When in Doubt, Follow the Money

When I was young I used to hear my grandfather talk of things happening on the news and on the political front.

From time to time he would grumble…follow the money…follow the money. That little phrase is very timely right about now for the good citizens of New Brunswick.

Pretend for a minute that you are the premier of New Brunswick and had spent the past three years running up successive budget deficits - even though you promised to adhere to balance budget legislation? What if you had ran the total debt from $5.6 billion to $7.4 billion in three short years? What if you knew there were a number of tough decisions that you have to make in the last year of your mandate? These decisions would probably upset a lot of people that you would need to vote for you to get reelected? To avoid these tough decisions you would have to borrow even more money in year four.

Hmmmm….What to do…..What to do…

You might be on the look out for some CASH and a lot of it. But where would you find it?

Wait a second – New Brunswick has a government owned and operated power utility and is located in a strategic geographic position to pump power into the USA. That could be worth some money. Even though it has a debt (about $4.8 billion) it is not really a debt in the sense that tax payers do not have to pay it. It is serviced by the rate payers and has assets that back it up. For a buyer this should be an attractive proposition.

What if you could sell this utility and get some cash. And by cash we mean a lot of cash. Perhaps somewhere in the $5 billion dollar range. Could it really be worth that much? What if as part of the deal you could get power rates frozen for residential customers and industrial users would get a break. Holy moly you might say – what a killer deal. Tons of cash and rate freeze/reduction. Everyone wins. You would be tempted to quickly jump at that. Devilish details about the deal be damned – you would want that cash. You would send a team in with instructions not to come out until a deal was signed ASAP.

Being a smart politician you would know that you would have to show the people that the utility in question is no longer good and somehow convince them that the debt of that utility is both very bad and part of the overall provincial debt.

As well you would have to be careful about how you position what you are going to do with all that cash. You would be wise to think that the owners of the publicly owned utility might have some issues with you selling it and what you might be planning to do with the money you are getting. Well you might say – all that money will go to pay off the really bad debt associated with the power utility. This will also lower the overall provincial debt by a lot. Sounds good. Right. Just to make sure it all goes off without a hitch you hire several public relations firms to sell the people of NB on the whole thing.

Good news. Somehow you were able to pull it all off and convince the people that the sale of the utility paid off a large chunk of the overall provincial debt – that $4.8 billion associated with the utility. Even though you know it is not really a debt. But you have convinced most New Brunswickers that it is. Phew…

But ohhh boy all that cash….$5B worth. How many good things could you do with that? With overall net debt down by $4.8 billion you might be tempted to borrow some more money to help get through the last year of your mandate and throw enough election goodies around to ensure a victory next September. Even though the the real New Brunswick debt has not changed. Enough people believe it has to allow you to get busy borrowing.

Crafty…Very Crafty….

All the hullabaloo about the NB Power deal and what is good or bad, the MOU, NERA report, heritage pool, NPV analysis etc… is all smoke and mirrors to allow the Graham government to go on a spending spree. It is no coincidence that the infrastructure spending was just increased to $1.9 billion over two years. They can do this all the while telling the people of NB that the ‘net’ debt (the one all of a sudden includes NB power’s debt) went down. They can go out and borrow a LOT of money this year and still report that the net debt of the province of NB went down

They are planning on a long summer's worth of black top and as many other make work projects as it takes to buy their way to reelection in September 2010. That is why the budget was backed up into December. To allow for capital projects to get the green light in time for work to start as soon as the snow melts.

Perhaps Mr. Graham is a little smarter than people are giving him credit for. You have to give him kudos for getting us all to think about everything except the money.

As Grandpa always said………………...follow the money.

The Future of Loyalty

Like most New Brunswickers, we here at the NB Conservative have always been proud to support our local businesses. We fill up our cars at Irving, eat McCain's Super Fries, and even though they are darned expensive we do enjoy Ganong's chicken bones, especially at Christmas time.

But this holiday season we are starting to wonder what the Ghost of Christmas Future might show these New Brunswick titans if he had the chance to float them into a time yet to be.

As more and more New Brunswickers start to figure out that the deal to sell NB Power is really a deal that benefits big business - how will their loyalty be affected towards these famous families? After all, not one of them has stood up to say "We want some savings, but we also want to share these savings with the people who buy our products and work in our plants."

Let's be clear about a couple of things. First, the debt of NB Power is not going away. It is simply being shifted from NB to Quebec, and the people of this province are still going to be the ones who will pay it back. Secondly, this debt was not created by residential customers only, so it's not really fair that only residential customers should have to pay it back.

The big family businesses of this province have not been showing the holiday spirit of giving during this whole debate. Can they reasonably expect to keep seeing our gift of customer loyalty under the Christmas tree this year?

Transformational Independence

When Shawn Graham was elected in 2006 with almost a plurality of the vote, he promised to honour that landslide victory by delivering transformational change.

With his recent appointment of a six-person independent panel to review the Hydro Quebec deal - he has once again delivered on that promise.

Instead of relying on the stodgy old definition of "independent" to refer to people who are at arms-length from Government or who have no appearance of a conflict of interest, Premier Graham has decided to go in a completely transformational other direction.

1. In answer to the concern that the Hydro Quebec deal was written for the benefit of big business, Premier Graham has decided to appoint David Ganong, the CEO of Ganong Chocolates to be the Chair of the Independent Committee. And hey, it has been several months since Shawn Graham gave David Ganong a $2 million loan so he could hire 50 more people at his chocolate factory. (see Smiling Shawn and Dave here: http://www.gnb.ca/cnb/news/bnb/2008e0565bn.htm)

2. What?! Most Premiers would only appoint one major industrialist to an independent review panel? Well not Transformation Man Graham. Here comes Allison McCain the Chairman of McCain International to provide some more balance to the committee.

3. But what about Dr. John McLaughlin, the recently retired President of UNB? Good news - he also fits into Premier Graham's transformed definition of independent - because McLaughlin is not only a charter member of the New Brunswick Business Council but he also used to report to David Ganong who is the Chair of the UNB Board of Governors. How's that for arms-length?

4. By now you are wondering - how can this panel of transformationalists exist without at least one environmental activist? Thank goodness Premier Shawn was able to convince Dr. Louis LaPierre to join the group - he's a world renowned biologist and the former Chair of Sustainable Development at the University of Moncton - also known as the Irving Chair because it is named after KC Irving.

5. Of course, no independent committee would be complete without a member who has so many Liberal appointments to his name that it groans with disbelief - enter Gilles Lepage. Who he? It's not possible to repeat here all the posts the Liberals have appointed him to over the years, but currently he is both the Chair of the NB Pension Investment Management Corporation as well as being the Vice-Chair of Facilicorp, another Crown Corporation. Phew - it's hard being a Liberal appointee.

6. And finally there is Elizabeth Weir. Let's just make it clear, we here at the NB Conservative love Elizabeth - everybody does. And we certainly don't believe that she will be any less independent just because she reports to Energy Minister Jack Keir who is also the Minister responsible for Efficiency NB - the crown corporation that she heads up.

So there you have it - the most transformationally independent review panel in the history of New Brunswick. Where some Premiers would be bending over backwards to appoint people who don't even have a whiff of conflict - New Brunswick stands apart. Shawn Graham could have appointed people like retired Supreme Court Judges or the President of the Canadian Institute of Chartered Accountants - but no. Major industrialists, environmentalists, people who report to the Minister of Energy - that's the panel to review the deal to sell NB Power - the new transformational way.

PS - Just one more for the tin hat folks out there - Gilles Lepage was also the Co-author of the Self-Sufficiency Report in 2007. Who was the other co-author? None other than Francis McGuire, who was recently appointed the Chairman of NB Power.

Shawn, Interrupted

In May of this year, our Liberal Premier and friend Shawn Graham made a very odd comment about whether he would be willing to call an early election.

He said essentially that he wanted to stick to the fixed election date of Sept 27, 2010, but that if an "issue of public importance" came along he might have to go to the people.

We know now that Shawn Graham personally broke his promise about NB Power and started the sales pitch with Premier Jean Charest in January of this year. Obviously a few months later he was so excited about how the talks were going he accidentally let it slip that it might become an election-worthy issue.

Were the Liberals lining up for a snap election? The timing of recent events for are very curious. On October 29th the Big Deal was signed with Charest. There is also a provincial Liberal party convention scheduled for Saturday November the 14th. This is just three days before the Legislature is set to start on the 17th with a fancy Speech from the Throne.

And let's not forget that the provincial budget has been announced for December 1st. Which we have also been forewarned by the Finance Minister is going to contain another historic deficit.

That's an awful lot of interrelated stuff happening within 33 days.

But consider this - if Shawn Graham's plan all along was to call a snap election at the Liberal Convention on November the 14th - then the House opening and the budget would be postponed until the spring. He could be campaigning on lower power rates as well as the positive impact they could have on the provincial budget - he wouldn't be campaigning on another terrible deficit.

The real kicker is that with a snap election there would be no time for the Official Opposition to ask annoying questions in the Legislature that would reveal the details of the Big Deal. Plus we also know that they have been spending our tax dollars on a massive advertising campaign in the three weeks leading up to the snap election date.

We here at the NB Conservative believe that the Liberal gurus intended all along to use the two week period between the announcement of the Big Deal and the Liberal convention to make the final decision on calling a snap election. But we also think a funny thing happened on the way to the election - the people have already spoken.

Consolidation Loan

For a different perspective on the NB Power deal, we here at NB Conservative would like to switch into allegory mode.

I have friend who is not so good with his money. He has his own business and he tends to spend more than he earns every year. In fact, over the past several years he has accumulated so much debt that he is basically broke.

I like my friend because we think the same way about a lot of things, he's always around when I need some help around the house, and hey, sometimes he spends his money buying me gifts. Who doesn't like that?

I remember one time in particular, when I was out of work and needed a job, my friend was there with a short term contract to help me keep the food on the table for my family.

He's a good friend and I know I can rely on him. Despite the fact he is a terrible money manager.

Recently, my friend came to me and said he had been offered a consolidation loan by his bank (for the sake of argument let's say it was the Bank of Quebec). And he wanted my advice about whether he should take the loan.

When I looked at the deal I was not totally convinced it would be good for my friend. Yes, it would basically take all his bad, high interest debt and put it into one loan where he could make easy regular payments over the next 30 years. That was the good part.

However, some of the other terms of the loan were not so good:

• He was going to have to give up all the equity he had in his house. He could still live there, but now he would be paying rent to the bank.
• The interest rate on the 30 year loan was only fixed for the first five years, after that it could go up by an amount that the bank determined.
• There was a slim chance that the bank would stop doing business in Canada, and if so, that would make my friend's life very complicated.
• It wasn't really clear in the loan agreement what would happen to all his retirement savings and he was really concerned about that aspect of the deal.
• The bank was also going to be deciding where he could spend his money in the future and that was probably going to mean he could no longer shop at the local stores he liked to support in his community.
• And he certainly would not be allowed to support as many people in the community with jobs and contracts anymore.

After considering all those things I still wasn't sure this would be a good option for my friend. But then he threw in one more condition of the loan.

It turns out that not all my friend's money problems were his alone. He had been working in partnership over the years with his Uncle Mervin, who was partly responsible for some of the bad debt that had been accumulating. But now that my friend needed help repaying his debts it appeared that he was on his own. Uncle Mervin refused to co-sign the consolidation loan and my friend was going to have to pay it back all by himself.

So, dear reader, let us ask you this: what advice would you give to our friend?

Nothing to Fear?

The Liberal government of Shawn Graham has developed an interesting line of attack against the opposition to their power deal. They just accuse their opponents of "fear mongering".

That is an interesting choice of words because it implies that the Liberal believe people have reason to be afraid of this deal. And that's probably true, but not for the reasons that the Liberals themselves are afraid.

New Brunswickers are most afraid because of their experience with the Graham Liberals. When they surprised people with ridiculous changes to the university system - the people had to march in the streets to get their attention. When they surprised people with changes to the French Immersion program, people had to take their own government to court to get them to listen. And the lawsuit against the changes to the health care regions is still making its way through the legal system.

With this latest brain wave, which the Premier says he was directly responsible for the idea, what is the lesson they learned from past experience? Have they learned how to do a better job of consulting with New Brunswickers?

No, rather they have learned that to get their crazy schemes past a knowing public they have to put on a huge and costly public relations campaign, not reveal too many details, and most importantly they need to threaten people that if they don't agree to an arbitrary deadline then their power bills will be increased.

Now that's fear mongering.

Jumping the Shark

Those of us at a certain age can recall a terrific TV show from the 1970's called "Happy Days". It had a delightful cast of characters and produced many memorable catch-phrases and story lines.

Happy Days was also responsible for spawning the phrase "jumping the shark". Unfortunately, "jumping the shark" refers to the point at which a show runs out of good ideas and just throws out any kind of controversial or exciting sounding story line to keep viewers interested. In this case, it was an episode (three-parter!) where Fonzie makes a crazy bet that he can jump over a shark on water-skis.

Here in New Brunswick - SHAWN GRAHAM HAS JUMPED THE SHARK.

Oh sure, we have all enjoyed many episodes of "Meet the Liberals" over the past three years. There was the one where Shawn said he was going to balance the books (oopsie!). There was the one where Shawn said he would lower taxes - then raise them - then lower them (oh those crazy Liberals). There was the one where Shawn was going to make Saint John an energy hub (whatever that means). And of course many, many more.

But with the deal to sell NB Power to Quebec - Premier Graham has jumped the shark and completely lost all credibility. Apparently he has no sense of irony at all because he has launched a website called "lowerratesnb" for a deal that does not lower rates for homeowners one single penny. The website contains buttons that are called "Win Win" and "Economic Growth" when clearly hundreds of good paying engineering jobs are going to be lost as we shut down one power plant after another. There's even a button called "Reliability" --- does anyone remember how many weeks it took Hydro Quebec to restore service after the ice storm?

When politicians jump the shark, and there are lots of examples in Canadian history, their time is up. Unfortunately they always seem to be the last to know.

Rejoice!

What More Do You Need to Know?

"The business community in Quebec is rejoicing" or so goes our rough translation of the first article in La Presse to talk about The Deal. The headline reads Favorable Reactions to Hydro Quebec Buying NB Power, which should tell you everything you need to know.

The President of the Montreal Chamber of Commerce, Michel Leblanc, says the deal will not only lead to important economic advancements for Quebec, but also be important for the environment.

Later in the article, Quebec environmentalists are said to be very happy that the deal will mean two plants will close (Dalhousie and Courtney Bay) which will reduce greenhouse gas emissions. The environmentalists have already started lobbying Hydro Quebec to close down two more New Brunswick power plants - Coleson Cove and Belledune.

The head of the Quebec union that represents Hydro Quebec workers says it is too soon to comment on the story as he only found out about it this morning. But the representative of the union, Maxime Valade, did say they will be looking closely at the credentials of the New Brunswick workers and the procedures for accepting new members, to ensure "all the proper rules are followed".

Read more about the rejoicing here

Promises Made, Promises Broken

We were going to list the broken promises Premier Graham has inflicted on the people of NB, but we do not have the new Bell Fibre Op, and so lack the required bandwidth to handle them all.

Liberal '06 Platform Reprint

Charter for Change Election 2006

We’ll put our province on the road to self-sufficiency by turning New Brunswick into a leader in energy conservation and generation

Together we will ... Lead the country in energy generation, green power technology and conservation

The Best in Energy Generation & Conservation

We will give consumers real control over energy costs and we will put more money back in New Brunswickers’ pockets. As energy prices fluctuate worldwide, a Liberal Government will work to protect consumers here at home.

A Liberal Government will introduce an innovative plan that will position New Brunswick as an energy leader in generation, promote green power and implement a massive conservation program that will grant homeowners $2,000 for home conservation.

Through NB Power, New Brunswick has long met the electricity needs of its citizens. Large construction projects, such as the refurbishment of Point Lepreau, can also stimulate the economy and provide employment to highly skilled professionals and tradespeople.

The people of New Brunswick are the shareholders of NB Power. Government does not need to be involved in the day-to-day operations of the utility but there is a responsibility to provide clear strategic direction and to define expectations.

A Liberal Government will:

1. Maintain NB Power as a publicly-owned utility that will serve all New Brunswickers equally.

2. Amend the Electricity Act to include a clear statement of purpose that puts the public good of New Brunswickers at the forefront.

3. Establish a long-term energy plan for NB Power with clear strategic direction and objectives.

4. Pursue a Maritime Energy Accord between the three Maritime provinces.

5. Establish regular reporting between the CEO of NB Power and the Minister of Energy.

6. Amend the Energy and Utilities Act to restore the independence of the Energy and Utilities Board, including the ability to review NB Power contracts over $75 million.

7. Establish an independent Office of the Consumer Ombudsman at NB Power.

8. Appoint a Consumer Representative to the NB Power Board of Directors.

9. Establish a no-disconnect policy between November 1 and March 31 for households in legitimate economic need.

Charter for Change:The Best in Energy Generation & Conservation

Pursue an at source rebate on the eight per cent provincial portion of the HST on electricity, natural gas and home heating oil.

Time to Gloat?

Must mention the fact the NB Conservative Blog broke the story in July.

Just sayin'

See it here

Not in Anybody's Interest?

A bombshell rumour is circulating in the Provincial Capital that the Graham Liberals have been working on a secret deal to sell NB Power to Quebec.

Given the Graham track record on management and negotiating skills, the power generated from the collective shiver running down our spines could probably light up the City of Bathurst for a week.

These guys could not get a lower pay increase with New Brunswick doctors after 10 months of negotiations, threats of law suits, and passing legislation to give them all the authority to do whatever they wanted. Why do they think New Brunswickers would even remotely trust them to negotiate with the sharp dealers at Hydro Quebec?

In response to the rumours, the Premier's press flak said "it's not in anybody's interest to talk about a possible outcome" of their conversations with Quebec.

Hey, Buddy, every New Brunswicker is a share holder of NB Power Inc - therefore it is precisely in everybody's interest to talk about possible outcomes.

More to come . . .

A Giant, Gaping Hole

One of the constants of the universe is that the sun will rise in the East and set in the West. Another is that you can always count on TJ Burke to have an opinion on a topic.

MLA Burke is quoted in the morning papers reacting to the surprise news of a call center closing in his riding in Fredericton. Some of his comments include:

"It sickens me, quite truthfully"

"It's a pretty big shock"

"Nothing short of a catastrophe"

"It's a giant, gaping hole at the Brookside Mall"

Most tellingly however is his statement that he will meet with Premier Graham this week to kick around some ideas about what to do.

"I don't know what the strategy will be at this time" said Burke.

Why doesn't the government know what the strategy will be? Why were they taken by surprise on this announcement? Why aren't there any contingency plans in place? And if there are, why aren't the Liberal MLA's aware of them?

This is the second announcement of the closure of a Fredericton call center in two weeks, both of which announcements cruelly coincide with the annual conference of Contact NB, the call center industry association for this province.

No doubt at the conference, participants will be discussing the "giant gaping hole" - not the one that will be left at the Brookside Mall, but rather the "giant gaping hole" in the Liberal government's contact center strategy.

Get It?

"Did you hear the one about the Finance Minister who believes in Self-Sufficiency but wants the federal government to give him more handouts?"

"Greg Byrne"

A horse walks into a bar and orders a Shirley Temple with a side of self-suffiency. The bartender says, "Hey, you know we don't serve your kind in here". And the horse says, "Greg Byrne".

"Knock-Knock"

"Who's there?"

"Finance Minister who believes in Self-Sufficiency but wants the feds to give him more handouts."

"Finance Minister who believes in Self-Sufficiency but wants the feds to give him more handouts - who?"

"Greg Byrne"

A Priest, a Rabbi, and an Imam are walking in the park and talking about self-sufficiency. The Priest says, "In order to have self-sufficiency you need to have a growing economy". The Rabbi says, "Self-sufficiency means doing more with less and not asking for handouts". And the Imam says, "Greg Byrne".

There once was a Finance Minister from Lincoln,

Who about self-sufficiency was thinkin'.

But more money from the feds,

Was what was in in head,

"Greg Byrne"

** News item: Finance Minister says despite growing economy he doesn't want Ottawa to lower transfer payments to NB.

Cry Me a Chocolate River

Few projects stand as a testament to Liberal hubris as blatantly as the project to replace the Petitcodiac River causeway between Moncton and Riverview.

Despite countless studies and environmental impact assessments, Shawn Graham has decided that the causeway must go because this project is "not significant only here in New Brunswick, but across Canada and around the world" *

That's right - people in China, India, and even Swaziland are just waiting with baited breath to see that causeway replaced by a bridge. Sheesh!

All political hyperbole aside (or as the Premier used to pronounce it - "hyper-bowl") the opening price tag on this project is in the neighbourhood of $100 million dollars, which amounts to about $1,000 for every single person living in the Greater Moncton Area.

Back here in the real world, we at the NB Conservative have a not so novel idea for the Premier. Do what they do in the US states when they have a mega project to fund - they ask the good citizens to vote on taking out a bond. In other words, they ask first if everyone agrees to borrow the money and then they actually pay it back.

In fact, we double-chocolate-river dare the Premier to put this initiative on a ballot, either province wide or in a local referendum, and then see if it's worth pursuing.

* In case you might have thought we made the quote up, here it is in its entirety from an actual government press release:

"The construction of the Petitcodiac causeway did not simply block the river," said Graham. "It devastated the river's ecosystem, eliminated commercial fisheries, and changed a way of life for residents of Fort Folly First Nation who had used the river for fishing, travel and trade.”

"Our undertaking of this important environmental project is significant not only here in New Brunswick, but across Canada and around the world. When the Petitcodiac River's magnificent tidal bore can be appreciated once again, and when species such as salmon, smelt and shad return, this endeavour will stand as a symbol of what we are capable of here in this great province, and why we can be proud to call it home." - www.gnb.ca

Missed Op-portunity

Shawn Graham's good friends at Bell-Aliant have really screwed him this time.

This week it was announced that they would be closing down their call centers in northern New Brunswick putting hundreds of workers on the unemployment line.

Didn't Shawn just give Bell-Aliant a big million dollar pile of our taxes so that they could install fiber optic cables in Fredericton and Saint John?

Didn't Shawn also just tear up the public procurement rules to give Bell-Aliant a sweetheart contract extension on their government business worth millions more?

What exactly are we getting in return? The chance to pay $100 a month for an over-priced internet connection and now, it turns out, job losses in the one area of New Brunswick that needs jobs the most.

Spending Up and Math Scores Down

While the Liberals were recently touting their success in raising literacy rates among our school age children, they were just as aggressively down-playing the three-year drop in numeracy rates.

The conspiracy theorists here at the NB Conservative are wondering if maybe lower numeracy scores aren't one of the objectives of the provincial Liberal party. After all, why would Liberals want New Brunswickers to be good with numbers? If more people understood the size of the provincial deficit this year they would be a lot more pissed off about it.

In December, the Graham Grits are going to produce a follow-up budget to the last deficit balloon they released only 7 months ago. All accounts are that it is going to be full of rosy predictions and very light on difficult choices.

Of course the fewer the number of people who understand just how bad their number are the better for them. So don't count on any extra budget money going towards math education.

What Did You Expect?

After a week of traveling around New Brunswick, the Finance Minister has announced some surprising news - all the people who came to the pre-budget meetings want the government to spend more money.

These meetings were not recorded or televised so we will have to take his word for it. But from the sounds of things there were plenty of union reps at all the stops encouraging more spending on government programs.

Then again, Mr. Byrne, what did you expect?

The Liberal government put out a pre-budget questionnaire that asked people how soon they would like to see the deficit paid off: 3 years from now, 4 years from now, or 5 years from now.

That's right - they told the public that balancing the books immediately was not even an option.

So when you tell people in advance you want to keep spending and borrowing more money that we have - why would people come to your meetings with ideas for spending less?

Quick Question

For our loyal readers.

If the new leader of the NB Green Party is Jack MacDougall, who ran against Shawn Graham for the Liberal leadership 7 years ago, does that make him the Leader of the Red Green Party?

Quick Question

For our loyal readers.

If the new leader of the NB Green Party is Jack MacDougall, who ran against Shawn Graham for the Liberal leadership 7 years ago, does that make him the Leader of the Red Green Party?

Optics of Fibre - The Opdate

A while back we were talking about the new fibre optic service to homes that Bell Aliant is rolling out in Fredericton and Saint John over the next year.

This sounds like an interesting new product. Our problem at the time was the provincial government's involvement in the deal. It essentially amounted to the Graham Liberals giving the big Bell phone company (headquarters in Toronto) a tax-payer funded grant along with a sweetheart contract for the government phone business.

Now the other shoes are starting to drop. Bell recently announced that the cost of this tax-payer subsidized service is going to be $100 per month for high-speed internet. Yowch!

We're sure the Premier can afford to spend more than $1,000 a year to be able to download YouTube videos, but it makes you wonder just how many actual New Brunswickers will actually be able to get this new service.

All Aboard the Feeling Good Train

While everyone else in the provincial capital is hooked on jazz and blues this week, we here at the NB Conservative are in more of a country mood. Especially after the announcement that the old train station on York Street is finally getting a make-over. The good news brings to mind one of Sammy Kershaw's greatest CD's "Feelin' Good Train".

We should of course be "feelin' good" about this news, but the involvement of NB Liquor in the deal raises more than a few red flags.

Our readers will recall the brilliant strategy of the Booze Bunker the last time they decided to open a new store, this one in Salisbury. Not only did they build a shop conveniently right off the Trans-Canada Highway but they have also decided to go head-to-head with an agency store just 5 minutes drive away.

What are the details on the train station deal and how much will beer buyers be on the hook for the new signature store in Fredericton?

So far the facts are sketchy, which always leads us to believe there must be more to the story. We know from public comments that they will be paying $23.50 per square foot for a 20 year lease. That's pretty pricy even for downtown Fredericton, but it's not outrageous.

Of course, a shrewd landlord will make his bucks on all the extras: fit-ups, escalator clauses, maintenance agreements, etc. Oh did we mention, the landlord is the Irving family?

We will leave the final comments to Sammy:

You work so hard just tryin' to make a livin'
Still you wind up on the losin' end
We don't want to leave the station without you
You'll have the best time that you'll ever spend

Economic Advice

Hard to imagine anyone in New Brunswick looking to the NDP government in Nova Scotia to be a role model. But new Premier Darrell Dexter seems to be getting a few things right.

Recently when they rolled out the typical report by an accounting firm stating that "the situation is worse than the last government would admit" (these reports are standard every time the government changes hands) Dexter also established a team of advisers on the economy.

And what a team - NBer Donald Savoie, APEC chair Elizabeth Beale, a former BMO Vice-President and a university economist.

Meanwhile back in New Brunswick - nothing.

No wait, that's not true. In March of this year Premier Graham held the first meeting of the Self-Sufficiency round table - a bi-partisan group of 36 New Brunswickers with the goal of making the province stronger and more prosperous.

The problem - it hasn't met since.

Guess we are going to solve our economic problems using photo-ops and not advice.

Off to the Races

In the wacky world of the Shawn Graham Liberals it makes sense to take revenues away from non-profit groups in order to give more millions of dollars to people involved in horse racing.

At least that's what their latest scheme proposes to do. They are going to allocate 150 VLT machines worth of revenues to the NB Harness Racing Association, but only 25 of those machines will actually be at racing tracks. The rest will be ... in some other place.

In a recent article, otherwise competent Minister Jack Keir was trotted out to explain Graham-onomics. "It's not like it's new money that's being generated for them" was his explanation. He further explained that their goal is to make the horse racing industry sustainable, but also points out that the economics of horse racing already generates $20 million per year in activity. So why do they need the money?

In the meantime - the Graham Liberals announced last year they are cutting back on VLT machines in order to make room for the new casino being built in Moncton. Which machines are being cut? - you guessed it, the ones that are hosted by non-profit groups and small businesses across NB. Don't they have the same right to be sustainable too?

The Beer Bust

NB Liquor Admits Beer was a Bust

Actually, the official news release from Booze HQ said no such thing - but if you read between the lines it's there.

What the press flak from NB Liquor actually said was that they were "very pleased with these results". In August, the store brand beer generated about 1% of all beer sales. To put that into perspective, the booze corp sold 1 million (!!) cases of beer in August and 990,000 of those were NOT the Selection brand.

This despite the fact that you can't walk into a liquor store without tripping over the Selection Beer display.

So regardless of the fact that August share of sales were down over 60% from the initial launch, that is apparently one for the win column at the booze bunker.

They are even claiming that the $18.67 cases were the reason why beer sales have increased in New Brunswick. The problem with that analysis? When you take away the Selection numbers, beer sales were still up! So basically if they had done nothing they would still be making money. But we guess that's true of any monopoly.

Curiously absent from the presser was any mention of how sales affected border communities. You may recall that the whole reason given for entering into an untendered contract with Moosehead to produce Selection Beer was to compete with low prices in Quebec. Does anyone know what Selection sales were like in places like Edmundston and Campbellton?

Reduce, Reuse, Recycle?

As we have heard often lately from the Graham Liberals New Brunswick is in an economic crunch. We are experiencing a monster of a deficit this year ($750 million) and the future is not looking much brighter.

That's why, when TJ Burke announced he was stepping down from Cabinet last week, the Premier's reaction seemed so out of place.

With 21 Ministers the Graham Liberals already have one of the largest Cabinets in New Brunswick's history, and certainly a lot bigger than similar sized provinces. Saskatchewan has 18, Manitoba has 18, Newfoundland has 18, and the new NDP (!) government in Nova Scotia only has 12.

We at the NB Conservative think that Burke's resignation as Environment Minister would have been an excellent opportunity to reduce the size of cabinet down to a more modest level.

Think of it this way - every Minister gets an extra $40,000 in salary, gets a special housing allowance in Fredericton, gets a vehicle allowance of about $500 per month, has to have an Executive Assistant and a Secretary hired to help them out, and so on and so forth. Maybe it all only adds up to an extra quarter of a million dollars a year - but shouldn't the Premier be leading the way when money is so tight?

License Plates

The Shawn Graham Liberals have recently rediscovered the economy is an issue. Several news releases and public statements over the past month have referred to their so-called 5-point plan to rescue New Brunswick.

So just out of curiosity - which one of the 5 points is the one that says now would be a good time to change the slogan on our license plates, thereby costing every person in New Brunswick an extra $25 bucks when they renew their vehicle registration?

And by the way - aren't these license plates made in Nova Scotia?

UPDATE: Yes, all our license plates are made by Waldale Manufacturing in Amherst Nova Scotia. Maybe helping their economy is the sixth point in the plan?

Is NB Power for Sale?

Selling NB Power to Quebec

If you blinked you might have missed. Right around the time kids were getting out of school and many New Brunswickers were thinking about summer vacation, the Liberals announced they are in talks with Hydro-Quebec to take over NB Power.

On the surface this does appear to be a good match. Both companies are owned by their respective provincial governments. NB Power is 100% owned by the people of New Brunswick and Hydro-Quebec is 100% owned by the citizens of that province. Also, both corporations are broken into logical components with divisions for generation, transmission, distribution and shared corporate services. Both NB Power and Hydro-Quebec operate a nuclear power plant.

But while they appear to be mirror images of each other in terms of organization, there is one major difference that puts NB Power is a very weak position at the Liberal bargaining table. And it's not just a size issue because Hydro-Quebec is about 10 times bigger than NB Power.

The real weakness of NB Power is that it is so unprofitable. And because it makes no money it has accumulated a monstrous amount of debt. Just to compare, Hydro-Quebec last year had accumulated over $22 billion in shareholders equity and they have paid down a lot of their debts. NB Power on the other hand has only accumulated $351 million in shareholders equity versus 4.7 billion in debts. In fact, NB Power probably owes a lot more than it is worth. Ouch.

This is the equivalent situation to going to the car dealership because you know that it's time to get a vehicle that is more fuel efficient, better technology, safer, etc. However, all you have to trade in is an old clunker with more than 200,000 km on it, rust spots everywhere, leaking oil and bald tires. Guess how much the dealer is going to give you for a trade-in credit. You will be lucky if they offer to take it off your hands for you for free.

Now to give them credit, the Shawn Graham Liberals are slick operators and smooth talkers, so maybe they will be able to get something out of those negotiations with the Province of Quebec. But that certainly has not been proven by history, if Quebec's negotiations with Newfoundland over Churchill Falls are any guide.

The Optics of Fibre

Just like your phone bill, the Devil is in the details.

Everyone knows when you get your phone or cable bill, it's worth it to double check all the details, because there are sometimes hidden costs and mistakes.

Recently Bell Aliant announced that they were going to roll out high-speed fibre optic connections to every house and business in Fredericton and Saint John. Good news, right? Yes, if you live in one of those areas it is good news, because competition (in this case versus Rogers) is always a good thing.

However, some of the fine print is a little troubling. Even more troubling are the details that we don't know.

Bell Aliant is a large national company that operates in several provinces including Ontario, Quebec, and the Atlantic Region. It is not to be confused with its predecessor Aliant that used to only cover the Atlantic provinces. That company was bought by Bell Canada and became Bell Aliant (clever!). And it is certainly not to be confused with NBTel which used to be a New Brunswick owned and operated business.

Bell Aliant is regulated by the CRTC. They have to spend certain amounts of money every year on capital expenditures and they are choosing to spend $60 million rolling out fibre optic lines in two NB cities between now and mid-2010.

To do this they are getting $1 million from us taxpayers, which was why we originally thought Premier Graham was invited to the announcement and included in the press release. But buried in the details was a little blurb that part of the deal included an agreement from the Government of New Brunswick to give Bell a 3 year contract worth (coincidentally) $60 million.

Now the press release does not specify what the 3 year agreement covers. Presumably it means that the government will use Bell Aliant exclusively for all its phone lines, cell phones, internet, and other related services for the next three years. But again - no details were given.

A news story on the announcement indicated that the government was skirting around public procurement rules to give Bell Aliant this special treatment. The news article also suggested that this contract was richer than it could have been with a public tender, and so it was going to cost us taxpayers an extra $7 million for the same service - but again no details.

Most curious was the missing information on speeds and pricing, usually the two most important considerations in any phone or cable equation. In the USA, a similar service called FIOS which is offered by Verizon costs between $50 and $150 per month. How much more will it cost in New Brunswick?

It's always great to see New Brunswick become more competitive with greater options for consumers and businesses to access internet and phone services. However, why is our government eliminating competition with a sole-source contract that will cost us an extra $7 million? Worse, they are eliminating competition province-wide, and taking money from all New Brunswickers, in order to support a service that covers about 25% of the population.

And why can't a big national company like Bell afford to pay for this without all the tricks and gimmicks from the Liberals anyway?

When the bills start rolling in on this project, it will be worth the time for New Brunswickers to check the fine print. There may be some hidden costs and surprises.

Spot the Mistakes

A fun game for kids are those "Spot the mistakes" pictures where you can find places where the artist has drawn people doing things incorrectly and kids get to pick up on others' mistakes.

A less fun pastime for adults is the "Spot the mistakes" game that comes with every Liberal press release.

Recently the acting Liberal Finance Minister decided to write a six paragraph letter to the editor in defense of the Grit tax plan. Unfortunately he left out about 10 more paragraphs (if he really wanted people to have the whole story).

Some of the gems in his letter include:

"It is true that we modestly increased taxes in our first budget" - well modesty is in the eye of the beholder I guess.

"When we took office, independent auditors showed us ... we were facing a potential deficit of $400 million". Yes, the Grits did hire the accounting firm of Grant Thornton to tell them, based on a worst case scenario, how bad could the province's books get? And they did say, if the Liberals were to completely fail as a government the deficit could reach $400 million.

But what actually happened is that because of the good financial management New Brunswick had over 7 years with Bernard Lord the year end budget was more than balanced. In fact when the Liberals announced their first budget (the one with all the tax hikes) they said there would be about a $35 million surplus for the year before instead of a $400 deficit. But as if their credibility wasn't already in doubt, when the actual Auditor General got finished with the books, it turned out that the last Bernard Lord budget resulted in a $237 million surplus. Whoops. Better not talk about reality when we have a report we paid $400,000 for that talks about fantasy numbers instead.

(Interestingly, the Liberals have never released the full Grant Thornton Report to the public, only the Executive Summary)

Acting Minister Keir's tall tale in the TJ keeps on delivering however, when he writes "In 2007 we increased personal income taxes by approximately $50 million. This year we have lowered them by $118 million...". Did you miss it? That's right - there was a whole year that took place between 2007 and this year which is 2009. How much was collected by the government in personal income taxes in 2008? We don't know because Mr. Keir conveniently leaves that page off his calendar.

But not to be a total Scrooge, Minister Keir does give some credit to the PC Opposition for being right about the highest earning 1,300 New Brunswickers getting the most tax cuts. But in an effort to downplay the amounts he says those 1,300 richest New Brunswickers "will still pay 5.2% of total all income tax in the province" down from paying 6%.

Gee, only a 0.8% reduction makes it sound like a pretty small tax cut, eh? Well consider that this year NB will collect more than $1.2 Billion in personal taxes. If the richest 1,300 contribute 6% of that that means they pay $72 million of the total. Thanks to the Liberal tax plan those same wealthy few will get $8 million in Liberal tax reductions to split between them, or about $6,000 per individual.

I wonder why Keir did not compare that to Premier Graham's recent visit to Dieppe where he was bragging about his great tax plan that is going to save a family there about $10 a week...

Latest Polling

Seems the Bristol poll out yesterday puts the provincial Tories in the lead.

See the Daily Gleaner article about the poll here.

With no indication of the number of New Brunswickers polled, it cannot be taken too seriously, as very possibly the error of margin could be quite high.

But it is one more indication that the early election talk will slow down more.

A Tribute to Sue Park

We here at the NB Conservative would like to admit not all the great posts come from us. Here's a fine example of a wise New Brunswicker giving her two cents worth on a recent CBC story concerning Fraser Papers seeking bankruptcy protection from their creditors. Thank you Sue Park, wherever you are.

Original Article is here

"How to lose $40 million dollars in one year. By Shawn Graham."

Step 1 - Agree to save a few hundred jobs that are obviously going to be lost due to a complete meltdown in the forestry industry.

Step 2 - Give a company that has a stock in free fall a $40 million loan guarantee.

Step 3 - Tell critics they are all idiots spouting "hogwash" about priorities because no money has changed hands under the deal (for more information on belittling the public - see Jack Keir's manual "How to run a business portfolio with no business experience")

Step 4 - Wait 12 months

Step 5 - By this point the company will be bankrupt and the security you hold will be available to you. Congratulations, you are the proud owner of pulp mill machinery.

Step 6 - Unload the machinery by auction where a foreign firm buys the machinery for 2 cents on the dollar. This will provide you with a return of $800,000 on your original $40 million investment.

Step 7 - Provide new owner $800,000 forgivable loan to keep machinery in New Brunswick

Congratulations. You have now lost every penny of your $40 million dollars. In addition, you will now have a new entity that will be dependent on you and rest assured, they will at some point ask you for another $40 million so the entire process can occur all over again. While this may seem like a lot of time, money and effort to save a few hundred jobs, my Dad says it is really worth doing because his friend Frank told him so.

COMING SOON!!! - How to Lose $50 Million in One Year.

Shawn shows you how to take the failsafe strategies he's applied to the forestry sector and apply them to the NB Construction Industry!!

Fall Election Postponed

Appears the fall election has been postponed. Sorry for earlier posts musing about the possibility of an early election call.

Psychic!

Quick call the X-Files because a real live psychic has been found in New Brunswick!

This week Donald Arseneault, the Minister of Post-Secondary Education, announced that if New Brunswick didn't get more money from Ottawa they would have to scrap the plans to build a new Community College in Fredericton.

The scary part is that the promise to build NBCC-Fredericton was made in the Liberal platform 3 years ago - but the federal program they are counting on to pay for it didn't even exist at that time! So how did he know three years ago what Stephen Harper would do in 2009? Amazing!

In order to make the promise in 2006 and for it to be dependent upon a one-time federal stimulus package - the Graham Liberals would have had to know that the economy was going to bust world-wide in 2008 and that the Government in Ottawa would pass a special one-time stimulus budget in January of 2009. Furthermore, Don "The Swami" Arseneault would have had to predict that out of the extra $40 billion the feds are dropping this year, $2 billion would go into universities and colleges. Astounding!

Unfortunately, like Nostradamus, the Minister's prediction was not accurate enough. When he had his vision 3 years ago he neglected to calculate the total amount of funding that NB would be eligible for, so now they are short of the money for Fredericton because they spent the initial funding on other projects. Making priorities is hard!

Still, at least now we here at NB Conservative know who to ask about our picks for next year's hockey pool.

More Election Talk

Why is the Premier suddenly talking about an autumn election, when he recently passed legislation stating that there would be fixed election dates? It makes you wonder what is going through his mind when he states that there may be some reason to go to the electorate a year before his mandate is finished.

We would presume that he has some insight on what his budget will look like next year and he will either have to make deep cuts into the civil service or increase taxes in order to pay for all his promises. We are only starting to feel the effects of the recession now, next year, when we feel the full impact of the downturn in the economy, we will see tax revenues plummet and there is no way the Premier will be able to deliver on all the promises he has made.

The cuts made to the public service this year were minor in comparison to what he will have to do next year if he wants to control spending at all. His MLAs in the Capitol region will be decimated and he desperately needs them to maintain his government. Never being someone who wants to deliver bad news, especially prior to an election, the Premier is contemplating calling an early election, renew his mandate and then bring all the bad news down blaming it on the recession stating he didn’t know it was going to be as bad as it is.

Don’t be fooled, if he does launch a campaign this year he will still make promises that he can’t keep. He states that he has done a good job of managing the economy and says that he will keep spending in check. Does anyone truly believe this? The Premier goes on talking about the transparency with his government and his plans, the only problem with the Premier and his transparency is that people will see right through it.

Why is the Finance Minister Spending So Much Time with the Auditor General??

Victor Boudreau is not just the Finance Minister, he is essentially the Chief Financial Officer for New Brunswick. Many might not realize but in addition to being Finance Minister, Boudreau is also in charge of several other government organizations such as NB Liquor, NB Investment Management Corporation, and the Regional Development Corporation.

Almost all of them are being investigated (or criticized) by the A-G.

The NB Investment Management Corporation, which looks after all the province's pension funds, was investigated last year. The A-G had to make several recommendations to the government about setting targets and disclosing information about incentives for employees.

A follow-up by the A-G's Office on the Regional Development Corporation noted they were still not providing evaluation reports on their programs and funding - something that has been a hot potato for Minister Boudreau lately. He had a recent disastrous meeting with the Editorial Board of the telegraph-Journal in which he admitted the problem and also admitted he doesn't know how to fix it.

Recently, the Conservative Opposition requested that the government ask the A-G investigate the very strange pricing practices at NB Liquor - where they apparently asked their wine suppliers to jack up the price so NB Liquor could make more money. How many stores do you know that would ask their suppliers to charge more so they can pass on the inflation to their customers?

Finally, when the Liberals tabled their budget this year they announced a massive deficit of over $700 million dollars, but then Boudreau said they just weren't going to count the $300 million they owe to the pension funds. (Here's an idea - next time your mortgage payment is due - try going to the bank and telling them you aren't counting your house payments as part of your expenses anymore.)

Once again, the A-G had to investigate and set the record state - the deficits that the Liberals are planning on running for the next four years are even worse than they are admitting to people.

How much confidence can anyone have in a Finance Minister who has every single one of his departments and agencies under a cloud of suspicion? Maybe Victor Boudreau's plan for stimulating the economy based on giving the Auditor General's office lots of work to do?