Conservatives Hollow Out Canada

More so called 'unintended consequences' of Harpers Income Trust flip flop and Ralph Klein's Electrical deregulation. And if you believe this was unintended then I have a bridge in Brooklyn I can sell you.

Hong Kong billionaire Li Ka-shing, Asia's richest man, is targeting further growth in Canada's energy sector as a company he controls has snapped up Calgary-based TransAlta Power LP for $629-million and could buy more of the country's beleaguered income trusts. TransAlta Power, one of Canada's larger power trusts, had put itself up for sale in May, claiming that the federal government's decision to tax income trusts like regular companies meant its business model was no longer the best way to serve unitholders. It is majority owned by Calgary-based private power producer TransAlta Corp.

People familiar with the deal said Mr. Li, who already controls approximately 71 per cent of Calgary-based Husky Energy Inc., is using his cash-rich position to take advantage of current uncertainty in the trust sector, with the TransAlta acquisition allowing CKI to become a meaningful Canadian electricity player without yet having to become an operator.

CKI has some $1.1-billion of cash still to spend. Potential acquisition targets in Canada could include power generation trust subsidies owned by other infrastructure companies, such as Enbridge Inc., which will likely be sold or restructured as traditional common stock companies by 2011.

Mr. Li's increasing interest follows recent acquisitions in Canada's energy sector by another unlikely overseas player, Abu Dhabi National Energy Co., known as Taqa, which has targeted $7.5-billion on acquisitions in Alberta in just six months.

TansAlta Power pushed for deregulation and played the Income Trust game. It also has the right to sell power south of the border in a blended mix with American electrical utilities. One of the only Canadian utilities to have such an arrangement. Thus it's generation of electricity is for sale to the highest bidder.

Jim Dinning the man who would be Ralph was on the board of TransAlta. While 'private' it was created under the Social Credit government and its board has always been open to the parking of former government cabinet ministers.

Today the Transalta board is a whose who of Canadian and American business interests. It and Enbridge both have influential former U.S. ambassadors to Canada on their boards.

Enbridge is another private energy company that was also a Trust when Flaherty announced his Halloween Surprise last year.

Interprovincial Pipe Line (IPL), which became Enbridge Pipelines in 1998, was incorporated in 1949, shortly after Canada's first major oil discovery at Leduc, Alberta. The original pipeline was constructed to transport oil from Western Canada to refineries in the east.

Although Interprovincial had long been publicly traded, for most of its life the company was primarily owned by a handful of producers who shipped their products on the system. Then in 1983, Hiram Walker Resources took a major position in Interprovincial, through a share swap. That led to a string of events that included the acquisition of Home Oil in 1986, the creation of Interhome Energy, and control by Olympia & York. In 1992, Olympia & York sold its majority interest into the general marketplace, and Interprovincial became a widely held company. That was really the beginning of the Enbridge of today.

But Enbridge now is also owner and operator of Canada's largest natural gas distribution system, and is building a new gas distribution system for the province of New Brunswick. Enbridge participates in gas transmission through the Alliance and Vector gas pipelines. It is involved in the gas midstream business, liquids feeder pipelines, electrical power distribution, retail energy services, energy marketing, fuel cells, and has a growing involvement internationally with investments such as the OCENSA crude oil pipeline in Colombia.

Ah yes Colombia, home of death squads for trade unionists, and now has been given Harpers favorite nation trading status.

Bush: Free Trade Benefits US Workers

Some in Congress have expressed concern over violence in Colombia, particularly attacks on trade unionists. President Uribe takes these concerns seriously, and he has responded decisively. He's established an independent prosecutors unit to investigate and punish homicides against labor unionists. He's allowed the International Labor Organization to station a permanent representative in Bogota. He's worked to offer young Colombians better alternatives to a life of violence and drugs -- including the new jobs and economic opportunities that would come from a trade agreement with the United States.

Colombia's record is not perfect, but the country is clearly headed in the right direction -- and is asking for our help. Both houses of the Colombian legislature have expressed overwhelming support for the trade agreement with the United States. And now they're waiting to see if we will uphold our end of the deal. If Congress were to reject this committed ally, we would damage America's credibility in the region, and make other countries less willing to cooperate in the future. As Prime Minister Stephen Harper of Canada put it, "If the United States turns its back on its friends in Colombia, this will set back our cause far more than any Latin American dictator could hope to achieve." By its bold actions, Colombia has proved itself worthy of America's support -- and I urge Congress to pass this vital agreement as soon as possible

.

Like TransAlta, Enbridge's board has former members of the Alberta Government, including the former CEO of Telus, as well as those with connections to the U.S. Government and with Dubai and other middle eastern investors looking to expand into the energy and utility markets in Canada.

There’s a new way of pegging an energy company a takeover target: TAQA-over.
As everybody knows, or will, once it finishes spending billions in the Canadian oil patch, TAQA is an acronym for Abu Dhabi National Energy Co., which is buying PrimeWest Energy Trust for $5-billion, and still has some $13-billion left to spend.

RBC analyst Fai Lee is calling Enbridge Income Fund a TAQA-over candidate. Without actually connecting the dots between the Abu Dhabi outfit and Enbridge, he calls the fund a potential takeover candidate for a private or strategic investor, given its attractive asset portfolio.

J. LORNE BRAITHWAITE

(Age 65) Malahide, County Dublin, Ireland

Mr. Braithwaite joined the Board in 1989 and is a member of the Corporate Social Responsibility Committee and the Human Resources & Compensation Committee.

Mr. Braithwaite was President and Chief Executive Officer of Cambridge Shopping Centres Limited (developer and manager of retail shopping malls in Canada) from 1978 to 2001. As of January 2006, Mr.Braithwaite joined the largest shopping mall company in the Middle East, as the Chairman of MAF Shopping Centres, LLC, Dubai, United Arab Emirates. He is a Director of Enbridge Gas Distribution Inc. (public utilities company that is an indirect, wholly-owned subsidiary of the Corporation), Jannock Properties Limited (public real estate company), Bata Shoe Corporation (private international shoe retailing company) and Canada Post Pension Plan Investment Advisory Committee. Mr. Braithwaite is also a Trustee of Enbridge Commercial Trust (trust and a subsidiary of Enbridge Income Fund which is managed by a subsidiary of the Corporation).

Mr. Braithwaite owns 33,751 Enbridge Shares and 7,637 Deferred Stock Units.

Like many of Alberta's energy companies there are overlaps between the board members.

Enbridge CEO Patrick Daniel also sits as the director on Encana, Conservative bag man Gwyn Morgans old company, which was another energy company that was about to become a trust when Flaherty made his ill fated announcement, and sits on Enerflex an oil field services and supply company.

Just as there are overlaps between Enbridge Trust board members and Telus.

The hollowing out of Canadian business is not a aberration, it is not accidental, it is the result of Canada's energy businesses situated in Alberta being open for business. The boards are made up of movers and shakers from the U.S. and Canada energy businesses, who are willing to sell off portions of their companies to foreign investors, by using the Income Trusts, which are unregulated.

Like energy deregulation, it was never about creating value for Albertans or Canadians but about creating value for foreign and American investors at our expense.

And since these guys are the movers and shakers in Alberta's energy sector they are also the same guys crying the blues about royalty increases. Not because it would hurt their bottom line but that it might not make their companies so attractive to foreign investment buy outs. But of course that too is a lot of Chicken Little nonsense as this recent buy out of TransAlta shows.

Alberta and Canada are open for business, come buy us out.

With globalization, however, hollowing out has become a political issue for most industrialized nations. The difference this time is that no single nation is the principal acquisitor, nor is any one country the sitting duck. The hunter and the hunted have become interchangeable. Companies in China, Brazil, Saudi Arabia, Sweden and Switzerland are on the prowl. And the prey may be in Germany, Italy, Britain, Australia, the U.S. and, yes, even Canada.

In the first eight months of this year, foreigners gobbled up Canadian companies worth an astounding $90 billion. Canadian companies such as Inco, Dofasco and Alcan that formed part of the industrial backbone of the Canadian economy are Canadian no more.

This "hollowing out" of corporate Canada worries many Canadians, including top business leaders. For example, Caldwell Securities, a major investment firm, has run full-page newspaper ads on "The Sellout of Corporate Canada." It called the loss of head offices and industrial leadership "one of the great corporate tragedies of our time."

Despite these warnings, Prime Minister Stephen Harper has left no doubt that he considers the sellout to be of little importance.

After months of rising pressure to do something about the supposed threat that foreigners will buy up too many Canadian companies, the federal government this week responded in almost exactly the right way: with a policy of tough-talking inaction.

Canada is not drifting towards protectionism despite a government promise to look into the country's foreign investment rules, according to Jim Flaherty, finance minister.

"We cannot turn our backs on what's happening in global trade nor would we want to," Mr Flaherty told the Financial Times. "You are not going to see a protectionist Canada."

Four out of five of Canada's leading CEOs think Ottawa should impose new restrictions on takeovers by foreign state-owned firms and seven out of 10 favour reviewing acquisitions by outsiders for national security concerns.

These survey results of Canadian Council of Chief Executives (CCCE) members are being released today as part of an effort by the 150-CEO group to address public fears about a "hollowing out" of Corporate Canada's head offices.

"The world is awash in capital despite the current credit squeeze and some of the biggest players wandering around snapping up companies have very deep pockets and happen to be state-owned players," said Thomas d'Aquino, president of the CCCE.

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Albertans Left Blown' In The Wind

You Don't Need A Weatherman To Know Which Way the Wind Blows. Not in Alberta home of the free market. No rent controls here says our Premier. No changes in Building Codes till 2010. No need to revise our pork barrel health boards.

But Steady Eddie will keep a cap on wind energy.

Wind power advocates are unhappy with the Alberta government for suggesting that the current cap on wind energy in the province might be raised, rather than eliminated completely.

And not let Albertans develop their own home based energy to reduce their energy bills and produce locally based micro green energy whose excess can be put into the provinces utility grid. So much for his much lauded free market politics.

The Stelmach government foresees nearly doubling the amount of wind-power generation allowed in Alberta, even as the province remains the only jurisdiction in Canada to cap the production of wind energy.

Alberta's Electric System Operator introduced last year a limit of 900 megawatts of wind-energy generation, saying it was uncertain about whether wind conditions and patterns could be properly forecast -- something needed to produce a reliable stream of power.

The decision enraged wind-energy producers, which have thousands of megawatts in the queue. The rules made Alberta the only jurisdiction in Canada to impose such a cap.

"Replacing it with a higher cap is not a preferred option," said Robert Hornung, president of the Canadian Wind Energy Association. "A cap sends a signal that a door is closed, and for investors in the industry, that sends a negative signal."

NDP environment critic David Eggen, who's long been lobbying the government to axe the cap, said more wind power will help slash greenhouse gas emissions spewed by coal-fired electricity plants.

The Tory government's priority for building transmission lines has gone to the carbon-based energy suppliers, he argued, which has further hindered wind-energy generation.

"If these guys (the government) are free marketers, get out of the way and let the renewable energy groups into the market," Eggen said. "There are so many delaying tactics to prevent renewable energy from getting a foothold in this province."

Of course there never was a free market in utilities in Alberta. They are either private monopolies like ATCO Frontenac, or TransAlta, or they are publicly owned like EPCOR and Enmax.

The former being influential supporters of the Tory government and their boards are retirement homes for former PC cabinet ministers.

Deregulation was done for their bottom line not for expansion of alternative utility services such as wind energy or home based green energy production.


Wind energy companies are all private small entrepreneurs.

Cowley Ridge in southwestern Alberta is the site of Canada's first commercial wind farm. The turbines generate enough electricity to power 7,000 homes. When it was launched in 1998, 3,000 households were signed up. Now, it has more than doubled with each home paying an extra $7.50 on average for using wind power.

While big utility monopolies like TransAlta are a dumping ground for ex Tory cabinet ministers their coal and gas powered hydro monopolies must be protected by their pals like Eddie.

The provincial government wants to insure those who control the grid, do not face competition from independent johnny come lately's promoting green energy nor from home based micro energy production.



H/T to Pierre Trudeau Is My Home Boy


SEE:

Power Failure

Heat Not Light

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What's That Smell?

A new task force funded by the Canadian government and the province of Alberta will study ways to capture and store greenhouse gases emitted by the province's massive oil sands projects, Prime Minister Stephen Harper said on Thursday. The task force will be headed by Steven Snyder, chief executive of TransAlta Corp., a Calgary-based power company that operates coal-fired plants in Alberta and elsewhere.

TransAlta the historical retirement home for ex Cabinet Ministers from the Alberta Government. Like Jim Dinning.

What's that smell? Nepotism? Nope just good old Alberta politics.

After all Steve Snyder knows how important the environment is, and how crucial CO2 sequestration is cause he told folks in Seattle about it five years ago!!! Just waiting for the government to tell them to do it. And to fund it.

Environmental issues today are greater than they've been in probably the history of the industry, and particularly in the Canadian context, with Kyoto at the forefront, but regardless of the CO2 issue, knocks, socks, water issues, in this industry are out there and bigger than ever. This is -- you know, the whole Kyoto argument has become a proxy for the environment, so it's raised environmental issues on everyone's mind. So whether, you know, the U.S., whether they sign Kyoto or not, I don't think it's the point. The point is, people are more conscious of the environment than they were, you know, asking for more action, and our industry's at the forefront of that. I mean, raising capital today, we all know that is more difficult than it was three years ago, so for a capital intensive business, that's pretty -- a pretty tough equation to be in. TransAlta Corporation Investors’ Days Presentation Seattle Seattle, Washington November 25, 2002

So If Steve and the boys at TransAlta were 'at the forefront five years ago how come we are only seeing them act now on CO2 sequestration and other environmental solutions. Just waiting with their hands out. Ottawa spends $155.9M to make Alberta oil industry more green

TransAlta is Alberta's first P3.

With ties to the provincial and federal governments and the Conservative party historically. During the Socred era and later with PC's a position on the Board was practically guaranteed if you were a well connected Calgary Cabinet Minister.

The forerunner of TransAlta Utilities, Calgary Power Company, was founded by banker W. Max Aitken in 1903. Aitken, who later became Lord Beaverbrook, reorganized a number of utilities as a subsidiary of his Royal Securities Company. He was joined in this venture by his friend and mentor R. B. Bennett, who served as Canadian Prime Minister from 1930 until 1935. Some business leaders felt that Aitken and Bennett were an unlikely team, since Bennett was known as an upstanding young man, while Aitken had earned a reputation as something of a renegade. Nonetheless, the pair joined several other prominent Canadian businessmen on Calgary Power's initial board of directors. Among these board members were: A. E. Cross, one of the founders of the Calgary Exhibition and Stampede; Herbert S. Holt, a Montrealer who was later knighted; and C. B. Smith, president of Calgary Power's forerunner, Calgary Power and Transmission Company Limited. Aitken soon became Calgary Power's first president.

In 1947, two years after the war ended, Calgary Power moved its head office from Montreal--then the nation's largest city and prime business center--to Calgary, reorganized, and incorporated as Calgary Power Ltd. At that time, Calgary Power supplied the province of Alberta with 99 percent of its hydroelectric power. Also in 1947, Calgary Power built its Barrier Hydro Plant and used it to test the use of a newly developed remote-control operation system. The automation efforts worked well enough that Calgary Power soon converted all of its plants to the Barrier Plant system. A control center that could operate the company's entire system was built in Seebe in 1951. The company continued its string of innovations by testing 'mobile radio' communications in its line patrol trucks.

Although electricity had begun to spread to rural areas in the 1940s, only 5 percent of farmers in the province had electricity of any kind. The majority of farmers were hesitant to adapt until it became obvious that electric service could increase farm production as well as provide modern conveniences. The main problem for utilities in supplying farms was a financial one: at the time, it was estimated that it would cost $200 million--or twice the provincial debt--to expand service and supply all of the farms with electricity. This dilemma led to an unprecedented cooperative effort between Calgary Power, farmers, and the provincial government.

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