Tag: BC Liberals

In-Sights: Comfortable

The first part of this article was written in November 2009; the addendum added April 2016.


In the days when the Fraser Valley had working forests, my Grandfather was its chief forest ranger, employed by the Province of BC.

An inquisitive child, I asked Grandmother, “Are you rich?”

She said, “No, but we’re comfortable.”

Still curious, I asked, “Will you get rich?“

Her reply, “No, you don’t become rich working for the government, but you can get a small pension and be comfortable.“

As time went by, comfortable turned to something else. The old girl lived to be 100, four years longer than her forest ranger. But, this was a time without adjustments or indexing. You opened and ended retirement with the same pension. Life though offered them rewards in other ways. They had unending pride in the land they pioneered. Something about service to the country and making it better for 24 grandchildren.

I imagine that senior public servants in modern days are much the same, happy to build a great land and proud of commendations from the high and mighty. Some may labour for years with little notice. Others are more fortunate.

Lee Doney is one example of a loyal public servant who was noticed. He retired in 2004 after more than 30 years of service and Hon. G. Campbell paid this tribute in the Legislature (Hansard, April 27, 2004):

Today I rise to recognize the many contributions of a career public servant, Lee Doney. He’s joined today by his mother and his family.

Lee is retiring this year. Certainly, it will be a great loss to British Columbia’s public service. . . . He has, in fact, been an exemplary public servant for the last 30 years.

Mr. Doney worked hard for this province. We hope he remains healthy and isn’t forced to take on part time jobs to remain comfortable.

ADDENDUM – 2016

It turned out that the retired public servant was forced to find new employment. Despite the generous pension afforded senior government executives, Doney has eked out a living by working in various suites of offices including those of the Public Sector Employers’ Council Secretariat (President), the Columbia Power Corporation (Chairman) and Western Forest Products Inc. (Chairman). No doubt his part time employment and close relationship with BC Liberals is helpful in WFP’s dealings with government.

Here is a recap of government payments to Mr. Doney as reported in Public Accounts.

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In-Sights: Comfortable

The first part of this article was written in November 2009; the addendum added April 2016. In the days when the Fraser Valley had working forests, my Grandfather was its chief forest ranger, employed by the Province of BC. An inquisitive child, I asked Grandmother, “Are you rich?” She said,

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In-Sights: Careless or captured? (A 2009 repeat)

When you read or listen to resource industry advocates, especially ones masquerading as objective political pundits, compare their concerns in 2009 about burning natural gas to generate peak-demand electricity to their current attitudes toward burning natural gas to liquefy natural gas. The following was first published at Northern Insight on August 4, 2009.

Despite deep cynicism about those backing Gordon Campbell’s Liberals, I’ve long held respect for the writing of Vaughn Palmer. My reservoir of appreciation seems now to have run dry. He has been bright, skilled and articulate, usually worth reading throughout 35 years with the Vancouver Sun.

Now, I don’t know. Is he distracted, overburdened, grown careless or captured by his subjects? What can explain Palmer’s early reporting about the British Columbia Utilities Commission decision on BC Hydro’s 2008 Long Term Acquisition Plan.

July 31, on his regular Vancouver radio outing, he led with this:

“I think it means the BC Utilities Commission is out of touch. You know, they said, “We’re not persuaded we need all this new green power because you’ve got the Burrard Thermal Plant sitting out there in Port Moody and it could run full time and take care of your power needs for many years.” Which, is completely out of touch. … the Utility Commission’s belief that the Burrard Thermal is the answer to any of the province’s power needs for the future just ignores its impact on air quality among other things.”

That is not merely weak reporting of the Commission’s determination. It is a reprehensible misstatement that totally fails to reflect the actual decision. I can think of only two possibilities. One is that Palmer had not read the report but relied on someone’s corrupt précis. The other is that he intentionally misled the audience for some purpose.

Sidekick Keith Baldrey, also of Canwest Global, contributed:

“And, that’s why I don’t understand why a number of environmental groups who are applauding this decision have remained silent on the fact that Burrard Thermal is to be relied on at an increasing rate because it produces dirty energy. That’s a contradictory and hypocritical position and a number of people haven’t really squared themselves with that.”

No Keith, the BC Utilities Commission simply didn’t say that.

Palmer subsequently shifted his attack, all but accusing the BCUC of joining forces with uninformed racists:

“You know, that bit about the First Nations – I mean think about this for a minute – if we go out and get public opinion on First Nations, one of the first things you hear from people is, “You know, they always want a handout from the government, they’re always taking government money.” You know, here you got a bunch of First Nations in British Columbia – some of the best led native bands in the province – gone out and they’ve found private partners to develop their own resources on their own traditional territory and the big provincial government regulator has slammed the door on their face. I mean, it’s no wonder that they’re feeling frustrated.”

Baldrey added:

“. . . these independent power projects have as economic partners First Nations groups. These are a huge economic development tool for impoverished First Nations and Vaughn and I were reading this morning, from the Sechelt Indian Band, a letter they’ve written the BC Utilities Commission accusing them of essentially, and I quote, “This appears to us to be nothing less than regulated racism.” So you’ve got First Nations now very much up in arms. With the stroke of a pen, the Utilities Commission has kiboshed what they saw as the number one tool to lift a lot of their people out of fairly extensive poverty and I don’t know if the Utilities Commission thought this through properly.”

I was interested to note that at 9am July 31, Baldrey and Palmer knew the contents of the Sechelt Band’s letter and were even armed with the pointed quote claiming “regulated racism.” Yet that letter was still warm from printing, being dated only one day before, July 30. I wonder how it came to be reviewed so promptly and publicly by the Victoria based journalists.

Was the Public Affairs Bureau (PAB) or the Independent Power Producers Association of BC (IPPBC) helping Chief Garry Feschuk and the shishalh First Nation circulate the letter? Were the flacks also providing pre-digested interpretations of the BCUC decision to certain journalists?

Palmer went on to provide a bit of accurate detail, saying the BCUC decision did not reject green power, private power or run of the river facilities and that, primarily, BC Hydro had to rework the scheduling of projects. Mind you, he ignored the BCUC determination that BC Hydro had been either inaccurate or dishonest in its power needs forecasting. That should have been news. At best, Palmer had part of the story correct but his headline material was worse than sloppy.

We cannot though accuse all professional journalists of faulty or inadequate reporting. Mark Hume at the Globe and Mail had no difficulty understanding the entire BCUC decision and writing conclusions based on the Commission’s actual findings. He said:

“The commission’s ruling made it clear, however, that there is no energy crisis – and that when there are energy shortfalls, such as during droughts or the period of peak demand in December, BC Hydro has a solid backup system in the Burrard Generating Station, an old, mostly idle plant fueled by natural gas.

“The commission is not saying we should run the Burrard plant, or that Burrard is a better source of energy than clean resources,” said economist Marvin Shaffer. What the commission determined is that Burrard is valuable as a backup facility, and that in that role it has the capacity of at least 5,000 gigawatt hours, not the 3,000 GWh estimated by BC Hydro.

“By refusing to accept the lower capacity, the commission called into question the need for BC Hydro to purchase backup power from IPPs.

“Had the British Columbia Utilities Commission not intervened, B.C. would have been damming its wild and scenic rivers, not in a noble fight against global warming, but in order to run air conditioners in California.”

Contrast that analysis to the one by Keith Baldrey:

“Yes, they (BCUC) just said go and use Burrard Thermal.”

One does not need to be a sophisticated media analyst to conclude that Canwest Global’s Palmer and Baldrey reported on the BCUC in a manner that is entirely below the standard set by Mark Hume. The Globe and Mail faces the same financial challenges as every newspaper publisher but in the western bureau, they employ and deploy high quality staff, particularly in comparison to the competition.

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In-Sights: Crime (still) in progress (a 2010 article repeated)

News item:

British Columbia Liberals announce the new Clean Energy Act sets the foundation for a new future of electricity self-sufficiency.

Definition:

Self-sufficiency: The ability to satisfy one’s basic needs without outside help.

News item:

General Electric, the multinational corporation ranked in 2009 by Forbes as the world’s largest, invested $727 million in British Columbia’s Toba Inlet hydro power project and the first phase of the Dokie Ridge wind farm project in the Peace River.

News item:

Finavera Renewables Inc., a Vancouver company with no revenues, an accumulated deficit of $41.7 million and an overall shareholder deficiency of $5.5 million at the beginning of fiscal year 2010,  was selected by BC Hydro to build four electricity-generating wind farms in northeastern B.C. The projects are expected to cost at least $800 million. General Electric has negotiated the exclusive right to provide 100 per cent financing for Finavera’s four wind projects.

I invite readers to consider this statement written by the auditors of Finavera and attached to the 2009 annual financial statements:

The [Energy Purchase Agreements] with B.C. Hydro provide a revenue stream based on a defined price and are the commercial cornerstones of any power project in British Columbia, providing the basis to move forward towards project construction and operation.

Despite all the disingenuous and misleading B.S. issued by Liberal politicians and operatives for private power producers, that single sentence, which is carefully constructed and required by professional audit standards, demonstrates the reason why there is a rush of private power projects.

The applicants do not need money or experience, they simply need political influence with Gordon Campbell and his associates. The energy purchase agreement provided by BC Hydro removes substantially all business risk and the favored ones take the project to the money brokers who readily fund it because the credit worthiness of British Columbia stands behind each EPA. This would be like buying a house you intend to rent to a provincial agency through a 40 year lease at double market rates, with payments guaranteed by the province.
Multinational, multi-industry companies like General Electric are quick to join because they earn giant returns at the capital stage of the project, selling turbines, generators and infrastructure equipment.  As an equity and financing partner, GE guarantees it will provide the hardware. With a guaranteed market and a guaranteed profit, the initial partners can hold shares long term for income or, more likely, dump them into institutional markets for quick capital gains, on which they will barely pay taxes. And that, is ironic because taxpayers are essential elements of the deal.
The whole program of private power production founded on BC Hydro Energy Purchase Agreements allows outrageous enrichment of a small number. The program is facilitated by influence peddling and its government facilitators are either witless or dishonest. One thing I believe about Gordon Campbell is that he is not witless.

Read Will McMartin’s outstanding article at The Tyee. BC’s Energy Independence? Don’t Believe It.

[Energy independence], it’s all a sham. British Columbia under Gordon Campbell’s BC Liberal government has become increasingly dependent on non-B.C. owned corporations to produce high-priced electricity, which BC Hydro is forced (by government edict) to buy, and in turn sell at inflated prices to captive residential and commercial consumers.

See also McMartin’s May 11 piece, General Electric and BC’s Private Power Gold Rush.

In February and March, $142,420 was generated through the sale of just over 2.8 million share-warrant units at five cents apiece. A few weeks later, another 10 million shares were sold at six cents each and fetched a total of $600,000.

The former sale appears to have gone to Anchorage Capital Master Offshore Ltd., a New York-based hedge fund founded in 2003 by Kevin Ulrich and Anthony Davis, a pair of alumni from Wall Street’s largest investment bank and brokerage, Goldman Sachs.

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In-Sights: What’s good for the BC Liberals may not be good for BC Hydro

An article by Dermod Travis of Integrity BC. First published February 15, 2016, repeated here with permission.

One of the last things anyone would ever imagine the B.C. government doing is adopting an old NDP program, but that’s exactly what Energy and Mines Minister Bill Bennett did this month when he announced a five-year, $300 million hydro bill deferment plan for 13 mines owned by six companies.

Never mind that B.C. Hydro is already grappling with its own deferral problems to the tune of $5 billion.

Make no mistake, there’s a price to pay when B.C. Hydro becomes a political arm of government. The intertwining of self-interests gets complicated, while the interests of ratepayers can take a backseat to political interests.

Three of the six companies in Bennett’s deal were highlighted in a December Financial Post article, “Debt risks mount as Canada’s base metal miners sink deep in the hole.”

One could argue that the headline alone justifies Bennett’s move, except there’s no guarantee – other than a hope and a prayer – that B.C. Hydro will be repaid.

The issue of what happens if metal prices don’t rebound wasn’t addressed in Bennett’s news release.

Consider the “dire financial position” of one of the companies: Colorado-based Thompson Creek Metals.

Last year, Deutsche Bank analyst Jorge Beristain said the company is “quickly approaching an end-game” with debts of $832 million US.

According to the Financial Post, Teck Resources “has more than $3.5 billion US of debt coming due between 2017 and 2023 and lost its investment-grade credit rating last year.”

Taseko Mines, “has more than $260 million of senior notes coming due in 2019, while a $30-million US secured loan matures this May.”

It seems like only yesterday that the company sent Bennett off to lobby Ottawa on its behalf.

In January 2014, Bennett spent a day on Parliament Hill meeting with Natural Resources minister Joe Oliver and Industry minister James Moore to make Taseko’s case for its controversial New Prosperity copper and gold project.

By then copper prices had already fallen 27.5 per cent off their 2011 high.

Taseko is also in the midst of a messy proxy fight with Chicago-based Raging River Capital over $26 million in management fees Taseko has paid Hunter Dickinson Inc. Taseko and Hunter Dickinson share three directors in common.

Imperial Metals owns three of the 13 mines in Bennett’s deal, including Mount Polley, Red Chris and Huckleberry. In 2004, the government quietly forgave $3 million in liabilities owed it by Huckleberry Mine.

Imperial Metals’s controlling shareholder – Murray Edwards – has a net worth of $2.69 billion.

The B.C. Liberal party has done well from them.

From 2005 to 2014, the six companies donated $2.8 million to the party. Key executives kicked-in another $380,000.

Three of the six companies donated $97,010 to the NDP, $75,300 of it in 2013.

B.C. Hydro’s contractual obligations with private power producers have ballooned from $22.25 billion in 2009 for “2010 and beyond” to $56.2 billion for “2016 and beyond.”

It’s the gift that keeps on giving for everyone involved, except ratepayers.

In a 2008 call for independent power projects, 75 proponents registered with B.C. Hydro.

Forty-three submitted proposals and, in 2010, B.C. Hydro signed purchase agreements with 18 of the proponents.

From July 1, 2008 to September 30, 2010 – when B.C. Hydro was making its decisions – 14 proponents donated $268,461 to the Liberals. One donated $1,000 to the NDP.

Ten of the 14 signed purchase agreements with B.C. Hydro. One of the 14 who didn’t, never donated again.

Their before and after donations are interesting too.

For the 10 successful proponents, their donations more than doubled from $112,801 (January 2005 to June 2008) to $229,471.
After the deals were done, they settled back again. Seven donated $112,345 to the Liberals and five gave $16,225 to the NDP (2010 to 2014).

In 2008, the Mining Association of B.C. received a $295,188 grant from the Northern Development Initiative Trust (NDIT) to make the business case for the Northwest Transmission Line.

In turn, the association hired Australia-based Macquarie Bank to “determine the threshold of economic activity that would be required to make the construction of the (line) an economically viable infrastructure project.”

NDIT’s Highway 37 Power Line Coalition has 22 private sector partners.

Excluding the six companies in Bennett’s deferral program, independent power producers and those identified by B.C. Hydro as “potential future mines” for the transmission line, three trade associations and ten of the companies donated $962,220 to the Liberals and $10,320 to the NDP.

Macquarie has donated $17,050 to the Liberals.

The $404 million transmission line overshot its budget by more than $300 million, with a final price tag of $716 million. But who counts bills among friends?

There are the nine “potential future mines” that B.C. Hydro hopes will one day connect to the line.

With the downturn in metal prices, B.C. Hydro shouldn’t hold its breath in anticipation.

Excluding donations from Imperial Metals and Teck, who have interests in three of the mines, the most generous companies were Goldcorp at $795,700, the Lundin Group of Companies ($112,145) and Copper Fox Metals ($93,130).

One of the founding directors of Copper Fox Metals is Hector MacKay-Dunn, who co-chaired the B.C. Liberal’s 2009 election preparation efforts.

MacKay-Dunn is affectionately known in some party circles as Hector the Collector for his prowess at political fundraising.
The nine companies behind the potential mines have donated $1 million to the Liberals and $18,050 to the NDP ($10,000 of it from Copper Fox in 2013).

And at the same time the government was imposing hydro rate increases on schools and hospitals in 2014, Bennett announced a $100 million B.C. Hydro initiative for pulp and paper producers to “support investments in more energy efficient equipment.”
The forest industry has donated more than $4.2 million to the Liberals and $294,905 to the NDP.

Tidy haul.

Add it all up: more than $9.8 million in donations from interested parties to the Liberals and $417,185 to the NDP, not including their 2015 donations.

Guess who gets saddled with the bill?

Including operating and capital development agreements that have tripled to $3.3 billion since 2010, B.C. Hydro’s contractual obligations now stand at $59.7 billion, not including their debt which has grown from $6.8 billion in 2004 to $16.7 billion last year.

They’ve had to borrow $3.2 billion just to turn around and give it to the B.C. government as so-called dividends.

Meanwhile, Hydro-Quebec cut a dividend cheque of $2.5 billion for the Quebec government in 2014.

They didn’t have to borrow money to cover the cheque and still had $700 million in profits left over.

In 2014, it’s rates were nearly two cents per kWh lower than B.C. From 2007 to 2015, its cumulative rate increase was 17.1 per cent. In B.C., it was 63.2 per cent.

Total donations from all of Hydro-Quebec’s suppliers and contractors to the Parti Quebecois and the Quebec Liberal party in the last 30-years? Zero.

Quebec bans corporate and union donations. The maximum any Quebec resident can give to a political party is $100 annually.

Dermod Travis is the executive director of IntegrityBC. www.integritybc.ca

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In-Sights: Dots that may connect – UPDATED

When first published on March 26, my article referred to “maintenance costing five times what refitting the same ships cost in BC ten years ago.” That was based on press reports that BC Ferries would spend $140 million for work on its two largest ships. However, North Van’s Grumps of Blog Borg Collective uncovered a confidential order issued by the British Columbia Ferries Commissioner, one of about 20 patronage appointees who “oversees” the ferry corporations’ management.

In October 2015, the Commissioner approved $173 million for the project but, as evidenced by the confidential order three months later, increased the approved amount by $46 million to $219 million. Instead of five times cost of the last refits, the 2016 multiplier is eight.

So, whether it is $140, $173, $219 millions or an even higher cost subsequently revealed, whether the contract is completed by 2018, 2019 or later, I predict the refits will be advertised as completed on-time, on-budget. That tag is applied to all BC Liberal projects, no matter how many times the budget or completion date must be altered.
* * * * * * * * * *The following was first published March 26, 2016:

When BC Ferries added a newly built ferry to its fleet in the 20th century, the vessel was constructed in BC shipyards. During the mid-nineties, two Spirit Class ships, currently the company’s finest, largest and most efficient per unit of traffic, were built in lower mainland and Vancouver Island yards for about $134 million each. In 2005 and 2006, $27 million was spent on refits and upgrades of the two ferries, with the work also done in BC.

With proven and efficient designs in hand, the BC Government surprised observers when it decided that three large ferries were to be built in Europe. The vessels cost about $190 million each but have fewer amenities and almost 25% less passenger and vehicle capacity than Spirit Class. Ferry corporation VP Mike Corrigan, its current CEO, claimed in 2004 that BC shipyards were only qualified to build small open-deck boats for short routes. That claim had already been proven false by Spirit Class vessels and by the subsequent federal decision to award BC shipbuilders an $8-billion contract for seven non-combat ships, an average of $1.15 billion each.

Critics argued that ferry construction in BC, even if contracted at higher prices, would have provided net benefits to the local economy. Economists credit the multiplier effect, which says:

An injection of extra income leads to more spending, which creates more income, and so on. The multiplier effect refers to the increase in final income arising from any new injection of spending.

The shipbuilding industry has a significant multiplier. A European economic study reports:

Shipbuilding is labor intensive and therefore provides jobs for a large number of people. …Moreover, it is technologically demanding and …also employs a large number of other industries and therefore results in many spillovers…

When contracts for the Super-C ferries were awarded to an overseas builder, people in the labour movement blamed the anti-union attitude held by the Campbell government and its appointees. However, my own conclusion about the motivation remained uncertain. The move seemed to make no sense, particularly since BC Ferries would have a continuing demand because its entire fleet needed renewal. Washington State, where the ferry system has slightly less traffic, has long required that all government-owned ferries be built in-state because of “the benefits to the state of a stable shipyard work force and economic benefits of in-state jobs.”

So, capability of building large ferries was not at issue, and benefits of domestic construction to the broad provincial economy were clear. So, why did Liberals decide to go abroad? They spent $700 million (in today’s dollars) on Super-C ferries, another $170 million for intermediate ferries built by Poland’s Remontowa Shipbuilding and now will spend yet more millions at the same yard for maintenance costing five times what refitting the same ships cost in BC ten years ago.

B.C. ferries will head to Poland for refits, Andrew Duffy, Victoria Times Colonist, March 25, 2016

A Polish shipyard has won a $140-million contract from B.C. Ferries to conduct the mid-life upgrades of the two Spirit-class vessels.

Gdansk-based Remontowa, the largest ship-repair yard in Poland, won the contract…

B.C. Ferries spokeswoman Deborah Marshall confirmed it is the first time the corporation has sent a vessel offshore for refit.

My audit training many years ago taught that if a situation cannot be explained by the ordinary, you must consider the extraordinary. As with BC Hydro, LNG and gas producer deals, I am left with gnawing suspicions; concerns not allayed by news that broke today.

Polish Remontowa shipbuilder management promised €1.2 million bribe, The Baltic Course, March 25, 2016

Polish shipbuilding company Remontowa Shipbuilding president Andrzej Wojtkiewicz and board member Jan Paszkowski transferred about 800,000 euros to the former management of the Estonian state-owned port company Port of Tallinn, while the total bribe was supposed to be 1.2 million euros… ($1.8 million CAN)

“Two people in management positions with the Polish shipbuilding company have been declared suspects in bribe-giving on a large scale. At the end of October employees of a Polish law enforcement agency questioned the men as suspects at the request of the Estonian Prosecutor General’s Office, an official of the Estonian Internal Security Service was present during the conduct of procedural acts,” Public Prosecutor Laura Feldmanis told BNS on Tuesday.

There are troubling patterns of BC government agencies contracting with companies outside the province that have ethical deficits, subjects even of accusations that bribery gained contracts. SNC-Lavalin is one, Kiewit and Malaysian Government owned Petronas are others. Ethical questions have been raised also about Site C contractors.

When BC Liberals destroy communications and fail to document government business, they are either involved in or setting the stage for illegal activities. Christy Clark runs a government that lacks moral principle.

ADDENDUM:

This is an extract from the application to the British Columbia Ferries Commissioner for Spirit Class Vessels Mid-Life Upgrades. It demonstrates the degree of transparency that keeps Liberals comfortable.

About four years ago, before the last election, Premier Clark was touting the capabilities of BC shipyards, shaking hands of workers and taking credit for promised federal contracts. However, it was photo-op time so her words were not meant to be believed.

That was then, this is now.

ADDENDUM

Prosecutor expands Port of Tallinn inquiry to cover purchase of icebreaker, The Baltic Course Magazine, March 3, 2016
“Hence the Internal Security Service and the prosecutor’s office are checking over the circumstances related to the purchase of the icebreaker Botnica in the framework of the already ongoing criminal procedure,” he added….

Officers of the Internal Security Service (ISS) detained Port of Tallinn CEO Ain Kaljurand and board member Allan Kiil as suspects in bribe-taking on Aug. 26 last year. They were released at the beginning of January and placed under electronic surveillance.

The former Port of Tallinn top executives are suspected of accepting bribes on a large scale over a period of several years at least since 2009. The Public Prosecutor’s Office has said the placement of orders for the construction of two new ferries at a shipyard in Gdansk, Poland is a central point of the investigation.

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In-Sights: Prima facie

Prima facie may be used as an adjective meaning: “Sufficient to establish a fact or raise a presumption unless disproved or rebutted.”Listen to Dermod Travis of Integrity BC talking with Ian Jessop, then consider the definition shown above.Your browser…

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