From November 30 to December 11, 2015, world leaders will gather in Paris in an attempt once more to negotiate an international treaty to reduce greenhouse gas emissions and hence global warming. Below I provide my thoughts in the lead up to this international convention.

Since the establishment of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992 that came into force in 1994 and is now ratified by 195 nations, there have been twenty Conferences of Parties. There are high expectations that the upcoming twenty-first Conference of Parties (COP21) in Paris later this year will deliver an international agreement that will allow the UNFCCC to attain its objective of “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.”

But this is not the first time high expectations have preceded and subsequently followed a COP. In 1997 at COP3 the Kyoto Protocol to the UNFCCC was adopted wherein Annex I nations agreed to reduce greenhouse gas emissions to 5% below 1990 levels on average by 2008-2012. While the Kyoto Protocol came into force in 2005, the lack of its binding nature, combined with Canada formally pulling out of the agreement in 2012 and the United States never ratifying it, watered down its effectiveness.

Similarly, expectations leading up to COP15 in Copenhagen were almost euphoric that a post Kyoto agreement would be reached. In the end COP15 was a disappointment. The so-called Copenhagen Accord, taken note of, as opposed to being agreed to, by the Conference of Parties outlined a loose set of aspirational goals supported by 114 nations. As part of the Copenhagen Accord, countries submitted voluntary reduction targets with the aim of holding the global temperature increase to less than 2°C. But as noted by, Rogelj (2010) if countries actually met their non-binding targets, it would be virtually certain that warming would exceed this amount. The disconnect between science and international policy is clearly quite profound.

Whether or not society chooses to take the necessary steps to mitigate climate change ultimately depends on the extent to which we value the importance of intergenerational equity. Ultimately and collectively we must ask ourselves whether or not we believe that future generations are entitled to the same environmental well-being and biodiversity that has been afforded our generation. What is clear from our scientific understanding of global warming is that the decisions being made today will have profound consequences for generations to come; yet future generations are not part of today’s decision making and today’s decision makers won’t have to live the consequences of the decisions they make.

Science can never be used to answer a question concerning the importance of intergenerational equity nor can it ever be used to prescribe a particular policy. However, science is able to examine the implications of various policy options. Policy can also be developed or modified to reflect the latest science. But in the end, the formulation of policy requires engaging a variety of stakeholders including special interests, religious groups, and industry. It also requires dealing with ethical, political, legal, financial and social issues including any potential application of the precautionary principle.

One thing that seems clear is that the nonbinding international climate treaty process to date has been a colossal failure. The negotiations have played out like a textbook example of the tragedy of the commons. It is in every person’s best financial interest to do absolutely nothing about greenhouse gas mitigation since the cost of action is borne by the individual yet the cost of inaction is distributed amongst billions of people in the generations to come.

Perhaps as we move forward with the COP process a more useful role for the United Nations at this juncture would be to attempt to reach agreement on an internationally acceptable price trajectory for carbon emissions. Such carbon pricing might include provisions that allow carbon tariffs to be added to imports from nations that have not implemented a domestic carbon pricing policy. For without global efforts to ensure the internalization of externalities associated with these emissions, it seems unlikely that announcing more non-binding aspirational reduction targets will be an effective mitigative tool. We’ve had more than two decades of evidence that this process has not worked.

Here science can be helpful in informing international pricing discussions by recognizing that warming responds near-linearly to cumulative carbon emissions. This allows for the calculation of the allowable emissions required to ensure future warming is below some specified (say 2°C) level (Weaver 2008; Allen et al., 2009; Meinshausen et al., 2009; Zickfeld et al., 2009).

Whether or not such discussions take place of course relies upon political will. The barriers to introducing climate change policy that would ensure a sustainable future are neither technological nor behavioural. They are almost purely political. For until such time as our elected leaders recognize and subsequently act upon the knowledge that the long-term climatic impacts of their decisions, or more appropriately lack thereof, are very serious, we see little prospect of meaningful international agreements being reached through the UNFCCC process.

This is the third in our series highlighting innovation and creativity within our region’s business sector.

Transitioning With offices in Vancouver, San Francisco, London, Paris, Hamburg, Sao Paulo, Singapore, Boston, Bucharest, and more than 11 million users, including 744 of the Fortune 1000 companies, Hootsuite is the world’s most widely used social media management platform. And it started right here in British Columbia.

When discussing alternatives to an economy fixated on oil and gas I turn to a vision of a province that fosters growth in a diverse range of industries, including nascent sectors like clean tech, bio tech, and high tech. British Columbia has a highly educated workforce that is prepared to take up the challenge and capitalize on the opportunity that transitioning to a 21st century economy presents. We have beautiful cities that talented individuals from around the world want to live in and the potential to increase our renewable energy production to support companies striving to lower their carbon footprint.

While it is easy to talk about these concepts theoretically, it was a great pleasure to see them in action when I visited Hootsuite headquarters in Vancouver last month. Hootsuite is a program that allows people and businesses to manage their social media programs across multiple social networks from one integrated dashboard. In essence, it organizes your social media presence, say on Twitter, Facebook, and LinkedIn, onto one screen that allows you to monitor and post content efficiently.

Hootsuite has grown incredibly fast since it was founded in 2008. When it first began the average employee age was 26. That has increased slightly over the years, of course, and with a global staff of 800 and counting the average age is now around 36. It is a young, energetic company that supports the community they have created and the values they share. The health and well-being of Hootsuite employees is clearly a priority and their Vancouver offices have a gym, fitness studio, music room, and nap room, which staff are free to use any time of day or night. There are yoga classes held in the studio five times a week and employees are encouraged to ride their bike to work. A healthy work-life balance, they say, is key. Not surprisingly, they also have a 96% employee retention rate.

Along with caring for their staff, Hootsuite also tries to contribute to the larger community. They hold 200 events, workshops, and lectures annually. Millions of non-profits and small businesses are provided with discounted services and training to help them maximize their social media impact. Hootsuite has provided free social media education to thousands of students through their Higher Education Program and Hootsuite CEO Ryan Holmes co-founded The Next Big Thing, a nonprofit foundation that “empowers young entrepreneurs with the peer and mentor network, alternative education, work space and technology they need to succeed.”

Having a minimal environmental impact has been foundational to Hootsuite since the beginning. Their office is largely paper-free, they use energy efficient appliances and lights, have teleconferences to reduce travel emission, source the food (and beer) in the kitchen locally when possible, and have a workforce that largely commutes by bike or transit.

Hootsuite tries to look at business more holistically than just revolving around shareholders, they say, which in turn, actually creates more value for shareholders. A recent milestone in their quest to use business as force for good, Hootsuite is now a certified B-Corporation. There are currently over 1,300 certified B-Corps across 41 countries and 121 industries that are leading a global movement to redefine success in business by voluntarily meeting higher standards of transparency, accountability, and performance. B-Corps aim to use business as a solution for social and environmental problems.

I asked representatives at Hootsuite if complying with the rigorous B-Corp standards for environmental and social excellence was difficult for the company, but they said “actually, we were already meeting a lot of their requirements.”

They began measuring their environmental footprint across all offices, implemented emission reduction plan, and evaluated the diversity of their workforce. After all, they said, “you can’t manage what you don’t measure and the B-Impact assessment compels companies to identify areas for improvement. It provides guidance for what companies  should pay attention to.”

Hootsuite is setting a wonderful example for businesses in B.C., demonstrating that companies do not need to compromise their environmental and social values for the sake of their bottom line. “We became a B-Corp because we were looking for a way to measure our impact and see how we stacked up against other socially conscious companies,” said the company’s CEO.

As we transition to a diversified 21st century economy, I hope more B.C. companies will follow suit and be supported as they align with this admirable business model.

This is the sixth in a seven week series examining the topic of child and youth mental health in B.C. As this is a complex and multifaceted topic, I will be narrowing my focus to a few popular beliefs and areas of concern that I have witnessed in my role as MLA. The purpose of this series is to debunk these beliefs, increase awareness of these concerns, end the stigma of mental health in our society and provide opportunities for you to impact what is happening in your community.

“The cost of not mending our services to provide adequate support to vulnerable children is huge. The human cost of suffering and despair is immeasurable. The economic costs of preventable long-term use of public services, unfulfilled human resources and drain on productivity are very clear. There are many more reasons to act than not.” – Mary Ellen Turpel-Lafond, Representative for Children and Youth

Popular Belief Seven: We can’t afford to put more money into the mental health care system

Reality: Mental health problems not only have devastating emotional, physical and social impacts on individuals and their families, they can also place an enormous burden on our economy. Conservative estimates find the direct costs (ie: health care, certain social services and income support) of mental health problems and illnesses to Canada to be at least $50 billion per year – with the total cost to the economy adding up to more than $2.5 trillion over the next 30 years.

However, the true economic cost is likely much higher as current estimates exclude expenses such as costs of caregiving and costs to the judicial system. In fact, if estimates in Ireland and Wales hold true for Canada, the current cost of mental illness is approximately $192 billion dollars.

In addition to these direct costs, there are also high indirect costs of mental illness. It is estimated that approximately 21.4% of the working population experienced a mental illness in 2011, resulting in the annual productivity impact of mental illness in the workplace to be over $6.4 billion. Similarly, a report out of the United States estimated the total lifetime economic cost of childhood mental health problems and illnesses to be $2.1 trillion. When translated to our smaller population, the cost in Canada would be roughly $200 billion.

And these expenses are not just felt by the public sector. With mental health problems and illnesses accounting for 79% of long-term disability claims and 75% of short-term disability claims, the costs for disability due to mental illness are the fastest-growing disability costs for Canadian employers. It is estimated that the private sector spends between $180 and $300 billion on short-term disability claims and $135 billion on long-term disability claims due to mental illness. With evidence suggesting that mental illness will be the leading cause of disability in high-income countries by 2030.

At this rate, the total cost of mental illness to society could soon be greater than the entire cost of the health care system in Canada.

Cost-savings of addressing the issue

While the economic costs of mental illness are evident, the savings that can be gleaned from improving services and supporting upstream initiatives can be harder to prove. For one, the benefits of reducing the rates of mental health problems are often not seen until the longer term. Because of this, the costs of mental health promotion and prevention are much easier to evaluate than the benefits. Similarly, cost-savings are not necessarily seen where the money was invested. For example, savings from investing in mental health education in schools are more likely to be seen down-the-line with reduced costs to the judicial and health care systems. As a result, it is hard to put an exact number on just how beneficial such programs can be.

That being said, there is a fair amount of evidence to show that the promotion of mental health and prevention of mental illness can go a long way in combating the rising costs of mental health problems and illnesses. A recent study by the Canadian Institute for Health Information suggests that there is a return on investment (ROI) for some mental health promotion and mental illness prevention interventions. The strongest ROI evidence can be seen for children and adolescents, where promotion and prevention programs have shown to provide huge and long-term impacts.

Although more detailed research and evidence within Canada is lacking, countries such as the U.K., U.S. and Australia have produced extensive economic evaluations of childhood and youth interventions. One study found cost-savings from $1.80 to $17.07 for every dollar spent on programming. While more research is needed to understand exactly how cost-beneficial such programs can be, it is clear that by investing in mental health we benefit both the economy, and society as a whole.

Weekly Action Item

As an MLA, I have witnessed first-hand the impact that public opinion and engagement can have on encouraging the BC government to focus on a specific issue. With this in mind, please consider taking time this week to communicate to decision-makers the importance of making child and youth mental health a priority. A good place to start might be to contact your local MLA and let them know that you would like British Columbia to take more action to address the mental health needs of our youth. Perhaps starting with the recommendations made to government by the Representative for Children and Youth.

Please also consider urging your friends and family to write letters or emails to local Mayors, Councilors, MLAs and MPs, and the offices of the Premier and the Prime Minister. It is time for us to take long-lasting, substantive steps to ensure the necessary supports and resources are in place to support the mental health and well-being of our young people. 

The local craft beer industry – renowned for its high employment, community involvement, and tourism draw – is being squeezed out by recent adjustments to B.C.’s liquor taxation and wholesale pricing policies. The new economic structure makes it increasingly difficult for private liquor retail stores (LRS) to make a profit selling craft beer, even though consumer demand continues to rise, and therefore limits local breweries’ presence in the marketplace.

Historically, the beer tax mark-up was allocated in three distinct steps (see blue curve in Figure 1) depending on brewery size (measured in hectolitres, abbreviated hl) that generally translated to small, medium, and large facilities. Small breweries, of which there are 75-80 in B.C., represent the fastest growing sector. There are roughly 10 breweries that qualified as mid-size, two that are “large” (in the 150,000 to 200,000 hl range) and four very large global brewers.  On April 1^st a graduated mark-up tax was introduced (red curve in Figure 1), giving the large producers a substantial tax break.

Figure 1. The majority of breweries in B.C. produce fewer than 15,000 hectolitres (hl) annually (1.5 megalitres) and were previously taxed at a significantly lower rate than the large scale breweries with the production capacity of 160,000 – 400,000 hl (16-40 megalitres), as illustrated by the tiered blue line. The new mark-up tax rate, indicated by the red graduated line, provides large beer corporations with a substantial tax break relative to small producers and increases the wholesale price for craft beer. In addition, a “sweet spot” is created at 201,000 hl (20.1 megalitres). Beyond that price, the mark-up begins to increase again.  A proposed solution is illustrated by the green line. The solution is obtained by fitting a quadratic function between (0 hl, $0.40/litre), (201,000 hl, $0.67/litre) and (350,000 hl, $1.08/litre). Beyond 35 megalitres annual production, the red and green curves are identical.

Now I recognize that the old system had its problems. There were two distinct discontinuities (jumps) in the volume tax-rates (blue curve in Figure 1). The first discontinuity or tax hike occurred at 15,000 hl while the second occurred at a production level of 160,000 hl. The introduction of these discontinuities would certainly be regressive towards companies wanting to grow. This follows since they created incentives to produce up 14,999 hl but not grow to over 15,000 hl just like an incentive was added to ensure no more than 159,999 hl were produced. Clearly this unfortunate barrier to success needed to be fixed.

The government proposed the red line in Figure 1. It is smoother and more continuous and so more gradually ties the increase in the tax rate to volume of production. But the government’s proposed solution doesn’t resolve the existence of a disincentive to growth. If simply moves it to 201,000 hl.  And here’s the problem. In making the change, small craft breweries were hit with a double-whammy as the revised tax shift also constrained the ability of the LRS to carry their product.

The changes, which were implemented without consultation with local breweries, are already having an impact. In May, I met Sean Hoyne from Hoyne Brewing Co. and Murray Langdon, the general manager of Vancouver Island Brewery, to discuss their concerns.

Under the new wholesale/taxation regimes, the price of large production beers, such as Molson or Budweiser, will remain relatively unchanged. The relative wholesale price the LRS will pay to stock craft beers, however, has risen. Both Hoyne and Langdon have already noticed that the LRS are reducing their orders and failing to restock once their local features have sold. It’s not that stores don’t want to carry these products, or that customers don’t want to buy them – support for local beers has grown exponentially over the past few years – but the new wholesale price tags on craft beer have rendered them unprofitable for private operators.

Figure 2. Example of the effect of the new pricing on liquor retail stores (LRS) and BC government liquor stores (GLS). The specific example is taken for a six pack of 355ml cans from a brewer producing less that 15,000 hl annually listing for $12.50. As this graph illustrates, the changes to BC liquor distribution board (BCLDB) mark-up and distribution rates have significantly reduced the profit margin on craft beer for the LRS, while increasing it for the GLS.

Although changes to the wholesale model were presented by the government as “leveling the playing field” between the LRS and government run BC Liquor stores (GLS), the reality has been different. Prior to April 1^st The LRS received a 16 per cent subsidy on wholesale costs, now they are being charged the same price as the GLS.

By removing the subsidy that allowed the LRS to purchase liquor at a slightly reduced price, they have reduced the ability of these small businesses to stock local craft beer at a rate competitive with their government-owned counterparts. Under the new wholesale pricing scheme the GLS, which are subsidized by the wholesale arm of the Liquor Distribution Branch, stand to gain more market share in the liquor sales sector. Furthermore, successful larger breweries like Pacific Western have inadvertently been set up to win at the cost of local craft beer.

To stay competitive with the GLS, the LRS will have to reduce their profit margin on craft beer (making it not worth the shelf space), raise consumer prices (thereby driving customers to the GLS), or stop carrying it all together.

In a statement, the Justice Minister described the changes as follows:

“BC Liquor Stores are now expected to compete with private liquor retailers — and as such, have been given a more equitable set of rules to follow — placing them at the same starting line as their competitors. We have created more separation between the retail and wholesale arms of the Liquor Distribution Branch, with BC Liquor Stores now purchasing at the same wholesale price as other retailers and having the option to offer extended hours, Sunday openings and refrigeration. We’re applying the 1km rule to all full-service liquor stores, both private in government, to help protect the investment of the private store owners. Our goal is to help stores and business owners be successful and to increase consumer convenience around B.C.”

And during question period in the B.C. legislature she defended them:

“On the first of April we do indeed begin the new wholesale pricing regime. That means that instead of having a series of discounts, price, price off and so on — a very complicated system — what we have now is a single system that applies to all purchasers. Every purchaser, whether you be an LRS, a rural agency store or a government store, you will all pay the same wholesale price for your liquor — your wine, your beer, your spirits… The overall price of the product will be roughly the same on April 1 as it is on March 31 — minor adjustments but roughly the same price.”

These “minor adjustments” risk compromising the viability of the nascent British Columbia craft beer industry. However, relatively simple changes to the volumetric approach to mark-up taxes can be made to ensure that BC made craft beer can remain profitable for the LRS. In Figure 1 (green line) I fit a quadratic between the three points (0 hl, $0.40/litre), (201,000 hl, $0.67/litre) and (350,000 hl, $1.08/litre). This quadratic fit benefits all BC brewers in that it eliminates all barriers to growth. It can further be coupled with small adjustments to the Liquor Distribution Board retail mark-up to recover the government revenue from the reduced low volume tax rate (see Figures 1 and 2).  With the craft beer sector only representing about  3%-6% of the overall beer sector (according to the Liquor Distribution Board), these subtle changes will once more allow the craft beer industry to thrive in BC.

It’s become far too common these days for government to introduce regulations with no consultation with affected stakeholders. In the present case, it has led to unforeseen consequences on the BC Craft Beer industry. But these can easily be remedied. So let’s get on with it.

Media Release

Media Statement – June 8, 2015
B.C. Craft Beer risk getting squeezed out of market
For Immediate Release

Victoria, B.C.– Changes in its wholesale pricing and liquor policies brought forward by the B.C. Government put small B.C. craft breweries at a disadvantage, and risk compromising the viability of this nascent industry, says Andrew Weaver, Deputy Leader of the BC Green Party and MLA for Oak Bay-Gordon Head.

The new policies make it increasingly difficult for private, often family-owned, liquor stores – the catalyst for the recent growth in local breweries – to make a profit on the sale of craft beer. This is the result of wholesale price mark-ups, the elimination of a subsidy previously offered to private liquor stores, and the Liquor Board’s policy of government liquor stores not increasing their retail prices.

Despite Minister Anton’s claims that the government was “leveling the playing field” within the liquor sector, and her assurance that prices would not increase, local producers are already being pushed out of the market.

“The recent changes to our liquor policy are making it unprofitable for private liquor stores to sell craft beer in BC.” said Andrew Weaver. “And as a consequence, it is impacting the viability of our craft beer industry.”

By jacking up the wholesale cost of BC Craft beers to small business retail outlets, they in turn must dramatically increase the price to the consumers to justify the shelf space. In doing so, they are no longer competitive with government liquor store pricing.

“The BC Liberals are putting the interests of a few large breweries and their government owned stores ahead of small business retail outlets and B.C.’s craft beer industry” notes Andrew Weaver. “There are simpler ways of adjusting the wholesale market to level the playing field imposing punitive effects on the BC Craft beer industry.”

The new wholesale pricing model introduced earlier this year eliminated the 3-tiered beer tax system, where allocation was based on production capacity, in favour of a more graduated mark-up tax that sees large and small producers pay similar tax mark-ups. The graduated mark-up could be easily tweaked to create a truly level playing field.

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Media contact

Mat Wright
Press Secretary – Andrew Weaver, MLA
Cell: 250 216 3382
Mat.Wright@leg.bc.ca

This is the second in our series highlighting innovation and creativity within our region’s business sector.

Transitioning to a green economy, one in which businesses prosper symbiotically with the environment, is a concept that has proven easy to romanticize, but difficult to bring to fruition.  The cost and logistics of making environmentally friendly adjustments to an established operation often seem prohibitive to business owners. On top of that, the specialized knowledge needed to tackle challenges like reducing a cooperation’s carbon footprint, water use, energy consumption, or waste output can be overwhelming for people already balancing a full schedule and a tight budget.

Helping businesses navigate these obstacles and reach their goals – from local sourcing to increasing efficiency to carbon neutrality – is an ambitious small company called Synergy Enterprises, founded in 2008 in Victoria by Jill Doucette. Jill grew up in Grand Forks, a community of 4,000 in the interior of B.C. built largely on farming and family-run businesses. At 17 she came to Vancouver Island to study biology at the University of Victoria. She was off to a strong entrepreneurial start when, shortly after moving here, she decided she would start a house painting company to pay for school. Jill organized contracts during the school year and spent all summer painting. Still a teenager, Jill was working 100 hours a week, had 17 employees, and was saving enough to finance her degree.

While at UVic Jill took a course on climate and society. It was during that class, she said, that she decided “if you’re going to do business, it has to be a business for good.” She took every environmental elective she could find and volunteered with organizations she admired in an attempt to learn as much as possible. After going to Japan for the World Student Environmental Summit, an experience she said gave her a global perspective and really stressed the need for environmental action in the business sector, she learned how to calculate carbon footprints and got to work. She developed a carbon footprint report format that she used to tell companies what their total emissions were, where they came from, and how they could be reduced. Black Stilt Coffee (now Hillside Coffee and Tea) was the first business Jill made carbon neutral – and the first carbon neutral coffee shop in B.C. She helped them reduce their energy use by 20%, shrink their carbon footprint by 66%, divert 98% of their waste away from landfills, and saved the business far more than they invested in the process.

From a marketing perspective the shift was hugely beneficial. Jill measured customer loyalty and staff retention throughout the transition and found a twofold increase in both. Staff stayed twice as a long, no small feat in the restaurant industry, and they no longer needed to advertise to attract new customers – now they had a story that people wanted to be a part of. Figure 1: Synergy’s Corporate Social Responsibility Report for their client Monk Office, a company that reduced their total emissions by 79% between 2007 and 2012.

Since then, Jill and her team have worked with dozens of other companies from a wide range of industries including The Bay Centre, The Village Restaurants, Eagle Wing Whale Watching Tours, Cascadia Liquor Stores, Canoe Brewpub, Big Wheel Burger, Habit Coffee, and Monk Office. Jill has also been involved in the design and direction of many local non-profits such as the Food Eco District Restaurant Society, an organization of sustainable restaurants in Victoria, the Vancouver Island Green Business Certification program, a sustainability certification program used to evaluate and verify environmentally friendly businesses, Synergy Sustainability Institute, the non-profit branch of Synergy Enterprises that develops sustainability initiatives, and she launched the Vancouver Island Green Economy Hub website to help people find companies and initiatives working to build a green economy on the island. In addition, the proceeds from her two books, Greening Your Office: Strategies That Work and Greening Your Community: Strategies for Engaged Citizens, go to supporting local environmental non-profits.

Synergy’s innovative and enthusiastic approach to creating a green economy in B.C. has helped dozens of local companies reduce their impact on the environment while being mindful of their bottom line. Using data and metrics to quantify a business’s operating practices and their potential for change, Jill and her team take a business perspective to environmentalism. “We appreciate a business’ constraints and work within them,” Jill said.

Transitioning to a green economy may be a daunting concept, but Synergy and their clients are proof that it is not only possible, it’s already happening.

Figure 2: Jill, far left, at the 2012 Eco Star Awards with Synergy’s clients Agenda Office Interiors and Oughtred Coffee & Tea.