News
1. ReconAfrica
Two Nova Scotians are working to protect an ecologically fragile area in northern Namibia, reports Joan Baxter:
[Calgary-based] ReconAfrica has taken out exploration licences covering 30,000 square kilometres, nearly half the size of Nova Scotia, in northern Namibia and Botswana. There are two World Heritage sites in the region — the Okavango Delta and Tsodilo Hills. It is also home to the San and other Indigenous people, and there are “critical freshwater sources and endangered wildlife,” that are of extreme importance and vulnerability in such arid countries.
Namibia is the driest country in sub-Sahara Africa.
Critics view ReconAfrica’s efforts to open up “a new frontier of oil and gas production” in the Okavango Delta watershed “in the midst of a mounting climate emergency” as deeply concerning from both “a human rights and environmental perspective.”
…
In August 2021, investment banker turned activist, Marco Rodzynek, wrote a scathing report of ReconAfrica’s operations and financial dealings, entitled “Anatomy of a billion dollar scam.” This is some of what Rodzynek has to say about the company’s activities:
ReconAfrica, through paid-for online publications like Oilprice.com, says they are sitting on the biggest onshore oil discovery of the decade. But our research following the money and investors’ capital shows that the company is simply a prefabricated online marketing campaign using digital advertising methods to make this fake news appear a reality.
If the company’s purpose is not to pump oil but to pump stock, as the research firm Viceroy alleges, then they have been fabulously successful. This tiny oil company with few assets, no oil in place and zero earnings has grown to nearly a billion-dollar company in the last year alone.
Despite announcing in April that they had found “a working petroleum system” in the supposed “newly discovered” Kavango Basin, the company has shown no independent analysis to back up these claims. The announcement did however coincide with a massive and potentially illegal online marketing campaign that pumped the stock price from 2 to 10 US Dollars in just six weeks.
Rodzynek continues:
ReconAfrica’s ongoing drilling program is being conducted in the world’s largest protected international wildlife reserve, the Kavango–Zambezi Transfrontier Conservation Area (“KAZA”), covering five nations — an area bigger than France. This massive park protects the world’s largest remaining herd of endangered elephants as well as dozens of other endangered species, like the Slaty Egret and Temmincks ground pangolin, which has been nearly poached to extinction.
The interlinked Kavango River, Okavango Delta and the Omatako ephemeral underground river which flows past ReconAfrica’s drill sites support almost a million people with sustainable livelihoods. The company’s drilling operations are already potentially damaging local water supplies in violation of Namibia’s environmental laws.
ReConAfrica’s operations have attracted a fair amount of negative international media attention, including from National Geographic and Al Jazeera.
The Canadian government established the Canadian Ombudsman for Responsible Enterprise (CORE) in order to investigate Canadian companies operating overseas, but that agency is completely powerless, say activists.
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2. Houston won’t appeal discrimination decision
“Premier Tim Houston said his government won’t fight a Nova Scotia Court of Appeal decision that found the province systemically discriminated against people with disabilities,” reports Zane Woodford.
As I reported yesterday morning:
The Province of Nova Scotia has for many years systemically discriminated against people with disabilities, ruled the Nova Scotia Court of Appeal [Wednesday].
The court extended a previous Nova Scotia Human Rights Commission Board of Inquiry decision that gave $100,000 compensation to each of three people, awarding one applicant, Beth MacLean, $300,000 in damages, which is the largest human rights general damages award in Canadian history. Unfortunately, MacLean died two weeks before the ruling.
Additionally, the Appeal Court awarded Joey Delaney $200,000 in general damages.
The third person, Sheila Livingstone, died in 2016, before the Board of Inquiry hearing; the Court of Appeal did not enlarge the Board’s award to her estate.
But besides the awards to the three people, the Court of Appeal sent the issue of systemic discrimination back to the Board of Inquiry, which could potentially affect up to a thousand other people in provincial care. The Court of Appeal found that the province had systemically discriminated against people with mental disabilities, but the exact contours of that discrimination are up to the Board of Inquiry to decide.
Yesterday afternoon, Woodford attended the post-cabinet press briefing with the premier; he reports:
Houston told reporters he wouldn’t appeal the decision. Houston sent his condolences to MacLean and Livingstone’s families, and praised them and Delaney for their courage.
“I just don’t think anyone should really have to take their government to court to make their government do the right thing. So, we received the message loud and clear, we will work with the community to make sure that the supports are in place,” he said.
Making sure supports are in place means creating more small options homes available for people with intellectual disabilities, and Houston admitted it’s no easy task.
“I can’t fix this overnight, nobody can,” he said.
“The overriding goal is we want to make sure that the supports are in place and that’s the directive the courts have given. It’s the right thing to do, it’s a human thing to do, and it’s what we’ll do.”
3. COVID
Nova Scotia announced 30 new cases of COVID-19 Thursday, and the Department of Health continues to note that “there are signs of community spread among those in Central Zone aged 20 to 40 who are unvaccinated and participating in social activities.”
A third of the new cases (10) were among children 11 years old and younger, who cannot be vaccinated, and there were two schools with potential exposure notices — Duc d’Anville Elementary (its ninth notification) and Rocky Lake Elementary (its first).
If the current rate of vaccination continues, Nova Scotia will reach 80% of the entire population (including the un-vaccinatable young children) fully vaccinated by around the first week of November.
4. Vaccine mandates
Zane Woodford has updated his article from yesterday about the city’s announcement that municipal employees will be required to be fully vaccinated:
Update: Asked for clarification on who the vaccine mandate applies to, spokesperson Laura Wright said it applies to about 4,000 HRM employees, including Halifax Regional Police and Halifax Regional Fire and Emergency. It does not apply to employees of Halifax Public Libraries or Halifax Water, which are arms-length entities with their own boards.
Another update: The Examiner asked Halifax Public Libraries and Halifax Water whether they would implement their own vaccine mandate policies. Here are their responses:
Mairead Barry, Halifax Public Libraries’ senior manager of strategy, wrote: “Yes the Library will be implementing a vaccine policy and are just doing final reviews before sharing it with staff.”
Jeff Myrick, Halifax Water’s communications and public relations manager, wrote: “While Halifax Water is independent of the Provincial Government and the city of Halifax, we are continually committed to the health and safety of our employees, customers and the general public. The decisions by the province and the city are fairly recent and we are still reviewing the specifics. We currently do not have a vaccine mandate, but are actively considering it in light of the strong encouragement from all three levels of government.”
5. Transcontinental says SaltWire still owes it $10 million
In 2017, the Chronicle Herald announced the creation of a new company, SaltWire, which purchased all 28 of Transcontinental’s newspapers in Atlantic Canada.
By any standard, the deal was ambitious, but just two years later SaltWire sued Transcontinental, saying Transcontinental had misrepresented the value of the properties. As I reported in April 2019:
The lawsuit claims that Transcontinental had inflated circulation figures to its customers, and so subsequently had to “remedy the wrongdoing by providing significant credits to customers for the non-existent circulation.” The customers didn’t learn of the misrepresentation until after the sale agreement with SaltWire.
Additionally, “SaltWire discovered that more than 141,00 flyer packages were not delivered by Transcontinental’s agent in Western Newfoundland [before the sale]. Significant damages have resulted from the requirement to clean-up those materials, and the need to compensate the client…”
There are other claims about assets not being worth what Transcontinental had stated, and then there’s a tax claim: SaltWire claims that Transcontinental had left it with an unpaid $1.7 million HST bill.
SaltWire’s suit was strange. First of all, it laid out that SaltWire was entirely too credulous:
I was struck by both the seriousness of the allegations levelled against Transcontinental and by the apparent lack of even basic due diligence on the part of SaltWire.
It appears SaltWire accepted at face value the valuation of the Transcontinental assets it purchased as presented in a slide presentation that Transcontinenetal used as part of its sales presentation.
But also, by June 2019, two months after SaltWire’s lawsuit was filed in the Supreme Court of Nova Scotia, Transcontinental hadn’t even been served notice of the suit. I noted at the time:
The way it normally works is when Company A sues Company B, Company A files a Statement of Claim with the court, then Company A hires a process server to serve Company B’s registered agent, and the proof of service is then filed with the court (this is called an “Affidavit of Service”). Then, Company B has 15 business days to file a counterclaim or a defence.
Since SaltWire filed its Statement of Claim, every few days I’ve trotted over to the courthouse to see what’s new with that lawsuit (I do other stuff too; I’m not wasting my time on this). But there’s been nothing. No Affidavit of Service, so therefore no counterclaim or defence.
I emailed Transcontinental yesterday to ask if the company had been served, and the company’s communications person, Patricia Lemoine, quickly responded:
To your question, please note that although the proceedings were filed on April 10, 2019, we have not yet received a copy directly from the plaintiff.
A lawsuit needs to be served by the plaintiff and this has not yet been done.
I also emailed both SaltWire and its lawyer, Gus Richardson, to ask why Transcontinental hasn’t been served, but neither has responded.
You can read SaltWire’s lawsuit against Transcontinental here.
I figured this was all some sort of game, and the companies would re-negotiate the deal in private, outside the courts, and that would be the end of it. In fact, nothing happened on the legal front for more than two years.
But then, last week, Transcontinental finally offered a defence, and countersued SaltWire — for $10 million plus interest.
In its defence, Transcontinental denies all of SaltWire’s allegations, and goes on to say that:
a) That it (Transcontinental) performed all its contractual obligations under the APA (Asset Purchase Agreement) full and in good faith, providing disclosure, assistance and support to Saltwire as required;
b) That Saltwire was afforded every opportunity to conduct comprehensive and satisfactory due diligence investigations in accordance with the February 1, 2017 letter of intent;
c) That Saltwire did in fact conduct comprehensive and satisfactory due diligence to evaluate the acquisition prior to entering the APA;
d) That it deal with Saltwire at all material times in good faith and in a commercially reasonable manner; and
e) That if Saltwire experienced losses or damages, then such resulted from industry-specific economic conditions affecting print media in the region and not from any fault as alleged or otherwise on the part of Transcontinental.
Transcontinental’s counterclaim lays out the finances of the 2017 purchase. The sale price for Transcontinental’s properties was $35.5 million, with $23.5 million paid up front and the remaining $10 million to be paid over three years, at an interest rate of 3% compounded annually. The scheduled payments were to be:
• $3,633,333.33 due on April 12, 2018
• $3,533,333.33 due on April 12, 2019
• $3,433,333.33 due on April 12, 2020
SaltWire has defaulted on all three payments, says Transcontinental. The company wants the court to issue a judgement against SaltWire for $10 million, plus the 3% interest extended to the date of the judgment.
You can read Transcontinental’s defence and counterclaim here.
Point e) above is worth considering. At the time of the purchase, the news industry was in a tailspin, with advertising revenues plummeting. The Herald was additionally in the middle of a strike by its newsroom employees. As I say, the deal was ambitious, demonstrating either great confidence on SaltWire’s part in its ability to navigate difficult waters that few other media companies had managed to transverse, or, alternatively, SaltWire was exceptionally foolhardy.
As alleged by Transcontinental, SaltWire failed to make the 2019 payment (no doubt SaltWire would say it was withholding payment because the properties were overvalued), perhaps demonstrating that SaltWire was in a precarious economic situation. But that was before the pandemic; by the time the second payment was due, SaltWire was in a tailspin thanks to COVID.
This week, I sat in on a hearing at Supreme Court regarding a lawsuit filed against SaltWire by six former employees in its Charlottetown printing press. (I wrote about the legal action here.) This was just a preliminary hearing, as SaltWire’s lawyer Grant Machum argued that the case should be held in PEI and not in Nova Scotia; Justice Kevin Coady heard arguments and will issue a decision in a couple of weeks. But along the way, Machum repeated SaltWire’s assertion that when the pandemic hit in March 2020 (a month before the second payment to Transcontinental was due), company revenues were cut by 85% and SaltWire laid off more than 350 employees.
SaltWire is a private company, and so I have no knowledge of its current financial position. It has no doubt recovered considerably from the hit of total lockdown in March and April of 2020, but I’m pretty confident in guessing that the company has been using the Canada Emergency Wage Subsidy (CEWS) to see it through these past 19 months — any company facing huge loss of revenue because of the pandemic would do the same.
When it was first implemented, for companies that lost 70% or more of their revenue due to the pandemic, CEWS covered up to 75% of their wage costs. That definitely would apply to SaltWire. But the CEWS subsidy was later reduced to 40%, and for the most recent period (Since Sept. 26), to just 20%. If SaltWire managed to decrease its losses to less than 75% but more than 50%, it would receive a lower percentage subsidy, and if losses were less than 50%, the subsidy would be lower still.
No matter what level of CEWS subsidy it has received, the benefit has no doubt kept many reporters working through the pandemic, and that’s a good thing.
But CEWS ends completely on Oct. 23.
I have no crystal ball, but I wouldn’t want to be in SaltWire’s position right now. With the Transcontinental lawsuit muddying the financial picture, a sale of any of its papers seems unlikely — why would, say, Brunswick News want to involve itself in that messy situation? And with CEWS expiring, even a small subsidy loss might be enough to start a new round of layoffs and closures.
Government
No meetings.
On campus
Dalhousie
Apartheid Internationalism: Canadians in Solidarity with White Rule in Southern Africa, 1965-1994 (Friday, 3:30pm, Room 1170, McCain Building and online) — Will Langford will talk; Teams meeting here
In the harbour
Halifax
05:00: Atlantic Sea, ro-ro container, arrives at Fairview Cove from Norfolk, Virginia
06:30: Nolhanava, ro-ro cargo, arrives at Fairview Cove from Saint-Pierre
07:00: Siem Dorado, offshore supply ship, arrives at Pier 9 from Bridgetown, Barbados
09:00: CSL Tacoma, bulker, sails from Gold Bond for sea
12:00: East Coast, oil tanker, arrives at anchorage from Saint John
12:00: Mitera, oil tanker, sails from Irving Oil for sea
13:00: Vivienne Sheri D, container ship, arrives at Pier 42 from Portland, Maine
16:30: Nolhanava sails for Saint-Pierre
20:30: Atlantic Sea sails for Liverpool, England
22:00: Vivienne Sheri D, container ship, sails for Argentia, Newfoundland
Cape Breton
12:00: Apache, oil tanker, sails from Point Tupper for sea
15:00: JMC-256, barge, with Sea Crescent, tug, moves through the causeway south to north en route from Cape Canaveral, Florida to Port Huron, Michigan
Footnotes
I’ve got a ton of stuff to write about, but no time to actually write it. Maybe I’ll get some of it done over the long weekend.
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Sure enough I bet the CEWS running out in a couple weeks will double the trouble Saltwire appears to be in. I truly miss the real Chronicle Herald days with fat sections and full staff. I also miss Liverpool’s Advance and the opportunities at convenience shops to grab the Globe or National weekend editions. But anyway…
Being a former employee of Transcontinental and also a company with Saltwire connections.. a pox on both their houses is all I have to say