Cinema Politica and Council of Canadians St. John's will be screening Gasland 2 on April 8 at MUN!

Monday, July 28, 2014

An $8 increase? Try $27.

The good news: Nalcor finally came through with some concrete numbers on the new rate projection.

 The bad news: they are worse than previously reported.

Here is the updated rate projections sent to me by a Nalcor representative (a member of the Nalcor "social media team").

Click image to embiggen

This table shows that the new projections are 0.5 cents higher than DG3 in 2018 and 1.8 cents higher in 2030.  This increases the projected average monthly consumer bill by $8 in 2018 rising to $27 in 2030.

Caution is always warranted when comparing dollar values across time.  However I believe this comparison is valid for the following reasons. (Update:  I have now received confirmation from Nalcor that both projections are in nominal prices and thus are directly comparable. The argument appearing in italics below is no longer important.)

1) In my email to Nalcor (reproduced below) I specifically asked to be provided with updated projections that were directly comparable to the DG3 estimates. The table I was sent is also presented in a way that suggests the numbers are meant to be compared.

2) If we assume that the June 2014 projection is not corrected for inflation but the DG3 figures are, then the table above would say that the new projection is lower in real terms than the DG3 figure, which doesn't make any sense.

3) The table explains the on-first-hearing-nonsensical remarks made by Ed Martin at the press conference when the new cost estimates were released: 

"When Muskrat Falls comes into service that's (a monthly power bill increase of) on average about 8 dollar per month to maybe as high as 28 dollars per month - depending on your usage factor - over what was projected at sanction for monthly electricity rates. Once again that depends - the range depends on how much electricity the person uses."

I believe that Martin explained this incorrectly. It does not make sense to offer such a wide range as an average,  but it does make sense to say that the average bill increase varies between $8 and $28 over the projected time period. This interpretation is in keeping with Martin's letter to the Telegram which (misleadingly) only offers a direct comparison to DG3 for 2018.

Press reports from the CBC (here and here) only provide the $8 figure and the Telegram report does not include any rate projection so this story has not been properly explained to the public.

It is interesting to compare the new projections with the DG3 projections for the isolated island option.

Click image to embiggen

The DG3 Isolated Electricity Rate is now lower than the new Interconnected Rate until 2025, after which it is higher.  Muskrat Falls is no longer a clear winner over this time frame, though it probably remains the cheaper option post-2030.

Email exchange reproduced below:

Sent: July 22 


I understand that a response to my earlier question is under preparation.  Here is the question for your convenience:

"I understand that Nalcor is estimating that the new cost estimates will
result in a $8 higher monthly power bill for the "average" customer.  I
would like to see the analysis that derived the $8 figure from the new
cost estimates.  Is that possible?"

Since posing this question there have been some other public statements from Nalcor that have sown confusion among the public. A good example is Ed Martin's letter to the Telegram that was not careful to explain he is using nominal price estimates.  This led to a blog post by Des Sullivan [note: actually written by JM] that has further muddied the waters:

I think it would be a big help if - in addition to answering the question above -  Nalcor released an update of estimated electricity rates in a form directly comparable to this chart:

thank you,

Tom Baird"

Recieved: July 28 

" Thank you Mr. Baird for another question. 

As requested, we've updated the Electricity Rates and Average Monthly Island Residential information based on the revised capital cost update for the Muskrat Falls Project that was released in June 2014. 

In our reply to your previous question on July 24, 2014, we noted that forecast electricity bills include all costs of generation, transmission, distribution, capital, operating, maintenance and sustaining capital, including fuel, interest and financing costs, plus Newfoundland Power costs.  All of these items are included in the projected rates. Prior to interconnection Newfoundland and Labrador Hydro anticipates significant capital expenditures to address load growth including a new gas turbine in 2014 and a new transmission line from Bay d'Espoir to Western Avalon in 2017. 

The rate projection information below is from 2018 (year Muskrat Falls Project will be included in island electricity rates) to 2030. The information that was prepared in October 2012 at Decision Gate 3 used 2017 as a starting reference point for Muskrat Falls. The information at Decision Gate 3 also included rate projections for the Isolated Island option. Since the Muskrat Falls Project (Interconnected Island) was sanction in December 2012 there is no longer an Isolated Island option for 2018 and beyond as the system will be interconnected with power from Muskrat Falls. 

At the time of the release of the capital cost update for the Muskrat Falls Project at the end of June 2014, Nalcor stated that the change in the electricity rates are expected to be in the range of about 7% to the average homeowner on the island using electric heat. This is for the 10-year period from 2014 to 2023. It is anticipated that when Muskrat Falls is fully operational and our province is powered almost exclusively by renewable energy sources, rates will stabilize for customers, increasing on average around one to two per cent per year. 

Attached is the updated chart as requested. 

This response will also be posted on the Muskrat Fall Project website shortly. 

(name omitted) "

Thursday, July 24, 2014

Response from Nalcor

18 days ago I wrote to Nalcor with this question:
"I understand that Nalcor is estimating that the new cost estimates will result in a $8 higher monthly power bill for the "average" customer.  I would like to see the analysis that derived the $8 figure from the new cost estimates.  Is that possible?"
I received the following reply today.

The email is a bit short on details. I would have liked to see how the burden is spread between residential users vs. industrial users, what the projected customer rate is in future years, and how the various parameters (projected fuel cost, interest rates, etc.) have changed since DG3. I think this email clarifies matters a little bit though.

One interesting observation:  they seem to assume that the higher price will have no effect on average consumption. Do they take price elasticity into account in their long term forecasts?

Friday, May 30, 2014

On the social position of beggars

An excerpt from George Orwell's "Down and Out in Paris and London".

It is worth saying something about the social position of beggars, for when one has consorted with them, and found that they are ordinary human beings, one cannot help being struck by the curious attitude that society takes towards them. People seem to feel that there is some essential difference between beggars and ordinary 'working' men. They are a race apart--outcasts, like criminals and prostitutes. Working men 'work', beggars do not 'work'; they are parasites, worthless in their very nature. It is taken for granted that a beggar does not 'earn' his living, as a bricklayer or a literary critic 'earns' his. He is a mere social excrescence, tolerated because we live in a humane age, but essentially despicable. 
Yet if one looks closely one sees that there is no essential difference between a beggar's livelihood and that of numberless respectable people. Beggars do not work, it is said; but, then, what is work? A navvy works by swinging a pick. An accountant works by adding up figures. A beggar works by standing out of doors in all weathers and getting varicose veins, chronic bronchitis, etc. It is a trade like any other; quite useless, of course--but, then, many reputable trades are quite useless. And as a social type a beggar compares well with scores of others. He is honest compared with the sellers of most patent medicines, high-minded compared with a Sunday newspaper proprietor, amiable compared with a hire-purchase tout--in short, a parasite, but a fairly harmless parasite. He seldom extracts more than a bare living from the community, and, what should justify him according to our ethical ideas, he pays for it over and over in suffering. I do not think there is anything about a beggar that sets him in a different class from other people, or gives most modern men the right to despise him. 
Then the question arises, Why are beggars despised?--for they are despised, universally. I believe it is for the simple reason that they fail to earn a decent living. In practice nobody cares whether work is useful or useless, productive or parasitic; the sole thing demanded is that it shall be profitable. In all the modern talk about energy, efficiency, social service and the rest of it, what meaning is there except 'Get money, get it legally, and get a lot of it'? Money has become the grand test of virtue. By this test beggars fail, and for this they are despised. If one could earn even ten pounds a week at begging, it would become a respectable profession immediately. A beggar, looked at realistically, is simply a businessman, getting his living, like other businessmen, in the way that comes to hand. He has not, more than most modern people, sold his honour; he has merely made the mistake of choosing a trade at which it is impossible to grow rich.

Tuesday, May 13, 2014

Some documents relating to the Humber Valley Paving scandal

I have collected below some documents related to the Humber Valley Paving scandal for the convenience of those following the controversy.

Updated:  An ATIPP request outlining communications between Gene Coleman and Nick McGrath around the time of the deal.

The paving contract. (pdf)

The bond contracts and tender book. (pdf)  One tidbit that hasn't been reported in the media is that the bonding company was the Guarantee Company of North America.

The letter from Transportation and Works  (T&W) releasing HVP from the bonds. (pdf)

A list of all tenders since 1996 that were awarded to HVP. (link)

Here is a email sent to me from the director of comms at T&W in response to my request for all information sent to the Telegram about HVP in recent weeks.


Attached/enclosed is the requested information.

1) History of Relationship with Humber Valley Paving
The Department of Transportation and Works has had a long-standing relationship with Humber Valley Paving that dates back to 1996. In 2007, the company changed ownership and was purchased by a number of investors, which included Mr. Frank Coleman.  It is our understanding that Mr. Coleman has recently sold his shares and is no longer a shareholder.

Attached is a complete listing of all projects where Humber Valley Paving was the successful proponent.  In all cases a public tendering process was used and the company was the lowest compliant bidder.

For your reference, there has been approximately $1.2 billion invested in highway/road improvement initiatives since 2007.

2) Background Information
Enclosed is additional information on the scope of work completed by Humber Valley Paving, as well as background information on the bond.

Under the contract to construct and pave 80 kilometers of highway between Happy Valley-Goose Bay and Churchill Falls, 60 per cent of the work was completed.  The company was only paid for the work completed.  They were not paid for work remaining to be done.

Included in the $11.8 million paid to Humber Valley Paving is the following:
- 106,000 tonnes of “Class A” gravel out of a total of 146,000 tonnes
- 30,000 tonnes of “Class  A” was manufactured and ready to place
- 444,000 tonnes of “Class B” gravel out of a total of 508,000 tonnes
- 40,000 tonnes of “Class B” was manufactured and ready to place
- 15,900 tonnes of asphalt out of a total of 73,700 tonnes
- 935 tonnes of liquid asphalt out of a total of 4500 tonnes
- 3500 meters of guide rail, which exceeded the estimated 3300 meters
- 5,000 flag person hours out of a total of 10,000 hours
- 12,800 meters of guide rail adjustment out of 14,000 meters


There was no money to refund.   Bonds are in essence an insurance policy and are called when a contractor fails to meet the requirements of the contract – most often due to a bankruptcy.  In order to call on a bond, the contractor would have to be declared in default of the contract. That said, there is no guarantee that the Provincial Government would recover the entire amount of the bonds that are in place.  Also, the Provincial Government is still responsible for all costs up to the value of the original contract.

The Provincial Government could have called the bonds.  If we had, project timelines and the viability of the company may have been jeopardized.  It would have also likely led to the loss of direct and indirect jobs and potentially contribute to weakening industry and taking a competitor out of the provincial marketplace.

Instead, the Provincial Government opted to relieve Humber Valley Paving of its remaining obligations and re-tender the work as part of another major tender involving 80 kilometers of paving between Happy Valley-Goose Bay and Cartwright Junction.  By taking this approach, we are ensuring a competitive bid process and the project being completed on time and on budget.

The original tender scheduled for the completion of this road work for July 31, 2014 and that target is now August 31, 2014.


Tuesday, May 6, 2014

HVP deal may have violated the Lobbyist Registration Act

Brad Cabana made an important observation on Twitter today.  It appears that Gene Coleman and Nick McGrath were in violation of the "Lobbyist Registration Act" when the controversial deal with Humber Valley Paving was being negotiated.  Here are the relevant parts of the Act:

 2. (c) (xvi) In this Act, "lobby " means to communicate with a public-office holder for remuneration or other gain, reward or benefit, in an attempt to influence public-office holders relating to the terms of a contract, the choice of a contractor, or the administration, implementation or enforcement of a contract.

2. (f) (i) "public-office holder" includes a member or an officer of the House of Assembly
6. (1)  In this section, 
(a)  "employee " includes an officer who is compensated for the performance of his or her duties; 
(b)  "in-house lobbyist" means a person who is employed by an organization   
(ii)  a part of whose duties as an employee is to lobby on behalf of that organization if the employee's duties to lobby together with the duties of other employees to lobby would constitute 20 % of time at work of one full time employee, assessed in a 3 month period, were those duties to lobby to be performed by only one employee; 
19. A consultant lobbyist or in-house lobbyist shall not lobby a public-office holder unless that person is registered in the registry of lobbyists with respect to those lobbying activities. 

Since McGrath has publicly admitted to verbally discussing the termination of the contract with Coleman, this clearly fits the definition of "lobbying".  I guess it is possible that HVP does so little lobbying that it wouldn't count as 20% of the time of one employee, but that seems unlikely.  I have not been able to check the registry of lobbyists myself (my browser is incompatible) but I am told that Coleman does not appear.

Here are the penalties.  It looks as though HVP might be forced to pay their bond penalty after all (see (6)).
31.  (1)  Every person who fails to comply with a provision of this Act is guilty of an offence. 
(5)  A person who is guilty of an offence under this section is liable on summary conviction, for a first offence, to a fine of not more than $25,000 and, for a second or subsequent offence, to a fine of not more than $100,000. 
(6)  In addition to the penalty referred to in subsection (5), the court may, where a person is guilty of an offence under this section, confiscate the proceeds of lobbying which were improperly obtained and direct that those proceeds be paid into the Consolidated Revenue Fund.

Friday, May 2, 2014

The Frank Coleman/Humber Valley Paving scandal - a timeline of events.

A few days ago, Peter Cowan of CBC broke a story about how Humber Valley Paving - a company closely linked to future Premier Frank Coleman - was allowed to cancel a multi-million dollar contract to pave a section of the Trans-Labrador Highway without paying any penalty.  I have prepared below a timeline of events linked to this story. We will continue to update as more details of this story emerge.

January 22: Dunderdale steps down as Premier.

February 10: Danny Williams publicly opposes Bill Barry for PC leader and mischaracterises the contents of letter Barry sent to caucus. (link).

February 14: Rumours circulate that Coleman is being courted by Williams to become PC leader. (link)

February 14: Coleman sells HVP, steps down as CEO (link, link).

March 10: Coleman steps down as a director of HVP (link).

March 13: HVP requests the termination of a $19M paving contract in Labrador (link).  ( it has now emerged that Gene Coleman - Frank's son - negotiated the deal, and that negotiations were done verbally and left no paper trail.  (link, link)).  This appears to be in violation of the Lobbyist Registration Act

March 13 evening (the same day!): Coleman announces he will enter the PC leadership race. Shortly after this announcement, both Steve Kent and Shawn Skinner announce they will not run.  (link)

March 14 noon: Nominations close for PC leadership race. Commentators widely agree that Coleman is almost certain to win the leadership and hence to become the next Premier.

March 21: The request to cancel the contract is granted. HVP gets paid $12M for road preparations and paving only 20km out of the 80km of what was required and have both their $9.5M performance bond and $9.5M labour/materials bond returned without any penalty. At this time three members of Coleman family, including his son Gene, were directors of the company and had an ownership stake in the company. (link, link). It was later revealed the Frank Coleman would have been personally liable to the bonding agency if the bonds had been pulled (link). This contradicts earlier statements by Coleman:

"No, I did not benefit personally from this whatsoever. It is incomprehensible to me that somebody could infer that I benefitted personally from this."(link)

April 20:  The 30 day period for sub-contractors to file a "mechanics lien" against HVP expires. Sub-contractors owed money who failed to file a lien will henceforth be forced to sue HVP in court. (link)

April 25: HVP shareholders release letter saying that "Mr. Frank Coleman and/ or members of his immediate family have no further interest in the ownership structure of Humber Group." (link)

As of April 31: Frank's relatives (grand children, nephews?), Michael and Robert Coleman are the sole directors of HVP. His son, Gene Coleman, is rumoured to have stepped down on April 28th. (link)

June 11: McGrath holds a press conference announcing the result of the retendering of the HVP contract.  McGrath claims that accounting for changes in project specs, cost to the taxpayers have risen by $1.5M. Ignoring specs, the cost has risen more than $2.5M. (link)

June 16: Frank Coleman quits the leadership "race" due to unspecified family issues. (link)

Sunday, March 2, 2014

A walking trail for Margaret's Place

Margaret's Place has emerged as a high density residential area; over a hundred condo units and dozens of row houses have been built on this central cul-de-sac in recent years, with another 44 unit condo in the works for Fall 2014. 

City councillors interested in improving walkability in the city should consider putting one or two short walking trails between Margaret's Place and Bonaventure Avenue.  I've indicated two possible routes below.

This would link these units directly the neighbourhood schools (Holy Heart, Brother Rice, Bonaventure), and the number 15 bus route leading to MUN/HSC and Quidi Vidi. It would also connect with an existing trail system leading to Churchill Square and provide a pedestrian short cut between Georgetown and Rabbittown.

These routes are already being used by walkers, even though this means clambering over snowbanks. Here are a few pictures of what pedestrians have to contend with to use these shortcuts.

Wednesday, February 12, 2014

Population projections

Population growth projections have recently emerged as a controversy. The Conference Board of Canada released a projection that the population of the province will drop to 482,000 in 2035.  Danny Williams declared the projection "bullshit" and city councillor Tom Hann also voiced criticism.

For fun, I decided to do my own projections using a very simple model under a few different scenarios.  In the models below, I assume:
  1. Every person dies on their 80th birthday.*
  2. There is an equal number of males and females in each age group.
* To be consistent I ignore everyone currently over 80 years old, so my population in 2013 is 507,000 instead of the actual 527,000.  This makes no difference to the projections, because 80 year olds don't have children.

Here is the chart.  The scenarios are explained below.

Friday, September 27, 2013

Peace, Consciousness, Community Weekend in St. John's

Check out this call out for an event happening this weekend, September 28-29.


We are human:  we all feel, we all have real beating hearts, we all need nourishment, we all need care, we all matter.  On what grounds do any of us dare to presume who is “worthy” and who is not?  And once we've recognized each others' intrinsic value, how can we continue to support an economic system that thrives on exploitation and inequality?  And how can we not question a political system that calls itself 'democracy' and yet is so entwined with such inhumane economics?
We know our lives are fundamentally interconnected with other humans and with the natural world that generously serves as our life support system.  How can we not see the insanity in continuing to harm each other and our planet?
The few have constructed many systems, structures & institutions, and now we, the many, are awakening to collectively reclaim them and re-imagine them in the spirit of basic human decency.
We are a beautiful multitude, with wide-ranging concerns, united in our compassion, our creativity, our commitment, and our spirit of cooperation.
This movement, this moment, is a call to conscience.  WE KNOW BETTER, so how can we not DO better?  With what excuses can we continue with such unfairness?
We speak from the heart and we celebrate our collective courage, imagination, and power!  We are truly all in this together. 

In that spirit, all are invited to participate this weekend:


Peace, Consciousness, Community Weekend in St. John's

Using our personal & collective wisdom (empathy + reason ;) to explore & enact truly new possibilities for 'Life on Earth' ~ from local to global levels! 

Saturday Sept 28 & Sunday Sept 29
10am-ish to 8pm-ish each day
War Memorial / Harbourside Park green spaces

A relaxed space for human-to-human conversations about things that matter.

A place for citizens to engage ideas, to use our IMAGINATIONS, to meet others who care, to get meaningful actions on-the-go, & so much more.... 

Kids & youth very, very welcome!

(If you want, bring along: blankets to sit on, paper or white boards to write on, sidewalk chalk, musical instruments... you get the idea ;)

The time is NOW!  Everything is a-changing... Look forward to seeing you there. Please spread the word far & wide!

- 30 -

Contact: Krista Koch, (look for me at the event ~tall, blonde, smiling! ;)

Monday, September 16, 2013

St. John's City Council candidates openness to electoral reform

One of the questions on the Independent survey of municipal candidates concerned electoral reform.  Candidates seemed fairly open to the idea - at least more open than I anticipated. I have tried to classify their answers into those supportive,  those open to the idea, and those who are happy with the status quo.

Question: The City of Toronto is planning to move to a ranked ballot system for municipal elections. This system reduces the problem of vote splitting in races with more than two candidates. Would you support a similar reform in St. John’s? Would you support some other kind of reform? 


Sherwin Flight: I would support some kind of reform, although exactly what that would be I am unsure of at this point. I believe this would require significant public consultations before determining the best approach to take.

Sandy Hickman: Toronto has a full ward system. This makes sense in ward and I would fully support for St. John’s. however, at large is a different situation and I like the current system. You can vote for four people or as few as you want. I like that flexibility. But I have always been open to new ideas. I thought the vote by mail was great idea when it came along but now feel we are behind the times in not having online voting (again this is held up by the government).

Lorne Loder: I would support electoral reform efforts, such as moving to a ranked ballot system, which would result in a council that better represents the residents. The first past the post system has been proven to produce a democratic deficit.

Fred Winsor: I believe we should explore other voting options.

Walter Harding: I actually would support that system. I feel a change is as good as a rest and this might entice otherwise apathetic voters to once again join the democratic process. I am saddened to see almost half of the ballots go in the trash during a municipal election as it costs hundreds of thousands of tax payers dollars to put off an election and I have worked hard over the past year to try and get 60 percent of voters to actually vote. An informed voter has my complete respect.

Scott Fitzgerald: I would support this type of reform. I would also support term limits. In my opinion, once a councillor serves two terms in one position they should have to run for something else. For example, after two terms as a ward councillor you could run at-large or for Deputy Mayor or Mayor. This would encourage new people to get involved in the political process.

Jennifer McCreath: I am always looking for ways to improve democracy. I would be open to looking at any possible electoral reform, that would promote and increase voters turnout and produce election results that best reflect what the electorate wants.

Open to the idea

Sheilagh O’Leary: Electoral reform, in all its many and varied forms, is a great interest of mine. Keeping in mind that one person’s “vote splitting” is another person’s “freedom to choose,” I would certainly be open to exploring this, and other, methods of reform to ensure clear majorities in all our electoral races.

Tom Badcock: While studying at university I had some very heated debates on this subject and I trust you will explain to your readers what a ‘ranked’ system is. Our system has flaws but it’s our system. Unfortunately, in a multi party system or in the case where there are many people running for the same position, the majority of voters do not select their party or their councillor. In Israel for example they have a party list system. This is a great example of democracy at its best but it leads to many more elections than we have in our fixed term system. I truly don’t know if the ranked system is the way to go.

Dave Lane: I’m always open to exploring options to improve our democratic system.

Deanne Stapleton: I would like to see the outcome of a ranked ballot system before I would support this reform.

Lionel West: I am in no rush to change the current voting process. I would consider viable options and discuss with citizens. Internet voting may be an option and one that is currently under consideration by the city. I would like to hear what citizens have to say about “term-limit councillors” and full-time councillors. If full-time councillors are employed, it may mean the number of councillors could be reduced.

Cecil Whitten: I am not familiar with the ranked ballot system, I look forward to learning about it. I would support the implementation of electronic voting.

Derek Winsor: I would like to look at a fair system of election that allows all taxpayers to consider themselves for election and not be based on who can put up the most signs and print the most flyers. I would like to see one area in each ward where signs can be posted from all the candidates. Once candidates declare their intention to run, there should be a section on the City of St. John’s website that posts links to candidate’s websites. I think that it would be worth looking at other options of voting procedures.

Lou Puddister: I believe in researching best practices from other jurisdictions, studying their merits, and implementing those best suited to our needs. I will take the time to review the proposed ranked ballot system and will post a response to this question on my campaign website.

Sarah Colborne Penney: I am not sure that this is needed here. I would have to fully examine this issue before taking a position on it.

Happy with status quo

Paul Sears: A. As a former member of St John’s Electoral Reform Committee I believe there will always be room for improvement in the electoral protocol and process. Having that said I would support having a review every 2 years to review the system and ensure we are maintaining the best approach for our city and citizens. B. No at present, I am content with our current system.

Bernard Davis: If our current system is working why would we change it?

Bruce Tilley: I feel that the current ballot system of mailing is fair but I would rather the old system (that of the Provincial and Federal system).

Andrew Harvey: I am never against looking at other options, but the current system seems to be sufficient at present. One piece of electoral reform I would like to see is a change in the provincial legislation to allow online voting.

Ron Ellsworth: I have never heard a complaint regarding the current system in place in St. John’s. If residents are satisfied with the electoral system we are using then there is no reason to change it.