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.

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?

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?