Spirited Energy, Legislature style: NDP selling Hydro, Tories surge in QP
NDP mommies and daddies throughout Manitoba were telling their kiddies a scary bedtime story Tuesday night.
In bedrooms bathed by the eerie glow of LED-lit cellphones, they told the tale of the day THE TORY DEVILS SOLD THE MANITOBA TELEPHONE SYSTEM TO THE RAPACIOUS CAPITALISTS.
Nov. 28 is the anniversary of the day the Filmon Conservative government used closure in 1996 to end the debate on the sale of MTS. It's a day that lives in the NDP annals of infamy, right next to the fall of Allende's socialist paradise in Chile.
The sale of MTS is used as a club to beat the Hugh McFadyen-led Tories every time the lacklustre Opposition demands a public inquiry into the Crocus Fund scandal, yesterday, for example. It's immediately followed by a chant of "We won't let you sell Manitoba Hydro."
And they're right. The PC's won't get a chance.
The NDP is already selling Hydro assets, and the Tories are quietly letting them do it.At least when the Conservatives sold MTS the money went into the rainy-day fund that the NDP has been draining for six years.
The process is reversed under New Democonomics, the economic theory practiced by the NDP.
The New Democrats love to point out that Hydro is a public utility owned by all the citizens of the province for the benefit of all the citizens. It sounds so Tommy Douglas warm and fuzzy. But in practice, it turns out some citizens are more equal than others. Tommy Douglas turned George Orwell.
This year the NDP sold off part of the Wuskwatim dam to the Nelson House Indian reserve. It's the model they intend to follow, they said, with the Conawapa and Gull Lake dams that are next on the list. No bids, no offers.
Just a sweetheart deal that cuts Manitobans out of the profits of their own public utility.
And what a deal!
You couldn't get anything better at Kern-Hill Furniture when daddy Nick was still alive.
NO money down.
Almost 30 YEARS to pay.
A SIX YEAR money-back guarantee.
C'MON DOWN !
Uh, not you, reader.
The Nisichawayasihk Cree Nation, aka Nelson House, is a reserve of fewer than 4000 members. It's biggest asset, outside of a swatch of land smaller than a golf course needed for the Wuskwatim dam, is a $40 million Hydro bond, which was payment for the last hydro project affecting the reserve. Oh, and the reserve is broke.
Nevertheless, since June, they are the proud owners of a third of the $1.2 billion dollar Wuskwatim power project.
It's New Democonomics at work.
NDP sold the one-third share of Wuskwatim for the rock bottom price of $85 million. That's an "investment" of 7 percent of the cost for a guaranteed 33 percent of the profits.
That's $85 million for a stake worth $400 million. A 470 percent return on investment to start with.
The Winnipeg Free Press said in March that:
"Sources indicate that the deal includes about $100 million in direct negotiated contracts for NCN. It could include contracts for camp construction, catering and security for the project. NCN band members will also receive some hiring preferences."
If so, the reserve gets all its money back before a single watt of power is sold.
Nelson House First Nation had to come up with $1 million as a deposit, fully refundable if the members walk away from the deal when the dam is built and ready to come online in 2012. The deal calls for Nelson House to come up with another $56 million as a first installment. Manitoba Hydro will lend them the money---- to buy the dam from Manitoba Hydro. And they have at least 29 years to pay it back, presumably from the profits of the dam they're buying.
They still need to find $28 million by the time the dam is built in 2012. How tough will that be?
Banker: And how do you expect to repay this loan?
NCN: Hydro says our share of the profits will be from $26 to $57 million a year.
Banker: Sign here.
The NDP opposes P3's-- private-public partnerships--- because, they argue, the private investors get all the profits and the public takes all the risk. Under New Democonomics the public sector puts up both ends of the investment and still shares the profits. Go figure.
We haven't seen such a sweet deal since, well, since the Crocus Fund.
You remember how Crocus got an "investment" from the Quebec Solidarite Fund (the 'Fond' ) for $10 million? http://blackrod.blogspot.com/2005/05/crocus-fund-and-mystery-loan-from.html
Except that the terms of the deal---absoutely no risk, the principle fully protected, the return-on-investment fully guaranteed for the length of the "investment"---resembled nothing so much as a loan, so much, in fact, that the Auditor General determined that it was---wait for it---actually a loan misrepresented as an investment.
Yet the NDP is allowed to sell Manitoba Hydro assets at terms so generous they make the Dollar Store seem like Saks Fifth Avenue.
And nobody says boo.
Under the Dome of the Legislature
You've heard the old saying "when the cat's away, the mice will play."
Well, when Premier Gary Doer was out of the Legislature for a couple of days (in Vancouver on official business), the Opposition caught fire and scorched the NDP benches.
Even when the Top Cat returned today, the Tories, plus Liberal Kevin Lamoureux, kept the heat turned up. The New Democrats are suddenly looking at the clock and counting the days until this session of the Legislature ends.
P.C. leader Hugh McFadyen seized the reins with, of all things, a revival of the Crocus scandal, the first topic he kiboshed after stepping into Stu Murray's shoes. And the NDP is squirming.
A New Attack
McFadyen rose in the Legislature on Tuesday and declared "J'accuse David Woodbury." He said the Tories have been tipped that Woodbury was the Crocus fund's "Mr. Inside", the point man who handled the Crocus file for the government outside of the normal chain of command. McFadyen said a public inquiry was needed to uncover whether Woodbury had kept Doer abreast of the fund's financial problems before they burst into the public.
On Thursday McFadyen raised the ante. He asked Doer to recuse himself from the matter because of his close relationship with Woodbury, and for the Attorney General to use his authority to issue an order-in-council establishing a public inquiry.
A New Defence
With Doer out of the province, Finance Minister Greg Selinger rushed to the parapets to fend of the latest attack. If the Crocus fund ended in disaster, it was Gary Filmon's fault, he thundered.
Oh, wait. That's the old defence. The new defence is that Crocus lost so much money during Filmon's watch that it was too weak to survive.
The Weakest Link
The Tories have identified the weak link on the government side. They've started peppering Industry Minister Scott Smith with questions about Crocus, which came under his portfolio. Gary Doer and Greg Selinger have had to run interference for Smith by leaping up to answer the questions for him.
Doer's return still managed to fluster McFadyen, though. At one point he interrupted a speech to complain to the Speaker about the insults flying across from Doer when his microphone is turned off.
Fewer Surgeries, Shorter waits
An exchange on Tuesday between Tory Myrna Driedger and Health Minister Theresa Oswald produced some real information about the health care system in Manitoba, although it was lost in the barrage of political rhetoric that accompanied both question and answer.
Driedger asked why the number of major surgeries done in Winnipeg fell from 58,000 in 1998-99 to 53,500 in 2005-06 despite an increase in the health budget of $1.5 billion.
Oswald answered that the government made its spending priority the reduction of wait lists for cancer and cardiac patients, which now stand below the national bench marks. Surgeries have been reduced as a result.
A fair question. And a fair answer. The public could decide which side of the fence they stood---if they could filter out the acidic partisan commentary that poisons Question Period.
Liberal MLA Kevin Lamoureux demanded to know why the Premier has not fired his chief of staff who is being investigated by Elections Manitoba over allegations of interfering in an NDP nomination race. Lamoureux used terms like corruption and bribery to describe what he read in the letter which was sent to the Premier and turned over to Election Manitoba. The Tories are letting Lamoureux carry this ball alone.
Weakest Link, Part Two
There's a reason the Tories have set their sights on Industry Minister Scott Smith. He's been their best friend this session.
It was Smith who revitalized the P.C.'s by letting slip how little support there has been from the private sector for the Spirited Energy rebranding excercise so far.
Stage One of the rebranding was to sell Spirited Energy to Manitobans.
Stage Two, which started this week, was to take the sell to the rest of the country.
The government said Stage One cost about $2.4 million, of which $1 million came from the private sector. In an unguarded moment Smith revealed that some of the "private sector" support was really from Crown corporations. That got the Opposition hounds baying.
Smith tried to quelch the criticism by naming names of some of the private sector supporters of Spirited Energy and how much they contributed. The total fell more than half a million dollars short of the $1 million he originally said had come from the private sector.
Tory leader McFadyen worked this bone Monday, but dropped it the rest of the week. We can't say whether it was because he lost interest in where the NDP spent advertising dollars, or whether he decided it was better not to alienate the Winnipeg Free Press, which has editorially supported the Tories, and which may have a conflict-of-interest when it comes to Spirited Energy ad monies.
The FP ignored Scott Smith's revelations as long as it possibly could, hoping they would go away. Then, four days later, a strange story appeared on Page A6 of Tuesday's paper.
It's a lesson for any journalism student on " How to read the newspaper and separate flim flam from news".
A. There was no byline. Now how unusual is that? It was the only story in the entire paper without a hint of who wrote it. Don't you wonder why?
B. The story undoubtedly started as a legitimate story from the Legislature bureau, probably about Hugh McFadyen's questions on Monday. We bet an editor immediately flagged it for the attention of editor Bob Cox. Cox blanched, and took it to publisher Andy Ritchie. Ritchie wasn't going to carry the can; he dialed the paper's Spirited Energy expert, co-owner Bob Silver, who sat on the committee that recommended the branding in the first place.
Silver made some suggestions. Ritchie and Cox added their own touches. And the story was rewritten beyond recognition. A group effort, nobody wanted the credit of a byline.
C. A story about an alleged lack of support from the private sector for Spirited Energy morphed into a story about the great support of the private sector. Except that the only source quoted was Dave Angus, in his role as the president of the Winnipeg Chamber of Commerce. Not one real business owner can be found in the story. The only other person quoted is Free Press publisher Andy Ritchie who gives his boss's branding campaign a rave review.
D. The writer(s) get around to the numbers in the bottom third of the story, the part that only diehard readers get to.
He/she/they wrote that
"private sector and community contributions to the Spirited Energy campaign include $300,000 donated by the Broadcaster's Association of Manitoba for on-air advertising space, as well as $165,000 of advertising space provided by Canwest Global. Manitoba Public Insurance gave $60,000 for this summer's travelling Spirited Energy street teams. Free Press Publications donated $53,000 of advertising space."
E. We guess MPI falls under designation"community contributions." We also noted what was missing from the list.
The Winnipeg Sun.
Scott Smith said last Friday that the Sun's contribution was $15,000.
In the cheapest of cheap shots, the FP refused to even print the name of other newspaper in town.
F. They did however mention Free Press Publications. You see, there's some question about whether the advertising in the Winnipeg Free Press is donated, or if the government is buying it.
Which raises the question of whether the co-owner of the newspaper has a conflict of interest in promoting Spirited Energy to the government through his committee work and collecting hefty ad revenue from the government at the other end.
The question isn't answered by the reference to Free Press Publications. This term just raises more questions.
Did the newspaper intend the reader to understand that the Winnipeg Free Press donated $53,000 worth of ad space for the Spirited Energy campaign? Then why not say it in so many words?
If the story had referred to Free Press publications (small p), we would understand that to mean the community weeklies and Uptown, which are sister publications to the FP.
But that would leave us wondering whether the Free Press made any contribution of its own.
In fact, we are wondering that. A newspaper story is supposed to clear up questions that readers have, not make things murkier.
And they do get murky.
- Free Press Publications shows up on a list of Spirited Energy "partners" on the SE website.
- But the Ottawa Press Gallery carries a listing for "Free Press Publications and Winnipeg Free Press" under 'affiliations', the "and" suggesting they are two entities.
It's obviously going to take a lot more energy to get to the bottom of this story. Maybe that's why we need Wuskwatim and Conawapa so badly.