"Only a free and unrestrained press can effectively expose deception in government"
Hugo L. Black - Most influential US Supreme Court Justice in the 20th century
In Newfoundland and Labrador we take for granted that our press is free - whatever that might mean. Perhaps it means they are free to say what they want within the laws of libel. Perhaps it means they are not subject to censorship. Perhaps. But, are they unrestrained? That is a valid question in this province. The press here are routinely criticized for simply regurgitating whatever press release or commentary the provincial government may give them. They are criticized for not questioning, thoroughly enough, politicians. There are exceptions of course. Take Russell Wangersky of The Telegram. Award winning journalist. Deep thinker. Critical thinker. Focuses on the issues of our day, and is not judgmental. He is a professional and recognized nationally as such. Unfortunately, there is the other side of the coin, and in the same paper. Reporter James MacLeod recently published on Twitter that his primary advice to journalism students on the meaning of journalism was to "not be a jerk". There are other professionals at the province's main paper to be sure. There are also many that fall into the other category.
The worst offender in this province, without question, is the local CBC. I've met and worked with CBC reporters all over the country, but never have I seen an operation like this one. Maybe if Harper is looking to privatize a part of CBC it could be this one - save the rest cause CBC is otherwise a great, professional organization. Personally, I've had a number of really amateur experiences with CBC NL. Without going into great detail, this one is my most notorious http://www.cbc.ca/news/canada/newfoundland-labrador/cochrane-the-curious-case-of-brad-cabana-1.1373079
Then there is the case of CBC Labrador. In an interview with a team searching for the Muskrat Falls u-boat a reporter stated I was trying to stop the Muskrat Falls project by involving the fabled sunken u-boat. That was not the case, or ever the case, and I contacted the producer of the show and requested the same time to refute that statement. The producer promised to look into the matter and get back to me - that was months ago. It's part of a pattern, frankly, at the CBC here - lazy journalism, personality framing, and reputation smearing. It's like having your high school rumor mongers in charge of discharging real news to people. The case in point that finally set me off to write this long over due blog is Alderon Iron Ore Inc.
For disclosure purposes, Alderon and Danny Williams are suing me for defamation, and I am counter-suing for the same. When Alderon and Williams sued, their Statement of Claim was published on the CBC website as part of the story. When I counter-sued my Statement of Defence was not published with the story. In other words, the CBC NL allowed Williams/Alderon's statements against me to stand without perspective. They also allowed public commentary on one side's story and not on the other. That prompted a very pointed article by one of the critically thinking bloggers at The Telegram http://www.thetelegram.com/Blog-Article/b/22420/Comment-Disabled . These are just examples that are personal to me.
This, however, is truly bizarre. Check out this story of Alderon demanding a power line for it's mining project http://www.cbc.ca/news/canada/newfoundland-labrador/alderon-says-clock-ticking-on-need-for-hydro-line-1.2509399 . The Minister Derick Dalley said earlier this week that the third power line would have to go through the PUB and that could take 4-6 months. Today, just days later, he says the decision will be next week. In addition, press sources reported Alderon had signed agreements with the Innu Nation and a Labrador municipality for revenue sharing. All positive stories on Alderon.
Now, check out this story from the South China Morning Post: http://www.scmp.com/business/commodities/article/1388556/hebei-iron-may-face-closer-watch
This story was forwarded on to the CBC and other provincial media outlets. Did they publish one word of it to their readership/listeners? No, they didn't. This despite the fact that Hebie Steel's only Canadian business is its investment in Alderon. This quote is a major red flag:
"Hugo Williamson, managing director of Risk Resolution Group, a British consultancy, said such allegations could result in extra scrutiny of a wide range of relationships that foreign firms had with Chinese state-owned enterprises.
Deals with companies in Canada in particular were likely to be examined by domestic investigation agencies if allegations of bribery were involved, Williamson said.
Hebei Iron and Steel did not reply to repeated request for a response to questions from the Post."
Then there is this quote which should concern every person in the province who pays taxes and/or utility bills, and will be forces to pay $300 million for a power line from the Upper Churchill to the mines:
"If there were insufficient funds within the group to make good on any losses sustained, then the parent company might be forced into a fire sale of assets, the lawyer said."
As troublesome and disturbing as it is that our media have not reported this story to the people of the province, there is more. Hebei has been ordered to cut back its production of steel by the Chinese government, thereby reducing demand for iron ore: http://usa.chinadaily.com.cn/epaper/2013-11/26/content_17132724.htm the massive cut back to Hebei raises the very logical question: Why would Hebei need more ore?
While Alderon has put out press release after press release about this agreement or that agreement it has signed with groups in Labrador, it has not uttered one word or printed one release to let shareholders know the situation of their primary partner and investor - Hebei. That may be an issue with folks like the Ontario Exchange Commission. Bottom line is the people in this province deserve to know what their politicians are committing them to, and frankly, CBC NL is being down right negligent in its duty to inform by spinning the positive but ignoring the other. It's a standard of journalism that has tainted the words of Hugo Black noted above. If the press is free, then what is restraining them? We deserve so much better, and thank God we get that from the three open line radio shows in the province run by VOCM. I shudder to think what the democracy of our province might look like without it.
Friday, January 24, 2014
Wednesday, January 22, 2014
Kathy Dunderdale - End Game
After the battle there is only tribute.
My experience with Kathy Dunderdale started at the PC convention in October 2010. I watched from 20 feet away as she nominated her choice as Vice President of the Party. It wasn't the "old boys" choice. A moment later, Danny Williams was on his feet and moving directly to his choice. He bent over and wrapped an arm around the shoulder of his choice, whispered in her ear long enough so everyone took notice, and Kathy's choice was scuttled. Symbolic really of the days to come.
When Williams suddenly chose to exit the political scene in December, 2010, Kathy became interim Premier due to her status as Deputy Premier. She claimed publicly she didn't want the job permanently, but no prominent members came forward to challenge. Suddenly there was a rah-rah for her leadership, and the taste of well-stroked ego convinced her to take it on full-time. I challenged her leadership with the required signatures and money, but the backroom boys wouldn't hear of it. A challenge and leadership race wasn't part of their plans. As Chick Chilock said to me, as left my home after spending three hours trying to brow beat me, "I am in the backroom, and we know you'll do the right thing." The right thing being: don't challenge the leadership.
In any case, Kathy took the bait of the backroom, disappeared for a few weeks, and came back a brand new woman. She had a new hair style and had shed dramatic weight in a very short period - leading some to speculate she had a surgery of some sort. She began her term with a soft, diplomatic approach, giving the doctors all they wanted and settling a large dispute with them. She hit a few bumps. Most notably the attempted appointment of Williams' girlfriend to the Offshore Petroleum Board. The attempt to cover up that mess, and the subsequent lies they got caught in, really framed the years to come - incompetence and falsehoods.
Kathy did manage to get through all that, win an election against two very weak opposition parties, and stroll on. She battled for the Muskrat Falls project, getting it through the House, but alienating many along the way with her combative, arrogant style. She pushed through Bill 29 severely limiting access to information in the province. She struck out viciously at opponents of the government as "nay-sayers" and "known critics of the government". She became framed as a sort of unfeeling tyrant.
All that being said, there is something else to be said here. There is no question, for anyone that understands how backroom politics work, that Kathy Dunderdale was set up from the very beginning. In the backroom its the "patsy" or "flak jacket". The patsy being the one that takes the fall for everything, and the flak jacket being the one to take the bullets to protect those really behind the scenes. In Kathy's case she had the unfortunate distinction of being both.
In my estimation, Kathy took the bullets for Danny Williams. Williams made every decision as premier until he left office in 2010 - some would say his decision making never ended. She took all the criticism for Muskrat Falls, Emera, the loan guarantee, etc. Most recently she took the blame for failing electrical infrastructure, crippled by $1.2 billion in cuts to upgrades and maintenance that were authorized in 2009 by her then boss - Danny Williams. She took the heat for mass layoffs in the public service, which had become bloated by massive hiring between 2004 and 2009 - by Danny Williams. She took heat for massive deficits in the public pension plans that were not paid into from 2003 to 2010 (or since) by her boss - Danny Williams. The list goes on and on.
Williams made himself out to be "good time Charlie". While he reigned it was one big party. Spend, spend, spend. During his reign the province would burn through nearly $11 billion in oil money. The massive hyper inflation raised the prices of people's homes and their wages. It was good times. Kathy then had to cut back to save up the 35% down payment needed for Williams' other pet project - Muskrat Falls. She had to put away upwards of $3 billion so the feds would put up their $5 billion loan guarantee. All a part of "Danny's plan" as one adamant PC said to me once.
Yes, the truth about Kathy is she never had a chance. She was put in as a figure head, and run by her Cabinet - all appointed by, you guessed it, Williams. She was set up for personal failure while achieving the goals of others. The ultimate "party pooper". As one friend would put it: "It's a sin". The province's first female premier gutted by the backroom. Sure her attitude and style did not help, but perhaps those were well known attributes.
Kathy Dunderdale will forever be known as Newfoundland and Labrador's first female premier. Like Kim Campbell was Canada's first female prime minister. Both were manipulated by ambition and vanity, and both suffered similar falls from grace. The difference in this province is people pile on - like a high school bully fest. I've been guilty of it myself at times. They won't leave Kathy with one shred of dignity. In the irony of all ironies, and I would argue deliberately so, some people have been crying out for Williams to come back and save them. The very man who orchestrated their pain in the first place with his decisions as premier. The biggest question out of all of this turbulence is this: "Will Newfoundlanders and Labradorians see how they are being manipulated, who is manipulating them, and change the political culture of the province -fundamentally? If the answer is no, then Kathy Dunderdale's sacrifice will have been for nothing. If the answer is yes, then hats off to Kathy Dunderdale.
My experience with Kathy Dunderdale started at the PC convention in October 2010. I watched from 20 feet away as she nominated her choice as Vice President of the Party. It wasn't the "old boys" choice. A moment later, Danny Williams was on his feet and moving directly to his choice. He bent over and wrapped an arm around the shoulder of his choice, whispered in her ear long enough so everyone took notice, and Kathy's choice was scuttled. Symbolic really of the days to come.
When Williams suddenly chose to exit the political scene in December, 2010, Kathy became interim Premier due to her status as Deputy Premier. She claimed publicly she didn't want the job permanently, but no prominent members came forward to challenge. Suddenly there was a rah-rah for her leadership, and the taste of well-stroked ego convinced her to take it on full-time. I challenged her leadership with the required signatures and money, but the backroom boys wouldn't hear of it. A challenge and leadership race wasn't part of their plans. As Chick Chilock said to me, as left my home after spending three hours trying to brow beat me, "I am in the backroom, and we know you'll do the right thing." The right thing being: don't challenge the leadership.
In any case, Kathy took the bait of the backroom, disappeared for a few weeks, and came back a brand new woman. She had a new hair style and had shed dramatic weight in a very short period - leading some to speculate she had a surgery of some sort. She began her term with a soft, diplomatic approach, giving the doctors all they wanted and settling a large dispute with them. She hit a few bumps. Most notably the attempted appointment of Williams' girlfriend to the Offshore Petroleum Board. The attempt to cover up that mess, and the subsequent lies they got caught in, really framed the years to come - incompetence and falsehoods.
Kathy did manage to get through all that, win an election against two very weak opposition parties, and stroll on. She battled for the Muskrat Falls project, getting it through the House, but alienating many along the way with her combative, arrogant style. She pushed through Bill 29 severely limiting access to information in the province. She struck out viciously at opponents of the government as "nay-sayers" and "known critics of the government". She became framed as a sort of unfeeling tyrant.
All that being said, there is something else to be said here. There is no question, for anyone that understands how backroom politics work, that Kathy Dunderdale was set up from the very beginning. In the backroom its the "patsy" or "flak jacket". The patsy being the one that takes the fall for everything, and the flak jacket being the one to take the bullets to protect those really behind the scenes. In Kathy's case she had the unfortunate distinction of being both.
In my estimation, Kathy took the bullets for Danny Williams. Williams made every decision as premier until he left office in 2010 - some would say his decision making never ended. She took all the criticism for Muskrat Falls, Emera, the loan guarantee, etc. Most recently she took the blame for failing electrical infrastructure, crippled by $1.2 billion in cuts to upgrades and maintenance that were authorized in 2009 by her then boss - Danny Williams. She took the heat for mass layoffs in the public service, which had become bloated by massive hiring between 2004 and 2009 - by Danny Williams. She took heat for massive deficits in the public pension plans that were not paid into from 2003 to 2010 (or since) by her boss - Danny Williams. The list goes on and on.
Williams made himself out to be "good time Charlie". While he reigned it was one big party. Spend, spend, spend. During his reign the province would burn through nearly $11 billion in oil money. The massive hyper inflation raised the prices of people's homes and their wages. It was good times. Kathy then had to cut back to save up the 35% down payment needed for Williams' other pet project - Muskrat Falls. She had to put away upwards of $3 billion so the feds would put up their $5 billion loan guarantee. All a part of "Danny's plan" as one adamant PC said to me once.
Yes, the truth about Kathy is she never had a chance. She was put in as a figure head, and run by her Cabinet - all appointed by, you guessed it, Williams. She was set up for personal failure while achieving the goals of others. The ultimate "party pooper". As one friend would put it: "It's a sin". The province's first female premier gutted by the backroom. Sure her attitude and style did not help, but perhaps those were well known attributes.
Kathy Dunderdale will forever be known as Newfoundland and Labrador's first female premier. Like Kim Campbell was Canada's first female prime minister. Both were manipulated by ambition and vanity, and both suffered similar falls from grace. The difference in this province is people pile on - like a high school bully fest. I've been guilty of it myself at times. They won't leave Kathy with one shred of dignity. In the irony of all ironies, and I would argue deliberately so, some people have been crying out for Williams to come back and save them. The very man who orchestrated their pain in the first place with his decisions as premier. The biggest question out of all of this turbulence is this: "Will Newfoundlanders and Labradorians see how they are being manipulated, who is manipulating them, and change the political culture of the province -fundamentally? If the answer is no, then Kathy Dunderdale's sacrifice will have been for nothing. If the answer is yes, then hats off to Kathy Dunderdale.
Friday, January 17, 2014
Nalcor and Hydro-Quebec's "Management Order" over the Upper Churchill
For the last few months I've been awaiting the hearing in Quebec Superior Court, between Nalcor and Hydro-Quebec, over recall rights and management of the Upper Churchill dam. The hearing was scheduled for January 20, 2014. Subsequently, it came to my attention the hearing had been put off. I was quite interested by this change as the french girl repeated the date of the hearing twice to me on the phone - so January 20th was a firm date.
I contacted the Superior Court registry in Montreal requesting clarification. The man on the other end was adamant there was no longer a hearing scheduled for the 20th, and said there was very little on the file - except one thing. That one thing was an "Ordannance De Gestion" - english translation: " Management Order". I was set back by this for a few reasons. First, at the time, I wasn't quite sure what a "Management Order" was. Second, I wasn't aware of any hearing or the like since the suit was first filed by Hydro-Quebec. The gentleman at the Superior Court would give no details though, other than to speak to Nalcor's (Strikeman Elliot) or Hydro-Quebec's (Norton Rose Fulbright Canada) lawyers.
Luckily, I knew how to order a copy of the order and did so. I tweeted Nalcor and the provincial government asking for a copy. No reply. Then today I sent another request, even though it was ordered, on twitter and copied in a local journalist. Nalcor came back with "we sent you a tweet two days ago", which of course, they didn't. Apparently, our world class people at Nalcor do not understand that every tweet they send is logged in their tweet record. In any case, they did dutifully send me a copy by email this evening - my $6.50 down the drain for my Quebec copy.
The nuts and bolts of the "Management Order" is an agreed upon approach by Nalcor and Hydro-Quebec to manage their proceedings - an agenda if you will. We might call it a case management order. Anyway, there are a few, very important details regarding this order.
The first detail that comes to mind is why is this order not public? Why was their no press release from Nalcor or the government? This court case has been prevalent on the minds of many in the province given past experiences with Hydro-Quebec and courts. It also shows the two utilities, through their lawyers, could actually come to an agreement - even if it is just how one is going to sue the other. After all, the order was given on October 3, 2013 by Chief Justice Francois Rolland of the Quebec Superior Court. That is three and a half months ago. Not a word from the government or Nalcor. Remember that.
The second, and by far more serious detail, is the length of time detailed in this agreed upon path. It begins on July 22, 2013 with the launch of Hydro-Quebec's suit, and ends on August 7, 2015. Yes that's 2015, and it's not a typo. That is the schedule. During this time the plan outlines exchanging of documents, examinations and all that type of legal stuff. That is not the end of it though. Really, that's just the beginning. Then it goes to the Quebec Superior Court for the actual hearing, then it likely gets appealed to the Quebec Appeals Court, and then likely to the Supreme Court of Canada. Realistically, it might not be fully resolved through the courts until 2018.
That should really shock a lot of people in the province of Newfoundland and Labrador. What it effectively means is Hydro-Quebec has covered its interests at the Upper Churchill. It has legally filed its opposition to the taking of power over the 300 MW allotted by the Power Contract. Its has also legally filed its opposition to Nalcor ignoring Hydro-Quebec's right to have the plant managed according to its needs, not Nalcor's, which again is enshrined in the Power Contract. So Hydro-Quebec is covered. It doesn't need all the power the Upper Churchill uses anyway given its surplus of wasted power over the last few years is as mush as all the power produced at Churchill Falls. Essentially, it can now sit back and watch as Nalcor continues to take power, manage the facility, break the Power Contract, all based on Williams' water management agreement, and then reap huge damages that will bankrupt CFLCo. It's almost been made too easy for Hydro-Quebec.
But I don't care about Hydro-Quebec. I care about Newfoundland and Labrador. It's a hard place to be right now, watching it all go down. One government bound and determined to build its gallows. Another watching with glee. How much better can Hydro-Quebec get it than being awarded costs for power taken that they can't even sell on the market? Now that is ironic.
If there is any sense of pride, or even just plain old self-preservation, the people in this province better stand up and fast. Only a complete and utter fool could build a dam that he can not run at more than 20%. Mind you, Napoleon decimated his once proud army in the vast Russian countryside. Hitler did the same. The Romans got too over extended. But, I am not aware that any of them did it purposely with full knowledge that they were driving their own into the ground. That's not the case here. Williams and Dunderdale had and have, before them, all the information not to make such a tragic and frankly stupid decision. Yet they did. Nalcor's hiding of the fact that while they build Muskrat Falls the very court case that will undermine it's use has been established - with their agreement. Kept from the people. The people being led like lambs to the slaughter - quietly.
Here is the order, the agenda is in French and English:
I contacted the Superior Court registry in Montreal requesting clarification. The man on the other end was adamant there was no longer a hearing scheduled for the 20th, and said there was very little on the file - except one thing. That one thing was an "Ordannance De Gestion" - english translation: " Management Order". I was set back by this for a few reasons. First, at the time, I wasn't quite sure what a "Management Order" was. Second, I wasn't aware of any hearing or the like since the suit was first filed by Hydro-Quebec. The gentleman at the Superior Court would give no details though, other than to speak to Nalcor's (Strikeman Elliot) or Hydro-Quebec's (Norton Rose Fulbright Canada) lawyers.
Luckily, I knew how to order a copy of the order and did so. I tweeted Nalcor and the provincial government asking for a copy. No reply. Then today I sent another request, even though it was ordered, on twitter and copied in a local journalist. Nalcor came back with "we sent you a tweet two days ago", which of course, they didn't. Apparently, our world class people at Nalcor do not understand that every tweet they send is logged in their tweet record. In any case, they did dutifully send me a copy by email this evening - my $6.50 down the drain for my Quebec copy.
The nuts and bolts of the "Management Order" is an agreed upon approach by Nalcor and Hydro-Quebec to manage their proceedings - an agenda if you will. We might call it a case management order. Anyway, there are a few, very important details regarding this order.
The first detail that comes to mind is why is this order not public? Why was their no press release from Nalcor or the government? This court case has been prevalent on the minds of many in the province given past experiences with Hydro-Quebec and courts. It also shows the two utilities, through their lawyers, could actually come to an agreement - even if it is just how one is going to sue the other. After all, the order was given on October 3, 2013 by Chief Justice Francois Rolland of the Quebec Superior Court. That is three and a half months ago. Not a word from the government or Nalcor. Remember that.
The second, and by far more serious detail, is the length of time detailed in this agreed upon path. It begins on July 22, 2013 with the launch of Hydro-Quebec's suit, and ends on August 7, 2015. Yes that's 2015, and it's not a typo. That is the schedule. During this time the plan outlines exchanging of documents, examinations and all that type of legal stuff. That is not the end of it though. Really, that's just the beginning. Then it goes to the Quebec Superior Court for the actual hearing, then it likely gets appealed to the Quebec Appeals Court, and then likely to the Supreme Court of Canada. Realistically, it might not be fully resolved through the courts until 2018.
That should really shock a lot of people in the province of Newfoundland and Labrador. What it effectively means is Hydro-Quebec has covered its interests at the Upper Churchill. It has legally filed its opposition to the taking of power over the 300 MW allotted by the Power Contract. Its has also legally filed its opposition to Nalcor ignoring Hydro-Quebec's right to have the plant managed according to its needs, not Nalcor's, which again is enshrined in the Power Contract. So Hydro-Quebec is covered. It doesn't need all the power the Upper Churchill uses anyway given its surplus of wasted power over the last few years is as mush as all the power produced at Churchill Falls. Essentially, it can now sit back and watch as Nalcor continues to take power, manage the facility, break the Power Contract, all based on Williams' water management agreement, and then reap huge damages that will bankrupt CFLCo. It's almost been made too easy for Hydro-Quebec.
But I don't care about Hydro-Quebec. I care about Newfoundland and Labrador. It's a hard place to be right now, watching it all go down. One government bound and determined to build its gallows. Another watching with glee. How much better can Hydro-Quebec get it than being awarded costs for power taken that they can't even sell on the market? Now that is ironic.
If there is any sense of pride, or even just plain old self-preservation, the people in this province better stand up and fast. Only a complete and utter fool could build a dam that he can not run at more than 20%. Mind you, Napoleon decimated his once proud army in the vast Russian countryside. Hitler did the same. The Romans got too over extended. But, I am not aware that any of them did it purposely with full knowledge that they were driving their own into the ground. That's not the case here. Williams and Dunderdale had and have, before them, all the information not to make such a tragic and frankly stupid decision. Yet they did. Nalcor's hiding of the fact that while they build Muskrat Falls the very court case that will undermine it's use has been established - with their agreement. Kept from the people. The people being led like lambs to the slaughter - quietly.
Here is the order, the agenda is in French and English:
Thursday, January 9, 2014
Newfoundland's Final Humiliation
There are few things that Newfoundlanders, and the province in general, are more afraid of than being made to look stupid. No body does. However, here it is taken to a higher level. There is a history of the "Newfie jokes" or even the just the term "Newfie" by itself, that boils the blood. The connotation is that somehow a Newfoundlander is doomed by birth right to be inferior to the rest of Canadians.
There are a lot of theories on why Newfoundlanders are so self-conscience about what others think of them. My own theory is that losing your country to become a province is a hard pill to swallow. It affects the collective psyche in ways that run deep and can last a long time. It's doubly hard for a proud people. That's why even today you will commonly hear the young and old refer to Canada as a separate entity: "just got back from Canada". Of course the reality is one doesn't leave Canada if travelling to the mainland. The reality is we are one country now, but the ground between the soul and reality is murky at best.
Another source of humiliation, that has become anger and resentment, is the Power Contract 1969 with Hydro-Quebec. In that case Premier Smallwood, all busied with big names like Winston Churchill and the Rothschilds, had the province agree to a 198 year lease of the Upper Churchill that allowed the Power Contract to be signed and gave Quebec control of the facility for a pittance. The actual annual pittance today is about $2 billion for Quebec and $65 million for Newfoundland and Labrador. Since the early 1970's the dollars from the project have left the province and the people followed. Smallwood's great cry was "industrialize or perish". The result was Quebec industrialized on cheap Labrador electricity and Newfoundland perished.
Fast forward to 2003, and the election of Danny Williams and the PCs. Williams got elected just as the beginnings of oil money started coming in. Williams was determined to undo the wrongs of the Power Contract, bring back nationalistic pride that he saw as robbed by the agreement, and show Hydro-Quebec the door. He created the "Energy Plan" in 2003, created a state owned monopoly (Nalcor) in 2007, and amended/created all types of legislation in between time to put the path in place. Come hell or high water he was going to make things right. Most Newfoundlanders, including this one, applauded at the notion of historical redress.
Then it came off the rails. Hydro-Quebec's directors on the board of CFLCo (the corp jointly owned by Hydro-Quebec and Newfoundland and Labrador Hydro 'NL Hydro') vetoed the Water Management Agreement that Nalcor's directors on NL Hydro and Nalcor itself had negotiated. Within a month Nalcor was knocking on the Public Utilities Board's (PUB) door for an imposed Water Management Agreement (WMA) - as per the aforementioned amendments Williams did to legislation back in 2007.
The PUB passed the Water management Agreement, without as much as a coma being changed, just as Nalcor had put it forward. Apparently, in June 2012 Nalcor began taking more MW from the Upper Churchill than it was allowed - which the WMA authorizes them to do. Quebec sat back and waited.
As part of my own lawsuit against the Government and Nalcor regarding the Muskrat Falls project, I served Hydro-Quebec with a letter inviting them to be an intervenor in the case. I informed them contractual rights under the Power Contract would be at issue. My purpose was to put them on formal notice, that if they refused to act they would be acknowledging the province's right to usurp their Power Contract rights. That would set a legal precedent, and they would be unable to come back at a later date and argue they were unaware of the case. In a sense, I pushed them from waiting in ambush for us to finish Muskrat Falls and then take us to court. Within 2 days of my initial injunction failing at the Supreme Court of Newfoundland and Labrador, Hydro-Quebec filed suit in the Superior Court of Quebec - ambush firmly tripped.
On January 20, 2013, 11 days from now, Hydro-Quebec's motion will be heard. It asks the Court to declare two things: 1. That Newfoundland and Labrador is not entitled to more than 300 MW of recall power plus the old Twinco block; and 2. That it has the right to manage the facility (which includes roads,switchyards,etc) in accordance with its needs - and only its needs. Both these rights are firmly established in the Power Contract and the Supreme Court of Canada's Review of the Reversion Act 1984. This province has no chance, and when I say no chance I mean zero chance, of winning these issues in court.
Getting to the meaning of the title of this article - the final humiliation. Estimates of exactly how much money has been spent on Muskrat Falls so far are hard to get. Conservatively it ranges from $800 million to $1 billion. Now the people of Newfoundland and Labrador, blinded by the nationalistic rhetoric of the Williams years, have to face the reality that the very foundation of the Muskrat Falls/Lower Churchill project is not valid. Without it there is no "banking" of power, no lines to mines, no power for the Island and no power for Nova Scotia. It is the kind of disgrace you don't wish upon your worst enemy. Williams will have succeeded in giving the province one last real humiliation on the national stage - one his old friend Harper was only too eager to assist with. For that I can not forgive him.
There are a lot of theories on why Newfoundlanders are so self-conscience about what others think of them. My own theory is that losing your country to become a province is a hard pill to swallow. It affects the collective psyche in ways that run deep and can last a long time. It's doubly hard for a proud people. That's why even today you will commonly hear the young and old refer to Canada as a separate entity: "just got back from Canada". Of course the reality is one doesn't leave Canada if travelling to the mainland. The reality is we are one country now, but the ground between the soul and reality is murky at best.
Another source of humiliation, that has become anger and resentment, is the Power Contract 1969 with Hydro-Quebec. In that case Premier Smallwood, all busied with big names like Winston Churchill and the Rothschilds, had the province agree to a 198 year lease of the Upper Churchill that allowed the Power Contract to be signed and gave Quebec control of the facility for a pittance. The actual annual pittance today is about $2 billion for Quebec and $65 million for Newfoundland and Labrador. Since the early 1970's the dollars from the project have left the province and the people followed. Smallwood's great cry was "industrialize or perish". The result was Quebec industrialized on cheap Labrador electricity and Newfoundland perished.
Fast forward to 2003, and the election of Danny Williams and the PCs. Williams got elected just as the beginnings of oil money started coming in. Williams was determined to undo the wrongs of the Power Contract, bring back nationalistic pride that he saw as robbed by the agreement, and show Hydro-Quebec the door. He created the "Energy Plan" in 2003, created a state owned monopoly (Nalcor) in 2007, and amended/created all types of legislation in between time to put the path in place. Come hell or high water he was going to make things right. Most Newfoundlanders, including this one, applauded at the notion of historical redress.
Then it came off the rails. Hydro-Quebec's directors on the board of CFLCo (the corp jointly owned by Hydro-Quebec and Newfoundland and Labrador Hydro 'NL Hydro') vetoed the Water Management Agreement that Nalcor's directors on NL Hydro and Nalcor itself had negotiated. Within a month Nalcor was knocking on the Public Utilities Board's (PUB) door for an imposed Water Management Agreement (WMA) - as per the aforementioned amendments Williams did to legislation back in 2007.
The PUB passed the Water management Agreement, without as much as a coma being changed, just as Nalcor had put it forward. Apparently, in June 2012 Nalcor began taking more MW from the Upper Churchill than it was allowed - which the WMA authorizes them to do. Quebec sat back and waited.
As part of my own lawsuit against the Government and Nalcor regarding the Muskrat Falls project, I served Hydro-Quebec with a letter inviting them to be an intervenor in the case. I informed them contractual rights under the Power Contract would be at issue. My purpose was to put them on formal notice, that if they refused to act they would be acknowledging the province's right to usurp their Power Contract rights. That would set a legal precedent, and they would be unable to come back at a later date and argue they were unaware of the case. In a sense, I pushed them from waiting in ambush for us to finish Muskrat Falls and then take us to court. Within 2 days of my initial injunction failing at the Supreme Court of Newfoundland and Labrador, Hydro-Quebec filed suit in the Superior Court of Quebec - ambush firmly tripped.
On January 20, 2013, 11 days from now, Hydro-Quebec's motion will be heard. It asks the Court to declare two things: 1. That Newfoundland and Labrador is not entitled to more than 300 MW of recall power plus the old Twinco block; and 2. That it has the right to manage the facility (which includes roads,switchyards,etc) in accordance with its needs - and only its needs. Both these rights are firmly established in the Power Contract and the Supreme Court of Canada's Review of the Reversion Act 1984. This province has no chance, and when I say no chance I mean zero chance, of winning these issues in court.
Getting to the meaning of the title of this article - the final humiliation. Estimates of exactly how much money has been spent on Muskrat Falls so far are hard to get. Conservatively it ranges from $800 million to $1 billion. Now the people of Newfoundland and Labrador, blinded by the nationalistic rhetoric of the Williams years, have to face the reality that the very foundation of the Muskrat Falls/Lower Churchill project is not valid. Without it there is no "banking" of power, no lines to mines, no power for the Island and no power for Nova Scotia. It is the kind of disgrace you don't wish upon your worst enemy. Williams will have succeeded in giving the province one last real humiliation on the national stage - one his old friend Harper was only too eager to assist with. For that I can not forgive him.
Tuesday, January 7, 2014
Ego, Arrogance, Incompetence and Crisis
The last week should have been a big eye opener for the people of Newfoundland and Labrador. It began with a stark, and sudden warning that the province would be plunged into rolling power black outs during extremely cold winter weather. People reacted with shock and disbelief when they discovered the outages were caused by "maintenance issues".
At least that was the original story. Planned maintenance on two generators and the breakdown of a third were named as the reason for the rolling black outs. Then it was the extreme weather - which wasn't that extreme. Then a switch yard blew up. Then it was the extreme weather and the maintenance. Then it was planned maintenance that had been delayed due to repairs of another generator. Then it wasn't planned maintenance, but rather maintenance caused by breakdowns. Then it was just plain repairs. As the week progressed so did the story.
The people were enraged. They've been told that the province's energy crown corp, Nalcor, was run by "world class" people, and they didn't need any uppity outsiders telling them what to do. It's a common refrain since Williams became premier here in 2003. They castigated the people who dare spoke in opposition to the obvious flaws in their power concepts and plans as "nay-sayers" and "known critics". Here, castigation is the best form of marginalization. In other words, to dare challenge the plans and actions of the government is somehow being anti-Newfoundland. Williams used to call them "traitors". Dunderdale has stuck with the "nay-sayers". A very small-minded response by very small-minded people.
Then reality hit when the rolling blackouts started happening during normal winter temperatures, and people became infuriated. They wondered out loud why their "world-class" system was not adequate. Nalcor came out with "no worries,its just planned maintenance". The government was absolutely silent. People were not satisfied. The talk talk shows lit up, and began running almost 24 hours a day. The provincial radio station VOCM began running coverage like a mix of CNN and talk-show. People's outrage escalated as a sense of betrayal, and an absence of leadership combined to fuel the fire.
The explanations kept changing, and it became very clear that, instead of being given a clear picture, spin was the order of the day. A deliberate attempt to manage the truth. Mask it. That all changed when the switch yard exploded and three quarters of the Island's population were plunged into darkness and cold. Luckily for rural Newfoundland wood burning stoves are common, and people were able to keep themselves warm. In the urban centers things were different. They suffered more rolling blackouts and the severity of the mass outage was pronounced with their reliance on electrical heating.
Sadly, at least one person, and perhaps more, died during these events as a result of carbon monoxide poisoning - trying to keep their homes warm, but not ventilating them properly. So many people were admitted to hospital for carbon monoxide poisoning that one Eastern Health doctor called it an "epidemic".
Yet, despite the collapse of the fable that the government and Nalcor was in complete control of the "manifest destiny" of the province, Ms Dunderdale and Nalcor refused to accept responsibility. There was no one to be blamed. There was no flaw in the electrical system. There is no flaw in the government's "energy plan". All was as it should be and the people needed to do their part and not use the power that had been trumpeted as "endless".
Confidence has been shaken. The propaganda-like nationalism surrounding electrical power has been severely shaken. The trust with government and Nalcor has been destroyed. After not making one appearance in the first 48 hours of the crisis, Dunderdale suffered so much criticism she held three press conferences in one day - damage control that failed. Yet the government and Nalcor clung to the myth that they can do no wrong. That the whole fiasco was not a "crisis" - even though 71% of the people believed it was in a province-wide radio poll. Dunderdale called it a "critical time" but not a "crisis".
It's all a symptom of the same thing really. Arrogance and incompetence. Too arrogant to admit incompetence, and too incompetent to admit arrogance. Media and some talk shows continuously call this a "bad PR" plan, or the government "out of control of the message". In reality, it's just the most recent example of a crisis in leadership through out the political and, in some ways, business circles of the province. Egos inflated by nationalism, bolstered by arrogance, and rooted in incompetence.
At least that was the original story. Planned maintenance on two generators and the breakdown of a third were named as the reason for the rolling black outs. Then it was the extreme weather - which wasn't that extreme. Then a switch yard blew up. Then it was the extreme weather and the maintenance. Then it was planned maintenance that had been delayed due to repairs of another generator. Then it wasn't planned maintenance, but rather maintenance caused by breakdowns. Then it was just plain repairs. As the week progressed so did the story.
The people were enraged. They've been told that the province's energy crown corp, Nalcor, was run by "world class" people, and they didn't need any uppity outsiders telling them what to do. It's a common refrain since Williams became premier here in 2003. They castigated the people who dare spoke in opposition to the obvious flaws in their power concepts and plans as "nay-sayers" and "known critics". Here, castigation is the best form of marginalization. In other words, to dare challenge the plans and actions of the government is somehow being anti-Newfoundland. Williams used to call them "traitors". Dunderdale has stuck with the "nay-sayers". A very small-minded response by very small-minded people.
Then reality hit when the rolling blackouts started happening during normal winter temperatures, and people became infuriated. They wondered out loud why their "world-class" system was not adequate. Nalcor came out with "no worries,its just planned maintenance". The government was absolutely silent. People were not satisfied. The talk talk shows lit up, and began running almost 24 hours a day. The provincial radio station VOCM began running coverage like a mix of CNN and talk-show. People's outrage escalated as a sense of betrayal, and an absence of leadership combined to fuel the fire.
The explanations kept changing, and it became very clear that, instead of being given a clear picture, spin was the order of the day. A deliberate attempt to manage the truth. Mask it. That all changed when the switch yard exploded and three quarters of the Island's population were plunged into darkness and cold. Luckily for rural Newfoundland wood burning stoves are common, and people were able to keep themselves warm. In the urban centers things were different. They suffered more rolling blackouts and the severity of the mass outage was pronounced with their reliance on electrical heating.
Sadly, at least one person, and perhaps more, died during these events as a result of carbon monoxide poisoning - trying to keep their homes warm, but not ventilating them properly. So many people were admitted to hospital for carbon monoxide poisoning that one Eastern Health doctor called it an "epidemic".
Yet, despite the collapse of the fable that the government and Nalcor was in complete control of the "manifest destiny" of the province, Ms Dunderdale and Nalcor refused to accept responsibility. There was no one to be blamed. There was no flaw in the electrical system. There is no flaw in the government's "energy plan". All was as it should be and the people needed to do their part and not use the power that had been trumpeted as "endless".
Confidence has been shaken. The propaganda-like nationalism surrounding electrical power has been severely shaken. The trust with government and Nalcor has been destroyed. After not making one appearance in the first 48 hours of the crisis, Dunderdale suffered so much criticism she held three press conferences in one day - damage control that failed. Yet the government and Nalcor clung to the myth that they can do no wrong. That the whole fiasco was not a "crisis" - even though 71% of the people believed it was in a province-wide radio poll. Dunderdale called it a "critical time" but not a "crisis".
It's all a symptom of the same thing really. Arrogance and incompetence. Too arrogant to admit incompetence, and too incompetent to admit arrogance. Media and some talk shows continuously call this a "bad PR" plan, or the government "out of control of the message". In reality, it's just the most recent example of a crisis in leadership through out the political and, in some ways, business circles of the province. Egos inflated by nationalism, bolstered by arrogance, and rooted in incompetence.
Friday, January 3, 2014
Alderon's Muskrat Falls Headache
A few weeks ago, Alderon Iron Ore Corp's Mark Morabito went "off his head" during a radio interview with VOCM during an open line radio show. He blasted the provincial government for not passing the environmental process for the Kami mining project in Labrador. He also criticized the failure of Nalcor and the government to sign a power supply agreement and build a $150 million power line system from the Upper Churchill to Lab West (and his mining project). Clearly, that line and power purchase agreement are crucial to the mine moving ahead. Here is an excerpt from Alderon's subsequent press release:
" We were informed of the status of power and various other files under review by the Provincial Government. Following our discussions with the Minister and his officials, we are confident that these matters are being pursued diligently and expeditiously, " says Tayfun Eldem, President and CEO of Alderon. " The Government's approval to build the power line is crucial to Alderon securing the previously announced debt financing and we are pleased that the Premier has expressed her support for the power line."
"Is crucial..to securing...financing." Interesting. All along the story about Alderon and Muskrat Falls has been Alderon doesn't need Muskrat Falls power unless it doubles its production down the road. Now it is suddenly necessary for financing. Of course. Alderon is calling it the "line", but the bottom line is Nalcor has no excess power to send on that line, so it would have to be power created at Muskrat Falls, and relayed through the Upper Churchill, and out to Lab West (and the mine). FYI on the environmental study issue - Alderon has to pay its Chinese partners $3 million a month for each month the approval fails to come through starting January, 2014 (which is now).
So, given the heavy weights behind Alderon, and all the dollars involved, how is it that Nalcor hasn't committed to the power line and a power supply contract to Alderon yet? According to earlier statements the price pure kilowatt hour has been agreed to. The problem is in the amount of power to be supplied. The answer lies in the Power Contract of 1969, and the Water management Agreement.
All Nalcor's, and the provincial government's plans involved implementing the WMA, which would allow Nalcor to take over the operation of the Upper Churchill. With that control, Nalcor could take power almost at whim from the Upper Churchill, and redistribute it as it wanted. For Alderon that would mean a secure power source. Whether Alderon's early founders Forbes and Manhattan were sold a bill of goods on the validity of this plan is uncertain. Who sold them on it? Williams? Altius? Both? It's hard to say right now. When push came to shove, and all the glossy pictures and back slapping were done, reality hit home.
Hydro-Quebec filed suit, which will be heard January 20, 2014. That is a suit Hydro-Quebec is going to win, and when it does, the WMA is not worth the paper it is written on. What does that mean for Nalcor? It means Nalcor will not be able to take 1 MW of power from the Upper Churchill, other than the recall they already have (and is fully consumed). Nalcor knows this. They are playing a very dangerous, and frankly stupid, game of chicken with Hydro-Quebec that we can not win.
What does that mean for Alderon? It means Nalcor can not commit to the power supply, and therefore it means there is no rationale reason to build a $150 million power line system. Unfortunately for Alderon, it has already used the credibility of Forbes and Manhattan's Chinese connections to make inroads - and promises. Now those promises are in serious doubt. Loss of face with the Chinese is a very, very bad thing.
In some ways there is a little poetic justice here. Danny Williams, the former Premier that brought in all the legislation that is now before the Court in Quebec, is also a main player in Alderon. Now his own legislation is hurting Alderon's chances of getting off the ground. Mean while, Dunderdale and company sit on the environmental application, likely as an out for them. It's all a bit of devilish karma coming to bite some people right in the arse. It begs the question: does Alderon have a Plan B to buy power from Hydro-Quebec, and if not why not? Politics is best suited divorced from the board room.
" We were informed of the status of power and various other files under review by the Provincial Government. Following our discussions with the Minister and his officials, we are confident that these matters are being pursued diligently and expeditiously, " says Tayfun Eldem, President and CEO of Alderon. " The Government's approval to build the power line is crucial to Alderon securing the previously announced debt financing and we are pleased that the Premier has expressed her support for the power line."
"Is crucial..to securing...financing." Interesting. All along the story about Alderon and Muskrat Falls has been Alderon doesn't need Muskrat Falls power unless it doubles its production down the road. Now it is suddenly necessary for financing. Of course. Alderon is calling it the "line", but the bottom line is Nalcor has no excess power to send on that line, so it would have to be power created at Muskrat Falls, and relayed through the Upper Churchill, and out to Lab West (and the mine). FYI on the environmental study issue - Alderon has to pay its Chinese partners $3 million a month for each month the approval fails to come through starting January, 2014 (which is now).
So, given the heavy weights behind Alderon, and all the dollars involved, how is it that Nalcor hasn't committed to the power line and a power supply contract to Alderon yet? According to earlier statements the price pure kilowatt hour has been agreed to. The problem is in the amount of power to be supplied. The answer lies in the Power Contract of 1969, and the Water management Agreement.
All Nalcor's, and the provincial government's plans involved implementing the WMA, which would allow Nalcor to take over the operation of the Upper Churchill. With that control, Nalcor could take power almost at whim from the Upper Churchill, and redistribute it as it wanted. For Alderon that would mean a secure power source. Whether Alderon's early founders Forbes and Manhattan were sold a bill of goods on the validity of this plan is uncertain. Who sold them on it? Williams? Altius? Both? It's hard to say right now. When push came to shove, and all the glossy pictures and back slapping were done, reality hit home.
Hydro-Quebec filed suit, which will be heard January 20, 2014. That is a suit Hydro-Quebec is going to win, and when it does, the WMA is not worth the paper it is written on. What does that mean for Nalcor? It means Nalcor will not be able to take 1 MW of power from the Upper Churchill, other than the recall they already have (and is fully consumed). Nalcor knows this. They are playing a very dangerous, and frankly stupid, game of chicken with Hydro-Quebec that we can not win.
What does that mean for Alderon? It means Nalcor can not commit to the power supply, and therefore it means there is no rationale reason to build a $150 million power line system. Unfortunately for Alderon, it has already used the credibility of Forbes and Manhattan's Chinese connections to make inroads - and promises. Now those promises are in serious doubt. Loss of face with the Chinese is a very, very bad thing.
In some ways there is a little poetic justice here. Danny Williams, the former Premier that brought in all the legislation that is now before the Court in Quebec, is also a main player in Alderon. Now his own legislation is hurting Alderon's chances of getting off the ground. Mean while, Dunderdale and company sit on the environmental application, likely as an out for them. It's all a bit of devilish karma coming to bite some people right in the arse. It begs the question: does Alderon have a Plan B to buy power from Hydro-Quebec, and if not why not? Politics is best suited divorced from the board room.
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