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.

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.

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.