NEWS

1. Deforestation Inc, Part 5

Yesterday, we published Part 5 of Joan Baxter’s investigative series, Deforestation Inc. She writes:

The Northern Pulp mill has been closed since January 2020. 

The mill’s owner, Paper Excellence, and its Northern Pulp family of companies are currently not repaying $86 million of outstanding debts to the province because they are under creditor protection. 

And Paper Excellence is suing the province for $450 million.

But that doesn’t mean Paper Excellence’s Northern Pulp has stopped harvesting on public land in Nova Scotia.

Department of Natural Resources and Renewables (DNRR) spokesperson Adele Poirier says Northern Pulp can access up to 308,000 hectares (761,000 acres) of Crown land to meet its 100,000 green metric tonne annual allowable cut under its current timber licence in central Nova Scotia.

In 2021, Poirier says Northern Pulp harvested 48,093 green metric tonnes on that Crown land and paid the province $965,000 in stumpage fees.

Poirier tells the Halifax Examiner that the current Northern Pulp Crown land licence was signed in 2018, and is up for renewal on July 31, 2023. She says the licence in central Nova Scotia harkens back to the 1965 Scott Maritime Act, which, remarkably, “continues to be in force.”

So, where is Paper Excellence selling the logs it falls in Nova Scotia?

In part, in Maine, to a mill that former mill managers tell us is owned by Asia Pulp & Paper.

That’s just the first revelation in the part of the series. Baxter goes on to examine the forest product certification process, which is the thrust of much of the reporting of her colleagues at the International Consortium of Investigative Journalists (ICIJ).

In short, the Forest Stewardship Council (FSC) is the primary forest certification organization around the globe. Many of the woodlots used by Northern Pulp mills have FSC certification, but because of its terrible track record in the forestry business, Asia Pulp & Paper has been unable to get FSC certification. This is perhaps why Northern Pulp and Asia Pulp & Paper go to such lengths to disassociate from each other — if it became clear that they were essentially the same company, or if at least they coordinated their efforts, then Northern Pulp might lose its FSC certification, and therefore sales.

But that issue aside, Baxter shows that the province of Nova Scotia has rejected the FSC certification process entirely, and for most logging on Crown land uses the industry ‘greenwashing’ certification called the Sustainable Forestry Initiative (SFI).

Here’s the thing, though: for Northern Pulp’s logging on Crown land, there’s no certification at all — not the global standard NSF, nor the greenwashing industry faux certification, SFI.

Baxter gets much more into the details. Click here to read “Deforestation Inc: Nova Scotia opts for forest certification scheme critics call ‘greenwashing.'”

We have, I think, one more instalment of Baxter’s series. (These things tend to grow — as initially planned, this was a four-part series.) That will likely get published tonight or tomorrow.

Again, I’m very proud that the Examiner is publishing and hosting the Deforestation Inc series. This kind of in-depth investigative reporting is why I started the Examiner. Please help us continue this work by subscribing. Thanks.

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2. Bluenose Inn case appealed

“A landlord ordered to pay a former tenant more than $13,000 is taking the case to Nova Scotia Supreme Court,” reports Zane Woodford:

It’s the latest step in a dispute between Bluenose Inn and Suites owner John Ghosn and tenant Brandy McGuire. The case is a test for last year’s amendments to Nova Scotia’s Residential Tenancies Act around renovictions.

Click here to read “Landlord appeals former Bluenose Inn and Suites tenant’s small claims win.”

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3. Delirium

“Delirium is described as a common but often under-recognized medical emergency,” reports Yvette d’Entremont:

It affects on average between one in four to one in five people in hospital on a given day. 

…

According to the Nova Scotia Health (NSH) ‘This Is Not My Mom’ campaign, delirium isn’t dementia, nor is it a mental illness. It’s a medical condition that causes a temporary problem with mental function. It usually begins suddenly and symptoms often come and go. They also typically increase at night.

“It is a medical emergency, and early diagnoses and treatment offer the best chance of recovery,” notes the campaign literature.

d’Entremont was tested herself:

[Dr. Samuel Searle] tells me that the first thing he needs to do is determine whether I’m appropriately alert.

“We identify two major forms. One is people are very confused and heightened, looking for a fight, agitated,” Searle explained. “And then there are other forms where people are very groggy and tired.”

After determining my level of alertness is appropriate, Searle formally introduces himself and asks me to share my age, date of birth, and to identify our current location. Then he asks what year it is. 

So far so good. 

Searle then requests that I cite the 12 months of the year, going backwards and starting from December. I don’t recall ever doing that in my life, but I get through it.

“Lovely. That was very well done. Nice and quick, no pauses,” Searle tells me. “Usually I’m looking for seven months at least. If you can’t get seven months, then that usually screens positive.”

The last thing he needs to check is whether there’s been any significant change or fluctuations in my cognition or overall alertness in the last 24 hours. 

He tells me that I’ve passed the test.

To be honest, I stumbled when I got to April, but that’s probably because I so hate this time of year I want to jump straight from January to May.

Anyway, click here to read “Campaign raising awareness about delirium with screenings at inpatient units in Nova Scotia.”

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4. Michelin

Yesterday, the province announced a $61.3 million subsidy for Michelin. The federal government is poised to provide an additional $44.3 million in subsidy, pending a final agreement with the company.

According to a press release, the subsidies are meant to underwrite the cost to Michelin to “modernize and expand its operation in Bridgewater, enabling the plant to produce in-demand tires for the rapidly evolving electric vehicle market, which are more energy efficient with less greenhouse gas emissions, as well as larger rim size tires.”

After the announcement, Jennifer Henderson contacted the federal government to ask the obvious questions:

Is the $44 million a contribution/grant to Michelin North America’s Bridgewater plant or is it a repayable loan? Did the company request/ apply for some assistance?

The answer she received from Laurie Bouchard, a spokesperson for Minister of Innovation, Science and Industry François-Philippe Champagne: “The terms of the agreement are commercially sensitive and can’t be disclose [sic].”

Translation: it’s public money, but it’s none of the public’s damn business.

The province attempts but fails to cover that enormous and engorged $61.3 million subsidy with the fig leaf of the Capital Investment Tax Credit, which itself was fluffed up by redefining the credit:

The tax credit rate increased from 15 to 25 per cent, the cap from $30 million to $100 million for all applicants and extended the time period from 2025 to 2029.

So again, Henderson asked the sensible question:

The policy change to the Capital Investment Tax Credit was made last October. Although this will apply to all companies making a large investment in equipment or a manufacturing process until 2029, is it accurate to report the policy change was made at the request of Michelin North America so Michelin would consider Bridgewater in its internal competition to choose a site for this EV tire production line? If there was no request from Michelin to expand the Capital investment tax credit, why did the province make the change?

She received this response from spokesperson Steven Stewart, a spokesperson for the Department of Finance:

As we work to grow our economy, the provincial government increased the Capital Investment Tax Credit to encourage companies to continue to invest in Nova Scotia and grow their presence here. The tax credit helps Nova Scotia companies expand by providing an incentive to invest in new equipment. The credit was expanded so many sectors and companies could take advantage of this incentive. It is open to any company making large capital investments.

Translation: [mumble]

We’ve asked Michelin for comment, but it hasn’t yet replied.

Words matter. A tax credit is a public subsidy, period. We should call it what it is plainly, and not use weasel words to hide what’s happening: Michelin is being given public funds to expand its operation. There may or may not be an argument for that, but that’s what it is.

(The Halifax Examiner gets a payroll tax credit from the federal government, but I’ve been careful to call it what it is: a subsidy.)

So, is there an argument for the Michelin subsidy?

The province says the expansion of the Bridgewater plant will “create more than 70 new jobs.” Let’s call it 75.

So, we, the public, are spending $105.6 million for 75 jobs, or about $1.4 million per job. Is that a reasonable public expenditure for a job? Someone call KPMG to run the economic impact study.

Henderson tells me I should give the context that tires are Nova Scotia’s second biggest export, after fish, something like $1.3 billion a year, and that Michelin employs 3,600 people at its three plants in the province. So that’s context. Now we should discuss corporate capture of government…

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VIEWS

Billionaire venture capitalists rule the world

I’ve been depressingly following the news of the collapse of Silicon Valley Bank, and the US Federal Deposit Insurance Company’s bailout of the venture capitalists whose companies’ deposits were placed in the bank.

To recap:

1. Billionaire venture capitalists invest in tech start-up firms;
2. The VCs insist that the start-ups place all their cash in SVB, over and above the $250,000 insured by the FDIC;
3. SVB makes a slew of horrible decisions, including investing that uninsured deposit money in long-term US Treasury bonds, which in a low-interest environment translates into essentially free money;
4. The Federal Reserve Bank decides to raise interest rates, which is typically the tool used to tackle inflation, but also typically means that lots of people will lose their jobs;
5. As interest rates increase, the start-ups find themselves short on cash and SVB’s sale of its Treasury bonds isn’t enough to cover their demands in the new high-interest environment;
6. Venture capitalist Peter Thiel, among others, tells the start-ups he (and others) funded to take all their money out of SVB;
7. There’s a bank run, and SVB can’t cover all the start-ups’ demands for their deposits; the FDIC takes over SVB;
8. The start-ups say they won’t be able to make payroll without immediate access to all the money they deposited in SVB, including deposits far exceeding the $250,000 insurance cap;
9. The FDIC says it will cover all deposits, insured or not, and the Biden administration creates a strategy for bailing out uninsured deposits into the future.

So much for the free market. After #8, the VCs should have stepped in and financed their own creations’ (the start-ups’) payroll. The Fed’s action in #9 is an effective public subsidy to the VCs, who now have zero risk and no accountability for telling their companies to park their money in SVB.

I wonder about that — #2 on my list. I don’t have any information about this yet, but there must have been a reason for the VCs to tell their companies to put all their money in SVB. There are better ways to manage cash risks, even with large payrolls (by, for example, the companies purchasing short-term Treasury deposits themselves), so it’s impossible not to speculate that the VCs were profiting directly from the bank, likely as shareholders, but also through other companies owned by the VCs that are contracted to SVB. Or, maybe one of the SVB execs has a sex slave island somewhere, shared with the VCs (I’m not even kidding here; we’ve seen how this works).

And Thiel’s companies all got out first and quick, apparently without any losses. I sure want to know if he somehow profitted from the SVB collapse.

Coming out of this, what will happen? Well, for one, banks and their depositors will no longer care as much about risk — if the government is going to cover all losses, regardless, why not be as risky as possible with depositors’ money? The FDIC’s regulatory weight is suddenly useless.

Second, VCs know they can get the government to backstop their investments at zero cost by simply screaming “people will lose their jobs!”

It’s telling that none of these VCs were at all concerned about the job losses across the entire economy that were supposed to result from the Fed raising interest rates, but suddenly the job losses in the tech industry that might result from the collapse of SVB were the most important thing in the world!, the subject of a gazillion all-cap tweets.

In reality, the economy is going through a screwy period that no one quite understands, and raising interest rates has not led to broad job losses across the entire economy, as it normally does. Truly, the first victim of raising interest rates is SVB, and there’s more than a little irony in that.

The past week has shown us who holds real power in America, and it’s not the hundreds of millions of people holding down jobs that aren’t in tech start-ups.

For me, the biggest problem illustrated by the SVB collapse is #1 on my list — VCs have too much damn cash. The very existence of billionaires is a system failure.

It used to be that lots and lots of “regular people” with a good middle class income would invest their savings into a range of companies with safe returns, 5 or 6% annually, enough to fund a reasonably comfortable retirement. But now there aren’t so many regular people with enough income to make such investments, while there are a few hundred or so billionaires who have the cash on hand to make a range of widely speculative and risky investments, with the hope that some portion of them will bring a 20% return, and one or two might be true unicorns, worth billions more.

That has disrupted the entire investment landscape, which is problematic in a lot of ways. But one particular problem is that if you have a few billion dollars, you can game the system, as was evidently done in #2 and #6 above, and most definitely achieved in #9.

We’ve been played.

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Government

City

Western Common Advisory Committee (Wednesday, 6:30pm, online) — agenda

Province

No meetings

On campus

Saint Mary’s

Crafts___Ship: Open Studio workshops (Wednesday, 3pm, SMU Art Gallery) — artists Carley Mullally, Gillian Maradyn-Jowsey and Inbal Newman host an artist talk and workshops in making bait bags, rug hooking, and pom pom making; all materials supplied, more info here

In the harbour

Halifax
10:30: Morning Peace, car carrier, arrives at Autoport from Southampton, England
11:30: Nolhanava, ro-ro cargo, arrives at Fairview Cove from Saint-Pierre
13:00: Tropic Lissette, cargo ship, sails from Pier 41 for Palm Beach, Florida
14:00: MSC Brianna, container ship, sails from Fairview Cove for sea
15:00: Atlantic Sea, ro-ro container, arrives at Fairview Cove from Norfolk, Virginia
15:30: CSL Metis, bulker, arrives at Gold Bond from Sydney
18:00: CMA CGM Louga, container ship, arrives at Pier 42 from Montreal
20:00: AlgoTitan, oil tanker, arrives at Imperial Oil from Corner Brook

Cape Breton
03:30: SFL Trinity, oil tanker, arrives at EverWind from New York
10:00: Algoma Integrity, bulker, sails from Aulds Cove quarry for Cape Canaveral, Florida

Footnotes

The time change is still doing a number on me. I’m going to take a mental health break of a few hours.