When listening to the radio, watching television or reading the newspapers about events in this province, there seems to be a missing link. One that bridges all that information together and provides a way for people to contribute, express or lobby their concerns in their own time. After-all, this is our home and everyone cannot fit in Lukie's boat and paddle their way to Upper Canada, nor should we!
Yesterday Sue's Blog focused on the journalistic style of James McLeod in his story headlined "Nalcor audit won’t be done before retirement: AG".
Today let's look at some of the other information we can take from this interview.
The AG Terry Paddon is retiring at months end. He leaves behind an unfinished audit of specific operations of Nalcor.
The story does not tell us some important things.
How far along is the audit?
When did Paddon expect to finish it when it began?
Did he run into unforeseen difficulties in attaining the information he needed?
Was it Paddon's intent to finish the audit before he retired?
What does Paddon think the cost will be to finish it?
Is it more costly under a new Auditor General than if he completed it before he retired?
Did he find anything worth noting now?
Terry Paddon is one of those nice people. Not much - I've ever seen in his personality that would put people off. He is a professional by designation and as best I could tell - took his role seriously.
Paddon - however - missed a couple of key areas in his tenure with the Department of Finance and as Auditor General. He missed some real activity regarding the Federal - Provincial Fiscal Arrangements Act (Equalization) - despite being alerted to it.
Equalization - as the program is normally referred to - primarily has been to the benefit of Quebec. The program which Stephen Harper promised he would change but then did not - I assume was kept whole for Quebec.
Harper's promise to remove royalties from non-renewable resources from the formula - would have meant that our oil revenues could have served to improve the lives of future generations so much more. That was a digression. (still angry at CPC for deliberately conning Newfoundland and Labrador and "Seantor" Manning's standing at Harper's side as he did it)
BREAKING NEWS
Many people may not have noticed - but Hydro-Quebec does a significant
amount of public program spending. They have been doing that for
decades. Why is the question....
ANSWER
Back in 2000 Stephane Dion then President of the Queen's Privy Council and Minister of Intergovernmental Affairs appeared on Bill Rowe's Open-Line. I asked questions the Minister could not answer on line - so he did as he promised - wrote me the answers to my questions.
Below is the response:
"On the question of the treatment of Churchill Falls under the Equalization program, it should be noted that an adjustment has been made in the calculation of Equalization payments since 1982 which takes into account how Churchill Falls hydro is priced. Equalization payments are based on the relative ability of each province to raise taxes; and the Churchill Falls adjustment shifts some capacity to tax hydro sites from Newfoundland to Quebec. The net effect is to reduce Quebec's annual Equalization payments while raising Newfoundland's. Furthermore, to the extent that profits from Churchill Falls translate into profits to Hydro Quebec that are remitted to the Quebec government, these too have the effect of lowering Quebec's Equalization."
Right from the get-go we were being further penalized on the Upper Churchill - while Quebec reaped even more benefits. Then the formula was changed to reflect the real contract (albeit not enough in my opinion).
Were we ever compensated for the past - NO.
The real kicker though was found accidentally in the last sentence of Dion's response. "Furthermore, to the extent that profits from Churchill Falls
translate into profits to Hydro Quebec that are remitted to the Quebec
government, these too have the effect of lowering Quebec's
Equalization."
That little remark was an eye opener for anybody watching Hydro-Quebec - as I certainly was.
The hundreds of News Releases coming out of Hydro-Quebec in those years were phenomenal. Now it made sense. Before profit - expenses come out. If Hydro-Quebec delivered or helped to deliver public programming on behalf of the Government of Quebec - they lowered their profits - while the province of Quebec saved equalization money - which gave the province even more to spend on public programs.
In short - Hydro-Quebec making billions off our resource - reduced their profits - lowered remitances to the government - in some years almost to zero - to avoid the loss of equalization. This in turn exponentially increased the value from Labrador resources for Quebec.
At the time Newfoundland and Labrador Hydro was making money and was remitting profits to Newfoundland and Labrador. At the time we could have taken advantage of the same. Today Nalcor is not "profitable" - only by force of the PUB, our laws, and oil activity. Nalcor never did do the investment and development that Hydro-Quebec has successfully.
Terry Paddon was aware of this and we did nothing. We sat on our hands and did nothing.
The political and media spin in Newfoundland and Labrador became we MUST become a "have" province. The romantic - naive - irrelevant title of "have". The "have being based on a formula that could see a financially destitute province be "have" while a thriving growing super power province be "have not".
Let me be more clear: Quebec has an unemployment rate of 6% Newfoundland and Labrador is at almost 15%. The population in NL was 530,854 in 1971 and 528,817 in 2017 meanwhile the population in Quebec was 6,137,305 in 1971 and 8,394,034 in 2017. Provincial debt NL is $23,052 per person while in Quebec it is $22,104. This does not include the albatross of 13 Billion for Muskrat Falls. Then we take into account that Nalcor is not financing all it's own obligations - we put in a fair chunk and it is only barely profitable because of oil operations. When compared to Hydro-Quebec which has hundreds of millions in profits - without oil revenues.
Paddon failed by not describing what equalization truly is and how the system works. It's not all his fault - but political masters should not have had that much say.
The media - should really get its collective act together and do some real reporting. It should make itself knowledgeable about important issues and policies before it puts out fluff - this denying the people of balanced information on which they can make a decision.
It is no longer acceptable to have zero leadership in politics and zero accountability of the news media.
We are broke. We continue to repeat mistakes. We continue to dream without doing anything that remotely will help us achieve our dream of prosperous future.
By the way - are there any MHA's willing to wade in to this discussion or members of our "press corps"?
James McLeod presented a news story on October 7th in the Telegram.
It was headlined "Nalcor audit won’t be done before retirement: AG"
As usual - pose a question - get an answer - print answer. No follow-up, no definitions of terms used, and no independent thought respecting the answer.
I'll get into Auditor General in another post - but for now - let's watch this "journalistic" masterpiece unfold.
The conversation between the two must have wandered into the need for a forensic audit. McLeod reports as follows on that question:
Paddon
was cautious when talking about a potential forensic audit for Muskrat
Falls. He said he knows it wouldn’t be cheap though.
“I’m not quite sure that the word ‘forensic audit’ is
appropriate. I mean, I think really what people are looking for is for
somebody to go in and look at, perhaps, the decision-making process and
the execution process, and those sorts of things,” he said.
“It would take a lot of time and a lot of resources. The outcome? I have no idea what the outcome would be.”
IN MY OPINION HERE IS WHAT SHOULD HAVE BEEN ASKED AND ANSWERED:
1. Paddon was cautious but did say it wouldn't be cheap though. Question: what's cheap? why are you cautious?
2. Paddon was not quite sure that the word 'forensic audit' is appropriate.
Question: why is it not appropriate? what part of a forensic audit would be inappropriate?
3. Paddon believes he knows what critics are calling for - decision making and execution process Question: how does that fall out of the purview of a forensic audit? Why do you believe "people" are only looking at those components?
4. Paddon believes it would take a lot of time and a lot of resources. Questions: How much time would this forensic audit need? How much would it cost. Cost relative to what? What might be the cost of NOT doing it?
5. Paddon has no idea what the outcome would be. Question: is that perhaps why people want one done? Is the reason you can't speculate on the outcome because you do not know what perimeters would be set?
and of course: Based on the doubling of the costs, hidden documents, continued extension on time-table for completion, independent contractors information hidden from shareholder. Don't these things present a red-flag to an accountant?
AFTER THIS MCLEOD SHOULD HAVE SOUGHT ANOTHER ACCOUNTING SOURCE AND ASKED THE SAME QUESTIONS.
Now let's do a bit of research ourselves and see if a forensic audit is exactly what we are asking for and know that we need.
Forensic auditing is a specialization within the field of accounting, and forensic auditors often provide expert testimony during trial proceedings. Most large accounting firms have a forensic auditing department.
The audit covers a wide range of investigative activities performed by accountants. The process may also include serving as an expert witness in a fraud trial.
The investigation process follows a similar path as a regular audit of financial statements. The steps can include planning, review and a report. If the investigation was undertaken to discover the presence of fraud, evidence is presented to uncover or disprove the fraud and determine the amount of the damages suffered. The findings are presented to the client — and possibly the court should the case go that far.
During the planning stage, the forensic auditing team establishes
objectives, such as identifying if fraud has been committed, how long it
has been going on, the parties involved, quantifying the financial loss
and providing fraud prevention measures. While gathering evidence, the
team collects evidence in the proper manner in order for it to be used
in a court case. There are various techniques used to gather evidence. A
report is produced for the client with the findings. Lastly, those
involved in the forensic audit may be asked to present their findings to
the court.
Forensic audits uncover several types of fraud. The most common involves
theft, including cash, inventory and fraudulent payments. Another type
of fraud is corruption, such as a conflict of interest, bribery and
extortion. The last major category is financial statement fraud. This
relates to misstatements of the financials of a company.
There are many other sites - but this should suffice to ensure that what we are asking for is exactly what we want and need.
This blog has already posted the RED FLAGS post on the need for a forensic audit.
McLeod should have put to a few known critics - the responses of the Auditor General and get another take on it.
This - let me find a source who has a title and a designation - and I can write a news piece is flawed and can lead to the readership relying too much value on the information presented.
This is the spin of spin and is yet another artificial deterrent to completing a forensic audit and attempting to curtail increased calls for a forensic audit.
It seems to me there are many people who just want this whole sordid mess to disappear. Unfortunately for them - social media is alive and growing.
As the bogeyman can be either gender - the use of the word should not cause sexist issues. Now as our new "unelected" Attorney General raised the topic of fear - I should not be accused of being nasty.
Judy Manning believes that criticism of her appointment is coming from the Opposition Parties as they are "threatened by the Progressive Conservative Government". Telegram story HERE
I would "with respect" reword that to read the electorate is threatened by the Progressive Conservative Government.
Threatened by the mounting debt,
Threatened by the unfunded pension liabilities,
Threatened by the Muskrat Falls project and escalating energy costs,
Threatened by scandal such as the Humber Valley Paving Contract,
Threatened by the erosion of democratic conventions,
Threatened by the level of patronage that continues,
Threatened by the continued loss of industry,
Threatened by our population statistics,
Threatened by the loss of the Justice Department,
Threatened by an "unelected" Attorney General who makes decisions based on her emotions (my heart is in the Placentia - St.Mary's District so I can't run anywhere else)
Threatened by the continued loss of rural communities, and
Threatened by the arrogance and disrespect this government has toward the people of the province.
If the whole idea of Ms. Manning's appointment was to frighten the Opposition - then I guess they are relying on the introduction of a bogeyman to frighten the critics into better behaviour.
Considering Ms. Manning brought up the topic of threatened let's look at why the PC's are making "innovative" changes to our democracy. Paul Davis is going to be different - see - look what he did. He plucked a well-connected Tory unelected out of a sole practitioner law office and threw her into a new Department of Public Safety. Furthermore - just to be different our "unelected" Premier chose somebody who was afraid to run in any of the by-elections. Then - just to be different he accepted the resignation of one Minister (who he would have fired anyway) and left another Minister named in the HVP report right where he was. Additionally - just to be different - he found that Labrador was without a Minister so - he plucked arguably the most controversial and bad-tempered off the backbench and presented him to the electorate as a changed man. Lastly he wanted to up the number of women in government - so he ignored an elected woman and went out and found one that he thought was more worthy of a Cabinet post?
One can only reasonably believe that Davis made such outrageous choices in a desperate attempt to put lipstick on a pig. Or if you prefer -You can't make a silk purse from a sow's ear. The end product is the same.
How about we outline why the PC government feels threatened:
1. The polls,
2. The by-election losses,
3. The defections or resignations of key Cabinet and caucus people,
4. The acrimonious mess of a failed first leadership race,
5. The divisive actions of Deputy Premier Steve Kent during the second leadership contest,
6. The very loud criticism from Progressive Conservatives,
7. The weak backbench (as evidenced by the "unelected" Premier's recent Cabinet shuffle),
8. Continued failure to communicate or continued failure of decisions,
9. The numbers of people showing up to vote for Liberal nominations in Tory districts, and
10. The growing voice of the people demanding both an election and a judicial inquiry on HVP.
Please just call an election - so we can sort this out. Let's see who the people want and don't want.
Her experience in the Court of Appeal can be found here.
Albeit - Pennecon - her client - did not win the day and Metal World - not her client - was awarded party and party costs - the case had some connection to a Mechanics Lien and the construction industry.
So how about Ms. Manning quit as Attorney General and instead head-up the Judicial/Public Inquiry on the HVP affair.
In this way - we the public - get to see her act within her profession - and determine if partisanship can be overlooked for such a proceeding.
Now I know she does not have the legal experience of Clyde Wells - we can still test her metal as she reviews the mess which is the HVP fiasco.
Let's see if she's comfortable questioning the "unelected" Premier or the "unelected" Premier in waiting who quit or the "interim" "unelected" Premier or the once "unelected" then "elected" Premier and current Cabinet colleagues such as Kevin O'Brien.
After the Inquiry is finished - we may be up to a general election. Let's see if she still wants to run for the PC's then.
This would be a big feather in her CV - and also allows us - the electorate - to see her in action. We would like to see "vintage" Manning and see if we like the bouquet. As it sits now - the bouquet - resembles that of rotting herring.
Although Inquiries are headed up by a Commissioner - usually a judge - Cabinet posts are usually filled by elected people - so we can make an exception.
Many things have happened over the past year - not the least of which is the resignation of the first woman to be elected Premier of our Province. She resigned last week - suddenly and without much notice - and hers was a majority government.
Muskrat Falls debate rages on.
Bill 29
The Liberal and Tory leadership races.
New Premier Tom Marshall.
The resignation of Jerome Kennedy.
Natural resource development.
Budgetary issues. Debt and deficits and the unfunded pension liabilities
Health Care
Auditor General's Report
The massive change in political polling results.
The defection of sitting MHA's.
The state of the NDP and ruling Tories.
The changing tide for the Liberals.
The new Liberal leader.
As we get settled in to 2014 - what's in store for us?
Roger Grimes has agreed to talk about it all - a perspective from a man who once held the top job and the responsibility of the office.
This will be two hours of fascinating discussion that you won't want to miss.
Tuesday - February 4th from 6-8 on the Island and from 5:30 to 7:30 in most of Labrador the former Premier will be my special guest - live on Talk with Sue.
You can join the show live and enter the chat room - where you can pose some questions.
Newfoundland and Labrador has many serious issues on the table. Not the least of which are the Muskrat Falls legacy of economic horror, health care, the Auditor General's findings, chronic unemployment and continued secrecy in government. The governing PC's have a few serious issues of their own.
One would think that the loss of a Premier - due to crashing polls, a complete disconnect with what the people of the province want, and a number of people dead during the blackout - would wake-up the skeleton left behind. Unfortunately - it's business as usual for this arrogant crew of partisans.
Sandy Collins at the height of this mess - decides - it's business as usual for him. What device was Sandy using to tweet? Who pays for the device? Who employs Sandy? Who pays his salary and benefits? He is a wannabe farceur - who confuses the role of his office with his amateur hobby.
He demonstrates this government's trademark arrogance and embraces the opportunity to verbally abuse ordinary citizens. His level of immaturity is obvious when one considers what he chooses to spend time on.
Your Premier just resigned - your party is in the tank - and Newfoundlanders and Labradorians do not want your government anymore. Playing twitter tag may be amusing to you but perhaps you should try marbles instead.
Collins has not learned a thing from the past month or so and clearly he plans to carry on - business as usual. No doubt that will land him a plum Cabinet post.
First demonstration:
It all started when Brad Cabana and Sandy Collins were having a few twitter jabs.
Sandy Collins
Rock Solid Politics
Sue Kelland-Dyer
Peter Cowan