AbitibiBowater seeks creditor protection

The following was issued today by AbitibiBowater:

US$ ABH (NYSE, TSX)

MONTREAL, April 16 /CNW Telbec/ - AbitibiBowater Inc. ("AbitibiBowater" or the "Company") today announced that it and certain of its U.S. and Canadian subsidiaries have filed voluntary petitions in the United States under Chapter 11 of the United States Bankruptcy Code ("Chapter 11").

As well, AbitibiBowater and certain of its Canadian subsidiaries will seek creditor protection under the Companies' Creditors Arrangement Act ("CCAA") in Canada. The Company intends to file in Canada on April 17, 2009.

AbitibiBowater's subsidiaries located outside the United States and Canada have not commenced Chapter 11, CCAA or similar proceedings. The Company has concluded that there are no viable alternatives to its previously announced proposed refinancing of its Bowater and Abitibi-Consolidated subsidiaries, and as a result has determined that the best course of action is to pursue its overall restructuring under Court supervision in the United States and Canada.

Concurrently with its CCAA filing, the Abitibi-Consolidated subsidiary will request the termination of its previously announced recapitalization transaction under the Canada Business Corporations Act. AbitibiBowater plans to use this process to deal decisively with its debt burden for the benefit of all stakeholders.

The Company's normal day-to-day operations will continue during the restructuring process.

AbitibiBowater's Board of Directors has, after careful deliberation, consultation with its advisors and extensive consideration of all other alternatives, resolved that the Company take this action in the long-term interests of AbitibiBowater, its employees, customers and other stakeholders.

The Company has also announced that it has entered into a financing commitment with Fairfax Financial Holdings Limited and Avenue Management LLC for debtor-in-possession (DIP) financing totaling approximately $200 million for certain of its Bowater subsidiaries. In addition, its Abitibi-Consolidated subsidiary has entered into an amendment providing for the continuation of its existing securitization program for its accounts receivable, in the approximate amount of $210 million.

These arrangements are subject to approval of the Courts in both the United States and Canada and will allow the Company to meet current operating needs, including wages, benefits and other operating expenses. Additional financing options are currently under consideration.

"Today's announced decisions ensure business continuity for AbitibiBowater and were made only after all other viable options to recapitalize our long-term debt were exhausted," stated David J. Paterson, President and Chief Executive Officer.

The steps we are taking today and the vote of confidence given to us by our restructuring financial partners will enable us to protect the value of the business for our many loyal employees, customers, suppliers and other stakeholders."

"Over many months, we undertook an exhaustive examination of the Company's recapitalization options," said Dick Evans, Chairman of the Board of Directors. "The Board and management believe the actions initiated today will allow the Company to make the necessary changes to ensure the long-term viability of the Company within a process that ensures fair and equitable treatment for all stakeholders, while allowing it to continue to meet the needs of its customers."

The Company's financial advisors are Blackstone Advisory Services LP and BMO Capital Markets and its legal advisors are Paul, Weiss, Rifkind, Wharton & Rice LLP, Stikeman Elliott LLP and Troutman Sanders LLP.

More information about AbitibiBowater's restructuring process can be found at www.abitibibowater.com or by calling toll-free 888-266-9280. International callers should dial 503-597-7698.

AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange.

Forward-Looking Statements

Statements in this press release that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements about the long term interest of the Company, business continuity and long-term viability, the protection of the value of the business, the proposed financing commitment as well as our overall restructuring plans.

Forward-looking statements may be identified by the use of forward-looking terminology such as the words "expect," "ensure", "believe", "will," and other terms with similar meaning indicating possible future events or potential impact on the business or other stakeholders of AbitibiBowater and its subsidiaries. The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance.

These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially.

These risks and uncertainties include, but are not limited to, the ability to negotiate definitive agreements for the proposed financing arrangements, the ability to obtain additional financing, the ability to obtain court approval for the financing, the ability to continue to meet the needs of our customers, the ability to meet all current operating needs, including wages, benefits and other operating expenses, the ability to ensure business continuity, the ability to protect the value of the business, the ability to make the necessary changes to ensure the long-term viability and the condition of the U.S. credit and capital markets generally.

Additional factors are detailed from time to time in AbitibiBowater's and Abitibi-Consolidated's filings with the Securities and Exchange Commission (SEC), including those factors contained in AbitibiBowater's Current Report on Form 8-K filed on February 9, 2009.

All forward-looking statements in this news release are expressly qualified by information contained in AbitibiBowater's and Abitibi-Consolidated's filings with the SEC. AbitibiBowater disclaims any obligation to update or revise any forward-looking information except as required by law.

For further information:

Investors: Duane Owens, Vice President, Finance, (864) 282-9488;

Media and Others: Seth Kursman, Vice President, Communications and Government Affairs, (514) 394-2398, seth.kursman@abitibibowater.com

 

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Gimme your lunch money, dork: the latest editorial version

The Telegram editorial this wintry Wednesday in April tackles the ever-stimulating issue of federal-provincial fiscal relations.

That’s federal transfers of cash to the provincial governments in plainer English.

After covering the litany of complaints from provincial governments about federal transfers, the Telly winds up this way:

Piecemeal doesn't work; different deals for different provinces cause more pain than gain. That being said, there should be some moderation built into the system to deal with revenues from non-renewable resources, so that provinces experiencing brief booms in commodity-based revenues can invest those revenues in a way that can keep them from needing more assistance when the revenues inevitably run out.

What we have here is a federation virtually united in saying that the federal government is mismanaging - and sometimes deliberately damaging - its fiscal relations with the provinces.

It's time for big repairs.

There are a few observations that may have been made before but are worth repeating.

Firstly, the “federation” – that is the provincial governments in it – have always been united in their fundamental belief that the federal government never hands them, individually or collectively, enough cash.

Secondly, since the provincial governments can never find a definition of “enough” which isn’t open-ended, there is absolutely no repair, big or small, which will end the bickering.

Thirdly, that doesn’t mean there can’t be or shouldn’t be changes.  It’s just that we have to bear in mind the first task is to sort through what ought to be in place.

This is a huge matter given that the provinces can’t even agree among themselves.  in the last round of discussions that led to the O’Brien recommendations, the provinces couldn’t agree on how to reform the system that redistributes some taxpayer cash from the federal government to the provincial ones.

Fourthly and flowing from that, one of the things to bear in mind is that provincial governments have a responsibility to manage their own financial affairs.  That’s the way our system is supposed to work and it falls to the public that foots the whole bill to hold them accountable for their actions.

In this neck of the national woods, we’ve set a new standard for unaccountable provincial public spending.  Take as an example, the political charade over “have” status and the federal budget.  The provincial government can spend as it pleases, withhold information from the public and launch yet another jihad over a supposed slight and few if any dare to question whether or not what we were being told is even close to the whole story.

Ask yourself this simple question:  would you have been half as bent out of shape over $414 million in Equalization payments lost to this province in 2009 if you had known in late January or even in November that the provincial government was sitting on $1.8 billion in temporary investments that it planned to use to fuel a $1.3 billion cash shortfall in its upcoming budget? 

By the by, even with that extra federal cash, the provincial government budget would still be out of whack on a cash basis by almost a billion and odds are good that we’d still be staring that $1.3 billion shortfall in the face anyway.  But that’s another story.

Think about who decided to spend $1.3 billion more than the government expected to take in during 2009.

It wasn’t Paul Martin, Jack Layton, Stephane Dion, Michael Ignatieff or even Stephen Harper.

It was Danny, Jerome and the rest of the provincial cabinet.

Before we start yet another round of federal-provincial wrangles over cash, we need to sort out who is responsible for what in the country.

That leads us to the fifth point:  we can’t have a worthwhile discussion if the basic facts of the matter are either ignored or presented wrongly.

As far as ignorance goes, few can match the way in which the talk show hosts at  Voice Of the Cabinet Minister joined the Premier’s January Jihad.  They didn’t need facts.  They didn’t question anything.  They not only accepted at face value the Premier’s premise but also took to adding their own torque.

Check with federal members of parliament and you’ll likely find that the first round of attacks they faced came from some known partisan corners but the largest group started once the government news agency’s on-air crew started encouraging people to pressure their members of parliament to stand up for the province.

The other news media, as influential as they are, were better in some cases but no one seemed to dig into the thing just a wee bit more than the late night newser allowed. This is not so much an exercise in blame – for all but the three talk show hosts – as it is to note that the sources of information on which so many rely can be swept along with the mob.

As for presented wrongly, we’d be remiss not to note the simple, but very important factual error in this Telegram editorial.

This province is dealing with a $414-million shortfall in offshore revenue payments this year, according to the provincial budget.

The $414 million is an Equalization amount, not oil revenues. Those oil revenue payments are down by more than a billion and the feds had nothing to do with it. 

The $414 million amount comes from the difference between what the provincial government was planning to do and what actually occurred.  In 2007, the provincial government planned to switch to O’Brien 50% in 2008/09 – a formula the Premier opposed two years ago(!) – such that the combination of that Equalization formula plus the 1985 Atlantic Accord (the real one) would generate extra cash on top of everything else that was flowing.

As it turned out, the federal government made changes to the formula for one year only in order to forestall an even bigger federal money problem now that Ontario qualifies for the federal hand-out.  Far from being the only province affected by the changes, Newfoundland and Labrador is arguably the least adversely affected.

All that leads us to another contentious point in the editorial, namely the suggestion that:

That being said, there should be some moderation built into the system to deal with revenues from non-renewable resources, so that provinces experiencing brief booms in commodity-based revenues can invest those revenues in a way that can keep them from needing more assistance when the revenues inevitably run out.

This idea has been around for some time, but just a simple look back over the past month should be a clue that this idea is one that needs some serious questioning.

For starters, provincial governments are free to spend their own money as they see fit.  Alberta started just such a heritage fund decades ago and today is infinitely better off as a consequence.

The provincial government could do the same thing here, in order to ensure that they can “invest those revenues in a way that can keep them from needing more assistance when the revenues inevitably run out.”  It’s an idea we’ve pushed among the e-scribbles since at least 2007.

There is nothing stopping the current administration from doing just that, except, of course, that they chose not to do so.

Chose not to do so, of course, as they started accumulating short-term investments they’ll start blowing this year to cover budget deficits.

And how much money are we talking about?

The $1.8 billion in temporary investments and cash is  more than the annual federal transfers to the province in just about any year in the last two decades or more. It’s also more than the provincial government’s own-source revenues 15 years ago (1994).

C0mpare that to the $414 million lost from the elimination of an option the provincial government didn’t even want when it started.

There may well be some repairs needed to federal-provincial fiscal relations.

But before we start that, we’ve got to repair the serious problem with the lack of public knowledge of what is actually going on. 

Federal-provincial repairs are like any others:  if you don’t know what you are doing, you could wind up putting a hammer through something that  didn’t need mending until you started swinging.

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Chinese officials in town

Wags will no doubt make much more of the story at the government’s official news agency that Chinese officials are in town to learn how we do things government-wise in this neck of the woods.

The group is apparently visiting St. John’s and Mount Pearl to find out about things like land use planning.  really, in the week we heard there’s a move a foot at Tammany at Gower to erect more duck crossing signs across the city, you just couldn’t make this stuff up.

For some reason AMEC exec Susan Sherk is offering comment on the Chinese trip.

Sherk says what they are mainly interested in is the fact that we engage the public so much in our decision making.

They must be surprised because unlike the land of Tiananmen, engaging citizens doesn’t involve machine guns.

Given the way things get done downtown, the gang at city hall can no doubt enlighten the Chinese on how to run over the citizenry without using tanks.

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Manley ponders rot

Former federal fin min John Manley compared the recent provincial budgets in Ontario and Newfoundland and Labrador.

Ontario took full advantage of the anxious times in which we live, and with the help of Ottawa tackled some of the toughest structural problems in its tax system. At the same time, it made a virtue of necessity in announcing stimulus spending that will end the short succession of surplus budgets and lead to predicted deficits of $3.9-billion and $14.1-billion over the next two years.

Ontario's tone was in sharp contrast to that of Newfoundland and Labrador, which treated Canadians to another blast of icy rhetoric about how Ottawa was screwing the Province by "unilaterally" changing equalization. (Equalization is a federal program — decisions to alter it are enacted by Parliament alone, so of course it's unilateral.)

Too bad Manley didn’t look beyond the superficial rhetoric of the past several months to see some curious things that rest beneath. Like say the source of the faux outrage which was carefully orchestrated for the media effect.

Turns out the provincial government timed its switch to O’Brien 50 (50% of non-renewables counted) in an effort to maximise its cash take from the program.

They presented a budget in 2008 which showed the fixed formula calculation but – and this is the crucial bit for later – they knew full well that:

• they had the option to switch to O’Brien retroactively; and,
• they’d planned to switch to O’Brien and pocket as much as $800 million in cash.

As the Premier put it in one media interview, they’d even foregone $65 million extra the year before just to set the whole thing up. That was the year the finance minister originally predicted a switch and then switched back at budget time.

The language at the time of the switcheroo obscured what they were up to:

"We conducted a thorough review of this updated information, and determined that it was no longer in the long term financial interest of Newfoundland and Labrador to elect the new formula for 2007-08…"

The rest of the release rabbits on about the great screwing supposedly done to the province.

The truth only became clear this year.  In order to generate the magical sums expected in 2009 through a combination of O’Brien and the 1985 Accord, they would have had to take in about $800 million from O’Brien 50 in 2008.  That’s the sort of forecasting they were using in 2008 when they made the decision and set the 2008 budget plan.

Unfortunately for the little project, world oil prices shot through the roof.

That brought in so much cash that the projections went off. Now they still switched to O’Brien 50 for 2008 and pocketed $116 million for from Equalization for 2008 which they’d never even hinted at before.

But remember that in November 2008, the premier proclaimed the province was off Equalization at that point. At the time he had the calculations  - even if only from his own provincial officials - that showed cash flowing from O’Brien in 2008, even if it was less than they’d originally projected.

And, odds are that he already had a very good idea that the government would elected O’Brien 50.

Reporters and others who looked at the whole claim of a second Equalization screwing in January 2009 all assessed it based on a very limited set of numbers and a very short-term perspective.  They didn’t see the long term sequence.

Case in point:  federal officials always share budget projections with their provincial counterparts. If there is a major change coming, they typically pass that on as well. There’s no indication they didn’t share projections with all the provinces through November, especially considering that the federal government planned a major budget reform in early December 2008.

Everyone forgets that little aspect.

If the federal opposition parties hadn’t scuttled the original Harper plans, the Equalization changes brought down in January would have actually occurred in December.

But if all that weren’t enough, there’s no sign the provincial government went looking for figures they normally get.

That alone should have sparked some local questioning, but it didn’t.

Not a peep.

If you accept the provincial version of events, not only did the numbers not come from the feds – as they always, invariably  do – but the provincial government officials never went looking for them.  That seems like an awful (incredible) dereliction of duty on the part of the public servants and – even more startling – an opportunity missed by the snarliest provincial government in Canada to accuse the federal government of perfidy when there was time to maximise the political damage that could be done.

Imagine the uproar if Danny Williams had howled in late November or early December?

By January – when they supposedly discovered a shafting - there was no chance the “problem” would be fixed. There was lots of posturing but nothing of a sustained value.  As it turns out, and contrary to the interpretation we gave it here at the time, the provincial government knew they had cash in hand and nothing to really worry about financially in the short term.

New information changes everything.

The locals also seem to have forgotten that the whole “have” province thing morphed as time passed.  By the time the 2009 budget emerged, “have” status was from that point forward, not from November as originally presented.

Is there something rotten, as Manley suggests?

Not really.

There’s just some really skilful political manipulation, lots of information kept from the public whose money is in play, and a raft of people  - reporters and politicians alike - who simply don’t bother to ask simple, obvious questions like “what did you know” and “when did you know it”.

Part of that situation likely comes from not knowing what ought to happen. 

Part of it comes from not wanting to ask.

Part of it comes from people who are in on the whole thing or willing to play along for their own purposes and own reasons.

That’s not rotten.

That’s just politics.

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AbitibiBowater gives default status report

Issued by AbitibiBowater (paragraphing changed to improve legibility):

ABH (NYSE, TSX) AXB (TSX)

MONTREAL, April 14 /CNW Telbec/ - AbitibiBowater Inc. and AbitibiBowater Canada Inc. (collectively, the "Companies") provide this bi-weekly Default Status Report in accordance with National Policy 12-203 - Cease Trade Order for Continuous Disclosure Defaults ("NP 12-203"). On March 31, 2009, the Companies announced that they were not able to timely file their annual financial statements, accompanying management's discussion and analysis and related CEO and CFO certifications (collectively, the "2008 Annual Financial Statements") for the financial year ended December 31, 2008.

In accordance with NP 12-203, and as previously announced, the Companies applied to the applicable securities commissions and regulators for Management Cease Trade Orders related to the shares of the common stock of AbitibiBowater Inc. and AbitibiBowater Canada Inc.'s exchangeable shares to be imposed against certain of the Companies' executive officers (and at the discretion of the applicable securities commissions, some or all of the persons who have been directors, officers or insiders of the Companies) instead of a general Cease Trade Order being imposed against all securities of the Companies.

On April 2, 2009, the Quebec Autorité des marchés financiers issued a temporary Management Cease Trade Order expiring on April 20, 2009, related to the Companies' securities against certain directors and officers of the Companies for so long as annual financial statements, certifications and related MD&A are not filed.

On April 6, 2009, the Ontario Securities Commission rendered a similar Management Cease Trade Order related to certain Ontario-resident directors of AbitibiBowater Inc. The issuance of such Management Cease Trade Orders does not generally affect the ability of persons who have not been directors, officers or insiders of the Companies to trade the securities of the Companies.

A general Cease Trade Order may be imposed by the applicable securities commissions if the Companies fail to satisfy the provisions of the Alternative Information Guidelines required pursuant to NP 12-203 (the "Alternative Information Guidelines").

The Companies are working with their auditors to complete the audit of the 2008 Annual Financial Statements as soon as possible. Until the 2008 Annual Financial Statements are filed, the Companies intend to satisfy the Alternative Information Guidelines by issuing bi-weekly Default Status Reports, each of which will be issued in the form of a press release. If the 2008 Annual Financial Statements are not filed beforehand, the Companies intend to issue their next Default Status Report on April 28, 2009.

The Companies report that since their original announcement on March 31,2009, (the "Notice") in respect of the delay in filing their 2008 Annual Financial Statements, there have not been any material changes to the information provided in the Notice other than as described herein nor any failure by the Companies in fulfilling their stated intentions with respect to satisfying the Alternative Information Guidelines.

In addition, there has not been any other specified default by the Companies under NP 12-203, nor are any anticipated and there is no other material information concerning the affairs of the Companies that has not been generally disclosed.

AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards.

AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange and AbitibiBowater Canada's exchangeable shares trade on the Toronto Stock Exchange under the stock symbol AXB.

Forward-Looking Statements

--------------------------

Statements in this news release that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements about the timing of the filing of the Annual Financial Statements, and our strategies for achieving our goals generally.

Forward-looking statements may be identified by the use of forward-looking terminology such as the words "will", "would" and "intends" and other terms with similar meaning indicating possible future events or potential impact on the business or stockholders of AbitibiBowater.

The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance.

These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, but are not limited to, the Companies' ability to remain in compliance with continued listing standards of the NYSE and the TSX, the ability to obtain a Management Cease Trade Order from the applicable Canadian securities regulatory authorities and the Companies' ability to satisfy the provisions of National Policy 12-203.

Additional factors are detailed from time to time in AbitibiBowater's filings with the Securities and Exchange Commission (SEC), including those factors contained in AbitibiBowater's Current Report on Form 8-K filed on February 9, 2009.

All forward-looking statements in this news release are expressly qualified by information contained in the AbitibiBowater's filings with the SEC and the Canadian securities regulatory authorities. AbitibiBowater disclaims any obligation to update or revise any forward-looking information.

For further information:

Investors: Duane Owens, Vice President, Finance, (864) 282-9488

Media and Others: Seth Kursman, Vice President, Communications and Government Affairs, (514) 394-2398, seth.kursman@abitibibowater.com

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Pharmacy security

A rash of break-ins at local drug stores has store owners wondering what needs to be done to increase security and keep prescription drugs out of the illicit market.

Here’s a thought.

Anyone who has shopped at a major supermarket will notice the steel gates that ring the dispensary area when the pharmacist is away. The stores have those security features since the entire layout is based on designs in Ontario where drug stores have been required for years – by regulation – to provide that level of security.

78. The parts of a pharmacy in which prescriptions are compounded and dispensed for the public or drugs are stored or sold by retail shall be so constructed that they may be locked and made not accessible to the public in the absence of a pharmacist. R.R.O. 1990, Reg. 551, s. 78.

Maybe the local pharmacy regulatory board should bring in those types of security features for all drug stores in the province.

The local regulations only apply to drug stores that have specifically applied for that type of set-up.  The lock and leave regulations in Newfoundland and Labrador applies when the dispensary is closed but the rest of the store is open.

If a pharmacist is always available when the pharmacy is open, there is no need to complete the Application for Approval of Lock and Leave form. An application form is available from the Board’s offices, or from the website www.nlpb.ca should you later decide to apply for Lock and Leave approval. [Italics added]

The Ontario regulation applies to all pharmacies at all times.  When the store is closed, the extra level of security in the dispensary make it that much harder for thieves to break in, turn off security cameras and then take their time breaking into the narcotic safe.

Maybe drug store owners could try that before they talk about getting rid of all “narcotics and restrict them to hospitals or one central location where they're dispensed only when needed,” as the CBC story linked above said one pharmacist  suggested.

Just a thought.

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Crass political opportunism continues unabated

The guy admits he knows nothing about the issue.

But that doesn’t stop him from renewing his efforts at trying to take political advantage of a tragedy.

Sadly, he wasn’t alone at the time this started.

Sadder still, he’s now got support from the rest of his political colleagues at Tammany on Gower.

And don’t forget that’s even though he admittedly knows nothing about the subject, and as it almost goes without saying, the rest of his council buddies know even less about the subject.

Of course, it has nothing whatsoever to do with the fact that this is an election year at city hall.

Nothing whatsoever.

And Mile One will make money.

No sh** update:  And lo and behold while that last sentence was written without benefit of having seen the print version of the Telegram, there in all it’s glory was a claim from last night’s council meeting that Mile One had actually made money last year without the benefit of a hockey team.

Of course, what council calls “profit” or “surplus” doesn’t take into account the multi-million dollar subsidy taxpayers funnel into the place. 

Again.

If we took that into account, the place would be certainly hundreds of thousands if not millions in the red.

Again.

And none of this taxpayer funded bullsh** has anything to do with the fact it is an election year.

What’s the phrase for that?

Oh yeah.

Nothing could be further from the truth.

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Provincial Tory pork star praises federal Connie cash

Local Tory stalwart Len Simms didn’t get the memo.

The former Provincial Conservative heavyweight, now holding down the heavyweight pork-post as head of Newfoundland AND Labrador Housing Corporation is praising the federal government’s stimulus package.

According to voice of the cabinet minister, Simms will have more than double the money to spend on interior and exterior renovations to public property – but hanks to federal cash.

That would be the evil federal government that always does nasty things to Newfoundland and Labrador.

Well, that is, the feds do that at least in the mind of the guy who funnels beaucoup provincial cash into Simms’ bank account.

Simms, you will recall, left his pork-post just long enough to run the Provincial Conservative campaign in 2007.  Just think of it as a form of in-out scheme.

There’s the in part of the scheme.

There’s the out part.

But the back “in” again part is apparently a double-whammy of salary plus pension.

 

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A little help for his friends

So which Progressive Conservative – maybe a member of the current House of Assembly - got the benefit of Ed Byrne’s constituency allowance to get elected?

Some time between August 2000 and April 2004, Ed Byrne used $3,000 of public money that was supposed to go toward Byrne’s constituency-related business to pay a campaign worker for work on a provincial by-election somewhere  in Newfoundland and Labrador.

By-election finance statements before 2005 aren’t available at the Elections Newfoundland and Labrador website so someone will have to troop along to Paul Reynolds’ office to get a look at the documents to see if the money was reported.

Plus, we can’t be sure that is the only such payment made out of the money Byrne is supposed to have misappropriated.  His agreed statement of facts recently in answer to fraud and corruption charges only accounted for a fraction  - 25% or so - of the total.

Then there’s things like the building supplies – lumber? – he bought and shipped up to his cabin in the woods. Did anyone check to see if it was dry-wall and  two by fours?  If there was a raft of two by twos in there, as well as washers and roofing nails and the timing was right, that might also turn out to be election-related purchases.  Two by two lumber, washers and roofing nails are used to hold up the ever-popular two foot by two foot election sign.

But what provincial by-elections were held in that time?

Trinity North (April 25, 2000)

Humber West (June 19, 2001)

Port de Grave (June 19, 2001)

St. Barbe (January 30, 2001)

The Straits and White Bay North (January 30, 2001)

Bonavista North (July 24, 2002)

Conception Bay South (November 12, 2002)

At least one of the Progressive Conservatives in those by-elections got a boost from public funds.

Which one was it?

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Moores linked to Airbus before 1984?

That’s the gist of documents found by CBC [ Globe’s got it too.], according to a story on the cbc.ca website:  former premier turned lobbyist Frank Moores dealt with KarlHeinz Schreiber about Airbus and political donations as far back as 1983.

Expect to see the Gin and Tonic Biographer – whose biography of Moores has a few gaps and errors in it as it is – in the media sounding more like an old friend of the family than the person who wrote the book on Frank.

It’s not like this situation hasn’t arisen before.

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Measurement and progress at Eastern Health

Without the benefit of a transcript, it’s hard to be 100% sure but your humble e-scribbler heard Jennifer Guy - Eastern Health’s vice president of partnerships and strategic communication  - claim that information everyone is in a tizzy about was a mere one inch from the top of the news release under scrutiny.

One inch?

Let’s check.

The information in question is simple enough to find:  there were 38 additional patients who’d met the criteria for breast cancer re-testing.

One only has to look 6.75 inches down from the top edge of the page or 4.75 inches below the headline to find it. 

One inch, Jennifer?

Hardly.

The actual number “38” is one inch from the top of the paragraph containing that information but that paragraph starts three and one half inches below the headline.

That “38” appears, incidentally, in the the fifth paragraph of the news release.

Normally, releases should put the most important information at the front.  As one scans down the page, the information becomes relatively less and less important.  That’s how reporters scan them and that’s how people working in communications normally write them.

Well, at least they ought to write them that way.

Using that approach, the most important information in this release is that “Eastern Health would like to inform the public that it is moving forward with the implementation of recommendations from the Cameron inquiry report.” [PR writing hint:  “would like” is a terrible phrase since it suggests that you would like to do some but won’t or can’t.  in this case it seems to be an accurate use of the phrase but ordinarily it’s a meaningless cliché, at best.]

Then there are two paragraphs telling that a working group “has been established” that will meet bi-weekly (is that twice a week or every two weeks?) and figure out which recommendations to implement in what order. [PR writing hint:  The passive voice is bad.  Active voice is infinitely better.  In this case, we should have seen a release that told who did what, as in:  “Interim CEO Louise Jones today appointed…”.  If she did it in consultation with her successor, all the better.  Mention that somewhere.  If nothing else, this approach makes it plain that someone is actually responsible for taking action.  That would seem to be important in this case from all that has gone on.  Use of the passive voice makes it look like the whole thing is happening as if by some unseen and mysterious force.]

There will also be a “steering committee”, we are told, but what it does remains a mystery.

At paragraph four, there’s more of the “would like” stuff and here’s where we get into the problem.

Paragraph five, which has the real information in it, starts out by giving all the background bumpf about “challenges” in internal information systems and how some organization had been “engaged” to help out.

In short, before we get to the news here, someone first wanted to give the explanations that sound more like excuses again.

Then there’s the bit about the patients and retesting.

This is a lousy piece of work, by any measure.  if all the rest weren’t true, it is unfocused in that it draws together a raft of different elements and crams them in the one place.

The second last sentence commits Eastern Health to “full disclosure” of the results of the retesting process.  That sounds like a pat phrase that someone figured might be good but that really doesn’t convey the accurate information; “full disclosure” suggests that Jane Jones will have her test scores posted to the web along with her medical records and the complete details of how her case got lost.  Well, Jane and her 37 sisters in re-testing.

This was pretty much a bad release, badly handled and as it turns out since the thing became a controversy, badly handled yet again.

If we measured Eastern’s progress on implementing changes by the same standard the new vice president used today in measuring a news release from her department,  we’d find ourselves moving backwards rather than forwards.

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NB grid booked up

The New Brunswick electricity is booked, with only 310 megawatts of capacity expected to come free in 2015, according to the Telegraph Journal.

Preliminary studies of the New Brunswick system commissioned by Newfoundland and Labrador Hydro  show that while the existing grid could handle power from the Lower Churchill, the booked capacity  - particularly across the New Brunswick to Maine intertie - is “the limiting factor.”

"When you reach an intertie and it is fully booked, fully reserved, you need to reach an agreement with one of the holders of the capacity," said Sylvain Gignac, the president of the NBSO [New Brunswick System Operator], which polices the province's transmission lines.

"It will be tough without building new transmission, except if they reach a deal with one of the biggest holders, which are Hydro-Québec Energy Marketing (HQ Energy Marketing Inc.) and New Brunswick Power (NB Power)."

In the current configuration, Newfoundland and Labrador Hydro would have to cut a deal with an existing user to ship what the Telegraph Journal says would be 740 megawatts through New Brunswick.

The alternative would be to build new capacity.  Nova Scotia-based Emera is reportedly looking at a new connection from Canada into the New England market.

In an interview with the Telegraph Journal, Hydro chief executive Ed Martin repeated the standard Hydro forecast: 

Commercial customers in Newfoundland and Labrador could take on some of Lower Churchill's power, Martin said, adding that the closure of a thermal generator could free up a greater need for the project's power there.

But New England remains the No. 1 market for the company.

"We would certainly target there but we're in business and anywhere we have a need that we can fulfill, we're going to consider that," Martin said.

Martin did not disclose what customers those might be.  Environmental impact documents for the Lower Churchill project do include a demand forecast that shows a domestic need for power from the Muskrat Falls and Gull Island sites.  As well, the thermal plant at Holyrood will be maintained in operation – not closed as suggested in Martin’s comment – to help manage the transmission of power from the Lower Churchill.

Hydro seems to be counting on Emera to add to the capacity across the international border.  The recent deal between Hydro and Emera that sees the latter buy power from Hydro could well be part of a much larger, developing relationship between the two companies.

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Meeker: on media

If you think Winston Smith is shy and retiring, try Geoff Meeker who in his most recent posting laces into the coverage of Eastern Health in comparison to other coverage.

However, reporters took the premier’s controversial comments and rushed them to air and print without question. Perhaps it’s easier to take a juicy quote like “they should be shot” and run with it, rather than challenge – and provoke – the premier.

If I had been a reporter at that scrum, I would have guffawed right in his face. I would have said, “But premier, your government also issues sensitive news releases late on a Friday afternoon. It seems to be a common tactic for certain issues.”

Of course, the premier would deny. And I would offer to come back with specific examples. But the deed would be done – the premier’s balloon would be deflated – with cameras rolling and microphones recording.*

Yes, this would piss the premier off. I would likely be placed on some kind of blacklist. But I would still be able to attend scrums, and that’s pretty much all you need these days – one-on-one access to the premier happens infrequently anyway.

DH h/t Update:  As one commenter noted, Friday news releases are featured in a West Wing episode called “Take out the trash day”.

As Josh explained it to Donna:

Donna: What's take out the trash day?
Josh: Friday.
Donna: I mean, what is it?
Josh: Any stories we have to give the press that we're not wild about, we give all in a lump on Friday.
Donna: Why do you do it in a lump?
Josh: Instead of one at a time?
Donna: I'd think you'd want to spread them out.
Josh: They've got X column inches to fill, right? They're going to fill them no matter what.
Donna: Yes.
Josh: So if we give them one story, that story's X column inches.
Donna: And if we give them five stories ...
Josh: They're a fifth the size.
Donna: Why do you do it on Friday?
Josh: Because no one reads the paper on Saturday.
Donna: You guys are real populists, aren't you?

 

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Winston Smith: on health care

Shame this guy – we all assume he’s a male writing under a pseudonym – feels so constrained in sharing his views.

But there is a Parkway-sized pothole on the road to separatist health policy: it's a provincial jurisdiction. The many failures of health care in NL cannot be pinned on Ottawa. If the separatists criticized the running of health care, they would have to criticize DW, whose government has been running it for six years.

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Offshore board announces inquiry into helicopter crash

A news release from the Canada-Newfoundland and Labrador Offshore Petroleum Board:

The C-NLOPB announced today that in accordance with the provisions of the Atlantic Accord Acts pertaining to ‘Mandatory Inquiries’, the Board shall establish an inquiry into worker safety associated with the recent helicopter incident in the Newfoundland and Labrador Offshore area.

The inquiry will not examine issues covered by the investigation of the Transportation Safety Board.

While we believe it is important to announce the inquiry at this time, we continue to work on a definition of the mandate, terms of reference, selection of a commissioner for the inquiry, and timeline for inquiry completion.

A further announcement will be made when these details are available.

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That’s great but…

There are plenty of pockets of oil offshore Newfoundland that have “significant discovery” status that aren’t commercially viable finds.

Expect StatoilHydro’s announcement that it has found hydrocarbons in a well on the Flemish Pass to be super hyped to all get out.  Some people will be over the moon just like they were hysterical in the early 1980s over Hibernia and Hebron.

This find is in at least 1100 metres of water.

Statoil Hydro will apparently apply to the offshore regulatory board to have this well declared a significant discovery. 

Before anyone gets excited, here’s the official definition of that term:

"a discovery indicated by the first well on a geological feature that demonstrates by flow testing the existence of hydrocarbons in that feature and, having regard to geological and engineering factors, suggests the existence of an accumulation of hydrocarbons that has potential for sustained production."

Look at that word “potential”.  Notice as well that nowhere in there does the word phrase “commercially viable” appear.

News of a find offshore is great but….

And it’s the stuff after the but we need to think about.  More information down the road and we can make a better judgment if this actually means anything more than the fact they’ve found oil.

Strong update: For those who missed it, local oil industry expert Rob Strong did a great interview on the StatoilHydro announcement with Radio Noon.  If they post an audio file, we'll link it.

Rob is well known in the local industry having been in it from the beginning. He did a great job of balancing the excitement that comes with a find of any type offshore with the wisdom borne from experience that there is still a long way to go before anywone starts uncorking the champagne.

Rob talked about the deep water and the challenges that come from drilling that far out in that much water.  Technology has come a long way but there are plenty of issues to be addressed in trying to bring oil into production that far out and down, even allowing for it to be large enough a find to be commercially viable.

Of course, too, we all have to recall that area is outside the current 200 mile exclusive economic zone.  No one has resolved yet what, if any, implications arise for anything that far out to sea from the provisions of the United Nations Convention on the Law of the Sea (UNCLOS).

That's the thing:  StatoilHydro's announcement is great.

But...

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How Irish aren’t we: budget deficit version

Here’s an idea for public finance we are not likely to see around these parts:

Irish politicians  - both in the Republic and in the North - are taking pay cuts to help deal with the country’s financial woes.  Cabinet in the Republic is slicing pay by 10%.  The opposition party leader is lopping off five percent of its pay and senior executives at the national broadcaster are taking a “significant reduction” in pay.

A tip of the derby to Guido Fawkes for that one.

Around these parts, government is facing a record forecast deficit.  We’ll have to wait until  next spring to see if it comes through as predicted in the budget.

In the meantime, cabinet is forecast to increase in size by one new portfolio plus all the attendant costs budget spending will likely stay at record heights for the next three years.

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Federal funding for universities

The Conservative government in Ottawa wants to funnel cash to the country’s universities but it wants to have a say in how the money is spent.

This is a curious change for a party elected not so very long ago with a supposed commitment to limiting federal spending in areas of provincial jurisdiction.

This is curious too since the provincial government objecting to the scheme is not the most chest-thumpingly independentist/sovereignist/autonomist one, but rather the supposedly demonic one in central Canada.

Ontario – of all provinces -  doesn’t like the strings attached to the Ottawa cash.

Education is an area of exclusive provincial jurisdiction under our constitution. Over the past 40 years that exclusivity has eroded in practice to varying degrees largely due to the federal decision to spend its cash in universities.  Many reasons are advanced for the spending and some of them are persuasive. 

For the most part, however, the federal government has not usually reserved for itself, as it wants to do in this case, the right to approve or disapprove of a project even though half the funding involved will come from either the provincial government or the university.

If the federal government wants to support research and development across Canada it may do so.  However, it should do so without restriction.  The money ought to be available to anyone – within or without a university – who can do the work.

On the other hand, if the federal government merely intends to funnel cash to a particular area of research, restricts the work to universities and then proposes to control the whole affair, it has crossed into an area where Canadians should not allow them.

How odd that no one seems to find this whole thing objectionable.

No one that is, except the Government of Ontario.

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Coincidence: Abitibi union version

Communications, Energy and Paperworkers union leaders met with Danny Williams in St. John’s in early April.

As a Canadian Press story put it on April 2, 2009:

"It really does create a lot of uncertainty ... and our members and retired members are uneasy about what's taking place," he [CEP president Dave Coles] said from Halifax, as he was returning from a meeting with Newfoundland and Labrador Premier Danny Williams.

A day after returning from the meeting, the union decided that the federal government needed to step in an bail out the company.  From cbc.ca on April 3, 2009:

Communications, Energy and Paperworkers union president Dave Coles says Stephen Harper must intervene.

"Our demand of the government is that it take care of the Canadian workers.… I want the prime minister to get off his duff and do something for Canadian workers," said Coles.

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Pentagon eyes VH-71 cancellation

As part of re-shaping defence spending, the Pentagon is proposing to scrap a purchase of an EH-101 variant, dubbed the VH-71, to replace the aging Sea Kings used by the Marine One presidential flight.

The 101 beat out Sikorsky’s S-92 in a competition that ended last year.

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Rio Tinto responds to aluminum downturn

Via company news release:

Rio Tinto Alcan today announced it will slow the construction of the Yarwun alumina refinery expansion in Gladstone and curtail annual bauxite production at its Weipa mine to 15 million tonnes (from 19.4 million tonnes in 2008) due to the sharp fall in alumina and aluminium demand and prices in recent months.

Announcing the decision, Rio Tinto Alcan Bauxite and Alumina president Steve Hodgson said the depressed state of the market and a sharp cutback in demand made further tough decisions necessary.

 

Someone needs to ask Wade Locke about that great big gi-enormous project that was supposedly coming any day now to Labrador.  Hint:  it was an aluminum plant.

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Continuing the Cougar S-92 SAR spin: CBC or Cougar?

CBC is running an exclusive interview with Cougar helicopters employees about the search and rescue mission its dedicated SAR helicopter flew the day one of its S-92s crashed.

There’s a paragraph in the middle of the CBC online story that leaps out for attention, given the focus in media coverage on the whole issue of 103 Squadron being on exercise at the time of the incident:

Cougar normally supplies backup to the Canadian Forces for search and rescue operations run out of its base in Gander, in central Newfoundland. But on March 12, the base's Cormorant helicopters were involved in a training exercise in Cape Breton, so Cougar's own rescue team was pressed into service.

“Pressed into service”.

That makes it sound like something was jury-rigged and unprepared, like Cougar didn’t normally do this sort of thing.

As the saying goes, nothing could be further from the truth. Cougar provides dedicated search and rescue service to the offshore oil industry.  It isn’t an accident.  They didn’t throw something together in haste that day.

Well, they shouldn’t have thrown it together because they apparently already knew where 103 Squadron was when CHI91 launched that Thursday morning and therefore knew the flying times involved.

Nothing in the CBC online story explains why it took the Cougar SAR flight so long to launch.

There is plenty of good stuff for Cougar and its people.   It’s a nice piece, the kind any public relations person would be happy to see in this sort of story given the inevitable questions that are already being asked about every aspect of this incident including Cougar’s own SAR response.

But given that the attack on 103 Squadron is largely a media-driven angle, one has to wonder:  is the spin in this piece coming from CBC or Cougar or both?

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Just shoot me

Gunplay  - or more accurately stating that people ought to be shot for certain things not normally associated with capital punishment offences  - is apparently quite the popular rhetorical device.

MP stirs up new fuss in apology to taxmen
The Gazette February 2, 1985

A Progressive Conservative member of Parliament who said last year that federal income tax officials should be shot has re-ignited the controversy with a grudging "apology."

Union officials who represent Revenue Canada's 14,000 taxation workers say the so-called apology from Cariboo-Chilcotin MP Lorne Greenaway amounts to a further "deliberate insult." They have now complained to
Prime Minister Brian Mulroney about the British Columbia back-bencher's behavior.

Greenaway set off the fuss last March when, as a member of a Tory caucus task force on Revenue Canada, he told a public meeting in Kamloops: "The only way we are going to straighten (tax department officials) out is to take them out and shoot them."

Said it before

Greenaway noted at the time that he had said the same thing on at least one other occasion.

But despite repeated demands by the Public Service Alliance of Canada for a retraction, and complaints to the prime minister and Revenue Minister Perrin Beatty, Greenaway did not respond for 10 months. Finally, on Jan. 25, he wrote the following letter to David Flinn, president of the union's taxation component:

"Dear Mr. Flinn:

"Perhaps if some of your people heard the witnesses that came before our Revenue Canada task force last March in Kamloops, B.C., heard of the abuses by Revenue Canada employees (against) taxpayers, saw the devastation caused, you might just begin to understand why one could be
driven to such an intemperate remark as I made at the time. I'm sorry we have a system that allows such horrors. I've been ordered to apologize and I do so."

That reply is "totally unacceptable," Flinn insisted. "This whole thing has been 10 months in the commode and still his attitude hasn't changed. In a brief telephone conversation Greenaway denied he had been
ordered to apologize by Mulroney and said his comments were "no big deal."

"I was told to apologize by my staff, so they wouldn't have so much work to do and so many phones to answer," he said.

Beatty characterized Greenaway's Kamloops remarks as regrettable but understandable.

"What he tried to do was set it in some context, which was that over the course of the time he spent as a very diligent member of the task force he'd heard a succession of stories where ordinary people had their rights affected, and he felt very strongly about it."

Beatty said nobody believes Greenaway's comment about shooting tax officials was meant to be taken literally.

 

---------------------

 

Rookie Liberal MP sorry for Lepine line

Times Colonist, January 25, 1994

 

Rookie Liberal MP Jag Bhaduria apologized and pleaded for forgiveness Monday for once telling Toronto school board supervisors they should be shot.

In a trembling voice, Bhaduria told the Commons he “deeply regrets” the comments in a 1989 letter to his former employers.

 

“The letter was written at a low point in my life, when I was under tremendous stress relating to my career and my family,” said the MP for Markham-Whitchurch-Stouffville.

The statement appeared to satisfy Prime Minister Chretien. “It's enough because it's an apology,” Chretien said as he hurried past outside the Commons.

Herb Gray, the government House leader, said Bhaduria had not offered to withdraw from the Liberal caucus and gave no indication the party was pressing him to do so.

In 1989, Bhaduria wrote to the Toronto board of education's director saying that Marc Lepine, who massacred 14 women at the University of Montreal, should have lined up certain school board supervisors “against the wall and shot all of you. That would have been the most satisfying day of my life.”

 

That statement was written just a few days after the rampage.

He was in a long-running battle with the board at the time. Bhaduria, a teacher who was born in India, argued he had been denied a promotion to vice-principal because of racial discrimination.

Liberal Party officials have said they learned of the letter after Bhaduria's name was already on the ballot for the Oct. 25 federal election.

Meanwhile, other controversies about Bhaduria's have surfaced.

In a 1977 interview in Maclean's magazine, Bhaduria said he had bought “quite a few” high-powered rifles after being racially attacked and threatened.

Shortly after his election last October, Bhaduria appeared in court as a character witness for Kuldip Singh Samra, who had already admitted to killing two men and wounding a third in a 1982 courtroom shooting.

Samra, who defended himself, argued he should be convicted of manslaughter. But he was found guilty of first-degree murder.

Bhaduria, 50, testified that “I found you [Samra] were a great humanist who believed in humanity and equality for all.”

---------------------

 

Cabinet ‘should be shot' over flights, Mohawk says

Ottawa Citizen, October 13, 1994

Mohawk leader Billy Two Rivers angrily suggested Wednesday that the federal cabinet should be executed for their support of low-level military flights over Labrador.

Calling them "pimps and "whoremasters”, Two Rivers said Prime Minister Jean Chretien and his ministers are making money from foreign countries for the flights even though it is causing Innu women to have miscarriages.

"Sometimes, I don't think they are human beings in the way that they think If they are robots and they are just machines serving the establishment, then maybe they should be put against the wall and shot,” said Two Rivers.

He also said the Pope is a "hypocrite” for not vocally supporting the Innu after they met him in Rome.

The former professional wrestler, who is known for being outspoken, made the comments to a meeting of Quebec and Labrador Indian chiefs.

Peter Penashue, president of the Innu Nation, immediately distanced himself from Two Rivers' comments. He said the Kahnawake leader's intentions were good but he should rephrase his harsh statements.

But while Two Rivers acknowledged that he made his speech in anger he refused to apologize. He said he was speaking on behalf of the Mohawk community of Quebec.

Quebec and Labrador chiefs approved a resolution demanding the government immediately stop the "murderous flights and begin environmental hearings.

The government is looking at increasing the number of annual flights by 5,000, bringing the number to 15,000 a year.

-----------------------

Elton John says he will apologise over Madonna tirade
Agence France Presse (English)
October 29, 2004

Elton John has said he will apologise to Madonna, after launching an expletive-laced attack on the Material Girl for lip-synching on stage.

"Would I apologize to her if I saw her? Yeah, because I don't want to hurt any artist's feelings," Sir Elton said in an interview in the latest edition of Entertainment Weekly magazine.

"It was my fault. I instigated the whole thing," he said. "But (lip-synching) applies to all those bloody teenage singers."

Attending an awards ceremony in London earlier this month, Sir Elton was incensed to find that Madonna had been nominated for best live act.

Taking to the stage, Sir Elton blasted: "Madonna - best f****** live act? F*** off. Anyone who lip-synchs in public on stage ... should be shot."

In the interview, the pop legend acknowledged that he had spoken out of turn.

"I don't want to escalate it because I like Madonna," he said. "She's been to my house for dinner. It was something that was said in the heat of the moment, and probably should not have been said."

At the time, Madonna's US spokeswoman Liz Rosenberg had flatly rejected Sir Elton's accusations, saying that Madonna neither lip-synched nor spent time "trashing" other artists.

Sir Elton argued that the media reaction to his comments had been out of proportion to their content.

"It was like I said I think all gays should be killed or I think Hitler was right," he said. "I just said someone was lip-synching."

----------------

MLA demoted for saying Premier should be shot

The Globe And Mail March 10, 2005

 

A Saskatchewan opposition politician who suggested Premier Lorne Calvert should be shot has been taken off committees and stripped of his critic duties.

Saskatchewan Party Leader Brad Wall took action yesterday against MLA Jason Dearborn for his comments at a public meeting last month. Mr. Dearborn member of the legislature for Kindersley, was meeting municipal officials when a reeve suggested someone would be shot if school board amalgamation caused taxes to go up. Mr. Dearborn replied his candidate would be the Premier. He has since apologized.

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Emera's role in wheeling deal

A quick review of the raw video of the wheeling deal news conference [cbc.ca/nl link] led to something that means we have to change our view of this deal a bit.

Emera is not the broker of further deals, as we took it earlier. It is the customer, at least as far as Newfoundland and Labrador Hydro is concerned.

At about the 17:25 minute of the news conference, the Premier says quite plainly that the power is sold on the Canadian side of the border to Emera which then is free to sell the power to the market. There's also a reference by Ed Martin at 23:24 to Emera selling power in New England, New York or into Ontario having taken delivery on the Canadian side of the international border.

Since Emera doesn't actually operate as a power distributor in New York, apparently, it's take from sales in the Empire State will be affected by the wheeling and other costs associated with the sale.

The Premier refers at about 25:55 to an escalator clause being in the contract but there is no indication of how that works. It could be something as simple as an inflation adjustment. No matter what it is, the figures tossed out by Ed Martin - maximum $80 million - don't match up with the returns from selling power that takes maximum advantage in the summer month demand spikes in New York.

Taken altogether that reinforces the notion - at least as far as the revenue projections go - that this deal is somewhat better than the previous arrangements. Ed Martin refers to 40 to 45% better than deals over the "past five to 10 years."

However, we also have to consider that the current market prices for electricity may also be better than they were even six to seven years ago. Any suggestion that this deal and the concept of wheeling power is responsible for the increase in prices would be like the government trying to take resposibility for oil being $150 a barrel last summer.

As one last caveat, take note of the references to making more as prices go up, subject to Emera taking a profit. That's all true. However, the downside is equally true, namely that if prices drop, Hydro will make less money. Notice there was no talk of having a floor price.

-srbp-

Spin doctor: heal thyself

Danny Williams is miffed that Eastern Health issued a news release Friday that included information that 38 more people had been identified who should have had their cancer screening tests redone.

Well, miffed is not the right word. He’s pissed off.

To quote the Premier:

"It's disgraceful. They should be shot over there."

Now that’s bad enough.

Just imagine just for a second if someone – in an authentic and understandable rage - had used those very words to described, for argument’s sake, the inactions of ministers or other officials a wee bit closer to the Premier’s heart than the bureaucrats at Eastern Health.

Okay, that’s a fairly obvious bit of Danny Williams’ favourite standard: the double one. He’s also practicing his other art: spin doctoring.

Then he added this bit:

"This is about people's lives … They have a right to be told," Williams said. "They have a right to be told in a proper manner. There has to be proper disclosure; there has to be someone there to answer questions. It's not something you do at the tail end of a Friday afternoon."

He’s right about that much.

And he’s right that the crucial bit of hard news ought not to have been buried in a news release that, as it would seem, was deliberate structured in all respects to obscure the kernel of news that directly affected people’s lives.

But to be perfectly frank, on a go backwards basis, it’s not like a whole raft of people much closer to the Premier’s political and administrative heart than the Eastern Health crew haven’t done exactly the same thing at least once before.

The culprits: Jerome Kennedy and the crew in government comms.

The incident: the risk of identity theft, not to forget potential disclosure of the details of medical records over the Internet.

The time: January 2008.

The news release: hard news buried at paragraph seven of an 11 paragraph news release.

Can we really fault people for following the examples offered by the tone at the top?

Say it ain't so update: The irrepressible fountain of uncomfortable truths, otherwise known as labradore, has compiled the Chronicles of Ridicule, that is, the litany of examples of the current administration releasing information late on a Friday or at other odd times when no one is available to comment.

He missed a couple on Equalization within the last six months, of course, but that's for another time.

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S-92 failed 30 minute run dry test

According to the Globe and Mail, the S-92 failed a test to confirm the aircraft can run for 30 minutes without oil in the main gearbox.

Documents obtained by The Globe and Mail show that the S-92 failed a critical test of whether the aircraft can keep flying if the oil in its main gearbox leaks out, a key safety feature found in other makes of helicopter – including a model that was beaten out by the Sikorsky for the Canadian military contract. The delivery of the helicopters to the Department of National Defence has already been beset by a series of delays.

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Wheeler deal numbers and stuff

1.  Five year sale of 130 megawatts (MW), 2004-2009:  $46 million annually. [See Note 1]

2.  Price (per kilowatt hour) for the five years:  4.0 cents per KWH.

3.  Two year deal to sell 130 MW of power to Emera:  Minimum $40 million annually.

4.  a.  Price for Emera deal (low;  $40 million for 130 MW):  3.5 cents per KWH

b.  Price for Emera deal (high;  $80 million for 250 MW): 3.6 cents per KWH [See Note 2]

5.  Cost of wheeling (paid to Hydro Quebec Transenergie):  $19 million.

6.  Cost of wheeling:  1.6 cents per KWH.

7.  Average consumer electricity price, New York, 2008:  16.9 cents per KWH. [21.125 Canadian cents per KWH at 25% exchange rate]

8.  Average consumer electricity price, New York, June to Sept 2008:  19.825 cents per KWH. [See Note 3]

9.   According to a cabinet minister familiar with the details of the 1998 Guaranteed Winter Availability Contract (GWAC), Newfoundland and Labrador Hydro considered wheeling the power in 1998 but decided against it since the price earned and the wheeling costs were considered too high. 

The figure at left shows pricing trends to 1999 for New York State. (Source: US EIA)

The information released thus far covers wheeling costs to the New York border. 

Additional wheeling costs would apply for each transmission system through which the power is wheeled before delivery to the final consumer. 

Emera is a broker, not a New York state energy retailer.

10.  The GWAC is apparently still in place.  This requires Newfoundland and Labrador Hydro to operate the plant at Churchill falls at peak efficiency to deliver at least 682 MW to Hydro Quebec during the winter months.  This amount may have been increased under this deal to 800 MW to replace the power that was sold to Quebec from 1998 to 2009 as part of the GWAC but which will now be wheeled to New York.

----------------------------

Note 1:  Values in Canadian dollars.  American prices in American dollars, except as noted.

Note 2:  130 megawatts is equivalent to 1.1388 billion KWH.  250 MW is equivalent to 2.19 billion KWH.  The figures at Line 4 are derived by simply dividing the revenue by the power output.  Since Newfoundland and Labrador Hydro did not release sufficient detail it is unclear if the revenue figures correspond to the power output or not. 130 megawatts at the higher price yields a price of 7.0 cents per KWH.

Note 3:  Source:  New York Energy Research and Development Authority

Wangersky on the Wheeler Deal

Simple.

Factual.

Right now, we’ll have Nova Scotian energy firm Emera handle the deals with customers.
But in fact, the big change involved is not as much the result of us meeting a giant challenge with some newfound strength and determination as it is that Hydro-Quebec changed its rules.

Not only for us, and not recently, either.

No, it’s not so much our strength and determination as the creation by Hydro-Quebec of a transmission unit called Hydro-Quebec Transenergie, and something called the Open Access Transmission Tariff.

In 1997. It hasn’t been a secret, either.

It’s amazing how newsrooms across the country were snookered in the first news cycle by the torque in the official news releases.

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Wheeling deal

Running a block of 130 megawatts of power through Quebec will cost Newfoundland and Labrador Hydro $19 million annually over the course of a five year deal with Hydro Quebec Transenergie.

The wheeling arrangement facilities the sale of the power to American markets.  The sale in the Untied States is brokered through Emera.  The Emera deal is for a duration of two years.  Newfoundland and Labrador Hydro is expected to net between $40 million and $80 million annually.

A previous deal to sell the same block of power directly to Hydro Quebec netted the Newfoundland and Labrador provincial energy company $46 million a year over a five year period. According to Le Devoir, Quebec sold the block on the American spot market.

In effect that would mean the deal announced Thursday merely replaces Hydro-Quebec with Emera as the broker. Hydro-Quebec still earns money on the project through its transmission arm and ultimately through its share of Churchill Falls Labrador Corporation, which generates the power.

Quebec energy minister Claude Bechard described the deal as win-win since it shows Newfoundland and Labrador had accepted the rules of the market instead of seeking special access to the Americans and a federal subsidy for a transmission line through Quebec.

«C'est aussi une bonne nouvelle pour le Québec en ce sens qu'on sait que Terre-Neuve voulait que le fédéral subventionne une ligne, voulait avoir des conditions spéciales pour exporter de l'énergie aux États-Unis. Donc, ils viennent d'accepter, si on veut, les règles du marché.»

Le Devoir said the deal includes a block of 800 megawatts of power for Quebec and 300 MW for Newfoundland and Labrador.  Out of the 300 MW, Newfoundland and Labrador will ship 130 MW to the United States after satisfying local demand with the other 170 MW.

However, under the 1969 Churchill falls deal, Hydro-Quebec purchases the lion’s share of Churchill Falls power – more than 5200 MW – at a fixed cost of fractions of a penny per kilowatt hour.

This arrangement of 800 MW for Hydro Quebec seems to be an increase in the amount guaranteed for winter availability (GWAC) in Quebec under a special 1998 agreement.   Under the original 1998 deal, Hydro Quebec received a guarantee on delivery of 682 megawatts during winter months and the Churchill Falls power plant would be operated at peak performance during the inter months to guarantee the additional power.

Winter is the peak demand time for Quebec.  American peak demand is in the summer.

A news release at the time suggested it was a long-term contract valued at $1.0 billion. [link corrected;  amount corrected]  The wheeling arrangement may have involved more complex negotiations than it first appeared.  The news release on Thursday about the Emera deal contained few facts.

Details of the GWAC deal have been removed from the provincial government website.  The Hydro website now archives news only as far back as 2002. A search of the site for guaranteed winter availability contract using the sites own search engine returned no results. A google search for the same term yielded several hits, all of which have been apparently removed from the Newfoundland and Labrador Hydro website.

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Informing or stifling?

For those who run any kind of online opinion space, the issue of reader comments gets to be an issue.

Over at the telegram, they get way more comments than any local blog and they have an ongoing issue with derogatory posts, spam and the use of sock puppet identities.  They’ve also got a set of terms and conditions people have to accept in order to make comments.

Fair enough.

Around these parts, it’s been a live and learn affair.  Initially, there were no comments.  Over time, we’ve relaxed the rules so now anything posted as a comment shows up on the blog immediately.  If you make a comment and post it, the thing should be there right away.  Just as a clue, hit refresh or reload in case your browser doesn’t refresh automatically.

One category that gets deleted – after the fact – are comments that are clearly nothing but spam.  That would be like the freighter one which just listed off a bunch of services.  These are usually posted by people who get paid to drop spam comments into blog spaces.

The other category is one that is clearly abusive and possible defamatory.  These are few and far between and there has only been one example of that within the past six months or so.

Other than that, just about anything goes.

This has been questioned a couple of times by people whose comments apparently didn’t appear.  if you’ve followed the threads of those discussions you’ll see the simple explanation.  And here’s the thing: you don’t have to take my word for it.  You can post a comment and it will appear right away.  Poof.

Other places do things differently.  Some have no comments and others practice censorship.  It’s called comment moderation, but in practice it’s a way of letting the blog author simply block any comments from appearing that don’t fit what  - as experience shows - are usually entirely arbitrary criteria.

Just as an experiment, your humble e-scribbler tested one of those censorship sites.  Two posts that were on topic to the the discussion were done using my own blogger ID.  They didn’t appear.

In another case and on a different post, two comments were made anonymously.

Interestingly enough, the first one – which queried the figure 35,000 megawatts in a discussion of Churchill Falls got through.  It also got a reply that the figure was what came from the original, i.e. the 1969, agreement.

The second comment pointed out very simply and succinctly that “Churchill Falls only produces a little under 6,000 MW”.

That one didn’t appear either, perhaps because the author suddenly clued in that he’d made a boo-boo.  He acknowledged the boo-boo in a comment of his own but never made any reference to the second anonymous comment at all.

Comments can wind up being a pain for anyone running an online opinion site.  Around these parts, the initial impulse to have no comments was wrong.  Even anonymous posts can bring a huge value to the discussion at hand.

if comments are moderated, then things depend very much on the blog author.  As experience shows, that’s often a case of saying one thing  - we don’t censor – but actually doing something radically different.

Inform the debate or stifle the discussion.

It really is an either/or proposition.

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Hydro inks electricity deal with Emera

State-owned energy company Newfoundland and Labrador Hydro has inked a two-year deal with Emera to for the latter to broker the sale of up to 250 megawatts of power from Churchill Falls into the north-eastern United States.

On the face of it, the deal looks like an arrangement to sell power on the spot market instead of the guaranteed purchase arrangement it replaces.

Premier Danny Williams said the agreements mean the province will get the “lion’s share” of the profits from the sale of the power. He said the $40 million to $80 million per year expected for the province comes after HQ and Emera Energy take their cuts.

Williams told members of the media today that, as the price of energy goes up, the revenue for the province will also increase.

By the same token, as prices go down so too would revenue, presumably.No details of the financing were released outside of estimates that Hydro would receive between $40 million and $80 million annually for the power, depending on electricity prices, the available power and the load capacity on the grid at the time of sale.

A separate five year agreement with Hydro Quebec Transenergie, owner of the Quebec energy transmission grid, facilitates the sale. News media reports have been erroneously playing up the Quebec angle on the story even though that aspect was pretty straightforward.  Since the American federal energy regulator established a free markets policy in 1992, Canadian electricity markets have had to adopt what is known as an open access transit tariff for electricity that allows power to be wheeled competitively across the province at rates set by the provincial electricity regulators.

Quebec Transenergie didn’t have much choice, provided the existing grid could handle the load. by the same token it’s unclear what New Brunswick premier Shawn Graham meant when he stated that he would not stand by and allow energy to be wheeled through his province at the expense of development in his province.  New Brunswick will have to abide by the same free market rules as other energy-producing provinces if it wants to sell power into the United States.

Interestingly, the sale is being handled by Newfoundland and Labrador Hydro, although the power is generated by Churchill Falls Labrador Company.  While Hydro used to be the CFLCo parent, the two are now sister companies within the provincial umbrella energy corporation.

The power deal appears to replace a similar arrangement with Hydro Quebec known as the guaranteed winter availability contract.  First signed in 1998, the GWAC saw Hydro recall 130 megawatts of power from Churchill Falls under the terms of the 1969 CFLCo development agreement and then re-sell the power to Hydro Quebec at a defined price far above the pernicious terms of the 1969 deal.

The original three-year GWAC contract was renewed for a further three years in 2001 and then for five years by the current provincial government. The five year deal expired on March 31, 2009. The five year deal generated $46 million revenues annually.

The GWAC was a way of forestalling a possible bankruptcy by CFLCo since the 1969 agreement returned insufficient revenue to keep the company solvent over time. The original news release, linked above contained a background presentation but this has disappeared from the provincial government website.

The original GWAC became the subject of some controversy with accusations arising from then opposition energy critic and current Hydro board chairman John Ottenheimer.

It is unclear from Thursday’s announcement if the GWAC and the related shareholder’s agreement within CFLCo have expired, been replaced or will be honoured in some other way. CFLCo is owned by Newfoundland and Labrador Hydro (65.8%) and Hydro Quebec (34.2%).

That information might change the claim today that Hydro captures the “lion’s share” of the revenues from the Emera deal.

Also unclear at this time is the status of the 225 megawatts of power from Churchill Falls that currently flows to western Labrador through Twin Falls Power Company.  Twin Falls was a joint venture of the two iron ore companies in western Labrador and BRINCO.  The power plant was shut down and TwinCo received a guaranteed price on a block of Churchill Falls power.  That agreement expires in 2014.

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Confederation 60: the panel discussion

If you weren’t at the Confederation panel discussion on Wednesday night you’re bound to have no idea what actually happened.

But if you were there you wound up as part of a great two hour discussion of a current issue that thankfully avoided turning into another edition of Radio Free Spindy.

The political science department at Memorial University organized a panel discussion on Confederation titled Terms of (Dis)union: Confederation 60 years on.

The panel comprised Terry Bishop-Stirling and Jeff Webb from the history department, political scientist Christopher Dunn, Jim Feehan from the economics department and Russell Wangersky from The Telegram.  Moderator for the evening was Doug Letto. After some opening remarks and a series of questions put to the panel by Letto, the moderator opened the floor for what proved to be where the real meat for the evening appeared.

The telegram coverage gives only a tiny portion of it, incidentally, and it isn’t online.  It also gets the vote count wrong.  The majority of hands opted for Confederation but the difference wasn’t overwhelming.  That’s what prompted panellist Terry Bishop-Stirling to comment that the result was pretty much what happened 60 years ago.

When asked about what was needed to change things from this point onward, there was an apparent consensus on the panel about the need for greater awareness of provincial issues among people across the country.  That thread wound through the night on one way or another.

On the surface that seems like a good idea and certainly the obsession in some quarters with what is written about the province in the Globe and Mail reflects that view.

But is there really a need for people in Saskatchewan or even Nova Scotia to be familiar with Newfoundland and Labrador history and issues on most of the things that dominate provincial politics here?  While it’s a wonderful Katimavik/national unity kind of idea, typically most of us do not bother with issues that are of a local and private nature somewhere else.

All the issues of economic development are the ones that get people agitated the most but they are also entirely under provincial jurisdiction. While people not from here ask the sorts of questions some of the panellists mentioned - and we've all had them – their inquisitiveness might be taken less as a sign of their ignorance and more as a normal curiosity at why that crowd down there are on our TVs again ranting about something.

In other words, it's not just a matter of why they don't know as much as a question of should they know or do they need to know in the first place.

Economist Jim Feehan repeated several times the idea that the history of Newfoundland and Labrador is a struggle for control of natural resources.  That’s certainly one view but provincial political control, which is what he seemed to be talking about, was sorted out in 1949 and reinforced in 1985.  At that point of realization, it gets a bit hard to figure out what value there would be in educating people in the lower mainland of British Columbia about Churchill Falls.

Heck, most Newfoundlanders and Labradorians aren’t up to speed on that except as myth.  That goes to perhaps the most incisive point made during the night by one of the audience members.

What may be needed came out of another part of the discussion, namely the need for a wide, local and public debate about local political priorities. That’s something which has been absent for the past five or six years. if that sort of thing were to take place maybe we could realise we are already masters of our own house. 

We just have to start acting like it.

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NB Premier: Not so fast, there Danny boy

New Brunswick premier Shawn Graham issued a warning to Rodney and Danny about any plans they might have for energy development involving his province:

Premier Shawn Graham sent a shot across the bows of his Atlantic Canadian counterparts Tuesday, saying the other three provinces cannot simply expect to build new energy projects and then ship the electrical power to the United States through New Brunswick's power grid.

Then he made it plain:

For example, he [federal defence minister Peter MacKay] pointed to Newfoundland and Labrador's hydro projects at Lower Churchill Falls.

The Newfoundland government's hydro corporation is currently in negotiations with several utilities in the Maritimes, discussing the possibility of bringing that electricity to the region via sub-sea cable.

Not so fast, Graham said Tuesday.

The premier, at an event in Toronto promoting his tax reforms, said he was "surprised" by MacKay's comments.

While Graham said he will co-operate with Ottawa and the other provinces, he warned that New Brunswick won't be taken advantage of or pushed aside.

In a follow-up interview, he went further.

"That energy has the potential to flow through our province, but we want to make sure it doesn't jeopardize the projects that we're trying to achieve here," he said.

"The marker that we're putting in the ground is: we're not just going to (allow) the erection of lines for electricity transmission in New Brunswick that benefit other regions, but not (us)."

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Coincidence: HST version

nottawa reports it.

Then someone else does.

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