June 13, 2012 - No. 88
Billions of Dollars in Electricity
Capital Projects Underway Across Canada
Capital Projects Must Serve the Public
Not Private Interests
Dollars in Electricity Capital Projects Underway Across Canada
• Capital Projects Must Serve the Public
Interest, Not Private Interests - Jim Nugent
• BC Hydro and the Rule of Thieves
into United States of North American Monopolies
• Ongoing Consultation With Monopolies on
• Food Safety Compromised by Cuts
and Harmonized Regulations -
• Government Tables Sweeping Food Safety Law in
• Canada's Duty Exemptions Harmonized with
Those of U.S.
Billions of Dollars in Electricity
Capital Projects Underway Across Canada
Capital Projects Must Serve the Public Interest,
Not Private Interests
In Canada's electrical power sector a massive capital
project is underway involving increasing capacity, transitioning to new
sources of energy and refurbishing aging infrastructure. The capital
spending projects underway are being used as an opportunity by
politicians to assist international monopolies
and financial groups to seize control of the vast public assets built
up in this sector and to capture the rich revenue streams from
household and industrial electricity ratepayers. Profits of private
owners are usually guaranteed in some way through power purchase
agreements and other arrangements negotiated in secret.
An entirely unnecessary additional layer of ownership is being laid
over the system. Additional tribute in the form of enterprise ownership
profit is being claimed by those inserting themselves into the system
The extent of the expansion and refurbishment of the
electrical sector taking place across the country is summarized in a
report released earlier this year by the Conference Board of Canada
(CBOC). The report says that between 2011-2030, there will be $347.5
billion invested across Canada in the creation of
new electrical infrastructure and the refurbishment of worn out
infrastructure. This massive project, the report says, will require 4.2
million person/years of labour, with much of this labour concentrated
in the first six years. It estimates that this investment in
electricity infrastructure will account for 1.2 per cent of annual
growth in national GDP over the 2011-2030 period, about half of the
expected annual GDP growth.
Total spending on electrical system plant and equipment
during the period is estimated to be $110 billion. Project purchases on
this scale could contribute to strengthening Canada's manufacturing
sector, particularly advanced technology manufacturing. Many Canadian
companies have the capability and employ
workers with the skills to produce all of the equipment required.
Despite this, half of all the plant and equipment required by power
projects will be imported according to the CBOC report.
Vast amounts of the society's resources will be
dedicated to this massive project, wealth created by workers and
workers' labour. All of it will be paid for by electricity users.
However, private profit not public interest will be at the centre of
these projects. According to CBOC's calculations, annual growth in
corporate profits will average of $2.7 billion a year from 2011-2030 as
a result of electricity projects, with government guarantees on much of
Electrical power is an
essential service required for
life and for the functioning of the economy. The public interest
demands that it be provided on a cost-recovery basis to households and
industry. The huge claims for ownership profit being placed on it will
weaken the electricity supply system and weaken the
economy now and for years to come. Workers have to confront the very
narrow private interests of the rich minority being placed at the
centre of the electrical sector and of the massive capital project
underway. Workers have to work out their own agenda for the electricity
generation, transmission and distribution
system and for every sector of the economy, an agenda that puts the
interest of the society at the centre of how the economy is organized.
Many questions have to be sorted out about committing so
much of society's resources to such capital projects, including:
- how can capital projects contribute to building a
self-reliant national economy at the highest level of technology
instead of building the empires of international monopolies;
- how can workers' savings and pensions be utilized for
strengthening the economy instead of the economy being weakened by
paying billions in interest to financiers and enterprise profits to
- how can reliable power be supplied at rates households
can afford and at rates that strengthen other industries;
- how can resource and other capital projects contribute
to humanizing the human and physical environment;
- how can energy and other projects contribute to
ensuring the rights of First Nations peoples and the rights of all.
There is no other force in society but the working class
that can or will work out a pro-social, human-centred direction for the
economy, including the huge capital projects being set in motion.
Workers have to work out a way forward for putting the interests of the
workers and the society at the centre of the economy.
BC Hydro and the Rule of Thieves
The Alberta-based monopoly AltaGas has a $1billion
hydro-electric power project underway in North-West BC. This
megaproject is an example of the kinds of privately-owned projects
underway across the country. These projects are displacing public
ownership and public interests in Canada's electricity generation,
transmission and distribution sector.
AltaGas is building three run-of-the-river power plants
on the lands of the Tahltan First Nation. One of these, the
McLymont Creek plant, received environmental approvals to go ahead
earlier this month. The McLymont plant is a $217 million project that
will have an output of 70 megawatts. BC Hydro
has already signed a secret long-term power purchase agreement with
AltaGas guaranteeing AltaGas profits in the project. BC Hydro is also
building a $400 million transmission line to bring the power produced
and other private generation companies to consumers.
The AltaGas megaproject fits
within the policy of the BC
government and some other provincial governments of handing over
development of all new power generation capacity to private sector
investors. A variety of excuses are used for this such as job creation,
green energy or First Nations economic development.
But none of these objectives require private ownership and in fact can
be better served by publicly-owned energy enterprises. It is also
claimed that imposing more ownership profit claims on the system will
somehow miraculously produce lower user fees for households and other
industries, but of course electricity
rates keep climbing as private ownership increases. The only objective
served by privatizing the electricity sector is to enable the rich to
extract even more profits from the sector in the form of claims for
A rough calculation using the example of the costs and
outputs of the McLymont Creek project shows what great scores private
electricity projects are for their owners and how they harm the public
interest. These calculations do not include any sweeteners for AltaGas
that BC Hydro may have built into the power
purchase agreement, which are kept secret under the hoax of "commercial
BC Hydro's average rate of return on assets is 11.2 per
cent a year.
BC Hydro's bond rate for debt financing is 3.65 per cent.
Since BC Hydro is a public enterprise, returns are
handed over to the provincial government. At BC Hydro's average rate of
return on assets, the McLymont Creek as a public enterprise would
generate $15.4 million a year for the government ($23 million minus
million in bond interest).
If AltaGas operates the plant at its 70 megawatt
capacity for a year at the going electricity price ($.06/kW hour), it
would receive $39 million from BC Hydro.
After debt financing of $8.83 million a year (at AltaGas
bond rate of 4.07 per cent), this would leave $31 million a year to
AltaGas as return on its McLymont Creek asset.
Public ownership -- $15 million a year for the
government, $7.60 million for bondholders.
Private ownership -- $31 million a year for private
owners, $8.83 million for bondholders.
AltaGas would earn enough to pay off the bondholders
holding the mortgage in less than 10 years and be able to collect $39
million a year free and clear for as long as the river runs.
This example shows that when viewed from the point of
view of the public interest, provincial government policies for handing
over development of new power generation to the private sector is
completely irrational. The financial arrangements in almost all
electric power projects underway and planned in the
electricity sector across the country involve thievery similar to the
McLymont Creek deal. The deals being floated in this sector are
revealing the political system in Canada as a kleptocracy, a system
based on the rule of thieves.
AltaGas and Tahltan Nation Sign McLymont
Volcano Creek Impact Benefit Agreements
- AltaGas Press Release,
Central Council today announced that they have signed
two Impact Benefit Agreements (IBAs), one for the McLymont Creek
run-of-river hydroelectric project and the other for the Volcano Creek
run-of-river hydroelectric project.
"The IBAs establish a formal partnership between AltaGas
and the Tahltan Nation and enable us to continue to develop our
projects in collaboration with the Tahltan community," said David
Cornhill, Chairman and Chief Executive Officer of AltaGas.
"This is an exciting day for our people and our Nation
that will shape the future of development in our territory. Today's
signing of the IBAs launches a partnership between the Tahltan Nation
and AltaGas. We look forward to strengthening our relationship with
AltaGas as we work together in the development
of these projects, ensuring our Nation, people and businesses receive
financial benefits, including revenue sharing, jobs and contract
opportunities, while also minimizing the environmental impacts and
protecting our culture and way of life," said Annita McPhee, President
of the Tahltan Central Council.
The projects are located near AltaGas' 195-MW Forrest
Kerr project, currently under construction, approximately 1,000 km
north of Vancouver, BC. AltaGas expects the Forrest Kerr project to
come into service in 2014, followed by McLymont Creek in 2015 and
Volcano Creek in 2016. Collectively the projects
are known as the Northwest Projects.
The Northwest Projects are to be constructed solely
within Tahltan Nation traditional territory and are expected to cost
approximately $1 billion. Once completed, the projects will provide
enough electricity for approximately 95,000 homes in British Columbia
and will offset more than 780,000 tonnes of greenhouse
gas equivalents annually. The projects will deliver electricity to the
terminus point of the previously announced 287-kV Northwest
Transmission Line (NTL), near Bob Quinn, BC, being constructed by BC
The Tahltan Nation includes on and off-reserve Tahltans
living in Telegraph Creek, Dease Lake and Iskut, and more than 3,000
people living across the country. Tahltan traditional territory
encompasses 11 percent of British Columbia. More than 50 percent of all
mineral exploration and mine development in
the province takes place in Tahltan traditional territory. For more
information about the Tahltan Central Council, visit www.tahltan.org.
AltaGas is an energy infrastructure business with a
focus on natural gas, power and regulated utilities. AltaGas creates
value by acquiring, growing and optimizing its energy infrastructure,
including a focus on renewable energy sources. For more information
Canada's Annexation into United States of
North American Monopolies
Ongoing Consultation with Monopolies on
The Harper government
has been holding ongoing consultations with representatives of some of
the biggest North American monopolies on how best to serve their
interests in establishing the North American
Security Perimeter. Such consultations with the monopolies are a sharp
contrast to the fact that Canadians have no say in whether
to be annexed into the United States.
On May 14 joint consultations on "business travel
between the United States and Canada" were held in Washington, DC. On
May 24 a similar consultation was held in Toronto. The consultations
were hosted jointly by Citizenship and Immigration Canada (CIC) and the
U.S. Department of Homeland Security
(DHS) and are being facilitated by the Washington-based Migration
The main issue on the agenda for the consultations has
been the demand of the monopolies for new arrangements to facilitate
the movement of labour within North America to fulfil the needs of the
monopolies for a highly skilled and "flexible" workforce.
Giving a clear sense of in whose interests changes to
immigration regulations will be, those in attendance at the Toronto
- BDO Canada (fifth largest accounting firm in the
- Canadian Bankers Association
- Canadian Council of Chief Executives
- Canadian Employee Relocation Council
- Canadian Manufacturers and Exporters
- Global Business Travel Association Canada
- Canadian Trucking Alliance
- Information Technology Association of Canada
- IBM Canada
- Maple Leaf Foods
- Microsoft Legal and Corporate Affairs Group
- Nexen Inc.
- Sun Life Financial
No unions, or organizations representing workers
participated despite the fact that it is the movement of workers which
is being discussed.
Speaking about the consultations,
Canada's Minister of
Public Safety Vic Toews stated: "This Government's top priority remains
jobs, growth and long-term prosperity. These consultations will help
improve cross-border trade and bring greater economic benefits to both
Canada and the United States."
"Billions of dollars worth of goods and hundreds of
thousands of people cross our shared border every day. We want to hear
directly from businesses on both sides of the border about how
cross-border business travel could improve. We especially want to hear
fresh ideas," added Minister of Citizenship, Immigration
and Multiculturalism Jason Kenney.
U.S. Secretary of Homeland Security Janet Napolitano
stated: "DHS is committed to working with our Canadian partners to
facilitate cross-border business, strengthening the economies of both
our countries. Through these joint consultations, we will receive
direct feedback from businesses on how we can improve
travel and trade at the border."
Food Safety Compromised by Cuts and
Major changes to Canada's food safety system are in the
works. The Harper government is cutting the number of food inspectors
at Canada's Food
Inspection Agency (CFIA) and is also harmonizing
regulations concerning food and drugs in the interest of Canadian, U.S.
and European agriculture monopolies as part of negotiations towards a
North American Security Perimeter
and a Canada-Europe Free Trade Agreement (CETA). To cover up that these
are nation-wrecking changes which threaten Canadians' food
security, the changes are presented as measures which are claimed will
assist small and medium-sized business.
The changes are in line with the demands of the biggest
American monopolies which are in control of the Regulatory Cooperation
Council (RCC), established to lead the process of harmonizing
regulations in various spheres between Canada and the United States.
When the RCC issued its Action Plan as
part of the Security Perimeter Negotiations, amongst other things it
called for "common approaches to food safety" and to "minimize the need
for routine food safety surveillance inspection activities in each
other's country." It also called for streamlining "the certification
requirements for meat and poultry, including
where possible, the reduction or elimination of redundant
certification, data elements and administrative procedures for
shipments flowing between Canada and the U.S."
The Harper government is
moving behind the backs of Canadians
without any discussion on the significance of how changes to Canada's
food safety regulations will affect the safety of Canada's food supply.
Senate Bill S-11, the Safe Food for Canadians Act,
received first reading June 7.
The Harper government backgrounder spins the aim of the bill as:
"Improved food safety oversight to better protect consumers,
streamlined and strengthened legislative authorities, and enhanced
international market opportunities for Canadian industry."
Regarding the bill's stated aim for "improved food
safety oversight to better protect consumers,"
the government states the legislation contains new prohibitions against
food commodity tampering, deceptive practices and hoaxes, strengthened
food traceability, and improved import controls.
With respect to the bill's ostensible aim for
"streamlined and strengthened legislative
authorities" the legislation will "modernize and simplify" existing
food safety legislation, by aligning inspection and enforcement powers
across all food commodities, "enabling inspectors to be more efficient,
and fostering even higher rates of compliance
for industry. As a result, consumers will enjoy a safer food supply."
The claimed benefit of the bill of "enhanced
international market opportunities for Canadian industry"
will provide new ministerial "authority to
certify food commodities for export," and will provide new review
mechanisms which will make it easier for regulated companies to review
decisions made by the Canada
Food Inspection Agency. According to the government, the new mechanisms
will be "faster and less costly than the judicial process."
In addition to Bill S-11, which would completely change
food safety laws, the Harper government is also putting facts on the
through changes to regulations concerning food safety.
On March 3, in the Canada Gazette, the journal
government regulations and new laws are announced, the Harper
government issued wide-ranging amendments to Canada's Meat Inspection
Regulations of 1990 in line with what is being demanded by the
monopolies through the Regulatory Cooperation
The regulations affect businesses involved in the
slaughter of food
animals, the processing, packaging, labelling, refrigeration, freezing
and storage of meat products. The stated aim of the amendments is to
make it easier for small and medium-sized businesses to meet federal
food inspection requirements so that
they can trade products inter-provincially and internationally. The aim
is not to ensure that the highest level of safety standards for food is
adopted by both the United States and Canada.
The stated aim will be achieved through amendments that
"streamline and simplify requirements for all existing federally
registered establishments as well as future applicants to the federal
system." The overview of the regulatory changes state that they will
"replace prescriptive requirements and/or criteria
with more outcome-based requirements." One of the other goals of the
amendments is to "increase alignment with regulations and policies of
Canada's major trading partners including the United Sates and the
Among other things the amendments make it easier to set
establishment and meet federal food safety requirements. For example,
one of the amendments revises room temperature requirements to process
domestic poultry, changing it from a specified temperature
(prescriptive) to a more "outcome-based
provision" that requires the temperature be appropriate to ensure the
preservation of a meat product. Who will decide what is appropriate and
based on what criteria is not explained. Given the number of food
inspectors is being cut at the same time as these changes are taking
place, one can assume that more of what
is considered "appropriate" will be left up to the companies to decide.
Another example of the lowering of food safety standards
are the changes being
made to regulations concerning the import of animal feed with beef
components in relation to bovine spongiform encephalopathy (BSE -- aka mad cow disease). The
amendments state: "Where ... BSE
is referenced ... modify
from 'free' to 'negligible' risk." This change would mean that feed
with beef components would be permitted for sale in Canada if it
comes from another country or part of Canada that is considered at
"negligible risk" of having BSE rather than "free" from
BSE, as previously required.
MP Claims Only Two Per Cent of Food Imported to Canada
related news, on February 17, NDP MP Malcolm Allen revealed in an
exchange in the Parliament that only two per cent of food imported to
No doubt this will become worse with fewer inspectors. Even more
astonishing was that Conservative MP David Anderson, Parliamentary
Secretary to the Minister of Natural Resource and to the Minister of
Agriculture and Agri-Food for the Canadian Wheat Board, refused to even
recognize this as an issue and instead
attacked the NDP MP:
Malcolm Allen: Madam Speaker, this past
the agriculture committee learned that only 2% of food imported into
Canada is actually inspected. Yet 100% of the products that we produce
and send abroad are inspected. Canadians expected, in fact believed,
that all imported food
was inspected. The agriculture committee now knows that is not true.
What is the government going to do to ensure that
imported food is
inspected so that Canadian consumers will feel safe when they feed
David Anderson: Madam Speaker, the
know that the CFIA enforces the same rigorous food safety standards on
imported food as it does for domestic food.
I can give him some examples of what we have done to
import system. He should know this if he is on the Agriculture
Our recent budget includes an additional $100 million
years to enhance food safety. We have delivered $223 million to the
food safety action plan. To improve controls on imported food, we
eliminated the 72-hour notification of inspections of meat imports. We
have established an import surveillance
team to perform 480 border blitzes.
Madam Speaker, I could go on, but I know my time is
Malcolm Allen: Madam Speaker, the
secretary should know that actually there are no CFIA inspectors at the
border. CBSA is responsible to do that and it does not know how to do
it. The $100 million was actually for exported food, not imported food.
The reality is we are not testing the products. In fact,
we do not
require that potable water be used on washed vegetables that are
imported into this country.
We need to restore consumers' confidence in the system.
government commit today to ensuring that the CFIA budget is not cut in
the next budget round?
David Anderson: Madam Speaker, something
does not know how to do is to apologize. The member opposite should
stand up and represent his caucus and apologize for the sleazy online
campaign that they have been conducting.
Government Tables Sweeping
Food Safety Law in Senate
On June 7, the Harper government introduced Senate Bill
S-11, An Act respecting food commodities, including
their inspection, their safety, their labeling and advertising, their
import, export and inter-provincial trade, the establishment of
standards for them, the registration or licensing of persons
who perform certain activities related to them, the establishment of
standards governing establishments where those activities are performed
and the registration of establishments where those activities are
performed. The short title of the Act is the Safe Food for
Canadians Act. The Summary
provided by the government states: "This enactment modernizes the
regulatory system for food commodities." There has been no explanation
presented as to why the legislation was introduced in the Senate before
the House of Commons.
The legislation is another omnibus bill which completely
transforms Canada's legal framework for the regulation of
all aspects of food safety including food production and sale within
Canada and between Canada and other countries. Amongst other things the
Act repeals the Fish Inspection Act, Meat Inspection Act
and Canada Agricultural
Products Act and centralizes the authority over food safety
previously held in those Acts.
In presenting considerations for the change, the
government claims change is needed, but refuses to
explain why or what the problems exist with the current laws. It
simply asserts that the current Acts were passed in the past and by
implication outdated. People want food safety, so
changes are needed, and because they are needed, the changes the
Conservatives are bringing into being will make Canadians' food safer.
Here is a good example of this attempt to cover up the
aims of the legislation: Under the heading "need for change" a Ministry
of Agriculture and Agri-Food backgrounder states: "Food in Canada is
currently regulated under a suite of different statutes: the Food
and Drugs Act, Fish Inspection Act, Meat
Inspection Act, Canada Agricultural Products Act, and the
Consumer Packaging and Labelling Act. These Acts were created at
various times over several decades, and have been updated at differing
frequencies. While these food statutes have served Canadians well, the
time has come to create
new tools to manage today's risks to food safety, while ensuring that
Canadian industry has continued opportunities in international trading
markets." We are also informed that the new legislation will "align
inspection and enforcement powers across all food commodities."
The government provides the following rationale for the
Act, giving an indication that the demands of the agri-monopolies,
mainly in the United States, and those in Canada that want a more
integrated North American market, are guiding the changes: "By further
aligning Canada's food safety system with those
of our key trading partners, the Act will enhance international market
opportunities for the Canadian food industry. A new authority in the
Act would allow certification of any food commodity for export and
increase global confidence in Canadian food. The Act will also
strengthen controls over imported food commodities,
introduce [ministerial] powers to register or
license regulated parties, and prohibit the importation of unsafe
The reference to "key trading partners" has become a
euphemism for the United States under the Harper government so as to
cover up that changes are being made to integrate Canada into the
United States of the North American Monopolies, something which
How any of this will actually make food safer for
Canadians is not at all discussed. Given that the Harper government is
in the midst of cutting food inspectors across the country, it is not
likely that the new Act is part of an overall plan to guarantee that
Canadians' food is safe. Instead it appears that the aim
guiding the legislation is to place the interests of the monopolies as
the main goal of the regulation of food safety.
One of the significant aspects of the new legislation is
that it gives power to the Minister of Agriculture and Agri-Food to
annex Canada's food safety system into the U.S. system. It gives the
Minister the power to accredit "persons, bodies, facilities or
laboratories in Canada and elsewhere and the recognition
of their activities or findings" concerning food safety, as well as to
recognize "systems of inspection, certification, manufacturing,
preparation, storage, packaging, labelling or testing," inside or
outside of Canada for import into Canada. This means that the Minister
will have the power to accredit all manner of U.S.
food exporters or other facilities as "pre-cleared," and
are thus to be trusted. It is similar to the way in which cargo
screened by U.S. Homeland Security is to be accepted as "secure" for
entry into Canada without our own screening system. In the case of
food, the power to "pre-clear" would mean that
U.S. exporters to Canada, for example, would be certified once in the
U.S. according to regulations "harmonized" with those of
the U.S. and then deemed safe. Future imports would then be
fast-tracked at the border and would not require inspection. This would
mean fewer inspection and checks of
food safety than already exist even though only two per cent of food
imported to Canada is inspected.
Such an arrangement would save the big food monopolies exporting into
Canada large amounts of money due to decreased inspections, and in some
cases less prescriptive requirements for
food safety. On the other hand, U.S. certification of
Canadian commodities for export to the U.S. is likely the
"prize" which certain monopolies based in Canada seek for
pushing the alignment of Canada's food safety regulations with
those of the United States. All of this is also
likely to be a step towards Canada's Food Safety regime being
the U.S. Food and Drug Administration (FDA). Both the FDA and
Agriculture and Agri-Food Canada have been involved in the negotiations
towards a North American Security Perimeter.
Bill S-11 also permits the Minister to "exempt,
with or without conditions, any item to which this Act applies, or a
person or activity in respect of a food commodity, from the application
of this Act or the regulations or a provision of this Act or the
regulations" with the caveat that the Minister must only
do so if he or she "is of the opinion that no risk of injury to human
health will result."
How any of this would improve safety for Canadians,
again, is not at all addressed as it is clear this is not the
overarching aim. This is the same Harper government which arbitrarily
destroyed the Canadian Wheat Board, a farmer-controlled public monopoly
which made a big contribution to ensuring that a steady supply of high
quality wheat and other grains were exported from
Canada. With its destruction, mainly U.S. agri-monopolies and their
narrow private interests have been put in command of Canada's wheat
industry. Clearly that was not about securing the food supply, just as
new legislation is surely not about
ensuring food safety for Canadians.
Canada's Duty Exemptions Harmonized
with Those of U.S.
On June 1, the Harper
Government announced that personal
exemption limits on the value of products Canadians can bring back into
the country before paying duty or tax have been harmonized with the
The changes mean that residents returning to Canada
after being out of the country for at least 24 hours will be exempt
from paying duties and taxes on up to $200 of goods purchased abroad.
The exemption limit for those returning after at least 48 hours abroad
is now $800.
Minister of State for Finance Ted Menzies made the
announcement stating: "Our Government understands how important an
efficient border is to Canadians and our economy. Every year, Canadians
take some 30 million overnight trips outside of Canada. This measure
will expedite customs clearance for returning
Canadian consumers, making cross-border business and personal travel
more convenient for Canadians. This change is long overdue."
The move to harmonize the exemption limits has been
followed by disinformation in the media which specifically targets the
costs of "supply-managed products" in Canada such as eggs, dairy and
poultry. The disinformation claims that with the exemptions Canadians
may decide to purchase more of these products
in the U.S. Such disinformation serves private monopoly interests by
sowing doubt in marketing boards, bodies which serve the public
interest by assisting farmers to earn their livelihoods through the
collective marketing of their produce.
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