1. Power rates
“Nova Scotia Power has filed an application that would see power rates rise 1.5% a year for residential customers in each of the next three years, if approved by the Utility and Review Board (UARB),” reports Jennifer Henderson:
The increases are related to rising fuel costs and purchases of imported power. Commercial and industrial class customers will see larger increases, so the average rate increase over the 2020-2022 period is estimated at two percent.
The rates above include an amount of $160.8 million customers overpaid for fuel in 2018 as well as $53.6 million associated with the Maritime Link built to bring in hydroelectricity from Labrador.
2. Donkin “rockfall”
“The reopening of Cape Breton’s Donkin coal mine, which shut down last week for a brief summer vacation period, has been delayed by a rockfall,” reports Tom Ayers for the CBC:
Canada’s only operating underground coal mine was scheduled to start back in limited production Monday morning, but the Nova Scotia Department of Labour said maintenance workers discovered a rockfall partway along the mine entranceway around 1 a.m.
There were no injuries.
[Scott Nauss, senior director of inspections and compliance with the Labour Department] said it was surprising that a rockfall occurred in tunnel number 2, which is the main entranceway into and out of the mine.
He said the department would have more information after inspectors confirm the details, but it appears the latest rockfall occurred “relatively close to the surface.”
Nauss said a preliminary report from the mine operator indicates the rockfall was less than halfway along the main slope. The mine extends at least two kilometres out under the ocean.
“Any rockfall is taken very seriously,” he said.
3. Inverness airport
Saltwire reporter Aaron Beswick points out that “[i]n April, Cabot [Links] co-founder and managing director Ben Cowan-Dewar registered the Cape Breton Island Airport Community Interest Company. Its other two directors are Jennifer Alkenbrack, an accountant for Cabot Links, and Daniel Gallivan, CEO of Halifax law firm Cox and Palmer.”
Beswick goes on to extensively quote officials from the federal Department of Natural Resources and Cape Breton Canso MP Rodger Cuzner about the proposed Inverness airport:
“It’s not a done deal yet and I can’t give you a date on when it will get the thumbs up or the thumbs down,” said Cuzner.
The airport would be owned by a non-profit specifically created to run it with Cabot Links underwriting any operational deficits, said Cuzner.
Any profits would go toward promoting tourism in the area.
“We sunk money into developing the of [sic] Port in Sydney and they’re continuing to bring in a second berth to increase their capacity — that’s us investing in tourism infrastructure in Sydney,” said Cuzner.
So there’s a Cape Breton Island Airport Community Interest Company, and somebody has been talking to federal officials about the proposed airport, but none of the parties are registered lobbyists. Cabot Links is not registered as a lobbyist, the Cape Breton Island Airport Community Interest Company is not registered as a lobbyist, and Ben Cowan-Dewar, Cabot Links co-owner Mike Keiser, Jennifer Alkenbrack, and Daniel Gallivan aren’t registered lobbyists. Cuzner is an MP, so dozens of lobbyists — from unions and corporations to a snowmobile organization to the Council for the Blind — have lobbied him and dutifully filled out their communications reports with the lobbyist registry, but no one has reported talking to Cuzner about an Inverness airport.
I think the argument will be that the Cape Breton Island Airport Community Interest Company does not pay anyone to lobby on its behalf, so therefore it doesn’t have to be listed on the registry. The registry identifies three types of lobbyists:
- A person who is hired to communicate on behalf of a client. This individual may be a professional lobbyist but could also be any individual who, in the course of his or her work for a client, communicates with or arranges meetings with a public office holder.
In-House Lobbyist (Corporations)
- A person who works for compensation in an entity that operates for profit.
In-House Lobbyist (Organizations)
- A person who works for compensation in a non-profit entity.
Cowan-Dewar, Keiser, Alkenbrack, and Gallivan are presumably not getting paid by the Cape Breton Island Airport Community Interest Company, so therefore they don’t have to register. But clearly, the entire point of the airport is to further enrich Cabot Links, Cowan-Dewar, and Keiser, and the airport will be in effect a “non-profit” wing of the for-profit company.
I’m sure Gallivan, the lawyer, is studiously adhering to the letter of the law. But this work-around makes a mockery of the lobbyist registry.
I haven’t seen this elsewhere in the media — maybe allnovascotia reported it, but they don’t allow me access to the site — but VistaCare Communications has filed for bankruptcy protection, claiming that they suffered from what looks to me to be borderline fraud. Exceedingly bad management, anyway.
VistaCare is a digital communications company; according to its website, it designs and builds fibre optic communication networks, and then helps businesses work those networks into their operations.
In a court filing, VistaCare partner and director Bruce Phinney describes the business, as follows.
VistaCare Communications has four subsidiaries: VC International, Advatek Systems, VistaCare Underground Equipment, and VistaCare Underground Services. The company’s headquarters is in Bedford, where it employs about 100 people, and there are about 250 more employees spread across offices in Moncton and Saint John in New Brunswick; Sudbury and Toronto in Ontario; Brooks, Alberta; Richmond, BC; and in Kentucky in the US.
Phinney says VistaCare and its subsidiaries have four divisions: the “outside plant” which builds and installs fibre cables; Integrated Communication Solutions — ICS, or the “inside plant” — which services security systems, A/V systems, and the like; Engineering and Design, which was created in order to get, well, engineering and design work related to fibre communications systems; and the International Design, which operates in the US.
The company has been feted by the usual suspects. Peter Moreira of course wrote a glowing profile of VistaCare partner and director Paul LeBlanc, although true to form, Moreira has been silent about the company’s bankruptcy filings. VistaCare also has gone on international trade missions sponsored by ACOA.
In fact, the company seemed to be doing well, growing at a steady clip. But all five corporate entities filed for bankruptcy protection last month.
VistaCare and its subsidiaries have financing through three primary lenders. BMO provides an operating line of credit of $10.9 million, but the outstanding amount is now at $10.8 million. “The line of credit operates on margin requirements and the companies are currently out of margin by approximately $6 million,” wrote Phinney.
RoyNat Inc. and RoyNat Capital provide term financing and some working capital; VistaCare owes RoyNat $8.9 million.
VistaCare also has a $1 million working capital loan from the Business Development Bank of Canada.
Phinney said that VistaCare saw “exponential growth” between 2015 and 2018, when revenue grew from $24 million to $50.5 million annually. That’s not exponential growth, but who expects corporate executives to understand math?
Regardless, “the majority of the growth… was through an expansion of geographic locations and service line expansion,” wrote Phinney.
Here’s the kicker:
During this time period, certain senior management at the Companies provided internal statements and forecasts based on internal financial statements provided to the Board of Directors. Decisions based on these financial reports were made to invest in additional equipment and diversify service lines. One of the more significant and recent examples was the decision to invest in the start up in 2018 of a new Engineering and Design division.
In 2018, the Companies discovered that there were issues with the financial forecasts that had been provided by particular members of management. While the investigation into the reasons for the misstatement is ongoing by the Companies, it was discovered that the financial results had been inaccurately reported with performance materially and substantially inflated for both the previously audited year ended October 31, 2017 and the internal statements for the year ended October 31, 2018.
The result of the misstatement was the profitability of certain projects was lower than forecast and the profitability margin was inflated. Once the misstatement was discovered, steps were taken immediately by the shareholders to rectify the issues facing the Companies. This included a review of operations and the Companies making operational and financial changes in order to improve profitability. In addition, changes were made to the senior management of the Companies.
The court filings in this case are extensive, but I don’t see that the senior managers who prepared the financials are named.
I went to the Registry of Joint Stock Companies office Friday and reconstructed the corporate histories of all five companies. At least as far as filings with the registry go, there has been no change in listed officers at the companies over the last several years, so the “changes… made to senior management” are a bit of a mystery to me.
As I read it, however, Phinney is suggesting that VistaCare is the victim of executive fraud.
I have to wonder, however, how a board of directors can be so hands-off as to not be aware of the situation outlined by Phinney. It suggests, to me anyway, a dereliction of fiduciary duties.
The court filings include an analysis by outside auditor Grant Thorton, and a plan for return to solvency that includes selling off assets. This is what bankruptcy protection is for, and for the sake of the 350 employees, here’s hoping it works.
5. Riverside Lobster
Readers will recall that Riverside Lobster came onto the Examiner’s radar because it pays shit wages to immigrant labour and because it had hired Frank Anderson, the disgraced former CEO of the South West Shore Development Authority. Anderson faced 11 criminal fraud charges for his actions at SWSDA, ultimately pleading guilty to a single charge of uttering a false document — an application to the Atlantic Canada Opportunities Agency. Since Anderson was hired by Riverside, Riverside has received about $1.5 million in ACOA financing. “Is it weird that a company that employs someone who was once convicted of fraud related to ACOA applications is now applying for and receiving ACOA grants and loans?” I asked in May. “Seems weird to me.”
In any event Riverside is now facing an employment-related lawsuit from an American fellow named Robert Marks. In a statement of claim filed in Supreme Court, Marks, of Lawrenceville, Georgia, says he was hired as a “national salesman” by Riverside in September 2017 (the nation is presumably the United States), and in March 2018 entered into a three-year Employment Agreement with Riverside. Under the terms of the Agreement, Marks was to be paid $150,000 annually, plus a 1% commission on paid sales, with the commission paid to Marks every three months. Additionally, Marks was to receive vacation pay, a cellphone allowance, and health insurance.
But, Marks alleges in the statement of claim, in September 2018 Riverside unilaterally changed the Agreement such that Marks would have to meet specific sales targets before he would be paid the commission. Marks claims that the Agreement was changed such that he “would now be required to sell all of the lobster meat in stock before receiving the commission.” He says that from October through December 2018 he was responsible for over $7 million in sales, but he was not paid a commission on those sales. In January, 2019, Riverside CEO David Deveau fired Marks; “Mr. Deveau advised the Applicant [Marks] that there was no reason for the termination,” reads the claim.
Marks was paid two months’ pay at firing, but was not paid vacation pay from October through December 2018, and Riverside has not paid him any commission from sales from March 2018 to January 2019. Riverside subsequently hired two people to replace him, says Marks.
Marks is represented by Bedford lawyer Barry Mason. The allegations in the statement of claim have not been tested in court.
6. Taking mom to court: Edna v Jane
One of the odder things about insurance claims is that often in order to get payment one family member has to sue another. I see this nearly every day when rifling through court cases: a guy gets bonked in the head by a falling pipe in his sister’s house, and ends up having to sue the sister, or whatever. The lawsuit does not reflect any deterioration of the loving relationship between brother and sister; it’s just a requirement in order to get the insurance payment.
Such is the case of Edna Restaurant Limited v. Just Jane’s Inc.
Edna is the popular Gottingen Street restaurant owned by Jenna Mooers. She leases the restaurant space from her mother, Jane Wright, the owner of the former Jane’s On the Common. Wright now owns the Gottingen Street building, and operates a catering business in the basement of the building and a small take-out shop in a narrow street-level space next to Edna. There’s no reason to think this is not a happy and prosperous relationship for all concerned.
But, as they say, shit happens. On December 29, 2017, the sprinkler system in Edna unexpectedly went off, resulting in considerable damage to the restaurant, a closure and loss of sales, and cleanup costs. Specifically, $112,683.32 — $69,386.99 to fix and repair the property; $12,301.35 in lost food and equipment; and $32,056.00 in lost sales. The itemized losses don’t add up to the total claimed, but I’m sure they’ll work that out.
Mooers produces great food, and her enterprises are obviously successful, but she has had horrible luck. She is co-owner of the CHKN Chop on North Street, which caught fire in February and has been closed since, although repairs continue.
Maxime Bernier’s new federal political party, the People’s Party of Canada (the P.P. of Canada), is running a candidate in Cumberland-Colchester named William Archer. Archer is an asshole. Reports Andrea Gunn for the Chronicle Herald:
One post [from Archer’s Facebook page] from late 2016 tells a joke about a man who learns his wife just had quintuplets. He says to the nurse he isn’t surprised because his penis is “the size of a chimney,” and the nurse responds that he ought to clean it because his children are black. In another post from 2014 titled “Irish virginity test,” a man (who is described as a “little person”) is instructed to paint his genitals blue and red on his wedding night and if his new wife is surprised to hit her with a shovel. Other posts make light of mental illness and violence against women, joke about drinking and driving, and use terms to describe people with disabilities that are no longer deemed socially acceptable.
Halifax and West Community Council (Tuesday, 6pm, City Hall) — here’s the agenda.
Special Regional Council (Wednesday, 6pm, City Hall) — public hearings on three developments.
Health (Tuesday, 1pm, Province House) — the committee will be asking folks from the Nova Scotia Health Authority about investments in orthopaedics, because there’s no greater health care concern now facing Nova Scotia.
Public Accounts (Wednesday, 9am, Province House) — all about bridges.
Community Garden (Tuesday, 12pm, Henry Street behind the Computer Science Building) — volunteers wanted. All fresh produce donated to the Loaded Ladle’s free meals program for students. Info and sign-up sheet here.
BRIC NS Student Seminar Series (Wednesday, 12pm, Room 140, Collaborative Health Education Building) — Keisha Jefferies will present “A Critical Examination of Leadership Experiences Among African Nova Scotian Nurses in Healthcare Practice.” Alysia Robinson will present “The Effect of Community of Discharge on Length of Stay for Unplanned Hospitalizations: An Indicator of Community Care Integration?”
Edible Plant Walk (Wednesday, 12:15pm, meet outside the Henry Hicks Building) — Su Donovaro from the Loaded Ladel will lead this walk. Register here.
Two is better than one: regulation of p53 activity by MDM2 and MDMX acidic domain (Wednesday, 4pm, Theatre B, Tupper Medical Building) — Quinyan (Andy) Song will talk.
In the harbour
There is no scheduled ship traffic today.
I’m away from the intertubes for the rest of the morning.
The Halifax Examiner is an advertising-free, subscriber-supported news site. Your subscription makes this work possible; please subscribe.