Inquiries in Alberta - Is a Good Thing

Smoky Lake Signal Article No. 233 (August 22, 2012) Whispering in the Wind Redford Wants Change – At What Price? A year ago Alison Redford was advocating “change” and a new way of doing government business in Alberta – since then Ms. Redford was installed as premier and her party was re-elected with a strong majority. With Premier Redford’s victory at the polls 10 months ago she has announced something like a dozen inquiries and investigations into how government operates in Alberta and how her government might operate better – I call her actions a necessary requirement for change and anxiously await the results, the follow-up and the implementation. Her announced investigations vary widely and include: a more effective monitoring system in the oil sands industry; queue-jumping in the medical services industry and her latest inquiry; the expense account scandal at Alberta Health Services. Critics have said that the various issues under investigation have already been studied to death and it is time for action. From my perspective, each and every issue under review should, no, must be thoroughly and closely examined before change is implemented – otherwise things could get even worse, adding mistake upon mistake. For example, the so called Alberta Health Services scandal when first exposed, appeared to be the actions of a rogue executive (with the possible help from his supervising board member) who had his greedy hands in the government’s “cookie jar” – a despicable set of actions but something the RCMP could have easily dealt with in their white collar crime unit. On closer examination, the press now suggests that there might be a culture of greed and elitism within the top echelons of Alberta Health Services, where about 50 senior executives are gouging the healthcare system with their lavish salaries, expense accounts, severance packages, pensions and supplementary pensions. So what started out as a single, rotten incident (that will have to dealt with and the perpetrator(s) thrown into jail) has evolved into an inquiry that will review the hiring practices and employment contracting practices for outside contractors and senior government bureaucrats. The inquiry will also establish reporting requirements and expense account guidelines for cabinet ministers and senior government officials. What I find particularly confusing in this whole mess is the lack of action on the part of the province’s Auditor General or independent auditors, when they are used – Ah, another inquiry. Regardless, I applaud Premier Redford’s call for the Alberta Health Services inquiry and all the other investigations she has initiated but she has to be cautious so as not to be branded a procrastinator – and accused of covering up all of the ground-in dirt. Does Smoky Lake Need a Couple of It’s Own Inquiries? Over the past year or so I have periodically commented on the EPCOR water pipeline coming to Smoky Lake – well the pipeline has been built but there is no EPCOR water coming into the Smoky Lake region? Months ago I concluded that Strathcona County oversold its water allotment leaving nothing for communities in the counties of Thorhild and Smoky Lake. Local politicians seem to be reluctant to talk about who did what to whom so in my view, I can only hope that politicians in the Smoky Lake region did all the right paperwork to guarantee an appropriate portion of the EPCOR water allocated to the northeast region, comes to communities in the Thorhild, Smoky Lake region. Another issue has arisen in the last week or so that seems to be troubling our local politicians – the federal elections commission has re-drawn the federal electoral map and in their wisdom recommend that residents in the Smoky Lake fall under a Fort McMurray constituency. From my perspective I don’t see any advantage or benefit to having Smoky Lake residents attached to a very large population center some 400 km away.

Redford has a Couple Problems

Smoky Lake Signal Article No. 232 (August 15, 2012) Whispering in the Wind For those who read this column regularly it is well known that I have supported Alison Redford’s candidacies, right from the start: in her bid for the Alberta PC leadership and then again in her success at the polls in the last provincial election. Today, I continue to support Premier Redford (and her team) but she is facing at least two challenges which could prove disastrous for her (and her progressive government). She must handle these two issues with conviction and determination – and yes handle both expeditiously. The Pipeline Saga Alberta, no Canada is on the threshold of becoming an energy superpower and to a large extent success will be dependant upon the acceptance of a pipeline running from Alberta to Kitimat, British Columbia. Rather than showing responsible leadership and preparing for the opportunity, politicians are squabbling amongst themselves – at least one is demanding a bigger piece of the revenue pie and another is showing indifference to the major issues involved – typically this approach is called the “Canadian Way”. Right from the start Premier Redford has asked for a “national” energy strategy and for that vision I congratulate Premier Redford, she is on the right track. On the other hand, Premier Christy Clark of British Columbia is demanding a share of Alberta’s royalty revenue (to her, if the money doesn’t come from Alberta then it will have to come from Ottawa) – some have called Ms Clark’s approach to be blackmail. I discount Premier Clark’s argument, to me her statements are largely a ploy to win power in next year’s provincial election in BC. The Prime Minister seems to be quite indifferent to the issues surrounding the pipeline debate – it’s like the decision to build the pipeline has already been made in Ottawa with only a few bureaucratic hoops to be overcome. Initially, Mr. Harper didn’t want to get involved in the squabble between Alberta and British Columbia, he seemed to view it as a tiff between two unruly children, he being the senior. More recently, the Prime Minister indicated that the decision on the Enbridge Northern Gateway pipeline would be based on the “science” and not on the politics – in my view it’s all about politics. No question in my mind; Premier Redford has got it right in asking for a nation building, “national energy strategy” and Prime Minister Steven Harper has got the responsibility to develop such a strategy. The first step for the Prime Minister, call for a First Ministers Conference on how Canada will become a responsible energy superpower. Alberta Health Services Debacle Alberta’s “expense account” scandal has blossomed into a monster of a problem for Premier Redford and Health Minister Horne and they had best deal with the problem quickly or suffer both short and long term consequences. What started out as a very serious bureaucratic problem; where chief financial officer, Allaudin Merali (with the possible help of a board member) milked the health system for a couple of million dollars between 2003 and 2008 when he was with the Edmonton Health Authority – very serious yes, possible contravention of the law, possibly and should any proven fraudster or any other related culprits be thrown in jail, no question! More information is coming to light on the whole issue of compensation, pensions and surprise, surprise there are even supplementary pensions in Alberta’s healthcare system. The press now confirms that Mr. Merali not only was given a million dollar severance package in 2008, he was given a generous regular pension and are now told was given a supplementary pension of $1.6 million over a ten year period. What is bizarre, Mr. Merali was re-hired by Alberta Health Services earlier this year (after he was fired by Ontario’s health authority) and only recently resigned after his extravagant expense spending was exposed. What is even more bizarre is that the outrageous compensation package offered to Mr. Merali seems to have been carried on and offered to about 50 executives within the province wide Alberta Health Services. Just looking at the “supplementary” pensions (that’s over and above regular salary and regular pensions); President and CEO, Chris Engle will receive $1.4 million; Executive Vice-president David Megrau will receive $783,000 and too many more to list – no question, something is “rotten in the state of” Alberta Health Services. To this point in time I will not accuse Premier Redford (nor Health Minister Fred Horne) for being complicit in this monster of a problem (I still think it is a massive, out of control bureaucratic problem); nevertheless, they both are responsible for the monster and will have to address the problem – they had better do it quickly; otherwise, they will be accused of a cover-up – the only course of action is a full blown inquiry.

Scandals Unfolding

Smoky Lake Signal Article No. 231 (August 9, 2012) Whispering in the Wind From my perspective, scandals should be described as shameful acts that go against “acceptable” standards or any codes of conduct as identified in the area’s legal systems. Scandals are almost always viewed by the general public as offensive, if not despicable and depending on how the news media handles a specific set of circumstances; scandals usually bring disgrace and humiliation to the individuals involved. In the last few months Canada has been exposed to three so-called scandals which have received varying degrees of attention: “Bev” Oda Scandal Bev Oda lost her job as the federal government’s International Cooperation Minister because she apparently up-graded her accommodation while on a trip to England and at the time, ordered a glass of orange juice costing $16. Bev Oda was also harassed in the press for having purchased an air filter contraption for her ministerial office (she’s a smoker). In my view, Bev Oda’s resulting resignation was not warranted and the Prime Minister should have never accepted her resignation – anybody that has done any amount of international business travel will not be shocked at being over charged for something (like $16 for a glass of orange juice) – simply put, being over charged for something is not an unusual occurrence when traveling and the media totally mishandled this non-scandal. Alberta Health Services Scandal One would have to be in a coma to not have heard of the Alberta Health Services scandal involving Sheila Weatherill and Allaudin Merali. From 1996 to 2008 Sheila Weatherill was President and CEO of the Capital Health Authority and between the years 2003 and 2008 she approved something like $350,000 in expenses for a Mr. Allaudin Merali who was, at that time, Chief Financial Officer of the Edmonton authority – he was also earning over $300,000 in annual pay. Mr. Merali left the Edmonton authority in 2008 to join EHealth Ontario where he earned $2,700 per day plus expenses – he was fired in 2009 because of an expense account scandal (his) in Ontario. In 2008 the Edmonton authority was consolidated into a province wide system, Alberta Health Services. Ms. Sheila Weatherill moved to the new province wide system as a board member and it’s chief operating officer – guess what, about 4 months ago, Allaudin Merali was re-hired as Executive Vice-President and Chief Financial Officer, Alberta Health Services at $425,000 per year. When all this expense account stuff was exposed by the CBC both Sheila Weatherill and Allaudin Merali resigned their positions. Premier Redford responded to the shocking revelations, stating that Mr. Merali’s actions were “entirely inappropriate.” Health Minister Fred Horne was “outraged” and “dumbfounded.” but did not indicate the possibility of legal action. The opposition parties did not hesitate with their comments and blamed Redford’s government and demanded action, including a forensic audit. For me it is a little early in the scandal to cast responsibility and the public has yet to hear from Dr. Chris Eagle, President and CEO of Alberta Health Services. One interesting point raised by Minister Horne who indicated that any contract commitment would be honored and that means a years severance pay (after only four months work) and a number of other “hidden in the contract” benefits which could end up costing the province millions. For the moment I think it is unfair to accuse politicians for faults that might have occurred in an “arms length organization.” In my view it will be up to Dr. Eagle and the board to clean up what is an obvious mess – after all there are something like 36 senior executives at Alberta Health Services (1 president; 6 executive vice-presidents; 18 senior vice-presidents and 11 vice-presidents) and that should be enough to manage the people and the $12 billion dollar budget – Dr. Eagle it up to you to offer appropriate transparency and undertake appropriate action! Manitoba’s Judicial Scandal I was challenged by an interested reader to deal with a judicial “sex” scandal unfolding in the Province of Manitoba. Lawyer Jack King and his wife, Judge Lori Douglas have been accused of sexual harassment and placing sexually explicit pictures of Judge Lori Douglas on the internet. Apparently the explicit pictures were taken between 1996 through 2003 and then placed on the internet in 2003. The pictures were also used to entice a third party (Alex Chapman) to participate in some form of group sex activity. The harassment charge comes from Mr. Chapman who apparently was given $25,000 (from Jack King) in 2003 for the return of the pictures? Judge Lori Douglas’ lawyer has already asked that the Canadian Judicial Council inquiry be folded because the judges in the inquiry are themselves biased (the inquiry is headed up by three distinguished judges from three provinces). Because another 10 witnesses have to be questioned, the inquiry has been scheduled for further hearings in the fall. To me, there are two primary issues involved in this scandal: First the harassment charges made by Alex Chapman – in my view the 2003 payoff of $25,000 to Chapman has settled the issue (Chapman initially asked for $100,000). The second issue has not been settled and it is whether Lori Douglas knew the sex photos taken of her were being posted online – and whether she lied on here application form to become a judge, when she was asked, if there was anything in her past that could or would negatively impact on the image of the judiciary in Manitoba (and elsewhere)? More to come on this one!

B.C. Premier on a Rampage

Smoky Lake Signal Article No. 230 (August 1, 2012) Whispering in the Wind An interesting thing happened to me while writing this article, the power went off and my plans had to change abruptly. I had to quickly learn my wife’s portable, battery operated computer system and at 71 that wasn’t easy. Hopefully this re-write will make it through the system before the copy deadline. B.C. Premier on a Rampage – Wants More Money! Premier Christy Clark of British Columbia threw a monkey wrench into federal-provincial and inter-provincial relations last week when Ms. Clark demanded more “benefit” and less risk from the construction and operation of the proposed Northern Gateway Pipeline; a $5.5 billion project that would ship bitumen from Alberta’s oil sands to Kitimat B.C. and then onward to Asian markets. According to some research done by the B.C. government; 8.2 per cent of the Northern Gateway’s projected $81 billion tax revenue would go to B.C. over a 30 year period. Said another way: $6.7 billion for B.C.; $4 billion for Saskatchewan; $32 billion for Alberta; and Ottawa would take in $36 billion. Premier Clark carefully states that if the Province of British Columbia doesn’t receive more “benefit” (from Alberta’s royalty levy) there will be no pipeline project. In one sense, Premier Clark has outlined her version of a National Energy Strategy, specifically as it relates to oil sands development in Alberta, in the meantime Premier Redford is moving forward on her version of a National Energy Strategy with the support of nine premiers and the territorial leaders (apparently without the participation of the Premier of British Columbia). To sum up, I think Premier Clark’s demands are ridiculous and divisive – and most important; extremely dangerous for the country – leads me to think that she has other motives. B.C. Premier of a Rampage – Wants to Get Re-elected! In early June of this year a poll was taken on Canada’s provincial premiers and their approval rankings – Saskatchewan’s premier, Brad Wall raked first with a 67 percent approval; second was Alberta’s premier, Alison Redford; and the premiers of Manitoba and Newfoundland / Labrador tied for third. The poll put Liberal leader and premier of British Columbia, Christy Clark’s rating at 30 per cent, a drop of 3 per cent from a similar poll taken in March of 2012 – only the Nova Scotia premier had a worse showing. Relevant is the ranking of British Columbia’s opposition leader, NDPs Adrian Dix, who ranked second most popular opposition leader in the poll with an approval rating of 58 per cent. To repeat, the poll was taken in early June, 2012 and the pollsters at that time indicated that if Christy Clark wants to hang on to power, she and the Liberals will have to find a way to close the gap before the next election (the election must be held in less than a year). Well, Christy Clark found a way to gain positive attention in British Columbia, the Northern Gateway Pipeline project. One pollster has already indicated that Christy Clark’s actions and rhetoric is going over well in British Columbia and could mean an approval boost of 10 or more points. Ten or more points is critical when fighting in an election – looking forward to an election in the early fall in British Columbia and a lot more Alberta bashing.

CHANGES IN ALBERTA

Smoky Lake Signal Article No. 229 (July 25, 2012) Whispering in the Wind Two important “political” events occurred just two days ago with another unfolding as this column is published. Collectively, these three events will end up showing the effectiveness of Canadian “cooperative” federalism – or show that “cooperative” federalism is just not working. NEXEN Inc. Takeover China’s state owned China National Offshore Oil Company (CNOOC) put in a bid on Monday to take over the interests and assets of Calgary based, NEXEN Inc. for $15.1 billion. The CNOOC will have to go through a lot of hurtles but in the end I don’t see any Canadian foreign investment review process turning down the application. For many in Ottawa it is particularly welcome news and demonstrates that Prime Minister Harper’s strategy of diversification of markets is working. The Prime Minister also wants Alberta’s oil sands development to be the cornerstone of Canada’s national energy strategy that identifies Canada as being an international energy “superpower” with locked in markets – the logic fits in perfectly with Premier Redford’s call for a National Energy Strategy. Nevertheless there are consequences for supporting the NEXEN takeover and the loss of some control over Alberta’s (if you will Canada’s) oil sands resource base. In my view the NEXEN has to be put into some sort of context, here is my first attempt: 1. Two studies that I have read about indicate that about two thirds (or about 71 percent) of oil sands production in Canada is owned by foreigner entities. 2. The Peoples Republic of China through state owned companies have invested something like $11.7 billion in oil sands production (between 2007 – 2011) which is about 16 percent of total investment of $73.6 billion (between 20907 – 2011). The NEXEN takeover price is $15.1 billion, one could conclude that China’s interest in Alberta’s oil sands development has increased to somewhere around 30 percent. 3. The NEXEN news releases regarding the CNOOC bid stress the fact that a good deal of their activity is international in scope, but it should be pointed out that NEXEN has significant interest in oil sands development: they have a 7.23 percent interest in Syncrude; have an operating project at Long Lake that NEXEN own 65 percent and CNOOC owns 35 percent. In total NEXEN has something like 300,000 acres of leased land in the Athabasca region with something like 3 – 6 billion barrels of recoverable oil sands resource. If the China National Offshore Oil Company is successful in the purchase of NEXEN, the CNOOC plans on opening a head office in Calgary which would control their North and Central American operations. CNOOC will also register on the stock market, something I find strange? British Columbia Demands More Benefit and Less Risk On Monday the British Columbia government released it’s conditions regarding their support for the proposed Enbridge Northern Gateway Pipeline project which, if approved, will move bitumen from Alberta to Kitimat, British Columbia and then onto Asian markets. For the British Columbia government the demands are quite straight forward; they want a greater share of the benefits (currently estimated at 8 percent) and a greater spread on the potential environmental risks attached to the project (both marine and pipeline). The Alberta government has rejected both demands indicating that the government of British Columbia, in making demands that will pit one province against another. The real question is going to be how Prime Minister Harper is going to deal with the aboriginal questions; where the proposed pipeline route will be going through hundreds of reserves. Council of the Federation Meeting The Premiers of Canada are meeting this week in Nova Scotia and there appears to be a lot of frustration regarding the apparent cool relationship between the Premiers and the Prime Minister. That coolness is not only reflected in the lack of First Ministers Meetings (none have been held for years) it is also reflected in the PM’s reluctance to have national discussions on topics like healthcare, education and of course, a national energy strategy. Premier Darrell Dexter is hosting this years meeting and suggests that there is some “consternation” amongst the premiers in that the Prime Minister is not engaging the provinces when the provinces are directly impacted by decisions made in Ottawa. What transpires at this meeting in Nova Scotia is not only going to be interesting the question is going to come down to will Prime Minister change his mind and do some NATION BUILDING with the premiers?

Smoky Lake Signal Article No. 228 (July 18, 2012) Whispering in the Wind After a two week holiday it has not been easy to get back into the groove of writing a weekly column; largely due to the hot weather and my unexplainable passion for the game of golf. Fortunately the Smoky Lake area saw some much needed rain on the weekend and that allowed me to set down some thoughts on what has been going on (or not going on) in the news. Smoky Lake Area A few weeks ago I wrote about Smoky Lake’s potable water issues and thought that the Highway 28/63 Regional Water Commission would explain why water is not flowing from the recently built (and completed) water delivery system. My understanding is that the bottleneck is a result of Capital Region Northeast Water Services Commission over-dedicating water supplies to industrial subscribers in the region south of Redwater – which likely means more pipeline capacity will have to be added if potable water is to flow into the Thorhild-Smoky Lake region. Two questions immediately come to mind: when will additional pipeline capacity be realized south of Redwater, and who is going to be paying the bill? Another bit of information has come to light that I found quite disappointing, if not disturbing; Dean Pickering resigned his position as Smoky Lake’s Town Manager. I personally found Mr. Pickering to be a very capable administrator and hope that the town council’s selection group finds someone with equal capabilities and qualifications. National Energy Strategy Even before she became Premier, Province of Alberta, Alison Redford was a strong advocate for a national energy strategy – from my perspective it was one of the key elements in her successful bid for the leadership of the Alberta PC Party and then her subsequent success in last April’s general election. More recently Premier Redford has taken her message for a Canadian National Energy Strategy into numerous political discussions within Canada, the United States and most recently, into the Peoples Republic of China. From what I have read there is some support for the concept (even in the private sector) but a real lack of detail and that is why Prime Minister Harper is a little cautious in offering the federal government’s “gung-ho” support for Premier Redford’s ideas. There is no doubt in my mind that the Prime Minister likes and supports some of the building blocks of a Canadian National Energy Strategy but doesn’t want to be involved in some of challenges attached to the development of a common regulatory framework in the provinces, never mind the problems attached to and dealing with the many aboriginal issues related to the construction of pipelines. For Premier Redford, her priority wish list is clear – the construction of two bitumen pipelines from Alberta to satisfy United States and Asian markets. If I were to summarize: Premier Redford has a brilliant economic idea that should be pursued with vigor – in the end, there will be a Canadian National Energy Strategy – and in the end, that Canadian National Energy Strategy will have to include environmental sanity, resource upgrading, diversification and economic consolidation. For Prime Minister Harper, it is time that he get off his ideological high horse and reject the idea that it is CENTRAL PLANNING and accept that the process being discussed is a form of NATION BUILDING.

Smoky Lake Water?

Smoky Lake Signal Article No. 227 (June 27, 2012) Whispering in the Wind Having sustainable, reasonably priced WATER for Smoky Lake’s communities are two great objectives that few would argue with. But circumstances in the area have actually degenerated with a lot of confusion regarding the facts and differing opinions as to what measures are going to be required to fix what appears to be a politically mismanaged set of circumstances – a situation that for the moment, appears to be out of control. Here are a few facts that are not in dispute: the waterline from Redwater to Waskatenau was completed a couple years back; the waterline from Waskatenau to Smoky Lake was just recently completed; but surprise, surprise there is no water available to fill the waterlines. Alberta’s “Water for Life” Strategy The Government of Alberta enacted a “Water for Life” strategy in 2003 and by that strategy, introduced a new, innovative “watershed planning approach” to deal with water and land use management issues. Critics have applauded this new approach to protect Alberta’s watersheds but have reservations related to how this new approach was being implemented, monitored and governed. From my perspective, recent revelations and actions by two relatively new governing bodies (the so called water commissions of northeast Alberta) are clear examples on how governance of a reasonably well thought out policy initiative, the “Water for Life” strategy, can get screwed up when it comes to the implementation and governance. The Water Commissions To implement the “Water for Life” strategy and to administer the water flows from EPCOR’s water treatment facilities in Edmonton going into north east Alberta, two water commissions have been established to manage the distribution system. First is the Capital Region Northeast Water Services Commission (which includes the various counties and municipalities south of Redwater and includes major centers like Fort Saskatchewan and Gibbons). The newer, second water commission has been labeled the Highway 28 / 63 Regional Water Commission (includes the County of Thorhild and the County of Smoky Lake and the various municipalities within those two counties). From my perspective, having a single water authority that oversees a safe, sustainable, reasonably priced water distribution system is not only necessary, it is critical. To have two independent water commissions overseeing a single distribution network is a recipe for sub-region price discrimination and unfair distribution practices – a true recipe for disaster. The Issue As I already pointed out the establishment of two (independent) water commissions puts the Thorhild and Smoky Lake regions at a major disadvantage when it comes to discussing the fair, reasonably priced distribution of water into the more northern area communities. From what I understand, the waterline capacity that’s presently going into the Capital Region Northeast Water Services Commission was, in part to be directed to the Highway 28 / 63 Regional Water Commission for residential use participants. Since the waterline capacity that was to be directed to the Highway 28 / 63 is being used by the Capital Region’s commercial participants – if I understand the conditions for the dedicated waterline, commercial use is a no – no? So the conclusion has got to be, build another waterline, but at whose expense and is there additional capacity available through EPCOR? In the meantime things are getting a little tense between the two water commissions – Gibbons councillor Doug Horner expressed his sentiments with a rather curt comment, “All our member communities would suffer so someone in Smoky Lake could wash their car.”