples-dependent  regional  e x c l u s i o n s , but  from  t h e power o f t h e  accumulation  staples-dependent  intervening to maintain  in British  excluded  exchange r e l a t i o n s h i p s maintained  the  Force  B.C.Hydro a Crown c o r p o r a t i o n o f a capitalist  to  i n the p r o v i n c e .  B.C.Hydro's I n s t i t u t i o n a l  of the  of pulp  p r o d u c t i o n , B.C.Hydro c o n t r i b u t e d s u b s t a n t i a l l y  economic a c t i v i t y  has  market-  government p l a n n i n g  phase o f  d e v e l o p m e n t and  development i n  impending  of  State  Intervention  63  B . C . H y d r o i n r e l a t i o n to the s t a p l e s i n d u s t r y i s a Crown c o r p o r a t i o n and not a p r o f i t - s e e k i n g  private corporation.  o t h e r words, B . C . Hydro as an agency of the s t a t e i s expected  to make p r o f i t s from i n d u s t r y .  p r o d u c t i o n but remains o u t s i d e and p r o f i t . R a t h e r , i t s meta-level  not in  the c r e a t i o n of s u r p l u s value  p r o d u c t i o n of e l e c t r i c i t y  i n p u t to g a i n a c o m p e t i t i v e  international  I t engaged  In  becomes a  edge i n the  s t a p l e s commodities t r a d e .  As the Acres r e p o r t  indicates: The low p r i c e of e l e c t r i c i t y r e l a t i v e to the i n t e r n a t i o n a l l y determined commodity p r i c e s of a l t e r n a t i v e sources of energy w i l l be of p a r t i c u l a r s i g n i f i c a n c e i n the f u t u r e i f the export o r i e n t e d i n d u s t r i e s of B . C . , p a r t i c u l a r l y those which are c a p i t a l i n t e n s i v e , are to remain c o m p e t i t i v e i n world m a r k e t s . 2 8  B . C . H y d r o was p l a n n i n g p a r t of i t s p r o d u c t i o n i n the s t a p l e s i n d u s t r y . electricity,  capacity for  increased  But other then producing  i t was not to produce e l e c t r i c a l and mechanical  equipment f o r i t s  own use,  or have a s i g n i f i c a n t  r o l e i n the  development of machinery used i n the s t a p l e s p r o d u c t i o n process.  As a u t i l i t y ,  the p r o d u c t i o n process therefore with i t s  B . C . H y d r o i s expected to stay  outside  (besides producing e l e c t r i c i t y )  and  has no c o n t r o l over the type of product manufactured electricity.  electricity not d i r e c t .  The l i n k between B . C . H y d r o ' s  and the development of d i v e r s i f i e d p r o d u c t i o n i s What i t can do i s p l a n f o r consumption of  28 Acres 1974,  p.  2-10.  State electricity process,  i n the a l r e a d y e s t a b l i s h e d  64  staples production  but i t cannot make others develop secondary i n d u s t r y .  During i t s  expanding phase B . C . H y d r o became a government  instrument to a t t r a c t investment The g i a n t  Intervention  investment  projects  c a p i t a l and employ l a b o u r .  (e.g.  Revelstoke  $2 b i l l i o n )  a t t r a c t e d l a r g e amounts of c a p i t a l and c r e a t e d employment.  By  1977 the company employed 12,557 urban and m i g r a t i n g workers. In the c i t i e s t h i s work f o r c e c o n s i s t e d planners,  engineers,  of  executives,  t e c h n i c a l and a d m i n i s t r a t i v e s t a f f .  In  the i n t e r i o r of the p r o v i n c e , a l a r g e work f o r c e of m i g r a t i n g c o n s t r u c t i o n workers moved from dam s i t e to dam s i t e . secure these investments,  the Crown c o r p o r a t i o n used  To the  p r o v i n c i a l c r e d i t r a t i n g (backed by government guarantees) by 1985 i t had accumulated debts t o t a l i n g  Another of the government's for multiple objectives  $9,649 m i l l i o n .  uses of the Crown c o r p o r a t i o n  was the c o n t r i b u t i o n i t was to make to  the general w e l l - b e i n g of the p r o v i n c i a l economy. " p r o v i n c e - b u i l d i n g " phase i n B r i t i s h Columbia,  response  During  I t became a  e n t r e p r e n e u r i a l protection-mechanism  to the r e c e s s i o n  the s t a p l e s economy absence of secondary  the  B.C.Hydro  became more than a mere Crown c o r p o r a t e u t i l i t y . state-organized  and  in  and p e r i o d i c s t r u c t u r a l problems i n  (of d e p l e t i o n , industry).  o v e r p r o d u c t i o n and c h r o n i c  State As  a state-owned  65  Intervention  c o r p o r a t i o n B . C . H y d r o , much l i k e a  p r i v a t e c o r p o r a t i o n , accumulated a s s e t s and c o l l e c t e d an i n c r e a s i n g amount of t a x e s . of  e l e c t r i c i t y - p r o d u c i n g l a r g e dams, t r a n s m i s s i o n l i n e s ,  other i n s t a l l a t i o n s . by  I t accumulated a s s e t s i n the  1985.  T h e i r v a l u e had r i s e n to $10.6  form and  billion  The c o l l e c t i o n and r e t e n t i o n of taxes i n B r i t i s h  Columbia became p a r t of the r e g i o n a l power s t r a t e g y of p r o v i n c i a l government.  the  Premier W . A . C . Bennett warned the  f e d e r a l government i n the B . C . l e g i s l a t u r e before  the  takeover: "I want t o serve n o t i c e t o the f e d e r a l government and everybody e l s e t h a t u n l e s s we get f a i r treatment we w i l l have to take over the B . C . E l e c t r i c . I c a n ' t b e l i e v e t h a t out of a l l the m i l l i o n s of p r o f i t s of the B . C . E l e c t r i c and o t h e r e l e c t r i c companies i n B.C. $ 350,000 i s h a l f the c o r p o r a t i o n t a x . T h i s government estimates i t s should r e c e i v e $1.4 million." 2 9  The  former tax revenues of B . C . E l e c t r i c were p a i d both  to the p r o v i n c i a l and f e d e r a l government. By 1985, Columbia government alone c o l l e c t e d $299 m i l l i o n million).  3 0  But t h i s  the  British  (Hydro pays no f e d e r a l income taxes)  (from B . C . H y d r o ' s revenues of  $1,953  i s not the o n l y tax revenue generated  a p a r t of b u i l d i n g and o p e r a t i n g h y d r o e l e c t r i c p r o j e c t s . c o n s u l t i n g company, A c r e s , Industrial  in its  Growth and Electricity  f u r t h e r p o t e n t i a l tax b e n e f i t s ,  r e p o r t , British Consumption,  The  Columbia itemizes  as a r e s u l t of h y d r o e l e c t r i c  29 Ronald Worley The Wonderful World of W.A.C. Bennett (Toronto: M c C l e l l a n d and Stewart L t d . , 1971), p . 231. 30 B . C . H y d r o Annual Report 1984/85, pp. 2 , 3 .  as  State or thermal  generating  government: d o e s pay taxes,  "1.  p r o j e c t s , which would a c c r u e  Federal  direct  and  f e d e r a l s a l e s t a x ] , 2.  3.  Social  benefits,  [and]  sector]." under the  5.  Subsidies  category  "tax"  generate e l e c t r i c i t y .  [normally  i n i t s annual  during  the  use  I t can  of be  collection  of a s s e t s  the  provincial  state.  and  political  party.  political  instruments  Party. affair hide  of  For  instance,  reports,  lauded  i n order  rates" to  benefits  which s e t a precedent  the  B.C.  the  within  Power  governing become  f o r e l e c t i o n s and  their  to produce votes.  p e o p l e by  i n using  and  power o f B.C.Hydro  Power A u t h o r i t y was  "cheap power" f o r t h e  3 2  include,  "water  such i n s t i t u t i o n s  i n preparation  achievements are  debt,  private  g o v e r n m e n t now  argued t h a t tax  A n o t h e r example o f p o l i t i c a l  direct  Municipal security  r i v e r water  enhance the  C o l u m b i a H y d r o and  provider  [B.C.Hydro  p a i d to the  C o m m i s s i o n were a t t i m e s s u b j e c t t o a b u s e by  British  taxes  Social  Crown c o r p o r a t i o n , B.C.Hydro, and  technological  to  b u i l d i n g of h y d r o e l e c t r i c p r o j e c t s  the  The  Provincial  B.C.Hydro payments t o t h e  3 1  w h i c h a r e payments f o r t h e  collected  indirect  s e c u r i t y p a y m e n t s , 4.  66  Intervention  the  a b u s e was  The  promoted as Social the  Credit  Briggs  Crown c o r p o r a t i o n s  m a n i p u l a t e power r a t e s  (which  a  to  otherwise  31 A c r e s C o n s u l t i n g S e r v i c e s L t d . British Columbia Industrial Growth and Electricity Consumption, a report prepared f o r B.C.Hydro, September 1974, p. 2-13. 32 H y d r o ' s $9.5 b i l l i o n d o l l a r d e b t w o u l d be s e e n a s d i r e c t g o v e r n m e n t d e b t i f i t was r u n as a government d e p a r t m e n t o f h y d r o e l e c t r i c development.  State  might to  reflect  true  c o s t s ) , and extend  semi-government  At very  corporations.  t h e same t i m e ,  strong  during  a desire  Intervention  natural  for  government aimed t o b u i l d a strong  regional  autonomy  province  subsequent  d e v e l o p m e n t became p a r t  Electric,  this  T h e b u i l d i n g o f dams a n d  independence.  theBritish  Columbia  pattern  of the staples  distant  from t h e urban centers  became  and decrease  Canada.  achieving  access  T h e W.A.C. B e n n e t t  dependence on C e n t r a l  to  resource  3 3  t h e 1960s and 1970s.  industrial  67  3 4  After  of the strategy  the takeover  o f B.C.  government, f o l l o w i n g t h e  tradition,  expanded  into areas  t o use resources  more  i nvalleys,  c a n y o n s , a n d r i v e r s f o r h y d r o e l e c t r i c power. The dynamic impetus t o undertake the  small  business  large  leaders  hydroelectric projects and t h e i r  came  aim t o aggrandize  from "their"  province.  33 " T h e g e n e r a l m a n a g e r o f t h e B . C . P o w e r C o m m i s s i o n , M r . L e e B r i g g s , i s s u e d a t h r e e t h o u s a n d word s t a t e m e n t i n w h i c h he d e c l a r e d t h a t he w o u l d n o t s t a n d i d l y by ' w h i l e t h o s e c h a r g e d w i t h t h e f i s c a l a f f a i r s o f t h i s p r o v i n c e p r o s t i t u t e t h e 80,000 c u s t o m e r s o f t h e B.C. P o w e r C o m m i s s i o n t o f u l f i l l e l e c t i o n p r o m i s e s . ' T h e i s s u e s ... t h e g o v e r n m e n t w i s h e d t o r e f i n a n c e some i t s b o r r o w i n g o n b e h a l f o f t h e P o w e r C o m m i s s i o n i n i t s e f f o r t t o e l i m i n a t e a l l d i r e c t debt-making them i n s t e a d t h e o b l i g a t i o n s o f t h e p o w e r u t i l i t y , ... t h e r e q u e s t e d r a t e i n c r e a s e ... b e h e l d u p , ... t h e t r e a s u r e i n n a t u r a l resources i n t h e n o r t h i n t h e n o r t h 'worth more t h a n K i n g Solomon's mines' a l l e g e d l y being g i v e n t o t h e Wenner-Gren i n t e r e s t s . " N e i l A . S w a i n s o n , Conflict over the Columbia (Montreal: McGill-Queens U n i v e r s i t y P r e s s , 1979), p. 96. 34 R i c h a r d s a n d P r a t t a r g u e t h a t i n t e r v e n i n g i n t h e e c o n o m y f o r such an o b j e c t i v e , a s t a t e a d m i n i s t r a t i o n t a k e s power t o u t i l i z e resources by employing " e n t r e p r e n e u r i a l development s t r a t e g i e s . " J o h n R i c h a r d s a n d L a r r y P r a t t Prairie Capitalism (Toronto: M c C l e l l a n d and S t e w a r t L t d . , 1979), pp. 327,8.  State  B.C.Hydro,  in its  68  Intervention  r o l e as a Crown c o r p o r a t e  development  company, can be used by the p r o v i n c i a l s t a t e to c o n c e a l region's  nature as a an e c o n o m i c a l l y u n s t a b l e  producing p e r i p h e r y . developments, galleries,  Images of s u c c e s s f u l  staples  industrial  such as of monumental dams, c i r c u i t breaker  penstocks,  powerhouses,  the  spillways,  generators,  h y d r a u l i c g a t e s , underground  turbines,  and push-button c o n s o l e s of  powerhouse c o n t r o l rooms are i m p r e s s i v e . dam i s two k i l o m e t r e s  The W . A . C .  Bennett  long and 183 metres h i g h , 850 metres  at  the base and 9 metres t h i c k at the t o p ; the G . M . Shrum Generating S t a t i o n  (Powerhouse)  Portage Mountain i s  272 metres  b u i l t i n s i d e the bedrock of long,  20 metres wide and 47  meters h i g h ; and W i l l i s t o n Lake covers an area of 164 hectares  (mostly drowned f o r e s t ) .  3 5  At the time of b u i l d i n g  these dams d u r i n g the 1960s and 1970s, s u p e r l a t i v e of  "largest  single  development,"  attributes  "biggest," "mightiest  world" f i t t e d w i t h a c u l t u r a l p e r i o d where houses, appliances,  600  and c a r s grew b i g g e r every y e a r .  i n the  boats,  The former  chairman of O n t a r i o Hydro S i r Adam Beck i d e n t i f i e d the behind g i g a n t i c h y d r o e l e c t r i c p r o j e c t s : for  u s . Nothing i s too expensive.  thought  "Nothing i s too b i g  Nothing i s  visionary."  Mega-dams g i v e the appearance of an a l r e a d y e x i s t i n g  3 6  industry  which b u i l d s and produces mechanical equipment and e l e c t r i c a l instrumentation.  The i d e a of the e x i s t e n c e of a secondary  35 B . C . Hydro, ff .A.C.Bennett Dam & G.M.Shrum Generating Station: Peace River Power, a 4-page pamphlet a v a i l a b l e  in  1986. 36  Paul  Hydro  McKay, Electric  Empire:  The Inside  Story  (Toronto: Between The L i n e s , 1983), p .  15.  of  Ontario  State  industry  or  at  l e a s t the  link  to  an  impending  consumer goods m a n u f a c t u r i n g  appears very  engineering  accomplishments,  gave support to  accounts  an  of  impending  British  69  Intervention  formation  logical.  Columbia  the  of  Such  optimistic  industrial  evolution.  Conclusion A state  m a j o r change has intervened  Through  contributed  dependent order  was  i n the  intervened  generated  through  the  successor, British  maintain  i t s a l l o c a t i o n of  substantially  state  to  taken place  by  and  B.C.  the  resources, creation  economy. In  means o f  to  the  Power C o m m i s s i o n .  a  accumulation. has staples-  the  provincial  electricity  staples  i n the  i t s larger economy  It retained  i t s  a  regional  international  defense mechanism f o r c o m p e t i t i v e  pricing  of  secondary  and  as  a means o f  as  of  force  products,  perceived  which  producers  Thereafter,  way.  provincial  institutional  staples  being  of  of  intervene  i n a much b i g g e r while  the  i t  addition,  production  sold cheaply  B.C.Hydro began t o  Columbia  way  staples-dependent  natural to  i n the  inducing  an  of  development  industry.  T h a t w h i c h has  continued  allocative  intervention  Columbia's  staples  two  interventions  and  i n the  i s the  dependence. i s the  by  way  of  productive  maintenance of What has  following:  force  by  coordinating  within  the  and  British  c h a n g e d by the  p r o v i n c i a l economy, B.C.Hydro has  institutional  the  and  way  state  become  objectives  of  apparatus an  of  the  the  State government through p r o d u c t i v e economy.  Intervention  intervention  i n the  stapl  71  Extension  Chapter B.C.HYDRO'S LINK TO  THE  IV  EXTENSION OF  STAPLES DEPENDENCE  Introduction In t h i s reports  c h a p t e r t h e p e r c e p t i o n s and  by B.C.Hydro e c o n o m i s t s ,  politicians  about  the use  industrial  development  contrasted  and  by, f o r e s t Columbia's  be e x a m i n e d .  compared w i t h t h e a c t u a l  manufacturing  the use  infrastructure These  views  use o f the by  In p a r t i c u l a r ,  Chemical,  evident i n  p l a n n e r s , and  of e l e c t r i c i t y  industry.  u s e by t h e Wood, P u l p & P a p e r , industry  consultants,  of the expanding  will  c o m p a n i e s and  rationales  and  and  are  reservoirs British i t s recent  Primary  Metals  i s examined.  Infrastructure Some i n f r a s t r u c t u r e was British  Columbia  by t h e l a t e  already i n place i n Northern 1950s, f o r example:  Highway; some d e v e l o p e d o i l and Transmission pipeline t h e U.S.  border  future,  t h e B.C.  Chetwynd, F o r t  To c o n t i n u e t h e a d d i t i o n North's  fields;  the  Westcoast  e x t e n d i n g from t h e Peace R i v e r a r e a t o  ( 1 9 5 7 ) ; and  (to Peace R i v e r ,  gas  the Alaska  Railway  S t . John,  extension i n  and  of i n f r a s t r u c t u r e  and  1958  Dawson C r e e k ) . t o improve  the  h y d r o - p o w e r p i o n e e r s i n t h e g o v e r n m e n t and  in  the p r i v a t e  sector planned t o develop the b i g g e s t e a r t h - f i l l  power-dam.  One  "progressive Mackenzie Shrum  o f t h o s e p i o n e e r s , Dr. G o r d o n Shrum s e t h i s  ideas"  (who  in contrast  travelled  reflected:  to those of  upstream  Alexander  on t h e P e a c e R i v e r i n  1793).  72  Extension  Mackenzie wrote i n t h i s j o u r n a l about t h e foaming r i v e r b u t i t i s d o u b t f u l t h a t he h a d a n y i d e a o f t h e i m p o r t a n t r o l e t h a t power w o u l d one day p l a y i n t h e development o f B r i t i s h C o l u m b i a . 1  Shrum f o r e s a w t h e d e v e l o p m e n t a l infrastructure pointed  itself  t o the timber  r o l e o f power a n d saw t h e  promising c o l l a t e r a l  removal and p o s s i b l e m i n e r a l  made a c c e s s i b l e v i a t h e r e s e r v o i r reservoir  itself  infrastructure  benefits.  transport  inaccessible  timber.  T w e n t y - f i v e y e a r s a f t e r Shrum i n d i c a t e d t h e lake's  transport  Industries  i n Mackenzie  l o g booms a c r o s s  w o u l d be q u i t e Industries  a crisis  Forest  ( a n i n s t a n t f o r e s t company  the lake:  (the pulp  t o Japan, I n d i a ,  town o f  the importance o f  " I f i t was t o go d r y i t  around here."  o p e r a t e s one saw m i l l  groundwood p u l p m i l l i n B.C.,  storage  p o t e n t i a l , t h e manager o f F i n l a y  6500 n e a r t h e W i l l i s t o n L a k e ) s t r e s s e s towing  exploration  (Shrum 1961:28), t h e  w o u l d become a n a t u r a l  t o remove f o r m e r l y  Finlay  Forest  a n d one e n e r g y - i n t e n s i v e  i s shipped t o the Crofton  and M e x i c o ) .  T h e company  b u l k power c u s t o m e r o f B.C.Hydro e l e c t r i c i t y  Central  I n t e r i o r D i v i s i o n ( a c t u a l consumption expected consumption  mill  i s the  largest  1981/82,  He  i n the  239 GW.h i n  330 GW.h i n 1 9 8 2 / 8 3 ) .  2  I n 1964,  1 Shrum comments o n t h e e x p l o r e r s j o u r n a l i n t h e " F o r e w o r d " o f t h e book The Big Dam Country, by B r u c e Ramsey a n d Dan M u r r a y , A P i c t o r i a l Record o f t h e Development o f t h e Peace R i v e r C o u n t r y , ( N o r t h V a n c o u v e r : I n F o c u s P u b l i c a t i o n s L t d . , 1969). Dr. G o r d o n Shrum was t h e c h a i r m a n o f B.C.Hydro a t t h e t i m e . 2 B.C.Hydro, T a b l e 1, " B u l k Power," E x h i b i t 97, B.C. U t i l i t i e s C o m m i s s i o n , S i t e C Hearings, 10 F e b . 1982, S h e e t 2 o f 4.  Extension  73  i t obtained e x t e n s i v e timber l i c e n s e s i n the Trench ( i n Peace R i v e r region)  and now uses the  s u r f a c e p r o v i d e d by B . C . H y d r o , logs  reservoir's  water  r a t h e r than expensive  roads,  t o t r a n s p o r t the  barge,  i n the winter by i c e b r i d g e )  the  logging  ( i n the summer by log boom or to i t s  mills.  The  t r a n s p o r t a t i o n d i s t a n c e s from the timber supply to the  mills  are at p r e s e n t up to 75 and 100 m i l e s a c r o s s the water  surface  and w i t h i n 3 years length of the  (by about 1989)  lake.  w i l l encompass the  In a d d i t i o n ,  logging  roads are  full  being  b u i l t to the timber i n higher e l e v a t i o n s to t r u c k the the the  lake.  transportation  logs  The r e s e r v o i r has indeed become an important i n f r a s t r u c t u r e f o r both F i n l a y F o r e s t  and the company which owns 43.7% of the company's B r i t i s h Columbia F o r e s t  Products.  Products  shares,  3  B r i t i s h Columbia F o r e s t Products uses the r e s e r v o i r much the same way.  It transports  timber by water per year — i t s  1.7  bridge,  by low l e v e l  bridge  or i c e - b r e a k i n g barge.  entire  1986 c u t .  In the  (the  lumber i s  in  (across the r e s e r v o i r ) ,  ice  From the f o r e s t resource  it  produces k r a f t p u l p and dimensional mills  in  m i l l i o n c u b i c meters of  summer, the timber i s t r a n s p o r t e d by booming and towing; the w i n t e r ,  to  lumber i n i t s  t h r e e saw  s o l d to the U . S . r a i l w a y m a r k e t ) .  company uses the r e s e r v o i r f o r t r a n s p o r t .  But i n s t e a d  the Peace R i v e r power as a primary source of energy,  This of  it  using self-  3 The i n f o r m a t i o n was o b t a i n e d from Mr. B. Crooks (Manager of F i n l a y F o r e s t Products i n Mackenzie) and Mr. K a r l Baker ( l o g g i n g manager of B . C . F o r e s t Products i n Mackenzie) on J u l y 22, 1986.  74  Extension generates 80 - 90% of i t s r e s i d u e such as sawdust,  power from hog f u e l shavings,  p r o c e s s i n g raw timber) and i s sufficiency.  bark, e t c .  ( u s u a l l y wood generated  s t r i v i n g towards energy  from  self-  The answer g i v e n , by a spokesmen i n the  c o r p o r a t e communications department of B . C . F o r e s t P r o d u c t s , of whether b u i l d i n g the dam and p r o v i d i n g the r e s e r v o i r made any d i f f e r e n c e  to the f o r e s t  i n d u s t r y was t h a t i t p r o b a b l y  "speeded up the process" of t a p p i n g the f o r e s t Peace R i v e r a r e a . accessibility  resource i n the  Both companies agreed t h a t the  t o the f o r e s t  increased  resource made a d i f f e r e n c e to  development of the town of Mackenzie.  Its  instant  development  was analyzed by Marchak, i n Green Gold, i n terms of s t r u c t u r e and p o p u l a t i o n t r a n s i e n c e . employed i n producing p r i m a r i l y f o r e s t companies are s t i l l  Its  the  class  i n h a b i t a n t s are  staples,  since  both  "looking at" the development of a  secondary paper p r o d u c t i o n i n d u s t r y . *  Pulp and dimensional  lumber have continued to be the end products made from the lumber a r r i v i n g at the shores of B . C . H y d r o ' s a r t i f i c i a l  lake.  They are processed by use of s e l f - g e n e r a t e d  (by  use of hog f u e l )  electricity  and the e l e c t r i c i t y from the head of the  - - - the W . A . C . Bennett dam ( b u i l t a c r o s s the Peace B . C . H y d r o has p l a y e d a dual r o l e , one, infrastructure,  lake  River).  as a p r o v i d e r of  two as p r o v i d e r of power f o r the  forest  processing industry. 4 Information from Mr. W. Hurt of the Corporate Communications Department of B . C . F o r e s t P r o d u c t ' s Vancouver O f f i c e , and the company's l o g g i n g manager i n Mackenzie, Mr. K a r l Baker, and Murray i n the Accounting Department J u l y and August 14, 1986. Pat Marchak's a n a l y s i s of Mackenzie i s i n "The I n s t a n t Town," Green Gold, p p . 303-322.  Extension  The assumed  idea o f t h e important i ntheindustrial  pervasive Utility  role  provincial  power  B.C.Hydro's  Economy,  network: linked  t h a t Peace R i v e r  "This  publication,  l a r g e power  system i s  being  t o more a n d more r e s o u r c e a r e a s  province,  e n s u r i n g a n a d e q u a t e s u p p l y o f power  industrial  development."  perception  t h a t "Hydro must keep pace w i t h  industrial  development"  electricity  in  British  expansion  and prepare  6  t o manufacturing.  Columbia i s l a r g e l y  semi-processed B.C.  Such  3  materials,  i s primarily  was b a s e d o nt h e anticipated  t o be a l o w - c o s t  Since  directed  of the  t o support  industrial  supplier  development  towards t h e export o f  much o f t h e m a n u f a c t u r i n g  staples  A  d e s c r i b e s i t s growing  gradually  of  power  d e v e l o p m e n t o f t h e p r o v i n c e was  i n many p u b l i c a t i o n s .  in an Expanding  75  done i n  production.  Manufacturing The in  term  provincial  "Manufacturing" government  as i t i sg e n e r a l l y  publications  Columbians m a n u f a c t u r e consumer manufacturing  describes thekind  destined  f o r t h ewholesale  to  for industrial  order  domestic  consumers."  7  does  referred t o  n o t mean  British  goods, b u t r a t h e r , of "...production  market, f o r i n t e r p l a n t  users, rather than On t h e o t h e r h a n d ,  direct  primarily transfer, or sale t o  Statistics  Canada  5 B . C . H y d r o I n f o r m a t i o n S e r v i c e s A Utility in an Expanding Economy, M a r c h , 1 9 7 0 , p . 1 8 . 6 B . C . H y d r o ( B C H Energy Blueprint 1981:Introduction) 7 M i n i s t r y o f I n d u s t r y and Small Business Development, " I n t r o d u c t i o n , " British Columbia Manufacturers' Directory  76  Extension  uses  a more c o m p r e h e n s i v e  manufacturing  i n d u s t r i e s which  consumer g o o d s . manufacturing, categories  classification includes  the four  major i n d u s t r i a l  o u t o f t h e twenty  major p u r c h a s e r s o f  manufacturing and  Allied  Chemical  categories  are  mostly  electricity  manufacturing (some o f t h e s e 20 a r e  "Man.") a r e in British  examined.  Industries"  (pulp  "Paper  and p a p e r ) , t h e "Chemical &  Industries,"  and t h e "Primary  ( f o r t h e 1985/86 p u r c h a s e s , staples  8  Columbia's  i n d u s t r i e s a r e : t h e "Wood I n d u s t r i e s , "  Products  Industries"  t h e manufacture o f  To a s s e s s t h e u s e o f e l e c t r i c i t y i n  i n B.C.Hydro's T a b l e I I , a b b r e v i a t i o n The  o f twenty  Metal  see Table I I ) .  These  industries or suppliers t o staples  industries.  I n B.C.Hydro's A n n u a l electricity  t o many s u c h  Reports, the rates  i n d u s t r i e s appear  charged f o r  under t h e c a t e g o r y  1985: A Directory of Manufacturing Activity in British Columbia ( V i c t o r i a : P r o v i n c e o f B r i t i s h C o l u m b i a , 1985). 8 T h e 1970 R e v i s i o n o f t h e S t a n d a r d I n d u s t r i a l C l a s s i f i c a t i o n i n c l u d e s : 1. Food a n d B e v e r a g e I n d u s t r i e s , 2. T o b a c c o P r o d u c t s I n d u s t r i e s , 3. Rubber a n d P l a s t i c P r o d u c t s I n d u s t r i e s , 4. L e a t h e r I n d u s t r i e s , 5. T e x t i l e I n d u s t r i e s , 6. K n i t t i n g M i l l s , 7. C l o t h i n g I n d u s t r i e s , 8. Wood I n d u s t r i e s , 9. F u r n i t u r e a n d F i x t u r e I n d u s t r i e s , 10. P a p e r a n d A l l i e d I n d u s t r i e s , 11. P r i n t i n g a n d P u b l i s h i n g I n d u s t r i e s , 12. P r i m a r y M e t a l I n d u s t r i e s , 13. M e t a l F a b r i c a t i n g I n d u s t r i e s , 14. M a c h i n e r y I n d u s t r i e s , 15. T r a n s p o r t a t i o n E q u i p m e n t I n d u s t r i e s , 16. E l e c t r i c a l P r o d u c t s I n d u s t r i e s , 17. N o n - M e t a l l i c M i n e r a l P r o d u c t s I n d u s t r i e s , 18. P e t r o l e u m a n d C o a l P r o d u c t s I n d u s t r i e s , 19. C h e m i c a l a n d C h e m i c a l P r o d u c t s I n d u s t r i e s , a n d 20. M i s c e l l a n e o u s M a n u f a c t u r i n g I n d u s t r i e s . S t a t i s t i c s Canada Consumption of Purchased Fuel and Electricity, c a t a l o g u e 57-208, 1982, p p . 62-68.  77  Extension  TABLE II ACTUAL ELECTRICAL SALES FOR 1985/86 and GROWTH OVER 1984/85 BY STANDARD INDUSTRIAL CLASSIFICATION (SIC) ( B i l l e d B a s i s , No Adjustments f o r A c c r u a l s ) 1985/86 (GWh) Residental:  9,793  Commercia1-Tota1 8,313 - T r a n s p , Comm. & Ut -Wholesale & R e t a i l - F i n a n c e , I n s , Real E s . -Coram, Bus, P e r s . S e r v . - P u b l i c Admin. & Def• -Unclassified Industrial 13,568 ( E x c l u d i n g Marketing) - M e t a l Mines -Mineral Fuels -Other Primary I n d . -Food & Beverage Man -Wood Manuf. -Paper & A l l i e d Man. - P r i m a r y Metal Man. (Smelting) -Non-Metallic Min. -Petroleum & Coal -Chemical & Chera. Man. -Other Manufact. -Construction Inter U t i l i t y (New West & Can. U t . ) Firm Export (Point Roberts/Hyder) Seattle City Light W.K.P. & L . Domestic Marketing - M e t a l Mines -Paper & A l l i e d -Chem. & Chem. P r o d . -Other  Growth  %  9,577 1,282 1,918 1,563 2,850 614 86  2 .3  7,970 1,221 1,805 1,467 2,712 602 163 13,221  1,930 670 229 364 1,871 5,791 139 310 362 1,267 458 176  263  1,011  B . C . H y d r o , Load Forecast  5.0 6.3 6.5 5.1 2.0 -47.5  2,170 632 189 345 1,751 5,477 131 311 343 1,290 434 148  446  31,481 Department,  -11.1 6.0 21.2 5.5 6.9 5.7 6.3 -0.3 5.6 -1,8 5.5 18.9 6 .6  14 0 6 230 749 31 1  4 .3  2 .6  247  14 134 41  33,138 Source:  1984/85 (GWh)  1 .4 583 .3 34 372 40 1  126 .7  5 .3 May 6, 1986.  576.5 101.3 -22.5  78  Extension of  "Transmission," since  s t a p l e s producers i n g e n e r a l  t h e i r e l e c t r i c i t y r i g h t o f f the t r a n s m i s s i o n l i n e customer transforms i t to the proper v o l t a g e ) .  receive  (the  "Transmission"  r a t e customers are p r i m a r i l y p u l p and paper p r o d u c e r s , wood manufacturers,  chemical p r o d u c e r s .  Table VI (see Appendix)  i n d i c a t e s the s a l e s made to these i n d u s t r i e s by B . C . H y d r o , from 1965 to 1976 (see  and Tables V I , and VII  Appendix) i n c l u d e the h i s t o r i c s a l e s s t a t i s t i c s from  to 1985 VIII,  (calendar y e a r s ) ,  (fiscal  years).  and IX (see  Added to the h i s t o r i c T a b l e s V I I ,  Appendix) are probable p r o j e c t i o n s of  number of B . C . H y d r o accounts  The  i n these  the  industries.  low r a t e p o l i c y f o r purchasers of e l e c t r i c i t y  "Transmission" r a t e s  at  i s u s u a l l y defended as a n e c e s s i t y  promote i n d u s t r i a l development,  to  p a r t i c u l a r l y i n l i g h t of  i n t e r n a t i o n a l c o m p e t i t i o n among s t a p l e s i n d u s t r i e s .  An .  a n a l y s i s done by the c o n s u l t i n g f i r m Acres f o r B . C . H y d r o revealing.  1974  It states that  " . . . the low p r i c e of  is  electricity  r e l a t i v e to the i n t e r n a t i o n a l l y determined commodity p r i c e s of a l t e r n a t i v e sources of energy w i l l be of p a r t i c u l a r significance of  i n the f u t u r e ,  i f the export o r i e n t e d  industries  B . C . , p a r t i c u l a r l y those which are c a p i t a l i n t e n s i v e ,  to remain c o m p e t i t i v e  i n world m a r k e t s . "  n e c e s s i t y of a c o m p e t i t i v e  9  T h i s p e r c e p t i o n of  i n t e r n a t i o n a l advantage has been  9 Acres C o n s u l t i n g S e r v i c e s L t d . , prepared f o r B . C . H y d r o , British  Columbia  Consumption,  Industrial  are  Growth  (Vancouver: A c r e s ,  and  Sept.  Electricity  1974), p . 2 -  9,10.  79  Extension maintained a  byboth t h e p r o v i n c i a l  powerful  The  high: and  argument.  electricity  1970)  (in  f o rpulp  cost  Allied  Products"  (1.96%),  portion of total  production  f o rt h e "Chemical  Metals"  and Chemical  (pulp and paper)  and primary  1973  doubled  from  that  fortunes  -Wood  "...the  etc.)  to  their  As  already  (3.75%),  "Primary  t o the pulp  "Paper  (1.16%).  10  and paper  Buchanan d e s c r i b e d  Authority's  [B.C.Hydro's]  i stherefore  i t by  stake  enormous...."  i n the 1 1  ( s a w m i l l s , plywood p l a n t s , and s h i n g l e  are described  timber  sharing  i n B.C.Hydro r e p o r t s w i t h  with  the the pulp  indicated i n the previous  number o f s a w m i l l s ,  larger  sawmills  industry  and pulp  into  installation  and paper  chapter,  mills,  together  with  coincided with  b y wood i n d u s t r i e s .  o f more c a p i t a l  reference industry.  the reduction i n  t h e coordination of timber  the North,  purchase of e l e c t r i c i t y the  (8.51%),  Industries  mills  the  costs  1,985 GW.h i n 1965 t o 4,209.9 GW.h i n  of the industry  Wood I n d u s t r i e s  the  Products"  "Wood" m a n u f a c t u r i n g  (seeTable V I , Appendix).  stating  manufacturing  and t h e needed chemicals was  B.C.Hydro's s a l e s o f e l e c t r i c i t y industry  government and B.C.Hydro a s  use by  the expansion of  t h e growth  i n the  Thereafter,  with  i n t e n s i v e machinery t o  10 A c r e s , 1974, T a b l e 2 . 3 , p . 16. 11 B . C . H y d r o , S t a t i s t i c a l A n a l y s i s D e p a r t m e n t , Pulp and Prospects in B.C. b y T.D. B u c h a n a n , B.C. H y d r o S e n i o r E c o n o m i s t , 21 D e c e m b e r , 1964, I n t r o d u c t i o n p a g e .  Paper  Extension  process  t h e wood, t h e e l e c t r i c i t y  increased  further.  80  consumption o f t h i s  industry  1 2  -Pulp and Paper During Department and  paper  survey,  t h e 1960s, promoted  B.C.Hydro's I n d u s t r i a l  the expansion of capital-intensive  industries.  In reference  "The P u l p a n d P a p e r  t o i t s own  industry  of British  John R a y b o u l d , t h e B.C.Hydro magazine, advance  of a nation  consumption, lbs  speak  annually.  Columbia," by  Progress,  measures  i n 1965 i s c i t e d :  paper  i t s a u t h o r i s most i m p r e s s e d w i t h  production capacity  industry  While, the publication  of t h e manufacture of fine-grade  Columbia,  the  of pulp mills  and w i t h  i n British increasing the  the idea of  (a continuation  B.C. P o w e r C o m m i s s i o n  In admiration  practice).  o f B.C. f o r e s t s  by f o r e i g n  500  does n o t  "industrialization-by-invitation"  processing  pulp  by i t s consumption o f paper. Not Canada's  b u t t h e U.S. c o n s u m p t i o n  per capita  Development  companies  from the  of the the article  lauds the following:  T h e l i s t o f m a j o r w o r l d c o m p a n i e s now o p e r a t i n g here, o r with m i l l s planned o r being b u i l t , i s impressive. Among t h e s e c o m p a n i e s a r e t h e R e e d Group o f E n g l a n d , S v e n s k a C e l l u l o s a o f Sweden, Unso G u t z e i t o f F i n l a n d , F e l d m u e h l o f Germany, E a s t A s i a t i c o f Denmark, W e y e r h a e u s e r a n d Mead o f t h e U.S., a n d M i t s u b i s h i a n d H o n s h u o f J a p a n .  12 A c r e s , 1974, p . 2-8; a n d T.D. S t a t i s t i c a l A n a l y s i s Department,  Industrial Classification in the B.C.Hydro Service  Buchanan, B.C.Hydro, Commercial S e r v i c e s D i v i s i o n  of KW.h Sold to Primary Potentials Area For Fiscal 1964/65, p . 3 .  Extension  81  A l l t h e new p u l p m i l l s i n B.C. w i l l h a v e a n i n i t i a l o p e r a t i n g c a p a c i t y r a n g i n g f r o m 250,000 - 350,000 tons per year. investment from  [original  Each m i l l represents a c a p i t a l $50 m i l l i o n t o $100 million,  emphasis]  [The a u t h o r o f t h e a r t i c l e c o n t i n u e s w i t h an industrial invitation reminder:] B.C.Hydro's I n d u s t r i a l Development Department, t h r o u g h s u c h i n d u s t r y s t u d i e s , h e l p s t o show and remind t h e b u s i n e s s community b o t h i n Canada and a b r o a d o f t h e u n i q u e o p p o r t u n i t i e s e x i s t i n g i n B.C. for expanding or e s t a b l i s h i n g d i s t r i b u t i o n f a c i l i t i e s and m a n u f a c t u r i n g p l a n t s t o s e r v e resource i n d u s t r i e s . 1 3  Yet,  the  staples  province  were  resource  industries,  resource  supply.  less  producers  interested  A  than study  invited  i n building  as  etc.  will  and  p u l p and locate  paper  discounted  by  Industrial  mills,  because of  electricity  B.C.Hydro's that  low  by  effects  w e r e known by  T.D. species  as  of tree  in British  aware of t h e t h e  to another.  He  minerals,  because of the 1 4  resource  The  Columbia.  some  shift  interpreted  an  The  B.C.Hydro  the continued e x p l o i t a t i o n  B u c h a n a n , was  natural  the province provides  invest  such  for  industries  local  cost power."  a d d e d b o n u s f o r t h o s e who  economists  cost  "Resource  processors of  generated  of these p o l i c i e s  the machinery low  i n the area primarily  not, p r i m a r i l y  outside the  they were i n a  Development Department concluded such  from  of the  from  forest.  one  these changes  with  13 J o h n R a y b o u l d , " P a p e r f o r t h e W o r l d , " a t w o - p a g e r e p r i n t f r o m t h e m a g a z i n e Progress (Vancouver: B.C.Hydro, F a l l i s s u e , 1966). 14 B . C . H y d r o , I n d u s t r i a l D e v e l o p m e n t D e p a r t m e n t , Power Intensive Industries for Peace River at - S i t e Power (Vancouver: B.C.Hydro, August 1963).  82  Extension  reference  to the  Sloan  move away f r o m an logs,  peeler  duction  of  concluded of  f i r "  that  of  Coast  then,  logs w i l l "the  the  number o f  the  in  The tions  predominate." zone  to  itself  "the the  age  increased  In the  sawmills  of  f o r the  hemlock"  industry's  from  12%  to  pulp  interior,  the  lumber and  locations;"  "the  increased  mill  companies  thereafter  pulp  mills  the  in  same  2000 i n t h e  state policies  direct  staples production  the  which favor  large  from o u t s i d e  corporathe  has  i m p l i c a t i o n s f o r the  diversification  of  products  and  secondary  The  from  B.C.  Buchanan suggests  product,  time 1950s  province  companies  rights  1 S  p u r s u i t of  manufacture of  age  Since  harvesting  at  from over  he  consumption  mills pulp  pro-  (pulp  22%.'  resources,..."  decreased  from  will saw  From t h i s  1 5  to obtain their  in central  sawmills  1978.  zone  i n which  i s moving  pulp  " . . . c o n s t r u c t i o n of  combined operations  330  Coast  l o g s t o w a r d s one  1963  province. small  number o f  "The  t r e e s consumed by  reduce competition  followed  to  to  log production  "...purchased  the  Coast  F r o m 1946  throughout the  and  pulp  ( s a w m i l l economy) t o  economy)."  (1957):  i n t e g r a t e d f o r e s t economy p r o d u c i n g  l o g s and  pulp  report  industry.  finished i n the  products  interest  ( i n s u c h a company t h e buyer of  the  pulp,  and  of  competition would  vertically  producer the  not  pup  of  mill  the  be,  forest the  as  integrated finished  owner a r e  the  15 T.D. B u c h a n a n , S e n i o r E c o n o m i s t , B . C . H y d r o , Pulp and Paper Prospects in B.C. ( V a n c o u v e r : B . C . H y d r o , December 21, 1964) p. 7. 16 M a r c h a k 1 9 8 3 , p . 40.  Extension  83  same) who manufacture t h e i r own f i n i s h e d products elsewhere. He concluded t h a t d i v e r s i f i c a t i o n of f o r e s t affected  by p a t t e r n s of  products  is  trade.  F o r e i g n t r a d e p o l i c i e s have hindered the development of a d i v e r s i f i e d f o r e s t products export i n d u s t r y i n B.C. Recent announcements of new "captive pulp" c a p a c i t i e s are a m a n i f e s t a t i o n of these p o l i c i e s . The p u l p customer has every reason to r e s i s t B . C . c o m p e t i t i o n i n overseas markets f o r h i s f i n i s h e d product. He i s i n a s t r o n g p o s i t i o n to do so because he a l r e a d y c o n t r o l s , i n p a r t , h i s B . C . source of s u p p l y . (Buchanan 1964:2)  He was w e l l aware t h a t d e c i s i o n s outside  about end products are made  B r i t i s h Columbia. He argued t h a t a l a c k of  diversification insufficient  i n h i b i t s the best use of the wood. There i s  value added and most important to an expanding  electrical utility,  the most b e n e f i c i a l  B.C.Hydro's e l e c t r i c i t y  i s not c r e a t e d .  f u t u r e market f o r He found the  following: " . . . M o s t of the p r e s e n t l y [December 1964] announced developments - whether l i n k e d with f o r e i g n c a p i t a l or not - w i l l r e s u l t i n products r e q u i r i n g maximum amounts of wood usage per ton of o u t p u t , y i e l d i n g minimum v a l u e s , and r e q u i r i n g minimum amounts of e l e c t r i c a l energy." (Buchanan 1964:2) To i l l u s t r a t e h i s p o i n t n u m e r i c a l l y he prepared T a b l e III.  As h i s t a b u l a t i o n shows, the d i v e r s i f i e d paper p r o d u c t s ,  such as " P r i n t p a p e r , " " F i b r e b o a r d , " and "Other paper b o a r d s , " use s u b s t a n t i a l l y h i g h e r amounts of e l e c t r i c i t y lower amounts of roundwood. surrounded by s u b s t a n t i a l  and  Meanwhile, the Peace R i v e r a r e a ,  forest  l a n d s , was developed  to  Extension  84  generate a h y d r o e l e c t r i c c a p a c i t y of 3,425,000 KW ( t h i s i s combined c a p a c i t y of the W . A . C . Canyon Dam).  the  Bennett Dam and the Peace  No a p p l i c a t i o n of t h i s e l e c t r i c a l  power  to  higher grade paper products i s apparent to t h i s day i n Mackenzie, the i n s t a n t Bennett dam r e s e r v o i r .  forest  processing  community near  T h i s power source c o u l d be absorbed  a g r e a t e r degree w i t h i n t h i s r e g i o n i f produce more s o p h i s t i c a t e d  i t would be used  end p r o d u c t s . Although the  over p r o d u c t i o n i s now l a r g e l y out of the hands of provincial resources  state,  the  i t has the p r o p e r t y r i g h t s over  to  to  control  the forest  and water power and can make i n i t i a l c h o i c e s over TABLE I I I WOOD AND ELECTRICITY REQUIREMENT  Product Feet  Unit KWH  Short Ton Wood p u l p Mechanical A** Chemical unbleached P r i n t paper Other paper Fibreboards Other paper boards * U.B.C: p . 159.  Roundwood Elec. Equiv. Req. Wood-Pulp Content Cu  ( a i r dry) bleached unbleached  82* 161 98 117 51 57  "Forestry Handbook of B r i t i s h Columbia,"  r  N/  850 520 470 920 300 300  1957,  ** John G . Harvey (Sandwell and Company): "Stream and Power f o r Pulp and Paper M i l l s ; " Pulp and Paper Magazine of Canada, J u l y 1963, p . 348. (assumes wood requirement to be 1/3 c h i p s and a 500 ton a day m i l l . ) Source: T . D . Buchanan (Senior Economist), B . C . Hydro, S t a t i s t i c a l A n a l y s i s Department, Commercial S e r v i c e s D i v i s i o n Pulp and Paper Prospects in B.C., p . 7.  85  Extension t h e i r development.  C o n t r i b u t i o n s to i n i t i a l  c h o i c e s of  the  development of water power can a l s o be made by the chairmen of B.C.Hydro.  Two recent chairmen had e x e c u t i v e experience  in  the f o r e s t p r o c e s s i n g i n d u s t r y .  The  former chairman, Robert Bonner, became a s e n i o r  p r e s i d e n t of MacMillan B l o e d e l i n 1968, forest  then the  company i n Canada. E f f e c t i v e January 1,  chairman of B . C . H y d r o .  The c u r r e n t chairman of  vice-  largest  1976,  he became  B.C.Hydro,  Chester Johnson, f o r m e r l y headed the Whonnok I n d u s t r i e s L t d . and  West F r a s e r Timber Company Co. L t d .  Both chairmen  t h e r e f o r e knew the important r e l a t i o n s h i p s between the p r o c e s s i n g i n d u s t r y and the p r o d u c t i o n of e l e c t r i c i t y ,  forest 1 7  but  n e i t h e r had been able to develop a s u b s t a n t i a l market f o r electricity  i n d i v e r s i f i e d paper p r o d u c t s .  R a t h e r , p u l p and  the r e q u i r e d chemical supply i n d u s t r y remain dominant i n f o r e s t  -Chemicals  and Chemical  processing.  Products  To produce k r a f t p u l p , sodium s u l p h a t e , are needed.  caustic  chemical i n g r e d i e n t s such as  soda, c h l o r i n e , and other  chemicals  The producers of these chemicals are among the  four major purchasers of B . C . H y d r o ' s e l e c t r i c i t y .  In a r e c e n t  r e p o r t prepared f o r B . C . H y d r o ' s Corporate Economist O f f i c e , DBA  Consulting Limited,  the r e l a t i o n s h i p between the  by  forecast  17 Canadian P r e s s , "Bonner P r o f i l e , " January 12, 1985. Rod Nut, "Changes at Hydro Spark Q u e s t i o n s , " The Vancouver Sun, March 29, 1986.  86  Extension of  purchases  i n the chemical  i n d u s t r y was d i r e c t l y  w i t h the p u l p and paper i n d u s t r y . electricity  "Nearly a l l of the  used i n B . C . ' s chemical  products f o r use  i n the f o r e s t r y  i n the p u l p and paper i n d u s t r y . " has two p l a n t s  i n d u s t r y and, i n p a r t i c u l a r 1 8  One such chemical  By  North Vancouver p r o d u c t i o n has quadrupled f o r soda.  The Nanaimo p l a n t s u p p l i e s most of  p r o d u c t i o n to the adjacent  McMillan B l o e d e l p u l p m i l l .  "Over 90% of p r o d u c t i o n of the two B . C . p l a n t s b l e a c h i n g chemicals The e l e c t r i c i t y  is  to major p u l p m i l l companies  purchase h i s t o r y of the chemical  be seen on Table II above,  and Table VI & VII  the primary metals  sold  as  in B . C . . "  1 9  i n d u s t r y can  (Appendix).  Another i n d u s t r y which uses very l a r g e amounts of is  Petroleum,  i n Nanaimo and i n North Vancouver.  c h l o r i n e and c a u s t i c its  company  i n Southern B r i t i s h Columbia.  has chemical p l a n t s its  purchased  i n d u s t r y i s used to make  Hooker Chemicals, a s u b s i d i a r y of O c c i d e n t a l  1974,  correlated  electricity  industry.  - P r i m a r y Metals I n d u s t r i e s (mining, m i l l i n g , smelting) In the  late f i f t i e s ,  was a p u z z l e to e x p e r t s , Development  the development  of the Peace r i v e r  s i n c e the Peace R i v e r Power  Co. and the p r o v i n c i a l government  claimed:  " . . . m u c h of the power w i l l be used at s i t e by i n d u s t r y  18 DPA C o n s u l t i n g L i m i t e d A Forecast Requirements of B.C.Hydro's Industrial  of Purchased Customers  Electricity 1981-91, a  r e p o r t prepared f o r B . C . H y d r o (Vancouver, August, 1981) p . 24. 19 Canadian O c c i d e n t a l Petroleum, Annual Report 1974, p . 15.  Extension 'flocking'  in."  2 0  To assess the p o s s i b i l i t i e s  metal i n d u s t r i e s u s i n g power at s i t e ,  87 of primary  B.C.Hydro's Industrial  Development Department prepared a study of  "Power  Intensive  I n d u s t r i e s f o r Peace R i v e r at S i t e Power" (August 13, Its  f i n d i n g s were t h a t  power i n t e n s i v e water,  1963).  " i t i s very d o u b t f u l t h a t any of  industries studied  (e.g.  the  aluminum, heavy  s i l i c o n c a r b i d e , z i r c o n i u m , t i t a n i u m , hydrogen  p e r o x i d e , ammonia e t c . )  can be induced to take "at s i t e "  Peace  power i n b l o c k s of 10 MW or more, i f a saving of o n l y two m i l l s i s o f f e r e d by the A u t h o r i t y over r a t e s a p p l i c a b l e at t i d e w a t e r .  [of  4 mills]  "It i s g e n e r a l l y cheaper to move  power from Portage Mountain (the  s i t e of the Gordon Shrum  powerhouse next to the W . A . C . Bennett dam b u i l t a c r o s s  the  Peace R i v e r ) to Vancouver than to move m a t e r i a l s twice  that  distance."  2 X  In case of aluminum, Ivan Bloch and A s s o c i a t e s of P o r t l a n d , Oregon, prepared a d e t a i l e d study f o r the B . C . E l e c t r i c Co. L t d . i n 1961 i n which i t was concluded t h a t i n order to a t t r a c t new aluminum producers to B . C . i t would be necessary to o f f e r 2 1/2 m i l l power at t i d e w a t e r , and concessions such as tax h o l i d a y [ s i c ] and s u b s i d i z e d s i t e s . Power would have to given away f r e e at Portage Mountain i f a saving i n power c o s t had to be used to o f f s e t e x t r a t r a n s p o r t a t i o n c o s t s r e s u l t i n g from a s i t e a t Portage Mountain. Estimated r a i l f r e i g h t c o s t s of one cent [ a p p l i c a b l e o n l y to bulk commodities] per ton m i l e were used i n t h i s study; t h i s f i g u r e was o b t a i n e d from a d i s c u s s i o n w i t h M e s s r s . J . Broadbent and V . Paul of the P. G . E . R a i l w a y . 20 The Vancouver Sun, "Peace R i v e r i s a Puzzle to E x p e r t s , " Electric Power in British Columbia, a s e r i e s of a r t i c l e s p u b l i s h e d i n a s p e c i a l pamphlet form, (Vancouver, June 1959), p. 7. 21 Power Intensive Industries, 1963, "Conclusion"  88  Extension  In a c t u a l p r a c t i c e the t r a n s p o r t a t i o n c o s t s of moving m a t e r i a l i n and o u t o f P o r t a g e M o u n t a i n w o u l d no d o u b t be h i g h e r b e c a u s e Mr. B r o a d b e n t s a i d t h e r a i l w a y has no p l a n s o f p r o v i d i n g r a i l s e r v i c e t o P o r t a g e M o u n t a i n , and t h i s b e i n g t h e c a s e , m a t e r i a l w o u l d t h e n have t o move some o f t h e d i s t a n c e by t r u c k which i n a l l l i k e l i h o o d would c o s t c o n s i d e r a b l y more t h a n one c e n t p e r t o n m i l e . 2 2  The  low  cost  of  on  s i t e power and  t r a n s p o r t a t i o n would not  be  aluminum and  smelters  Leaving the  aside  resource,  power i n t h e the  metal  consideration  transportation,  i n the  and  the  and  rail locate  Peace R i v e r  of p o p u l a t i o n ,  r i g h t combination are  development of  the  l o c a t i o n of  availability  of  greatest  area.  of  low  importance  cost to  industry.  the  f o r e s t products  i n production  was  of  staples production  r e l a t i o n s h i p between t h e  growth  enough a t t r a c t i o n t o  suitable hydroelectric site  refining the  the  primary metal  A the  other  subsidized  i n the  industries.  great  importance  i n the M.D.  following  smelting  Taylor  growth i n g e n e r a t i n g  in  sums  capacity  up and  way:  The e a r l y s e t t l e r s o f B r i t i s h C o l u m b i a were i n t e r e s t e d i n the f u r t r a d e . F o l l o w i n g t h e s e came those seeking mineral wealth; the r a i l r o a d b u i l d e r s ; t h e l o g g e r s ; t h e f i s h e r m e n and f a r m e r s ; and f i n a l l y the manufacturers [ p r i m a r i l y s t a p l e s producers]. T h e r e had a l w a y s been m a n u f a c t u r i n g i n B r i t i s h C o l u m b i a , b u t i t was c a r r i e d on on a s m a l l s c a l e u n t i l the twenties. During the depression a l l industry suffered. I t r e c o v e r e d d u r i n g t h e war and s i n c e t h a t t i m e has gone f o r w a r d a t a g r e a t l y increased rate. T h e r e i s no d o u b t t h a t t h e a v a i l a b i l i t y e l e c t r i c power has p l a y e d a p a r t i n t h i s 22  Power  Intensive  Industries,  1963,  p.l,3.  of  Extension  89  development. J . V . Rogers i n h i s paper "Power, the Pathway to Progress" o u t l i n e s the p a r t p l a y e d by e l e c t r i c power i n the development of the l a r g e smelting and r e f i n i n g complex at T r a i l . The a v a i l a b i l i t y of l a r g e - s c a l e , low-cost h y d r o - e l e c t r i c power motivated the establishment of the aluminum smelter at K i t i m a t . A l s o the a v a i l a b i l i t y of power has been important i n the growth of the p u l p and paper i n d u s t r y . In other i n d u s t r i e s t o o , the use of power i s important but not as important as i n the s m e l t i n g , r e f i n i n g , and f o r e s t products i n d u s t r i e s . Because i t i s these l a t t e r i n d u s t r i e s which are important to the general economic development of B r i t i s h Columbia, i t i s evident t h a t e l e c t r i c power has had an important p a r t to p l a y i n the economic growth of the p r o v i n c e . 2 3  Both the Aluminum Company of Canada (Alcan) i n K i t i m a t and the C o n s o l i d a t e d Mining and Smelting Company (Cominco) Trail  own t h e i r h y d r o e l e c t r i c generating  Kemano p r o j e c t generated  electricity  facilities.  s i n c e 1955,  in  Alcan's  and Cominco  bought out a l l but one p l a n t of the West Kootenay and L i g h t Company i n 1 9 4 7 . smelting  2 4  Both Cominco and A l c a n have dominated  i n d u s t r y i n B r i t i s h Columbia.  The A l c a n smelter electricity,  has no demand f o r u t i l i t y  because such v e r t i c a l l y i n t e g r a t e d  supply t h e i r energy needs by means of what Acres "industry-owned generation" addition,  the  (see  supplied companies calls  Appendix T a b l e X, X I ) .  In  "Alcan has the water r i g h t s to the Nechako and  Nanika R i v e r s u n t i l 1999,  and a d d i t i o n a l KWh would be  a v a i l a b l e each year i f these r i v e r s are developed f o r hydro  23 Mary Doreen T a y l o r Development of the E l e c t r i c i t y I n d u s t r y i n B r i t i s h Columbia, a M . A . T h e s i s , U n i v e r s i t y of B r i t i s h Columbia, Department of Geography, A p r i l , 1965, pp. 176,177. 24 T a y l o r , 1965, p . 13.  Extension power."  Besides having secured the r i g h t to  25  development smelter  of hydro power, A l c a n has l o c a t e d  near t i d e water i n K i t i m a t .  operation,  the company had (by 1954)  s u p p l y , the Kemano p r o j e c t , Jamaica. its  90  Its  bauxite  further i t s aluminum  Besides i t s integrated  smelting its  power  and the supply of b a u x i t e  1954 annual r e p o r t i n d i c a t e s ,  in  the company  ships  from Jamaica to K i t i m a t , processes, the b a u x i t e and  alumina with the use of Kemano power i n t o aluminum i n g o t s , ships these f o r manufacturing e l s e w h e r e .  In keeping  2 6  company t r a d i t i o n , A l c a n p i c k s the most s u i t a b l e owns i t s  hydroelectric projects  electricity  is  tide  Since  n a t u r a l resource to the smelter  and can  s t a p l e s such as aluminum i n g o t s from K i t i m a t v i a  water.  Cominco,  in T r a i l ,  the other primary metal manufacturer,  owns i t s  hydroelectric f a c i l i t i e s  others).  Some f a c i l i t i e s  o t h e r s were h e l d by i t s Light. to i t s  (Waneta, Corra L i n n and  were d i r e c t l y owned by Cominco, s u b s i d i a r y , West Kootenay Power and  Cominco has r e c e n t l y  sold a l l i t s  hydroelectric  u t i l i t y and i s c u r r e n t l y t r y i n g to s e l l  Power and L i g h t .  Supply  assets  West Kootenay  However, Cominco d i d not r e q u i r e B . C . H y d r o ' s  25 The B r i t i s h Columbia Energy Commission, B r i t i s h Energy  and  such a l a r g e component of aluminum p r o d u c t i o n ,  A l c a n can s h i p i t s s h i p out i t s  with  sites,  (dams, powerhouses).  and  and Demand  Forecast  1974-2006  Columbia  (Victoria:  L i e u t e n a n t - g o v e r n o r i n C o u n c i l , 29 November 1973), p . 1 8 1 . The Commission prepares annual reviews of s u p p l y , demand, and p r i c i n g of energy. 26  [Alcan] Aluminum  Ltd. Annual  Report  1953/1954  Extension power to produce i t s bismuth,  91  v a r i o u s grades of l e a d , g o l d ,  Idium and to process  Despite the r e s u l t s  its  phosphate and  of v a r i o u s f e a s i b i l i t y  which y i e l d e d no, or few p o t e n t i a l consumers of i n the mining and s m e l t i n g  silver,  sulfate.  2 7  assessments large  volumes  of  electricity  in  the B . C . H y d r o ' s I n d u s t r i a l Development Department saw t h e i r  r o l e i n encouraging new investment  industry,  28  and e n t e r p r i s e .  promoters  2 9  T h i s was  done by way of p r o v i d i n g " d e t a i l e d i n f o r m a t i o n on the mining i n d u s t r y , " and " o f f e r i n g c o n f i d e n t i a l o b l i g a t i o n to i n d u s t r i a l i s t s  seeking  service  without  i n f o r m a t i o n on p l a n t  s i t e s i n the G r e a t e r Vancouver a r e a . "  3 0  P a r t of  the  I n d u s t r i a l Development Department d u r i n g the 1970s has been absorbed i n t o the P r o p e r t i e s D i v i s i o n . T h i s D i v i s i o n developed industrial strategic  land along the B . C . H y d r o r a i l w a y and other l o c a t i o n i n order to s e l l  industrial users. operations system.  these p r o p e r t i e s  to  The primary purpose of these land banking  i s f o r promoting the use of the B . C . H y d r o r a i l w a y  3 1  27 The F i n a n c i a l Post C o r p o r a t i o n Cominco Ltd. (Toronto: Maclean Hunter, Nov. 27, 1985), p . 4. 28 Another study was done by B . C . H y d r o ' s S t a t i s t i c a l A n a l y s i s Department E l e c t r i c  Consumption  The  of B r i t i s h  in the B.C. Mining  Industry,  June 1964. 29 T . D . Buchanan, B . C . H y d r o S t a t i s t i c a l A n a l y s i s Department, Commercial S e r v i c e s D i v i s i o n B r i t i s h Columbia as an Investment Prospect, 26 June 1967. 30 J . C . Dawson, I n d u s t r i a l Development Department, B . C . H y d r o , Mining  Industry  Columbia  and the  Yukon  (Vancouver: B . C . H y d r o , January 1968), i n t r o d u c t i o n page. 31 John R. Bodnar, I n d u s t r i a l Development O f f i c e r i n d i c a t e d t h i s i s the extent of Hydro's present i n d u s t r i a l development. Informal i n t e r v i e w (May 6, 1986).  Extension  92  Diversification Although the  B.C.Hydro b u i l t  Columbia,  Peace,  Kootenay,  perception  of establishing  was  i n i t s industrial  absent  last  twenty  gear, Union,  Europe  Although tenders if  (under  by  such as Canron  Electrical Quality  at  Columbia  like  cranes  t o some l o c a l  (less  than  Pioneer, printed locally.  Inspection  & Inspection  the Soviet  dam s i t e s  Columbia  no l o c a l  Engineer  Department)  originates  spin-off  of building  a n d 5%  tower  steel  steel Lower  Mainland  25-50 t o n s )  were  Ltd. i n Surrey. Mainland boards  Y e t , when a l l i t e m s Tang, t h e S e n i o r  ( o f B.C.Hydro's summarizes:  from  of  hydroelectric  less  equipment  British  industries  have developed as a r e s u l t  decades  Fig.3).  circuit  percent o f a l l mechanical and e l e c t r i c a l  He c o n f i r m s t h a t  switch  i n t h e Lower  i n B.C. a r e a d d e d u p , S t e p h e n  Control  Columbia's  In the  Bridge D i v i s i o n and  Norelco Industries  c h a r g e r s a r e made  Equipment  industry  bids,  A t t i m e s , custom  L t d . Western  and Federal  dams i n B r i t i s h  near  i n Japan,  panel housings a r e manufactured  manufactured  strategy.  a recent transmission  Ltd., small  by m a n u f a c t u r e r s  battery  five  bids,  work has been awarded  Westinghouse  and  machinery  a 10% p r e f e r e n c e p r o v i s i o n f o r  $100, 000) from B r i t i s h  Ebco I n d u s t r i e s  Control  Rivers, the  generators, electrical  was a w a r d e d t o K o r e a .  companies,  many dams o n  and t h e United States, (see Appendix,  B.C.Hydro a l l o w s  fabricating  built  development  b r e a k e r s were bought  they a r e Canadian  contract  and Pend O r e i l l e  a hydroelectric  years, turbines,  and c i r c u i t  or planned t o b u i l d  than  used  Columbia.  i n communities British dams.  Extension  93  B . C . H y d r o ' s Research and Development Department  lends  o p e r a t i o n a l support i n case a mechanical or e l e c t r i c a l occurs,  e v a l u a t e s products used i n B . C . H y d r o  installations,  and p r o v i d e s suggestions f o r improving e x i s t i n g Although the department o c c a s i o n a l l y develops which i t o b t a i n s  patents,  failure  equipment.  technology  the impact on the development  mechanical or e l e c t r i c a l gear i n the P r o v i n c e i s  for of  small.  E x t e n s i o n o f t h e S t a p l e s Economy  Development of secondary i n d u s t r y continues  to be  a n t i c i p a t e d i n many government p u b l i c a t i o n s . The annual report, with the  British  Columbia  Facts  and Statistics  (1956), opens  statement: B r i t i s h Columbia, t r a v e r s e d by t h r e e d i s t i n c t mountain ranges and w i t h , on the whole, a h i g h r a t e of p r e c i p i t a t i o n , has many mountain r i v e r s which o f f e r o p p o r t u n i t y f o r power development and consequent secondary i n d u s t r i a l g r o w t h . (page twenty-five) 3 2  In the same p u b l i c a t i o n , the  "Manufacturing" S e c t i o n ' s  paragraph s t a r t e d f o r seven c o n s e c u t i v e  years  opening  (1956-1962) with  the same c l a i m : "Secondary i n d u s t r i e s are r a p i d l y accounting f o r a l a r g e p o r t i o n of B r i t i s h Columbia's t o t a l p r o d u c t i o n values."  32 T . L . Sturgess & R.W. Bonner, Department of I n d u s t r i a l Development, T r a d e , and Commerce, Bureau of Economics and S t a t i s t i c s , The Government of B r i t i s h Columbia, British Columbia Facts and Statistics, Volume X, 1956, pp. twentyf i v e , t w e n t y - s i x . R.W. Bonner l a t e r became chairman of B.C.Hydro.  94  Extension Thereafter,  the  l e a d i n g p r o d u c t i o n s e c t o r s of manufactured  goods were i n t r o d u c e d i n order of gross product v a l u e s . of  the c a t e g o r i e s have been renamed and some g i v e  i m p r e s s i o n of the apparent development Year: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.  1. 2. 3. 4. 5. 6.  Wood Paper and A l l i e d Food and Beverage Petroleum & Coal P r . Primary Metals Metal F a b r i c a t i n g  7.  Transportation Equipment Chemical and Chemical Products Non-metallic Mineral Products Other I n d u s t r i e s  8. 9.  Fertilizers  10.  However, the d i s c u s s i o n  i n the 1984 e d i t i o n of  Facts  and Statistics  is  British  less optimistic  d e s c r i p t i o n of the r a p i d development s t a t e s the  industry.  1983  Sawmills Pulp and Paper Petroleum Products Fish-Processing Vaneers and Plywoods S l a u g h t e r i n g and Meat-Packing Sash, Door, and Planing M i l l s M i s c e l l a n e o u s Foods Preparations Ship B u i l d i n g  Columbia  the  of secondary  1956  Some  in  its  of secondary i n d u s t r y .  It  following: The p r o v i n c e s manufacturing i n d u s t r i e s are l a r g e l y resource based: namely f o r e s t p r o d u c t s , r e f i n e d nonf e r r o u s m e t a l s , f i s h p r o d u c t s , and processed agricultural products.... The Wood and Paper and A l l i e d I n d u s t r i e s accounted f o r 45 percent of the v a l u e of p r o v i n c i a l f a c t o r y shipments i n 1983. T h i s domination i s expected to continue i n the near f u t u r e although f u r t h e r p r o c e s s i n g of other resources and an expansion i n higher technology products such as e l e c t r i c a l equipment, i n d u s t r i a l equipment, c h e m i c a l s , and plastics is a n t i c i p a t e d . 3 3  33 Don P h i l l i p s  (minister),  B u s i n e s s Development British  1983,  p.  67.  M i n i s t r y of Industry and Small Columbia  Facts  and  Statistics,  95  Extension  The argument t h a t a d i v e r s i f i e d manufacturing i n d u s t r y depends upon abundant s u p p l i e s of e l e c t r i c i t y a t a moderate c o s t does not mean t h a t the abundance of  low c o s t  electricity  brought about the d i v e r s i f i c a t i o n of the the manufacturing industry.  Out of the twenty manufacturing i n d u s t r i e s c a t e g o r i z e d by S t a t i s t i c s Canada, t h r e e — "Wood I n d u s t r i e s , "  "Paper and  A l l i e d I n d u s t r i e s , " and "Chemical and Chemical Products I n d u s t r i e s " - - purchase on the average  85% of the  total  e l e c t r i c i t y used i n manufacturing i n B r i t i s h Columbia. historical  review of the purchase s t a t i s t i c s of the  major i n d u s t r i e s f o r the p e r i o d from 1962 to 1983 t h a t the v a r i a t i o n of purchases, manufacturing,  three  indicates  as a percentage of the  total  has stayed w i t h i n the range of 81% to 87%  throughout the growth of B . C . H y d r o ' s p r o d u c t i o n of (see  A  Appendix, Table X I I ) .  electricity  In summary, the a d d i t i o n of  B . C . H y d r o ' s e l e c t r i c i t y has not brought about d i v e r s i f i e d industry.  With the expansion of B . C . H y d r o i n t o the i n t e r i o r of province,  the p r o v i n c i a l  s t a t e ' s i n t e r v e n t i o n i n the  p r o d u c t i o n of e l e c t r i c i t y becomes e v i d e n t . & Allied"  the  The "Wood," "Paper  (pulp and p a p e r ) , and "Chemical" i n d u s t r i e s '  show  the s t a t e ' s i n c r e a s i n g share of p r o d u c t i o n of low c o s t electricity.  F o r e s t products i n d u s t r i e s purchased i n c r e a s i n g  Extension amounts their  o f lowcost  electricity  f r o m B.C.Hydro  self-generation ofelectricity  On t h e c o n t r a r y , t h e s m e l t i n g the  category  Cominco), but  o f "Primary  have purchased  increased  consumers  their  Metals" little  96 and reduced  (see Table I V ) .  industries,  represented by  (dominated by Alcan and  electricity  own g e n e r a t i o n .  from  B.C.Hydro,  I ncontrast,  i n t h e "wood m a n u f a c t u r i n g "  smaller  s e c t o r do n o t have  TABLE I V THE I N C R E A S E I N 'PURCHASED' V E R S U S ' S E L F - G E N E R A T E D ' ELECTRICITY ( T h o u s a n d s o f KW.h) Manufacturing  Industry  1965  1971*  -Wood  Purchased: Self-generated:  595,972 393,297  1,091,457 249,878  -Paper & A l l i e d Purchased: Self-generated:  2,023,077 1,094,774  3,702,397 1,585,324  -Chemical & Chem. Purchased: Products Self-generated:  460,829 1,130,562  1,106,056 1,002,238  -Primary Metals Purchased: Self-generated:  131,636 5,493,595  233,735 6,491,173  Source:  Columbia  B.C.Hydro, Acres  Industrial  Consulting  Services Ltd.,  Growth and Electricity  British  Consumption,  ( S e p t e m b e r , 1 9 7 4 ) , T a b l e 2.2, p . 2-13, c o n s t r u c t e d u n p u b l i s h e d S t a t i s t i c s Canada d a t a . * B.C.Hydro's Department o f Marketing and P l a n n i n g compiled these comparisons f o r t h e 1980s.  from has not  the f i n a n c i a l , water, or energy resources t o generate own power.  their  They are more dependent on B . C . H y d r o and pay  h i g h e r r a t e s than the major u s e r s .  Extension B.C.Hydro's rate structure i s a possible  97 disincentive  to  the development of a more d i v e r s i f i e d manufacturing i n d u s t r y w i t h i n the f o r e s t  products s e c t o r .  extended t o 88% of the the  year 1983,  B r i t i s h Columbia purchase: 1,270  1,018, approx. 80%). diversified  Table V I I , V I I I ,  GW.h, B . C . H y d r o s a l e s  On the other hand, i n the more  "Wood Manufacturing" s e c t o r  (the p r o d u c t i o n of  lumber, plywood, d o o r s , hardwood, f l o o r s , coffins,  etc.)  o n l y nine accounts  t o t a l purchase of 1,979 Transmission rate  (see  p a r t i c l e board,  (or 256 GW.h), out of  GW.h i n 1983,  receive  Tables V I I , X I I ) .  the  B.C.Hydro's  T h i s means  approximately 87% of the purchases by customers  that  i n the "Wood  Manufacturing" category are paying the higher General r a t e 1983,  is  "Pulp and Paper" i n d u s t r y and to 80% of  "Chemicals" i n d u s t r y (see  total  The "Transmission" r a t e  4 cents/KW.h versus  Although the t o t a l  (in  2.5 c e n t s / K W . h ) .  purchase of e l e c t r i c i t y  in  manufacturing i n c r e a s e d from 3,808 (GW.h) to 9,780.4 the l a r g e r supply of e l e c t r i c i t y was a p p l i e d to the of timber and chemicals used i n p u l p p r o d u c t i o n . p r o d u c t i o n c o n s i s t s l a r g e l y of export s t a p l e s , a v a i l a b i l i t y of e l e c t r i c i t y  processing  Since  the  d i d not d i v e r s i f y the  (GW.h),  forest  increased staples  economy.  Conclusion B.C.Hydro consultants, the s o l u t i o n to the  engineers,  and p l a n n e r s  perceived  l a c k of primary and secondary i n d u s t r y i n  Extension  British  C o l u m b i a as  infrastructure and  and  one  of of  linking  f o r e s t wealth.  The  b u i l d i n g the  i t to B r i t i s h  d e v e l o p m e n t show a p r e f e r e n c e  intensive,  i n t e r n a t i o n a l , and  electricity. capacity  The  utility  and  products, "Keefer  i n the  industry,  contributed  not  the  industry  supply  manufacturing,  paper and  the  but  used  industry,  the  of 85%  electricity of  i n the  the  production  i t s s u p p l i e r the  other  abundant  a diversified  Most o f  supply  of  dams.  Just  f o r w a r d and  h y d r o e l e c t r i c equipment  as  as  a secondary  linkages  did  to  the  not electricity  processes of  chemical  the  products  "Wood timber,  p u r c h a s e s and  the  in  d i d not but  around  does the  community  industry,  industry  i n many segments o f t h e  backward  p a p e r , wood  electricity  At  The  cost  form of p r o c e s s i n g  forest processors.  tourism  low  purchased  b u i l d i n g o f many h y d r o e l e c t r i c s t r u c t u r e s  promotion of  northern  Contrary  q u a l i f y f o r low-rate e l e c t r i c i t y  as  of  t o b u i l d i n g power  ( p u l p and  smelting).  wood i n d u s t r y .  b e n e f i t from the  same way  on  capital  consumption of  M a n u f a c t u r i n g , " a more d i v e r s i f i e d does not  for  developed access to  solicited  staples  m a n u f a c t u r i n g was  p u l p and  reports  industry.  chemical products,  scenario,"  diversify  mineral  l i n k e d them w i t h B.C.Hydro's power g r i d .  p r o m o t e d and  electricity  for  staples  Crown c o r p o r a t i o n  resources  Columbia's  l a r g e volume c o n s u m e r s  These p e r c e p t i o n s  f o r the  hydroelectric  Crown c o r p o r a t i o n ' s  industrial  98  level, lead  to  the  hydro  s t a p l e s economy,  were d e v e l o p e d .  B.C.Hydro  no  to  99  Extension  extended  the  stereotyped economy  within  In  on  the  other  perception of  the  reproducing  colonial by  B.C.Hydro  reality  that  economy.  was  by  manufacturing  words,  and  invitation" Its  the  ("industrialization  dependent  sector  s t a p l e s economy  traditions  to  production.  did very  utility  i n the  extended  the  The  way  Canadian  of  British  Statement  of  February  industrial  development  despite  evidence  to  primary  attraction  to  1980,"  change  the  the  leading  "industrialization  by  foreign corporations.  beyond  to  the  facilitate  role  government  Columbia's  of  a  policy  which  economy.  "Energy  contains  Policy  again  of  the  1960s  that  the  resources  in British  Columbia,  contrary  industry  staples  to  are  expanded  pursued  assumptions  the  and  was  went  of  staples-dependent  government  Statement  statement  i t actively  province's  little  staples exports  B.C.Hydro  the  already  centers").  hydroelectric infrastructure  staples  of  ideas  invitation,""development  I t s promotion  extended  the  and  the  same  1970s, are  the  the  repeats:  The p r o v i n c e ' s h y d r o e l e c t r i c p o t e n t i a l i s p e r h a p s the s t r o n g e s t a t t r a c t i o n f o r f i r m s c o n s i d e r i n g where t o l o c a t e and expand . . . . 3 4  34 T h e B r i t i s h V a n c o u v e r , May  Columbia 1983, p.  Utilities 41.  Commission,  Site  C  Report,  100  Planning  Chapter PLANNING THE  V  "UNPLANNED SURPLUS"  Introduction The  contradictions inherent  electricity the  major  and  with  to  quality  staples  B.C.Hydro  planning  contrasted approach  by  of  information In  by  the  government,  of  the  "unplanned to  plan  infrastructure controlled  the  the  for  the  "...entrusted 1 9 6 2 Hydro  substantial  requirements  with  On  economy  and  the  a  chapter. Then,  of  a  the  one  "boom  electricity  thwart  this  s t a t e , the of  Authority  on  Act  the  they  the  are  conditions  and  the  bust" policy  at  the  root  state  as other,  foreign  process.  government our  First  industrial  hand,  of  technocratic  economic  clear  industries;  in planning  production  c o n t r a d i c t i o n s are  management  Power  autonomy  of  using  staples  the  versus  inherent  provincial  in this  introduced.  absence  surplus." an  expanded  available in a  staples producers  Within  The  planning  development  economy.  attempts  examined  p r a c t i c e s are  the  hydro  are  i n the  energy  allows  is resources."  1  B.C.Hydro  hydroelectric projects:  I t g i v e s Hydro b r o a d power r e g a r d i n g t h e generation and s u p p l y o f power i n t h e p r o v i n c e and the a d d i t i o n a l a u t h o r i t y to c a r r y out i t s work. 2  1 From t h e " E n e r g y P o l i c y S t a t e m e n t ( F e b r u a r y 1980)," submitted as E x h i b i t 4 6 t o the B r i t i s h Columbia Utilities C o m m i s s i o n a n d c i t e d i n i t s Site C Report, May 1 9 8 3 , p . 4 1 . 2 The 1 9 6 2 Power A u t h o r i t y A c t and t h e s u b s e q u e n t amended and c u r r e n t l y R . S . B . C . 1 7 9 , c . 1 8 8 g i v e t h i s p o w e r . Site C Report, p.42.  Planning In a d d i t i o n , o t h e r Ministry  institutions  o f E n e r g y , t h e Water R i g h t s  C o m m i s s i o n s , and to b u i l d  government  dams.  same t i m e  the Cabinet The  broad  to accord with  prominent p o l i c y provincial  101  Branch,  such  as  the  Advisory  c o n t r i b u t e to the  final decision  powers g i v e n t o B.C.Hydro a r e a t government p o l i c y  d i r e c t i o n s are  directions.  the  Two  g i v e n t o B.C.Hydro i n t h e  g o v e r n m e n t ' s E n e r g y S t a t e m e n t on  February  1980:  1) "We s t i l l have c o n s i d e r a b l e u n t a p p e d h y d r o e l e c t r i c p o t e n t i a l " [and B.C.Hydro s h o u l d investigate this potential]. 2) T h a t " t h e p r o v i n c e ' s h y d r o - e l e c t r i c p o t e n t i a l i s perhaps the s t r o n g e s t a t t r a c t i o n f o r f i r m s c o n s i d e r i n g where t o l o c a t e and e x p a n d . " " . . . T h a t a s e c u r e and r e l i a b l e s o u r c e o f e l e c t r i c i t y i s a v a i l a b l e t o meet t h e P r o v i n c e ' s n o r m a l g r o w t h ; and t h a t e l e c t r i c a l energy i s a v a i l a b l e to a l l i n d u s t r i e s on a f a i r and e q u i t a b l e b a s i s . " 3  The more t h a n  p l a n n i n g , d e s i g n i n g , and just  a political  because of the technical social  rationale).  be  For the  evident that during the  Utilities  than  economic  and  an  goals, r e l a t i v e ability  C Report,  stability the  t o the c o n d i t i o n s i t becomes  1980s t h e c o m p r e h e n s i v e  Site  and  be  to ignore  economic environment,  Commission,  dams, where  t e c h n o c r a t i c approach to  When a p p l y i n g O f f e ' s t h e o r y  a staples-dependent  3 B.C.  (such as b u i l d i n g  clear-cut  the production c y c l e ,  argues  by many o b s t a c l e s  easier to achieve  t h e r e must be  side-effects. in  may  Offe  approach ( p u r p o s i v e - r a t i o n a l  i s confronted  c h o i c e o f ends  success  successful, during  experts)  o f dams r e q u i r e  approach to p l a n n i n g .  that the t e c h n o c r a t i c planning a p p r o a c h u s e d by  building  pp.  planning  40,41.  Planning approach encounters  numerous o b s t a c l e s .  102  Responses  by the  major s t a p l e s producers themselves deny the a b i l i t y to p l a n comprehensively.  The major problem f o r B.C.Hydro and the  p r o v i n c i a l government i n p l a n n i n g the e l e c t r i c a l  load  requirements f o r a s t a p l e s producing i n d u s t r y , i s  the  i n a b i l i t y to o b t a i n r e l i a b l e i n f o r m a t i o n from s t a p l e s producers.  Government and B.C.Hydro S o l u t i o n s t o Complex Problems  Planning  B.C.Hydro and other p r o v i n c i a l s t a t e i n s t i t u t i o n s the p u b l i c h y d r o e l e c t r i c i n f r a s t r u c t u r e f o r the i n d u s t r i a l growth. solutions  expected  The major assumptions were t h a t the  best  to complex p l a n n i n g problems can be found by:  accurate f o r e c a s t i n g , infrastructure, of  planned  2) e f f i c i e n t  of  the  3) b u i l d i n g the p r o j e c t s at the r i g h t time and  the a p p r o p r i a t e s i z e ,  purchasers,  development  1)  4) determining the needs of  5) c r e d i t f i n a n c i n g of p r o j e c t s ,  a p p r o p r i a t e p r i c e of  and 6)  the  electricity.  Forecasting In order to f o r e c a s t  the needs of i n d u s t r i a l  customers,  d i s t r i c t managers and the S p e c i a l C o n t r a c t s Department i n B . C . H y d r o asked p l a n n e r s i n v a r i o u s m u l t i n a t i o n a l  staples  producing companies and l o c a l governmental agencies what needed.  B.C.Hydro described t h i s  they  process:  D i s t r i c t managers c o n s u l t l o c a l governments, business and i n d u s t r y r e p r e s e n t a t i v e s . The data  is  Planning  103  c o m p i l e d and a n a l y z e d . I n a d d i t i o n e x p a n s i o n p l a n s of e x i s t i n g l a r g e i n d u s t r i a l customers a r e a n a l y z e d . I n q u i r i e s r e l a t e d t o p o s s i b l e new i n d u s t r i a l development a r e e v a l u a t e d . 4  The  forecasts  forindustrial  electricity  under c o n d i t i o n s o f a s t a p l e s - d e p e n d e n t to predict.  Consequently,  allowances for  industries  Energy in  forindustrial  Board  coming  i t s forecast  refers to this  purchases  Credit  report, practice  logic of  was f o l l o w e d , a n d e x t r a of e l e c t r i c i t y  into the province.  (a S o c i a l  economy a r e d i f f i c u l t  t h e developmental  "industrialization-by-invitation"  requirements  were made  The B r i t i s h  Columbia  government a d v i s o r y committee)  Electric  Power Requirements  of extra  allowances:  (to 1990),  I n 1 9 6 1 " . . . a l a r g e a l l o w a n c e was a d d e d t o t h e b a s e p r o v i n c i a l f o r e c a s t f o r new power i n t e n s i v e l o a d s coming i n t o t h e p r o v i n c e . T h e r e was no a t t e m p t made i n 1 9 6 1 t o a l l o c a t e t h e new l o a d t o any p a r t i c u l a r area." I n 1 9 7 0 " . . . s u b s t a n t i a l a l l o w a n c e s were made f o r i n d u s t r i a l l o a d s i n i n d i v i d u a l E.A.S.'s [ E l e c t r i c S e r v i c e A r e a s , B.C. i s d i v i d e d i n t o 18 s u c h a r e a s ] o v e r a n d above t h o s e a l r e a d y i n c l u d e d i n B.C.Hydro, A l c a n , a n d Cominco p r o j e c t i o n s . " 5  The  p r a c t i c e o f adding  loads continued i n 1981. number o f i n q u i r i e s retained  from  extra allowances  As a r e s u l t industrial  for industrial  o f an " . . . u n u s u a l l y h i g h  customers,  B.C.Hydro  DPA C o n s u l t i n g L i m i t e d t o c o n s t r u c t a f o r e c a s t  of the  4 B.C.Hydro, "What y o u n e e d , " Energy Blueprint 1981. 5 B r i t i s h C o l u m b i a E n e r g y B o a r d ( a n A d v i s o r y Committee on t h e Power M a r k e t ) Electric Power Requirements: in British Columbia Projection to 1990, Government o f B r i t i s h C o l u m b i a , May 1, 1971, p. 1 1 .  Planning requirement of t h i s Percent  per  group of customers through  annum f o r e c a s t s were c o n s t r u c t e d  combined p u r c h a s e d e l e c t r i c i t y mining, chemical  and  petro-chemical  b a s e d on  i n d i v i d u a l company p r o j e c t i o n s . "  the  low  ( 7 . 1 % per  ( 2 . 2 % per  1981,  petro-chemical  year), probable  year) increases  same y e a r t h i s  Blueprint  and  r e p o r t was  urged  by  adding  the  smelting,  sector 7  written,  these  f o r e c a s t s were  DPA's  report  ( 4 . 5 % per  in industrial  increased  1991."°  i n d u s t r i e s . Within  the  high  smelting  [to]  requirements of  sectors,  predicted  104  year),  and  consumption.  B.C.Hydro's  In  Energy  h y d r o e l e c t r i c development:  The g r o w t h r a t e o f e l e c t r i c demand i s f o r e c a s t t o i n c r e a s e by 6.1 p e r c e n t a n n u a l l y i n t h e 11 y e a r s f r o m A p r i l 1, 1980 t o M a r c h 3 1 , 1 9 9 1 . H y d r o must keep pace w i t h a n t i c i p a t e d i n d u s t r i a l development •• • I t i s v i t a l t o i n d u s t r y , t o government and t o t h e p u b l i c t h a t we p l a n t o d a y t o meet c u s t o m e r r e q u i r e m e n t s 10 o r more y e a r s h e n c e . a  B.C.Hydro f o r e c a s t s d i f f e r e d  from these of the  Energy Commission's  ( t h e f o r m e r name o f t h e  Commission). Before  the  M i n i s t r y of  B.C.  Utilities  Energy, Mines  P e t r o l e u m R e s o u r c e s made a d e c i s i o n a b o u t g r a n t i n g project  certificate  referred Utilities  to build  " S i t e C"  (on t h e  B.C.Hydro's a p p l i c a t i o n b a c k t o t h e Commission f o r a  B.C.  and an  energy  Peace R i v e r ) , i t British  Columbia  review.  6 DPA C o n s u l t i n g L i m i t e d V a n c o u v e r , p r e p a r e d f o r B.C.Hydro A Forecast of Purchased Electricity Requirements of B.C.Hydro Industrial Customers 1981-90 ( V a n c o u v e r : DPA, A u g u s t , 1 9 8 1 ) , p . 1. 7 DPA c o n s u l t a n t s , 1 9 8 1 , p . 1. 8 B.C.Hydro, Energy Blueprint 1981, "Introduction."  105  Planning  The Commission heard c o n s i d e r a b l e evidence regarding Hydro's f o r e c a s t i n g r e c o r d . In p r e s e n t i n g t h e September 1981 f o r e c a s t s , Hydro acknowledged t h a t : "Quite f r a n k l y , our f o r e c a s t i n g r e c o r d , t h a t o f other energy f o r e c a s t s , has d e t e r i o r a t e d d u r i n g the energy t r o u b l e d s e v e n t i e s . " (1:46)  like  A review o f i t s past f o r e c a s t s i n d i c a t e d t h a t during the 1970's Hydro overestimated demand by an average of 11% i n the f o u r t h year and by 37% i n t h e e i g h t h year f o l l o w i n g t h e year o f the f o r e c a s t . Hydro's estimates f o r the l a r g e s t component o f demand, t h e bulk [ i n d u s t r i a l ] s e c t o r , have been t h e p o o r e s t ( E x 12:C14). 9  S i z e o f the H y d r o e l e c t r i c To  solve  producing that  t h e problem  Infrastructure of finding  the hydroelectric  t h e most  efficient  infrastructure  way o f b u i l d i n g capacity  its  r e s i d e n t i a l , commercial,  was  t h e dual  industry automatic the  catalyst  comes  f o rjobs  c a n be e x p o r t e d about.  Shrum  before  The r a t i o n a l e  and i n d u s t r i a l  argued  assumed  i t was n e e d e d b y customers.  with  c a n be assumed  until  way o f  the hydroelectric  and i n d u s t r i a l  was - - i f e l e c t r i c i t y  surplus  growth  policy.  efficient  i n f r a s t r u c t u r e , B.C.Hydro  was t o b u i l d  river  t h e most  respect  This to  t o be "an  growth,"  then  1 0  the anticipated  industrial  i n the following  way:  For t h e economic production o f power t h e r e i s a minimum l i m i t t o t h e s i z e o f t h e i n i t i a l generating i n s t a l l a t i o n s f o r both t h e Peace and Columbia projects. T h i s minimum i n e a c h c a s e p r o v i d e s more power t h a n t h e P r o v i n c e c a n u s e i n t h e e a r l y y e a r s of t h e p r o j e c t s .  9 BCUC, Site C Report, 1 9 8 3 , p. 5 8 . 10 Paul McKay, Electric Empire: the Inside Story of Hydro. (Toronto: Between the L i n e s , 1 9 8 3 ) , p. 1 8 6 .  Ontario  106  Planning  I f any m a r k e t c o u l d be c r e a t e d f o r t h e u n u s e d p o r t i o n of the g e n e r a t i o n i t would, even i f s o l d a t a l o w e r p r i c e , b r i n g e x t r a income t o t h e p r o j e c t and so b e n e f i t B r i t i s h C o l u m b i a c o n s u m e r s . I f t h i s a d d i t i o n a l power c o u l d be e x p o r t e d a t a recoverable b a s i s , t h e r e c e i p t s w o u l d r e d u c e t h e c o s t s o f power to B r i t i s h Columbia c o n s u m e r s . " 1 1  The  benefits  s e e n t o be increase  to the  the  Province of  creation  in reliability  Timing and  S i z e of  of  extra  and  built.  instance, in  the  Phil  early  i n the  provision system.  of  an  1 2  Projects  t o when t h e  Predictions  r e v e n u e , and  flexibility  Rushed d e v e l o p m e n t was p r o b l e m as  s u c h o v e r - i n s t a l l a t i o n were  of  the  c h a r a c t e r i s t i c response to  hydroelectric energy  G a g l i a r d i , the  the  i n f r a s t r u c t u r e should  s h o r t a g e s were a b u n d a n t . Minister  of  Highways,  be  For  predicted  1960s: By 1970 we w i l l be w a l k i n g a r o u n d w i t h c a n d l e s on o u r h a t s t o see y o u r way i f t h e P e a c e as w e l l as t h e C o l u m b i a d o e s n ' t go a h e a d . I would l i k e t o know how we a r e g o i n g t o s i t a r o u n d q u i b b l i n g a b o u t i t . We a r e n o t i n t e r e s t e d i n t h e p o l i t i c s o f power. We want t o be a b l e t o t u r n on a s w i t c h and see t h e l i g h t s go on. 1 3  Action  and  priorities.  b u i l d i n g during Consideration  a booming economy were as  t o when t h e  were s u p p o r t e d w i t h e x t r a p o l a t e d c o n s u m p t i o n and  projects  curves of  rising  the were n e e d e d power  i n c r e m e n t a l / p e r annum p e r c e n t a g e s .  11 Shrum 1961, p. 27. 12 B r i t i s h C o l u m b i a U t i l i t i e s C o m m i s s i o n , " I n t h e M a t t e r o f B r i t i s h C o l u m b i a Hydro and Power A u t h o r i t y A p p l i c a t i o n s f o r R a t e R e l i e f , " Decision, F e b r u a r y 28, 1983, p. 93. 13 Sherman, 1966, p. 225.  107  Planning  Purchasers'  Requirements  B.C.Hydro system be  f o r domestic  built  living  British  Paddy  needs.  t o generate  customers for  i t planned  Treaty.  " I f he c o u l d  would  a s u r p l u s o f power.  i t would  barrier." and,  1  since  capital  hydroelectric  investment  taxpayer,  for this  projects  and guaranteed  thefinancing  River  could  both  be  the export  power was w i d e l y good  assumed,  vehicles f o r  by t h e p r o v i n c i a l  f o r these projects  sold  wanted t h e  t o break  were  still  t h e two r i v e r s  T h e r e f o r e i t must  and Washington  market  Canada  Certainly  become t h e i m p l e m e n t  A ready  4  1960s,  reasoning f o r  going,  i nnegotiations.  t h e U.S. S i n c e O t t a w a  treaty,  Yet, i n theearly  g e t t h e Peace  hand  projects  b u i l d i n g s and  b y means o f t h e C o l u m b i a  keep t h e whip  would  t o be p u r c h a s e d by  and commercial  industry.  barrier  (electricity) hydroelectric  d e s c r i b e s W.A.C. B e n n e t t ' s  the export  produce  means  electricity  Columbia's  Sherman  That  i nresidential  breaking  in  and constructed i t s  so t h e state-produced end product  used  were  claims that  was  state's  readily  available.  The  Financing of Projects The  and  financing  American  procedures. "funds  capital  14 P a d d y p . 246.  "Most  Sherman,  dams  and followed e s t a b l i s h e d  B.C.Hydro's  areraised  customers."  of thehydroelectric  through  Energy Blueprint borrowing  borrowing  Bennett  takes  drew  Canadian  borrowing  1981 i n d i c a t e s  and through  t h e form  on  rates  that  p a i d by  o f long-term  (Toronto: M c C l e l l a n d Stewart,  bonds  1966),  108  Planning (20 t o 30 y e a r s ) , t h r o u g h the p u b l i c , brokers." first  o r through The  origin  Europe.  o f funds  - usually  Hydro's c r e d i t  investments  from  issuedt o  p r i v a t e placements a r r a n g e d by  t o Canada a s a s o u r c e  must go e l s e w h e r e  The  government t r u s t e e d f u n d s  these  varies.  o f funds,  "Hydro u s u a l l y  looks  b u t o n o c c a s i o n we [ s i c ]  t o the U n i t e d S t a t e s , but a l s o t o  is a vital  factor  in attracting  sources."  Price o f Electricity Under t h e new B.C.  Utilities  Commission A c t , t h e  Commission r e g u l a t e s t h e r a t e s charged new  provincial  energy  policy.  1 5  Because p r i c e s  s u r p l u s power have been d e c r e a s i n g per  KW.h i n 1980 t o 2.9 i n 1 9 8 5 ) ,  has  been t o n e g o t i a t e and  In  by B.C.Hydro u n d e r  1 6  f o r export o f  s i n c e 1980 ( f r o m the  response  4.1  cents  by B.C.Hydro  hope f o r f i r m e x p o r t c o n t r a c t s .  order t o increase i t s e l e c t r i c i t y  is  r e q u i r e d t o a p p e a r b e f o r e t h e B.C.  In  i t s power t o s e t r a t e s ,  rates,  Utilities  the Commission can  the  the  1 - 7  utility  Commission.  request  missing  15 Two A c t s a r e o f i m p o r t a n c e : "The B.C. U t i l i t i e s A c t " B.C. S t a t u t e s (1980), C h a p t e r 60; "Hydro and Power A u t h o r i t y A c t " B.C. S t a t u t e s (1979), C h a p t e r 188. 16 B.C.Hydro Annual Report 1984/85, p . 11. 17 " F i r m power i s now b e i n g s o l d i n t h e s o u t h e r n U.S. f o r l e s s t h a n f o u r c e n t s a kwh and s u r p l u s power f r o m t h e N o r t h w e s t i s g o i n g i n t o t h e S o u t h e r n C a l i f o r n i a m a r k e t f o r l e s s t h a n two c e n t s a kwh. To g i v e y o u some a p p r e c i a t i o n o f t h e r e l a t i v e meaning o f t h o s e v a l u e s , B.C. s o l d i t s downstream b e n e f i t s t o t h e U.S. u n d e r t h e 1964 C o l u m b i a R i v e r T r e a t y f o r 5.3 c e n t s a kwh [the" Columbia River Treaty Protocol and Related Documents s t a t e s 5.3 m i l l s p e r kwh, p . 178, i n o t h e r words .53 c e n t s a kwh], a n amount t h a t c r i t i c s s a i d a t t h e t i m e was a b l a t a n t g i v e - a w a y . " M a r j o r i e N i c h o l s , The Vancouver Sun, A p r i l 3,  1986.  109  Planning  evidence,  both  increases. who  f r o m opponents and  In a d d i t i o n ,  present  evidence.  quasi-judicial 1980s a n d  the also of  the With  role.  of  conservation, or the  "...objective years."  by of  agencies,  other  respect to  the  rate  cross-examine  r a t e s , i t has thorough  those  assumed  hearings  a n t i c i p a t e d consumer r e s i s t a n c e f e a r of  industry),  the  than  a  in (but  increasing self-generation  B.C.Hydro d e c l a r e d i t s  a v o i d i n g r a t e increases f o r a p e r i o d of  During  1 8  Commission can  A f t e r three very  fearful  electricity  proponents of  Commission hearings,  five  government  B.C.Hydro, were requested  to  submit  information.  The  Ministry  submitted 1981)  the  to the  were r e p e a t e d industries  Blue Site that  to the  of  E n e r g y , M i n e s , and  Paper  No.3:  C hearings. low  Petroleum  Energy  Considerations  In t h i s  paper the  electricity  prices will  Resources (October assumptions  attract  smelter  province:  The p r i c e s a n d a v a i l a b i l i t y o f e l e c t r i c i t y i n B r i t i s h C o l u m b i a has r e s u l t e d i n c o n s i d e r a b l e i n t e r e s t among f i r m s i n t h i s i n d u s t r y [ t h e p r i m a r y metals industry] i n l o c a t i n g operations w i t h i n the province.19 Several  developments were g i v e n  (by a d d i n g copper  another  as  examples: Alcan's  s m e l t e r ) , Cominco's z i n c  s m e l t e r s , and  two  or  three  smelter,  ferro-silicon  expansion two  smelters.  18 B.C. U t i l i t i e s C o m m i s s i o n , " I n t h e M a t t e r o f A p p l i c a t i o n by B r i t i s h C o l u m b i a H y d r o a n d P o w e r A u t h o r i t y , " Decision, May 9, 1986, p. 42. 19 B.C. M i n i s t r y o f E n e r g y , Mines and Petroleum Resources, Blue Paper No. 3 Energy Considerations, O c t o b e r 1981, p. 21.  Planning  110  B . C . H y d r o has s o l d on average l e s s than 200 GW.h to smelting i n d u s t r y s i n c e  1962.  the  A l c a n produces about 5000 Gw.h  and Cominco about 3000 GW.h to supply t h e i r own o p e r a t i o n s . Both have taken advantage of the i d e a l hydro s i t e s allowed them to produce cheap e l e c t r i c i t y ) when B . C . H y d r o price,  came i n t o e x i s t e n c e .  Neither B.C.Hydro's  In 1985 and 1986,  and 139 GW.h, r e s p e c t i v e l y ,  The  they a l r e a d y owned  nor a v a i l a b i l i t y of power has been an i n c e n t i v e to any  major s m e l t i n g i n d u s t r y .  (see  (which  Table I I ,  B.C.Hydro sold  131  to "Primary Metal" Manufacturers  above).  Solutions  From the above i t can.be concluded t h a t f i v e major solutions  to the p l a n n i n g problems of the h y d r o e l e c t r i c  i n f r a s t r u c t u r e emerged: 1) to make l a r g e allowances power-intensive  f o r new  i n d u s t r i e s d u r i n g the 1960s, 1970s, and 1980s  f o r i n d u s t r i e s coming i n t o the p r o v i n c e ; 2) to b u i l d ahead of provincial  i n d u s t r i a l consumption requirements and p l a n f o r  the export of the s u r p l u s e l e c t r i c i t y u n t i l the economy grows; 3) to f i n a n c e the b u i l d i n g of dams w i t h U . S . , Canadian, and European c a p i t a l - - about h a l f  i n U . S . funds; 4) to  the commitments of l a r g e i n d u s t r i a l i n v e s t o r s s i z e of dams, t r a n s m i s s i o n f a c i l i t i e s ,  include  i n p l a n n i n g the  and e l e c t r i c i t y  purchases; and 5) to s o l v e the problem of l a r g e amounts of power (which come suddenly on l i n e when b i g dams are  finished  and the i n d u s t r i a l purchasers are not yet ready to buy) by temporary power exports  i n t o a "power hungry" U n i t e d S t a t e s  Planning  market. A l l these hydroelectric  solutions  111  t ot h e development o f  power system h a r b o r a s u b s t a n t i a l  degree o f  uncertainty. The S o l u t i o n s a n d t h e "Unplanned Clear Goal In  Requirement  order  Claus Offe  Surplus"  f o r the technocratic  argues,  the state  approach t obe s u c c e s s f u l ,  apparatus as directed  government needs c l e a r , conventional to  what t h e g o a l s  receive  such c l e a r  Commission pointed direction  o fproduction  andoperational  should  T h e B.C. U t i l i t i e s  Hydro was n o t g i v e n  a s t o what i t s r o l e  cues a s  be. B.C.Hydro d i d n o t  policy directions. out that  by i t s  clear  i n t h e i n d u s t r i a l development by  means o f e l e c t r i c i t y - i n t e n s i v e i n d u s t r y  i n the province  should  be. THE COMMISSION HAS NO RECOMMENDATION ON GOVERNMENT POLICY IN THESE MATTERS. THE COMMISSION RECOMMENDS, HOWEVER, THAT GOVERNMENT POLICY WITH RESPECT TO BOTH THE TYPE OF INDUSTRIAL DEVELOPMENT IT IS SEEKING AND THE ROLE OF HYDRO IN FACILITATING ITS DEVELOPMENT SHOULD BE CLARIFIED TO ASSIST HYDRO IN DEVELOPING ITS PLANS, AND ALSO TO ASSIST FUTURE COMMISSION PANELS IN ASSESSING THE NEED FOR NEW SUPPLY. (Original Emphasis) zo  As  indicated  a l l o w a n c e s were category  included  20  forecast  BCUC,  repeatedly,  large i n d u s t r i a l  i n the forecast.  Precisely  i n this  o f i n d u s t r i a l demand, B.C.Hydro's f o r e c a s t i n g h a d  been t h e p o o r e s t . sector  above,  Site  " F o r example t h e 1973 b u l k [ i n d u s t r i a l ]  overestimated  C Report,  actual  May 1 9 8 3 , p .  1 9 8 0 r e q u i r e m e n t s b y some  301.  112  Planning 64.5 p e r c e n t .  The 1976 r e q u i r e m e n t s f o r e c a s t o v e r e s t i m a t e d  a c t u a l 1980 r e q u i r e m e n t s i n t h e b u l k 25.8 p e r c e n t . " engineering for  2 1  [ i n d u s t r i a l ] s e c t o r by  Such f o r e c a s t s a r e used t o make p l a n n i n g and  d e c i s i o n s , and t h e r e f o r e have s e r i o u s  implications  geologists, hydrologists, corporate planners, the  c o n s t r u c t i o n work f o r c e , and o t h e r t e c h n i c a l  I t t a k e s 10 t o 15 y e a r s t o p l a n , d e s i g n , b u i l d a major h y d r o e l e c t r i c p r o j e c t . planning  analyses,  engineering  work has t o be redone.  l i c e n s e , and  information,  s t u d i e s , drawings, c o n t r a c t s ,  and many o t h e r c o s t l y p r e p a r a t i o n s construction begins.  Site  staff.  are required years before  When a p r o j e c t i s postponed, some o f t h e I f projects are canceled, m i l l i o n s of  d o l l a r s need t o be w r i t t e n o f f .  The Site  C Report  indicates  e x p e n d i t u r e s on t h e "Peace S i t e C [ p r o j e c t ] a r e $35,000,000" and  " a p p r o x i m a t e l y $160,000,000 has been spent on a l l major  p l a n n e d h y d r o , t h e r m a l and t r a n s m i s s i o n c u r r e n t l y i n the planning  developments, t h a t a r e  s t a g e up t o March 1982."  Despite  the i n d u s t r i a l o p t i m i s m e x p r e s s e d f o r growth i n t h e B r i t i s h Columbia i n d u s t r y , o f f i c i a l S t a t i s t i c s Canada p u b l i c a t i o n s o f purchased e l e c t r i c i t y by major i n d u s t r i e s show l i t t l e  growth.  As T a b l e V i n d i c a t e s , t h e t o t a l p u r c h a s e s o f e l e c t r i c i t y reported  t o S t a t i s t i c s Canada by t h e s t a p l e s p r o d u c e r s i n t h e  21 Columbia-Resources Group L t d . i n t h e r e p o r t p r e p a r e d f o r the B.C. U t i l i t i e s Commission, Assessment of B.C. Hydro Electric Load Forecasts Including Comparisons with B.C. Government Forecasts, 5 November 1981, p. C-13. T h i s r e p o r t  was  24,  s u b m i t t e d t o t h e H e a r i n g s on S i t e C as E x h i b i t 12 (Nov. 1981)  Planning  Mining,  Logging  have d e c l i n e d  and Manufacturing s e c t o r s  subsequent  of British  113  Columbia  t o 1976.  TABLE V Consumption o f Purchased E l e c t r i c i t y by t h e M i n i n g , Logging and M a n u f a c t u r i n g I n d u s t r i e s i n B r i t i s h Columbia 1975-1982  Note:  A l l values are expressed  i n thousand  MW.h  INDUSTRIES  YEAR  MINING  1982 1981 1980 1979 1978 1977 1976 1975  LOGGING  2 967. 3 002. 2 693. 2 537. 2 459.5 2 373.1 2 103.6 2 131.6  MANUFACTURING  8 9 10 10 9 8 10 8  41.6 40.5 38.8 37.Ir 31.1 32.0 29.8 29.4  963.6 076.1 042.2 008.4 371.9 915.5 717.1 162.5  TOTAL  11 12 12 12 11 11 12 10  972.2 118.6 774.0 582.5 862.5 320.6 850.5 325.5  Source: S t a t i s t i c s Canada, Consumption oif Purchased Fuel and Electricity: by the Manufacturing, Mining, Logging, and Electric Power Industries (Ottawa: M i n i s t e r o f Supply and S e r v i c e s C a n a d a ) , c a t a l o g u e 57-208, V o l u m e s 1975, 1976, 1977, 1978,  1979,  1980,  1981,  1982.  Note: "Consumption o f p u r c h a s e d energy by t h e i n d u s t r i e s n o t e d does n o t r e p r e s e n t t h e i r t o t a l consumption, i n t h a t t h e data exclude consumption o f any s e l f - p r o d u c e d f u e l o r e l e c t r i c i t y . " MW.h = MEGAWATT-HOURS: 1 x 1 0 kilowatt-hours. *" = r e v i s e d f i g u r e * The h i g h e s t t o t a l i s c a u s e d by s t i l l u n r e s o l v e d a c c u r a c y i n the S t a t i s t i c s Canada f i g u r e s i n t h e " P r i m a r y M e t a l I n d u s t r i e s " l i n e 12 c a t e g o r y i n M a n u f a c t u r i n g ( C o m i n c o h a s l i k e l y r e p o r t e d s e l f - g e n e r a t e d p o w e r b e t w e e n 1962 t o 1976) S t a t i s t i c s Canada i n Ottawa c a n n o t r e v e a l t h e r e p o r t i n g p a r t y . Cominco p u r c h a s e d power f r o m i t s s u b s i d i a r y West Kootenay Power a n d L i g h t . 3  Planning Stability  Requirement  Since b r i n g i n g a h y d r o e l e c t r i c and  114  infrastructure  (planning  b u i l d i n g a dam) i n t o p r o d u c t i o n takes 10 to 15 y e a r s and  the subsequent p r o d u c t i o n c y c l e implementation  is  50 to 100 y e a r s ,  of a h y d r o e l e c t r i c development  the  program i s  p a r t i c u l a r l y v u l n e r a b l e to the s t r u c t u r a l c o n d i t i o n s staples-dependent economy. natural resource, staple,  and the  They a r e : the d e p l e t i o n  of a of  the  the o v e r p r o d u c t i o n or l a c k of demand of  l a c k of secondary  the  i n d u s t r y or product  innovation.  The  l i m i t s to n a t u r a l f o r e s t resources are s i n g l e d out  the most important f a c t o r  influencing  f o r e s t products i n d u s t r y .  f u t u r e growth i n  The M i n i s t r y of Energy i n  " I n d u s t r i a l Sector  Energy Requirement Forecast"  found t h a t logging  and sawmill a c t i v i t y  and  85 m i l l i o n to 1990.  identified  Possible  (October  the f o r e s t p r o c e s s i n g electricity  1981)  l e v e l s have been 75  or 75 m i l l i o n to  1985,  shortages of c h i p s were  along w i t h a low i n c r e a s e  the f o r e s t i n d u s t r y of 1.15  the  its  reduced to conform with l i m i t s of maximum h a r v e s t s of m i l l i o n c u b i c meters per year to 1995,  percent  of energy requirements annually u n t i l 1 9 9 5 .  i n d u s t r y stops growing - -  requirement f o r t h i s i n d u s t r y  manufacturing i n d u s t r y consumption)  No. 3 Energy  Considerations,  in As  2 2  the  (85% of Hydro's  declines.  Such  reductions  22 The M i n i s t r y of Energy, Mines and Petroleum Resources, Paper  as  October 1981,  paper was submitted to the S i t e C H e a r i n g s .  p.  20.  Blue  This  Planning can  115  a l s o be caused by o v e r p r o d u c t i o n or l a c k of demand f o r  the  staple.  The economy,  "boom and bust" c y c l e ,  so much p a r t of the  does not p r o v i d e s u f f i c i e n t  term p l a n n i n g process which i s hydroelectric f a c i l i t i e s . recessions,  stability  staples  f o r the  long  r e q u i r e d to p l a n major  During p e r i o d s of prolonged  the o r i g i n a l demand requested by the i n d u s t r y may  no longer be needed,  and d u r i n g p e r i o d s of  sustained  expansion,  o v e r - o p t i m i s t i c demand i n d i c a t i o n s are given by the  industry.  B.C.Hydro's forecasting  1981,  methods,  used up u n t i l  d i d not take i n t o account such changes i n economic  conditions.  2 3  Furthermore, p o l i t i c a l l e a d e r s and B r i t i s h  Columbia developers  often  assume t h a t exports and the  economy  would f o l l o w a p a t t e r n of incremental growth.  On the c o n t r a r y , B r i t i s h Columbia's dependent p a t t e r n of economic development d i d not f o l l o w the  colonial capitalist  growth p a t t e r n of the B r i t i s h I n d u s t r i a l R e v o l u t i o n , such as i n d i c a t e d by K a r l Marx i n Capital, h a n d i c r a f t shops,  where small master  producing consumer commodities,  manufactures and subsequently In B r i t i s h Columbia,  into large scale  develop  industries.  i n d u s t r i e s developed from a mix of  s t a p l e s producers and l a r g e s t a p l e s producers to l a r g e s t a p l e s producers ( c h a r a c t e r i z e d by the a expansion of the s t a p l e s economy). 23 BCUC, Site C Report, p . 89. 24 K a r l Marx Capital, chapters 13,  into 2 4  small  increasingly capitalist  Continuous improvements  14,  15.  Planning ( p r o d u c t i v e technology) end day.  116  i n the primary p r o c e s s i n g of the same  products ( p u l p , paper, lumber, m i n e r a l s ) c o n t i n u e s to T h i s i s not what T . D . Buchanan, a B . C . H y d r o  economist,  expected.  Investment  Prospect,  In h i s r e p o r t , British he l i s t e d  senior  Columbia  as an  " . . . t h e reasons why a long term  i n v e s t o r can r e a l i s t i c a l l y take an o p t i m i s t i c view of prospects  this  B.C.'s  f o r continued r a p i d growth: B. C . has an expanding and v i g o r o u s p o p u l a t i o n which assures a growing domestic market f o r secondary i n d u s t r i e s and the economic s t i m u l u s of expanding expenditures i n s o c i a l f a c i l i t i e s , housing and public u t i l i t i e s . " 2 5  Yet,  the i n v e s t o r s who would use s u b s t a n t i a l amounts of  e l e c t r i c i t y were the s t a p l e s p r o d u c e r s .  For example,  producers and t h e i r chemical s u p p l i e r s d i d not  pulp  establish  secondary i n d u s t r y by way of d i v e r s e grade paper p r o d u c t i o n . The  investors  i n s t a p l e s p r o d u c t i o n have l i t t l e  confidence  in  producing d i v e r s e products f o r the domestic B r i t i s h Columbia market. Because they are o v e r l y dependent on f o r e i g n markets, the  need f o r e l e c t r i c i t y remains s u b s t a n t i a l l y determined by  s t a p l e s products markets o u t s i d e the p r o v i n c e .  The  P l a n n i n g Power D e n i e d  i n a Staples-Dependent  With r e s p e c t to O f f e ' s t h e o r y , arises:  the f o l l o w i n g  Economy  question  Is the power and knowledge f o r comprehensive p l a n n i n g  25 T . D . Buchanan, B . C . H y d r o , S t a t i s t i c a l A n a l y s i s Department Commercial S e r v i c e s D i v i s i o n , British Columbia as an Investment Prospect, 26 June 1967, I n t r o d u c t i o n : "Summary and Highlights," 7.(e).  117  Planning  of the e l e c t r i c a l peripheral  infrastructure  f o r industry available  s t a t e i n which p r o d u c t i o n  i s largely  t othe  determined  by  forces outside the region?  When c o m b i n e d w i t h o t h e r f a c t o r s o f p r o d u c t i o n ( c a p i t a l equipment, l a b o u r , m a t e r i a l s , f u e l and m a n a g e r i a l e x p e r t i s e , e t c . ) , e l e c t r i c i t y , a s one individual factor of production, contributes tothe e x t r a c t i o n o f n a t u r a l r e s o u r c e s and t h e p r o d u c t i o n o f goods a n d s e r v i c e s , a n d t h u s t o t h e g e n e r a t i o n o f value-added i n B r i t i s h Columbia.  However, t h e demands f o r t h e s e goods ( a n d i m p l i c i t l y , t h e i r v a l u e - a d d e d ) a r e d e t e r m i n e d by exogenous market f o r c e s , p a r t i c u l a r l y t h o s e o f e x t e r n a l export markets, i n which t h e major p o r t i o n o f B.C. p r i m a r y r e s o u r c e s a r e s o l d . 2 6  The  power t o p l a n f o r e l e c t r i c i t y  resource The  sector faces a barrier  consumption  t o planning  f o r e i g n o w n e r s h i p , whereby d i r e c t i v e s  made i n l i g h t value  of interests  outside B r i t i s h  a n d demand o f s t a p l e s p r o d u c t s  region,  the resource  the q u a l i t y planning  itself  hydroelectric  where most o f t h e i m p o r t a n t region,  Columbia;  2) t h e  outside the  f o r comprehensive To p l a n a  f o r a staples-dependent  economy,  d e c i s i o n s a r e made o u t s i d e t h e  is difficult.  In t h e p u l p and paper i n d u s t r y t h e f o r e i g n ownership i s substantial 26 A c r e s ,  (Marchak 1983:87).  1974,  p . 2-8,  2-9.  1)  and d e c i s i o n s a r e  i s determined  by s t a p l e s p r o d u c e r s .  infrastructure  i n three areas.  i s s u b j e c t t o d e p l e t i o n ; a n d 3)  of information necessary  i s denied  i n the  Corporate  head o f f i c e s i n  Planning  eastern  C a n a d a , t h e U.S.A.,  technology, how of  long  priority  Europe and Japan decide  of products  how m u c h i n d u s t r i a l  electricity  i n British  interested  i n manufacturing  countries  (especially  Columbia.  when t h e y  own m a n u f a c t u r i n g  processing  facilities  i s limited  allocated  tend  infrastructure  o f non-renewable  affects  resource  growth  planning  a  due t o  resources.  the control of the  The i n s t a b i l i t y  the planning  i n British  resources  markets  reduces t h e c o n t r o l o f the p r o v i n c i a l process.  more o f  c a n become o v e r p l a n n e d  government. Over-dependence on such  accumulation  own  i n t e g r a t e d and  As a r e s u l t ,  markets elsewhere a r e beyond  substantially  in  their  are  f o rthe staples production, i n  limits  times  Their  by t h e a v a i l a b l e n a t u r a l  the  capacity.  are vertically  Therefore,  absence o f d i v e r s i f i c a t i o n ,  cycles  i n their  t o e x p a n d b y way o f u s i n g  the  its  relations,  staples producers  goods  t o them by t h e government.  hydroelectric  regional  Foreign  plants).  same n a t u r a l r e s o u r c e s .  The  labour  i s required f o r their  finished  have t h e i r  Columbia  produced,  on  t o produce e t c . . A l l a r e f a c t o r s i n the determination  production  the  118  o f such  o f an e l e c t r i c a l  state  over  production  system's  I t c a n produce a s u b s t a n t i a l s u r p l u s o f power i n  of very  low growth and during  the staples production  market.  the saturation of  supply  Planning Industrial  Customers i n B r i t i s h  In response  to the  119  Columbia  "unplanned s u r p l u s " of  electricity,  former B . C . H y d r o chairman Robert Bonner s a i d : Hydro was merely responding to what i t s c o r p o r a t e customers thought they would need. He s a i d those i n d u s t r i e s c o u l d not have f o r e c a s t p l a n t c l o s i n g s and the general slump i n the economy t h a t r e s u l t e d i n a drop i n the demand of e l e c t r i c i t y . 2 7  Norman O l s o n , the p r e s i d e n t of B r i t i s h Columbia Hydro and Power A u t h o r i t y , acknowledging i n a s i m i l a r response of  the  lack  demand f o r power from the $2 b i l l i o n Revelstoke dam,  indicated,  " . . . the e a r l i e r f o r e c a s t  was based a t l e a s t  in  p a r t on f i r m i n q u i r i e s from companies wishing to set  up or  expand t h e i r businesses and t h e i r use of e l e c t r i c i t y  in  B r i t i s h Columbia. He asks r h e t o r i c a l l y : "Where are now?"  they  28  The  l a c k of promised i n d u s t r i a l consumption and  subsequent  non-purchase was advanced by both the chairman and  the former p r e s i d e n t of B . C . H y d r o as a cause of the "unplanned surplus."  T h i s i s s u e became a major focus at the B . C . U t i l i t y  Commission H e a r i n g s .  J.R.  B r a s s i n g t o n i n charge of B . C . H y d r o ' s S p e c i a l Power  C o n t r a c t s Department, which d e a l s with b u l k i n q u i r i e s  since  27 Russel K e l l y , " B . C . Has Too Much Dam Power," February 14 1984. Photocopied a r t i c l e . 28 A l b e r t S i g u r d s o n , "B.C.Hydro f o r e s e e s f u r t h e r c u t s i n c a p i t a l p r o j e c t s as growth slows," The Globe and Mail September 26, 1983, p . B l .  120  Planning 1970,  t a b l e s o f 34  presented  expand t h e i r verify  existing  these tables,  c o m p a n i e s w h i c h were p l a n n i n g t o  operations or s t a r t R.  Overstall,  new  a geologist  on b e h a l f o f t h e S o c i e t y f o r t h e P r o m o t i o n Conservation  (SPEC),  companies. Both their  independently  Overstall  and  of  surveyed  February  1982).  industrial  had  either  During plants,  these  the  inquiring  their 1981  to  surveys, plans f o r e s t a b l i s h i n g  or expansions  of e x i s t i n g  been c a n c e l e d o r were r e d u c e d  and  researcher  Environmental  w i t h i n a f o u r month p e r i o d ( O c t o b e r  new  Canadian  and  To  B r a s s i n g t o n c o n c u r r e d on many o f  f i n d i n g s because t h e companies reduced  requirements  accounts.  foreign controlled  by  the  facilities, following  companies:  F e r r o - S i l i c o n S m e l t e r : Sumitomo/SKW Canada L t d . , M i t s u b i s h i Canada L t d . , M i t s u i & Co. (Canada) L t d . ; C o a l M i n i n g E x p a n s i o n : F o r d i n g C o a l L t d . , B.P. Canada L t d . , P e t r o - C a n a d a C o a l D i v i s i o n ; L e a d and Zink: Cyprus A n v i l Mining C o r p o r a t i o n ; S t i k i n e & S c h a f t C r e e k C o p p e r : T e c k C o r p o r a t i o n , Kennco E x p l o r a t i o n ; P u l p and P a p e r : E u r o c a n P u l p & P a p e r Ltd., C a n a d i a n C e l l u l o s e Company L t d . , Doman I n d u s t r i e s L t d , and f o r p u l p m i l l C h e m i c a l s : Canadian O c c i d e n t a l P e t r o l e u m . 2 9  There  i s no  evidence  that  not p u r c h a s i n g the e l e c t r i c i t y for. MW)  Overstall  t h e y were h e l d r e s p o n s i b l e f o r they  ( f r o m SPEC) c h e c k e d  had 85%  made f i r m  inquiries  of the c a p a c i t y  o f t h e c o m p a n i e s w h i c h B.C.Hydro had  indicated  (1349  as  29 E x h i b i t 97: T a b l e 1, t i t l e d "B.C. H y d r o B u l k Power (1800 S e r i e s ) Accounts D e t a i l - Probable E l e c t r i c a l P r o j e c t e d S a l e s ; " E x h i b i t 98: T a b l e 2, B.C. H y d r o 1981 B u l k Load P r o j e c t i o n s - " O t h e r " Assumed S t a g i n g ; " and E x h i b i t 96: Statement of Evidence of R i c h a r d O v e r s t a l l (S.P.E.C.); these e x h i b i t s were p r e s e n t e d t o and f i l e d by t h e B.C. Utilities C o m m i s s i o n d u r i n g t h e S i t e C Hearings on F e b r u a r y 10, 1982, p.  4421.  121  Planning  inquiries did  (requests)  not confirm  in  reference  (667 MW). °  and reconfirming were  be  overly  1983 and  pulp m i l l s  other  price  will  o r 73% o f load  electricity  b u t "wood  a low-cost  30 BCUC Site Overstall, V 31 BCUC Site 32 BCUC Site 33 BCUC Site  growth  supply  found t o  recovery  "...in  added o f 20.2%  i n capacity  from  chemi-thermal 3 2  In contrast  to industrial  the higher  tothe users,  prices of  i n the technological pulping"  i n the forestry), since not  costs  a r e a major  concern."  t o some d e g r e e t h e g o v e r n m e n t ' s  incentive t o industry  C ol C C C  Upon  3 1  customers,  was a l s o  and chemi-thermal mechanical  ( 2 , 4 0 0 GW.h  contradicts  that  n o t be s i g n i f i c a n t  change t o "thermal  This  period."  that  forecast.  i n value  s e v e n new  significant  argued  expect  the original  growth  forecast  the decade."  major expansion  that  i s very  Hydro w i t n e s s e s  electricity  over  said  with."  potential industrial  real  t h e m i d 1990s w i t h  argument t h a t  " I would  I t had assumed a s t r o n g  32.0% r e s p e c t i v e l y , w i t h  mechanical  as  with  issue  i n the forest industry  optimistic.  until  (B.C.Hydro)  h i srevised  5 6 1 [MW] w i t h i n  and 1984, namely w i t h  1986  since  less than half  Hydro's outlook  take  He t e s t i f i e d :  have t o serve  Hydro estimates  still  he c o n c u r r e d ,  SPEC'S.  was e v e n b e l o w  49% o f those  a n d r e v i s i o n s : "...some o f t h e  S P E C m a d e we w o u l d  However, i n g e n e r a l  revising  Mr. B r a s s i n g t o n  3  to the forecasts  changes that  Hydro would  by t h e companies, b u t found,  program.'  3 3  'electricity  When  overly  Hearings, F e b r u a r y 10, 1982, F o r t S t . John, Mr. . 26, p. 4339. Hearings, V o l . 26, pp. 4421, 4481. Report, M a y 1 9 8 3 , p . 7 4 . Report, M a y 1 9 8 3 , p p . 7 5 , 7 6 .  122  Planning optimistic building of  rate  industrial  forecasts contribute t othe  of infrastructure, increases  The  B.C.  over  Utilities  Petroleum  costs  are  spread  b y way  a l l consumers.  Commission, not  B.C.Hydro f o r e c a s t s , but M i n e s and  then the  over-  a l s o those  only  o f the  questioned  the  M i n i s t r y o f Energy,  Resources.  In cross-examination o f the M i n i s t r y ' s f o r e c a s t s one major area o f controversy r e l a t e d t othe primary m e t a l s a n d m i n i n g i n d u s t r i e s -- t h e n u m b e r a n d t i m i n g o f new c o p p e r , l e a d - z i n c , f e r r o - s i l i c o n a n d aluminum smelters i n p a r t i c u l a r . . . . TheM i n i s t r y p a n e l a g r e e d t h a t some o f t h e a s s u m p t i o n s i n t h e s e areas, f o r example, those w i t h respect t o f e r r o s i l i c o n s m e l t e r s , may h a v e b e e n o v e r l y o p t i m i s t i c  (10:1,602).  The the on  inability  appropriate planning  apparent.  3 4  o f the  size  information  extended i n the  staples-dependent  m i n i n g ) deny B.C.Hydro, the government, the consumption. industry  and  information Utilities  by the  major  sectors  economy  (e.g.  and  are  inability brought  with  t o supply  forward  of British f o r e s t products and  plan  for  adequate  future  i n the  C Report,  conclusions  t odevelopment p o l i c y  M a y 1983,  p . 74.  for  the  planning  T h e C o m m i s s i o n came t o t h e  respect  based  becomes  Themajor c o n t r a d i c t i o n between p l a n n i n g the  produce  M i n i s t r y o f Energy, and the  Columbia:  34 BCUC Site  industry,  power t o c o m p r e h e n s i v e l y  Commission.  conclusions  s t a t e t op l a n  o f i t s h y d r o e l e c t r i c s y s t e m , when  Corporations  Columbia's  provincial  in  o f t h e B.C. following British  123  Planning  The e v i d e n c e showed c l e a r l y t h a t a m a j o r d i f f i c u l t y Hydro f a c e s i n d e v e l o p i n g l o a d growth f o r e c a s t s and h e n c e s y s t e m p l a n s i s i n e s t i m a t i n g t h e f u t u r e new i n d u s t r i a l loads. On t h e one hand, H y d r o f e e l s o b l i g e d t o make p r o v i s i o n s f o r s u c h l o a d s s o t h a t e l e c t r i c i t y s u p p l y d o e s n o t c o n s t r a i n new e c o n o m i c development. On t h e o t h e r hand, s i n c e t h e s e l o a d s a r e n o t c o m m i t t e d , i t i s n o t c l e a r t o what e x t e n t t h e y s h o u l d be t a k e n i n t o a c c o u n t s i n c e new f a c i l i t i e s m i g h t be b u i l t i n a n t i c i p a t i o n o f l o a d s t h a t never m a t e r i a l i z e . T h i s problem r e l a t e s d i r e c t l y t o p r o v i n c i a l i n d u s t r i a l p o l i c y and t h e e x t e n t t o which t h e p r o v i n c e wishes t o encourage t h e development o f e l e c t r i c i t y - i n t e n s i v e i n d u s t r y and t o gear Hydro's p l a n n i n g t o accommodate s u c h d e v e l o p m e n t whenever i t occurs. 3 5  The  u n d e r u t i l i z a t i o n o f hydro f a c i l i t i e s ,  Cheekeye-Dunsmuir p r o j e c t s dam  Mr.  Sheehan  primarily  a r e very  testified  driven  that  by t h e c o s t  utilization  o f only  transmission  capacity  major i n d u s t r i a l indicates, will  260 MW i n 10%.  increases are  lines  fiscal  capacity  Island,  t o handle a load  y e a r 1986/87 —  B.C.Hydro t e s t i f i e d  that  3 6  t h e R e v e l s t o k e Dam ( c a p a c i t y  a  "...this  was b a s e d o n l o a d p r o j e c t i o n s  used u n t i l  By a d d i n g  t o Vancouver  customers on t h e I s l a n d . . . . "  also, that  n o t be f u l l y  rate  Finance o f  o f t h o s e two p r o j e c t s .  B.C.Hydro a d d e d 2400 MW t r a n s m i s s i o n t o be o n l y  Columbians.  Vice-President,  current  Cheekeye-Dunsmuir t r a n s m i s s i o n  forecast  t oa large part t o  costly forBritish  (B.C.Hydro's E x e c u t i v e  Administration)  the  ($ 838 m i l l i o n ) a n d t h e R e v e l s t o k e  ($ 1,921 m i l l i o n ) w h i c h were b u i l t  accommodate i n d u s t r y ,  such as t h e  by t h e  The u t i l i t y 1843. MW)  1992 f o r d o m e s t i c p u r p o s e s . I n  35 BCUC Site C Report, May 1983, p . 300. 36 BCUC Decision May 9, 1986, p . 19. T h i s f a c t was c o n f i r m e d i n a p e r s o n a l i n t e r v i e w w i t h B r a s s i n g t o n o n J u l y 21, 1986.  Planning  124  the meantime, the dam's use i s dependent on the export market in  the U . S .  Size o f the Surplus  The  s i z e of the s u r p l u s can be gauged by Hydro's  a p p l i c a t i o n t o the N a t i o n a l Energy Board (the f e d e r a l approving the export of e l e c t r i c i t y )  i n 1983 t o  agency  export  c a p a c i t y and e l e c t r i c i t y f o r the years from 1 October 1984, 30 September 1990.  to  Since B r i t i s h Columbians do not need the  Revelstoke dam f o r t h i s p e r i o d ,  B.C.Hydro a p p l i e d f o r  t o t a l amount of f i r m export not exceeding  the  2,000 MW (a  c a p a c i t y g r e a t e r than Revelstoke dam) and 6,000 GW.h ( e q u i v a l e n t to the purchase of Hydro's e l e c t r i c i t y B r i t i s h Columbia's p u l p m i l l s ) . predict i f  its  i n a l l of  Since B . C . H y d r o c o u l d not  c o m p e t i t o r s i n the U n i t e d S t a t e s would have  f i r m or i n t e r r u p t a b l e power or energy t o s e l l , a p p l i e d f o r l i c e n s e s t o exchange,  store,  sell  the company or t r a n s f e r  i n t e r r u p t a b l e energy i n the amount of not exceeding GW.h  (Nearly h a l f of B . C . H y d r o ' s t o t a l  be deducted) and  i.e.  f i r m s a l e s would  c i r c u l a t e (simultaneous import  export arrangement), the flow of power not exceeding  GW.h. and  and t o l o o p ,  sales,  15,000  3 7  3,000  T h i s r e q u i r e s i n c r e a s e d i n t e r l i n k a g e with the U . S . ,  Alberta grid  system.  37 The N a t i o n a l Energy Board of Canada,  In the Matter  of the  National Energy Board Act and in the Matter of an Application of British Columbia Hydro and Power Authority: To renew, with modifications. License No. El-128; El-130; El-127. 1983,  Volume 1,  pp.  7,8,9.  125  Planning The by  its  s i z e of the h y d r o e l e c t r i c system i s u s u a l l y  c a p a c i t y to produce power.  c a p a c i t y has grown to "a t o t a l  B.C.Hydro's operating  name p l a t e c a p a c i t y of some  10,483 MW [Megawatt = 1000 K i l o w a t t s ] . As a l r e a d y above,  described  indicated  the h i g h e s t one-hour demand ever recorded to the end of  1985 on Hydro's i n t e g r a t e d system - - 6 , 8 1 6 MW - - o c c u r r e d on 26 November 1 9 8 5 . " conditions)  (under extreme c o l d and export  Despite a d j u s t e d f o r e c a s t s and supposed p l a n n i n g  a c c o r d i n g to customers  38  "customer sovereignty"  set  conditions  the demand), the c a p a c i t y i s  35% above  h i g h e s t peak ever r e c o r d e d . T h i s i n d i c a t e s margin, but a s u b s t a n t i a l  (where the  not j u s t a s a f e t y  surplus capacity.  The B u r r a r d  Thermal P l a n t (912 MW, replacement v a l u e $1.4  b i l l i o n ) was  to  serve as an emergency power source i n case low s p r i n g r i v e r flows would not f i l l  the r e s e r v o i r s or i f B r i t i s h Columbia  were faced w i t h a d r a u g h t . I t has h a r d l y been used. The Energy Minister,  Stephen Rogers, commented on Hydro's s u r p l u s and the  i d l e n e s s of t h i s p l a n t : a plant l i k e this someday.  It's  "Other u t i l i t i e s  just s i t t i n g  there  can't believe  just  l i k e wearing a b e l t and  we have  i n case we need  suspenders."  it  39  38 B . C . H y d r o , B.C.Hydro: The Background, " H i s t o r y , " 1983, p . 3 . Shrum (1961: 27) i n d i c a t e d the estimated p o t e n t i a l c a p a c i t y of both r i v e r s . " C a p a c i t y - During the p e r i o d from 1968 to 1979 the Peace p r o j e c t c o u l d add 3,084 mw. of c a p a c i t y to the B r i t i s h Columbia power-supply. During the p e r i o d from 1967 to 1983 the Columbia p r o j e c t c o u l d add 4,220 mw. of c a p a c i t y . " The t o t a l c a p a c i t y of the two r i v e r s which was added to the system i s very c l o s e to the c a p a c i t y which has a c t u a l l y has been added by 1986. Shrum*s p r e d i c t i o n s under c o n d i t i o n s of c o n t i n u e d s t a p l e s p r o d u c t i o n were c l o s e to the a c t u a l e v e n t s . 39 Vaughn Palmer, The Sun, Vancouver, November 6 1985.  Planning  126  Conclusion In  summary, p l a n n e r s ,  development o f f i c e r s , g o v e r n m e n t , and infrastructure and  the  complex p l a n n i n g by  industrial of  policy  The goals  electricity  and  of  contributed  the  hydroelectric building  requires  the  absence of led  to  contributed  a  of  such  solutions  dams  to  information  clear  substantial  government overestimates  substantially  to  the  power.  contradiction  and  The  industrial  provincial  Both, unreliable  direction  n e e d s and  surplus  B.C.Hydro, the  Columbia.  problems.  industry  industrial  overall  of  politicians,  have shaped the  British  production  provided  within  industry of  experts,  planning  between the  output-oriented  denied  staples-dependent  substantially  to  in a the  "unplanned  planning  surplus."  economy  127  Intensification  Chapter VI B.C.HYDRO AND THE INTENSIFICATION OF STAPLES DEPENDENCE Introduction Before describing  t h e 1980s s t a t e  d e v e l o p m e n t o f h y d r o power, i t w i l l interventions that  covered  i n recent  state  help  i n the  to recall the  i n previous chapters.  decades t h e q u a n t i t y  intervention  intervention  I t was a r g u e d  and scope o f p r o v i n c i a l  i n the production  o f e l e c t r i c i t y has  increased.  I t h a s done s o i n two ways, o n e , t h e s t a t e h a s  intervened  t o expand t h e i n d u s t r y  projects, of  since  stand out.  unprofitable electricity  River,  d e c a d e s , two m a j o r  smaller  utilities  by s e v e r a l  developing  aspects:  taking  intervention  o v e r t h e B.C.  t h e U.S. t o r e g u l a t e  t h e Columbia  t h e P e a c e R i v e r , t o open t h e N o r t h ,  industry  capital.  t o proceed with t h e  The s e c o n d  as a r e l i e f  Both i n t e r v e n t i o n s  provincial  state's  allocation  of f o r e s t s , minerals,  allocating  the provincial natural  providing  f o r unemployment o f t h e  50s, and t h e p r o m i s e s o f i n f l o w  building  (1945)  and t h e promotion o f  for forest processing.  Company, a l l o w i n g  interventions  t h e B.C. Power C o m m i s s i o n  rural electrification  a dam-building late  over  characterized  Electric  three  In the f i r s t ,  taking  and d i s t r i b u t i o n  t h e 1940s.  During the f i r s t  was  hydroelectric  two, i t h a s e x p a n d e d t h e p r o d u c t i o n  electricity  started  of building  of industrial  a n d dam-  d i f f e r e d from t h e  allocative interventions  (such as t h e  o r dam s i t e s ) . resources,  When  the state d i d not  128  Intensification have t o sites, the  produce the but  i n order  to  power h o u s e s , and  objects was  forest areas,  (build  build  mineral  and  or  hydroelectric projects  switchyards),  the  a dams). T h e r e f o r e ,  insufficient  deposits,  the  a technocratic  s t a t e had  planning  (the  to  allocative  dam dams  produce  bureaucracy  structure  was  required.  Allocations only,  but  i n order  politics  was  informed  by  of  production,  produce  own  output produced  market). the  Once t h e  contradictions  the  staples  production  presented  dam  had  no  shock"  renewed t h r e a t lack  of  a prolonged  representatives  of  new  the  conditions,  the  new  to  the  became i n v o l v e d  in  but  by  versus  recession state to  the  state,  state  use  the  (a t e r m  used  requests).  i n the  1980s  process.  development, a  puts pressure  intervened  because  British  accumulation  respond.  the  disallowed  obligations to  industrial  siz  electricity  they  recession  the  be the  w h i c h means f i r m  and  on  site,  state-produced  planning  to  f o r w h i c h t h e y made " f i r m i n q u i r i e s "  Unemployment, power, and  state  (the  solely  had  i s d i r e c t e d from outside  because they  "surplus a  relying  Decisions  producers, load  considerations  between planning  A market f o r the  B.C.Hydro f o r e c a s t e r s  The  something,  actual  C o l u m b i a , and  by  political  the  of  electricity  on  sufficient.  comprehensive e l e c t r i c a l their  based  longer  grew.  consisted  to  be  no  dams, t h e  market  could  To  f o r the  surplus  o  onto reconcile  third  time  these in  a  129  Intensification  m a j o r way. A q u a l i t a t i v e mode o f o p e r a t i o n . part  change has taken  Since  In the interim,  overproduction  produced,  technocratic structure  (B.C.Hydro) has been t r a n s f o r m e d  more i n f r a s t r u c t u r e ,  i n the state's  major p r o j e c t s a r e already  of the state's internal  electricity.  place  to allocate  and  generate  t h e s t a t e does need t o b u i l d  because under c o n d i t i o n s o f  the necessary  mode o f i n t e r v e n t i o n r e s e m b l e s  allocation,  namely, t h e a l l o c a t i o n  electricity  t o staples producers  of discounted  and purchasers  surplus i n the United  States.  In the  this  state,  state's  experiences  accumulative  integrated control  f o r e i g n environment,  Site  over  an input product,  questions  should  share,  vertically  produce  input products  the provincial  and  s t a t e has  I t has c o n t r o l  f o ra f o r e i g n market. i n a new w a y .  with an i n t e r v e n t i o n i n a bigger  industrial  consumption?  developing  electricity evident.  which has  only  a n d i s u n c e r t a i n how m u c h i t s C r o w n  C f o rexport), given  historically  (primary  resources.  about production a r i s e  proceed  utilities,  Unlike a  production  and market  i t s control  corporation  state  functions.  resources,  consumer goods),  over  new c o m p l e x i t i e s i n f u l f i l l i n g t h e  m u l t i n a t i o n a l c o r p o r a t i o n (e.g. Alcan)  over  delegated  B.C.Hydro a s an agency o f  i t s unreliable  The Should t h e  way ( e . g .  market share  The c o m p l e x i t i e s o f b u i l d i n g as an e x p o r t a b l e  Some o f t h e m a r e :  resource  i n the dams a n d  product a r e  competition  transmission problems o f e l e c t r i c i t y ,  build  from  U.S.  uncertain  130  Intensification  revenues  to pay s t a t e d e b t s ,  consumption on a l a r g e r Third  and u n c e r t a i n i n d u s t r i a l  scale.  Intervention  In the 1980s a changing p a t t e r n of t h r e a t s p r o d u c t i o n of e l e c t r i c i t y s u r p l u s "power t r a p . " Watkins c a l l s the specialization  to  the  has emerged i n B r i t i s h Columbia:  the  T h i s c o n d i t i o n can be compared to what  "staples t r a p . "  Its  characteristics  i n the wrong k i n d of s t a p l e  are:  (electricity  energy resource p r o d u c t ) ; a weakening of the n a t u r a l  -  the  resource  base; unemployment and underemployment; and the l o s s of initial The  o p p o r t u n i t i e s f o r easy growth (Watkins 1967:64,63).  events l e a d i n g up to the power s u r p l u s and the  resource base ( d e s c r i b e d i n p r e v i o u s c h a p t e r s ) ,  weakening  combined with  unemployment and underemployment, are c h a r a c t e r i s t i c of situation in  i n the 1980s.  The average annual unemployment  the rate  B r i t i s h Columbia has d r a m a t i c a l l y i n c r e a s e d i n the 1980s  (1980, 6.8%;  1981,  14.7%; and 1985,  6.1%;  14.2%),  1982, 1  12.1%; 1983,  13.8;  1984,  not o n l y i n the general p o p u l a t i o n ,  but p a r t i c u l a r l y among the employees and workers who planned and  b u i l t h y d r o e l e c t r i c dams. Since the beginning of the Peace and Columbia h y d r o e l e c t r i c p r o j e c t s more than 20 years ago, Hydro's c o n s t r u c t i o n a c t i v i t y has p r o v i d e d a s i g n i f i c a n t share of t o t a l c o n s t r u c t i o n employment i n B . C . - about 10 percent on a v e r a g e . 2  1 S t a t i s t i c Canada, 12 months c a l e n d a r year average annual unemployment r a t e , catalogue No. 71-201. 2 B . C . H y d r o , Revelstoke Dam & Generating Station: Columbia River Power, c i t e d i n the s e c t i o n "Economic Impact" on t h i s promotional pamphlet, ISBN 0-7719-9914-3.  Intensification  131  As the p r o v i n c i a l s t a p l e s producers r e q u i r e d substantially  less e l e c t r i c i t y ,  came t o a s t o p .  the i n d u s t r y of b u i l d i n g dams  Not only i s the m i g r a t i n g c o n s t r u c t i o n  force  which moved from dam s i t e to dam s i t e w i t h i n the p r o v i n c e no longer r e q u i r e d to b u i l d dams, but the employment of substantial designers, end.  numbers of h y d r o e l e c t r i c e x p e r t s , draftsmen, and a d m i n i s t r a t i v e s t a f f  engineers, comes to an  T h i s was the r e s u l t of the t h i r d major i n t e r v e n t i o n by  the p r o v i n c i a l s t a t e i n t o the p r o d u c t i o n of e l e c t r i c i t y British The  in  Columbia. stopping of 10% of the c o n s t r u c t i o n a c t i v i t y  B r i t i s h Columbia, a f t e r  in  s o c i a l i z i n g a work f o r c e around the  b u i l d i n g of dams, has had a severe e f f e c t on the  construction  labour f o r c e .  Revelstoke  The labour f o r c e estimates f o r the  dam v a r i e d : While 790 workers were employed a t the s t a r t c o n s t r u c t i o n i n 1977, of  t h i s work f o r c e rose to a peak i n  3220 workers; upon completion of the dam i n 1985,  workers were r e q u i r e d . the c o n s t r u c t i o n phase,  3  of 1981  o n l y 40  T h i s work f o r c e i s only needed d u r i n g thereafter  25 - 40 persons can operate  and m a i n t a i n a h y d r o e l e c t r i c dam. The age d i s t r i b u t i o n of  this  c o n s t r u c t i o n work f o r c e showed 70% were 31 to 55 years old."* The  f a m i l y o r i e n t a t i o n of the workers was h i g h , 74% were  3 Revelstoke Demonstration Housing Project "Labour Force Estimates - Revelstoke Dam," p . 3 9 , source: Canadian Resourcecon L t d . . 4 N i c h o l a s V i n c e n t , " F i e l d A c t u a l i t i e s of an Impact M o n i t o r i n g Program," F i g u r e 1 : C o n s t r u c t i o n Work f o r c e age D i s t r i b u t i o n , Social Impact Assessment, e d i t o r s : Frank J. T e s t e r , W i l l i a m Mykes ( C a l g a r y : D e t s e l i g , 1981), p . 255.  Intensification m a r r i e d , and 38% had f a m i l i e s . f o r c e of s i n g l e men, but a f t e r  132  They were no longer a work  5  20 years of b u i l d i n g dams,  B . C . H y d r o had c r e a t e d a middle aged f a m i l y o r i e n t e d work force.  Their l i v e l i h o o d is  substantially affected  by the  stoppage of c o n s t r u c t i o n . Many other employees,  not only engineers  and c o n s t r u c t i o n  workers, but, c o n s t r u c t i o n managers, d e s i g n e r s ,  white c o l l a r  o f f i c e r workers, equipment o p e r a t o r s were p a r t of an e l i t e work f o r c e b u i l t up over the l a s t twenty years who do not know what to do n e x t . employees  In f i v e y e a r s ,  since  1980,  the number of  i n B . C . H y d r o has d e c l i n e d by 5,593 employees  12,195 i n 1980 to 6,602 by 1 9 8 6 .  In 1977,  6  from  the wages p a i d  to  employees made up 21% of B . C . H y d r o ' s c o s t s , whereas by 1986 they were f o r e c a s t  to be only 11% of c o s t s .  have i n c r e a s e d from c o n s t i t u t i n g forecast  Finance charges  35% of the c o s t s i n 1977 to a  by Hydro to be 45% of budget c o s t s i n 1 9 8 6 .  f i n a n c e charges were an a d d i t i o n a l cause of the  7  These  layoffs  b e s i d e s the primary cause of the l a y o f f s which was Hydro's excess c a p a c i t y .  5 V i n c e n t , 1981, 6 B.C.Hydro  Annual  p.256. Report  1984/85,  p.  15;  the  number of  employees f o r 1986 i s from e x h i b i t 22, Hearing No. 5, January 10, 1986 submitted to the B . C . U t i l i t i e s Commission by B.C.Hydro. 7 J . P . Sheehan (Executive V i c e - P r e s i d e n t , Finance and A d m i n i s t r a t i o n ) , 1984 Rate Application Volume 2 - P a r t 2 , Supplementary Testimony 12 August 1985, a submission to the B . C . U t i l i t i e s Commission as e x h i b i t 2 (2), (entered January 6, 1986), T a b l e , e n t i t l e d " D i s t r i b u t i o n of T o t a l Costs %," p . 12.  Intensification  133  The o v e r - b u i l d i n g of h y d r o e l e c t r i c p r o j e c t s had a severe e f f e c t on B r i t i s h Columbia's e n g i n e e r s .  The A s s o c i a t i o n of  Professional  Engineers of B . C . s a i d "almost 15% of  associations  11,000 members - about 1500 p e o p l e , i n c l u d i n g  almost 500 former Hydro employees engineers  the  - remain out of w o r k . "  8  The  have set up a c h a r i t a b l e fund to h e l p those f a c i n g  economic d i s a s t e r .  Many former B . C . H y d r o engineers  have sued  t h e i r employer f o r wrongful d i s m i s s a l and won t h e i r c a s e s . B . C . H y d r o ' s Bob M a r t i n , p r e s i d e n t of the A s s o c i a t i o n of Professional  Engineers of B . C . , i n d i c a t e d i n November 1985  t h a t out "of 1,200  u n i v e r s i t y of B . C . e n g i n e e r i n g  graduates  over the l a s t t h r e e y e a r s , o n l y about 400 are working f u l l t i m e . " "We are a d v i s i n g them t o go back E a s t , We t e l l  them,  'You are Canadian e n g i n e e r s ,  w i t h an a c c r e d i t e d degree.  or t o go South.  you are  respected  Go and get some experience  elsewhere and then when t h i n g s s t a r t booming here you can come b a c k . ' " M a r t i n then i d e n t i f i e d the i n t e r l i n k a g e between t r a d e s and p r o f e s s i o n s . "Unless B . C . ' s engineers are busy t h e r e i s l i t t l e hope of a resurgence among the t r a d e s and he added: ' I f we d o n ' t move soon, t h i s p r o v i n c e i s i n r e a l t r o u b l e . We have got t o develop more secondary i n d u s t r y i n order t o i n j e c t a b e t t e r balance i n t o the economy.'" But as he noted, the Mainland o f f i c e  "smart money" i s going i n t o Lower  buildings.  9  B . C . H y d r o ' s chairman, Chester  Johnson, on the other hand, would l i k e t o advance the  building  8 Kim Bolan and Dave Margoshes, The Vancouver Sun, "Dismissal c o s t a t Hydro t o r i s e , " February 5, 1986. 9 A l a n D a n i e l s , The Vancouver Sun, "Engineers have l i t t l e t o c e l e b r a t e , " November 15, 1985.  Intensification of  another dam.  Professional  In h i s address to the Management and  Employment S o c i e t y ' s  General Meeting, he wanted  to g i v e engineers and other p r o f e s s i o n a l He p o i n t e d to the d i f f e r e n c e s B.C.Hydro forecast  employees some hope.  between the government's  estimates by s a y i n g :  t h r e e to f o u r y e a r s , he notes:  by  need f o r S i t e C by  they are more o p t i m i s t i c than u s . " "No one has enjoyed t h i s process  me, the members of the task f o r c e , managers,  and  "the new f o r e c a s t  the Energy M i n i s t r y has advanced domestic  the l a y o f f s  134  the c o n s u l t a n t s  About - - not  or the  but i t had t o be done as Hydro changed from a  b u i l d i n g to an o p e r a t i o n a l m o d e . "  10  However t h i s  new  " o p e r a t i o n a l mode" goes beyond o p e r a t i n g a u t i l i t y  --  marketing and a l l o c a t i o n of e l e c t r i c i t y  industries  to v a r i o u s  have taken on a new emphasis.  The Government a n d B.C.Hydro ( R e s t r u c t u r i n g a n d New P o l i c i e s )  In the i n t e r i m , the government and B . C . H y d r o changed  the  mode of i n t e r v e n t i o n from a p r o d u c t i v e mode to a marketing a l l o c a t i v e mode.  In May of 1984,  e i g h t members on the  member board of B.C.Hydro d i r e c t o r s were r e p l a c e d by corporate p e r s o n a l i t i e s  15  five  and the permanent d i r e c t o r s h i p of  the  Energy M i n i s t e r Stephen Rogers. "Mr. Rogers s a i d the new appointments are the f i r s t s t e p i n a "new d i r e c t i o n " being taken by Hydro, a Crown c o r p o r a t i o n set up i n 1962 by former Premier W . A . C . Bennett. "As we are a n t i c i p a t i n g changes i n 10 Chester A . Johnson, Speech Notes Mapes Annual Meeting 18 February 1986. (To f o r e c a s t , the M i n i s t r y uses a i n d u s t r y s e c t o r a l approach to f o r e c a s t i n g and Hydro maintains an "enduser" approach, i . e . asks i n d u s t r i a l r e p r e s e n t a t i v e s ) .  135  Intensification  the mandate and p r a c t i c e s of B . C . H y d r o , " Mr. Rogers s a i d , "the time i s a p p r o p r i a t e f o r a corresponding adjustment i n c o r p o r a t e s t r u c t u r e . " "Obviously we are g e t t i n g away from being an e n g i n e e r i n g f i r m to being a c o r p o r a t e , f i n a n c i a l i n s t i t u t i o n . " x x  The  change  in d i r e c t i o n ,  1 2  g i v e n by means of  power over the Crown c o r p o r a t i o n ,  has s u b s t a n t i a l l y  the i n t e r n a l mode of o p e r a t i o n of B . C . H y d r o . 3  of  Hydro spokesman Peter McMullan:  political  3  altered  In the  words  "We've changed from being a  p r o d u c t i o n company to an o p e r a t i n g company." He a l s o s a i d "layoffs  are a p a r t of  the Crown u t i l i t y . - * 3  January 1985,  'an ongoing p r o c e s s '  of  that  restructuring  Chester Johnson who became chairman i n  (formerly heading Whonnok I n d u s t r i e s  L t d . and  West F r a s e r Timber Co. L t d . ) i s quoted as being "committed a lean and e f f i c i e n t  Hydro run along p r i v a t e s e c t o r  In h i s o p i n i o n t h i s c o u l d be achieved as a Crown c o r p o r a t i o n . " 3  5  Commission he " . . . t e s t i f i e d from a development  to  lines."  "despite Hydro's s t a t u s  Before the B . C . U t i l i t i e s on the t r a n s i t i o n of the  utility  and o p e r a t i n g company to simply an  o p e r a t i n g company," but "subsequently  modified h i s  statement  to i n c l u d e i n " o p e r a t i n g , " the requirement t h a t the u t i l i t y prepared to b u i l d and grow with the economic needs of  be  the  11 The Globe & Mail, "Howe S t r e e t t a k i n g over Hydro, NDP c h a r g e s , " May 18, 1984, p . B C l . 12 Max Weber, Economy and Society (Berkeley: U n i v e r s i t y of C a l i f o r n i a , 1978 e d i t i o n ) p . 989. 13 The p u r p o s i v e r a t i o n a l mode of o p e r a t i o n which i s c h a r a c t e r i z e d by p l a n n i n g and e n g i n e e r i n g i s transformed to a p o l i t i c a l i n p u t - o r i e n t e d b u r e a u c r a t i c m a r k e t i n g . The output ( b u i l d i n g dams) does no longer determine the i n t e r n a l structure. 14 The Vancouver Sun, "B.C.Hydro c u t s 40 head o f f i c e p o s i t i o n s , " June 26, 1985. 15 Rod Nut, The Vancouver Sun, "Changes at Hydro spark q u e s t i o n s , " March 29, 1986.  Intensification Province." is  little  Backward  136  T h i s i s u n l i k e l y d u r i n g the 1980s, because there  1 6  domestic need f o r more power. Planning  Hydro "ends up p l a n n i n g backwards, attempting to c r e a t e a demand f o r o v e r c a p a c i t y i t has b u i l t and d o e s n ' t know what to do with" " 1  The  7  "unplanned s u r p l u s " of e l e c t r i c i t y  economy i s  intensively  in a staples  marketed to s t a p l e s p r o d u c e r s .  As the  Energy M i n i s t e r announced i t to B r i t i s h Columbians: "We w i l l use the e x i s t i n g s u r p l u s of e l e c t r i c i t y to power the government's economic renewal p r o g r a m . " (Stephen Rogers) 1 8  Hydro's E x e c u t i v e V i c e - P r e s i d e n t B i l l  Best has i n t r o d u c e d  a new marketing p o l i c y which weds c o n s e r v a t i o n to marketing o p p o r t u n i t i e s . i n f l u e n c e customers  selective  "Under the new p o l i c y Hydro t r i e s  ( p r i m a r i l y i n d u s t r i a l and commercial)  c o n v e r t to e f f i c i e n t  use of e l e c t r i c i t y  and gas where  to to  this  w i l l meet t h e i r energy requirements at lower longterm c o s t . " Mr.  Best then j u s t i f i e s  arguing t h a t  it  l a r g e r base of  the v a l i d i t y of t h i s program by  spreads the p o t e n t i a l  rate increases  Columbia  over a  sales.  16 B . C . U t i l i t i e s Commission, In the Matter British  1 9  Hydro  and Power Authority  of Application Decision,  May  by  9,  1986, p . 9 . 17 " F i r s t the Power then the Demand" Energy Futures V o l , No 5, June 1985, p . 4. 18 The Honorable Bob M c C l e l l a n d , M i n i s t e r of the M i n i s t r y of Industry and Small Business Development, "Hydro Discounts to A t t r a c t Jobs" BC Economic Bulletin, V i c t o r i a , Spring 1985, p.8. 19 B.C.Hydro Service Digest, a B . C . H y d r o i n f o r m a t i o n pamphlet mailed with the monthly b i l l s , 16 October - 16 December 1985, p. 4.  137  Intensification  The  rationale i n the "efficient"  coincides  with  technology  use of  the introduction of labour  i n pulp  mills  a n d saw m i l l s .  electricity  displacing  automatic  The e f f i c i e n t  use of  electricity  i s c a l c u l a t e d on a p e r c e n t a g e o f end p r o d u c t  basis.  i s , B.C.Hydro's i n t e r e s t  That  existing that  staples producers.  output.  will  Since  electricity cost  t h e new t e c h n o l o g y  of workers,  Side  overemphasis of producing  engineers  electricity engineers  Discount  of the product  acts: of  into  salesmen.  Instead  of  of  policy, applying  industry, and f i b e r - p e r -  forests.  Power  incentives.  discounts,  fixed  (rather than the  new c o n v e r s i o n  become s a l e s m e n t o t h e m a j o r u s e r s  o n e t h e Critical  sawmills,  component o f t h e  t h e same s t a p l e ) a r e n o t p a r t  One way t o r e d u c e t h e s u r p l u s discount  --  such as t h e  t o the development of secondary  consumers o f  increased  p r o d u c e s more s t a p l e s  To i m p l e m e n t t h i s  are turned  more  because o f t h e  effects,  i s  t h e speed o f d e p l e t i o n o f t h e f o r e s t  and d i v e r s i f i c a t i o n  rationale.  which uses  r u n becomes a s m a l l e r  Of t h e e n d p r o d u c t .  resource,  acre  The main argument p u t f o r w a r d  be more p r o d u c t i v e ,  i n the long  displacement  this  i s i n more s a l e s t o  t h e i n t r o d u c t i o n o f new t e c h n o l o g y  electricity  cost  level  The p r o v i n c i a l Industries  electricity  mines,  i s to offer  critical  special  government passed  Act,  whereby w i t h  two  the help  industries (closed  e t c . )were r e i n s t i t u t e d  (this  o f d i s c o u n t s ) ; t w o , t h e Industrial  a c t h a s no Electricity  Intensification Discount  Act, whereby d i s c o u n t e d e l e c t r i c i t y  138  i s used  to  a t t r a c t new i n d u s t r i e s to B r i t i s h Columbia and expansions  of  existing  i n d u s t r i e s are e n c o u r a g e d .  the  Discount  Act i s  l i m i t e d to customers who are or w i l l be  consumers of e l e c t r i c i t y higher).  [in]  to r e p l a c e s e l f - g e n e r a t i o n In g e n e r a l ,  2 1  to  These new p o l i c i e s  try  by saw m i l l s , p u l p m i l l s , and other  these d i s c o u n t programs do not  i n c l u d e small i n n o v a t i v e companies. for existing  and mining i n d u s t r y .  officer  1.3  where t h i s would be used  d i s p l a c e turbogenerators using o i l . "  a preference  was  Turndown"  February 1985 to p r o v i d e a r a t e of  cents/kWh (about 55% d i s c o u n t )  industries.  large  (served a t v o l t a g e s of 60 kV and  A Hydro program c a l l e d "Turbine  "...initiated  pulp,  The e l i g i b i l i t y of  2 0  Rather these p o l i c i e s  show  s t a p l e s p r o d u c t i o n i n the c h e m i c a l , B.C.Hydro's p o l i t i c a l  liason  explains: The d i s c o u n t s are only aimed a t e x p o r t i n g i n d u s t r i e s , because i f d i s c o u n t s were a v a i l a b l e t o i n d u s t r i e s s u p p l y i n g the p r o v i n c i a l domestic market, t h i s would c r e a t e product p r i c i n g i n e q u a l i t y and an economic imbalance w i t h i n B r i t i s h C o l u m b i a . 2 2  20 The C r i t i c a l I n d u s t r i e s A c t , Statutes of B.C. 1985, chapter 47, June 28, 1985. I n d u s t r i a l E l e c t r i c i t y Discount A c t , Statutes of B.C. 1985, chapter 49, J u l y 11, 1 9 8 5 . B . C . H y d r o ; r e f e r e n c e to the a c t s was a l s o made i n the submission to the B r i t i s h Columbia U t i l i t i e s Commission, 1984 Rate Application, Volume 2 - P a r t , Supplementary Testimony of J . P . S h e e h a n , 12 August 1985, p . 6 , 7 , Sheehan i s the E x e c u t i v e V i c e P r e s i d e n t , Finance and A d m i n i s t r a t i o n . 21 W.A. B i l l B e s t , S e n i o r V i c e - P r e s i d e n t , System Development and R e s e a r c h , Address to: "Industrial Utilities (ICNU) at Portland Airport  Customers of Sheraton, 11  Northwest February  1986." T h i s document was c i r c u l a t e d as a B . C . H y d r o i n t e r n a l memo. 22 P e r s o n a l c o n v e r s a t i o n between myself and the the p o l i t i c a l l i a s o n o f f i c e r of B . C . H y d r o , August 14, 1986.  Intensification  139  -Mining  In the mining i n d u s t r y , Lornex Mining C o r p . ' s  Logan Lake  m i n e - m i l l complex near Kamloops was the f i r s t to o b t a i n 25% percent d i s c o u n t e d e l e c t r i c i t y under the E l e c t r i c i t y Discount Act" to enable  "Industrial  "Lornex to pump a d d i t i o n a l  water to improve m i n e r a l recovery a t the mine. The e x t r a water will  be used to process  lower grade copper and molybdenum  o r e . " The use of e l e c t r i c i t y ,  it  i s argued, keeps jobs  extends the ore body, accumulates ($800 000), government  (employment of c a p i t a l , revenue)  e x t r a revenue f o r B . C . H y d r o  b r i n g s the mine d i s c o u n t s a v i n g s , ($300 000).  A l l this  longer,  and money to  the  e x t r a accumulation  labour and r e t u r n i n government  i s claimed to be the r e s u l t of u s i n g  e l e c t r i c i t y t o pump water.  discount  Not only mineral s t a p l e s producers  but a l s o North Vancouver chemical companies which supply p u l p m i l l s found uses f o r the d i s c o u n t e d Chemical  electricity.  2 3  companies  The Energy M i n i s t e r Stephen Rogers announced t h a t were signed with the government so "B.C.Hydro w i l l ERCO, a d i v i s i o n of Tennaco Canada I n c . , electricity  deals  supply  with 10 megawatts of  a d i s c o u n t of 25% f o r two years  . . . to  increase  p r o d u c t i o n of sodium c h l o r a t e , used mainly i n p u l p m i l l s as a b l e a c h i n g agent;" the e x t r a product w i l l be e x p o r t e d , to s i x  jobs w i l l be c r e a t e d .  L i k e w i s e , the  O c c i d e n t a l Petroleum L t d . w i l l get  and four  Canadian  s i x megawatts of  23 The Vancouver Sun, "Lornex gets break i n r a t e s , " (October 4, 1985) p . C8.  electricity  140  Intensification  electricity cent  f o r .three y e a r s  at a discount  "... t o s t e p up p r o d u c t i o n  a l s o used as b l e a c h i n g production  will  agents  o f c h l o r i n e and c a u s t i c soda,  i n the pulp  go t o C r e s t b r o o k  Forest  by R o g e r s t h a t t h e two d e a l s w i l l  million  f o r H y d r o , a n d "1.2  $5.8  accumulate  to provincial  coffers." "* 2  mills The  to  million  i n d u s t r y . The e x t r a  Industries Ltd." I t i  claimed  -Pulp  25 p e r  averaging  25 p e r c e n t  l a r g e and s m a l l  s e e k new e x p o r t Western Pulp's  pulp m i l l s ,  discounts  mill  cents  i n Port A l i c e  McMullan s a i d ;  were a l s o  " t h e move w i l l  markets" s a i d Rogers.  spokesman P e t e r t o p a y 1.3  electricity  help  extended  the m i l l s  The d i s c o u n t s f o r  exceeded  25%;  "the discount  Hydro  allows  Port  Alic  p e r k i l o w a t t hour, r a t h e r than t h e r e g u l a r  rate of four cents  p e r k i l o w a t t hour."  He  continued,  " t h i s i s a f a i r l y common t h i n g " ... a d d i n g t h a t o t h e r c o m p a n i e s t h a t have u s e d t h e d i s c o u n t i n c l u d e t h e B.C. F o r e s t P r o d u c t s m i l l a t C r o f t e n , t h e Canadian F o r e s t I n d u s t r i e s o p e r a t i o n a t E l k F a l l s and M c M i l l a n B l o e d e l m i l l s a t Harmac, P o r t A l b e r n i and P o w e l l R i v e r . ... M c M u l l a n s a i d t h a t H y d r o h a s c o l l e c t e d $5.6 m i l l i o n i n r e v e n u e . W e s t e r n P u l p p r e s i d e n t Ron R o g s t a d s a i d t h e m i l l s have a l s o a p p l i e d f o r a n o t h e r e l e c t r i c i t y d i s c o u n t f r o m B.C.Hydro, s i m i l a r t o t h e o n e s g i v e n l a s t November t o a M a c M i l l a n B l o e d e l p a p e r m i l l i n P o w e l l R i v e r a n d t o a Crown F o r e s t I n d u s t r i e s m i l l a t Campbell R i v e r . 2 5  24 Vancouver Sun, "Two C h e m i c a l Companies S i g n up Cheap Power Deal," 15 November 1985. 25 K e i t h B a l d r e y a n d G a r y Mason, The Vancouver Sun, "Hydro m i l l d e a l c i t e d a s c o n f l i c t " J a n u a r y 21, 1986.  141  Intensification There was l i t t l e  evidence t h a t the d i s c o u n t s  diversified  any p a r t of the p u l p and other s t a p l e s p r o d u c t i o n or a t t r a c t e d substantial  i n d u s t r i a l u s e r s of e l e c t r i c i t y to the p r o v i n c e .  2 6  The s u r p l u s of e l e c t r i c i t y of the 1980s has been marketed w i t h i n the p r o v i n c e as i n e a r l i e r p e r i o d s with the  lowest  r a t e s p a i d by the s t a p l e s p r o d u c e r s . The p r o v i n c i a l c o n j u n c t i o n with i t s  state,  in  new a l l o c a t i o n of low c o s t e l e c t r i c i t y  a l r e a d y e x i s t i n g p r o d u c t i o n of the s t a p l e s ,  is  to  likely  c o n t r i b u t i n g to the f a s t e r consumption of the n a t u r a l resources  f o r which i t has a mandate to be steward i n the  public interest.  I n c r e a s i n g f o r e s t r y p r o d u c t i o n by means of  d i s c o u n t e l e c t r i c i t y only i n t e n s i f i e s dependence.  the p r o v i n c i a l  As B . C . H y d r o ' s own f o r e c a s t s  indicate  ("Transmission Rate S a l e s , " Appendix, Tables V I I I , industrial  staples  IX)  recent  s a l e s i n the area of p u l p & paper, wood  manufacturing, and chemicals are growing s l o w l y .  Since  loans  f o r b u i l d i n g the e x t r a c a p a c i t y cannot be p a i d with hope,  the  a l t e r n a t i v e f o r s a l e s of the s t a t e ' s "unplanned s u r p l u s " i s market the e l e c t r i c i t y -Stand-by  to  itself.  Staple  Electricity  is a versatile  c o n s t i t u t e s a captured r e s o u r c e .  source of energy,  but  A market of s t a p l e s products  26 The d i s c o u n t program, when coupled with s t a p l e s p r o d u c t i o n , appears to have been very accumulative s i n c e b o t h , the F o r e s t M i n i s t e r Tom Waterland and The Energy M i n i s t e r Stephen Rogers h e l d shares i n Western Pulp L t d . Because of t h i s c o n f l i c t of i n t e r e s t , Waterland and Rogers needed to r e s i g n t h e i r ministerial positions ( K e i t h B a l d r e y , January 21, 1986).  Intensification can  be developed o v e r s e a s ,  142  but new markets f o r e l e c t r i c i t y  are  c o n f i n e d to t r a n s m i s s i o n v i a power l i n e s w i t h i n the p r o v i n c e , or  to l o c a t i o n s o u t s i d e the p r o v i n c e .  In buyers, and  a d d i t i o n , such an i n d u s t r i a l s t a p l e has no f i r m is  s u b j e c t to u n p r e d i c t a b l e p r i c e d r o p s , i s  t h e r e f o r e can only be s o l d to other Canadian P r o v i n c e s or  the U n i t e d S t a t e s . The p r o v i n c i a l of  landlocked  l i m i t s t o growth of i t s p r e s e n t  s t a t e i s faced with s t a p l e s economy,  threats  while  debts have to be r e p a i d f o r dams and t r a n s m i s s i o n l i n e s . p l a n n i n g and c o n s t r u c t i o n had t e m p o r a r i l y helped to the accumulation process  either  it  intervention,  needs to  or opt f o r an even l a r g e r p r o d u c t i v e  namely, to t r a n s f o r m h y d r o e l e c t r i c development  the g e n e r a t i o n of e l e c t r i c i t y  Forward P l a n n i n g  (Export  i n t o an export i n d u s t r y .  power)  Previous export c o n t r a c t s have been signed with to  h y d r o e l e c t r i c developments  Rivers.  Such agreements  government, U.S..  the  i n t e r v e n e to d i v e r s i f y p r o d u c t i o n i n order to improve  the accumulation p r o c e s s ,  and  continue  i n the s t a p l e s economy. Because  s t a t e i s f u n c t i o n a l l y r e l a t e d to t h i s p r o c e s s ,  Their  respect  on the Columbia and S k a g i t  are made between the  provincial  and the f e d e r a l governments i n Canada and the  For example,  the U . S . made a lump sum payment f o r u s i n g  the Canadian Columbia R i v e r V a l l e y to h o l d water behind two storage dams ( K e e n l e y s i d e ,  Duncan) and the r i g h t to  exercise  c o n t r o l over the r e l e a s e of water from the Mica and Revelstoke dams so i t can be routed with maximum g e n e r a t i o n b e n e f i t  and  143  Intensification f l o o d c o n t r o l through the American Columbia r i v e r b e d and storage r e s e r v o i r s .  Another B r i t i s h Columbia v a l l e y was  2 7  be f l o o d e d by the C i t y of S e a t t l e .  to  The p r o v i n c i a l government  agreed to have the S k a g i t V a l l e y f l o o d e d by r a i s i n g the  Ross  dam 37 meters  the  i n 1967.  However, due to popular p r e s s u r e  v a l l e y was not f l o o d e d and an agreement was announced by the i n t e r n a t i o n a l J o i n t Commission, which a d j u d i c a t e s boundary d i s p u t e s . financial  T h i s agreement  "involves  Canada-U.S.  unspecified  commitments by B . C . to supply the power t h a t  Seattle  would have r e c e i v e d had a hydro p r o j e c t south of the American border gone a h e a d . "  2 8  These were s p e c i a l  agreements and do  not h e l p to reduce the c u r r e n t s u r p l u s . The power s u r p l u s and f o r e i g n export c o n s i d e r a t i o n s r a i s e d very e a r l y i n the B . C . Energy B o a r d ' s Report Columbia  Peace  Power  Projects  on J u l y  31,  1961.  were  on the  More than  25  years ago the chairman of the B . C . Energy Board, Gordon Shrum predicted: . . . s i n c e the minimum e f f i c i e n t development of e i t h e r the Peace or Columbia w i l l p r o v i d e more power than B r i t i s h Columbia can absorb i n the e a r l y years of the p r o j e c t , i t i s not economic to develop the two s i m u l t a n e o u s l y without f i n d i n g a very l a r g e market at renumerative p r i c e s o u t s i d e the P r o v i n c e f o r t h i s a d d i t i o n a l power, (p. 6) 27 Departments of E x t e r n a l A f f a i r s and Northern A f f a i r s and National  Resources,  The Columbia  River  Treaty  Protocol  and  Related Documents (Ottawa: Queen's P r i n t e r , February 1984) "It c o m p l i c a t e s the water-management task t h a t one of Hydro's two r i v e r systems, the Columbia, i s shared with the U . S . . "Vaughn Palmer "A Green Bundle For ' B l u e G o l d ' , " The Vancouver Sun, November 7, 1985. 28 Canadian Press (CP), V i c t o r i a " S k a g i t , Bgt", March 31, 1983.  Intensification During the 1980s r e c e s s i o n ,  144  the employment c o n d i t i o n s and  economic circumstances and the need to develop h y d r o e l e c t r i c p o t e n t i a l are again used by the S o c i a l C r e d i t government and B . C . H y d r o as reasons to expand the h y d r o e l e c t r i c infrastructure.  Although o f f i c i a l l y ,  the hydro system was  to  have been b u i l t f o r the p r o v i n c e , i n 1983 the B . C . U t i l i t i e s Commission found the e f f i c i e n c y production capacity) its  c r i t e r i a (optimum h y d r a u l i c  used by B . C . H y d r o i n the development of  system can u l t i m a t e l y only be j u s t i f i e d  "...by  contemplating s a l e s i n t o the export market." Commission noted Hydro has not i t s e l f probable export  Yet the  provided a forecast  of  revenues.  The o r g a n i z a t i o n s r e p r e s e n t i n g i n d u s t r y i n B r i t i s h Columbia have taken a p o s i t i o n c o n s i s t e n t economic i n t e r e s t s ,  but i n c o n s i s t e n t  the S i t e C Hearings (1981/1982), specifically  with t h e i r own  toward B . C . H y d r o .  During  " . . . t h e Mining A s s o c i a t i o n  r e f e r r e d to the need to allow f o r the expanding  needs of the p r o v i n c i a l mining and smelting i n d u s t r y " i n submission j u s t i f y i n g the p r o j e c t on grounds of the p o t e n t i a l of B r i t i s h C o l u m b i a . Relief  2 9  economic  In p r e p a r a t i o n of the Rate  H e a r i n g s , the C o u n c i l of F o r e s t I n d u s t r i e s ,  Association,  the Mining  and the E l e c t r o - C h e m i c a l I n t e r v e n e r s h i r e d a  f o r e c a s t i n g c o n s u l t a n t to prepare  "a f o r e c a s t  s u r p l u s revenues of $135 m i l l i o n i n f i s c a l million in fiscal  1984"  its  105.  export  1983 and $146  i n order to have export  29 BCUC Site C Report, 1983, p . 1 2 3 . 29 BCUC Decision, February 1983, p .  of  revenues  145  Intensification  r e c o g n i z e d as Hydro revenues rate  increases.  On  3 0  support expansion their  own  the  industrial  hand, spokesmen f o r i n d u s t r y for  on t h e o t h e r hand, t h e y want r e l i e f  export e l e c t r i c i t y  to export since  Building  t h e one  thereby reduce  o f B.C.Hydro t o have ample e l e c t r i c i t y  industries;  p r i c e s through  and  industries  revenues  from  w h i c h B.C.Hydro  d i d n o t grow as  has  predicted.  Dams f o r E x p o r t I n A u g u s t , 1985 t h e p r o v i n c i a l government announced t h a t i t w o u l d p e r m i t H y d r o t o b u i l d a new dam on t h e P e a c e R i v e r , n e a r F o r t S t . J o h n i n n o r t h e r n B.C., i f s u i t a b l e f i r m c o n t r a c t s c o u l d be a r r a n g e d t o e x p o r t t h e power t o C a l i f o r n i a on a l o n g - t e r m b a s i s , p e r h a p s 20 t o 25 y e a r s . 3 1  The  f o c u s of development  development o f h y d r o e l e c t r i c f o r e i g n c o u n t r y , as Although, now  from  "Johnson  building  said  i n many s t a p l e s  Hydro has  dam  on t h e C o l u m b i a  i n February  t o p e n e t r a t e new  1986.  markets.  He With  the in a  industries.  3 2  demand.  i n Premier  said:  supply  the r a t i o n a l e f o r before, the The  f o r export, rather than domestic  u n d e r l i e s t h e argument f o r w a r d e d address  directly  River to  i s t h e same a s f o r w a r d e d  f o r eventual p r o v i n c i a l  supply expansion  but  enough s u r p l u s e l e c t r i c i t y  need f o r t h e n e x t d e c a d e , "  another  to pre-build  longer p r o v i n c i a l ,  power i s d e t e r m i n e d  i s the case  i t s R e v e l s t o k e dam  California's  i s no  Bill  idea  of  need, Bennett's  "B.C.Hydro i s w o r k i n g  the r i g h t  kind of  need  TV hard  long-term  UC Decision, F e b r u a r y 1983, p. 105. 31 B.C.Hydro, B.C. Hydro: The Background, a handout p r e p a r e d f o r t h e p u b l i c , March 31, 1986, 32 P e t e r C o m p a r e l l i , " F a s t A c t i o n S o u g h t on Power P a c t , " The Vancouver Sun, September 17, 1985.  Intensification deal i n C a l i f o r n i a a b l e t o speed  - and a f a i r p r i c e f o r our power - w e ' l l  up the S i t e C p r o j e c t , which w i l l have to  b u i l t some day i n any c a s e . " its  be  [be]  But before B . C . H y d r o can p l a n  3 3  system f o r such markets,  utilities  146  i t needs to n e g o t i a t e w i t h U . S .  and agencies of the U.S government such as  the  B o n n e v i l l e Power A d m i n i s t r a t i o n . The B o n n e v i l l e Power A d m i n i s t r a t i o n was formed i n 1937 to market the energy from the Grand Coulee P r o j e c t and a l l other f e d e r a l l y c o n s t r u c t e d p r o j e c t s i n the r e g i o n . The establishment of BPA was i n p a r t a r e c o g n i t i o n of the p o t e n t i a l energy from the Columbia R i v e r and the need to secure markets i n the expanding r e g i o n f o r t h a t e n e r g y . 3 4  In a t r a d e seminar h e l d on the Expo grounds between B o n n e v i l l e Power A d m i n i s t r a t i o n , Southern C a l i f o r n i a and B . C . H y d r o r e p r e s e n t a t i v e s ,  Michael Peevey,  p r e s i d e n t of Southern C a l i f o r n i a E d i s o n s a i d :  Edison,  executive  vice-  "We want more  t r a d e w i t h B . C . , " and about S i t e C , he commented,  "as long as  the economies of S i t e C pan out we would buy more  electricity  from B . C . " Even B o n n e v i l l e ' s a d m i n i s t r a t o r Peter Johnson appeared warm towards S i t e C: "BPA and the u t i l i t i e s P a c i f i c Northwest are very i n t e r e s t e d Bennett's Canada,...  i n the  i n Premier B i l l  p r o p o s a l to b u i l d S i t e C before  it  is  needed  in  but . . . marketing of S i t e C power would n e c e s s i t a t e  even more c a p a c i t y One way to get  [the a b i l i t y to t r a n s m i t 7,900  megawatts].  i t would be to complete the t h i r d AC l i n e  to  33 Doug Ward, "BCGEU P r e s i d e n t H a l t s T a l k s a f t e r B e n n e t t ' s TV address" Vancouver Sun February 6, 1986. 34 Power P l a n n i n g Committee, Review of Power Planning in the Pacific Northwest 1981, p . 29.  Intensification California...."  147  "Hydro chairman Chester Johnson has s a i d ,  would l i k e f i r m c o n t r a c t s with C a l i f o r n i a C c o u l d begin i n e a r l y 1 9 8 7 . "  35  he  . . . so work on S i t e  C a l i f o r n i a has  enjoyed  substantial  savings  by buying i n t e r r u p t a b l e power without  contracts.  "Southern C a l i f o r n i a E d i s o n has estimated  it  firm saved  about $900 M i l l i o n i n 1983 by such purchases from the U . S . P a c i f i c Northwest,  Southwest  and B . C . Hydro r e p r e s e n t i n g  37% of t h e i r annual r e q u i r e m e n t s . "  The Press Release of  36  B o n n e v i l l e Power A d m i n i s t r a t i o n i n Oregon (June 12, states  the  1986)  whose i n t e r e s t s are to be served i n the S i t e C  development will  about  study:  "For BPA, a p r i n c i p a l  f a c t o r i n the  study  be i n s u r i n g t h a t any s a l e of S i t e C power be i n the  i n t e r e s t s of Northwest r a t e p a y e r s . "  3 - 7  U n i t e d S t a t e s customers be i n t e r e s t e d  But, why would the i n having B r i t i s h  Columbia develop S i t e C without g r a n t i n g long-term p e r m i s s i o n to t r a n s m i t the power? One reason i s t h a t governments  and b u s i n e s s e s l i k e  to  reduce t h e i r f i n a n c i a l r i s k s . The p r i c e of b u i l d i n g S i t e C , was i n d i c a t e d before the B . C . U t i l i t i e s Commission.  It  "would  c o s t 14 to 16 cents [per k i l o w a t t hour] to produce S i t e C power."  3 8  T h i s i s very h i g h , when compared with export  rates  35 Rod N u t t , " U . S . prepared to back S i t e C dam on Peace," The Vancouver Sun, May 12, 1986. 36 B i l l B e s t , Address to I n d u s t r i a l Customers, 1986 p . 8 . 37 Department of Energy Information of the U n i t e d S t a t e s of America, Bonneville Power Administration, r e l e a s e d by BPA's Media R e l a t i o n s , P o r t l a n d , Oregon June 12, 1986. 38 M a r j o r i e N i c h o l s i n d i c a t e s Hydro made those f i g u r e s p u b l i c before the B . C . U t i l i t i e s Commission on October 31, 1984, The Vancouver Sun, A p r i l 5, 1986. Attempts to v e r i f y these f i g u r e s w i t h the B . C . H y d r o Finance Department were met with a d e c l i n i n g response, on the grounds t h a t such i n f o r m a t i o n might  148  Intensification i n d i c a t e d by the 1985 B . C . H y d r o Annual R e p o r t .  They were  2.9  c e n t s per KWh. The t o t a l c o s t of S i t e C i s estimated t o be $3 billion. if  The United S t a t e s and l a r g e c o r p o r a t i o n s do not mind  somebody e l s e w i l l  c a r r y the f i n a n c i a l and environmental  burden f o r d e v e l o p i n g the c o s t l y g e n e r a t i o n of power. Best,  Bill  Senior V i c e - P r e s i d e n t r e s p o n s i b l e f o r B . C . H y d r o ' s System  Development and Research, gave another very important reason why the U n i t e d S t a t e s would be i n t e r e s t e d built.  i n seeing S i t e C  In h i s address t o the I n d u s t r i a l Customers of  Northwest U t i l i t i e s at P o r t l a n d A i r p o r t Sheraton on February 11,  1986,  he s a i d : One of your a s s o c i a t i o n ' s Energy P l a n n i n g P r i n c i p l e s i s t h a t you ' . . . advocate p o l i c i e s which promote an adequate and f l e x i b l e supply a b l e t o support and encourage a growing economy, yet a b l e t o a d j u s t f o r changing economic c o n d i t i o n s or supply disruptions.' 3 9  In o t h e r words the i n d u s t r i a l users i n the northwestern United S t a t e s enjoy the p l e n t i f u l supply of e l e c t r i c i t y of  the  P a c i f i c Northwest U t i l i t i e s and B . C . H y d r o . The p o l i c y d i r e c t i o n adopted by the i n d u s t r i a l customers i n d i c a t e s , are not i n t e r e s t e d  i n firm contracts,  between o v e r b u i l t u t i l i t i e s  assures  since  they  competition  low r a t e s .  Some a l r e a d y  r e c e i v e d i s c o u n t e d r a t e s from the B o n n e v i l l e Power A u t h o r i t y . BPA has i d e n t i f i e d t h i s c o n d i t i o n i n terms of the s i t u a t i o n of its  d i r e c t - s e r v i c e i n d u s t r i a l customers.  s i t u a t i o n of some of BPA's d i r e c t - s e r v i c e  "The p r e c a r i o u s industrial  be used a g a i n s t the company (August 14, 1986). 39 B i l l B e s t , Address t o : I n d u s t r i a l Customers of Northwest U t i l i t i e s at P o r t l a n d A i r p o r t Sheraton, 11 February 1986, p . 10.  Intensification customers,  149  p r i m a r i l y the aluminum i n d u s t r y t h a t buys about one  t h i r d of BPA's power, c o u l d have a b i g impact on BPA's o v e r a l l load f o r e c a s t  [medium 1.3  % annual i n c r e a s e f o r  1984-2004].'"*°  In o r d e r t o keep up the demand f o r e l e c t r i c i t y from i n d u s t r i a l customers, and t o a v o i d i n d u s t r i a l customers j u s t dropping o f f the g r i d change,  (by c l o s i n g t h e i r a c c o u n t s ) ,  i f economic c o n d i t i o n s  BPA a p p l i e d to the F e d e r a l Energy R e g u l a t o r y  Commission f o r r a t e s t h a t  " . . . c o u l d be as low as 1.5  cents per  k i l o w a t t - h o u r or as h i g h as 2.86 c e n t s per kwh - - based on the p r i c e of  Foreign  aluminum."  41  Environment  Analysis  In t h i s s e c t i o n ,  the p r o d u c t i o n of e l e c t r i c i t y  approached as a semi-processed n a t u r a l r e s o u r c e , words,  like a staple.  Succeeding p r o v i n c i a l  resources,  R i v e r s are i n t h i s way  seen as energy resources and the e l e c t r i c i t y they when harnessed, becomes an " i n d u s t r i a l  i n other  government  p o l i c i e s have p e r c e i v e d r i v e r v a l l e y s as n a t u r a l which can be p r o g r e s s i v e l y d e p l e t e d .  is  staple."  generate, The 1980  energy p o l i c y statement i n d i c a t e s how the government sees  its  role: We - the government on b e h a l f of the people of B . C . - are e n t r u s t e d w i t h the management of our energy resources. We s t i l l have c o n s i d e r a b l e untapped h y d r o - e l e c t r i c p o t e n t i a l , and B r i t i s h Columbia i s c u r r e n t l y 40 Department of Energy Information of the U n i t e d S t a t e s of America, Bonneville Power Administration, P o r t l a n d , Oregon, Media R e l a t i o n s O f f i c e , June 16, 1986. 41 BPA Press Release May 13, 1985.  150  Intensification  i n v e s t i g a t i n g remote s i t e s w h i c h c o u l d be u s e d t o meet t h e c o n t i n u i n g g r o w t h i n demand f o r electricity. 4 2  This  i s a k i n t o t h e development  the staples theory.  It i s similar  r e s o u r c e s whereby t h e h y d r o e l e c t r i c exploited  by moving  farther  t h e b e s t power s i t e s . continuing  growth,  as an  accumulative functions  similar  natural  of r i v e r s i s at  with expectations of  Watkins  institutional  i t s force  i n the  curtailed  state's  (by means o f l a n d - l o c k e d  foreign  force  i s severely  out the p r o v i n c i a l  industrial  environment.  A l t h o u g h Shrum i d e n t i f i e d over-building  of  export mentality" develops.  Columbia,  when i t a t t e m p t s t o c a r r y  i n a larger  potential  t o g e t h e r w i t h what  A l t h o u g h B.C.Hydro i s a m a j o r  staple)  to exploitation  in  an o v e r e m p h a s i s on t h e i m p o r t a n c e o f t h e  "inhibiting  province of B r i t i s h  identified  away f r o m u r b a n a r e a s t o b u i l d  In a d d i t i o n ,  production of e l e c t r i c i t y identifies  tradition  the issues  surrounding the  o f t h e h y d r o s y s t e m t w e n t y - f i v e y e a r s ago,  uncertainties  about t h e e x p o r t market  have  remained.  The o n l y p o t e n t i a l m a r k e t s f o r B r i t i s h C o l u m b i a s u r p l u s power a r e i n t h e U n i t e d S t a t e s P a c i f i c N o r t h w e s t , C a l i f o r n i a , and p o s s i b l y A l b e r t a . The b o a r d has n o t c o n d u c t e d a d e t a i l e d s t u d y o f t h e s e p o t e n t i a l e x p o r t m a r k e t s f o r s u r p l u s power f r o m B r i t i s h C o l u m b i a , and hence no d e c i s i o n as t o t h e e c o n o m i c f e a s i b i l i t y o f s u c h e x p o r t c a n be made a t t h i s t i m e (Shrum 1961:6). 42 From.the "Government o f B r i t i s h C o l u m b i a ' s S t a t e m e n t o f F e b r u a r y 1980" c i t e d i n t h e B.C. C o m m i s s i o n Site C Report, V a n c o u v e r , May 1983,  Energy P o l i c y Utilities p. 41.  Intensification  151  The major i s s u e s of export revenue i n s t a b i l i t y and the i n t e r - l i n k a g e problem p e r s i s t , substantial  although p e r i o d i c a l l y  s a l e s are made to the United S t a t e s  $250 m i l l i o n a n n u a l l y , from 1975 to 1986).  (from $ 5 -  Despite p u b l i c  pronouncements t h a t exports keep r a t e s i n the p r o v i n c e  low,  the B . C . U t i l i t i e s Commission concluded the f o l l o w i n g from B . C . H y d r o e l a b o r a t i o n and the testimony  of Mr. Sheehan:  Export s u r p l u s revenues are not f o r e c a s t or c o n s i d e r e d i n s e t t i n g r a t e s and the A u t h o r i t y ' s Board of D i r e c t o r s , i n c l u d i n g M i n i s t e r s of the Crown, have a n n u a l l y approved s e t t i n g r a t e s on t h i s basis. B . C . H y d r o does not b e l i e v e t h a t e i t h e r p r i c e s or volumes of p o s s i b l e export s a l e s can be p r e d i c t e d with s u f f i c i e n t accuracy to allow them to be taken i n t o account i n e s t a b l i s h i n g domestic r a t e s . P l a c i n g r e l i a n c e on h i g h l y u n c e r t a i n and p o t e n t i a l v o l a t i l e export s u r p l u s revenue i n s e t t i n g revenue requirements would i n t r o d u c e an unacceptably h i g h l e v e l of f i n a n c i a l r i s k . . . 4 3  The r i s k of p r o v i n c i a l s t a t e p r o d u c t i o n of stand-by power f o r a f o r e i g n environment s t a r t e d w i t h the i n t e g r a t i o n of t r a n s m i s s i o n network.  In order to export stand-by  the  electrical  power and p r o v i d e a 5% r e s e r v e pool of power f o r the U n i t e d States  (which i s to be r e c i p r o c a l i n case of f a i l u r e s ) ,  B r i t i s h Columbia power g r i d i s  the  i n t e g r a t e d with the U . S .  Northwestern power g r i d to a f f o r d maximum c o o r d i n a t i o n . The export r a t e s vary a c c o r d i n g t o the Northwest u t i l i t y market and weather c o n d i t i o n s . between d i s p a t c h e r s  B i n d i n g s a l e s agreements are made  i n the B . C . H y d r o ' s Burnaby Mountain  43 B . C . U t i l i t i e s Commission, Decision, 28, 1983.  pp. 101-102,  February  Intensification  Control bill  Center  i s mailed  In the  a n d t h e d i s p a t c h e r s o f U.S. u t i l i t i e s , t h e next  1980s,  day.  4 4  s u r p l u s power c o n t i n u e s  stand-by b a s i s and shows g r e a t are unpredictable million U.S.  152  to  fluctuations.  be exported on a "Export  . . . swings i n export e a r n i n g s  from one year to the  next."  demands and r e s t r i c t e d a c c e s s .  California  BPA t r a n s m i s s i o n  optimistic  possibility  4 5  This  is  earnings  can be  $150  l a r g e l y due  to  The " i n t e r - l i n k a g e " t o  the  l i n e s was i n d i c a t e d as an  by Shrum i n  1961:  . . . t h e r a p i d g r o w t h a n d s i z e o f t h e power l o a d s i n C a l i f o r n i a a n d t h e p l a n t o c o n s t r u c t a power i n t e r l i n k a g e between t h e P a c i f i c N o r t h w e s t a n d C a l i f o r n i a s u g g e s t t h a t t h e r e i s a good p o s s i b i l i t y t h a t e x p o r t o f s u r p l u s B r i t i s h C o l u m b i a power t o C a l i f o r n i a w o u l d be f e a s i b l e . (Shrum 1961:6)  This p o s s i b i l i t y  h a s r e m a i n e d a n u n r e s o l v e d p r o b l e m . B.C.Hydro  chairman, Chester  Johnson, f i n d s t h a t t h e t r a n s m i s s i o n  access  i s a t times  severely curtailed.  "sales  i n February  have t o t a l e d  He n o t e d  o n l y $5 m i l l i o n . "  line  i n 1986, 4 6  that  The  44 I n f o r m a t i o n o b t a i n e d d u r i n g a v i s i t t o B.C.Hydro's B u r n a b y M o u n t a i n C o n t r o l C e n t r e o n F e b r u a r y 7, 1986. 45 H y d r o c o u n s e l Ken M c K e n z i e ' s argument b e f o r e t h e B.C. U t i l i t i e s Commission i n d e f e n s e o f k e e p i n g t h e i n t e r i m r a t e i n c r e a s e , c i t e d by Rod N u t t , " M a j o r u s e r s demand r o l l b a c k on i n t e r i m r a t e f o r e l e c t r i c i t y , " The Vancouver Sun, J a n u a r y 24, 1986. 46 The more e x t e n s i v e n o t e s by C h e s t e r J o h n s o n i n d i c a t e u n d e r the heading o f e x p o r t s , t h a t "revenue from t h e s a l e o f s u r p l u s e l e c t r i c i t y t o t h e U.S. r e a c h e d $248 m i l l i o n by 16 F e b r u a r y , w o u l d have b o t t o m l i n e p r o b l e m s w i t h o u t t h i s . D r y w e a t h e r h e l p e d . T r a n s m i s s i o n l i n e a c c e s s now s e v e r e l y c u r t a i l e d by BPA [ B o n n e v i l l e Power A u t h o r i t y ] . S a l e s i n F e b r u a r y have t o t a l e d o n l y $ 5 m i l l i o n . " Speech Notes Mapes A n n u a l M e e t i n g 18 F e b r u a r y 1986.  153  Intensification export  of surplus e l e c t r i c i t y  s t a n d - b y b a s i s by t h e BPA.  has  only  been a l l o w e d  on a  I t s Extraregional Access  policy  states:  BPA w i l l n o t p r o v i d e A s s u r e d D e l i v e r y t o extraregional u t i l i t i e s . BPA may, by c o n t r a c t , p r o v i d e e x t r a r e g i o n a l u t i l i t i e s l i m i t e d a c c e s s t o I n t e r t i e C a p a c i t y . Such a c c e s s , however, w o u l d be c o n d i t i o n e d o n s u c h u t i l i t i e s ' p a r t i c i p a t i o n i n the P a c i f i c Northwest's c o o r d i n a t e d p l a n n i n g and o p e r a t i o n t o a g r e a t e r e x t e n t t h a t i n the p a s t o r agreement t o p r o v i d e other a p p r o p r i a t e c o n s i d e r a t i o n o f value t o the P a c i f i c Northwest. [Oregon, Washington, Idaho, a p o r t i o n o f Nevada, U t a h , and W y o m i n g ] 4-7  Since staple,  electricity  B.C.Hydro and  increasingly  i n export  past  60 y e a r s  has  this the  a land-locked  government  are  complex p o l i c i e s  Columbia's S o c i a l  grid"  and supports  s a l e s i n the  s a l e was due t o u n u s u a l l y  was i m p o r t i n g  resource,  t o transport  C r e d i t government  "Commitment t o t h e c o n c e p t  electricity  $250 m i l l i o n  it  British  s t r e s s e s the  north-south  This  the p r o v i n c i a l  dependent on o t h e r  such r e s o u r c e s . currently  i s a captured  year  this  ending  of a true  by p o i n t i n g t o 31,1986.  March  d r y w e a t h e r . BPA e x p l a i n s why  power i n 1985. flow o f the  "Only f o u r times  in  Columbia been lower  the  during  t h e month o f J u l y . " " L a s t J a n u a r y , u s u a l l y t h e w e t t e s t  month  of  BPA c u t  off 47  the year,  was t h e  supplying the U.S.  driest  nonfirm  January ever  recorded."  4 8  power s a l e s t o C a l i f o r n i a ,  brought  D e p a r t m e n t o f E n e r g y , B o n n e v i l l e Power A d m i n i s t r a t i o n ,  Near Term Intertie  Access  Policy,  (June 1, 1985) p . 10.  A  c o p y o f t h i s p o l i c y was o b t a i n e d f r o m t h e B.C. Utilities C o m m i s s i o n , E x h i b i t 21, H e a r i n g No. 4, e n t e r e d by B.C.Hydro o n J a n u a r y 9, 1986. 48 U.S. E n e r g y D e p a r t m e n t , Bonneville Power Administration, P r e s s R e l e a s e , J u l y 31, 1985.  Intensification all  154  the water i t can down from the Columbia R i v e r i n B r i t i s h  Columbia, thereby B . C . H y d r o was able to o b t a i n e x t r a from storage and export of power. shortfall,  own  B . C . H y d r o imported some of A l b e r t a ' s cheap c o a l -  generated p o w e r . power l i n e s  To make up i t s  revenues  4 9  T h i s temporary power demand and access to  d u r i n g 1985 was due t o dry weather  conditions  r a t h e r than demand growth i n the U n i t e d S t a t e s .  Futures  Because B . C . H y d r o ' s p r o d u c t i o n c a p a c i t y i n the i n t e r i m has  outgrown the p r o v i n c i a l environment,  the o n l y way i t  can  expand i s w i t h i n the A l b e r t a or the U n i t e d S t a t e s environment. So f a r B . C . H y d r o can be seen as having helped m a i n t a i n the f u n c t i o n of accumulation by p r o d u c t i v e i n t e r v e n t i o n i n the p r o v i n c i a l environment. But how w e l l w i l l i t perform the f u n c t i o n of accumulation i n the U.S environment? t h i s q u e s t i o n and g a i n some i n s i g h t this  function's  To answer  i t w i l l h e l p to use  f o u r b a s i c p r i n c i p l e s and analyze  the  B.C.Hydro's  (that i s an agency of the s t a t e ' s ) performance i n the U n i t e d S t a t e s environment with r e f e r e n c e  to e x c l u s i o n ,  maintenance,  dependency and l e g i t i m a t i o n .  49 U . S . Energy Department, Bonneville Power Administration, Press Releases J u l y 12, 1986. "The a p p l i c a n t [B.C.Hydro] t e s t i f i e d ( t r a n s c r i p t pages 938 and 982) t h a t s u r p l u s energy i s being purchased from A l b e r t a to r e p l e n i s h i t r e s e r v o i r s which have been drawn down below normal l e v e l s by the i n c r e a s e d export s a l e s . " "The B . C . H y d r o / A l b e r t a 500 kv i n t e r t i e which was p l a c e d i n s e r v i c e i n e a r l y 1986 w i t h a c a p a c i t y of about 800 MW, has the p o t e n t i a l to y i e l d s u b s t a n t i a l b e n e f i t s to both p r o v i n c e s . " B.C. Utilities Commission, Decision, May 9, 1986.  Intensification  155  Once B . C . H y d r o expands i n t o the f o r e i g n environment several  o b s t a c l e s can be noted:  B . C . H y d r o and the  provincial  government are excluded from the d e c i s i o n making process t o a g r e a t e r degree ( i n t e r - l i n k a g e ) ;  B . C . H y d r o i s unable  to  m a i n t a i n a p r e d i c t a b l e source of income; the c o r p o r a t i o n and the government stake t h e i r dependence  on becoming powerful  through accumulation o u t s i d e  t h e i r environment; and they run  into increasing d i f f i c u l t i e s  i n l e g i t i m i z i n g the p r o c e s s .  s p i t e of having adopted a new mode ( a l l o c a t i v e operation,  they w i l l  marketing)  In of  r e q u i r e an i n c r e a s e d p r o d u c t i v e  i n t e r v e n t i o n to be maintained (e.g  b u i l d i n g S i t e C dam) i n the  new environment. Exclusion  (provincial/international)  The p r o v i n c i a l or to c o n t r o l i t enterprises) (electricity)  s t a t e has no a u t h o r i t y to order p r o d u c t i o n  in private foreign enterprises  and has no r i g h t to supply i t s  (U.S.  energy product  without p e r m i s s i o n of f o r e i g n s t a t e  energy  producers. In the meantime,  the P a c i f i c Northwest has become a  competitor f o r s a l e s to C a l i f o r n i a . corporation i t s e l f  has a s e r i o u s  p u b l i c a t i o n Issue Alert  The B o n n e v i l l e Power  s u r p l u s of power.  In  its  " S e l l i n g South: BPA Seeks Ways of  Marketing Surplus Power to the P a c i f i c Southwest"  it  reveals  h i s t o r y of s u r p l u s power and i n c r e a s e d c u r r e n t s u r p l u s . Two decades ago,  BPA made long-term s u r p l u s c a p a c i t y  sales  c o n t r a c t s with C a l i f o r n i a which are due f o r renewal i n 1987  a  Intensification and 1988.  156  BPA has developed a d d i t i o n a l power s u r p l u s e s and  became aware of t h i s  s i t u a t i o n i n 1982 and i s  n e g o t i a t e c o n t r a c t s with  s i n c e t r y i n g to  California.  BPA would s e l l up to 2,000 megawatts of s u r p l u s c a p a c i t y f o r the 20-year term, and would s e l l f i r m energy (based on f o r e c a s t e d BPA s u r p l u s e s ) on a r o l l i n g f i v e - y e a r b a s i s . C u r r e n t l y i t looks as though 1,000 megawatts of s u r p l u s f i r m energy might be a v a i l a b l e f o r the f i r s t f i v e y e a r s . 5  The development of p o s s i b l e not e v i d e n t  U . S . Northwest s u r p l u s e s  The development of a "surplus c o n f l i c t "  puts  s t r a i n on the access and i n t e r - l i n k a g e to  California.  Although the i n t e r - l i n k a g e problem has a twenty-  f i v e year h i s t o r y , B . C . H y d r o ' s s u r p l u s export c o n t i n u e s occupy a "backseat to a c c e s s . " excluded from the export of f i r m  were  i n p r o v i n c i a l government and B . C . H y d r o  considerations. additional  0  5 1  In 1986,  B.C.Hydro  to is  (except to P o i n t Roberts and Hyder)  electricity. B o n n e v i l l e ' s i n t e r t i e access p o l i c y , adopted September 7, [1984] p r o v i d e s t h a t under c e r t a i n c o n d i t i o n s access to the i n t e r t i e i s a l l o c a t e d among B o n n e v i l l e and P a c i f i c Northwest u t i l i t i e s based on t h e i r d e c l a r a t i o n s of a v a i l a b l e s u r p l u s power, and t h a t no other u t i l i t i e s may use the l i n e s . 5 2  T h i s p o l i c y was c h a l l e n g e d by " . . . t h e Los Angeles Department of Water and Power, which i s a major buyer of 50 U . S . Department of Energy, B o n n e v i l l e Power A d m i n i s t r a t i o n , Issue Alert " S e l l i n g South: BPA Seeks Ways of Marketing Surplus Power to the P a c i f i c Southwest" B . C . U t i l i t i e s Commission, F i l e No. 14, no d a t e . 51 B r i a n L e w i s , business r e p o r t e r f o r the Sun, on CBC AM R a d i o , 12:50 h, September 3, 1985. 52 American Press (AP) " B o n n e v i l l e , " P o r t l a n d , Oregon, January 17, 1985.  157  Intensification  surplus  power t r a n s m i t t e d  California power  inter-linkage  competing surplus  with  Pacific  lines."  Northwest British  3  i s that  Bonneville's  policy  which  Columbia's  British  i s restricted  cheaper  Columbia's  a r g u m e n t s t o g a i n maximum b e n e f i t s  have  v i a the Pacific  Columbia's  by B o n n e v i l l e ' s  who  challenged  prevents purchase of  i s thereby being used  However, t h e a c c e s s t o B r i t i s h energy  utilities  than  those  hydroelectric  has been d e v e l o p e d t o b e n e f i t  industry  Southwest  i s i n effect  The r e a s o n L o s A n g e l e s  b y U.S. u t i l i t i e s .  advantage  Columbia  and Southwest  p o w e r f r o m B.C. H y d r o a t r a t e s p o s s i b l y charged  River to  - Pacific  f o raccess t o C a l i f o r n i a  inter-linkage.  policy  5  U.S. N o r t h w e s t  capacity  Northwest this  over three  from t h e Columbia  British  by Los A n g e l e s . cheap source o f  access p o l i c y and  f o ri t s constituents.  B o n n e v i l l e contends that t h e p o l i c y i s l e g a l and n e c e s s a r y b e c a u s e t h e i n t e r - l i n k a g e was b u i l t w i t h t a x p a y e r s money t o be r e p a i d b y B o n n e v i l l e t h r o u g h s a l e s o f power and o t h e r revenue. B o n n e v i l l e s h o u l d , t h e r e f o r e , give a p r i o r i t y o f access t o i t s e l f and P a c i f i c Northwest u t i l i t i e s t o accomplish t h a t . 5  Since  B.C.Hydro i s r e p o r t e d  contract  with  gigawatt-hrs  t o have $190  Los Angeles worth o f power a n n u a l l y  production  o f B . C . ' s new $2  Bonneville  i s i n effect  signed  —  billion  a tollgate  "a t h r e e - y e a r  million  about  half  to sell  3,000  of t h e annual  Revelstoke dam," keeper  4  5 5  f o r B.C.  53 A t h r e e - j u d g e p a n e l w a s c o n s i d e r i n g t h i s c h a l l e n g e , r e p o r t e d by t h e A m e r i c a n P r e s s (AP) " B o n n e v i l l e , " P o r t l a n d , O r e g o n , J a n u a r y 17, 1985. 54 A m e r i c a n P r e s s ( A P ) " B o n n e v i l l e , " P o r t l a n d , O r e g o n , J a n u a r y  17,  55  17,  1985.  American  1985.  Press  (AP) " B o n n e v i l l e , "  Portland,  Oregon,  January  158  Intensification electricity: such  i t charges  electricity  B.C.Hydro f o r t h e t r a n s m i s s i o n when  i s a l l o w e d t o be e x p o r t e d t o C a l i f o r n i a .  Chester Johnson agreed  " o t h e r U.S.  C a l i f o r n i a market, p a r t i c u l a r l y said,  a l t h o u g h t h e r e has  inter-linkage policy, out the bumps." After a  the  But  36  been e x p o r t e d  Ma intenance  Hydro,  1,  to  working  persists.  t o J u n e 1,  quarter of f i s c a l  1986 were Z e r o ;  no power h a s 5 7  Columbia,  power r a t e s c h a r g e d  [B.C.] Hydro i s a n e f f i c i e n t  survey  Hydro Quebec and economist  i n the world  O n t a r i o Hydro. But  John H e l l i w e l l  by O n t a r i o  low-cost producer o f  ... t h e r a t e B.C.Hydro c h a r g e s lowest  t o i n d u s t r y are  i t s industrial after  Sweden,  Power s h o u l d be p r i c e d generate  electricity."  s a  South  U n i v e r s i t y o f B.C.  c a u t i o n s , ... 'the c o s t t o t h e  consumer i s t h e wrong way t o measure t h e e f f i c i e n c y ...  BPA's  (functiona1)  customers i s the f i f t h  energy  o f exports  " A c c o r d i n g t o an i n t e r n a t i o n a l  electricity  Africa,  instability  about  We a r e j u s t  f o r t h e e n t i r e t h r e e month p e r i o d .  British  low.  " t h i n g s a r e not bad.  The e x p o r t s f o r t h e f i r s t  1986/87 f r o m A p r i l  very  A r i z o n a a n d New M e x i c o . He  been "a l o t o f r h e t o r i c "  the  the  " e x p o r t boom" o f 1985, t h e s p r i n g o f 1986 r e p r e s e n t s  "power b u s t . "  In  states are also chasing  a t what i t c o s t s t o b u i l d  o f Hydro. new dams  B.C.Hydro's Crown c o r p o r a t e  56 J e s Odam, The Vancouver Sun, " B e n n e t t h a i l s power b r e a k t h r o u g h " , September 18, 1985. 57 T h e r e s p o n s e g i v e n t o a n i n q u i r y a b o u t t h e c u r r e n t volume f r o m t h e B.C.Hydro c h a i r m a n ' s o f f i c e o n A u g u s t 20, 1986. T h e D e p a r t m e n t o f M a r k e t i n g , R e s e a r c h a n d P l a n n i n g a t B.C.Hydro i n d i c a t e d , a l s o , t h e l a c k o f e x p o r t s a l e s : "we c a n ' t move a t h i n g " ( A u g u s t 14, 1986). 58 Rod N u t t , The Vancouver Sun, "Changes a t Hydro s p a r k q u e s t i o n s , " M a r c h 29, 1986.  159  Intensification growth o r i e n t e d p o l i c y and  low c o s t  The  expansion  supply.  of hydroelectric  system *  grew and  55  during the  "as a t M a r c h 31,  B.C.Hydro's o u t s t a n d i n g l o n g - t e r m d e b t t o t a l e d o f t h i s amount $4,666 m i l l i o n was p a y a b l e  million;  c u r r e n c y a n d 5,103 m i l l i o n $3,742).  The e f f e c t i v e  was p a y a b l e i n U.S.  interest  M a r c h 31, 1985, was 12.04%." money t o t h e U n i t e d S t a t e s , f o r t h e U.S. pay  capacity  d e b t o f t h e Crown c o r p o r a t i o n a c c u m u l a t e d  building 1985,  however e m p h a s i z e s  Canadian  currency  p o r t i o n o f which  (U.S.  c o s t on d e b t o u t s t a n d i n g a s a t Particularly  an i n c r e a s i n g  the export o f t o pay  amount was u s e d t o  c o n s t i t u t e s the growing  d i s a c c u m u l a t i o n . T h e d e p e n d e n c e o n U.S.  a s a n e c e s s a r y o b l i g a t i o n by t h e c h a i r m a n said:  in  s u c h a s t h e $5,103 m i l l i o n  f o r the excess c a p a c i t y ,  regional  eo  $9,469  trend of  l o a n s i s seen  o f B.C.Hydro, who  "When y o u ' v e a Crown c o r p o r a t i o n , you have v e r y h e a v y  borrowing  from f o r e i g n c o u n t r i e s ,  like  o u t o f New Y o r k  [ s i c ] ." e3  As a r e s u l t  ofprovincial  B.C.Hydro l o a n s and rating level  a decline  government g u a r a n t e e s f o r i n tax revenue,  c o u l d no l o n g e r be m a i n t a i n e d . of credit  rating?  Investors Services c o n d i t i o n s and  As Timothy  I n c . , New Y o r k  t h e AAA c r e d i t  What d e t e r m i n e s  the  C r o w e l l o f Moody's  indicates,  the e f f e c t s o f the r e c e s s i o n  "'market 'will  be t a k e n  59 S i n c e 1961 t h e f o l l o w i n g dams were b u i l t : W.A.C.Bennett ($.5 b i l l i o n ) , t h e P e a c e Canyon Dam ($.5 b i l l i o n ) , Seven M i l e , K o o t e n a y C a n a l , M i c a , R e v e l s t o k e ($2 b i l l i o n ) . 60 B.C.Hydro A n n u a l R e p o r t 1984/85, p.14. 61 C a n a d i a n P r e s s ( C P ) , "Bonner P r o f i l e , " J a n u a r y 12, 1985.  160  Intensification i n t o account  when H y d r o ' s s i t u a t i o n  l o o k a h e a d , ' he s a i d . provinces financial effect  'But we r e m a i n  situation;  with f a l l i n g  Very  expensive  (interest  with the  The Moody's  6 2  rating  interest  electrical  payments.  capacity with exported  r a t e s ) would s t r e n g t h e n t h e p r o v i n c e  and brought  about  resulted  The hope t h a t money regionally  a c h i e v e d t h e o p p o s i t e : i t weakened t h e p r o v i n c e ' s rating  to Aal,  6 3  a n d h e a v i l y m o r t g a g e d dams have  the export o f large excess  rates.  'We t e n d t o  t a x r e c e i p t s , and  B.C.Hydro's c r e d i t  which i m p l i e s higher i n t e r e s t  buying  concerned  t h a t i t h a d on t h e need t o b o r r o w . ' "  I n v e s t o r ' s S e r v i c e lowered  in  i s reviewed.  credit  an e x p o r t d e p e n d e n c e on t h e U n i t e d  States.  Dependence The  (functional)  provincial  decision-making relationship  state's  "power r e l a t i o n s h i p s ,  power depends  i ncapitalist  ( l i k e every other  provincial  the d i r e c t  state  accumulation  r a t e s and t a x e s c l i m b e d million  i n 1985.  itself  ( O f f e 1975:126).  was i n c r e a s i n g l y  $71 m i l l i o n  time t h e s t a t e  accumulation  r e l i a n t on  B.C.Hydro i n t h e e a r l y  1984/58 R e p o r t  from  At this  continue the p r o v i n c i a l  process"  p r o c e s s from  1 9 8 0 s . B.C.Hydro's A n n u a l  social  s o c i e t y ) upon t h e p r e s e n c e a n d  c o n t i n u i t y of the accumulation The  i t s very  i n d i c a t e s t h a t water i n 1980,  t o $299  i s attempting t o  p r o c e s s by r e l y i n g o n  62 C a n a d i a n P r e s s ( C P ) , "Hydro," A p r i l 12, 1983. 63 B.C.Hydro A n n u a l R e p o r t 1984/85, p . 14.  161  Intensification electricity  exports  the  i n t e r e s t payments,  flow  of  to help  problem to t r a n s m i t capital state  outside  f o r the there  debts i t i n c u r r e d . i s no  of the  country.  The  and  Canada by  provincial  p o s s i b l y U.S. way  accumulation.  power o f t h e p r o v i n c i a l California  s t a p l e s producers which  o f c h e a p power s a l e s w h i c h a r e  undermines the  compete  lower  than  the  utilities,  B.C.Hydro t o buy  electricity  same r a t e s as  West K o o t e n a y Power and  California  utility's provincial  Large purchasers of  to obtain  provincial  regional  rates.  This process  strive  In  inter-linkage  (B.C.Hydro i n t e r e s t payments)  i s i n c r e a s i n g l y d e p e n d e n t upon h e l p i n g  industries with  pay  L i g h t , one  owned by  surplus  the  foreign  of the  Cominco,  electricity  i n the  utilities.  remaining has  at the  province  private  s u c c e s s f u l l y sued same r a t e  as  utilities.  Legitimation The s t a t e c a n o n l y function as a c a p i t a l i s t s t a t e a p p e a l i n g t o s y m b o l s and s o u r c e s o f s u p p o r t t h a t conceal i t s n a t u r e as a [ s t a p l e s - d e p e n d e n t ] capitalist s t a t e ( O f f e 1975:127). Politicians symbols o f mitigated as  the  industrial by  the  B.C.Hydro r e p r e s e n t a t i v e s progress  impact e x p e r t s .  c r e a t i o n o f a new  electricity, by  and  are  and  as  adverse e f f e c t s are  of discounted  by  c h e a p power, and  the  such  surplus  attracting industry.  g o v e r n m e n t a r e made f o r j o b s  attracted  to  Development a f t e r t h o u g h t s ,  category  portrayed  appeal  by  Promises  i n those i n d u s t r i e s  increase  in construction  Intensification jobs  i s pointed  environmental consultants  and s o c i a l  dams a r e b e i n g  impact  who s t u d y a q u a t i c ,  service concerns. is  out while  i s mitigated  British  resource  The i m p o r t e d t e c h n o l o g y o f B.C.Hydro  has changed.  Columbia  by  The  f o r e s t r y , f i s h e r y , and s o c i a l  u s e d a s a n example o f i n d u s t r i a l  whereas l i t t l e  built.  162  development and p r o g r e s s ,  The k i t c h e n  hardware s t o r e s  itself  hardware i n t h e  i s a s i m p o r t e d a s t h e mega-  h a r d w a r e u s e d o n t h e W.A.C. B e n n e t t Dam a n d i n t h e G o r d o n Shrum G e n e r a t i n g  The an  a b s o r b e r o f any temporary  even b e f o r e  in  (on t h e Peace R i v e r ) .  "power h u n g e r " o f C a l i f o r n i a  electricity.  the  Station  industrial  The o f f e r s t o C a l i f o r n i a the. m a j o r dams were b u i l t  San F r a n c i s c o  ( i n August  U.S. M i s l e a d i n g "  California  o f o u r power were made by W.A.C. B e n n e t t  1961).  from B r i t i s h  political  favored to t h e i r  reasoning  and t r a v e l  Gordon B e l l ,  Northwest r e a l l y  during  centre  the Victoria  "'Power Hunger'  raised thequestions,  and t h e P a c i f i c  electricity the  surplus of  o p e n i n g c e r e m o n i e s o f B.C.'s new t r a d e  Times B u s i n e s s e d i t o r , i n h i s a r t i c l e for  has o f t e n been c i t e d as  Claims  t o whether needed t o import  C o l u m b i a . He f o u n d t h a t  i t was r a t h e r  o f t h e Kennedy A d m i n i s t r a t i o n  which  p u b l i c power p r o j e c t s , o f t e n w i t h o u t enough a t t e n t i o n e c o n o m i c r a t i o n a l e . He c i t e s  twenty-five  thefollowing  facts  y e a r s ago:  E v e n w i t n e s s e s f r o m t h e B o n n e v i l l e Power A d m i n i s t r a t i o n , a n i n t e g r a l p a r t o f t h e v a s t U.S. p u b l i c power s y s t e m , were f o r c e d t o c o n c e d e i n h e a r i n g s b e f o r e a House c o m m i t t e e t h a t , e v e n u n d e r t h e most a d v e r s e w e a t h e r c o n d i t i o n s on r e c o r d , power g e n e r a t i n g c a p a c i t y o f t h e northwest r e g i o n would  Intensification  163  f a l l s h o r t of estimated demand by no more than 1 per cent over the next h a l f d e c a d e . . . . T h i s was a tough p o i n t f o r B o n n e v i l l e to concede because i t has been, p r i m a r i l y , on the evidence of U . S . f e d e r a l power spokesmen t h a t the "power hungry" northwest and C a l i f o r n i a image was b u i l t up. T h i s i s p o l i t i c s and not economics . . . . B e l l then d e s c r i b e s the plans of the g i a n t g r i d being planned d u r i n g the 1960s by Mr. U d a l l which was to l i n k l a r g e Northwestern and Southwestern u t i l i t i e s grid.  the  into a giant  In r e l a t i o n to f u t u r e needs f o r B . C . power, B e l l  raised  the b i g q u e s t i o n : Is i t not p o s s i b l e t h a t the c l a i m s of "power hunger" have been m i s l e a d i n g i n other than p u r e l y economic terms? Is i t not p o s s i b l e t h a t any power 'vacuum'f i c t i t i o u s or r e a l - w i l l be f i l l e d by the U . S . p u b l i c power, l e a v i n g no room f o r import of f o r e i g n power? C e r t a i n l y i t seems d o u b t f u l t h a t I n t e r i o r S e c r e t a r y and h i s c o h o r t s have done a l l t h e i r p r o p a g a n d i z i n g on the need f o r power f o r the b e n e f i t of B . C . Mr. U d a l l i s pushing hard f o r a m u l t i - m i l l i o n d o l l a r western U . S . g r i d s y s t e m . . . . 6 4  T w e n t y - f i v e years l a t e r i n March 1986, Bennett  Premier B i l l  upon the r e t u r n of one of many v i s i t to  B . C . H y d r o ' s s u r p l u s power to C a l i f o r n i a found the  sell following:  . . . t h a t the C a l i f o r n i a n s 'have become very very i n t e r e s t e d ' i n buying export e l e c t r i c i t y from B . C . He s a i d the C a l i f o r n i a n s have r e c o g n i z e d t h a t one of the best o p t i o n s f o r t h e i r f u t u r e energy needs i s the ' s a f e , c l e a n a f f o r d a b l e ' power from B . C . He c o n t r a s t e d t h i s p e r c e p t i o n with the r e l a t i v e ignorance about B . C . e l e c t r i c i t y when he f i r s t v i s i t e d C a l i f o r n i a to t a l k about i t two years ago: ' T h e r e ' s been a remarkable change of v i e w . ' 6 5  64 Gordon B e l l , Victoria Times, "'Power Hunger' Claims f o r U . S . M i s l e a d i n g ? " August 12, 1961. 65 The Vancouver Sun, "Bennett f i n d s C a l i f o r n i a n s w i t h f r e s h savvy - a n d . . . POWER HUNGRY," (March 8,1986).  Intensification  164  Conclusions In  response  characterized product, of  a  initial  were  i n the of  off.  This  third  direction  staples  are  finding  electricity  does  so,  by  resources, in  the  as  This  extends  that an  a  and  s t o p p i n g 10%  more t h a n  consists  operations of government  approach which  mills,  now  chemical  threat  export markets  to  the  restart  and  intensifies  way  of  t o produce centers of  a  to  and  and  The  "backward"  having  staples of  the  f o r the  the  produced  "power  mines).  logic be of  of  increasingly  an  industrial  The  trap"  surplus  Columbia's  California.  and  to  dependence.  to  industry  a  the production  companies  (staple)  British  development  employees  B.C.Hydro.  developmental  resource  way.  i s d i s c o u n t - marketed  intensifies the  to  loss  of  B.C.Hydro  and  i s due  5000  of  "forward"  energy  manufacturing  halt,  i n a major  of  solution  i n order  are  combination  escape  i s seen  B.C.Hydro  respect  which  new  the  with  (pulp  to  the  and  energy and  policies  (surplus)  advocates  but  a  by  "backward"  policy  export.  the  approach  with  internal  policy  "forward"  combines  come t o  intervention  the  producers  i s an  trap,  wrong  electricity  construction,  of  first  government  production of  major  of  The  the  dams h a s  of  electricity  This  growth;  Columbia's  power  power  unemployment  reformulation  the  1980s  r e s o u r c e base,  easy  planning.  a  weakening  transformation  of  of  i n the  laid  major  threat  specialization  building  British  by  the  the  intervening The  to  and  of  viewing  exploited building  for  dams,  dependence. remote  staple  to  It  river be  used  165  Intensification  When  examining  accumulation legitimacy) arise  are  excluded  in a  from  the of  to  (interruptable maintain  this  foreign  debt  skills;  the  revenues and  as  a  decision power,  residential  making  sales  in a  process  of  payments  and  water  this  already  the  from  to  a  of  becomes the  undermined  same  degree they  income an  effort  eroded  by  and  appropriating by  local  to  labour export  utilities  as  California,  and  ("power-hungry"  California,  cheap  becomes  rates  are  greater  engineering on  which  utilities);  becomes  dependence  and  government  U.S.  source  lost  of  uncertainties  process  accumulation  process  electricity)  the  fluctuating currency);  power  taxes  functions  dependence  and  competition  less predictable  political  of  environment B.C.Hydro  i n d u s t r i e s demanding  legitimacy  maintenance,  foreign  intensified.  subject  provincial state's  (exclusion,  (transmission are  the  increasingly  questionable.  the  166  Chapter  VII  CONCLUSION Summary  Out  of  the  c o n t e x t of  development would b r i n g arose the the  expectations that  about a d i v e r s i f i e d secondary  q u e s t i o n w h i c h was  provincial state's  central to  intervention  power, i n t e n d e d t o d i v e r s i f y t h e intensify  British  q u e s t i o n was  planning of  the  way  of  extension of  dependence.  contributing industry,  I t has  B.C.Hydro, an  intensifying  the  elucidate  theoretical  points  staples  the  key  concepts of  the  Problem of  the  nature of dams) i n a helps  p r o b l e m and  Offe's  the  theory  state  dependent s t a p l e s  production:  supported continuation,  and  than  secondary  a partial  the  has  and  industries.  answer  a  Marchak)  C a p i t a l i s t State  intervention  r e s o u r c e dependent c a p i t a l i s t i d e n t i f y several  rather  (Innis, Watkins,  "Theory of  state  the  provincial state,  P o l i c y F o r m a t i o n " were a p p l i e d productive  This  the i n t e n s i f i c a t i o n  staples  find  hydro  actually  dependence,  i n extending  i n the  did  analysis:  development of  force  staples  of  been argued, t h a t  agency of  production  blend of  and  theory  four  s u b s t a n t i a l l y to the  become a m a j o r i n s t i t u t i o n a l  of  dependence?  f o r i n d u s t r i a l power n e e d s , and  staples  To  t h i s t h e s i s : Why  i n d u s t r i a l base,  the  industry  i n developing public  Columbia's s t a p l e s  a n s w e r e d by  intervention,  hydroelectric  to  and  understand  ( i . e . the  building  society.  Staples  developmental patterns  of  i t s colonial origin, i t s state-  i t s recurring  structural  167  Conclusion conditions.  In p e r i p h e r a l s t a t e s ,  substantially  based on revenues  the accumulation process  is  from s t a p l e s p r o d u c t i o n .  O f f e ' s concept of the s t a t e i s d e r i v e d from the  opportunities  of accumulation the s t a t e needs to p r o v i d e i n order to m a i n t a i n the economic system. s t a t e needs to i n t e r v e n e ,  To do so,  i t was argued,  not o n l y by a l l o c a t i n g  the  resources,  but a l s o by t u r n i n g water power i n t o an e l e c t r i c a l p r o d u c t . T h i s development c o n t i n u e d d u r i n g the l a s t twenty years and helped m a i n t a i n the accumulation  process.  The p r o v i n c i a l s t a t e ' s i n t e r v e n t i o n s electricity  s t a r t e d i n 1945 with the B . C . Power Commission's  purchase of small u t i l i t i e s uniformly p r i c e d e l e c t r i c i t y electricity  of  to supply the r u r a l areas  with  and promote the i n d u s t r i a l use of  i n areas found u n p r o f i t a b l e to serve by the  private u t i l i t i e s . natural  i n the p r o d u c t i o n of  resources  At the same t i m e ,  larger  the a l l o c a t i o n of  by the p r o v i n c i a l s t a t e and the  acquisition  l a r g e n a t u r a l resource areas by l a r g e m u l t i n a t i o n a l  corporations continued. Subsequent to the second i n t e r v e n t i o n ,  the t a k e - o v e r  the B . C . E l e c t r i c (1961), the p l a n n i n g emphasis  of  changed.  B . C . H y d r o ' s expansionary p e r i o d was c h a r a c t e r i z e d by: megadams, cheap bulk r a t e s ,  b u i l d i n g before demand, opening  N o r t h , p o l i t i c i z i n g h y d r o e l e c t r i c development, dams as an i n d u s t r y .  the  and b u i l d i n g  During t h i s p e r i o d , the s t a t e had became  increasingly involved in bringing hydroelectric projects p r o d u c t i o n and f o r m u l a t i n g p o l i c y to continue  this  into  Conclusion development.  168  The "dual r i v e r p o l i c y " came to d e f i n e  the  course of h y d r o e l e c t r i c development d u r i n g the 1960s, and 1980s.  1970s,  By b u i l d i n g dams B . C . H y d r o became an i n s t i t u t i o n a l  f o r c e which brought investment money i n t o the p r o v i n c e , c r e a t e d jobs d u r i n g the c o n s t r u c t i o n and p l a n n i n g phase, promised i n d u s t r i a l d i v e r s i f i c a t i o n , and improved r e e l e c t i o n chances of the government.  Instead of f o s t e r i n g  competition  with other regions by i n c r e a s e d product i n n o v a t i o n , interventions  the  ( i n the p r o d u c t i o n of e l e c t r i c i t y and a l l o c a t i o n  of n a t u r a l resources)  served as a m e t a - l e v e l  interregional  c o m p e t i t i v e d e v i c e f o r making s t a p l e s products  competitive.  B . C . H y d r o was not merely a u t i l i t y which s u p p l i e d electricity. government's internal  I t was a l s o the Crown c o r p o r a t i o n advancing the i n d u s t r i a l development p o l i c y .  r e p o r t s show s e v e r a l emphases:  B.C.Hydro's  l i n k i n g the n a t u r a l  r e s o u r c e s t o the e l e c t r i c a l i n f r a s t r u c t u r e , expanding the supply of e l e c t r i c i t y f o r f o r e s t p r a c t i c e of  processing,  c o n t i n u i n g the  "industrialization-by-invitation" (particularly in  the promotion of mining and f o r e s t r y ) ,  d e v e l o p i n g low c o s t  e l e c t r i c i t y as an i n c e n t i v e to power i n t e n s i v e  i n d u s t r i e s , and  d i s s e m i n a t i n g the n o t i o n t h a t d i v e r s i f i e d manufacturing depends on l a r g e amounts of low c o s t  electricity.  B . C . H y d r o b u i l t l a r g e dams on the Columbia and Peace R i v e r with a n t i c i p a t i o n of a t t r a c t i n g i n d u s t r i e s .  No l a r g e  s m e l t i n g i n d u s t r i e s were a t t r a c t e d by the abundance of  169  Conclusion electricity. sites  for their  users of  major  and  Cominco had  smelting  industrial  companies.  operations.  electricity  During the  Industries"  Chemical  constituted  and  to  i n the  categories  constituted only  availability  major d i v e r s i f i c a t i o n the  1960s.  catalyst  17 15%  l o a d was  of  three  "Paper  and  and  "Chemical  ( s u p p l i e r s of pulp m i l l s ) the  Crown  of  corporation's  1983.  to  industrial  The  manufacturing  Hydro's remaining Columbia.  utilized  sales  In o t h e r  The  i n the  dreams t h a t  to bring  words,  p r i m a r i l y by  d i d not  production  construction  low  electricity  about secondary not  of  the  b r i n g about  goods s i n c e  a  the  have n o t  diversify  their  and  consumer  Spin-off  developed, except  r a t e s and  s t a p l e s p r o d u c e r s , they d i d not substantially  industry  visits  use  to the  dam  resource  goods  industries for  sites.  Despite  r o y a l t i e s to  such i n c e n t i v e s  products.  in  w o u l d become a  become a r e a l i t y .  electricity  to  industries.  electricity  government promoted t o u r i s t granting  processing  major expansion of h y d r o e l e c t r i c development  m a n u f a c t u r i n g has f r o m dam  of  dam  remaining  mills),  grade paper),  industries in British  expanding f o r e s t processing  of  low  86%  remaining  B.C.Hydro's i n d u s t r i a l  The  major forest  (saw  s a l e s f r o m 1961  industry  purchasers  the  were t h e  Industries"  between 81%  manufacturing  The  own  e x p a n d i n g p h a s e o f B.C.Hydro,  (pulp  Products  manufacturing  start  developed t h e i r  i n d u s t r i e s , "Wood I n d u s t r i e s "  Allied and  Alcan  to  Conclusion Planners, development  experts,  officers within  g o v e r n m e n t , and infrastructure efforts  politicians,  industry  B.C.Hydro, t h e p r o v i n c i a l  Columbia.  the hydro-system,  became a p p a r e n t . E v i d e n c e was the  following contributed  of the i n d u s t r i a l  industrial  staple  an  "unplanned  surplus:  B.C.Hydro's i n a b i l i t y  energy p r o d u c t ) ,  industrial  industrial  the "surplus  i s characterized s h o c k " due  t h e weakening  of e l e c t r i c i t y ,  unanticipated result  of a c l e a r  by  unexpected  to the lack of resource  provincial  1980s "power t r a p , "  planning  i n the  debt load  a p p r o a c h . As  B.C.Hydro and  government responded w i t h t h e t h i r d  intervention,  predicted  base,  and t h e s t a g g e r i n g  by t h e t e c h n o c r a t i c  of t h i s  as a  optimism  unemployment and underemployment, t h e r e d u c e d g r o w t h consumption  markets  policy direction.  1980s "power t r a p "  industry,  their  the treatment of e l e c t r i c i t y  government  e x p a n s i o n by  that  unreliability  to predict  w i t h b i g p r o j e c t s , and t h e a b s e n c e  side-effects:  surplus"  indicates  the  associated  The  substantial  p r e s e n t e d which  to this  consumption,  (exportable  Despite  c u s t o m e r s ' f i r m commitments t o expand  staples production, for  industrial  have s h a p e d t h e h y d r o e l e c t r i c  of B r i t i s h  to plan  and  170  whereby t h e p r o v i n c i a l government  were a  the  major reduced  B . C . H y d r o ' s c o n t r i b u t i o n t o t h e p r o v i n c i a l economy.  This of  third  major  intervention consisted  the i n t e r n a l operations  an o p e r a t i n g  of  transformation  o f B.C.Hydro f r o m a p r o d u c t i o n  company and a r e f o r m u l a t i o n  o f p o l i c y by  the  to  171  Conclusion government and with  B.C.Hydro. The  respect to production of e l e c t r i c i t y  "backward" and  The  "forward"  additional  (pulp m i l l s ,  "forward"  markets f o r the  s u r p l u s and  t o produce  The  environment  intensifies  simple domestic  greater degree. predictable  role  can  be  eroded  d e p e n d e n c e on degree  by  persuade  from  line  In p u r s u i t  hydro  accumulation  relatively  the  provincial  t h e d e c i s i o n making p r o c e s s t o a stand-by  The  sales are  process of  p a y m e n t s . The  a p p r o p r i a t i n g export  revenues  interest  access) w i l l  rates,  political carries  a high to  i s legitimate.  and  for  If  electricity,  export conditions  be d e t e r m i n e d  of such a p o l i c y  less  accumulation  i t becomes more d i f f i c u l t  f o r export, the p r i c e  t h e number o f j o b s , t h e (transmission  in a  B.C.Hydro and  income.  f o r e i g n debt  solely  export  legitimacy) i n a  than  the population that the process  dams a r e b u i l t  States.  less certain  o f u n c e r t a i n t y , and  staples  remote  in facilitating  I n t e r r u p t a b l e and  sources of  mines)  f o r export.  environment.  government a r e e x c l u d e d  to  i n v o l v e s s e e k i n g new  the development of  state's  are  of  the  c o m p a n i e s , and  ( e x c l u s i o n , m a i n t e n a n c e , d e p e n d e n c e , and foreign  are a combination  having produced  chemical  policy  electricity  provincial  policies  i s d i s c o u n t marketed  production. I t thereby  d e p e n d e n c e . The  sites  stems f r o m  ( s u r p l u s ) w h i c h now  staples producers  of the  planning.  "backward" a p p r o a c h  power f i r s t  for  major d i r e c t i o n  i n the  the p r o v i n c e  United  intensifies  172  Conclusion  its  dependency.  When examining the 1980s "power t r a p "  becomes e v i d e n t t h a t the p r o v i n c i a l (1975:144) i n d i c a t e s ,  it  s t a t e was u n a b l e , as Offe  to c a r r y out the f u n c t i o n s  of  accumulation by means of p r o d u c t i v e i n t e r v e n t i o n without paralyzing  side-effects.  New Material T h i s t h e s i s makes new m a t e r i a l gathered i n the library  (e.g.  r e p o r t s and s t u d i e s by the no longer  B.C.Hydro existing  I n d u s t r i a l Development Department) and other i n t e r n a l B . C . H y d r o documents a v a i l a b l e to the general r e a d e r ; example,  excerpts  for  from r e p o r t s which l i n k B . C . H y d r o to  promotion of the consumption of e l e c t r i c i t y resource p r o c e s s i n g  the  i n primary  i n d u s t r i e s and the promotion of  " i n d u s t r i a l i z a t i o n - b y - i n v i t a t i o n . " In a d d i t i o n , w r i t t e n m a t e r i a l and new i n f o r m a t i o n was gathered by way of i n t e r v i e w s w i t h s e l e c t B . C . H y d r o employees departments:  and q u a l i t y c o n t r o l  who buy B . C . H y d r o equipment. My own p e r s o n a l  experience (1966  i n several  i n the r e s e a r c h department, Burnaby Mountain  C o n t r o l C e n t e r , marketing e n g i n e e r s , officers  informal  i n the p l a n n i n g process of h y d r o e l e c t r i c p r o j e c t s  - 1982), and very recent c r o s s - e x a m i n a t i o n s  of B . C . H y d r o  e x e c u t i v e s before the B . C . U t i l i t i e s Commission are p a r t of the e m p i r i c a l i n f o r m a t i o n .  U t i l i t y of Result T h i s t h e s i s i s a c o n t r i b u t i o n to understanding the r e p e t i t i o n of h i s t o r i c a l staples-dependent  development  173  Conclusion patterns  which are  repeated  i n the  the  state, as well  the  development o f e l e c t r i c i t y  productive  as a de-mystification  i n t e r v e n t i o n s by  o f the  dreams  produces s u b s t a n t i a l  that  secondary  industry.  The  a p p r o a c h u s e d may be a p p l i c a b l e  other p r o v i n c i a l Quebec, and studies  Manitoba Hydro.  state  p r o d u c e d and  tourist  industry  (e.g.  such as O n t a r i o  productive  Expo 86,  the  o p e r a t e d by t h e t o keep the  analysis of Hydro,  O r , i t may be u s e f u l  which i n v e s t i g a t e the  peripheral was  power u t i l i t i e s ,  t o the  in  other  interventions  productive  by t h e  input  which  state primarily for  accumulation process  Hydro  the  going).  Limitations The  state  intervention  i n Canada has  had  i n Crown c o r p o r a t i o n s .  argument t h a t  "the  has  t o an e x t e n t t h a t  of  increased  quantity  a new p h a s e o f c a p i t a l i s t  (Offe  1975:125)  and  then s o l d o f f t o the  Offe's capitalism 1975:144) the  theory - the  stresses  t h e o r y does not  o v e r - p r o d u c t i o n and  Offe's intervention  makes i t j u s t i f i a b l e  development i n r e c e n t  private  that  t o speak  decades"  context of  w h i c h were e s t a b l i s h e d  function  scope o f such p r o d u c t i v e  state's  scope o f s t a t e  during  the  sector.  "under c o n d i t i o n s  need f o r p r o d u c t i v e  i s a necessary  However, t h e  and  Therefore,  needs t o be r e e x a m i n e d i n t h e  C a n a d i a n Crown c o r p o r a t i o n s war  a history o f productive  of  state a c t i v i t i e s "  f o r accumulation,  interventions  is  and  advanced (Offe that  increasing.  adequately cover the  case o f the  s u b s e q u e n t need f o r a l l o c a t i o n o f  174  Conclusion  this  surplus  (the "staples  Such an e v e n t productive order  requires  activities  t o cover  realities:  the state, (e.g.  strategies), anticipated  and  (e.g.  there  that  i s s e e n by O f f e Only  adjustment  o f the state with i t s  " i s neither  i n that  (Offe  1975:144).  theory allow the  state  (Offe  (e.g.  "backward  production).  1975:144).  within  various  Beside the levels of  difficult.  of industries varies within  l e v e l s o f g o v e r n m e n t , B.C.Hydro p r i m a r i l y i t charges  different  categorizes ("transmission" f o r  b u l k u s e r s a n d " G e n e r a l " f o r "wood m a n u f a c t u r i n g " ) . T h e provincial  In  and workable  i n this thesis,  comparisons  by t h e r a t e s  t o new  mode t o a n a l l o c a t i v e mode o f  of industry  g o v e r n m e n t made s t a t i s t i c a l  sales  The s t a t e  way d o e s O f f e ' s  i n the a p p l i c a t i o n o f theory  industrial  these  readjust  o f 'system maintenance'"  categorization  n o r t o be  integration of the state  does n o t o f f e r a " r e l i a b l e  categorization  visible  t o continuously  i n an o v e r - p r o d u c i n g  o t h e r words, O f f e  The  In  i n d i c a t e s two f u n c t i o n a l  by d i s c o u n t - s e l l i n g t h e s u r p l u s  empirical  t o stop i t s  a c t u a l l y does r e c o n c i l e  from a p r o d u c t i v e  intervention  limits  case).  change o f departments and  a n d two, t h a t a strategy  conditions.  strategy  Offe  functions  the accumulation process"  planning"  i n this  i n the interim,  and t h u s a c h i e v e a b a l a n c e d  therefore  better  o n e , t h e c o n s t a n t a t t e m p t t o r e c o n c i l e a n d make  structure  functions  fits  t o s t o p b u i l d i n g more dams).  such c o n d i t i o n s  compatible the various internal  trap"  government u s e s a v a r i e t y o f c a t e g o r i z a t i o n  ( " s e c t o r s o f m a n u f a c t u r i n g goods") and u n i t s  (primarily  175  Conclusion  dollars  and  consistency collected the  by  reports  factory was  shipments).  obtained  with  S t a t i s t i c s Canada given  by  The  only  reference  reasonable to federal  which are only  the industry  to the  as  statistic  reliable  government.  as  176  BIBLIOGRAPHY GOVERNMENT REPORTS, STATDTES & PDBLICATIONS B . 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"Text of Wenner Gren I n t e n t . " V o l . 31, March 1957, pp. 71-72.  Whitaker, Reg. "Images of the S t a t e i n Canada." The State. E d i t e d by Leo P a n i t c h . Toronto: U n i v e r s i t y Toronto P r e s s , 1983. Wilson,  and  49-79.  Ronald.  in the Way: The Human Aspects  Project.  Toronto:  The Wonderful  Toronto: M c C l e l l a n d ,  1971.  University  World  of  Canadian of  of the  Toronto  of W.A.C. Bennett.  187  APPENDIX FIGURE 1 DEVELOPMENTAL SCENARIOS T h i s schematic d i s p l a y s t h e t h r e e h y d r o e l e c t r i c and s t a p l e s economy d e v e l o p m e n t s c e n a r i o s t o i l l u s t r a t e more r e a d i l y t h e nature o f t h e problem under study. DREAM SCENARIO  (KEEFER 1 8 9 9 )  PRE-HYDRO DEVELOPMENT  CONSIDERATIONS  EFFECT ON PRODUCT  ECONOMIC RELATIONSHIP  Present staples product plus elec. infrastr. planning  steady supply of cheap e l e c tricity  diversification of staples  staples independence through industrial evolution  EXTENSION SCENARIO  (SHRUM 1 9 6 1 )  PRE-HYDRO DEVELOPMENT  CONSIDERATIONS  EFFECT ON PRODUCT  ECONOMIC RELATIONSHIP  Present staples product plus dual r i v e r electrical infrastructure policy  more a c c e s s to resources (roads, reservoirs), spin-offs, electricity as s t a p l e  continued staples production  staples dependence, temporary surplus electricity export  PRE-HYDRO DEVELOPMENT  CONSIDERATIONS  EFFECT ON PRODUCT  ECONOMIC RELATIONSHIP  Staples product "unplanned oversupply," building f o r export  continued foreign capital debts, domestic, staples i n d u s t r i a l power production s a l e s p u s h , temp, jobs, e l e c t r i c i t y as s t a p l e  INTENSIFICATION ( 1 9 8 6 ) SCENARIO  intensification: resource & electrical staples dependence, long-term export of variable U.S. r e v e n u e for constant d e b t payment, surplus induced dependence  188  FIGURE 2 GLOSSARY Electrical  Terms  HYDROELECTRIC POWER STATION: a power s t a t i o n w h i c h g e n e r a t e s e l e c t r i c i t y from h y d r a u l i c s o u r c e s . The w a t e r r o t a t e s t u r b i n e s connected t o generators. CAPACITY: F o r example, a g e n e r a t o r h a s a c e r t a i n c a p a c i t y (measured i n w a t t s ) t o p r o d u c e power. I n an e l e c t r i c a l system the a d d i t i o n o f t h e s e name-plate g e n e r a t o r c a p a c i t i e s i s r e f e r r e d t o as t h e t o t a l c a p a c i t y . POWER: P o t e n t i a l c a p a c i t y . ENERGY: a v a i l a b l e h e a t i n e l e c t r i c i t y m e a s u r e d i n k i l o w a t t - h o u r s , where one k i l o w a t t - h o u r i s e q u i v a l e n t t o 3412.97 B t u . WATT: t h e b a s i c u n i t  f o r measuring  WATT-HOUR: t h e b a s i c u n i t (kW): 1000  KILOWATT  KILOWATT-HOUR MEGAWATTS  GIGAWATT  (kW.h): 1000  energy.  3  watt-hours.  kilowatts  (MW.h): 1 x 1 0  (GW): 1 x 1 0  GIGAWATT-HOUR  f o r measuring  watts.  (MW): 1 x 1 0  MEGAWATT-HOUR  power.  (GW.h):  6  kilowatt-hours.  3  kilowatts. 1 x 10  kilowatt-hours.  6  MILL: o n e - t e n t h o f a c e n t . LOAD: t h e amount o f e l e c t r i c a l p o i n t on a system.  power d e l i v e r e d a t a n y s p e c i f i e d  PEAK LOAD: t h e maximum a v e r a g e l o a d d u r i n g a t i m e i n t e r v a l o f s p e c i f i e d d u r a t i o n ( e . g . , 20 m i n u t e s ) o c c u r i n g d u r i n g a g i v e n p e r i o d o f time (e.g., a d a y ) . DEMAND: t h e power (measured i n w a t t s ) o r e n e r g y (measured i n w a t t - h o u r s ) r e q u i r e d t o s u p p l y t h e system l o a d a t any g i v e n t i m e .  S o u r c e : Potential Exports  by B a t t l e ,  Benefits  and Costs  Gislason,  Douglas.  of Canadian  Electricity-  189 FIGURE 3 IMPORTED GENERATORS, TURBINES, AND ELECTRICAL GEAR USED IN BRITISH COLUMBIA HYDROELECTRIC PROJECTS MANUFACTURERS OR COMPANY OF ORIGIN  DAM S I T E  EQUIPMENT  P e a c e Canyon ( S i t e 1)  Dam  Portage Mountain ( B e n n e t Dam, Shrum G e n e r . Station) Seven M i l e Dam  M i c a Dam  Generators Turbines  (4) (4)  Generators Turbines S w i t c h Gear Giant C i r c . Breakers  (5)  CGE (3) T o s h i b a (5) F u j i (3) T o s h i b a Brown B o v e r i  Turbines Generators S w i t c h Gear Giant Circ. Breakers  (4) (4) ITE  Turbines  (2) H i t a c h i (2) L e n i n g r a d s k y M e t a l l i c h e s k i (4) C a n . G e n e r a l E l e c t r i c I T E (Brown B o v e r i )  Generators S w i t c h Gear Kootenay  Canal  Revelstoke  Source:  1986.  B.C.Hydro,  (No.) & COMPANY  Turbines Generators Turbines Generators S w i t c h Gear Quality  Mitsubishi Leningradsky M e t a l l i c h e s k y Zavod (Emec T r a d i n g L t d . )  (2) (2)  Fuji Fuji  Brown B o v e r i Mitsubishi Hitachi (Brown B o v e r i )  Fuji  (4) M i t s u b i s h i (4) Can. G e n e r a l  Electric  (4) Fuji (4) Fuji Mitsubishi  C o n t r o l & I n s p e c t i o n Dept., J u l y  21,  TABLE VI B . C . H y d r o Sales C l a s s i f i e d in Industrial Analysis 1965-1976 Manufacturing (GW.h) Year  Pulp & ]Paper  1965 1966 1967 1968 1969  1 2 2 2 3  985.2 441.7 737.4 994.1 353.7  1970 1971 1972 1973 1974  3 3 3 4 4  288.7 765.5 846.6 209.9 173.9  1975 1976  3 448.9 4 489.4  Other Mfg.  Total Mfg.  Chemicals  Wood  463.4 692.5 738.7 891.4 945.8  472.6 535.7 573.6 627.6 688.2  579.5 643.9 675.9 715.2 782.1  3 4 4 5 5  500.6 313.7 725.6 228.2 769.8  968.1 016.0 078.4 317.0 277.0  739.5 839.9 985.3 1 131.1 1 124.5  810.4 876.7 920.8 971.9 1 016.0  5 6 6 7 7  806.7 498.1 831.1 629.9 591.4  1 013.9 1 376.3  1 038.9 1 274.7  1 017.7 1 051.5  6 519.4 8 191.9  1 1 1 1  Source: B . C . H y d r o , Department of M a r k e t i n g , Research, P l a n n i n g , (obtained i n June 1986).  and  191 TABLE V I I Composition o f T r a n s m i s s i o n Rate S a l e s H i s t o r i c & Probable Projections 14:27 F r i d a y , J a n u a r y 31, 1986 Pulp & Paper Avg Energy No. Sales A c c . GW.h Historic  Wood Manufacturing* %of Total  Avg Energy No. Sales %of A c c . GW.h Total  Chemicals Avg Energy No. Sales %of A c c . GW.h Total  1974/75 1975/76 1976/77 1977/78 1978/79  18 18 18 18 18  4,141 3,398 4,360 4,336 4,768  53.7 49.9 53.4 51.1 52.2  3 3 3 3 5  144 129 146 154 194  1.8 1.9 1.7 1.8 2.2  6 6 6 6 6  1,237 975 1,254 1,349 1,419  16.0 14.3 15.4 15.9 15.5  1979/80 1980/81 1981/82 1982/83 1983/84  18 18 20 20 20  4,693 4,738 4,271 4,465 4,604  50.9 49.4 45.7 49.4 49.7  6 7 7 9 9  205 234 223 256 293  2.2 2.4 2.5 2.7 3.1  6 6 6 6 6  1,372 1,427 1,241 1,018 986  14.9 14.9 13.3 11.3 10.6  1984/85  20  5,766  52.7  10  292  2.6  6  1,258  11.5  Avg. Annual G r o w t h (%) 10 Y e a r s  74/75-84/85  Projections  3.4  7.3  0.2  1985/86 1986/87 1987/88 1988/89 1989/90  21 21 21 22 22  6,150 6,625 5,850 6,125 6,205  54.4 53.9 50.0 49.5 49.2  10 13 13 13 13  325 370 410 410 410  3.0 3.0 3.5 3.4 3.3  6 7 7 7 8  1,295 1,370 1,350 1,385 1,435  11.4 11.1 11.5 11.2 11.4  1990/91 1991/92 1992/93 1993/94 1994/95  22 22 22 22 22  6,205 6,540 6,815 6,715 6,990  47.2 47.4 47.4 47.1 47.4  13 13 13 13 13  410 410 410 410 410  3.1 2.9 2.8 2.8 2.8  8 8 8 8 8  1,555 1.625 1,695 1,735 1,775  11.8 11.8 11.8 12.2 12.0  1995/96  22  7,115  47.5  13  410  2.9  8  1,795  12.0  Avg. Annual G r o w t h (%) 11 Y e a r s  84/85-95/96  1.9  3.1  3.3  * Most Wood Man. s a l e s a r e i n t h e G e n e r a l R a t e c a t e g o r y S o u r c e : B.C.Hydro, Dep. o f M a r k e t i n g , R e s e a r c h a n d P l a n n i n g .  192 TABLE V I I I Composition o f Transmission Rate Sales H i s t o r i c & Probable Projections 14:27 F r i d a y , J a n u a r y 31, 1986 Metal Mining Avg No. Acc. Historic  Mineral Fuels  Energy Sales %of GW.h Total  Other Industrials  Avg Energy Avg No. S a l e s % o f No. A c c . GW.h T o t a l A c c .  Energy Sales %of GW.h Total  1974/75 1975/76 1976/77 1977/78 1978/79  11 11 11 12 12  1,695 1,715 1,786 1,947 1,963  22 .0 25 .2 21 .9 23 .0 21 .5  2 2 2 2 2  199 211 165 227 265  2 .6 3 .1 2 .0 2 .7 2 .9  4 4 5 5 6  278 282 317 331 377  3 .6 4 .2 3 .9 3 .9 4 .1  1979/80 1980/81 1981/82 1982/83 1983/84  12 14 15 13 14  2,085 2,264 2,637 2,340 2,279  22 .6 23 .6 28 .2 25 .9 24 .6  2 2  2 3 5  259 302 326 294 367  2 .8 3 .1 2 .5 3 .3 4 .0  7 8 9 10 10  430 423 443 452 468  4 .7 4 .4 4 .7 5 .0 5 .1  1984/85  13  2,169  19 .8  6  619  5 .7  10  506  4 .6  Avg. Annual G r o w t h (%) 10 Y e a r s  74/75-84/85 Projections  2.5  12.0  6.2  1985/86 1986/87 1987/88 1988/89 1989/90  10 11 11 12 11  2,040 2,325 2,345 2,340 2,325  18 .0 18 .9 20 .0 18 .9 18 .4  7 8 8 8 8  660 745 795 805 805  5 .8 6 .1 6 .8 6 .5 6 .4  9 9 11 11 11  500 505 580 920 1,040  4 .4 4 .1 5 .0 7 .4 8 .2  1990/91 1991/92 1992/93 1993/94 1994/95  12 12 12 11 11  2,585 2,835 2,995 2,885 2,885  19 .7 20 .6 20 .8 20 .2 19 .6  9 9 10 10 10  825 825 855 855 860  6 .3 6 .0 5 .9 6 .0 5 .8  11 11 12 12 15  1,140 1,140 1,190 1,240 1,390  8 .7 8 .3 8 .3 8 .7 9 .4  1995/96  10  2,575  17 .2  10  860  5 .7  16  1,770  11 .8  Avg. Annual G r o w t h (%) 11 Y e a r s  84/85-95/96  Source:  1.6  B . C . H y d r o , Dep.  3.0 o fMarketing,  12.1 R e s e a r c h and  Planning.  193 TABLE I X Composition o f Transmission Rate S a l e s Historic & Probable Projections 14:27 F r i d a y , J a n u a r y 31, 1986 Commercial A v g No. Accounts Historic  Total  Energy Sales %of GW.h Total  Sales  A v g No. Accounts  Energy Sales GW.h  1974/75 1975/76 1976/77 1977/78 1978/79  1 2 1 1 2  20 96 138 135 147  .3 1 .4 1 .7 1 .6 1 .6  45 46 46 47 51  7,714 6,808 8,166 8,479 9,133  1979/80 1980/81 1981/82 1982/83 1983/84  3 3 3 4 7  173 209 198 221 267  1 .9 2 .2 2 .1 2 .4 2 .9  54 58 62 65 71  9,217 9,597 9,339 9,046 9,264  1984/85  8  334  3 .1  73  10,944  Avg. Annual G r o w t h (%) 10 Y e a r s  74/75-84/85 Projections  32.5  3.6  1985/86 1986/87 1987/88 1988/89 1989/90  8 9 11 11 11  345 360 375 385 395  3 .0 2 .9 3 .2 3 .1 3 .1  71 78 82 84 84  11,315 12,300 11,705 12,370 12,615  1990/91 1991/92 1992/93 1993/94 1994/95  11 11 11 11 11  420 420 425 425 435  3 .2 3 .0 3 .0 3 .0 3 .0  86 86 88 87 90  13,140 13,795 14,385 14,265 14,745  1995/96  11  440  2 .9  90  14,965  Avg. Annual G r o w t h (%) 11 Y e a r s  84/85-95/96  Source:  2.5  B . C . H y d r o , Dep.  2.9 o f Marketing, Research  and  Planning.  TABLE X PROVINCIAL .SUMMARY  1  9  4  1945-1965  TOTAL E L E C T R I C I T Y GENERATED WITHIN B.C. (excludes exports, f i r m & surplus) ENERGY (KW.h m i l l i o n s ) Utilities Industry Total Own Gen. %Inc. Year  1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 3,899 .2  4,588 .8  1956 4,279 .5  5,775 .7  1957  4,843 .1  6,404 .8  1958 5,468 .1  6,454 .7  1959  6,089 .9  6,440 .3  1960 6,431 .8  7,258 .1  1961 6,801 .7  6,619 .4  1962 7,352 .5  7,427 .9  1963 7,872 .5  7,752 .7  1964 8,706 .7  8,570 .3  1965 9,969 .4  8,982 .6  3,277.1 0.6 3,319.1 5.2 3,491.2 13.0 3,946.6 9.9 4,335.6 12.2 4,866.2 5.7 5,143.3 5.5 5,424.3 12.9 6,122.2 13.6 6,953.5 22.1 8,488.0 18.5 10,055.2 11.9 11,247,9 6.0 11,922.8 5.1 12,530.2 9.3 13,689.9 -2.0 13,421.1 10.1 14,780.4 5.7 15,625.2 10.6 17,277.0 9.7 18,952.0  I n d u s t r y ' s Own G e n e r a t i o n Breakdown * PEAK-MW Alcan Cominco Other B.C.  545 .5 577 .8 593 .3 674 .0 792 .9 879 .0 942 .1 1,050 .0 1,151 .3 1,301 .0 1,370 .8 2,172 .9  1,045 .1 1,502 .7  2,513 .5 2,207 .4  1,054 .8 1,880 .1  3,365 .1 2,117 .7  922 .0 1,872 .6  3,314 .8 2,180 .5  959 .4 1,981 .8  3,164 .2 2,167 .3  1,108 .8 2,085 .0  3,706 .3 2,315 .8  1,236 .0 2,229 .9  2,773 .0 2,543 .4  1,303 .0 2,399 .3  3,496 .8 2,631 .3  1,299 .8 2,423 .7  3,593 .1 2,696 .4  1,463 .2 2,633 .9  4,071 .0 2,764 .0  1,735 .3 2,974 .7  4,189 .6 3,087 .8  1,705 .2 3,137 .7  S o u r c e : B.C.Hydro, Dep. o f M a r k e t i n g , ( O b t a i n e d , J u n e 1986). * Excluding Sales t o U t i l i t i e s  Research and P l a n n i n g ,  TABLE XI PROVINCIAL SUMMARY  195  1966-1984  TOTAL E L E C T R I C I T Y GENERATED WITHIN B.C. (excludes exports, f i r m & surplus) ENERGY (KW. h m i l l i o n s ) UtiliIndustry ties Own G e n . Year  1966 11,499. 2  9,609.9  1967 12,640. 5  9,994.9  1968 14,071. 9 10,357.9 1969 15,580. 9 11,024.7 1970 16,527. 7  9,156.9  1971 18,238. 7 10,468.5 1972 20,700. 0 10,100.0 1973 23,300. 0 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984  9,900.0  Total %Inc.  11.4 21,109.1 7.2 22,635.4 7.9 24,429.8 8.9 26,605.6 -3.5 25,684.6 11.8 28,707.2 7.3 30,800.0 7.8 33,200.0 2.4 34,000.0 -2.1 33,300.0 9.3 36,400.0 5.5 38,400.0 4.2 40,000.0 3.3 41,300.0 3.4 42,700.0 1.2 43,200.0 1.9 44,000.0 1.7 44,750.0 1.9 45,615.0  I n d u s t r y ' s Own G e n e r a t i o n Breakdown * PEAK-MW Alcan Cominco Other B.C.  4,492 .6 3,322 .4  1,794. 9 3,474 .2  4,892 .6 3,193 .1  1,909. 2 3,781 .1  5,062 .4 3,034 .4  2,261. 1 4,194 .9  5,550 .5 3,096 .3  2,377. 9 4,340 .5  3,741 .8 3,206 .1  2,209. 0 4,548 .0  5,324 .0 2,830 .3  2,314. 2 4,831 .0  5,400 .0 3,000 .0  1,700. 0  5,700 .0 2,080 .0  2,120. 0  S o u r c e : B.C.Hydro, Dep. o f M a r k e t i n g , R e s e a r c h a n d P l a n n i n g . A handwritten note on t h e data sheet i n d i c a t e d t h e data from 1972-1982 a r e f r o m S t a t i s t i c s Canada, C a t a l o g u e 57-204. * Excluding Sales t o U t i l i t i e s  196  TABLE X I I M A N U F A C T U R I N G I N D U S T R Y I N B R I T I S H C O L U M B I A (1975-1983) B . C . , YUKON & N.W. T E R R I T O R I E S (1962-1974) LARGEST PURCHASERS OF E L E C T R I C I T Y (GW.h) Manufacturing  Categories  Year  Wood I n d .  Pulp & Paper  Chemic. & Total Ch. P r o d . 3 C a t e g .  Total 20 C a t e g .  1962 1963 1964 1965  469 521 521 595  1,411 1,362 1,536 2,023  1,315 1,336 1,497 1,601  3,195 3,219 3,554 4,219  3,808 3,866 4,105* 4,950  84 83 86 85  1966 1967 1968 1969 1970  667 734 773 875 934  2,435 2,743 3,020 3,394 4,093  1,908 1,919 2,100 2,080 2,013  5,010 5,396 5,893 6,349 7,040  5,830 6,288 6,852 7,381 8,105  86 86 86 86 86  1971 1972 1973 1974 1975!  1,091 1,245 1,466 1,410 1,404  3,702 4,248 3,705 3,561 3,319  2,158 1,188 1,374 1,362 884  6,951 6,681 6,545 6,333 5,607  8,093 7,857 7,794 7,564 6,910  85 85 84 84 81  1976 1977 1978 1979 1980  1,648 1,868 1,982 2,059 2,061  4,317 4,339 4,492 4,947 4,801  1,634 1,416 1,464 1,497 1,575  7,599 7,603 7,938 8,503 8,437  8,900 8,916* 9,372 10,008 10,042  85 86 85 85 84  1981 1982 1983  1,840 1,776 1,979  4,216 4,453 5,056  1,420 1,202 1,270  7,476 7,431 8,305  9,076 8,964 9,780  82 83 85  Source: S t a t i s t i c s Canada, M a n u f a c t u r i n g and P r i m a r y I n d u s t r i e s D i v i s i o n , "Consumption o f Purchased F u e l and E l e c t r i c i t y 1962-1974," C a t a l o g u e 5-3301-508, t h e d a t a f o r t h i s p e r i o d i n c l u d e B.C., Y u k o n a n d N o r t h w e s t T e r r i t o r i e s ; ! t h e p e r i o d o f 1975-1983 o r i g i n a t e s w h i c h i s f o r B.C. p u r c h a s e s o n l y .  from  Catatogue  57-208  * N o t e : T h e T o t a l s f o r t h e 20 M a n u f a c t u r i n g C a t e g o r i e s h a d t o be a d j u s t e d f o r r e p o r t i n g o f h i g h anomalous purchases (1964-1975) i n t h e " P r i m a r y M e t a l s I n d u s t r y . " T h e a n o m a l y i s l i k e l y due t o Cominco r e p o r t i n g t h e p u r c h a s e o f power f r o m i t s own u t i l i t y W e s t K o o t e n a y P o w e r & L i g h t . T h e r e f o r e , t h e " T o t a l " w a s a d j u s t e d b y a l l o w i n g o n l y 200 (GW.h) f o r t h e " P r i m a r y M e t a l s I n d u s t r y . "  

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