Sunday, October 31, 2010

Saskatchewan Conservative MP’s wasted $607,608.94 on flyers in 2009-10; Randy Hoback, Kelly Block and Tom Lukiwski biggest spenders

Sask. Conservative MP’s Randy Hoback, Kelly Block and Tom Lukiwski

Conservative Finance Minister Jim Flaherty’s annual fall update – delivered in a speech to the Mississauga Chinese Business Association on October 12, 2010 – reveals the depth of the Harper government’s financial mess:

▪ a record $55.6 billion budget deficit in the 2009-10 fiscal year
▪ a projected $45.4 billion deficit in the current fiscal year (2010-11)
▪ a combined, two-year deficit of $101 billion
▪ no surplus until at least 2015-16

To get the books balanced, Flaherty told the business crowd the government will continue to follow a three point plan laid out in Budget 2010 that involves ending the temporary stimulus measures contained in the Economic Action Plan; targeted measures to limit growth of direct program spending; and, undertaking a review of administrative operations, aimed at reducing overhead costs and improving service delivery.

Flaherty said the government will “exercise fiscal restraint.”

Chapter 4.1 of this year’s federal budget notes that, “The Government will lead by example, introducing legislation to freeze the salaries of the Prime Minister, Ministers, Members of Parliament and Senators for 2010–11, 2011–12 and 2012–13. It will also freeze the overall budget of Ministers’ offices and calls on Members of both Houses of Parliament to do the same. It will also maintain the freeze at 2008–09 levels on departmental spending on travel, conferences and hospitality.”

The restraint, however, does not appear to extend to MP’s printing expenses where spending is out of control.

Each year the Speaker of the House of Commons, on behalf of the Board of Internal Economy (BOIE), tables the consolidated Individual Member’s Expenditures report pursuant to BOIE By-laws. The 2009-10 report was tabled October 28, 2010.

The document details member spending on staff, office rent, supplies, travel and printing — which includes costs incurred for producing two types of flyers: householders and ten percenters.

Householders are oversized, often two-colour newsletters sent by MP’s to inform their constituents about parliamentary activities and issues. MP’s are allowed to print and mail up to four householders per calendar year per household in their constituency, which on average represents 45,000 households per householder.

Ten percenters are single page photocopied black and white flyers reproduced in quantities not exceeding 10% of the total number of households in a MP’s constituency. MP’s may print and mail an unlimited number of ten percenters per year however each ten percenter must have a 50% difference in textual content from other ten percenters produced that year and can only be distributed within the MP’s own constituency, which on average represents 4,500 copies per ten percenter. Ten percenters are usually nasty and highly partisan. They’re also taxpayer funded.

Records indicate that since the Harper Conservatives took office in January 2006, the cost of printing has increased a whopping 148.68 per cent going from $5.94-million in 2005-06 to $14.77-million last year. The five-year totals are as follows:

2005-06: $5,940,826
2006-07: $7,852,378
2007-08: $9,408,531
2008-09: $10,062,553
2009-10: $14,774,107

At the provincial level, Saskatchewan’s 13 Conservative MP’s blew an astounding $607,608.94 on flyers in 2009-10, an increase of 32.14 per cent over the previous year.

Since 2006-07, spending on householders and ten percenters by Saskatchewan Conservative MP’s has risen 125.75 per cent.

The biggest culprits last year were Randy Hoback (Prince Albert) $73,116.60, Kelly Block (Saskatoon-Rosetown-Biggar) $67,358.15, and Tom Lukiwski (Regina-Lumsden Lake) $59,888.64.

Hoback and Block were newly elected October 14, 2008. In less than 18 eighteen months they have managed to top the list as the biggest wasters of taxpayer money on flyers among Saskatchewan MP’s.

In Block’s case, since the summer of 2009, she has mailed out at least 30 ten percenters, most of which are partisan and say nothing about Block’s activities as an MP. They serve little purpose other than to praise and promote Prime Minister Stephen Harper and the Conservative Party of Canada.

Block sends out so many flyers that sometimes constituents receive two different ones on the same day. The most recent examples of this were September 13 and 23, 2010.

The subject matter of Block’s ten percenters ranges from scaring people into thinking that crime is so rampant that people aren’t safe in their own homes, to heralding cuts to the GST (which are costing $76 billion in forgone taxes between 2008 and 2013) that most economists worth their salt say is reckless, to the creepy ongoing obsession with the long-gun registry, or talking up the Harper government’s pathetic response to calls for improved Unemployment Insurance (EI) benefits in Budget 2009, which the Canadian Centre for Policy Alternatives called the “biggest single failure of the budget.”

One area that Block’s ten percenters don’t address is the obscene corporate tax cuts that the Harper government has implemented. According to Les Whittington, a reporter in the Toronto Star’s Ottawa Bureau, between 2008 and 2013, these cuts alone will reduce the cash-strapped federal government’s tax take by a cumulative $60 billion. [Analysis: Jim Flaherty’s sacred cows — corporate tax cuts (Toronto Star, February 24, 2010)]

The Harper government intends to continue with its planned corporate tax cuts no matter how damaging they are to the federal treasury.

“We are staying on course to having the lowest corporate income tax rate in the G7 by 2012,” Finance Minister Jim Flaherty said in his budget speech March 4, 2010.

“Some argue that we should cancel these tax reductions. Our government will follow through on our commitment. Reducing the tax burden on businesses is a key part of Canada’s advantage in the global economy.” [Budget leaves corporate tax cuts intact (CBC News, March 4, 2010)]

The truth is, Canada is already competitive.

A KPMG study released May 12, 2010, assessing the general tax competitiveness of 95 cities in 10 countries found that Canada, at 12.2 per cent, has the lowest effective corporate income tax rate. Other G7 countries like the United Kingdom (20.2%), United States (28.3%), Germany (29.8%), Italy (33.4%), and Japan (36.3%) aren’t even close. Only France at 15.4 per cent is within striking distance.

The report also shows that Canada ranks second in both statutory labour costs and total effective tax rate, and is sixth on ‘other corporate taxes,’ which include capital taxes, sales taxes, property taxes, and miscellaneous business taxes.

Tax rates used in the study were in effect as at January 1, 2010, three months before Flaherty’s remarks.

Interestingly, Block’s website has a page titled ‘What Kelly has sent out’. There you’ll find a downloadable calendar, householders, and tax guide but no ten percenters. Why is that? Could it be that Block is embarrassed to show constituents just how much taxpayer money she has wasted on them over the past two years?

Ten percenter spreading fear over crime

Ten percenter promoting reckless GST cuts

Anti-NDP ten percenter

Tuesday, October 19, 2010

PotashCorp and BHP Billiton refuse to disclose advertising costs; Wall government denies access request for potash royalty and tax break figures

Bill Doyle’s former Saskatoon residence

It’s a toss up as to what’s worse: the sorry spectacle of billion dollar corporations trying to buy the public’s affection, or Premier Brad Wall and Energy and Resources Minister Bill Boyd wrapping themselves in the Saskatchewan flag as defenders of the province’s interests.

Not long after BHP Billiton announced its US$38.6 billion hostile takeover bid of Potash Corporation of Saskatchewan, the Australian-based mining giant began taking out half- and full-page ads in the province’s two largest daily newspapers – the Saskatoon StarPhoenix and Regina Leader-Post – to promote itself as friendly, community-minded, and vital to the economy.

“We have a proven track record with our EKATI diamond mine, which has created 10,000 jobs and the benefits that go with spending $3.4 billion in local businesses in the Northwest Territories,” notes an BHP ad in the StarPhoenix on October 8, 2010.

The company says it plans to continue that success in Saskatchewan.

“BHP Billiton and Saskatchewan. A future together.” Good grief.

It wasn’t long before Potash Corp followed suit with a similar ad campaign. One full-page spread on September 25, 2010, had a smiling Bill Doyle, the company’s uber-rich president and CEO, explaining in an open letter how important PotashCorp has been to the provincial economy over the past 20 years, and how its $7 billion expansion program will create almost 15,000 jobs and $3.2 billion of new economic activity in the province.

“If you have questions about PotashCorp, email us at,” Doyle’s letter said at the end.

On the surface, both companies appear friendly and open. Just don’t ask them about their business, though, like how much they’re spending on advertising.

In emails dated October 15, 2010, both companies refused to disclose the cost of their respective ad campaigns in Saskatchewan newspapers.

“BHP Billiton has been raising its profile in the Province of Saskatchewan over the years that we have had a presence there and since our offer for PotashCorp. However, I am not able to disclose the amount spent on advertising,” said Bronwyn Wilkinson, BHP Billiton’s investor and media relations contact in Vancouver.

“We are not in the habit of breaking out specific line items of our business,” was the terse response from PotashCorp’s director of public affairs, Bill Johnson, in Saskatoon.

There was a time when companies had ‘public relations’ departments. Not anymore.

Expensive advertising is not the only way that BHP Billiton and PotashCorp are trying to attract public support.

On October 4, 2010, BHP Billiton announced it was taking over title sponsorship of the Enchanted Forest holiday light tour from the Saskatchewan Indian Gaming Authority, at a cost of $100,000 per year for three years, the StarPhoenix reported.

The annual Christmas light show has run for 11 years at the Saskatoon Forestry Farm Park and Zoo, with visitors driving through the park to look at light displays. Last year, the event raised $50,000 for the Saskatoon Zoo Foundation and $50,000 for the City Hospital Foundation. [Lights on for BHP Billiton (StarPhoenix, October 5, 2010)]

This was followed by the PotashCorp announcement on October 5, 2010, that the company was entering a minimum $5 million sponsorship agreement to help refurbish Saskatoon’s Kinsmen Park that includes an old fashioned carousel, miniature train, play village and paddling pool. [PotashCorp pledges cash to rejuvenate Kinsmen Park (StarPhoenix, October 6, 2010)]

Then, on October 13, 2010, PotashCorp presented a cheque for $500,000 to the Friendship Inn – a local soup kitchen and drop-in centre – in support of the Friendship Inn’s Friends in Deed capital campaign.

The Friendship Inn has now raised $1 million of its $3-million goal following the launch of PotashCorp’s gift-matching challenge in June. The funds will go toward an expansion of the centre, the StarPhoenix said. [PotashCorp offers guideline (StarPhoenix, October 14, 2010)]

Despite all the money being thrown around, the public doesn’t appear to be buying what the companies are selling, especially BHP.

An Insightrix Research Inc. poll released October 14, 2010, shows that 55% of Saskatchewan residents remain either strongly (31%) or somewhat (24%) opposed to the deal. This is unchanged from findings of a similar poll conducted by Insightrix in late August 2010 on behalf of News Talk 980 CJME and News Talk 650 CKOM. Presently, 13% support the potential transaction (14% in August) and 12% are unsure (10% in August). Finally, 21% are indifferent on the issue, compared to 22% in August.

Former Saskatchewan NDP Premier Allan Blakeney hit the nail on the head in a recent op-ed to the StarPhoenix when he pointed out that BHP Billiton was in the business of making money by dealing in iron ore, metallurgical coal, thermal coal, nickel, manganese, copper, diamonds, petroleum, lead, zinc, and aluminum (and perhaps some more).

“In its world, potash will be filed after petroleum and before titanium,” he said.

“The day BHP can make more money selling potash mines than selling potash will be the day that BHP sells the mines.

“It would be taking a huge chance to allow this company to corral all the shares for easy sale to a consumer group. This may well be the last chance for Canada and Saskatchewan to make sure that the mines are owned by producers.”

Blakeney wants to see a rule under the Investment Canada Act that says 60 per cent of all shares of PotashCorp shall be owned by Canadian citizens who are resident in Canada. [Keep potash 60 per cent Cdn. (StarPhoenix, October 14, 2010)]

PotashCorp is taking some well-deserved hits as well, including one from a former union organizer over the companies rotten treatment of its employees, and particularly its retired employees.

Terry Stevens, who was active in organizing potash workers at mines in the Saskatoon area in the late 1960s and early 1970s for the United Steelworkers of America, said in a recent op-ed to the StarPhoenix that he’s “observed over the years many non-union employees rise through the ranks to senior management and executive positions at PCS. Many of them became millionaires and multi-millionaires following the privatization of the Crown Corporation in the late 1980s by the Grant Devine government.”

No one has done better than Bill Doyle, Stevens said. According to PotashCorp’s annual report, he has share and stock options totalling 3,426,000, valued at $531 million.

“When Doyle cashes out, not one cent will come to Saskatchewan or Canada as tax revenue, because he is an American citizen living in the U.S. and does not have Canadian residence. He has looked after himself, the PCS executives, and the board of directors well. They are all very wealthy, or much wealthier, now.

“Doyle was a generous indeed, to all but the working men and women who toiled for years to build PCS. Many of them are now retired, without health benefits to care for conditions resulting from their work in building up PCS. It should be noted that Doyle and company executives now and in the past enjoy the best health benefits available upon retirement.

“Yet the company continues to deny minimum health benefits to its retired employees.”

Stevens is critical of PotashCorp’s current advertising campaign featuring Doyle thanking those who played a role in making Saskatchewan the potash capital of the world.

“Once again, the employees’ contribution was completely overlooked,” Stevens said. [Billiton takeover might be helpful for PCS workers (StarPhoenix, October 7, 2010)]

Doyle at one time lived in Saskatoon, but he now resides in a suburb of Chicago where the company has its main U.S. office.

In July 2002, Doyle put the family’s extravagant riverfront home located at 329 Saskatchewan Crescent West on the market for an astounding $3 million. At the time, the average house in Saskatoon was going for about $120,000.

According to the StarPhoenix, the 6,000 square-foot, brick, custom-designed home came with a state-of-the-art kitchen, a multi-media room, a wine cellar, six bedrooms, seven bathrooms and a professionally landscaped yard that includes multi-level patios leading to the riverbank.

Betty Ann Heggie, the then senior vice-president of corporate relations at PotashCorp, told the newspaper that Doyle owned a home in Chicago and intended to purchase a smaller place in Saskatoon when he sells his current residence. [City home is yours -- for $3 million (StarPhoenix, January 9, 2003)]

The Doyle home reportedly sold for $2 million in 2004. [Quick facts about Potash CEO Bill Doyle (Globe and Mail, October 15, 2010)]

One of the reasons the Doyle’s left Saskatoon is that Bill’s wife, Kathy Doyle, according to the Globe and Mail, ‘felt the local school system could not meet her family’s needs, and she moved the family back to their home in suburban Winnetka, Ill.’

Mr. Doyle faced the prospect of weeks on planes, then returning to an empty mansion in Saskatoon. So he, too, went back to Chicago and sold the Canadian house, the newspaper said. [Potash Corp.’s biggest booster facing the toughest sales job of his life (Globe and Mail, October 16, 2010)]

It’s possible the reference to ‘local school system’ meant the public system. Perhaps it was Saskatoon’s shortage of private schools that was the problem.

It seems, too, that Doyle never did buy the smaller home in Saskatoon like he planned.

Aside from flooding the StarPhoenix and Leader-Post with expensive advertising, BHP Billiton and PotashCorp have done nothing to engage the public directly.

Graham Kerr, president of BHP Billiton’s diamonds and specialty products division, had lots of time recently to rub shoulders with local business weasels speaking at a luncheon on October 5, 2010, sponsored by the Regina & District Chamber of Commerce and attending a breakfast on October 14, 2010, put on by the Greater Saskatoon Chamber of Commerce. But meet with residents at a town hall meeting? There’s no sign of that happening any time soon.

PotashCorp, on the other hand, doesn’t seem to have done anything.

The right wing Saskatchewan Party government is no better.

Premier Brad Wall and Energy and Resources Minister Bill Boyd have repeatedly stated that potash belongs to the people of Saskatchewan, but ever since BHP Billiton’s takeover attempt was announced on August 18, 2010, the provincial government has made no efforts whatsoever to ask the public what it wants.

“Potash belongs to the people of the province. It doesn’t belong to Potash Corp. or any other entity,” Wall told Diane Francis, Financial Post editor at large, last month in an interview. [Sale will run up against Wall (Financial Post, September 16, 2010)]

“The concern here is that at the end of the day, the people of Saskatchewan, who own the resource, feel that the best alternative is available to them -- either the option of saying no or the option of saying yes, with significant undertakings in place,” Boyd told reporters on October 4, 2010, after the Conference Board of Canada was released. [Ottawa must protect Sask. interests: Boyd (StarPhoenix, October 6, 2010)]

In the interview with Francis, Wall acknowledged that provincial powers override shareholder rights.

“Certainly that’s my understanding. We have the powers to regulate the resource and retain sovereign powers of taxation. We’re going to be very measured about this. This is not a time for ideology,” Wall said.

“We want to make sure that long after my government is gone, the people of Saskatchewan maintain control.”

However, when Opposition NDP Leader Dwain Lingenfelter on October 12, 2010, laid out a seven-point plan addressing things like ownership and control, Wall immediately rejected the ideas.

Lingenfelter called for a “golden share,” which would give the holder ‘veto power’ over all other shareholders, with respect to specific corporate decisions.

The NDP plan would have the people of Saskatchewan own shares in the corporation; and, for the corporation to sign an agreement with the province to adjust its potash royalties, such that the people of Saskatchewan will be made whole for any loss in royalties due to the construction of new or expanded mines or due to corporate tax write-offs from acquisition debt.

Wall said the Saskatchewan Party government would not make broader changes to the government’s royalty scheme. He dismissed the NDP’s proposal saying it would curtail expansion plans and kill jobs throughout the potash industry. [Sask. may urge feds to nix bid for PotashCorp (StarPhoenix, October 14, 2010)]

Wall provided no alternative plan or evidence to back his comments. In fact, the only thing the Wall government has done since mid-August when the issue erupted is to hire the conservative Conference Board of Canada – a mouthpiece for the business community – at a cost between $70,000 and $80,000 for advice on what to do.

In a nutshell, the Conference Board’s report (released October 4, 2010) says the province, over the long-term, has little to fear in a BHP Billiton takeover of PotashCorp. No surprise there.

Wall’s behaviour is disgraceful. He leads the people of Saskatchewan to believe that it not only owns the potash but should control it as well. And then, when presented with a plan to make it happen he bails.

There is one other thing that the Wall government has done on this file since August. It has managed to offend the Aboriginal community by crapping all over a request by the Federation of Saskatchewan Indian Nations (FSIN) for a greater share of resource revenues, including potash.

The situation has gotten so bad, so quickly, that the FSIN is considering legal action against the Saskatchewan Party government.

Premier Brad Wall did himself no favours when he seemed to welcome the challenge saying he doesn’t agree First Nations have any jurisdiction over natural resources in Saskatchewan.

“We wouldn’t agree with that, obviously,” Wall told reporters on October 13, 2010.

“If there’s any attempt from a legal standpoint we would defend the fact that the natural resources of Saskatchewan are the exclusive jurisdiction of the province of Saskatchewan according to the Natural Resources Transfer Act of 1930,” he said.

That act “sets out whose jurisdictions this is and we obviously feel very confident in that being the position of the province,” Wall said. [FSIN will ‘take a stand’ (StarPhoenix, October 14, 2010)]

Making matters worse is Energy and Resources Minister Bill Boyd, who said the government was happy to work with First Nations, but that there is no obligation on the part of the province to share any revenues from potash or other natural resources with First Nations. [‘Unfinished business’ (StarPhoenix, October 12, 2010)]

Now there’s a good starting point for discussions.

Potash companies operating in Saskatchewan have gotten a great deal over the years.

In his August 21, 2010, column on the Wall government’s first quarter financial report, Leader-Post political columnist Murray Mandryk touched on the lucrative business of potash, specifically the “enormous amount of power and influence” that corporations like BHP Billiton and PotashCorp wield over government. It’s the kind of sway that allows them “to demand tax and royalty breaks, such as the one for new-mine development” that kicked in January 1, 2010.

Mandryk said finance officials wouldn’t provide a breakdown of how much those royalty breaks for mine development will cost Saskatchewan this year, or even how much more royalty money the province will be getting as a result of the potash market recovery.

“This is because these few potash players can demand and get confidentiality on issues such as what royalties they pay and how much they each get in tax exemptions,” said Mandryk.

“It’s pretty clear, however, that these companies have any uncanny ability to get subsidies from government. We saw this once again on [August 19] when the government announced 120 more Mosaic head office jobs for that new Regina office building.

“The government has guaranteed a $100,000-a-year subsidy for each of those jobs for five years, then a $25,000 subsidy for each job forever after.

“This $25,000 per corporate job tax break has been extended to all existing corporate potash from a government.” [Potash comes with uncertainty (StarPhoenix, August 21, 2010)]

If BHP Billiton is successful in taking over PotashCorp will the company start demanding royalty concessions like it did in Australia? As Mandryk pointed out in his August 20, 2010, column, BHP is massive with with “roughly 20 times the revenue of the Saskatchewan government.” [Impact of BHP deal hits home (StarPhoenix, August 20, 2010)]

What’s Wall’s plan for dealing with that scenario?

On October 7, 2010, the Saskatchewan Ministry of Energy of Resources made it official when it denied an access to information request for a detailed breakdown of the royalties paid and tax exemptions received by Agrium Inc., Mosaic Company, and Potash Corporation of Saskatchewan since January 1, 2010.

The ministry gives two reasons for the refusal:

▪ Disclosure of the information could reasonably be expected to prejudice the economic interest of the Government of Saskatchewan or a government institution; and,

▪ Records contain financial information that is supplied in confidence, implicitly or explicitly, to a government institution by a third party.

The ministry’s decision has been referred to the Saskatchewan Information and Privacy Commissioner for review, where the onus will be on the Wall government to prove its case for absolute secrecy.

For a natural resource that the public supposedly owns, the people of Saskatchewan have very little say in how it’s being managed and exploited.

Email from PotashCorp

Email from BHP Billiton