NEWS
1. Money
Earlier this month, I made a direct appeal for money for the Halifax Examiner.
I’m happy to report that many readers have re-upped their subscriptions or subscribed for the first time, and people additionally kicked in with donations. We’re not completely out of the woods — money is going to be especially tight through April — but thanks to your responses, I’m no longer contemplating drastic actions. The Examiner continues to power on.
I’m beyond grateful for the reader support.
It’s not too late to subscribe or make a donation.
(Send this item: right click and copy this link)
2. Deforestation Inc
We’ve taken the first part of Joan Baxter’s six-part Deforestation Inc series out from behind the paywall.
Joan is now in Ottawa, following up on her reporting.
(Send this item: right click and copy this link)
3. Michelin
“I knew it. I don’t know it, of course. Not officially. Still. But that’s only because of all the usual bafflegab from all the usual sources,” writes Stephen Kimber of the enormous public subsidies announced last week for Michelin.
Kimber reviews the history of public payouts to Michelin, which he has tracked for decades, and which Jennifer Henderson traced last week.
I was particularly taken by Kimber’s tracing of how little Michelin has to do to get that public money:
How much must Michelin spend on lobbying to always get such favourable-to-itself results?
Apparently… very little.
According to a search of the Nova Scotia lobbyists’ registry, there have been just two lobbyists registered to make Michelin’s case with the government over the years.
The first, Kim West— then a principal of the PR firm McArthur Thompson Law — was registered to lobby for Michelin North America in 2005. But, three years later, her status was listed as “terminated.”
The second, George Sutherland of New Glasgow, appears to have been on staff at Michelin, and his lobbying activities included “seek[ing] funding and tax credits for possible investment projects and mak[ing] representations on any legislation or policy that may affect Michelin.” He was appointed in 2012 but his status has been inactive since 2014.
Both responded no to the form’s question — “Have you lobbied, or do you expect to lobby, a member of the House of Assembly in the member’s capacity as a member? Or a person on the member’s staff?”
No?
Puzzling?
Not really.
Why would Michelin waste all that money trying to persuade a government when that government is already well and truly persuaded to do its bidding?
Click here to read “What Michelin wants, Michelin gets… always.”
(Send this item: right click and copy this link)
4. Financiers rule our lives
Mary Campbell of the Cape Breton Spectator provides one of her typical deep dives in the privatization of health care, and then onto rental issues. You should read the whole thing, but this part nails it:
REITs like Killam, for example, are landlords to thousands of tenants in this province, because we treat housing as a commodity ripe for the exploiting and nobody is better at exploitation than the finance industry.
No surprise, then, that hedge funds like Kensington Capital Partners are investing in for-profit healthcare (their portfolio includes Clearpoint Health Network, a chain of Canadian surgical clinics).
Which means the day has come when the financial industry has crept its way into pretty much every corner of your life: owning the roof over your head, the clinic where you get your knee replacement, the animal hospital where your pet is treated, the newspaper that gives you your information about the world—improving none of these things while extracting as much profit as humanly (or algorithmically) possible.
Click here to read Campbell’s piece. As with the Examiner, the Cape Breton Spectator is subscriber supported, and so this article is behind the Spectator’s paywall. Click here to purchase a subscription to the Spectator.
(Send this item: right click and copy this link)
5. Heart surgeons
“For the third time since 2010, a review of the cardiac surgery division at the Queen Elizabeth II Health Sciences Centre in Halifax acknowledges that some people are not being held accountable for their behaviour at work,” reports Michael Gorman for the CBC.
Gorman spoke with 11 people who have worked or still worked in the cardiac surgery division:
“It was almost like a free range for them to do whatever the hell they wanted, say whatever they wanted,” said one person.
Several people told CBC that poor behaviour seemed to escalate when it appeared that there would be no long-term consequences for surgeons.
“These are people that understand the demeanour that should be used in the operating room,” said another person.
“When they veer away from that demeanour and they get away with it, they’ll go even farther than that.”
Another person who no longer works in the division described their time in Halifax as “the worst-ever environment” they’ve worked in, adding that it was “demeaning” and “degrading.”
People who talked to CBC stressed that not all surgeons in the division behave in an unprofessional way, but one source said “some people in this system are almost untouchable.”
Documents anonymously delivered to CBC, including emails and workplace incident reports, show people raising complaints about the conduct of some surgeons. They include allegations of verbal tirades, intimidation and throwing items in operating rooms.
(Send this item: right click and copy this link)
6. Nurses
A press release from the Nova Scotia College of Nursing:
As Nova Scotia’s nursing regulator, the Nova Scotia College of Nursing’s (NSCN) role is to ensure that all nurses providing nursing services for Nova Scotians are qualified to do so. The public can depend on NSCN to license those who meet registration requirements and demonstrate they have the knowledge, skills, and competence required to safely and ethically practice as a nurse.
Over the coming weeks, NSCN will implement a new first-in-Canada approach to registration and licensure that will establish a fast and predictable pathway to licensure in our province. Registered nurses who demonstrate good standing and good character and are licensed in Canada, the Philippines, India, Nigeria, USA, UK, Australia, or New Zealand, are eligible for registration and licensure in Nova Scotia immediately with no additional requirements other than passing the entrance exam. Using an equity lens, the newly developed approach yields consistent and predictable licensing outcomes for nurses educated in Nova Scotia, Canada, and seven specific countries that equate to 87% of NSCN’s current international applicants.
The new registration and licensing approach will:
• Reduce the overall application process timeline for nurses licensed in good standing in another Canadian jurisdiction from five days to 24 hours. (Effective March 29, 2023)
• Reduce the overall application process timeline for international nurses in good standing from the Philippines, India, Nigeria, USA, UK, Australia, and New Zealand from over a year to a matter of a few weeks. Nurses from these countries will apply directly to NSCN. (Effective May 1, 2023)
“I am pleased to share what is truly a first-in-the-country approach to licensing international and Canadian nurses in Nova Scotia,” says Sue Smith, CEO and Registrar of the Nova Scotia College of Nursing. “The new approach will significantly decrease licensing time; increase licensure of nurses; reduce administrative requirements; and is aligned with new initiatives of health care partners. It’s a safe and faster process for nurses who want to work in our province, which is a good news story for all Nova Scotians.”
“This is great news. We need more nurses across the province, and we need to make it easier for nurses who want to come and build their lives here to get to work quickly,” said Michelle Thompson, Minister of Health and Wellness. “During COVID, the College saw the need, and responded quickly to support patient care. These most recent changes continue on this work and deliver solutions that align with government’s direction to all health system partners in the province to think differently and move quickly.”
Funding from the Provincial Nursing Strategy and Department of Health and Wellness helped enable NSCN to dedicate the organizational resources quickly to identify and implement these solutions to support the supply of nurses in Nova Scotia.
While NSCN’s current focus is on Canada and the seven countries noted above, the approach is scalable. All applicants for licensure in Nova Scotia are required to pass the national entry-to-practice exam to demonstrate they have the individual competencies required to practice safely and competently and will have the opportunity to enter practice with a conditional licence while waiting to successfully complete the exam.
(Send this item: right click and copy this link)
7. Writers’ Federation now in the property management business
“A 230-year-old house called Jampolis Cottage in Avonport, N.S., has been donated to the Writers’ Federation of Nova Scotia,” reports Josefa Cameron for the CBC:
The property sits along the shores of the Minas Basin with a view of Cape Blomidon.
Americans Neil and Jane Jampolis were award-winning scenic and lighting designers. They bought the property in 1996.
…
In 2003, Jane and Neil founded a living trust stipulating that the house would be donated to a charitable organization for the purpose of a retreat for artists or writers. Jane died in 2017 and Neil in 2019.
The gift is of course generous, and I guess there are writers who actually benefit from that type of retreat (I’m not one of them; improve my productivity by putting me in a noisy coffeeshop).
But when I read this, my first thought was, ‘my dog, a bunch of writers are going to maintain a property?’
You’ve got your general cleaning and cutting the grass, the draining the pipes in the winter and un-draining them in the spring, the wind damage, the roving pests to deal with, the teenager partiers breaking in, the… it exhausts me just thinking about it.
I’ve never understood the Canadian love of owning a cottage. I can’t even properly maintain my primary residence; why would I want to double the burden with a second property?
Probably the Writers’ Federation has thought this through. Maybe there’s a budding home repair guide author in the group.
(Send this item: right click and copy this link)
VIEWS
1. The problem with auditors
“Silicon Valley Bank failed just 14 days after KPMG LLP gave the lender a clean bill of health,” report Jonathan Weil and Jean Eaglesham for the Wall Street Journal:
Signature Bank went down 11 days after the accounting firm signed off on its audit.
What KPMG knew about the two banks’ financial situation and what it missed will likely be the subject of regulatory scrutiny and lawsuits.
KPMG signed the audit report for Silicon Valley Bank’s parent, SVB Financial Group on Feb. 24. Regulators seized the bank on March 10 after a surge of withdrawals threatened to leave it short of cash.
“Common sense tells you that an auditor issuing a clean report, a clean bill of health, on the 16th-largest bank in the United States that within two weeks fails without any warning, is trouble for the auditor,” said Lynn Turner, who was chief accountant of the Securities and Exchange Commission from 1998 to 2001.
I’ve been fascinated by auditing in general for quite a while, and by KPMG in particular since it uncritically approved the “business case” for the new Halifax Convention Centre. As I wrote last week:
Recall that KPMG produced an analysis of the proposed Halifax Convention Centre based on expected convention attendance figures provided by Trade Centre Limited and came up with an economic impact result that was lower than that promised by TCL. Yikes! But no matter: TCL simply gave KPMG new attendance figures (apparently, simply created out of whole cloth) double the original figures, and had KPMG run the analysis a second time. Unsurprisingly, the second analysis came up with an economic impact double the first, and TCL used the second analysis to promote its project. KPMG never questioned the second set of attendance figures, nor called attention to the discrepancy. KPMG still has a steady trade in the economic impact analyses business.
Audits and economic impact studies are two different things, but there’s a common problem underlying both, at least for the lay person.
Those of us not in the financial priesthood can be forgiven for not understanding the very narrow role played by companies like KPMG. It took me a decade or so of reporting on business before I figured this out.
See, most people think “audit” means a company’s books get looked at, and the auditor will tell us if the company is run by a bunch of crooks or not, where the money ultimately goes, if the business is doing what it’s supposed to be doing, and if we as a society are benefiting from it.
That’s completely wrong.
Oh, forensic audits are sometimes performed after a known crime has occurred, but that’s a very small subset of all auditing, and you’ve got to pay a lot more money for those.
Normal audits — the type of audits every publicly traded corporation, crown corporation, and government agency has performed at the end of every fiscal year — aren’t doing much more than making sure that the money held in organizational accounts is properly labelled. That’s it. Nothing more.
Crown Corporation X might say they’re putting $200,000 towards executive travel. The auditing firm comes in, looks at the accounts, and says, yep, $200,000 went towards executive travel, and it was properly accounted for. Never mind that the director of Crown Corporation X was expensing trips to Vegas strip clubs — it’s not up to the auditor to assess the value or even purpose of the executive trips. All that matters is the $200,000 is labelled correctly, and it was. So Crown Corporation X gets a clean audit, and then it crows to the public: ‘We got a clean audit! Nothing to see here.’
Here’s a real world example: Tracy Kitch and the IWK. As I reported in April 2019:
Recently unsealed court documents obtained by the Halifax Examiner reveal new details about the expense scandal at the IWK.
The documents are eight “information to obtain” (ITO) applications for production orders — basically, the equivalent of search warrants but for documents and records — related to expenses claimed by former IWK CEO Tracy Kitch.
The problems with Kitch’s expenses were uncovered by CBC reporter Michael Gorman.
Kitch now faces charges of fraud over $5,000 and breach of trust. The IWK’s former Chief Financial Officer, Stephen D’Arcy, faces charges of breach of trust, unauthorized use of a computer, and mischief to data.
Kitch’s recent conviction was overturned on appeal, and the Crown is now assessing whether to try her again. At issue is whether Kitch’s expenditures were consciously fraudulent or mere careless mismanagement, but there’s no question that her expenses were entirely inappropriate.
I continued:
On July 11, 2017, recent board chair Bob Hanf and new board chair Karen Hutt met with Kitch. At the meeting, “Kitch provided a file which Kitch claimed to have found in her executive assistant’s desk,” wrote Comer. “Kitch stated that this file would provide legitimate business explanations for her expenses.” Hutt told Kitch to give the file to the IWK’s lawyer, and the lawyer would in turn give it to the Finance Department. However, Hutt said that as far as she knew neither the lawyer nor the Finance Department ever received the file.
On July 14, 2017, Hutt called an emergency meeting of the board; at the meeting, the board formed a committee to review the situation, and hired Grant Thornton to conduct an audit.
“The special committee realized that the questionable expenses involved more than just the corporate credit card, but also included expense claims and direct billing,” wrote Comer.
The special committee received the Grant Thornton audit on August 14, 2017. “The [audit] report showed a lack of receipts and supporting documentation for Kitch’s expenses,” wrote Comer. Over the next week, both Hutt and Leah White, one of the Grant Thornton auditors, pressed Kitch for more documentation, but never received it. So on August 23, Hutt and two other members of the special committee met with Kitch and demanded her resignation.’
So auditors found the problem, right? Well, no. At least not right away.
You see, Grant Thornton had for many years conducted the annual audit of the IWK’s financial statements. Here’s the Grant Thornton audit of the financial statements in 2016. Here’s the Grant Thornton audit of the financial statements issued on March 31, 2017, just five months before Grant Thornton was tasked to specifically look at Kitch’s expenses.
In other words, neither the 2016 nor March 31, 2017 audit identified anything wrong with Kitch’s expenses. Whatever the expenses were, no matter. Whether they were appropriate or not, no matter. All that mattered was that they were properly slotted into the correct budget line on the financial statements, and they were. So the IWK got a clean bill of financial health from the auditor; wrote Grant Thornton:
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Health Centre as at March 31, 2017, and the results of its operations and changes in accumulated surplus, changes in net debt, and its cash flows for the year then ended, in accordance with Canadian public sector accounting standards.
It took Gorman’s reporting to reveal the problem with Kitch’s expenses.
Again, this doesn’t seem right to the everyday person’s way of thinking. Auditors are supposed to uncover stuff like this, we think. We’re wrong. That’s not usually their job. They have to be particularly tasked with that chore, as was the case with Grant Thornton’s August 14, 2017 audit of Kitch’s expenses, which was akin to a detailed forensic audit.
I haven’t read the KPMG audits of Silicon Valley Bank or Signature Bank, but I’m assuming the same basic situation applies: SVB said it had X dollars in long-term government securities making Y% interest, and yep, it sure did. The bank wasn’t lying about that. The financial statements were correct. So, KPMG gave SVB a clean audit. KPMG was never tasked with assessing the risk of those securities, and so didn’t.
If there’s any takeaway from this, it should be: an audit usually doesn’t mean much at all, at least in terms of what we, the public, are concerned about.
(Send this item: right click and copy this link)
Government
City
Today
Advisory Committee on Accessibility in HRM (Monday, 4pm, online) — agenda
Tomorrow
Halifax Regional Council (Tuesday, 1pm, City Hall) — Regional Council agenda; Committee of the Whole agenda
Province
Today
No meetings
Tomorrow
Legislature sits (Tuesday, 1pm, Province House)
On campus
Dalhousie
Today
Assisted reproduction in Canada: gaps, trends, and opportunities (Monday, 12:30pm, online) — Nichole Austin will talk
Tomorrow
Serial secondary and tertiary endosymbioses in dinoflagellates (Tuesday, 10am, Room 3-H1, Tupper Medical Building) — Yuji Inagaki, from Tsukuba University, Japan, will talk
Earthquake, Erdogan, Elections: Türkiye in 2023 (Tuesday, 3pm, Room 3107, Mona Campbell Building and online) — a roundtable discussion on Turkish politics, looking ahead to the 2023 general elections; featuring Can Mutlu, Buket Tatlidil, and Emre Turker, moderated by Tobias Schminke
Speak It: From the Heart of Black Nova Scotia (Tuesday, 6pm, online) — film screening and discussion with Sylvia Hamilton, David Wood, Tandiwe Nyajeka, Karen Hudson, Krista Brodie, Shawn Grouse, and Emmanuel Solomon
Concerto Night 2023 (Tuesday, 7:30pm, Rebecca Cohn Auditorium) — with Fountain School of Performing Arts student soloists and orchestra; tickets $15/ $10, info here
In the harbour
Halifax
04:45: MSC Qingdao, container ship, sails from Pier 42 for Suez, Egypt
05:30: Violet Ace, car carrier, arrives at Autoport from Emden, Germany
07:45: SFL Thelon, oil tanker, arrives at Anchorage #1 (south of Georges Island) from Al Muajjiz, Saudi Arabia
08:00: Onego Deusto, cargo ship, sails from Pier 27 for sea
10:30: CSL Tacoma, bulker, moves from Anchorage #13 (Bedford Basin) to Gold Bond
11:30: ZIM Qingdao, container ship, sails from Pier 42 for New York
15:30: Violet Ace sails for sea
21:00: CMA CGM Nerval, container ship, arrives at Pier 42 from Bremerhaven, Germany
Cape Breton
06:00: Shelia Ann, bulker, arrives at Coal Pier (Sydney) from Norfolk, Virginia
06:00: AlgoTitan, oil tanker, arrives at Government Wharf (Sydney) from Corner Brook
15:00: Tanja, bulker, sails from Port Hawkesbury Paper for sea
17:00: AlgoTitan sails for sea
Footnotes
Now we wait for summer. And wait. And wait.
Adventures in Canadiana
– Up here in the north it’s more often Coles notes than Cliffs notes.
– I was born here. Love living here. Have never understood the compulsion to have a cottage to rush off to
The situation with auditing, and similar practices is one I think about a lot in terms of government, large corporations, regulations, and governance. We have these baroque practices and business requirements that gobble up a lot of time, effort, and dollars… but they don’t REALLY do what people think they do. They don’t really contribute to good governance and they certainly don’t contribute towards any sort of transparency or public accounts.
What’s galling is when we apply this to government and crown corporations it really just looks like a case of wanting them to “run like a business”, and result on a LOT of funnelling of public dollars to private companies.
It is worth noting the value of responsible journalism. It is a very rare thing in our current polarized media world. Truth and facts and the search for those by skilled reporters is rapidly becoming a target for right wing extremists who choose to brand that as left wing “fake news”. Besides the impeccable work of the Examiner and the amazing skills of the astute journalists here, I have to highlight the work of the CBC’s Michael Gorman. He is cited twice in today’s Morning File for true investigative journalism. Among other great stories he has covered, he was the one that exposed the shady backroom deal on Owls Head Park and the previous government’s attempt to sell the ecologically protected protected area at fire sale price to a wealthy American developer. This kind of journalism is the highest calling to true public service and needs to be treasured and protected from partisan and commercial interest.
Regarding whose role it was to identify Ms Kitch’s expenditures to be . I have been part of getting a number of community organizations established, including identifying what the budget would be used for. Initially the request for funds would identify the general purpose. Depending on the organizational chart, it would be the bookkeeper, or manager of the department that oversees use of funds, such as “Accounts Manager” whose job it would be to catch if there was inappropriate use. Overseeing the appropriate use of funds should be in place well in advance of submission of an annual report to the overseeing body, such as the board. All employees are trained in the purpose of the organization when hired: someone was responsible to catch this well in advance of an external audit. The culture of approval of this misuse goes far deeper than one employee.
On the problem with auditors, today in The Tyee is a story about the BS audit of the Trans Mountain Pipeline that continues to suck billions:
“Stunningly, the report does not mention the history of persistent cost overruns or lack of cost controls. Apparently there are no accounting issues when a government promises that it will build a pipeline for $7.4 billion and then ends up spending more than $30 billion on the sucker. ”
https://thetyee.ca/Analysis/2023/03/20/Trudeau-Pipeline-Scandal/