After her communion scrum, Premier Kathy Dunderdale led reporters in a brief prayer in which she asked for divine help to get her out of the political quagmire she’d made for herself over the call centre jobs.
- srbp -
- srbp -
Reporters took the time to ask her a few questions as a confused Premier Kathy Dunderdale lined up for communion outside the House of Assembly.
Got a better caption? Send it along.
- srbp -
It takes an especially keen political genius to take someone else’s political problem and make it yours.
It takes an even rarer form of political genius to take a guaranteed loser issue and stake your entire political future to it with loopy rhetoric.
But that is exactly what Kathy Dunderdale has done with a decision by the federal Conservatives to shift 12 jobs at a search and rescue call centre from St. John’s to Halifax.
The Premier spent almost 19 minutes today scrumming with reporters to discuss a 15 to 20 minute telephone conversation she had with Prime Minister Stephen Harper about the transfer.
You can see the raw video of the scrum embedded in CBC’s online story.
Dunderdale told reporters that the “full force” of the provincial government will now be brought to bear to get the Prime Minister and his cabinet to change their minds. She said she has tasked two cabinet ministers and their senior staff to take “every opportunity” to pursue the issue with their federal counterparts over the next year. In addition, Dunderdale said she is also going to be doing the same thing, spending every available minute of the next year fighting to keep the 12 jobs in the province.
Now while Dunderdale acknowledges that she didn’t make this decision, she has decided to make this the singularly most important issue of her administration. In effect, she is staking her political reputation on this single issue.
And for that reason, she has now taken what could be Stephen Harper’s problem and made it her own. Dunderdale appears to be doing this for the same reason that Roger Grimes tried to foment political rows with the federal government before 2003: she has the naive understanding that people will park their brains and back a Premier who is fighting a foreign oppression.
What’s worse she seems to think this will bolster her political standing in rural areas. That the sense you get when you hear Dunderdale tell reporters that “the vast majority of the people working in this province” making their living on the water.
That simply isn’t true.
Dunderdale should know and you can bet the Prime Minister and his officials know it as well.
But consider for a minute that Dunderdale has effectively made this the single issue that will occupy – using her own words – every minute of her time over the next year.
This trumps fishery reform.
It trumps talks to implement the Wells inquiry report recommendations into offshore safety. Just think about that for a second when Dunderdale says “safety trumps all.”
And it trumps her precious loan guarantee for Muskrat Falls.
How did she get into this mess, aside from the naive belief about local politics? Well, it’s the sort of ass-thinking that led Dunderdale to offer to pay the federal government to keep the jobs in the province.
That’s despite a point Dunderdale acknowledged during the scrum, namely that the federal government has been accused of offloading federal responsibilities for years.
It’s despite the fact that when pushed on it, Dunderdale had to admit that taking over the role 12 months from now is a big, complex issue that needs further study.
And that’s despite the fact that this is clearly a federal responsibility.
Think about it: if there’s a tragedy that can be linked to the decision, Harper and his people will wear it. That risk alone would cause politicians to run from the decision. odds are that if they’ve already ruled out the idea that where a phone gets answered won’t materially change the time it takes a helicopter to fly or for a ship to steam to a rescue site.
And if you look at the comments coming from this province since the feds made the decision, no one has yet pointed to how this decision would threaten lives. Even Dunderdale hasn’t been able to explain simply and clearly how this puts lives at risk.
The best they’ve come up with is the rather silly claim that mainlanders can’t understand our incomprehensible dialect or that mainlanders might be too stupid or irresponsible to know which North Harbour someone might be talking about.
If a mainlander relied on such racist stereotypes of dumb newfies, we’d be manning the barricades and running up the battle flags. Why should we treat it any differently when locals use the same garbage?
Both of these arguments rely on preposterous claims. If you are to believe them, search and rescue professionals who already routinely deal with people from this province cannot understand their impenetrable accents or be bothered to learn what towns or headlands are where on the map.
If this was actually the case, then we could turn the former AbitibiBowater mill at Grand Falls-Windsor into a coffin factory the work would be that steady. Not only would the locals be drowning in droves but so too would the Chinese, Filipinos, Bulgarians, Japanese, Russians, Portuguese and a world of other seafarers who don’t even speak English in the first place, let alone who have a local dialect and an accent to boot. and who pass our shores daily.
And when Dunderdale adds the laughable claim about the vast majority working on the water – check the labour stats – then you know that there is no comment too silly for Dunderdale to make.
Where these 12 jobs get done might be an important issue. But Kathy Dunderdale knows the federal government will not change its decision. As a result she knows the outcome is failure before she pledges to put this issue before all others on her agenda for dealing with Uncle Ottawa and fight it every second of every minute of every day in the full glare of the media who will be following it intently for the whole time.
What a better position could she be in with an election coming this fall?
We will get to see her evident political impotence. every day
The voters will be reminded of her poor judgment every day.
And Dunderdale runs the very serious risk of being goaded by her self-imposed impotence of having to ramp up the rhetoric to ever more ludicrous levels.
Yep.
Forrest Gump’s mom had it right.
- srbp -
Along with population statistics, here’s another one you can bet the current provincial Conservative crowd won’t be holding out quite as enthusiastically as the fabricated version of Bank of Canada' governor’s remarks they were using until recently.
As the Globe reported:
Top policy makers indicated Wednesday that they are on heightened alert for a deeper crisis in Europe that spreads beyond Greece and, potentially, hurts Canadian banks or the wider economy. Though the direct exposure of Canadian banks to countries such as Greece is low, the Bank of Canada warned that Canada’s financial institutions are vulnerable through links to the United States and other countries that are much more exposed.
Those top policy makers include analysts at the Bank of Canada and federal finance minister Jim Flaherty.
The question that remains is what economic problems in the United States and Europe would do to demand for oil – our new chief export – and other commodities as well as what it might do to prices for them as well. Anything that drops the price and the demand will also drastically affect provincial government revenues.
That won’t be good on a go forward basis, to use another of a recently famous politician’s famous phrases. Since the provincial government doesn’t even have an imaginary protective bubble this time, that could make what one analyst forecasts as a bad deficit and debt situation get much worse.
- srbp -
Adios John Hickey, the Pavement Putin of the Permafrost.
The ever-troublesome labradore offered a fitting tribute to Hickey as leaves politics.
The staunch defender of the Muskrat Falls megadebt project won’t like people being reminded of his position a decade ago when another Premier had a better deal, at least as far as the taxpayers of the province would be concerned.
labradore offers a copy of the letter then-Goose Bay mayor John Hickey sent to then-Premier Roger Grimes conveying the position of the town council on Grimes’ potential deal.
Among Council’s reasons for rejecting the development of Gull Island and Muskrat Falls together without saddling the province with massive debt, jacking up domestic electricity prices and shipping discount power to people outside Newfoundland and Labrador?
For starters, they wanted a written guarantee 500 megawatts of power would be available for development in Labrador. In the Muskrat Falls plan, there is no written guarantee and the thing won’t produce enough power to ship to Nova Scotia for free, to the island and still give Hickey 500 megs for Labrador. It’s not possible.
Then they wanted direct industrial development in the Lake Melville region from the project. Again, the Muskrat Falls project offers exactly nada on that one.
Lastly, Council wanted to make sure that ALCOA would have what he termed a “competitive opportunity” to build a smelter in Labrador.
Again: goose egg.
Wasn’t Leo Abbass a member of Council back then?
Maybe someone should ask him if that 2002 letter still represents his resolute position.
.
Kathy and Steve had a nice chat on the phone, but Stephen Harper’s biggest Newfoundland and Labrador fan couldn’t persuade her guy to change his mind about shifting a search and rescue call centre from St. John’s to the Joint Rescue Co-ordination Centre in Halifax.
So much for raising expectations, Kath when you know you can’t deliver.
Luckily for the people of the province, Harper wasn’t interested in [Premier Kathy]* Dunderdale’s idiotic suggestion that the provincial government take over the call centre and pay to keep the jobs in this province. So much for that ass-thought.
- srbp -
* added for clarity.
Updated: Premier Kathy Dunderdale will play out the last act in the bizarro local political drama that comes with telephone calls when she scrums with reporters on Thursday. This should be a doozy.
And if you want a simple description of the Newfoundland political life cycle of the telephone call, refer to nottawa. He relies on his considerable experience to map it out for you. .
Recent population figures from Statistics Canada suggest the recession is over and things are getting back to normal.
Population in Newfoundland and Labrador dropped in the last quarter primarily due to out-migration.
Regular readers of these e-scribbles will be familiar with the point.
- srbp -
Add the Pavement Putin of the Permafrost to the list of provincial Conservatives who won’t be seeking re-election come the fall.
John Hickey won’t be running again, since apparently two terms are enough. Did someone leave off the “to be pensionable” part of that? Your humble e-scribbler had him in the doubtful pile some time ago although last December he appeared to be readying for a run at federal politics.
So much for the story circulated to the ever-gullible last December that all incumbent Tories would be seeking re-election.
If you believed that you likely also believe that there was no December Deal to keep Kathy Dunderdale in place until after the next general election when the Tories will hold the real race to replace Danny.
Hickey will be remembered for many things, not including the photo, above, from The Labradorian.
In his most illustrious moment, though, Hickey launched a lawsuit against former Liberal leader Roger Grimes for comments Danny Williams made and attributed to Grimes. The law suit died a quiet, but embarrassing death.
Don’t be surprised if Goose Bay mayor Leo Abbass seeks the Tory nod in the upcoming election.
As for the Liberals, Danny Dumaresque dropped a flyer in the district but has since started sniffing around seats on the island. Among the most recent likely targets for Dumaresque: Lewisporte and Tory incumbent Wade Verge. No word on another potential Liberal candidate in Menihek yet.
- srbp -
Having jacked expectations through the ceiling, Kathy Dunderdale better convince Stephen Harper to commit to halt the transfer of the jobs at the coast guard search and rescue co-ordination office in St. John’s to Halifax.
If she gets nothing, then she will bear responsibility for the failure.
The only worse outcome will be if harper takes Dunderdale’s commitment to have the provincial government pay for the federal operation.
Dunderdale and Harper will speak by telephone this evening, apparently but Dunderdale has already said she won’t be available to brief reporters on the call afterward.
Local media are hyping the crap out of it based on Dunderdale’s babbling in front of reporters on Tuesday.
- srbp -
Almost three years after Danny Williams’s Conservative administration in Newfoundland and Labrador expropriated Fortis’ electricity assets in the province, the government of Belize has taken a leaf from Williams’ playbook and seized Fortis’ interest in Belize Electric Limited.
Fortis held a 70% interest in the company at the time of the seizure.
Compensation for the expropriation has yet to be determined.
In related news, Standard & Poor’s is warning the Belize government that it may downgrade the country’s credit rating in the wake of the move. According to Reuters:
"The final details of the acquisition and its impact on the government's debt burden and fiscal flexibility are uncertain. However, based on the information currently available, we believe that there is significant likelihood that we could lower the ratings to 'B-minus' upon the conclusion of this transaction," S&P said.
In its statement, S&P said Belize's general government debt as a portion of gross domestic product is already a high 85 percent, with the interest burden around 15 percent of its revenues.
“The proposed bill would allow the government to take over Fortis's share, with an estimated book value of $100 million," S&P said, which noted Fortis holds 70 percent of the company's equity.
- srbp -
The shipyard that supposedly had so much work it didn’t know what to do just laid off 250 workers.
Makes you wonder why the company dropped out of a lucrative shipbuilding contract and – equally – why Kathy Dunderdale took the news without batting an eyelid.
And why exactly did they drop out of the multi-billion dollar JSS contract competition?
Say it ain’t so Update: This story from voice of the cabinet minister certainly looks like we have a major problem at Kiewit, that the provincial government has known about the problems for some time, and that their only solution is to try and rush through a provincial government ferry contract to keep the yard open, at least in the near term.
So how long has the provincial government known about the problem?
How bad is it?
And why did the provincial government keep the story from the people who will likely be paying to keep the yard going?
The VOCM story before it gets disappeared:
The MHA for Grand Bank is questioning Peter Kiewit Infrastructure Company's commitment to the people of the Burin Peninsula. Labour Minister Darin King calls the layoffs at the Marystown shipyard unfortunate, but he says the government has been working studiously with Kiewit and the union to develop a new ferry strategy that could greatly assist the community's shipyard.
- srbp -
I’ll share a quote with you now from Canadian marathon runner Peter Maher that I found interesting: "Running is a big question mark that's there each and every day. It asks you, 'Are you going to be a wimp or are you going to be strong today?’"
My answer is I am going to be strong today, and looking around this room, I can see that’s your answer as well.
That’s a bit of Kathy Dunderdale’s speech to delegates at the NOIA oil and gas conference in St. John’s on Tuesday.
Odd choice of words, isn’t it?
Forget that the quote is actually only attributed to the Canadian-born marathoner. Think about the implications of the words. It isn’t about the internal struggle to find the inner strength to start a race and finish it or to challenge yourself to go that extra mile. It isn’t about growth and perseverance.
Nope.
Every day she faces the choice between being strong or being a wimp.
Of manning up or being a pussy.
Dunderdale used a quote that is almost self-consciously masculine in a room where most of the people in it were men.
Men don’t talk like that, of course. Well, not unless they want to make sure everyone knows how insecure they are.
It’s like sex. The more you talk about it, the less you are getting it.
Strength is like power. If you talk about it, you don’t have it.
Dunderdale talks like that a lot.
She likes to draw distinctions between herself and others.
Stark opposites.
Opposition politicians are too stunned to understand something, but she is smarter.
She could on the steps of Confederation Building be ranting and raving or throwing stones but she is better than that.
It’s part of a theme she’s been on since earlier this year: Kathy is different. Politicians need to do that, of course. You win elections by being different from the others in the pack. This is different. These comparisons are something she does even when it doesn’t really fit with the topic.
That’s what tells you she has a need to send this message over and over. The thing you start to wonder after a while is why she feels that need. Conventional political wisdom is that she is safely enthroned as both Premier and leader of the provincial Conservatives. And while her polling numbers are dropping she is – supposedly – way ahead of her rivals. She shouldn’t be feeling quite safe.
Strength and power and the need to point out how she is different are for Kathy Dunderdale what books and reading are for Sarah Palin and Danny Williams.
How she is different might not always be clear, even to Kathy, but she goes to great lengths to point out she is something-er than someone else.
And that’s really part of the problem for Dunderdale. She winds up defining herself in terms of the person or group she’s dealing with at a particular time. What you are left with is the sense that Kathy Dunderdale cannot define her ideas, her values and her approach to leadership on her own.
The result gets convoluted sometimes like it did back in February when she was the same as Danny but different all at the same time, the more she talked.
You can see this need to bring up inappropriate comparisons if you can stand listening to her entire scrum with reporters outside the NOIA conference. It’s only seven and a bit minutes in total.
Dunderdale starts out by saying she and her staff are pressuring the Prime Minister as hard as they can. Then she tosses in the comparison about how she could be scoring political points by grandstanding but she isn’t. That’s a gratuitous line but note that it’s there as the second point.
Then Dunderdale goes into a list of how she and her staff and getting a message through to this one and that one in Ottawa. She’ll keep it up as long as she keeps it up. The goal is to get the federal government to reverse the decision to close a local search and rescue call center.
Then Dunderdale says that while all pressuring and pushing to get the feds to change their mind is going on, she and her officials are talking with Uncle Ottawa about taking over this supposedly essential service from the federal government. Well sort of taking it over, maybe, if they don’t mind, because in between the message sending thing, they are doing the idea thinking thing.
But having now started out by saying the whole thing was about getting the feds to keep the thing running here in the province, Dunderdale says that right at the moment they are on another tack entirely. “The piece is, though,” says Dunderdale, resorting to her trademark way of using jargony words to try and sound smarter, that she and her officials are trying to find solutions.
Then she’s back talking about how she could be out there throwing rocks at the federal government but she is thinking long-term here. And all that dissolves in a speculative bit about how medievally stone-throwingy she might get when or if the federal government doesn’t do one or maybe both of the two clear messages Dunderdale is sending despite the fact the Prime Minister won;t return her telephone calls.
All those shifts from the conciliatory and diplomatic to the possibly blustering and two different, contradictory policy threads in about the time it takes to hard-boil an egg.
Amazing, isn’t it?
If nothing else changes between now and next October, Kathy Dunderdale will likely keep her current job. How long she keeps it would be anyone’s guess. If you want to put a bet, try something measured in months, not years.
But once the campaign starts, Kathy is going to have a hard time of it up against any politician – leader or not – if she can only define herself by reference to who she is talking about at any given moment. And in a televised debate up against two different leaders with different styles, Kathy might get herself into an even greater identity crisis than she seems to be having already.
- srbp -
We’d all like to think that political ideas come out of politicians’ heads after careful thought and lots of research.
In Newfoundland and Labrador, government ideas tend to spring from the ass.
A whole bunch of people in the province are not happy with federal plans to close a coast guard emergency call centre and shift the work to the Joint Regional Search and Rescue Centre in Halifax. Those people think the federal Conservatives pulled that idea out of someone’s ass.
Organized labour in the province is screaming blue murder about the decision. The opposition parties in the provincial legislature are raising a stink. They wanted to have an emergency session of the legislature and pass a resolution condemning the action. Kathy wouldn’t do it.
Meanwhile, Premier Kathy Dunderdale has been taking her time trying to figure out out to get in front of this issue politically while not pissing off the guy on whom she is dependant for a loan guarantee to help finance her mega-debt project slash election gimmick, better known as Muskrat Falls.
Premier Kathy Dunderdale told reporters last week that someone in her office was trying to get a telephone call through to the Prime Minister.
And a week later, she had to stand in front of reporters and tell them she was still trying to speak with her pal Steve on the telephone.
Well, either that or arrange a meeting whichever came first.
But on that most 19th century of technologies?
Nada on the telephone hooking up thingy.
The message is getting through, though, Kathy assures us.
And pressure is being applied using that passively voice sentence.
How, exactly is it getting through asked the brazen fish broadcast host Brian Callahan of fish minister Clyde Jackman? No call. No meeting. How is the word getting through from the provincial government to the federals?
Jackman didn’t know.
He just said we’d all know soon what the feds decided to do for sure on the call centre.
Now just to put that in perspective for those unfamiliar with anything that happened in the world before say 1999, that isn’t the way these things work usually.
Even in the darkest hours after the collapse of the Meech Lake Accord, Brian Mulroney would still answer the phone even if he knew Clyde Wells was on the other end.
The day Igor ripped through the province, Stephen Harper called Danny Williams to offer up whatever help Dan-o wanted. That’s right. Dan didn’t even have to wait to get his call returned. he got one free from Steve. Now Dan might have reportedly said no thanks because he didn’t want Peter Mackay to horn in on the credit for saving Danny’s bacon, but at least he actually did get the Prime Minister himself on the horn.
So Kathy’s message obviously isn’t getting through to the federal government on anything. Her loan guarantee is looking a bit more dodgy than before, she doesn’t really have anything to offer as a distraction and her poll results are still sucking worse than the St. John’s sewerage treatment plant on full reverse.
Not a good place to be in politically, especially for a party that used to thrive on issues just like this.
So what to do?
Offer to take over some bits of search and rescue in the province from the federal government.
Never mind the constitution.
Never mind that for decades provincial premiers have been fighting to keep the feds from dumping their responsibilities into provincial laps free of federal charge.
Never mind the cost to the public purse.
Never mind the fact mismanagement by Kath and her predecessor have left the government in a rough financial spot despite unprecedented government revenues such that the next decade could make everyone look longingly on the 1930s.
Never mind, even, that Kath and her mates buggered up the Igor thing that looked suspiciously like an emergency of the searching and rescuing type so that you’d wonder if they could actually find each other in the dark, in a closet with both hands and a flashlight.
No.
Faced with being outflanked politically by her local opponents, Kath opted to show how much she is different from every other politician in a long, sorry line of politicians in this province.
She decided to think with her ass.
In the past week, she could have fired off a strongly worded letter to Ottawa.
She could have sent a fax to Peter Penashue, the regional minister who is also the intergovernmental affairs minister.
She could have told reporters that she had made clear the views of her government that this was just not on.
When asked about it, she could have gone for the sophisticated answer and pointed out that the loan guarantee was another issue and that she would always look out for the best interests yada, yada, yada.
Instead, she opted for the ass-thought.
And to make matters worse, Kathy blathered on in public to reporters about her blatant political impotence by telling them that she has been a week trying to figure out how to get Steve to call her back but without success.
You don’t have to look at her possible motives for offering to take federal responsibilities off their hands and pay for them with provincial cash to boot. Nor do you have to look very hard to find the considerable numbers of flaws in her political bungling of what should have been a relatively small political issue.
What you can see pretty clearly is that Kathy Dunderdale and her political staff came up with this idea on the fly in a desperate attempt to be seen to be doing something on the issue. All they’ve really done in the process is show seasoned observers that they really don’t have a clue.
It is also pretty clear that they really don’t have any sense of direction, generally. That’s not surprising, mind you, given that when Danny did a runner, Kathy was only supposed to keep the office warm for a few months until his permanent replacement showed up. They’ve been coasting for a while.
But you would think that when the governing Tories decided to keep Kathy on a bit longer than originally planned, they’d have given her a set of ideas and some people who could actually manage these sorts of issues for her. That’s what experienced, seasoned political parties should be able to do after only seven years in office.
Should be able to do, but can’t in this case.
And just other other governments that couldn’t manage the small stuff, they went to the usual repository of Newfoundland political brilliance: the ass.
After a mere seven years in office.
Not a good sign.
Not a good sign at all.
- srbp -
A conference in Halifax last week heard a tale of electricity demand in the United States that you certainly aren’t hearing from proponents of mega-debt projects north of the border.
Massachusetts-based consultant Danielle Powers said that the New England states have enough capacity to meet anticipated demand in the near term. At the same time, Powers said the situation could change if up to 8500 megawatts of existing generation in the United States wound up out of production.
But still:
"When you look at (natural gas) prices right now, I don't know how the case is made financially to bring the resources in," she responded. "In the near term, unless I'm missing something, I don't see it working."
Price seems to be the key. Another American consultant quoted in the same New Brunswick Business Journal article put it the same way. John Kerry is policy director for the Conference of New England Governors:
"There will be, at some point in the future, the need for reasonably priced Canadian power," he said at the Atlantic Power conference. "The lower the price, the greater the chance they will purchase Canadian power."
Something says Kerry wouldn’t think that 14.3 cents per kilowatt hour plus wheeling charges through three Canadian provinces and up to five American states will wind up with “reasonably priced” power in New England.
- srbp -
The controversy over the provincial government’s bungling of the emergency response to Hurricane Igor got a bit more curious on Monday when labradore released a series of e-mails he obtained from the provincial government under access to information laws.
The e-mails document a part of the record of how Danny Williams wound up recording a segment of This Hour has 22 Minutes the same week as the disaster. Coupled with documents released to the Packet in April, they undermine the provincial government’s contention that they needed three or four days to figure out how bad things were before they asked the federal government for assistance.
CBC was originally scheduled to record the Williams’ appearance on September 21. They put that off until later in the week, but here’s where things get really interesting.
At 11: 00 AM the day of the storm, Danny Williams’ publicist sent an e-mail to an unidentified person at 22 minutes that included the following comments:
We've cleared his schedule as we will be going around the province visiting sites. Destruction is widespread already and the storm hasn't even hit full force yet.
At that point they knew things were very bad. They also knew they’d be “visiting sites”. They obviously didn’t need to assess the situation since the provincial government’s emergency response organization had all sorts of sources of accurate information on roads, hospitals, schools and anything else going on in the province. Williams and his crew were planning the standard politicians’ sight-seeing tours of disaster areas.
Now the official explanation for the four day delay in calling in federal assistance is that the provincial government needed to figure out how bad things were and what they needed to do. Williams’ successor Kathy Dunderdale, Tom Hedderson, the municipal affairs minister at the time and the current municipal affairs minister, Kevin “Fairity” O’Brien all have tried on variations of that same argument.
But before noon on the day the storm hit, the Premier’s Office already knew that “Destruction” was widespread.
Later on the same day, Williams’ publicist wrote this:
State of emergency being declared in a few places already. Major damage and flooding. The place is a mess.
But what really stands out is what you get when you cross reference the comments by Williams’ publicist with situation reporters released to the Packet by the federal government about its response to Igor. For some reason they are on the CBC’s website and not available from either the packet or its daily big-brother, the Telegram.
In an e-mail giving the situation as of 13:15 PM September 21, a federal situation report contained this note:
Highway infrastructure is profoundly impacted. Of all events, Fire and Emergency Services NL (FESNL) has stated that this is by far the worst disaster that they are facing.
The note refers to a death that happened.
But bear in mind this information came to the federal emergency co-ordination team from the provincial government’s team at FESNL. Public Safety Canada and the National Defence both had liaison officers at the FESNL emergency operations centre to make co-ordination easier.
So if the provincial government had such a handle on the scope of the problem, why did they hesitate to call in extra resources?
Good question.
So far there hasn’t been a good answer.
- srbp -
Municipal affairs minister Kevin “Fairity” O’Brien continues to defend bungled decision-making at the topmost levels of the province’s emergency response system by citing the work done by the hard-working men and women who actually did the heavy lifting during Hurricane Igor.
Geoff Meeker’s got a solid post on the whole controversy over O’Brien’s unfounded and despicable attack on the integrity of the reporter and editor at the Packet for printing a story based on fact.
Two things:
1. Fairity can’t refute the evidence so he follows the pattern of his idol and launches into character assassination instead. Pure chickenshit.
2. Like poultry poo, O’Brien’s comments stink to the high heavens. Every time O’Brien launches into one of his diatribes, he only fuels public resentment aimed at government over the whole issue.
Keep going Kevin.
It takes a rare type of political genius to think that making a bad situation worse is a good idea.
- srbp -
Good to his word from last February, former Conservative member of parliament Rex Barnes is challenging Ray Hunter for the Tory nomination Grand Falls-Windsor-Green Bay South.
Notice in a piece from NTV News that Barnes is rattling off a bunch of problems that have come up since the Conservatives swept to power in 2003. That Internet connection one is especially noticeable given that the Tories coughed up $20 million to help several private sector companies expand their business in the province.
Now this is a place where party affiliation is often a case of whatever-gets-me-elected. Ask Dipper cum Tory cum Connie Trevor Taylor about flags of convenience. Right off the bat, Rex is getting a few points for sticking with the team he started with.
But given that his constituents are complaining about stuff his buddies did or failed to do - as the case may be, it seems odd he wants to run for the Tories. As for incumbent Ray Hunter, he hasn’t always been so well loved inside the Tory caucus.
The nomination fight is on Wednesday.
It might be interesting to see if the loser - whoever that might be – decides to change parties. After all, this district is one that turned up on a few lists of districts the Liberals could pick up even while Danny was still around. With temporary leader Kathy “Dropping-like-a-stone” Dunderdale, the Tories might have a hard time hanging onto this seat regardless of whether the Tories run Rex or Ray.
If one of them changes teams after the nomination, that might be a clue as to how Tories are assessing the chances of them hanging onto this seat.
And if Kathy Dunderdale turns up with a fire truck to give away, or someone starts laying pavement any time soon, you can bet its on the Tory list of vulnerable seats.
- srbp -
- srbp -
Tom Hedderson, Fairity O’Brien and other lame local politicians will likely be re-thinking their political futures soon.
CBC announced Friday that Anthony Germain will be hosting the CBC’s flagship morning show in Newfoundland and Labrador later this summer. He will replace Jeff Gilhooley, who is retiring in July.
His reporting career spans two decades from local radio in New Brunswick to CBC Radio's parliamentary bureau in Ottawa. In the nation's capital, Germain won investigative awards from the Canadian Association of Journalists for investigative reporting on both radio and television.
Germain has hosted CBC Radio's flagship political show The House as well as the local Ottawa morning show. He has been a guest host on The Current, As It Happens, and The Sunday Edition.
Germain is currently the CBC’s China correspondent.
Germain will be the latest in a series of heavy-hitter hosts on the corporation’s major morning broadcast in the province. The CBC has three other morning shows serving regions of the province but the St. John’s show has the largest audience and has been growing in popularity with the local audience.
- srbp -
Municipal affairs minister Kevin “Fairity” O’Brien thinks that his government’s response to last year’s Hurricane Igor disaster was absolutely correct in every respect.
In fact, he is so convinced of the rightness of what he and his colleagues did that
“I would not change a thing and it's fine for you to say, like looking at an email — a paper trail — and say that somebody up in Ottawa or someone somewhere else was scratching their head," said an emotional O'Brien [in a CBC interview].
You can hear the full O’Brien interview here: CBC Radio St. John’s Morning Show.
CBC left the final word of their piece with someone who was coping with the disaster while cabinet ministers flitted around on helicopters “assessing” things and talking to reporters:
Eric Squires, the Anglican minister in Catalina and the organizer of relief efforts when people were left without necessities, said the provincial government failed residents.
"[I'm] really disgusted because we were desperate out here for water and bread," said Rev. Squires.
"I called [provincial] fire and emergency services to ask if we could get a boat to go across the bay to get some bread and water and they said 'No, buy what you want and send us the bill.' And during the same time they turned down [federal] help for us."
- srbp -
Even to people not desperately in need of help in the wake of last year’s Hurricane Igor, it was pretty obvious - at the time - the provincial government was more geared to stoking and stroking political egos than anything else.
By the second or third day, media reports made it obvious that people desperately needed help, the provincial government couldn’t deliver help and that assistance from the federal government was a mere telephone call away.
Only a blind partisan or cockeyed optimist thought otherwise and - given the most recent developments - only a complete fool would claim otherwise today.
Information released to the Clarenville Packet under federal access to information laws documents the extent of the bungling inside the highest levels of the provincial government. we aren’t talking about the front line workers or contractors. We are talking senior bureaucrats, their political masters and their political masters’ legion of fart catchers.
An intra-agency meeting of the Regional Emergency Management Coordinating Committee (REMCC) was held the afternoon of Sept. 21. Representatives of Public Safety Canada, Environment and National Defense departments, and the provincial government noted resources were on standby.
Captain Michael Pretty of the Canadian Forces offered to have 180 staff deployed in six to 10 hours and the HMSC St. John’s and two helicopters mobilized.
The Canadian Coast Guard had 36 generators (125-700 watt) and 45 water removal pumps, with operators, available.
The province also had access to the national emergency stockpile of food.
The province declined all these offers.
And so it went day after day.
Evidence mounted that the provincial government simply was completely incapable of responding and at still the politicians refused to make a simple request for aid.
While the federal agencies standing by to assist initially thought the provincial government had a grip on things, by mid morning on September 23 they had changed their minds. The Packet quotes a federal situation report that power was out in wide areas, food supplies were running short and citizens were having to take matters into their own hands to deal with shortages of everything including medical supplies.
By the time provincial officials realised they were in the middle of a mess, they could not even draft a simple letter to request aid. The Canadian Forces liaison officer had to include a letter in an e-mail, asking the officials to print it off, sign it and send it back.
It still took the provincial government 24 hours more to respond and even then it very consciously and deliberately restricted the aid to the barest minimum. As the Packet reports:
The official RFA [request for assistance] was sent by the province to the federal Department of Public Safety at 2:07 p.m. on Friday, Sept. 24.
It asked, specifically, for “Sea King helicopters and the ship-based naval support necessary to maintain operation of said helicopters.
“For greater certainty, the province of Newfoundland and Labrador is requesting no other assistance from the DND at this time," the province stated in its request.
Thankfully, the federal officials ignored that last direction.
As Canadian Forces ships aircraft and personnel streamed into the province, the Prime Minister and Premier took a helicopter tour of a part of the region.
Danny Williams’ staff, meanwhile, had been co-ordinating a television appearance for the Premier all through the hurricane aftermath.
Williams left the Prime Minister later in the afternoon of Friday, September 24 and drove to a downtown St. John’s school where a crew from “This hour has 22 minutes” and a classroom full of elementary school students waited to record a sketch due to air the following week. The sketch featured Williams spewing some characteristic invective.
Just to illustrate the extent to which the provincial government’s bungling and miss-placed priorities were apparent at the time, take a look at posts your humble e-scribbler made last September. The first came on September 23. There’s another on September 24.
The second, a week later, highlighted the way in which the government’s public statements seemed designed to stroke political egos rather than provide concrete information to people affected by the disaster. It turned out to be an apt metaphor for what was going on inside the disaster response headquarters.
As the Packet notes, the first provincial assistance request to the federal government focused entirely on cash to pay compensation for victims. At a time when thousands were still stranded, lacking power and with dwindling food supplies, the provincial authorities were busily handing out claims packets and looking to Uncle Ottawa for cash. Meanwhile, the politicians were flying around staging photo ops for the evening news programs.
Danny Williams’ successor had a chance on Thursday to address the rather blindingly obvious shortcomings of the provincial government’s response. Kathy Dunderdale said everything had been handled very well. Not satisfied with the completely foolish response alone, Dunderdale went farther. The delay in asking for federal help was merely to ensure the provincial officials had proper plans. After all, said Dunderdale, all those soldiers, sailors and air crew would merely be an added burden on local communities already reeling from the disaster.
Yes, friends, in Kathy’s world, help is actually a hindrance. In the face of such comments, it doesn’t matter if Dunderdale is genuinely so stupid that she spouts such nonsense or merely thinks the rest of us are even more stupid such that we’d believe such a thing.
What matters is that her remarks are - without doubt or debate – utterly wrong.
They are stupid in a way that gives the word a new meaning.
The Canadian Forces came to Newfoundland last September with clothing, food, and shelter not only for themselves but for others as well. That is precisely why they came in the first place. They stood ready from the beginning to come from the moment the storm hit.
Had Danny Williams and his officials asked for them on the first day only to send them home shortly after, the whole affair would have cost them nothing. Under federal law, a provincial request for aid means that the federal government picks up the whole tab.
In other words, there was no legitimate reason for any delay in asking for help.
Yvonne Jones is right: Kathy Dunderdale owes the people of the Bonavista and Burin peninsulas an apology for the mess regardless of whether it was caused by political egos or old-fashioned incompetence. If Dunderdale had half a wit about her, she’d have acknowledged the problems and as the new Premier committed to right the wrongs.
Instead she told a monstrous whopper of a tale. You could call it a lie, but frankly, you cannot be sure that Dunderdale actually knows that what she said is drivel. Dunderdale might just be so inept that she must rely on briefing notes written by another incompetent.
And that is makes Dunderdale’s response all the worse. The public can loathe the showboat and all his puffing last September. He’s gone and no longer matters. She could have distanced herself from him safely and cleanly with no cost.
But Dunderdale didn’t.
She turnered up, yet again.
Last fall, your humble e-scribbler noted that natural catastrophes sometimes turn out to foreshadow political disasters. Well, no one could have foreseen the political disaster that is Premier Kathy Dunderdale.
Put Kathy Dunderdale’s demonstrated incompetence on Thursday over Hurricane Igor together with a series of events during her leadership (including her disastrous poll results in May) and you can bet she is going to get quite a surprise come the fall.
That is, Dunderdale will get a surprise in the fall unless a few of her more capable caucus mates decide to get rid of her before then for the good of the party and the province.
- srbp -
The Government of Prince Edward Island has appointed a five member commission to examine the province’s energy supply and pricing.
The commission — which includes Mike O'Brien, David Arsenault, Roger King, Gerald Morneau and Richard Hassard — will spend the next year looking at the future of P.E.I.'s electricity costs.
The province has some of the highest electricity rates in the country. Most of the power is purchased from outside resources — largely New Brunswick.
One potential source for the island is electricity from Muskrat Falls.
Speaking at a conference in Halifax on Tuesday, Bill Marshall, New Brunswick’s former electricity grid regulator said that Muskrat Falls could provide the Maritimes with a source of power cheaper than imports from New England. It could also allow the region to shut down environmentally dirty thermal plants.
What Marshall didn’t say is that this is only possible because Nalcor and the provincial government plan to sell Muskrat Falls power to consumers outside Newfoundland and Labrador below the cost of producing electricity at Muskrat Falls. Consumers inside the province will pay the full cost of production plus guaranteed profits to Nalcor, Emera and Newfoundland Power.
According to Premier Kathy Dunderdale, Muskrat Falls power will cost 14.3 cents per kilowatt hour to produce, assuming the project meets all current cost projections. That’s about four times the current wholesale cost of electricity in Ontario.
- srbp -
Consider the simple reality.
The current provincial administration has more money – without considering federal transfers – than any other government in the province’s history.
Most of the government’s money comes from oil.
Oil prices are at persistent record high levels.
There are fewer people in the province than in 30 years.
Yet the provincial government is going to be running record deficits for the next five years.
And if Wade Locke’s analysis is only partially true, the provincial government will run record deficits virtually every year for the next decade and more and build debt to unprecedented, unthinkable levels.
That’s all without factoring in the Muskrat Falls mega-debt project.
We got into this state because successive provincial administrations believed in overspending today and ignoring tomorrow. Over the past seven years in particular, the scale of fundamental mismanagement has been breathtaking. Danny Williams and his associates haven’t done anything others haven’t done before. It’s just been astonishing that they have followed a reckless course despite all the experience in this province and elsewhere that warned against it.
To appreciate just how well people in this province understood what needed to be done compare the recently Alberta expert panel’s economic strategy with the the 1992 Strategic Economic Plan developed over the course of two and a half years of widespread consultation. Allow for the difference in the two provinces and it is remarkable how similar the language is. Both talk about the need to develop infrastructure, broaden the economic base, promote entrepreneurship and soundly manage provincial spending.
We’ll get to the economic policies in another post in this series. For now let’s toss out some ideas that the provincial should implement in order to make sure the public treasury is definitely managed prudently to provide a prosperous and secure future.
There are at least three basic principles that underpin these ideas:
First, recognise that the role of the provincial government is to create a climate in which personal and collective innovation in the private sector can create economically and environmentally sustainable jobs. Government just isn’t good at it and decades of experience in Newfoundland and Labrador shows it is a bad idea for government to become as heavily involved in the economy as it has become in the past seven years.
Second, recognise that while government spending can play an important role in balancing the ups and downs of the economic cycle, it is a very bad idea to make people dependent on public spending for their primary economic activity. It didn’t work in the Soviet Union and it won’t work here.
Third, non-renewable resources won’t last forever. As such, the government must – as a moral obligation to the people it serves – adopt strict policies that maximise the long term benefit from resource revenues.
Now the ideas:
- srbp -
Canadian household debt is at at record levels according to report by the Certified General Accountants Association.
The latest report adds a new twist to a discussion of the potential risks for consumer debt in this province discussed in a post last week.
Table 17 from the report shows provinces with segments of the population considered to be highly vulnerable for debt growth and financial problems associated with heavy debt loads.
Another table (19 on page 74) shows levels of savings for Newfoundland and Labrador are relatively low. At the same time, house prices increased at the highest average level of all provinces for the period 2007 to 2009.
According to some thinking, the economic vulnerability represented by small savings could be offset by the relatively high level of equity that could be represented in the high house prices. That would theoretically make Newfoundland and Labrador no more risky than Alberta where the savings levels are the highest in the country while house prices have dropped lately.
Small problem.
House prices can shift dramatically while savings and investments tend to hold value over a long period of time.
The summary of that chapter’s conclusions also sounds a strong warning, even allowing that the conclusions are for the country as a whole, not just one province. Incidentally, this is all one paragraph in the report. The layout is changed here to make reading easier:
First, the positive signs of improving labour market conditions portrayed by the unemployment rate and the hiring intentions of firms may be deceptive. Labour market conditions continue to be fairly weak: the market’s ability to keep up with the increase in working age population recovers slowly (and even deteriorates in some of the provinces); the long-term unemployment rate continues to increase while the decline in the proportion of discouraged workers has not yet materialized. Weak labour market conditions may suppress the short-to-medium term growth in earnings while increased and more prolonged absence of employment may decrease individual’s life-long earnings.
Second, certain socio-economic groups (i.e. youth, workers with low educational attainment, lone parents, and self-employed) may be seen as vulnerable as they are faced with higher labour market stress due to elevated likelihood of longer-term unemployment and reduced employment options.
Third, individuals in vulnerable groups that reside in provinces having a weak labour market may be at a higher risk of elevated financial stress.
Fourth, the recent recession and economic recovery brought only slight improvements to the conventional savings out of income; at the same time, accumulation of savings through wealth has been weakening in the past several years. Neither active savings from income, nor passive savings through equity are evenly distributed across provinces and households. The lack (or low levels) of active savings may jeopardize individual’s ability to pay and honour debt obligations in the future.
- srbp -
Remember the December deal and all the claims that the provincial Tories would all be standing for re-election, bar none?
Yeah, well you could take that one to the bank. Not.
As your humble e-scribbler told you a while ago there are a few Conservatives who will be cashing out rather than take another run at fattening the pension even more.
For the record, here’s the partial list from last week’s post:
The provincial Conservatives, for example, included a pledge to run again for all incumbents in the December deal that installed Kathy Dunderdale for a longer interim term than originally planned.
Before then, the slate of incumbents likely to quit included Dunderdale herself. Finance minister Tom Marshall was reputedly headed for retirement, along with Sheila Osborne , Bob Ridgley*, Roger Fitzgerald, Dave Denine and a few others who were pensionable.
Michael Connors of NTV tweeted on Wednesday that St. John’s West incumbent Sheila Osborne is leaving.
Local rumblings also have it that minister of something or other Dave Denine will also leave a seat vacant should some Mount Pearl municipal councilor want to take a shot at a promotion and a bigger salary.
Can Sheila’s bro Tom Ridgley be far behind? How about Fairity O’Brien and Harry Harding?
It could only be a matter of time. The Tories are a little over halfway through their list of nominations and some districts are conspicuous by their absence.
Stay tuned.
- srbp -
* Corrected from Tom Ridgeley in original.
In light of the suggestion the provincial government needs a blue ribbon panel of experts to decide how to safeguard the provincial economic future, take a look at what is going on in Alberta.
Conservative premier Ed Stelmach appointed just such a panel headed up by former federal cabinet minister David Emerson.
And, not surprisingly, the Stelmach government is likely to reject all of the panel’s suggestions. You can find an excellent discussion of it in a Jeff Simpson column from the end of May.
The Stelmach government’s decision is hardly surprising given the history of Conservative governments in Alberta since Peter Lougheed left office. But it is also hardly surprising since the current Conservative administration in this province is basically following the same policy of spending that Alberta Conservatives have been following.
What the locals haven’t adopted is the low tax, small government mantra of their western cousins. They also don’t have the enormous oil and gas resources.
What they share with their Alberta relatives is the same fundamental attitudes that the panel identifies as being serious risks: complacency and insularity. As you can read on page 16 of the panel’s report:
Alberta has resources the world needs, but we cannot assume the world will beat a path to our door. Boom times can breed complacency. We can forget we are facing stiff global competition, and that our productivity lags that of competitor countries…
The report criticises the fixation with “selling stuff” to people. There’s a parallel in this province, incidentally, in the drive to build expensive electricity projects at huge cost. The current provincial government talks about it as a strategic investment but, in reality, it is nothing more than “selling stuff” to people.
What the Emerson panel described as a strategic approach is decidedly different:
We must take steps now to ensure we realize the full benefit of our energy resources and broaden our economic base in the new global context. As we look outward, we must expand our thinking beyond simply “selling stuff” to those who want it.
Now is the time to think more broadly about investing strategically in businesses in other parts of the world, attracting investment to Alberta, becoming part of the international networks that are creating exciting new knowledge and technology, and finding specialized niches we might fill in global supply networks. We must invest in helping Albertans engage with the world and prosper in a global economy, carefully considering how we use our current public wealth to build a legacy for future generations.
Interesting ideas; ideas worthy of further discussion, especially since they harken back to strategic ideas developed in this province almost two decades ago as the way we could move forward successfully in a highly competitive world.
- srbp -
To look at the fishery in Newfoundland and Labrador is to see as clear an example as one may find of the fundamental bankruptcy of the sort of old-fashioned politics that has existed from the earliest of times and that persists right down to modern day Ottawa.
It is not business, as your humble e-scribbler has said before, as much as it is a Frankenstein experiment in social engineering. Politician after politician after politician has used the fishery for his own political gain. The fishery is the heart and soul of the province, we are told. Mention fishing and you will find politicians eager to display their passion to rise to its defence against all manner of assailants, most of them entirely fictional.
Is there fundamentally any difference between John Efford, say, and Ryan Cleary?
Absolutely not.
Cleary with his crusade to find out what happened to the fish is merely the latest version of the old blow-hard Newfoundland politician. Cleary’s already mounted his ass and headed off to find the missing fish. If by some miracle, Cleary gets the crowd in Ottawa to fund the junket-commission he wants, he will look, inevitably, in all the places where the information isn’t. If he doesn’t get the cash – as he won’t – Cleary will claim this is yet another example of Canadian exploitation of the poor benighted fisher folk who form the moral core of a long-suffering society blah blah blah blah.
Either way, Cleary will garner column inch after sound bite from reporters at home who are always ready to spew the bullshit to the punters or from mainland scribes hard up for copy and who know as much about the eastern-most part of Canada as the average Hmong tribesman does and seem to care even less.
Passion is their thing. After an early embarrassment and dismissal from cabinet, John Efford rebuilt his political profile as a fisheries crusader who was as full of it as Cleary is, or Tom Rideout or any of a dozen others.
For politicians, all this will be good to the last fish. Kathy Dunderdale is vowing to step into the latest problem at the Marystown plant so that fish are processed in the province and not sent outside where they can be turned into food or some such far more cost-effectively than they can be handled in places like Marystown.
This is the same problem, incidentally, that Fishery Products International had with the same species and the same plant on a few years ago. Kath should recall. She and her colleagues decided the way to handle that was to smash FPI to bits. The lucrative bits went to foreigners. The headquarters building changed hands a couple of times within a year and now houses some lovely provincial government tenants. The other bits wound up going to Ocean Choice, the Torily-connected fish processing company that is now experiencing some sort of karmic retribution.
What goes around, comes around, apparently and in a small province, it seems to pick up speed on the return trip.
So firmly entrenched is the political desire to interfere in the fishery that the current fisheries minister is refusing to accept a dramatic proposal from the fishermen and the processors to do the sorts of things people have been saying they needed to do for years.
The current provincial government’s decision only further emphasises the extent to which the fishery is controlled by people who have no business in the business.
The solution is to turn control of the industry over to the only people who can decide for themselves how best to run it: processors and harvesters.
Not surprisingly, therefore, the first bold proposal to reform the fishery is for the provincial government to accept the recent fisheries reform proposal without further delay.
The second idea is to eliminate all subsidies to the industry within two years. They drain the provincial treasury and serve only to prop up businesses that otherwise wouldn’t make it.
The third idea is for the provincial government to abolish processing licenses with the elaborate red tape restrictions that go with it. The current system helps to keep too many people and too many plants working in an industry featuring low wages, limited capital for investment and with no prospect that new workers will enter the industry to keep it going.
Instead, license processors as businesses under occupational health and safety rules or anything similar legislation. Beyond that? Nothing. Let processors open plants, close plants or reorganize plants as they see fit based on the business’ finances. If a plant goes bust, then it goes bust.
The end result will be fewer plants but fewer plants is exactly what the industry needs. Where those plants will be and how many that will exist are not things anybody can or should predict. What will emerge at the end of the change will be stronger companies that are more likely to survive in a highly competitive global market. In the end there might only be one big company – looking, not surprisingly like FPI – and a bunch of small niche companies. There could be a couple of bigger, integrated operations but the people in the industry will be able to make a decent living from their work and their industry will be more attractive than the current mess is.
Fish harvesting also needs an overhaul.
The fourth idea is to establish a system of fish auctions using internationally recognised grading systems would improve quality and the cash that fishermen get for their landings.
Processors from any province would be required to bid for landings at the auction sites in a daily competition. Alternately, processors could operate their own fleets or make supply contracts with harvesters. The two systems could operate side-by-side but harvesters would have a choice.
Increased competition would also ensure they wouldn’t be victimised in a system like the old one where they had no choice but sell to the handful of locals in a closed system. It would also give fishermen greater control over their own individual operations.
Changes to the harvesting side of the industry will need federal involvement, but federal politicians and bureaucrats would have good reason to support a system that reduces the political and financial headaches of the current system.
Fish harvesting businesses would also profit by the fifth idea, the elimination of the byzantine system of gear restrictions and vessel size restrictions that serve no useful purpose in a modern industry that is run as an industry. “Buddying-up” - having several licenses on one boat – is an example of how people in the industry are already trying to make sensible changes to meet the economic pressures of the industry. They are limited in how far they can go, however, by the inertia that keeps in place a system of rules that may have worked decades ago but that simply make no sense any more.
Something that may have worked once but that no longer makes any sense: that is really the tale of the entire fishing industry in Newfoundland and Labrador, if not all of Atlantic Canada.
To build the fishery of the future, we have to let go of ideas that simply make no sense any more.
We must turn the industry over to the people who are trying to make a living in it.
They know best what to do.
We just need to give them a chance.
- srbp -
Updated Bonus Idea: Dismantling the Stalinist provincial bureaucracy that is stifling the fishery at the provincial level will allow the fisheries department to focus on new priorities.
The biggest of these would be encouraging aquaculture .
The next biggest would helping to promote a new identity for local seafood based on quality. This would be a key part of ensuring the future fishery is internationally competitive.
From Fortis:
“The Government of Belize (the "Government") issued a media release on Friday, June 10, 2011 announcing the Government's interest, "...in purchasing majority shares in BEL so as to assume control of the company." No purchase proposal has been received by Fortis Inc. ("Fortis" or the "Corporation") (TSX:FTS).
Fortis holds an approximate 70% ownership interest in BEL, an integrated electric utility and the principal distributor in Belize, Central America, following investment at the invitation of the Government in 1999. In addition to its investment in BEL, Fortis owns Belize Electric Company Limited ("BECOL"), a non-regulated hydroelectric generation business that operates three hydroelectric generating facilities in Belize.
In June 2008 the Public Utilities Commission of Belize ("PUC") issued a rate order that has had a significant negative impact on the financial condition and operations of BEL. The order effectively disallowed the recovery of previously incurred fuel and purchased power costs in customer rates and set customer rates at a level that does not allow BEL to earn a fair and reasonable return. BEL appealed the PUC rate order to the Supreme Court of Belize. On March 15, 2011, the court rendered its judgment dismissing BEL's application and finding that, among other things, the generally accepted concept of Good Utility Practice is not applicable in Belize. BEL has appealed this judgment to the Court of Appeal of Belize; however, a hearing is not expected until the first quarter of 2012. On May 16, 2011, the Supreme Court of Belize granted BEL's application to enjoin the PUC from engaging in any rate making proceedings or taking any enforcement or penal actions against BEL pending the appeal of its judgment. BEL has been in default of covenants under its long-term lending agreements since 2008 and has had no access to credit during this period.
As at March 31, 2011, the assets of BEL represented less than 2% of the total assets of Fortis; the combined assets of BEL and BECOL represented approximately 3% of the total assets of Fortis.”
- srbp -
