Tuesday, June 30, 2015

Blood on their hands

An earlier In-Sights article included:
I have no doubt BC Liberal involvement with Big Pharma is at the root of high-level government decisions to knee-cap research into the safety and efficacy of more than $25 billion worth of pharmaceuticals sold each year in Canada.
Writing in the Vancouver Observer, family practitioner Dr. Warren Bell emphasizes and enlarges upon my inference:
B.C. Premier Christy Clark and her senior ministers are using every tactic in the book to avoid any sort of public disclosure of what happened behind the scenes when eight health researchers were illegitimately fired, one after the other, in the fall of 2012.

As a family physician for nearly 40 years, I have watched the pharmaceutical industry infiltrate into political and regulatory structures, as part of the general corporatization of society. What the Liberal government is now doing is simply one more example of how bought-and-sold officials sustain this pernicious process...

The relationship between the BC Liberals and Big Pharma had already been clearly mapped out years ago, with the formation of the Pharmaceutical Task Force, whose nine members were dominated by drug industry representatives, including — astonishingly — Russell Williams, “president of Canada's Research-Based Pharmaceutical Companies (Rx&D)...

When the report of this body was finally released, it became clear that its primary purpose was to either destroy or severely limit an organization that had become a thorn in Big Pharma’s side. This was the UBC-based Therapeutics Initiative, a research body with a stellar international reputation for cutting through drug industry hype and delivering accurate information about drug effectiveness and hazards. It was, for example, the first group to question the safety of Vioxx, which was eventually taken off the market in 2004 because of severe harm to the heart.

Its withdrawal also caused $28 billion damage to the bottom line of its manufacturer Merck.

Christy Clark is using every political and legal tool at her disposal to cover up what really happened since the fall of 2012. The public needs to know if the premier's longstanding support for the bottom line of the drug industry and resulting hostility toward industry critics influenced these firings.

...The context for this debacle clearly suggests that the relationship between Big Pharma and Christy Clark and her ministers is obscured by government obstructionism...

The only suitable outcome in this matter is for an outraged citizenry to exert relentless pressure on the provincial government, compelling it to come clean and allow the real story to be told.

Anything less will be a perversion of natural justice, and a continuation of business — big business — as usual.
Dr. Bell provides a prescription that might alter the current outbreak of Liberal obfuscation. A real cure requires the dedication to reform shown by Alberta Premier Rachel Notley. The first bill introduced by her new government banned corporate and union contributions to political parties. The same response is vitally needed in British Columbia. As we’ve seen, lives depend on the change.

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Saturday, June 27, 2015

One other Commission of Inquiry is needed

I have no doubt BC Liberal involvement with Big Pharma is at the root of high-level government decisions to knee-cap research into the safety and efficacy of more than $25 billion worth of pharmaceuticals sold each year in Canada.

Drug research conducted by the Health Ministry and agencies like Therapeutics Initiative threatened the financial interests of indulgent Christy Clark sponsors. Her government squeezed T.I. financially but solid public support for the independent effort kept Liberals from killing it. As a result, the politicians chose a different approach to discredit drug research. That led to newly appointed health minister Dr. Margaret MacDiarmid, and her deputy minister Graham Whitmarsh, telling a press conference that misconduct by researchers had been so serious that RCMP were conducting a criminal investigation. We now know there was no police examination but less well known is that numerous ongoing drug research projects were ended.

In human and ethical terms, the health ministry scandal is immense. In financial terms, it costs the public a small sum compared to natural resource outrages. While CKNW's Jon McComb and a few others in media are calling for an independent inquiry into the health ministry firings, there is another subject to examine. We need to follow our Albertan neighbours and do a comprehensive examination of natural resource revenues, or more accurately, their absence.

Despite making claims of a trillion dollar prosperity fund, the Clark government is ensuring resource extractors pay little or nothing. We are forced to admit, Gwyn Morgan and his friends in the mining and natural gas businesses found themselves a good one in Christy Clark. And, in 2015, it keeps getting better. For them. Not for us.

Compare the current year of proceeds from sales of natural gas rights to the year before Christy Clark took over the Premier's office.

Yes, the government that promised a trillion dollar Prosperity Fund from gas revenues, that spends over $400 million a year on the ministry assisting resource companies and much more on subsidies to producers, that plans legislation to tie the hands of future governments considering gas taxes, has paved the road to riches for a few people. Spending 12 million tax dollars on a Bollywood extravaganza drew much notice but it was a drop in the ocean compared to benefits flowing to Christy Clark's natural resource sponsors.

Unfortunately, it is not only gas producers that bought favours from BC Liberals. When Christy Clark enjoyed a fundraiser attended by Calgary millionaires and billionaires, a key organizer of the event was tar sands kingpin Murray Edwards. In addition to chairing Canadian Natural Resources, Edwards also controls Imperial Metals, the company infamous for the Mount Polley mine disaster. Another of Imperial's projects is the Red Chris mine, an operation that has Alaskans unsettled. Significantly for BC taxpayers, the billion dollar northwest transmission line was needed to supply subsidized power to Red Chris.

In the April article, Takin' Care of Business, I suggested that most people would be surprised to learn the BC Liberal Party receives more in contributions from mining companies than BC citizens earn in direct revenues from mining of metals and minerals.

JasonS, commenting at Remembering the desperate nineties suggested I use a different style of graph for illustration, a style more fitting to BC's political landscape. His comment:
Norm I love your graphs and charts for their devastating realities. I am a blue collar kind of guy so I have ideas but not the aptitude to bring them to fruition. Since many British Columbians can only interpret government malfeasance in nautical terms (ie fast ferries) I want a tongue in cheek graph showing the many MANY Neo-Liberal transgressions, cost over runs and incompetent business practices in the form of tiny pictures of fast ferries.

BC place roof cost over runs would be 2 and a half fast ferries, whereas the new Port Mann would be 4 or more fast ferries. I'm sure it would be a good thing for the NDP to plaster posters around the next election time but I wouldn't trust them to find their own asses with a map and a flash light. I know its not your job and if it never comes to light that's OK. I just needed to express this idea and you were the only one I "know" that could pull it off. You don't have to post this if you wish. But just imagine the huge list with all the little fast ferries. A huge reality check.
I love the idea. A representation of BC Hydro's obligations to private power producers would be worth about 150 fast ferry icons.

Note: Gas sales revenues are drawn from the government's monthly reports: CROWN PETROLEUM AND NATURAL GAS RIGHTS PUBLIC TENDER, ACCEPTED OFFERS

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Friday, June 26, 2015

All the spin that's fit to print - updated

British Columbia's June sale of oil and gas rights brought the 2015 six month total to $7.1 million. The monthly average for this calendar year is the lowest in 38 years reported by government. Even without adjusting earlier years to current dollars, Christy Clark's receipts are 4% of the average since 1978, when Bennett the Younger was Premier. No one will be surprised that BC Liberals are enjoying rewarding relations with financial supporters who happen to be natural gas producers

Don't expect to read about this in your daily newspaper or hear about it on TV or radio. It is not information the Canadian Association of Petroleum Producers and compliant news partners want spread widely. With rights costs in the last five years running at 15% of the preceding five years, gas companies have a good thing going with Christy Clark and Rich Coleman. However, it's not something they want to publicize.

Seven months ago, I wrote about direct subsidies to gas producers in BC and pundit Vaughn Palmer's helpfulness in explaining government policies. It's repeated below:
- - - - - - - - - - -
This week, British Columbia saw evidence that corporate media does not report adverse details about public finance unless the material is dropped on desks in digested form, complete with defensive spin from government or industry.

The issue of BC taxpayer subsidies to the oil and gas industry is not new. Auditor General John Doyle qualified his opinion of the province's 2012 financial statements for reasons that included this:
"Failure to provide for earned natural gas producer royalty credits
"No provision has been made in the summary financial statements for royalty credits
earned by natural gas producers under the government’s deep-well drilling program.
In this respect the summary financial statements are not in accordance with Canadian
public sector accounting standards.

"Had a provision been made prospectively, as required by Canadian public sector
accounting standards when an issue is raised by an auditor in one period but not
corrected until a subsequent period, accounts payable and accrued liabilities as
at March 31, 2012, would have been greater by $702 million, natural resources and
economic development expenses for the year then ended would have been greater by
$702 million and the deficit for the year then ended would have been greater by
$702 million."
Although the required provision had grown by $160 million in 2013 and another $316 million in 2014, Acting Auditor General Russ Jones dropped the issue from Independent Auditor's Reports issued in annual Public Accounts. It was restored in Auditor General Carol Bellringer's first major work, The 2014 Summary Financial Statements and the Auditor General's Findings.

MSM political pundits ignored the information reported here but when highlighted by the Auditor General, it was covered by Canadian Press. But, the news needed spin so who better than Vaughn Palmer to provide it. Here is part of his October 31 column:
"Another matter that may be of interest to British Columbians is around the incentives that government offers oil and natural gas producers,” wrote Bellringer in the letter signed by herself and deputy auditor general (and her immediate predecessor) Russ Jones.

"Going back to the New Democratic Party time in office, the province has been offering incentives to develop and maintain production. Companies that undertake less profitable activities like drilling in the off-season or tapping into deeper reserves are in line for the incentives, taken as discounts against current or future royalties."
Curious the columnist would state the letter was signed by Russ Jones, even though it is not. That misstatement could be the work of a helpful spin doctor aiming to shelter the former acting AG who months ago chose not to report on the unrecorded royalty issue. Palmer makes no mention Bellringer reinstating AG John Doyle's concerns or of the fact that the $1.25 billion in outstanding credits is not recorded in the province's books and, if it were, the Liberal deficit record would be quite different.

Also interesting that Palmer has the NDP share responsibility for current financial incentives to the oil and gas industry, although the opposition party was last elected 18½ years ago and, over time, Liberals broadened the subsidy program so that today, almost all exploration work earns credits. In fact, a source told me that the acceleration of the producer credit program was government's response to industry concerns they had paid too much for drilling rights when the gas market was stronger.

Here is a real and important message of Palmer's column:
"But that glut also suggests this would be a risky time for the government to begin scaling back on incentives to develop and maintain production. In a continent awash in gas, companies would probably shift operations elsewhere."
That is the race-to-the-bottom argument of Extractivism that supposes government should expect little and even be prepared to pay multinational companies to come here, extract resources and export them to other places.

Palmer also touches on the near-double financing costs of public-private partnerships but he allows, without further comment, that,
"Liberals will cite the reputed benefits of private-sector innovation, on-time construction, capped budgets and off-loaded risks."
Ah, yes, the on-time, on-budget argument that Liberals so enjoy. However, Northern Insight readers are not easily misled. The Sea to Sky Highway, initially a $400 million project, finished late at a cost of almost $800 million plus a great deal more for parts of the highway not included in the P3 adventure. The $3.3 billion Port Mann megaproject was to be a $2 billion P3 project until the lead proponent suffered financial difficulties. So much for off-loaded risks and capped budgets.

The Sun's political pundit conveyed another message for the government,
"Not all of the report was critical of the Liberals. The new auditor general dropped some of her office’s long-standing disagreements with the in-house government comptroller. She also concluded that the Port Mann Bridge will eventually be self-supporting from tolls, just as the government always said it would be."
Reality is that the Auditor did not drop the Port Mann concerns. The fact set changed. The bridge opened and, with the plan for dramatically higher tolls and the intention of eliminating untolled Fraser River crossings (Pattullo and Massey), Port Mann will become self-supporting. The Transportation Investment Corporation provides clear evidence of what is intended for commuters. That is toll revenue in 2017 that is 78% higher than in 2014. Apparently, Vaughn Palmer and the Liberals have forgotten the commitment to restraint that was so vital in September when schools were closed.

Palmer ends his piece by saying that, with a new financial watchdog in town, politicians ought to wake up and pay attention. I respect what I've seen from Ms Bellringer but I had great respect for John Doyle before he was forced out for excessive diligence. What the Press Gallery member should have written is that he and his colleagues were going to start analyzing financial records of the province and take counsel from financial experts instead of government spin doctors. A well informed public and rigorous financial controls may assure good management of public finances. Hollow advice to politicians will not.

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Tuesday, June 23, 2015

Discriminating justice: inequality before the law

Almost eight years after the death of Robert Dziekanski, Taser-toting RCMP constable Kwesi Millington was dealt a card that read, "Go Directly to Jail." Of course, an appeal may see Millington free on bail soon and the process should ensure the RCMP pays lawyers on this case for years to come.

Millington's 30-month sentence was not for deploying a conducted energy weapon five times nor for failure to provide medical assistance to the unconscious and breathless Polish traveller. Instead it was for perjury after he fabricated testimony given at the Braidwood Inquiry investigating Dziekanski's death.

Former police corporal Monty Robinson was similarly convicted in March but has not yet been sentenced for perjury. In July 2012, Robinson received a one year non-custodial term following conviction for obstructing an impaired driving investigation after killing a motorcyclist in a traffic collision.

Two other officers involved in the Dziekanski homicide escaped punishment. In July 2013, Cst. Bill Bentley was found not guilty of perjury and Cst. Gerry Rundel was acquitted in April of this year.

Dzienkanski's death was an individual tragedy that exposed an inconsistent court system, which dealt differently with four men who acted together in killing another. The courts believed rationalizations of two white men but disbelieved the justifications offered by two non-white men. Was that unexpected? Not in a nation that incarcerates aboriginal men at 10 times the national rate.

In the earlier days of this website, I wrote extensively about the death of Robert Dziekanski and the efforts of senior RCMP managers to evade responsibility for the acts of their members. The killing was a result of poor training and faulty decisions made by four junior officers under stress. The subsequent cover-up and defamation of a man who could no longer defend himself was a considered series of acts managed by the most senior officers of the RCMP. None of those individuals were punished at all; the worst were promoted and rewarded with medals.

Earlier articles about the Robert Dziekanski case are linked here.

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Saturday, June 20, 2015

A million here, a million there...

...pretty soon you're talking real money.

North Van's Grumps at Blog Borg Collective scours provincial files, searching for meaningful data chunks. Usually, he finds indicators of underlying stories that are worthy of attention but, paying attention is never a simple task. These are generally situations where the government has come out on the losing end of a court case. Total costs to taxpayers will be substantially higher because noted payments only represent a portion of government's costs in disputes.

The clear indication from these reports is that Christy Clark's government relies on non-strategic decision making, with little analysis and even less public consultation and debate. Ad hockery produces unsound decisions, some of which lead to lawsuits that cost taxpayers millions.

Sadly, those are the decision making skills at play in the province's LNG negotiations.

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Friday, June 19, 2015

Jumbo stumble

Eight months ago, Judith Lavoie wrote at DesmogCanada about Jumbo Glacier:
Stuck in the ground, halfway down the valley trail leading into the proposed Jumbo Glacier Resort, is a stick, leaning crookedly against a small tree, inscribed with the word “Lift.”

About one kilometre away, at the bottom of a recently bulldozed track into soggy underbrush, is another marker with the words “Proposed Corner of Lodge.”

The two markers, reams of flagging tape, several parked backhoes and a drill, where two employees are watching a small stream of water run into the ditch, are the only apparent signs of construction at the site in the remote heart of the Purcell Mountains.

A vital deadline is looming for Glacier Resorts Ltd., which by next month has to prove to B.C.’s Environmental Assessment Office that significant progress has been made on the billion-dollar plan to build a 6,300-bed resort on Crown land in the glacial wilderness, 55-kilometres west of Invermere.

If the company fails to convince the Environmental Assessment Office’s enforcement officers and, subsequently, Environment Minister Mary Polak, that construction is well underway, it risks losing the environmental assessment certificate granted by the province in 2004. The certificate, which expires Oct. 12, was renewed in 2009 and, under legislation cannot be renewed a second time. The company must prove that construction has “substantially started” for the certificate to become permanent...
Robyn Duncan at Wildsight reported,
The facts on the ground are clear: they have poured a couple concrete slabs and they have poured a couple footings for the base of a ski lift. After 10 years, that's it. The concrete slabs can't be considered foundations. Why? Because they are slabs with holes in them, where footings will later be drilled and poured. Plans to go in and alter the slabs next year for use as a foundation by adding footings, mechanical conduits, and so on, do not count towards a determination of substantial start this year. In 10 years, this is all that has been achieved on the proposed $1 billion project...
Greg Deck, Mayor of Jumbo Glacier Mountain Resort Municipality — the community with a council, a million dollar budget and no residents — saw things differently. Ms. Lavoie explained:
According to Jumbo Glacier Resort Municipality Mayor Greg Deck, everything is on track and construction is underway. “I don’t know the definition of substantial, but certainly the beginning of the lodge and the towers for the lift strike me as substantial,” he said.
Yes, that may be true, if small, non-structural slabs without footings are the beginnings of a large building for public assembly. Not true if the slabs are mere pretence. The latter possibility seems more likely because, after eight months of foot dragging, Minister Mary Polak finally cancelled the environmental assessment certificate. Perhaps Liberals will explain why the public is stuck with a 7-figure tab for an under-financed promoter's dream. A province that charges citizens as much as $83 for a birth certificate tempers its demand for cash when political friends and corporate welfare bums are involved.

The following was published at Northern Insight August 22, 2012 and, with current developments, it's worth re-posting once more.

Bob Mackin has an interesting piece in The Tyee about a newspaper tycoon and BC Liberal abettor. David Black's bluster was about about oil refining but the part of Mackin's story that caught my eye involved one-time Province newspaper publisher Paddy Sherman.

In 1958, Sherman was both a news reporter and an avid mountain man. Apparently, vocation served avocation when he wrote a front page promotion for an unlikely BC ski resort. There was no financing and little substance to the extravagant plan but that didn't bother The Province. Sherman wanted the facility to proceed so they gave it maximum splash.

Mackin provides another newspaper's eventual headline:
"Grandiose Garibaldi Scheme Falls Flat on Its No-Assets."
Some months ago, I tracked the life story of Jumbo Glacier Ski Resort. The proposal has reappeared occasionally since it was first reported in a July 1991 edition of the Vancouver Sun:
"A Japanese-backed company is planning to build a $250-million year-round ski resort on a series of spectacular glaciers west of Panorama..."
In 1993, The Province was calling Jumbo Glacier Resort a certainty involving European and Asian investors. Two years later, newspapers said the project was proceeding with support from a consortium of Canadian, U.S. and European investors. In 2012, the Times Colonist repeated promises the ski hill would soon be operational. NW's Bill Good and others try to paint Jumbo as a victim of regulatory foot dragging but actually Jumbo has been an unfinanced scheme with proponents hoping that media play would attract investors. Shills in the corporate "news" operations were willing partners.

By the way, don't plan your ski vacation at Jumbo just yet.

Media may have people like Bob Mackin aiming to report accurately and sincerely but it has many more who earn a living by shilling for special financial interests. Sometimes, the promoted is a ski hill, fish farming or "ethical oil." Other times, it is a pipeline operator, car dealer or land developer.

The shill factor in media, especially in new media, is illustrated by a report in ZDNet.
"A Federal judge overseeing the Oracle vs. Google patent lawsuit said that search giant has failed to comply with a request to document all payments to bloggers and writers covering the trial.

"...U.S. District Judge William Alsup said in his order:
"The August 7 order was not limited to authors “paid . . . to report or comment” or to “quid pro quo” situations. Rather, the order was designed to bring to light authors whose statements about the issues in the case might have been influenced by the receipt of money from Google or Oracle. For example, Oracle has disclosed that it retained a blogger as a consultant. Even though the payment was for consulting work, the payment might have influenced the blogger’s reports on issues in the civil action...

"Google suggests that it has paid so many commenters that it will be impossible to list them all..."

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Wednesday, June 17, 2015

Serving public or corporate interests?

The audio file below is a recording of my time with Ian Jessop June 17. We talk about LNG and resource taxation, inter-provincial cooperation on resource matters and oil spill response capability.

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Celebrate and protect our marine ecology

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Change begins in Alberta

A new approach:
"We can work together. We can disagree without being disagreeable. Today, our political and party system cries out for renewal. We can listen to each other and build on each other’s best ideas. We need to return to a respectful relationship with this land’s indigenous peoples."
Restore education and health as provincial priorities
"Alberta’s new government will reintroduce a fair and progressive tax system, and restore stable support for health and education in order to do exactly that."
"This province needs to demonstrate real leadership on the environment and on climate change."
Economic diversity:
"Alberta’s new government will also be a good partner with job creators – with entrepreneurs, with small business, with credit unions and co-ops, and with the great enterprises we have built together."
Restore fairness to government revenue:
"Corporate taxes on the largest and most profitable corporations in Alberta will be increased from 10 per cent to 12 per cent. Small business taxes will remain at the current rate – 3 per cent. And progressive income taxes will be reintroduced in Alberta for those earning more than $125,000 a year.

"We need to review how the people of Alberta – including our grandchildren and great-grandchildren, many years from now – will be rewarded for the development of their own energy resources."
Ban political donations by unions and corporations
"Our political system has been far, far too dependent on funds from a narrow range of donors with deep pockets, and too removed from the interests of ordinary people."

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Monday, June 15, 2015

Some business is very private

The eastern media had much to say recently about conflicted journalists. On the west coast, even CKNW's Sean Leslie, a newsman who knows the subject, weighed in on Evan Solomon's difficulties at the CBC. Vancouver Sun columnist Pete McMartin, with blithe hypocrisy, wrote that in view of the controversy arising from Mansbridge's and Murphy's:
"speaking fees from oil and gas organizations, and Amanda Lang’s speaking fees from the Royal Bank of Canada — wouldn’t you think the CBC would have dug a little deeper into Solomon’s business dealings, if only to avoid yet another public relations disaster?"
Meanwhile, for the stars in the lesser constellation of British Columbia, pro-media life carried on as normal:
That polite thank you led to a question from a vigilant observer and new blogger:
Of course, BC journalists who've come to rely on non-journalistic income won't be asked difficult questions by colleagues. Since the publishers sold themselves to corporate paymasters, they're not likely to complain about individual staffers doing the same. In fact, employers depend upon it because the result is that journalists don't rely solely upon salaries for income.

The tacit approval of management and precarious job security means that no pro-media associates in British Columbia dare to speak about conflicts of interest, unless they involve CBC staff working 3,400 km from Vancouver. Situations here might involve receipt of undisclosed payments from business groups or enjoyment of salaries paid to family members by government or organizations affected by news coverage. By the way, the BC Business Council referenced above is partly funded by government.

The difficulty goes beyond protecting colleagues, friends and family. When a real or potential conflict of interest exists in BC, it goes unreported. By example, when lawyer Marcia McNeil was hired by the BC Liberal Government to "examine" the Health Ministry firings, no pro-media pundit disclosed that her husband, Scott Sutherland, was another of those ubiquitous spin doctors hired by Liberals to spread good words about government.

McNeil's immediate family has a financial relationship with the government that hired her for a sensitive task. Was it appropriate for McNeil to take the assignment? To me, that is unclear because the BC Law Society says:
...a lawyer must not perform any legal services for a client if:
(a) the lawyer has a direct or indirect financial interest in the subject matter of the legal services...
I've written extensively about conflicts of interest in public affairs and I invite readers to scan through past articles by clicking here.

Tom Stoppard:
“Words are sacred. If you get the right ones, in the right order, you can nudge the world a little.”

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Thursday, June 11, 2015

P3 primer for British Columbia

A May 2015 article by Vaughn Palmer reminded me of an article on public partnership first published here in 2013. Palmer's column included this:
"Among the eyebrow-raising details was the disclosure that longtime Partnerships boss Larry Blain had been doing double duty as board chair and a paid consultant on a number of projects."
During time at Parternships BC, Mr. Blain averaged over half a million dollars a year in salaries and expenses. What else he received is not public information.

Since the beginning of time, the public built facilities in partnerships with private industry. Typically, government determined needs according to its priorities, hired consultants for design and tendering, awarded work to the lowest bidder and financed with its usual sources, typically the lowest cost borrowing available. As long as all phases were completed with competence, the project succeeded without surprises.

However, sharp operators with no expertise beyond influence peddling, were left out of the process. So they invented the term public-private partnership, the infamous P3, and claimed for it special efficiency. Partnerships BC was created to sell the concept to plain folks who pay taxes. That led to hiring of a CEO who earned $1.6 million over three years and appointment of a board room full of Directors, all loyal BC Liberal contributors who are keen to take back give back.

Partnerships BC justifies its existence. They claim timely delivery, risk transfer and innovation as public benefits of P3s. They also claim benefits through international investments and job growth from economic activity. However, if this is the best they can do, I have news: well more than a million dollars in salaries is being wasted in the executive offices of Partnerships BC. By the way, in this time of Not-Net-Zero, the two senior officers of Partnerships BC had their salaries rise by 11% in fiscal year 2012, costing the corporation almost $5,000 a month.

Financing costs for any project depends on numerous variables. Most are the same for public or private sectors although British Columbia borrows at rates below those of private companies and has certainty of its borrowing ability. Indeed, we have already experienced P3s in need of public financing to replace collapsed private commitments. There is no intrinsic financing advantage to a P3 but there is a likely disadvantage.

Risk Transfer: In both public and private sector projects, risk is a matter of negotiation. The risk is held by the party to whom it is assigned through the bidding and contracting processes. In a fixed price contract, the contractor carries risk. In a cost plus contract, the buyer holds the risk. There is no certain advantage to a P3 although there is an advantage to the smartest negotiators.

Partnerships BC boasts that, "if the contractors don’t deliver, they don’t get paid." Yes, just like when the public sector tenders a contract. PBC also says "private companies that are fully responsible for overruns have a greater incentive to innovate at every stage." Yes, and so do contractors hired with fixed price contracts.

In practice, when private partners don't deliver, public partners sweeten the pot through renegotiation and taxpayers pick up the pieces. One study noted as many as 87% of P3s are changed after initial agreements are signed.

The silliest claims are about how P3s attract international financial investment, freeing up tax dollars for other priorities and how private sector activity creates jobs for British Columbians. This is not different from the old fashioned system where the Finance Ministry borrowed funds on the New York bond market and contracted a Vancouver company to build a project.

The last justification is that building infrastructure – such as roads and bridges – sets the stage for even more growth and opportunity. No argument there, except there is no advantage for a P3 in creating that benefit,

Certainly though, there are advantages to public private partnerships, at least to the private part. Notice that most P3 business detail is kept secret. Since taxpayers know only what the contracting parties permit, there can never be an independent evaluation of honesty and fairness.

Let us work through an example. The old fashioned public process:
  • Government decides to build a bridge after staff determines needs and priorities.
  • Qualified local designers and traffic engineers are hired to develop a plan and various engineering tests are completed and cost estimates made.
  • When all variables are determined, the job is put to tender and awarded to the highest rated bidder.
  • Construction is completed according to the contract and the facility enters service.
  • Permanent financing is matched with the asset's useful life and debt payments are serviced from general revenue or tolls.
  • Maintenance and operational contracts are awarded to local companies with appropriate capabilities. These contracts are periodically re-tendered to ensure optimum service.
The new fashioned public private partnership:
  • Government decides to build a bridge after staff determines needs and priorities.
  • A public private partnership is sought from the handful of international infrastructure specialists interested in this work.
  • A private partner is selected. Since design details and project scope are unclear, engineering qualification do not apply so this is awarded to the friendliest people.
  • The friendly people hire qualified local designers and traffic engineers to develop a plan, conduct engineering tests and make construction estimates.
  • When all engineering and design variables are determined, the private partner sits down with government and negotiates a deal.
  • The private partner takes that irrevocable deal to financiers and arranges money to accomplish the project. It will purchase a completion guarantee bond to satisfy the financiers and the province. It will pay dearly for that guarantee.
  • Construction is completed according to the contract and the facility enters service.
  • The private partner now hires local maintenance and operational contractors with appropriate capabilities. (The private partner is a developer not an operator.)
  • With construction complete and operational contracts in place, private partner will now sell its interest to a pension fund administrator such as the BC Investment Management Corp.
It is that final flip that creates the best profit opportunity although every phase from the beginning is a profit making opportunity. Profit making opportunities with almost no public scrutiny.

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When the call screener makes life difficult - Replay

An item first published in January 2015:

January 2, an unidentified caller chatted with CKNW Legislative reporter and talkshow host Sean Leslie, the spouse of a BC Liberal Government Communications Director, appointed by Order in Council, who has been paid more than $250,000 total in the last three fiscal years.

It won't surprise any regular reader that I believe the caller made valid points. Below is a graphic created with numbers from The Federal Energy Regulatory Commission and B.C. Hydro. It supplements the caller's arguments.

Perhaps British Columbia has a difficult economic environment that creates unavoidable burdens for taxpayers and consumers. The alternative is troubling. But, something that looks like a duck, swims like a duck, and quacks like a duck may very well be an actual duck.

UPDATE to the item published January 3, 2015:

In Mostly fools, written almost three years ago, I examined work of Press Gallery member and Times Colonist writer Les Leyne. It included this:
Les Leyne's son works as a public affairs/government relations research analyst. A free Northern Insight subscription to any reader who can identify which party employs Andrew Leyne.
Of course, the columnist's son worked for the Liberal caucus, then the Ministry of Environment and now Hill+Knowlton where he is a government lobbyist, sometimes for a pharmaceutical client. Interestingly, the Vancouver Sun's Rob Shaw and Lori Culbert reported a fired Health Ministry researcher was evaluating the province’s anti-smoking program but Leyne wrote that the Health Ministry firings were a mystery. That is no proof of conflict due to a family members's interests but it raises a question about the appropriateness of disclosure.

We also know that Rebecca Scott, wife of Stephen Smart, another Press Gallery denizen, was employed by OIC appointment as a Public Affairs Officer. The CBC Ombudsman found that to be problematic.

To be fair, I know nothing of the quality of communications work performed for the Government by Ms. Leslie or Ms. Trotter (Tom Fletcher's OIC appointed spouse). However, I see a pattern of the BC Liberal Party aligning itself financially to families of political journalists. This puts news people in positions of conflict, real or perceived. Lew, in comments below, talks about lucrative appointments "that can be rescinded at any time at the pleasure of the government." Most families would be seriously distressed if six or seven thousand dollars of monthly income suddenly disappeared.

Some will argue that spousal income is distinct, that journalist Mr. X is not in conflict because the Government he covers pay cash to Mrs. X. However, when public administrators deal with ordinary citizens - whether for tax programs, subsidized housing, medical service premium assistance, social assistance, student loans, etc. - the determinant is always family income. Financial affairs of one spouse is deemed to be connected with the partner's.

We should consider if a specific Liberal strategy is to use public funds to tame media members; I've been told that it is.


Here is a list of Press Gallery members, according to the provincial government directory, January 4, 2015
Chris Brinton, CTV / Press Gallery President
Tom Fletcher, Black Press / Press Gallery President
Keith Baldrey, Global BC
Howard Cooper, Global BC
Jeff Davies, CBC Radio
Kirk Duncan, A News
Wells Gaetz, A News
Justine Hunter, Globe & Mail
Linsey Kines, Times Colonist
Shachi Kurl, A News (She left the news operation (now CTV Vancouver Island) in May 2011)
Sean Leslie, CKNW Radio
Les Leyne, Times Colonist
Craig McInnes, Vancouver Sun
Dirk Meissner, Canadian Press
Vaughn Palmer, Vancouver Sun
Belle Puri, CBC TV
John Richardson, Shaw TV
Heather Robinson, CBC TV
Sophie Rousseau, Radio Canada TV
Mike Smyth, Vancouver Province
Marc Trudeau, CBC TV
Kristina Verruyt, Shaw TV
Jonathan Villeneuve, Radio Canada TV

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Wednesday, June 10, 2015

Secret LNG negotiations revealed

Adrian Raeside, one British Columbia's fine editorial cartoonists, probably says more in one panel about the state of LNG negotiations that my words could ever achieve. Reproduced here with his kind permission.

A collection of Adrian Raeside's work is available through Harbour Publishing.

Link to Raeside's home page.
Check out the gallery of editorial cartoons and by clicking on the label RAESIDE shown below, find examples repeated here.

Not a Raeside effort, the following was provided by a reader.

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Tuesday, June 9, 2015

Not last in sparkle ponies - updated

Statistics Canada reports weekly earnings by province (Table 281-0027) and it seems that if Christy Clark aims to lead average British Columbians in a race to the bottom, she is succeeding.

In British Columbia, we are experiencing a steady decline in the proportion of goods producing jobs. These now account for less than 20% of the province's employment.

Worst hit is manufacturing. In the last year of NDP administration, the proportion of manufacturing jobs in the goods producing sector was 50%. It is now 37%, with the worst declines under Clark.

BC Liberals have focused on non-renewable resource industries and consistently argued their policies of subsidies, reduced taxes and industry self-regulation would result in sustained job growth. Statistics Canada surveys paint an opposite story.

The remaining items were first published May 10, 2015.

The final item is intended to remind us that, for corporate welfare bums, creating good quality jobs is not high on the list of priorities.

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Monday, June 8, 2015

Socialist hordes at the gates, this time for real

“Socialism: a way of organizing a society in which major industries are owned and controlled by the government”

For years, leaders of the BC Business Party (AKA Social Credit or Liberal) echoed W.A.C. Bennett's 1972 warning, "The socialist hordes are at the gates of British Columbia."

Maclean's Magazine reported in 1999 that Liberal leader Gordon Campbell "is promising to weed socialist apparatchiks from the civil service."

In 2010, Liberal campaigner Jim Shepard said,
“You know, we lived through socialism in B.C. for 10 years. I know what it looks like and it is not pretty.”
Pretty, in Shepard's lexicon, apparently means lower production of goods, fewer jobs, less personal income, unaffordable housing, less accessible higher education and termination of apprenticeship and training programs - all elements of "free-enterprise" Liberalism.

May 2012, Liberal Rich Coleman told the Opposition in BC Legislative debates:
I know the socialist-communist thinking is that everything should be nationalized and controlled. If you had your way, you probably would nationalize mining, nationalize natural gas. You would nationalize everything, because you don't believe in the private sector.
Questioned by columnist Mike Smyth outside the house, Coleman repeated his description of the NDP:
That's what they are - they're socialists, they're communists. That's what W.A.C. Bennett used to say, "The socialist hordes are at the gates." People should start to think about that.
It seems the minister of questionable transactions has had a change in thinking. Coleman is now a cheerleader for state ownership, but with conditions: the state involved must be foreign, unaccountable and accustomed to secret dealings. Besides taxpayer dollars, Coleman and friends are offering easy regulatory approvals, foreign-worker permits, cheap power, tax holidays, accelerated write-offs, royalty-free natural gas and crown lands to help LNG proponents negotiate with First Nations.

Who are the "socialist-communists" Coleman is now keen to embrace? First in line is Petroliam Nasional Berhad (PETRONAS), which is wholly owned by the Government of Malaysia, an Islamic nation with a flawed democracy and a reputation for official corruption. The Asian oil company - accountable solely to Malaysia's prime minister Najib Razak - has delivered annual dividends to government of ten billion Canadian dollars in recent years but the nation faces mounting financial pressures. Budget deficits in each of the past 17 years have resulted in rapid debt growth and recent dedication to national austerity.

Other "socialist-communists" welcomed through Coleman's doors are the state owned China Petroleum & Chemical Corp (Sinopec) and government owned Indian Oil Corporation. They are partnering with Petronas and Japan Petroleum Exploration Company (JAPEX), which was founded by government in 1955.

Liberal pals in media can be counted on to echo socialist disaster myths from the nineties but they go strangely silent when there are questions to ask today's ruling political class. While claiming no appetite for new enterprises owned by the people of British Columbia, those leaders show unbounded willingness to borrow and invest public funds in businesses owned by foreign governments. That might make sense if there was to be a certain flow of significant economic benefits and a commitment to clean renewable energy.

Instead, British Columbia is lending support to Stephen Harper who this week embarrassed Canada on the world stage by efforts to obstruct establishment of GHG emission limits. However, at least Harper took to the stage, Clark and Coleman do their deeds in the shadows.

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Hudson Mews v. Portland Hotel Society

I was reminded of this item from July 2014 after hearing Michael Campbell's latest rant on CKNW. He suggested too little attention had been paid to inappropriate spending at the Portland Hotel Society but, as usual, Campbell ignores an even larger landscape of fraud and potential fraud.

Ideologues like Campbell pretend outrage when social agencies perform badly and public funds are misspent. However, if billions of dollars are transferred from the public sector to business through grants, subsidies and tax expenditures, the indignation vanishes.

We might wonder why an ideologue like Campbell stayed on air throughout the death spiral as NW slipped from Top Dog to Mangy Mutt in Vancouver's radio wars. His survival demonstrates media owners have a wider set of goals than earning profits from one segment of their asset portfolio. Corus Radio may not earn the profits it once did from NW but the billionaire Shaw Family has more important objectives. Most of its business is conducted in government regulated oligopolies and serving special interests comes with that territory.

The same principles apply at Postmedia, the publisher of many of Canada's important daily newspapers. The company - whose beneficial ownership is held by American hedge funds - has partnered with operators that annually extract and export tens of billions of dollars of natural resources. Controlling the public dialogue on resources is critical to continuing the status quo. If that takes a few hundred million to fund a money-losing newspaper empire, it shall be done.
* * * * *
The Code of Ethics published by the Society for Professional Journalists includes, among others:
  • Be vigilant and courageous about holding those with power accountable.
  • Deny favored treatment to advertisers and special interests and resist their pressure to influence news coverage.
Is the pro-media of British Columbia guided by those or similar principles? Consider the following.

When insiders at the Portland Hotel Society were caught misusing tens of thousands of dollars provided them by public agencies and donors, outrage echoed for weeks and heads rolled at the PHS. I did a Google search tonight, using the phrase,
"Portland Hotel Society" audit.
The search engine returned 165,000 results. Among the first listed were numerous items by Postmedia, Global TV and CBC. Even a release produced by www.newsroom.gov.bc.ca was near the top of the Google search page. Undoubtedly, the PHS story deserved wide coverage. That occurred and I have no objection.

Has the same diligence been applied respecting the powerful Ilich family's Townline Group of Companies and parties also associated with the Portland Hotel Society affair? Those others are Cabinet Minister Rich Coleman, BC Housing and auditors acting for the public. I did a Google search, using the phrase,
Townline "Hudson Mews" audit.
Hudson Mews
The search engine returned one result. That was Bob Mackin's article at The Tyee, Internal Audit Slammed BC Housing Deal in Victoria. He wrote about Rich Coleman's plan for BC Housing to invest $32.8 million in a decidedly upscale Victoria housing project being developed by people the Minister knew well,
...But a May 13, 2011 Internal Audit and Advisory Services report released to The Tyee via Freedom of Information tells a different story. The report said auditors rejected B.C. Housing's claim that Hudson Mews would improve directly or indirectly social housing in Victoria. It concluded that the project would expose the province to "significant and unnecessary financial risks."

"B.C. Housing was prepared to go forward with this project despite the fact there were significantly unresolved issues with respect to the project's financial viability," said the report. "Further, B.C. Housing management knew of these issues, but appeared undeterred in proceeding with the project."

...The executive summary said auditors found the Townline-retained appraiser overstated the property value by approximately $900,000, leading to a public perception that the province was receiving a substantial discount on the announced $4 million land purchase.

In fact, the province was receiving a discount of less than $100,000 in exchange for the direct award of the management contract to TLHS.
So, if the overstatement of value uncovered by auditors was close to a million dollars, the obvious conclusion is that Hudson Mews was potentially a financial controversy far larger than that involving the wayward Portland Hotel Society. If that's the case, why is it only covered by one independent investigator?

If mainstream media's political reporters were truly vigilant and courageous about holding those with power accountable, they'd have been all over the Hudson Mews story before one under-resourced freelancer could get his laptop warmed, even though he is the most diligent and feared public affairs journalist in the province.

If Postmedia didn't offer favored treatment to advertisers and special interests, it might have had one of its non-conflicted political reporters working on Hudson Mews. But then, the publisher of BC's largest daily newspapers seems determined to follow its current business plan for whatever time is has left before the Trustee in Bankruptcy arrives.

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Saturday, June 6, 2015

How a people live

The trailer for Lisa Jackson's fine documentary: How a People Live, the story of the Gwa’sala-‘Nakwaxda’xw Nations of BC.

The full 45 minute documentary is available through the CBC Player. I recommend it.

The trailer for another short film by Lisa Jackson, available with many others on her website linked above.

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Thursday, June 4, 2015

Dr Gabor Mate - belated respects due - Replay

Following is one of the first articles published at this blog. From April 2009, it is updated today with information about an upcoming and unconventional addiction healing event involving Dr. Mate.
* * * * *
A semi-credulous youth in the sixties, I enrolled at UBC in first year Arts, or as we labeled our doors in residence, Pre-Medicine I or Pre-Law I. Campus life and its varied styles intrigued me immediately.

Among those demanding attention were anti-war protesters. LBJ was ramping-up action in Vietnam but the student resistance movement was growing too. Often, groups gathered on the main library plaza to shout against U.S. actions in Indochina. But, campus protesters were not much respected then and counter-demonstrators often appeared.

One time, a nasty pack of red-jacketed engineering students arrived to torment the peaceniks. I observed from a distance, not bothered by that rudeness or antidemocratic spirit. My analytic skills were unformed and I was comfortable with political orthodoxy. A particular target of the hectoring was a speaker named Gabor Mate. I remember clearly that brave young guy standing up to the bullies, stating unpopular ideas. Mate, in the next few years, was regularly noticed about campus, even if not appreciated by my circle.

In later times, hearing Mate speak and through reading his words, my admiration built for his spirit and intelligence, although I never knew him personally. Like many others, my views about Vietnam shifted and I came to regret my passivity at the library on that day of war protest. I realized that Gabor Mate’s conscience was evolved substantially more than mine then. Perhaps that was because he had close relatives victimized by unimaginable Nazi crimes. He knew tragedy of war firsthand. Today, I realize how lucky we are to have individuals willing to step out from the crowd trying to redirect events that the rest of us fail to understand.

I learned that he became a teacher, then a physician who left family practice to work with HIV positive drug addicts on the downtown eastside streets of Vancouver. Mate is a behavioral expert, a lecturer and author of four books. His latest, When the Body Says No, argues that chronic disease can be triggered by stress from repression of emotions. Still today, some of Mate’s opinions are controversial but you can be certain that his intellectual honesty remains untempered. For more than four decades, I've owed him thanks for that.

My schoolteacher son mentioned recently that he had been impressed at a Pro-D lecture given by Dr. Mate. That seemed an interesting coincidence and I reflected on how separated moments of life can unexpectedly connect. Forty something years ago, I didn’t listen very well to student activist Gabor Mate. This year, my son perhaps makes up for that. He intends to use the doctor’s wisdom, without waiting decades.

Read Margaret Gunning about Gabor Mate and When the Body Says No at January Magazine

Recovery 2.0 Info & Registration

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