Category Archives: Business

Nov 11 2014
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Business, Energy, Environment, Government, Oil and Gas

A moratorium that’s missing in action

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Something has put the swagger back into Steve Moran’s step. The CEO of Corridor Resources is pulling his best impression of Mad Magazine’s mascot, Alfred E. Neuman, these days. What, him fret?

“We’re a little bit worried about the short term, but over the long term, no, we’re not as concerned,” he told the Telegraph-Journal last week, regarding the New Brunswick government’s decision to slap a moratorium on hydraulic fracturing in shale gas development.

“We think government officials understand the potential of the resource here and we think that once they feel they have addressed their issues in terms of health and safety that they will come around and that we’ll be back to work. . .We are confident that, over time, we will work our way through this moratorium.”

All of which raises an interesting question: What moratorium would that be?

The new Liberal government of Brian Gallant has been threatening to level a temporary ban on fracking since long before their election win.

Indeed, it’s not too hyperbolic to say that more words have been expended on the potential perils to human health of hydraulic fracturing than there has been gas extracted from the ground.

Here’s the new premier on the subject two weeks ago: “We believe there should be a moratorium on hydraulic fracturing due to the lack of information concerning the risks to our environment, our health, and our water. I think it’s important for people to know what we’re concerned about – it’s the process of extraction called hydraulic fracturing.”

Now, here’s Energy Minister Donald Arseneault just last week at the New Brunswick Exploration, Mining and Petroleum conference: “We have a clear mandate from the people and a very consistent message over the last two years that we want a moratorium on the shale gas industry. We had a clear mandate on election day to move forward on that and that’s what we are going to bring forward in the near future.”

Again, when, exactly, would that be?

In reality, it is not at all clear that the Liberals have received a “clear mandate from the people” on this issue. Some surveys conducted before, during and after the election campaign indicated that the public in this province is deeply divided on hydraulic fracturing. If anything, the edge seems to go to the pro-gas lobby as long as the industry can provide credible, verifiable assurances about its safety practices and environmental stewardship.

Neither is it clear that Messrs. Gallant and Arseneault are singing the same tune, let alone from the same song sheet.

There’s a big difference between slapping a ban on the shale gas industry, as Mr. Arseneault is mumbling about doing, and carefully parsing the distinction between hydraulic fracturing and other methods of resource extraction, as Premier Gallant is wont to do.

One definitively slams the door; the other leaves it open just a crack.

Of course, in this parade of mixed messages, Mr. Aresneault has been a marvelous band leader.

On the tricky position into which any sort of moratorium would put Corridor Resources and its gas customer Potash Corp., the minister weaved for the Telegraph-Journal earlier this month:

“The last thing we want to do is potentially put certain operations in jeopardy. For me, PotashCorp is a major player in New Brunswick. It’s a concern for me. It doesn’t mean that it gives everybody a green light, but it’s definitely in the back of my mind that I’ve got to be conscious and responsible going forward.”

As to the fate of PotashCorp’s new Picadilly mine without ready supplies of fracked natural gas, Mr. Arseneault said, “Those are the questions we are going to be asking the company. If we didn’t impose a moratorium, what is the activity they have planned for the next couple of years? Having a moratorium, how will it impact their operation? Will it impact potash? We haven’t settled on a specific menu other than we know there will be a moratorium.”

But, I wonder if that’s even certain anymore.

Indeed, Steve Moran, is there something you’re not telling us?

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Nov 07 2014
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Business, Economy, Education

Will work for nothing? You’re hired

Put this kid to work. . .for free

Put this kid to work. . .for free

It must be awfully nice up there in his big office, shuttered with gilded blinds that stop the stark light of reality from reaching impertinently to his leather chair. Perhaps that’s why Bank of Canada Governor Stephen Poloz likes to cheerfully blurt the odd absurdity from time to time.

Like this one to reporters in Ottawa on Monday:

“When I bump into youths, they ask me, you know, ‘What an I supposed to do in a situation?’ I say, ‘look, having something unpaid on your CV is very worth it because that’s the one thing you can do  to counteract this scarring effect. Get some real-life experience even though you are discouraged, even if it’s for free.”

Oh sure, I can just imagine Mr. Poloz bumping into “youths”. Why, it happens all the time, don’t you know. In fact, he must be plum tuckered out, what with all the questions about their futures Canada’s young people pose to him each and every day.

Why wouldn’t the $400,000-a-year fat cat throw up his hands in mock exasperation and, in effect, say: “Let ‘em eat cake”?

Or, more accurately, this to the House of Commons Finance Committee on Tuesday:

“Volunteer to do something that is at least somewhat related to your experience set, so it’s clear that you are gaining some learning experience during that period.”

Or this to Liberal MP Scott Brison (who worried that unpaid internships might favour kids from wealthier families, who could afford to stake their progency):

“There are issues like the ones you’re raising. . .but I still think when there are those opportunities, one should grab them because it will reduce the scarring effect, all other things equal.”

And while we’re about parsing Mr. Poloz’s recent ruminations, what is this “scarring effect” to which he refers?

Is it the humiliation of having to live in your parent’s basement because no one will give you a job that pays well enough to cover the monthly let on a cold-water flat down by the docks?

Or is it that empty feeling in the pit of your stomach that refuses to go away because you cant afford anything more nourishing than a tin of peanuts every other day?

Whatever it is, Mr. Poloz is, at least, on the bandwagon. Unpaid internships are all the rage these days.

A couple of years ago, the Daily Mail in the United Kingdom reported, “Firms across the country are increasingly relying on unpaid interns in a bid to cut costs in a tough economic climate, according to a new study. Bosses in the design and digital industry expect more work for less money, leading to fewer permanent staff members and more unpaid interns, according to think tank the Institute for Public Policy

Research, which carried out a survey of 500 agency workers.”

More recently, Susan Adams, a staff writer at Forbes, observed, “As the ranks of the unemployed have swelled and the surplus of jobless college students and grads has grown, increasing numbers of people young and old have been signing on for unpaid internships, wanting to make contacts and accumulate résumé lines that can help them get paying work.”

And according to a CBC report last March, “Unpaid internships are on the rise in Canada, with some organizations estimating there’s as many as 300,000 people currently working for free at some of the country’s biggest, and wealthiest, corporations.

The ranks of unpaid interns swelled in the aftermath of the 2008 economic recession, said Sean Geobey, a research associate with the Canadian Centre for Policy Alternatives and the author of a recent report entitled The Young and the Jobless.”

Still, a backlash does appear to be brewing. “This is not the sort of social contract that today’s kids saw their parents and grandparents grow up under,” Mr. Geobey said. “We’re starting to see Canadians – young people and their parents in particular – seriously question what exactly is going on here, and why are we apparently returning to 19th-century labour practices.”

I’ll make Mr. Poloz a deal. I’ll swap with him for a week. See how he likes it.

Mind you, my job’s not an unpaid internship.

Some days, it just feels that way.

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Nov 04 2014
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Business, Economy, Energy, Oil and Gas, Politics

It’s time to get clear on natural gas

Welcome to the energy big leagues, Mr. Premier.

Wheels upon wheels, gears upon gears, the squeeze play against Brian Gallant’s determination to impose a moratorium on hydraulic fracturing in New Brunswick – the preferred industry method for extracting natural gas, with water, sand and a proprietary soup of chemicals,  from sedimentary rock – has officially commenced.

Not that there’s anything especially surprising about Corridor Resources’ public insistence that 30 of its fracked gas wells supplies PotashCorp’s operations in the Sussex area of the province – to no ill effect on the water, soil and air – with a competitively priced, comparatively clean source of fuel with which to dry the fertilizer for market readiness.

Nor is their anything particularly shocking about PotashCorp’s addendum last week.

“Access to a secure, stable and sustainable gas supply is critical to our. . .longterm success,” New Brunswick General Manager Jean-Guy Leclair told the Telegraph-Journal. “While there are alternate fuel sources for our facility, they would have profound implications on our current and future operational costs.”

Read between the lines, Mr. Premier. That’s a palpable threat. By now, you must know this. What’s mystifying is why you apparently didn’t see it coming.

Or, perhaps, you did, and your hard line in the sand during the election campaign was merely a political gambit to win over some voters.

Maybe your strategists advised you to hold that line for as long as you could and then capitulate only when major industrial players left you no choice.

If I had been one of your back-room boys, I would not have counselled this: Stay true to your principles until such time as the oil and gas lobby intimates major job losses; then reverse course in the broader interests of economic development.

And, in the process, blame the big, bad bogey man of corporate Canada for forcing your hand. “The devil made me do it, folks,” you might plead. “What can I say?”

Whatever is the case, all of it has been poor politics, poorer public policy and a fundamentally bad start for a new government.

And it’s getting worse.

Cabinet solidarity is one of the rocks that grounds leadership in a parliamentary democracy. It tells the electorate that the men and women the premier has chosen has his or her back, and, in the process assures the great, voting unwashed that they haven’t made a colossal mistake at the ballot box.

So, under these circumstances, what are we to make of Mines and Energy Minister Donald Arseneault’s freelance, off-playbook commentary last week?

“I was the minister back in 2007 who struck the deal to attract that investment of $2.2 billion (PotashCorp’s expansion) to New Brunswick,” he told the Telegraph-Journal last week. “We do know that Corridor feeds gas to the potash mines, and for me that is a very important component. . .For me, PotashCorp is a major player in New Brunswick. . .The last thing we want to do is potentially put certain operations in jeopardy.”

Now, we cut to a Page 3 story in the same organ on the same day.

“No,” declared Premier Gallant, “for us, it is a hydraulic fracturing moratorium, and we’re certainly willing to meet with different operations, different businesses, all stakeholders and New Brunswickers to understand the best way to implement this moratorium.”

None of which actually clarifies anything, except that the young premier of this province understands practically nothing about energy politics and, far more troubling, he seems oblivious to the worries of at least one of his important lieutenants – the one in charge of, arguably, the most important economic portfolio.

What now shall we expect? Will a great muzzling commence?

There is a way, of course, to safely and responsibly frack for gas in New Brunswick. We’ve been doing it for years. As long as we adhere to the tightest regulations our democracy provides — with the most comprehensive environmental oversight common sense produces — we have an even chance to reduce our reliance on far dirtier forms of fossil fuel and maybe, just maybe, generate the economic incentive to fully transition into a renewable, sustainable society. There is nothing new in any of this.

What is new is that we, in this fine, elegant, innocent part of the world must face the fact that we need the hard, tough, clear leadership to get us where we need to be.

Welcome to the energy big leagues, New Brunswick.

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Oct 28 2014
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Business, Trade

Loosen up the ties that bind in Atlantic Canada

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The Canadian Federation of Independent Business, that favourite whipping post of the progressive left, is no stranger to provocation.

Its website recounts proudly its origin story:

“One evening in 1969, John Bulloch, a teacher at Ryerson Polytechnical Institute, was soaking in his tub and reading the new federal White Paper on taxation. He was infuriated to see it proposed a 50 per cent tax rate for Canadian small businesses.

The then Liberal government had exempted the powerful from many of its proposals, and proceeded to hammer small business and middle-income Canadians.”

One tax revolt and three years later the CFIB was born, and it’s been fighting what it believes to be the good fight ever since.

Consider the recent doings of its Atlantic Vice-President Jordi Morgan, one of the featured speakers at last week’s Sussex & District Chamber of Commerce (yours truly was the other one) annual business awards dinner. He’s incensed by interprovincial trade barriers. Indeed, he has every right to be.

Almost everyone in the Atlantic provinces – businesspeople, politicians, economists, academics – agrees that the framework regulating the flow of goods and services across provincial borders is archaic, frequently absurd and often pernicious.

In fact, dismantling inter-provincial trade barriers in Canada has been one of the putative goals of swaths of provincial leaders since the last decade of the 20th century, when the Agreement on Internal Trade came into effect to explicityly “reduce barriers to the movement of persons, goods, services and investments within Canada.”

The problem is the effort has been like drawing blood from a stone. As Mr. Morgan observed during his address last week, “It takes leadership, and will require considerable. . .courage.”

That’s because we have quite probably lost site of the lessons of our own history – a common enough occurrence in this and every other country.

“Earlier this year,” Mr. Morgan reported, “we surveyed our membership. . .Almost 89 per cent of our members who responded in Atlantic Canada agree the premiers should commit to reducing internal trade barriers. This is nothing new.”

He continued: “In 1864, the first of the Charlottetown conferences was convened to hammer out some of the philosophical and legal structures of our nation. . .The founding fathers found a point of agreement in opposition to Inter-Provincial Trade Barriers. They believed if Canadians were to prosper it was essential that all Canadians could freely access markets within the country.”

In fact, the Constitution is clear. Section 121 (March, 1867) states: “All Articles of the Growth, Produce or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Province.”

But a funny thing happened on the way to the national marketplace. “Through a variety of decisions throughout the 20the century, subsequent judicial interpretations of section 121 served to open the door to closing more doors,” Mr. Morgan said. “While custom duties and similar charges remain prohibited between provinces, successive government have successfully closed or restricted their provincial borders through mazes of indirect taxation and absurd regulations.”

How silly have matters become?

The size of milk and cream containers are tightly mandated. Asked Mr. Morgan: “Do we need protection from the amount of milk we put in our coffee?”

Then there’s the annoying fuss over truck tires. “From province to province, the regulations aren’t consistent,” Mr. Morgan said. “There are situations where depending on the load, trucks must stop and change tires when they cross the provincial border to be in compliance.”

These are only a few examples from a regulatory regime that, more often than not, continues to obstruct trade long after the protections it once provided outlived their useful purpose. It also seems patently ludicrous that while Prime Minister Stephen Harper jaunts around the world signing free trade agreement with the Europeans, the fine for bringing the equivalent of two bottles of wine purchased in another province into New Brunswick is 300 bucks.

Within this context, interprovincial trade in goods and services should not be a politically charged issue. To its credit, the CFIB is not making it one.

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Oct 15 2014
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Business, Economy, Politics

How to tempt a global downturn

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One of the great, not entirely discreditable, boasts of the current federal government has been its masterful handling of both the national economy and the public books during and after the Great Recession of 2008-09.

And, indeed, the world looked on in envy, as a piece in The Economist this past May reminded readers: “In the government’s retelling of the crisis, it alone stood between Canadians and doom.

“(The country) weathered the financial crisis well. No bank needed to be rescued: the World Economic Forum anointed Canada’s banking system the soundest in the world. Mark Carney was exported to the Bank of England in large part because of his work at the Bank of Canada. Stephen Harper, the prime minister, took to describing Jim Flaherty, who died on April 10th just weeks after leaving the cabinet, as “the best finance minister on the planet’.”

Of course, as The Economist writer, and many others, point out, Canada’s performance during the downturn owed as much to the sturdiness of its financial traditions and institutions than to the foresight of the sitting government.

But whichever successful combination of policy and regulatory fiat did the trick, the timing of Canada’s financial fortitude was inarguably auspicious.

Is it so today, 62 months into the recovery?

The question is more than merely academic. Lately, the dreaded ‘r’-word has been making rounds, if not yet headlines, in the world’s increasingly turbulent capital markets, leaving many economists to ponder when the dominoes will again begin to fall, and which nations are most vulnerable when they do.

According to London-based economist Philip Pilkington, writing in Aljazeera America last month, “The current consensus among American policymakers and commentators, including Federal Reserve Chairwoman Janet Yellen, is that the U.S. economic recovery is well underway. But not everyone agrees with this assessment. One firm in particular, the Jerome Levy Forecasting Centre a New York–based economic consultancy, warned that the world economy might plunge into another recession in 2015 that will take down the U.S. economy with it.”

What makes this all the more troubling is that these guys are no Chicken Littles. When they say the sky is falling, they’re always right. Mr. Pilkington notes: “Levy economists. . .use The Profits Perspective forecasting model developed by Jerome Levy in 1908. . .(and) have accurately predicted every major financial event in the past few decades, including the financial crisis, which many mainstream economists said was unforeseeable.”

All of which leads Mr. Pilkington to conclude that U.S. policymakers continue to underestimate the impact emerging economies, whose growth rates have substantially slowed in the past couple of years, have on developed ones.

“They have once again become hypnotized by their overly simplistic, abstract models, which exposed their failure in 2008,” he writes. “This generates a rather bizarre argument about what constitutes slow wage growth. Meanwhile a storm that could tip the world back into recession seems to be gathering in the emerging market economies. It is perhaps time to listen to and engage with the economists who saw the last crisis coming. If these self-reinforcing tendencies within the profession continue, it seems unlikely that we could effectively face down future economic problems.”

Has any of this showed up on the radar in the war rooms of Ottawa’s economic planners?

Certainly, Parliamentary Budget Officer Denis Frechette and his researchers wonder what justifies collecting billions-of-dollars more in Employment Insurance premiums than are required to pay for the system over the next two years – a circumstance that, they insist, will likely suppress job creation.

“PBO estimates that the Small Business Job Credit will create 200 new full‐time equivalent jobs in 2015 and 600 new jobs in 2016,” their report to Parliament stated last week. “PBO estimates the premium rate freeze will reduce full‐time equivalent employment by 2,000 jobs in 2015 and a further 8,000 jobs in 2016.”

Just in time, perhaps, for the next great, jobs-devouring recession.

Brilliant, boys and girls!

That’s how the onetime envy of the world becomes its laughingstock.

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Oct 01 2014
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Business, Politics, Trade

Europeans flying high on Canada’s dime

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Taxes, we are firmly told by our big brothers in federal office, are not for repairing the nation’s frayed social safety net.

They are not for offsetting the demographic demands on the health care system of an increasingly aging population.

And they are certainly not for anything so wobbly and unnecessary as a fully-subsidized, universal program of early childhood education spanning this great realm from coast to coast to shining coast.

I can tell you what they are for, though.

“Prime Minister Stephen Harper gave visiting European delegates a free flight home to Brussels last week, after adding a Toronto reception to their schedule,” the CBC dutifully reported on Sunday, after having obtained a government email to the RCMP’s Protective Policing branch.

According to the public broadcaster’s Terry Milewski, “That reception made it impossible for the visitors to make a planned commercial flight from Ottawa, and thereby get to a Saturday meeting in Brussels. The cost of the (Canadian Forces) Airbus flight is estimated at more than $300,000”

Specifically, the piece states: “The modified Airbus A310 costs $22,537 an hour to operate, according to official figures in 2012. The price has likely risen since then, but, at that rate, and assuming 15 hours’ flight time from Toronto to Brussels and back, the trip would have cost $338,055.”

And that doesn’t begin to account for the costs of additional security, motorcades, or the reception, itself, which was arranged to mark the occasion of Canada and the European Union signing their new Comprehensive Economic and Trade Agreement (CETA). Of course, opinions varied on the significance of the cotillion, itself.

Trade Minister Ed Fast assured the House of Commons that it was “a critical element” of the European visit. “On this side, we understand how important trade and investment are to driving economic growth and long-term prosperity in this country,” he said whilst denouncing his NDP tormentors as “anti-trade”.

Yet, the Europeans, themselves, seemed to suggest that the reception was not a formal extension of the summit which produced the final agreement earlier in the day. It was. . .oh. . .how do you say? . .a party.

And as people would be up late, presumably having a marvelous time trading war stories from their days at the negotiating table (Hey Frank, you remember that time I rewrote Section 4, Sub-section 8, Paragraph A in less than three minutes? I tell you, the Europeans never knew what hit ‘em), putting a publicly paid-for jet at the disposal of our new best-friends-forever to facilitate their last-minute return home, is just the gentlemanly thing to do.

At least Greg Thomas wasn’t buying the hooey. According to the CBC article, the director of the Canadian Taxpayers’ Federation found himself in the deliciously ironic position of being a guest of the event at the Royal York Hotel in Toronto: “(He) said his organization would send a cheque to the government for the cost of his attendance, and added that the Airbus freebie was a waste of taxpayers’ money. ‘Victory lap or not, there’s no excuse (for) blowing 300 grand on short notice for what amounts to a political show,’ (he added). ‘Many Canadians can stomach the expense of hosting the royal family when they come to Canada. (But) having royal treatment afforded to European bureaucrats is not something that’s going to go down, I think, in any part of the country. They could have done this in Ottawa. They could have saved $300,000 and it would have had the same effect.’”

Amen to that, brother. And if this were any other sort of negotiation, planners in the Prime Minister’s Office might well have decided that discretion is, indeed, the better part of valour.

But this was CETA, the glittering jewell in Stephen Harper’s crown as prime minister – or so he believes. 

“The historic. . .Agreement is by far Canada’s most ambitious trade initiative, broader in scope and deeper in ambition than the. . .North American Free Trade Agreement,” reads the Foreign Affairs, Trade and Development website. “It will open new markets to our exporters throughout the EU and generate significant benefits for all Canadians. The Government of Canada has made opening new markets through agreements like CETA a priority – just one way it is creating jobs and opportunities for Canadians in every region of the country.”

Let us hope so. It seems we have some taxes to pay.

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Aug 28 2014
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Business, Climate, Media

All the news that’s fit to ignore

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If I were a newspaper editor with my pick of front-page stories, which would I choose to run above the fold?

Would it be the one about Burger King gobbling up Tim Hortons for a cool $12.5 billion? Or would it be the one about humanity possibly facing extinction in a century or so thanks entirely to manmade global warming?

At the Globe and Mail, at any rate, the answer is a no-brainer (as it is, I’d guess, at just about every other daily news organ in the world). Donuts and burgers trump the apocalypse every time.

And so it was, Tuesday, when the Globe ran its insider’s look-see at the deal between Timmy’s and 3G Capital Group, the Brazilian private equity fund that bought Burger King for $4.1 billion in 2010, on Page One.

Meanwhile, casually floating amid the news of less apparent import on Page Nine was an Associated Press story about the final draft report of the United Nations’ Intergovernmental Panel on Climate Change – a report which makes dire predictions of  “severe, pervasive and irreversible impacts for people and ecosystems.”

You might have reasonably expected a followup in the front section’s middle two-page spread, normally reserved for in-depth analyses of subjects and topics in the news. But, no. There, too, Tim’s had dibs.

“You may have heard that Tim Hortons is becoming part of a newly-formed global company headquartered in Canada,” the advertising copy cheerly chirped. “Among other things, this will help us grow and expand our brand around the world. What remains the same is our focus on top quality, fresh products, value, great service and investment in community. . .That focus on our guests and community will never change.”

Neither, alas, will mankind’s preternatural ability to miss the forest for the trees.

A multi-billion-dollar corporate merger happens every couple of years, or so. But the end of the world as we know it? Come on people, that’s a once-in-a-lifetime event. One would think it deserves a little more respect than it gets in the mainstream media and popular press.

“The UN report tells us once again what we know with a greater degree of certainty: that climate change is real, it is caused by us, and it is already causing substantial damage to us and our environment,” Michael Mann, a climatologist at Pennsylvania State University told the Associated Press. “If there is one take-home point of this report, it is this: We have to act now.”

Or not.

Consider what John Christy has to say. He, too, is a climate scientist, though unlike most of his peers, he’s no catastrophe junkie. The University of Alabama academic told the AP, “Humans are clever. We shall adapt to whatever happens.”

Not surprisingly, Dr. Christy is not altogether beloved by his peers. In a recent New York Times piece, Kerry Emanuel, a professor of atmospheric science at the Massachusetts Institute of Technology equated his colleague’s sanguinity about the future to courting disaster. “It’s kind of like telling a little girl who’s trying to run across a busy street to catch a school bus to go for it, knowing there’s a substantial chance that she’ll be killed,” he said. “She might make it. But it’s a big gamble to take.”

But Dr. Christy’s “relax, don’t worry attitude” has made him the darling of certain Republican members of congress, conspiracy theorists and populist nincompoops who equate education with elitism (except, presumably, when he’s in the room).

And because he appears to rationally demur at the current, standard model of anthropogenic atmospheric warming, his views invariably find their way into the type of news copy that all-too-valiantly strives to be “objective” and “balanced”. (Although, really, if 99 experts on a subject say a thing is about to happen and one says it’s not, does lending both sides equal credence serve the interests of objectivity and balance)?

It hardly matters, because if a thing hasn’t happened, it’s not front-page news. And if there is even the slightest question or debate about its likelihood of ever occurring, it is, at best, Page Nine material.

Now, a story about one fast food giant gobbling up another. . .well, that’s real. Heck, you can almost taste the relevance, can’t you?

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Aug 20 2014
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Business, Politics

Shale gas lawsuit puts government credibility on the line

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The New Brunswick government ritually boasts it maintains the toughest, most circumspect regulatory standards for shale gas in North America. But that’s faint comfort if those responsible for enforcing them don’t actually know what they say.

No doubt to the grim satisfaction of opponents of the controversial drilling technique – who have always mistrusted officialdom’s supreme confidence in the structural integrity of its knowledge bank – a glaring case in point now plays out on the front pages of provincial newspapers.

According to Legislative reporter Adam Huras, documents obtained by Brunswick News show that the Department of Natural Resources was advised that an exploration company complied with the law (when it undertook seismic testing within the borders of the municipality of Sussex) before government officials issued a press release that stated precisely the opposite.

That announcement, on behalf of then-Natural Resources Minister Bruce Northrup, on November 9, 2011, read, in part: “I wish to inform the public that a complaint has been filed by the Department of Natural Resources with the RCMP alleging Windsor Energy Inc. of Calgary, Alta., violated the Oil and Natural Gas Act by directing a contracted company to conduct geophysical exploration within the boundaries of the Town of Sussex.

“Under regulation 86-191 of the Oil and Natural Gas Act, a municipality’s written permission is required before geophysical activity can be conducted inside the boundaries of an incorporated municipality.”

The epistle then concluded on a note of supreme sanctimony: “New Brunswickers can be assured that all companies exploring for or developing oil and natural gas reserves in our province are expected to observe our laws and that we will ensure these laws are upheld. The rules we have in place and those now being developed to strengthen our regulatory framework are intended to protect our people and our environment, and must be respected.”

Regrettably – if only for the government – it appears that Windsor violated no laws; that it was obligated to obtain permission to test from either the town (which it did not consult) or the Province (which it did), but not necessarily both.

Certainly, the company’s CEO, Khalid Amin, is sure Windsor did nothing wrong. Now, he’s suing the provincial government for $100 million alleging that Mr. Northrup’s comments in the November press release and the follow-up RCMP investigation (which produced no charges, naturally) were libelous.

There is much to ponder in all of this, starting with the investigative reporter’s credo: Who knew what, when?

The chain of correspondence at the end of October, 2011, clearly shows one Charles Murray, a lawyer attached to Communications New Brunswick, strongly advising Natural Resources to cool its jets: “It would perhaps have been good form or or polite of them (Windsor) to obtain the permission of both (the town and the Province). . .It was not, however, required under the provisions of the regulations. . .Given that, I am not at all in favour of the minister stating that Windsor violated the province’s Oil and Natural Gas Act.”

You can’t get any more categorical than that. So, then, why did government officials ignore the advice in its entirety? Did they believe they had a steadier grip on the relevant legislation than did the attorney they presumably paid to advise them on the one thing about which lawyers know more than anybody: the law?

According to Mr. Huras’s report, the emails he obtained “also show that government staff asked the RCMP not to publicly reveal the reason why the investigation into Windsor’s seismic work in the Sussex area would not result in charges.”

That’s predictable. Stupid, but predictable.

In situations like these, the only reason why the cops would not pursue charges  is that they believe the subject of their investigation committed no infraction.

In this case, expunging a talking point from a communications strategy isn’t going to prevent anyone from coming to that conclusion, or that the provincial government’s ham-handed stick-handling of the whole affair undermines public confidence in its ability to administer and regulate the shale gas industry in New Brunswick.

After all, why is the original, offending statement – the one over which Mr. Amin is suing the Province – still posted to the Department of Natural Resources’ website, still out there in the public domain in all its taunting glory?

Forget about this government knowing what its own regulations say.

Does it even know what it’s doing?

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Jul 30 2014
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Business, Economy, Energy, Government

Ducking the dreaded ‘B-word’ in New Brunswick

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Those who maintain that in the absence of a global depression governments and the jurisdictions they administer do not go bankrupt – not, at least, in the barrel-wearing, down-and- out sort of way – do not remember Argentina.

In a 2008 edition of Der Spiegel, the magazine reported, “The signs of looming national bankruptcy are plentiful, and bankers in the Uruguayan capital of Montevideo know them well. In late 2001, they were the first to see the coming crash in Argentina. Men traveled across the Rio de la Plata, from Buenos Aires to Montevideo, carrying suitcases filled with US dollars. They stood in long lines at the city’s banks, depositing the contents of their suitcases into accounts and safe deposit boxes there. Uruguay is South America’s Switzerland, a safe haven for money in times of crisis. No one asks about where the millions come from.”

The article continued: “Once the Argentine businessmen had transferred their dollars abroad, the second phase of the collapse began. The Argentine government froze all bank accounts, capping the maximum amount an accountholder could withdraw at only $250 (€198) a week. Small investors, those who had left their money in the banks, were the hardest hit. Tens of thousands of desperate citizens stormed the banks, and many spent nights sleeping in front of the automated teller machines.”

Finally came the denouement of that country’s humiliation: “The last phase of the downturn began in the Buenos Aires suburbs. After consumption had dropped by 60 per cent, young men began looting supermarkets. In December 2001, 40,000 people gathered on Plaza de Mayo in front of the Casa Rosada, the presidential palace. There, they banged pots and pans together day and night, until an unnerved President Fernando de la Rúa fled by helicopter.”

Reach back even farther into history, if closer to home (at least culturally), and we may recall the economic wreckage of post-World War II Britain, which had to borrow the equivalent in today’s dollars of $150 billion from the United States just to keep the lights on, cops on the payroll and hospitals open. The Brits have only just paid back the Yanks the final installment of the loan.

In fact, national bankruptcies are a far more common occurrence in the modern world than many suspect – made all the more chilling by the thorough devastation they wreak on the afflicted economies.

Money’s not worth a plug nickel for anyone (except, perhaps, for those who had the foresight to move their cash to offshore, safe havens before the collapse). Schools and emergency rooms shut down with alarming speed. As for public pensions, you can forget about them altogether.

And because societies are vastly more complex and intra-dependent than are individuals, a jurisdiction can take years, even decades, to crawl back to some semblance of solvency.

Anyone who has endured a personal bankruptcy knows what it’s like to have a trustee like Price Waterhouse tethered to his ankle. But these guys are guardian angels compared to the dark minions who ply their trade at the International Monetary Fund.

It’s lamentable (though not surprising) that, in this run-up to the September 22 New Brunswick election, almost no one has uttered the ‘B-word’ in relation to the province’s dreadful fiscal shape.

It appears we live in a perpetual state of denial, expecting to make no hard choices, to undertake no risky business (can you spell s-h-a-l-e gas?) that might replenish our collective coffers, and yet always expecting fine, fat, grass-fed chickens in our pots at the end of the day.

The New Brunswick Business Council – a collection of demonstrably successful heavy-hitters, whose membership roster includes names like Oland, McCain and Ganong – made headlines this week by challenging the province’s political parties to drop their usual talking points and talk plainly to citizens. What, it demanded, are these political hopefuls going to do to clean up the mess that is New Brunswick’s financial condition?

The Council suggests a temporary hike in the HST and radical surgery on the spending side of the ledger. To be sure, the measures it prescribes aren’t nice, comfortable or easy. But the alternative is obviously far worse.

At least these folks remember Argentina.

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Jul 29 2014
1 Comment
Business, Economy, Government

Ducking the dreaded ‘B-word’ in New Brunswick

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Those who maintain that in the absence of a global depression governments and the jurisdictions they administer do not go bankrupt – not, at least, in the barrel-wearing, down-and- out sort of way – do not remember Argentina.

In a 2008 edition of Der Spiegel, the magazine reported, “The signs of looming national bankruptcy are plentiful, and bankers in the Uruguayan capital of Montevideo know them well. In late 2001, they were the first to see the coming crash in Argentina. Men traveled across the Rio de la Plata, from Buenos Aires to Montevideo, carrying suitcases filled with US dollars. They stood in long lines at the city’s banks, depositing the contents of their suitcases into accounts and safe deposit boxes there. Uruguay is South America’s Switzerland, a safe haven for money in times of crisis. No one asks about where the millions come from.”

The article continued: “Once the Argentine businessmen had transferred their dollars abroad, the second phase of the collapse began. The Argentine government froze all bank accounts, capping the maximum amount an accountholder could withdraw at only $250 (€198) a week. Small investors, those who had left their money in the banks, were the hardest hit. Tens of thousands of desperate citizens stormed the banks, and many spent nights sleeping in front of the automated teller machines.”

Finally came the denouement of that country’s humiliation: “The last phase of the downturn began in the Buenos Aires suburbs. After consumption had dropped by 60 per cent, young men began looting supermarkets. In December 2001, 40,000 people gathered on Plaza de Mayo in front of the Casa Rosada, the presidential palace. There, they banged pots and pans together day and night, until an unnerved President Fernando de la Rúa fled by helicopter.”

Reach back even farther into history, if closer to home (at least culturally), and we may recall the economic wreckage of post-World War II Britain, which had to borrow the equivalent in today’s dollars of $150 billion from the United States just to keep the lights on, cops on the payroll and hospitals open. The Brits have only just paid back the Yanks the final installment of the loan.

In fact, national bankruptcies are a far more common occurrence in the modern world than many suspect – made all the more chilling by the thorough devastation they wreak on the afflicted economies.

Money’s not worth a plug nickel for anyone (except, perhaps, for those who had the foresight to move their cash to offshore, safe havens before the collapse). Schools and emergency rooms shut down with alarming speed. As for public pensions, you can forget about them altogether.

And because societies are vastly more complex and intra-dependent than are individuals, a jurisdiction can take years, even decades, to crawl back to some semblance of solvency.

Anyone who has endured a personal bankruptcy knows what it’s like to have a trustee like Price Waterhouse tethered to his ankle. But these guys are guardian angels compared to the dark minions who ply their trade at the International Monetary Fund.

It’s lamentable (though not surprising) that, in this run-up to the September 22 New Brunswick election, almost no one has uttered the ‘B-word’ in relation to the province’s dreadful fiscal shape.

It appears we live in a perpetual state of denial, expecting to make no hard choices, to undertake no risky business (can you spell s-h-a-l-e gas?) that might replenish our collective coffers, and yet always expecting fine, fat, grass-fed chickens in our pots at the end of the day.

The New Brunswick Business Council – a collection of demonstrably successful heavy-hitters, whose membership roster includes names like Oland, McCain and Ganong – made headlines this week by challenging the province’s political parties to drop their usual talking points and talk plainly to citizens. What, it demanded, are these political hopefuls going to do to clean up the mess that is New Brunswick’s financial condition?

The Council suggests a temporary hike in the HST and radical surgery on the spending side of the ledger. To be sure, the measures it prescribes aren’t nice, comfortable or easy. But the alternative is obviously far worse.

At least these folks remember Argentina.

Tagged , , ,
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