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Nothing wrong with CityWest payment to company owner

It’s a business transaction, plain and simple
CityWest crew installing high speed fibre internet in Smithers in 2015. (Chris Gareau photo)

By Andre Carrel

CityWest is small and modest company, but not unlike Telus and many other telecommunication companies it operates in a highly competitive, albeit regulated market.

What is unique about CityWest is that, while not a crown corporation in the strict legal sense, it is a publicly-owned corporation. The owner in this case is the City of Prince Rupert.

CityWest’s recent payment of half a million dollars to the City of Prince Rupert is not unusual. In January 2022, the Terrace Standard reported payments far in excess of this amount by CityWest to the City of Prince Rupert. The most recent payment should not be a surprise.

It is not uncommon for corporations to donate funds to communities. Philanthropy plays a vital role in the corporate sector. The identity of a corporation’s owners tends to be reflected in its donations policies.

Corporate generosity is inclined to benefit high profile community facilities and events in the fields of sports and culture. The beneficiary may recognize the gift with a prominently placed plaque. Depending on the largess of a donation received, it is not uncommon for a facility or festival to be named after its benefactor.

Corporate philanthropy rarely benefits basic community infrastructure. What corporation would offer to sponsor the upgrading of a municipal sewage treatment plant or the reclamation of a landfill site in exchange for the honour of having the project named after its sponsor?

To suggest that a corporation should forego profits and lower the price of the services it provides on the grounds that the corporation is publicly-owned suggests that profits are not elemental to capitalism’s philosophy, that profits are a hidden tax.

CityWest’s donation to Prince Rupert is neither a gift nor a PR stunt. It is a business transaction. It concerns none other than the owners and the management of the corporation. The identity of the owner is irrelevant. If I owned CityWest, a payment by CityWest to me, in whatever amount and for whatever reason, would be of no concern to anyone.

Ownership entails privileges. Imagine if the City of Terrace were the owner of the property on which the CN yard is located. Imagine if CN’s right to maintain its rail yard on the property were established in a lease subject to periodic renewal. What broader consequences might arise from such a relationship between the City and the railway?

Is it fair to speculate that, if the City of Terrace were the lessor of the property on which the CN’s rail yard is located, negotiations for the construction of a pedestrian overpass would likely have produced a satisfactory result by now?

A century ago a group of citizens in Prince Rupert acted on their vision and proceeded to form a telephone company. Canada has a rich history of publicly owned service companies; many, if not most of which have been sold over time, most recently during the neo-liberal euphoria of the 1980s.

Prince Rupert did not join that parade. That decision and multiple like decisions over time have preserved the municipality’s ownership of their telephone company. With that, Prince Rupert has created an endowment for the community, and it benefits from its foresight and courage.

CityWest is not a gift horse, and the money paid to the municipality is not a PR stunt: it is the community’s reward for its loyalty to CityWest’s founders.