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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