Reading the article “City accepts offer to develop aviation industry” in last week’s Peak it was hard to know whether to laugh or cry. Now we are being promised an aircraft factory? It was almost exactly four years ago that the Peak reported on Mayor Dave Formosa’s list of promised economic projects, including a commitment by Upper Valley Aviation to build an aircraft maintenance business at the airport. It didn’t happen.
The company that is supposed to be developing this new industry is Gaoshi Holdings based in Vancouver. One would expect that a company promising to start an aircraft manufacturing facility from scratch would have deep pockets, extensive experience, and an office on Howe Street. Well, no. A corporate search reveals that Gaoshi is just two directors whose office is a house in a residential Vancouver neighbourhood. There is no actual business, no index of executive officers, no visible employees and no indication of what the company does or has done. Its principal identifiable action was to dissolve itself and then start up again.
The city’s economic development officer, Scott Randolph, is acting as if the plant is just around the corner, stating “…this is huge, it’s big.” But at this point it appears to be little more than a 99-year lease, a promise of a tax holiday and a $600,000 lease fee that is being held in a city trust fund. And a big dollop of wishful thinking.
The mayor says council has been “keeping this under wraps for a year and a half.” Is it pure coincidence that it is being announced two months before the civic election? What is the likelihood that this project will find its way onto the long list of similarly unrealized projects? There was the above-mentioned aircraft maintenance business that never materialized. There was a garbage incinerator (thank goodness it failed), a greenhouse industry, an aquaculture operation, a fish processing plant and of course Sino Bright and Mr. Liu’s university. That’s zero for six.
That leaves the marijuana business, located in the (city-owned) old mill administration building. But there are lots of questions surrounding this enterprise, too. There has been a lot of financial activity including a reverse takeover so that Santé Veritas Therapeutics has now been taken over by an outfit called TILT, a combination of three US companies. It has no local phone number or local mailbox.
At least something is happening on this front. But the marijuana business involves huge risk and fierce competition from billion-dollar players. There are now 70 publicly traded companies, a ridiculous number for a small market like Canada. Big Pharma hasn’t even entered the fray yet; Big Alcohol already has startups. Success will only be achieved by ruthlessly driving down the per unit cost and that means huge operations, like Aurora Cannabis (market cap: $2.5 billion) and Canopy Growth (also $2.5 billion) which already has a distribution system in place. The next few years will see wave after wave of consolidation. Small investors will likely lose their shirts; small operations will be lucky to survive.
The creation of new industrial enterprises is incredibly difficult in a country that has been de-industrializing through successive trade agreements for almost 30 years. It is likely that no one could do much better than the current council. But candidates for civic office have a duty not to make promises they can’t keep. As Mayor Formosa himself once said, “Nothing is done until it’s done.”
Murray Dobbin is a Powell River freelance writer and social commentator.
