October
29, 2004
You think life is hard now?
You think your life is hard now?
Just wait until next year.
If the Qulliq Energy Corp., now the proud parent of the Nunavut Power Corp.,
gets its way next year, you'll start paying a lot more to eat, travel and keep
warm in the winter.
Depending on where you live, your food bills could go up by as much as 20 per
cent. You'll pay more to travel by air. If you're a tenant in a privately-owned
building, you'll pay more for rent when your lease is renegotiated.
If you live in Iqaluit, Rankin Inlet, Igloolik, Panniqtuuq, Cambridge Bay,
or Baker Lake, you will pay the biggest price increases of all.
The Government of Nunavut, which subsidizes nearly everyone in the territory
to some extent, will pay more too. That means they'll have less money to spend
on all the other things you want the government to do for you.
So dream on. The government won't do those things for you, because they will
be spending more money than ever before on power bills - their power bills and
your power bills.
The power corporation, as everyone knows, needs more money every year. If they
don't get it, they'll eventually go into some form of bankruptcy. To get that
money, they studied ways of making their customers pay for electricity.
But they are recommending only one method. And that method is to gouge the
greatest chunks of cash out of the communities that contain the largest numbers
of paying customers. That method will also gouge the greatest chunks of cash
out of the communities that contain the largest numbers of private businesses
- whose electrical power bills are not subsidized by the territorial government.
So next year, if you live in Iqaluit, Rankin Inlet, Igloolik, Panniqtuuq, Cambridge
Bay, or Baker Lake, you will pay those power bills yourself, every time you
go to the store to buy Enfalac, Pampers, pork chops or pilot biscuits.
At the same time, small numbers of people in small communities like Whale Cove,
Grise Fiord and Kugaaruk will see their power bills go down. That's because,
if you live in a big community, you will be subsiding the enormous costs of
generating power in those small places. This is how the power corporation's
one-price-fits-all rate system will actually work.
This rate system pretends to be fair, but it is not. It imposes a hidden tax
on Nunavut's businesses and homeowners, most of whom are located in the larger
communities. This hidden tax will strangle all real economic development in
Nunavut, especially the private sector growth that the Nunavut government claims
to support.
It will also impose enormous new costs upon the government. For example:
- The social assistance food allowance. Under the GN's miserly social assistance
program, a single person on welfare, living in either Iqaluit, Arviat, Kugluktuk,
Panniqtuuq, Qikiqtarjuaq and Rankin Inlet gets $285 a month to buy food, less
than what the average professional meeting-goer gets as a single day's honorarium.
But when the price of food rises in those communities because of higher power
rates, the territorial government will be forced to raise these food allowances
dramatically. If not, hungry welfare recipients will soon be climbing into your
windows late at night to steal what they can't afford to buy.
- Social housing tenants. About 50 per cent of Nunavut residents live in social
housing - and pay only a tiny portion of their real power bills. The territorial
government pays the rest. Because of the dramatic rise in residential power
bills in places like Iqaluit and Rankin Inlet, the government will soon be
paying much more.
- Northern allowance payments. Nunavut government employees all get northern
allowance payments based on the cost of living in the communities where they
live. When higher power rates change the cost of living in communities like
Iqaluit and Rankin, all those northern allowances will have to be recalculated,
and the government will pay many millions of dollars more every year.
There is no evidence that the GN is aware of the damage that the NPC's territorial
rates will inflict on private businesses. There is no evidence that the GN is
aware of the hardships that higher food prices will inflict on ordinary people.
And even if they are aware, there is no evidence that they are capable of analyzing
the situation and acting in a sensible manner.
The power corporation is doing all this within a territory where most things
are run by ignorant, incompetent drudges, from the GN on down. Just look at
the pathetic reaction of Iqaluit City Council, in a community where commercial
power bills would rise by 92 per cent, and where residential power bills would
rise by 59.2 per cent. Nearly four weeks after the power corporation released
and distributed its proposal - and posted it on the Internet - most councillors
claim not to be aware of what's going on.
Given that kind of willful stupidity, you can't blame the power corporation
for thinking they can get away with it. JB
October
22, 2004
An Inuit share of the mining business?
As many readers may know by now, the Tahera Corp.'s Jericho diamond mine, Nunavut's
first new working mine in many years, is almost ready to go.
After years of painstaking exploration and many months of equally painstaking
work aimed at guiding their project through a long list of bureaucratic processes,
Tahera executives have solved their biggest problem of all: how to pay for it.
The company struck a deal earlier this month with the renowned jewellery retailer,
Tiffany and Co., to borrow $35 million over the next five years. Tiffany will
also buy most of the diamonds that Tahera produces, and sell the diamonds they
don't want to buyers around the world.
But that deal represents only half of the $72.5 million in start-up money that
Tahera will need to pay the cost of constructing the mine, an on-site processing
plant, an airstrip and other infrastructure.
To raise the rest of the cash they need, Tahera will sell shares through the
stock market. We're not financial experts, but right now it looks like a good
buy. The company estimates that the mine will earn profits of about $142 million
a year, before taxes are applied. That figure, of course, could rise and fall
with the price of diamonds — but most observers believe prices will rise in
the future.
How can Inuit share in these profits? One way is through implementation of
the Inuit impact and benefits agreement between Tahera and the Kitikmeot Inuit
Association. This agreement will produce certain numbers of jobs and training
opportunities for Inuit workers, and contracting opportunities for Inuit businesses.
But there's a more direct way to share in Tahera's wealth — and that's to buy
into the company. There appear to be several ways of doing this: through the
regional birthright corporations, the Nunavut Trust, the Atuqtuarvik Corp.,
or some new entity.
Some Inuit corporations have a history of investing in dubious commercial enterprises
that end up losing money — and the beneficiaries never seem to find out why.
But investments in publicly traded companies are different. Companies such
as Tahera are legally required to make their financial statements available
to the public, and any other information that could affect their financial position.
Anyone with access to the Internet can easily find this information.
And the ownership of shares in a public company gives you the right to attend
shareholder meetings, and cast votes. If you own a big piece of the firm, you
might get a seat on its board of directors.
This is not the kind of decision that ought to be done hastily, of course.
If it's something that Inuit business organizations decide they want to do,
they should proceed only after doing a diligent analysis of the idea.
Jericho is only the first in a series of new mines that are likely to start
up in Nunavut over the next decade or so. When hundreds of millions of dollars
begin to flow back and forth, including big profits flowing into the hands of
southern investors, Inuit will want to know how they can share too. This is
one way of answering that question. JB
October
15, 2004
The Ed Horne excuse
Last week, a 41-year-old Kimmirut man, whose name we're not allowed to publish,
appeared in court to plead guilty to 10 sex charges involving the molestation
of children, and one sex charge related to an adult male.
This is not the first time this man has been brought to court for sexually
molesting children. In 1998, he was convicted of molesting two boys in Kimmirut
and Iqaluit, and sentenced to about two years in prison.
In his more recent past, this man has also displayed a capacity for deceit
and dishonesty. He's serving time right now on more than a dozen convictions
for fraud, a crime rooted in the deception of the innocent and the gullible.
Given what those fraud convictions may reveal about his character, it should
come as no surprise, then, to see him trying to sell what appears to be a phony
story to the court.
This one is a standard-issue "I'm-a-victim" tale aimed at producing
a lenient sentence.
Among other things, the man claims to have been a victim of Ed Horne, a former
teacher, principal, and infamous pedophile, who lived and taught in Kimmirut
during the 1983-84 and 1984-85 school years.
At that time, the man in court this week was about 19 or 20 — a full-grown
man.
Ed Horne was a pedophile who preyed on children only. All his victims were
boys. No adult has ever come forward to allege that Ed Horne sexually assaulted
them. There is no evidence in existence anywhere to suggest that Ed Horne ever
sexually assaulted an adult. So it's difficult to understand why the Kimmirut
man's defence lawyer even brought this dubious claim to court as part of his
sentencing submission.
It's intent, obviously, is to portray his client as a victim who needs help.
It's effect, however, is too make him look like a pathetic liar.
So what would motivate a person to concoct such a shaky story? Because there
are great benefits to be gained nowadays by portraying oneself as a victim.
Our popular culture celebrates victimhood, and the therapy industry rewards
it by showering victims with attention.
In 1997, an Inuit inmate at Stoney Mountain penitentiary claimed — in a group
therapy session — that Ed Horne had sexually abused him. He made the claim to
get better treatment — but it was a lie. Ironically, this lie led to a new investigation
into Horne's activities, which produced many legitimate victims who were telling
the truth. And it also produced more fabricated allegations from men who told
lies to attract attention to themselves or to gain other benefits.
The court system also rewards victims, at least, it's perceived as doing so,
whenever it imposes lighter sentences on victims who victimize others. And that
likely explains why the "Ed Horne excuse" now appears to be an increasingly
common ploy used by defence lawyers to obtain lighter sentences for convicted
offenders.
But what's the difference between an "Ed Horne victim," and any other
sexual abuse victim? There are probably thousands of sexual abuse victims in
Nunavut, people who have been abused by fathers, uncles, brothers, grandparents,
and other family or community members. Why does being "an Ed Horne victim"
give you a leg up in the victimization game?
And unlike most sexual abuse victims in Nunavut, Ed Horne's victims have benefited
from a financial compensation package, which includes healing and therapeutic
activities for those who want it. So if anything, being "an Ed Horne victim"
should be deemed an aggravating, not a mitigating factor in sentencing. It should
get you more, not less time in jail.
Judges in Nunavut have an extremely difficult job, and producing appropriate
sentences to fit the offender, and the offence, is perhaps their most difficult
task of all. That job will get a lot tougher if they don't beware of con artists
making phony claims to attract sympathy. JB
October
8, 2004
Paying for power at the cash register
Back in 1986, the irrepressible Gordon Wray, an unjustly forgotten MLA who
at that time represented the people of Baker Lake and Arviat in the Northwest
Territories Legislative Assembly, had a long chat with a young reporter from
Nunatsiaq News.
His subject: the impending divison of the Northwest Territories and the creation
of Nunavut, and his deep concerns about the Nunavut territory's ability to survive.
"They think it's easy? Just wait until they try to split the power corporation,"
Wray said.
He was right.
The question of what to do with the NWT power corporation led to a convoluted
mess. At first, leaders tried to keep it in one piece, to be shared between
the two territories after 1999.
But NWT leaders got greedy. They insisted that the NWT government would name
a majority of its board members, own a majority of its shares, and get the biggest
share of its profits, or "dividends." This was unacceptable for Nunavut
leaders, for obvious reasons.
So not long after 1999, they created the Nunavut Power Corp. On April 1, 2001,
it went into business.
As we know now, the new made-in-Nunavut utility began losing money at an alarming
rate, especially in its second year, for a long list of reasons: incompetence
by now-managers inherited from the NWT, rising fuel and labour costs, and prices
that are too low. And the NWT still owes Nunavut millions of dollars in an unresolved
dispute over division of the power corporation's assets and liabilities.
At the same time, its former managers couldn't produce financial statements
on time. That meant few people learned of its worst financial losses until earlier
this year, when the Auditor General of Canada issued her scathing report on
Nunavut's Crown corporations.
And without the information contained in those long-delayed financial statements,
the power corporation could not supply the back-up needed to explain why they
must charge higher power rates.
Now, the power corporation's board intends to finish the job. They've done
what could not have been done in the recent past: propose a brand-new rate structure.
Their plan, released last week, will dramatically change the way that the Nunavut
Power Corp. calculates your power bills. If their scheme goes forward as is,
you will pay the same rate no matter where you live in Nunavut.
It's an idea with a lot of merit. Nunavut's current rate structure is incomprehensible
to most residents; the new plan is simple and easy to understand. It will surely
turn out to be an easier system for the power corporation's billing clerks to
administer.
And as the power corporation correctly points out, large numbers of residents
already pay a "territorial rate" — because they're protected by territorial-wide
subsidies. Social housing tenants will see no change. Homeowners and tenants
in privately-owned housing may see minor changes, but only if they use more
than 700 kilowatt-hours a month.
There's just one hitch.
If you live in Iqaluit, Rankin Inlet and a few other large communities, you
may end up paying a lot more. But not through your power bills. You will end
up paying more at the cash register, whenever you shop for food and clothing.
Here's why: Right now, the lowest commercial rates are charged to businesses
located in larger communities such as Iqaluit and Rankin Inlet, Igloolik, Cambridge
Bay, Panniqtuuq, and Baker Lake.
When the new territorial-wide rates come into effect, retail stores, hotels
and other small businesses in those communities will see a dramatic jump in
their power bills. In Iqaluit, small businesses will pay nearly twice as much
as they do now for the electrical power they need to run their freezers, kitchens
and storage areas.
When that happens, those businesses will make you pay for it, every time you
go to the store to buy Enfalac, pilot biscuits, or pork chops. That's what businesses
must always do to survive when their costs go up — raise their prices.
It's likely that the power corporation's proposal will go forward more or less
in its current form. Right now, Nunavut's small business community is weak and
disorganized — their chambers of commerce may not have the capacity to challenge
the new rate structure.
But when your food bills go up next year, it's not food that you'll actually
be paying more for, but the store manager's power bills. JB
October
1, 2004
The cheque, please
Last March, the federal minister of finance, Ralph Goodale, announced in his
budget speech that his government will spend $90 million on economic development
in the three territories over the next five years.
That works out to about $6 million per territory, per year. Not much, especially
when you compare it with the $66-million proposal for an economic development
agreement that Nunavut submitted to Ottawa in December of 2002. But we'll take
it all the same.
There's just one problem: as of this week — seven months later — Ottawa had
not actually released the money.
Instead, the federal government got Larry Bagnell, the parliamentary secretary
for DIAND, to ask a bunch of questions. The Nunavut Economic Forum, a 38-member
coalition of Nunavut organizations, got the job of answering them.
This week, the NEF's president, Monica Ell, presented Ethel Blondin-Andrews,
Bagnell's replacement, with the fruit of their labours.
Guess what? It's another document! This one is called "Qanijijuq,"
or "Preparing for the Journey."
No, it's not a how-to manual for would-be tourists. It's mostly a list of answers
to Larry Bagnell's questions.
And pretty much all of those answers regurgitate information that's already
contained in other documents, such as the Nunavut Economic Development Strategy,
the Conference Board of Canada's work on Nunavut's economy, and various other
materials in the public domain.
If Bagnell was so curious, you'd think he could have found some underworked
sluggo at DIAND to dredge up the answers. Better that than dump the work onto
the Nunavut Economic Forum, forcing the organization's employees to divert time
and resources from the job their supposed to do.
The next time Ethel Blondin-Andrew comes to Nunavut, she'd better come with
a cheque, not another list of questions that have already been answered many
time before. JB
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