VICTORIA -- Hype or substance? That's the question to be asked in connection with the new employee share ownership program proposed by the provincial government.
The government claims the new program will not only create new jobs and secure existing ones, but also raise badly needed funds for increased economic activity.
The opposition, on the other hand, says the program is just another example of government trying to baffle the brains of its citizens with b.s.
Whom do you believe, the critics or the government? Based on the lack of logic and substance on which some of this government's hare-brained schemes are based, you might have doubts about this latest program. After all, it's being promoted by the same man who wants to solve the problems of a hell hole called Oakalla by pressing its inmates into chain gangs. Still, you'd be making a mistake dismissing the employee share ownership program out of hand. It's got potential.
Here's how it would work. Employees will be encouraged to invest in the companies for which they work. Since it's doubtful that workers will turn over their savings to their employers just because Economic Development Minister Grace McCarthy thinks it's a great idea, the government offers prospective employee investors a little financial incentive in the form of a 20- per-cent bonus up to $2,000.
That means if an employee invests $10,000 in his employer's company, the government will augment the investment by a further $2,000. That's no gift to spit at.
The province will also pay half the start-up costs for employee-employer groups qualifying for assistance, to a maximum of $5,000.
Program officials say that most of British Columbia's 1.4 million private sector employees will be eligible to participate in the program, but they expect that only two to eight per cent of them will actually take part.
Based on that forecast, the government will allocate 6.5 million for the program in the next fiscal year, $8 million in 1989-90 and $10 million in 1990©91. Funds raised by the program, estimated at up to $100 million over the next three years, are to be spent on the expansion of existing and the start-up of new companies.
The potential benefits of the program are obvious. New investment capital, no matter how it's raised, is good for the economy. It not only secures and creates jobs, but results in spin-off effects that will benefit the province as a whole.
Then there is the consideration that employees who have a financial stake in the companies for which they work are probably more productive and less inclined to believe in the inevitability of labor-management confrontation.
The program's only drawback I can think of is the low participation rate anticipated by the government. Bob Williams, the NDP's economic development critic, points out that, according to the government's own estimates, only about 2,100 workers out of a total of 1.4 million eligible are expected to take part in the program.
It seems to me that's neither the government's nor the program's fault. If anyone other than financial corporations and big business has money to invest, it is those who have steady and secure jobs. The trick is to convince them to put some of their savings into the companies for which they work rather than keep it in the bank.
Of course, not every employee will be in a position to participate in the program, despite his or her eligibility. A large percentage of the work force is employed in industries that pay dismal wages. They don't have any savings. But there are enough who do.
Year after year, we're told Canadians have a penchant for saving money. Canada leads the industrialized nations when it comes to socking money away. The trouble is Canadians hate taking risks.
They are among the most timid investors. They'd rather keep their money in the bank at a relatively low but secure rate than get a bigger return by taking a flyer.
There's nothing wrong with the employee share ownership program. I foresee no problem getting employers to participate in the scheme. The only problem will be to make employees see its advantages. To that end, the government should set aside some funds for a publicity campaign. The best program will fall flat on its face if nobody knows about it.
To answer the question: hype or substance? The program has substance, but some hype will be needed to assure its success.