Month: January 2008

NDP Catherine Bell, her party’s natural resources critic, tells me this morning that, after reviewing the Auditor General’s special examination of AECL,  Natural Resources Minister Gary Lunn misled Parliament about the whole fiasco involving the shutdown of the Chalk River Nuclear Laboratory.

Her party, like others, is calling for Lunn’s resignation.

And, though Parliament is not set to resume its work until the end of the month, the opposition members of the House of Commons Standing Committee on Natural Resources hopes to convene a meeting of that committee next Tuesday in Ottawa and it wants Lunn to appear before that committee. Bell, though, recognizing that the AG report identifies problems at AECL occurred on the watch of the previous Liberal government as well as the current Conservative government, hopes to force the Natural Resources Committee to be as broad as possible in its probe of AECL’s failings.

Meanwhile, Lunn’s office tells me this morning that the Minister’s reaction to the AG’s special examination was to order a broad review of the corporate structure of AECL, which he did on Nov. 29. Lunn’s spokesperson also disputed the suggestion that the release of the AG’s audit was force by Liberal pressure on AECL. The spokesperson said AECL’s new board of directors met for the first time yesterday afternoon since the audit was delivered to AECL. The board wanted to review the audit before it was posted on its Web site.

 

In December, Liberal MP Omar Alghabra asked the Auditor General to audit Atomic Energy of Canada Ltd.

Today, the Liberals released a response from Fraser to Alghabra's letter. Fraser said her office just audited AECL and presented AECL's board with that audit on Sept 5 2007. She said AECL was under no legal obligation to disclose that audit but most Crown Corporations were expected to disclose it. She was mystified as to why AECL had not yet disclosed or published the audit.

As of 6 pm Wednesday AECL had not yet posted that audit and had not responded to calls I made today to AECL to see this audit.

Then, around 7 pm, the Liberals discovered that AECL had quietly posted the audit on its Web site.

The bottom line from the audit: Natural Resources Minister Gary Lunn knew in September that Chalk River was a mess, requiring hundreds of millions of dollars to address public safety and security deficiencies.

Here's the key line from the cover page of that audit:

“We would like to draw your attention to a significant deficiency related to the unresolved strategic challenges that the Corporation faces … it is our view that this report contains information that should be brought to the attention of the Minister of Natural Resources. Accordingly, following consultation with the Board, we will be forwarding a copy of the report to the Minister.”

Again: That was presented to AECL's board on September 5.

Some quotes from the audit:

“We did not do a technical assessment of the safety and security of the Corporation’s nuclear research facilities or waste management practices, as they are monitored by the Canadian Nuclear Safety Commission.”

But, the auditor did have this to say:

“Our examination found a significant deficiency with respect to the risk that the Corporation may be unable to resolve three strategic challenges that, in particular, entail long-term funding requirements and that together would impair its ability to achieve its mandate. These challenges are the completion and licensing of the Dedicated Isotope Facility (DIF), the development and licensability of the Advanced CANDU Reactor (ACR) in time for the market requirement, and the replacement of aging facilities at Chalk River Laboratories (CRL)”

“30. A significant deficiency is one that prevents, or puts at material risk, the organization’s ability to achieve one or more of its statutory control objectives—to safeguard and control its assets, to manage its resources economically and efficiently, and to carry out its operations effectively—in support of its mandate. 31. During our special examination, we noted a significant deficiency: the risk to AECL’s ability to achieve its mandate due to unresolved strategic challenges that, in particular, entail long-term funding requirements. These challenges are the completion and licensing of the Dedicated Isotope Facility (DIF), the development and licensability of the Advanced CANDU Reactor (ACR) in time for the market requirement, and the replacement of aging facilities at Chalk River Laboratories (CRL).” (p. 12)

38. Replacement of aging facilities at Chalk River Laboratories. Limited funds threaten AECL’s ability to manage the Canadian nuclear platform responsively and cost-effectively and to properly safeguard its assets. Some of the building infrastructure at the Chalk River Laboratories (CRL) is 50 to 60 years old, well past the end of its originally intended useful life. In our 2002 special examination, we reported that until AECL could resolve how to fund the replacement of the aging buildings, the risks to public safety were likely to increase. 39. AECL has made limited investments in its infrastructure in recent years. Over the last five years, it obtained a total of $34 million in incremental funding from the federal government to deal with urgent heath, safety, security, and environmental requirements at the Chalk River site.

40. AECL has identified a need to increase its operating and capital investment by some $600 million in the next 5 years (about $850 million in the next 10 years) to address fire and building code deficiencies as well as licensing, health, safety, and security issues at the Chalk River Laboratories site. We understand that these amounts will not be included in AECL’s operating and capital budgets until the government provides direction on future funding.

The Canadian International Trade Tribunal today said that it will continue to try to prevent Chinese-made steel from coming into the Canadian market. The CITT believes impose anti-dumping duties on steel made in China are still required to protect Canadian industry.

Canadian steelmakers will, however, now have to compete against steel manufactured in Russia and in South Africa. The CITT lifted anti-dumping duties it had previously imposed on steel from those countries.

Mind you, we don’t exactly have a lot of Canadian steelmakers these days. Stelco, Dofasco, Ipsco and Algoma Steel have all been acquired by foreign steel makers since Stelco first complained about the Chinese and the Russians back in 1987.

 

 

The Federal Aviation Administration has asked The Boeing Co. to provide it with some proof that evil hackers on board a new giant 787 won’t be able to somehow take over the plane’s electronics.

The 787, which can carry 381 people (left), will be set up in such a way that passengers ought to be able to connect to the Web while they’re flying. Kinda cool, when you think about it, but the FAA is worried that “Because of this new passenger connectivity, the proposed data network design and integration may result in security vulnerabilities from intentional or unintentional corruption of data and systems critical to the safety and maintenance of the airplane.”

Existing safety regulations which the FAA normally enforces are not set up for a world where we can check e-mail and Facebook from 40,000 feet and so it has asked Boeing to show that “security, integrity, and availability of the aircraft systems and data networks are not compromised by certain wired or wireless electronic connections between airplane data buses and networks.”

On Friday, Prime Minister Harper will host the provincial premiers and territorial first ministers at 24 Sussex Drive. The economy is right at the top of the agenda. Here’s a letter from Jay Myers, an economist who is also the chief executive of Canadian Manufacturers and Exporters, a trade association which represents the country’s, er, manufacturers and exporters. Jay’s group is a relatively influential one and he has some thoughts about how governments can help business in Canada:

January 9th, 2008

Dear Prime Minister and Premiers,

When you meet on Friday to discuss Canada’s economic prospects in light of the recent surge in the Canadian dollar, you will have the opportunity to set the course for policy reforms needed to ensure the long-term competitiveness and prosperity of the entire Canadian economy.

Urgent action is needed in support of those industries at the cutting edge of international competition and innovation, but which are nevertheless bearing the brunt of currency appreciation, Canada’s manufacturing and exporting sectors.  At the same time, the policy reforms necessary to enable these industries to respond to the challenges of currency appreciation are the very initiatives required to sustain long-term economic growth and prosperity in a highly competitive global economy.

Today, our customers and our competitors are located around the world.  The competition for investment, for market share, and for knowledge, technology, and skilled workers, is intense.  But, Canadians have remarkable assets working in our favour – the richness of our natural resources, a highly educated and highly skilled workforce, our knowledge base, a highly productive business sector, and our well developed logistics, services, and knowledge infrastructure.  Our future economic prosperity rests on our ability to grow those assets, to create greater value from them, and to take advantage of new business opportunities both within Canada and around the world.

Manufacturers and exporters are the businesses that convert our country’s natural resources, and the knowledge and skills of Canadians into higher-value products and services tradable in global markets.  They are Canada’s innovative businesses.  But, many are now struggling to respond to the short-term challenges of dollar appreciation, rapidly rising business costs, and increasing low-cost competition from other countries.

In order to survive in the short-term and to grow and prosper in the future, Canada’s manufacturers and exporters must innovate.  They must become more specialized, customized, efficient, and fast.  They need to invest in new technologies, new products and services, new markets, as well as in upgrading the knowledge, skills, and expertise of their workforce.  If those investments are to be made in Canada, they require a predictable and internationally competitive tax and regulatory environment, reliable and cost-competitive infrastructure, secure and efficient access to domestic and international markets, and a highly productive and cost-efficient services sector.

We recognize that the onus is on each and every business to compete and win.  But, governments also have a critical role to play in ensuring a business environment that enables Canadian industry to retain and attract investment, and make the crucial improvements they require to remain competitive and grow in global markets.

We acknowledge the initiatives that your governments have already taken at both federal and provincial levels to reduce business taxes, streamline regulations, eliminate inter-provincial barriers to trade, and support investments in infrastructure, innovation, skills development, and new technologies.

But, more concerted action is now required in order to meet the unprecedented challenges of dollar appreciation, escalating energy costs, a weakening US economy, and fierce global competition.

We urge you on Friday to commit to working together in order to achieve the following seven objectives on an urgent basis:

1. Build the most attractive tax environment in the world for business investment in productive assets, innovation, and skills development.  Policy reforms required to do this include:
• Extension of the two-year write-off for investments in manufacturing and processing machinery and equipment for at least another five years; 
• Improvements in the Scientific Research and Experimental Development tax credit system to make the credits refundable and reduce administrative uncertainties;
• Extension of tax loss carry-back provisions from three to seven years;
• Introduction of an Employers’ Training Tax Credit, creditable against Employment Insurance premiums;
• Immediate elimination of provincial capital taxes;
• Transformation of provincial sales taxes into a value-added tax structure; and
• The reduction of Canada’s combined federal and provincial corporate tax rate to 22% by 2012.
2. Coordinate efforts in support of encouraging business investment in new production facilities, technologies, and innovation initiatives.  Federal as well as provincial investments are necessary if Canada is to compete with other industrial economies in securing business investment, product mandates, and industrial innovation activity. 
3. Harmonize and coordinate regulations to eliminate unnecessary differences, streamline regulatory requirements, and reduce compliance costs.  Your governments should take every opportunity to create a competitive regulatory environment in Canada by simplifying regulations, building enabling regulatory frameworks for new technologies, reducing the cost of regulatory compliance, eliminating duplication and inconsistencies in regulatory requirements, and eliminating regulatory restrictions on trade and labour mobility across Canada.  Clear timetables for regulatory reviews should be established in order to provide greater certainty for investment.  Furthermore, we recommend the establishment of a Canadian Competitiveness Commission, based on the Australian model, which would assess federal and provincial regulatory initiatives with respect to their impacts on economic competitiveness.
4. Expedite and coordinate investments in border, security, and transportation infrastructure based on a national logistics strategy aimed at ensuring the efficient flow of goods between Canada and our largest trading partner, the United States, while making Canada the preferred logistics hub for trade between North America and the rest of the world.
5. Respond to the skills shortages that Canadian businesses are facing by jointly encouraging closer collaboration between industry and our universities and colleges with respect to both research and education, speeding up entry procedures for temporary foreign skilled workers, and helping Canadian workers enter productive employment in labour markets across the country.
6. Ensure that federal and provincial investments in innovation, education, workforce development, and public infrastructure generate the greatest possible economic benefits for Canadians.  Government procurement should aim to leverage business opportunities and encourage innovation on the part of Canadian industry.  Your governments would simply be following the lead of every other industrialized country in this regard.
7. Make the investments and expedite the regulatory processes required to ensure that Canadian industry has access to reliable and cost competitive energy supplies now and in the future.

These measures will significantly enhance the business environment for manufacturers, as well as for other business sectors, across Canada.  They will encourage the growth of value-adding businesses and enable companies to make the changes they require to co
mpete and win in global markets with our currency trading at or above par with the US dollar.  All Canadians will benefit because their prosperity and employment opportunities depend on both the competitiveness and growth prospects of Canada’s manufacturing and exporting sectors. 

We aim to maintain a world-class manufacturing and exporting sector in Canada that will enable Canadians to continue to enjoy strong economic growth and high-value, high-paying jobs.  We trust that you share that same vision and recognize that a strong and competitive manufacturing and exporting base is an integral part of Canada’s economic future.

Sincerely,

Jayson Myers                                                               

President                                                                     

Canadian Manufacturers & Exporters   

Last December, Liberal MP Omar Alghabra, his party’s Natural Resources Critic, wrote to Auditor General Sheila Fraser to ask her to do a special examination of Atomic Energy of Canada Ltd. (AECL), a Crown corporation. Fraser wrote back to tell Alghabra that, under federal law, crown corporations are subject to a special examination at least once every five years and that she had just completed such an examination of AECL.

Fraser said she presented her report to the board of AECL on Sept. 5, 2007.

She went on to say, “Although there is no statutory requirement that federal Crown corporations make special examination reports public, there is an expectation that they do so … To the best of our knowledge, AECL has yet to release its special examination report…”

  UPDATE: Well, look at that! A few
hours after Stephane Dion brought up the absence of the AG Audit of
AECL at a nationally televised news conference, AECL has posted the audit on its Web site.

NDP MPs Pat Martin and Joe Comartin sent the following letter to David Johnston who is expected to report this Friday to the government about the Mulroney-Schreiber inquiry:

Friday, December 21, 2007

Dear Dr. Johnston,

Thank you for taking on the task of recommending the mandate for the public inquiry into the Schreiber-Mulroney affair.

On behalf of the NDP, and after consultation with NDP representatives on the committee, we would like to present the following observations and recommendations to aid you in your work.

While we cannot submit an exhaustive list of recommendations and observations – especially given the fact that the committee's study is ongoing – we hope that the suggestions below will be useful to your work. 

Ethics Rules and Codes of Conduct

The terms of reference must allow the Inquiry to address the question of whether anyone's actions broke ethical rules governing parliamentarians and public office holders at the time. Furthermore, the terms must direct the Inquiry to provide any relevant recommendations with respect to changes to current ethical rules, including the Code of Conduct and Conflict of Interest Code, to better protect against future wrongdoing and begin the crucial task of rebuilding Canadians' faith in these important public institutions.

The Inquiry should make a priority of probing the question of possible inappropriate use of money to influence – or attempt to influence – public policy decisions. This must include addressing the questions of whether any Members of Parliament personally benefited from any of these decisions, what were the sources of the money; where the money originated; was this money ever used, or intended to be used, to influence government policy decisions with respect to decisions taken involving the Messerschmitt Bolkow-Blohm (MBB), Bear Head and/or Airbus projects and what the role of Government Consultants International (GCI) was in these projects.

We believe that the terms should be set to include review of the rules making lobbying more transparent, conflict of interest rules governing Parliamentarians and code of conduct rules for senior public office holders. We would also like to insure that the findings of the public inquiry include recommendations for how these rules need to function better so we can ensure that MPs aren't trading on their status.

Forensic investigation

The Inquiry must have sufficiently broad terms of reference to be able to “follow the money.” Our committee found overlapping trails of money and for the Inquiry to do useful work, these threads must be untangled. This must include not only examining the Airbus deal, but also the MBB deal to provide helicopters to the Coast Guard and the Bear Head/Thyysen project, including the circumstances surrounding the Memorandum of Agreement between the Canadian government and Thyysen with respect to the Bear Head proposal and the role of GCI in these negotiations.

The evidence we have already heard before our Committee has raised quite a number of serious questions and concerns about the role of some lobbyists and consultants in setting government policy. While there have been some changes to lobbying rules recently, we think the Inquiry should consider whether further changes are needed. Canadians deserve to know what the relationship has been like between lobbyists and the government and what lessons we should learn from this, including whether there has been an adequacy of enforcement.

Role of the Department of Justice and the RCMP

The Inquiry must also examine the role of the federal Department of Justice and the RCMP in their investigations into these matters and specifically their decision to settle Mr. Mulroney's $50 million lawsuit against the Canadian Government.

We heard evidence that Schreiber was never questioned by the government or the RCMP at any time while the RCMP investigation was active. This has to be determined, along with additional questions such as why did they send a letter of apology to Mr. Schreiber and Mr. Frank Moores in light of the fact that they were not party to the Mr. Mulroney's defamation lawsuit? Who suggested, requested and approved these letters of apology?

Defamation lawsuit settlement

We also feel strongly that the mandate must include conducting an investigation as to whether the $2.1 million settlement of this lawsuit paid by the taxpayers of Canada to Mr. Mulroney could be set aside.

If recovery is possible then the Inquiry should have the mandate to recommend a course of conduct to the federal government as to how this recovery could be accomplished.

This should include recommendations for appropriate sanctions for Mr. Mulroney if the Inquiry concludes that he gave a misleading deposition with respect to the lawsuit.

We also should clarify that repercussions in this context shouldn't be taken to be exclusively legal repercussions but must include possible sanctions resulting from breaches of ethical and conflict of interest rules governing Members of Parliament or former Members of Parliament.

Recommendations for sanctions

The Inquiry's final report should also address whether the sanctions provided for in these codes are sufficient and whether a Prime Minister or former Prime Minister should be held to a higher ethical standard than other members of the cabinet.

Furthermore, if the Inquiry concludes that no appropriate sanctions exist for a real or apparent breach of these codes of conduct, then the Inquiry should have the latitude to suggest appropriate sanction for parliamentarians to consider.

In the meantime, it goes without saying that if committee members identify a breach based on the committee's study, then this breach should be reported back to the House of Commons for action immediately.

While the committee's work and evidence will be provided to the public inquiry, these investigations are also independent of each other and each must come to their own conclusions based on their own mandates.

Breaches of certain Acts

Specifically, the Inquiry should determine whether there was a breach of lobbying rules; the Parliament of Canada Act; the Conflict of Interest Code; or the Income Tax Act.

The Inquiry should further be tasked with reporting any findings of political interference in government decision making with regards to decisions taken on Airbus, MBB and/or Bear Head projects and the role of officials from GCI in making or influencing these decisions.

Findings of political interference

The Inquiry should report any findings of unethical or unusual interference into any of the investigations into the conduct of public office holders with respect to any of these projects.

This must of course include the conduct of all governments from 1985 to the present day.
 
 
Administrative and process mandate

In order to ensure Inquiry helps to restore the public's faith, all proceedings should be kept in public, excepting clear national security concerns. Similarly all the reports should be made public in their entirety, excepting cases where the release of this information is a clear threat to national security.

The Inquiry must have sufficient time to fully and completely fulfill its mandate and, keeping in mind our desire for fiscal prudence, must be provided sufficient resources to compete its work.

Building on the experience of the parliamentary committee, we recommend that the Inquiry be given specific direction to pursue the release of relevant documents. We strongly feel that for the Inquiry to be successful, it will need to have access to all documents, including tax records, and will need to employ forensic accountants to properly unravel these interweaving projects. 

We al
so recommend that Mr. Schreiber remain in Canada under subpoena for the duration of the Inquiry.

Conclusion

We want to thank you again for agreeing to take on this work. The successful completion of this important public inquiry will go a long way to restore Canadians' faith in their public institutions.

The NDP believes strongly that our political system can be reformed to provide greater checks and balances and better oversight within government and between government and Parliament. While there have been some steps towards limited reforms, we still witness a lot of apathy and voluntary disenfranchisement that we believe has come about in no small part as a result of years of government and political scandals.

We can all do better and the NDP pledges to be part of the solution and not part of the problem.

Yours sincerely,

Pat Martin, MP    Joe Comartin, MP
(Winnipeg Centre)    (Windsor-Tecumseh)