Sovereign Bond Yield Collapse Shows 

the World Is in Crisis Mode

Stephen Spratt, Ruth Carson and John Ainger Bloomberg March 6, 2020

(Bloomberg) -- Sovereign bonds are emphatically demonstrating their appeal as a last refuge for investors spooked by another global crisis, this time sparked by the economic fallout of the coronavirus.

Government debt racked up further historic milestones on Friday, with 30-year U.S. yields sliding through 1.3% for the first time and China’s 10-year rates falling to the lowest since the country was battling deflation in 2002. German yields closed in on record lows and those on short-dated U.K. debt neared 0% as the market braces for more stimulus from central banks.

The moves were so powerful they risk stoking alarm in other markets, from equities to credit. The unusually large swing in Treasuries sent S&P 500 Index futures tumbling, and pulled down equity benchmarks across Asia and Europe. Where yields bottom from here is anyone’s guess.

“Zero percent yields are no barrier to any bond market in the developed world right now,” said Shaun Roache, chief Asia-Pacific economist at S&P Global Ratings. “It’s an insane market -- investors are re-defining the idea of risk distribution.”

News on the coronavirus epidemic and policy makers’ responses -- including the Federal Reserve’s emergency 50-basis-point interest-rate cut Tuesday -- have swung stocks one way and the other. But for bonds it’s essentially been a one-way street.

Ten-year Treasury yields, arguably the single most powerful global financial-market metric, have cratered in the past three weeks, down about 80 basis points. That’s a scale unprecedented since the aftermath of the bankruptcy of Lehman Brothers Holdings Inc. in 2008.

They were at 0.73% as of 9:58 a.m. in London, with 30-year Treasuries at 1.31%. China’s 10-year notes yielded 2.63%, against about 3.15% at the start of the year. Australian 10-year bonds have lost about half the nominal yield they had just weeks ago, as that market anticipates the introduction of quantitative easing.

Sharp gains in U.S. long-bond futures have caused circuit breakers to kick in on three separate occasions, briefly halting trading.

Roache said investors are now discounting a return of QE by the Fed and an expansion in Bank of Japan asset purchases. Money markets are pricing about a 90% possibility that the European Central Bank will lower its deposit rate by 10 basis points next week, or boost asset purchases.

But the trend has been as inexorable as the spread of the coronavirus itself, with new waves of infections and markdowns in growth forecasts driving fresh inflows to risk-free securities.

It’s driven the global supply of bonds with negative yields to $14.4 trillion, up by well over $3 trillion since mid-January, before the epidemic became apparent in central China.

Last August’s record -- almost $17 trillion amid a rough patch in the U.S.-China trade war -- stands to be blown away should a swathe of the Treasury market see nominal yields drop below zero for the first time. Two-year rates have less than half a percentage point remaining.


Race to Zero

In the U.K. too, two-year yields at one point Friday morning hovered just 10 basis points above 0%.

“The race to zero is just flying off the handle,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. “Trying to draw a line in the sand for 10-year yields when markets are slammed by fanatical hopes of Fed action and pandemic fears in turn may be a fool’s errand.”

It’s all been a dramatic showcase for the benefits of bonds as a hedge in portfolios, after that traditional allocation strategy faced questions less than two years ago. The Bloomberg Barclays Global Aggregate index of bonds has returned 3.3% since the year began, versus about minus 7% for the MSCI All Country World Index of stocks. Gold, another once-maligned hedge, is up 11%.

CRIMINAL CAPITALISM
Tea Boy to Tattooed Trader: A Secret Tipster’s Life and Death

Franz Wild, Gaspard Sebag and Alan Katz Bloomberg March 5, 2020


(Bloomberg) -- The coroner ruled it “death by misadventure.”

By the time the concierge reached James Harris last June, he was lying in the hallway outside his apartment, arms and legs shaking, gasping for air. Although an ambulance crew raced in and administered an antidote for opiate overdoses, Harris’s pulse returned only briefly. Three minutes later, the 42-year-old British trader was dead.

Harris had been troubled for months, behind on his rent, drinking and using copious amounts of cocaine in his apartment not far from London’s Buckingham Palace, witnesses said in statements read at his inquest. While searching his apartment, police found crack pipes, sedatives and a mobile phone. When they lifted his body to wheel it to the ambulance and drive it to the morgue, a second phone dropped out of the dead man’s pocket.

Mobile phones were Harris’s main work tools. The one that fell out of his pocket was one of probably dozens he had used over the years and then discarded to avoid being traced. Through calls, texts and encrypted messaging apps, Harris plugged into a loose network of day traders on two continents who cultivated sources at banks and companies to procure an edge on large deals. They exchanged secrets on corporate takeovers, profit warnings and medical trials, trading on the information to generate what prosecutors say were hundreds of millions of dollars in profit.

Since Harris’s death, more details about different parts of the network have emerged in court proceedings. A few days after he died, his friend Walid Choucair was convicted of insider trading in London. Marc Demane Debih, a Geneva-based trader arrested in Serbia and extradited to the U.S., pleaded guilty and testified in a New York court in January that he got tips from a Goldman Sachs Group Inc. banker and from other insiders via a French art dealer. Telemaque Lavidas, son of a pharmaceutical-company director who wasn’t implicated in the scheme, was convicted of leaking company secrets to one of Demane Debih’s trading partners, who prosecutors say was also part of the insider-trading network.

A reconstruction of Harris’s life, based on interviews with people who knew him, helps fill in some missing pieces of the puzzle. More than a trader, Harris was a middleman, trafficking in information for a slice of future profits. He jealously guarded his sources, often exaggerated and sometimes provided false information, the friends say.

Harris had been tripped up long before Choucair, Demane Debih and Lavidas. He was arrested in the U.S. in 2012, pleaded guilty to securities fraud and agreed to go back to the U.K. rather than face prison in New York. He promised the judge that his days of trafficking inside information were over. In his decision, the judge said he was sure Harris had changed his ways.

But it didn’t take long for Harris to fall back in with his old crowd. The lure of money and the things it could buy — a vintage red Ferrari, expensive cigars and cocaine — was apparently too hard to resist for an optician’s son who started out as a tea boy at the London Stock Exchange. It had been a wild ride from that lowly beginning to the high-flying trader’s life, according to people who knew Harris and requested anonymity to speak about their dead friend.

At some point, Harris started mingling with a group of traders who shared tips, made millions and partied at glamorous clubs or on yachts docked off Monaco. He enjoyed the life, his friends said, and had a magnetic personality. He also had a dark side: One trader described him as an aggressive lout. Covered in tattoos strategically placed to be hidden by a dress shirt and pants, he was an odd figure among the traders who frequented celebrity hangouts like the Chiltern Firehouse and members-only Tramp in London, or Les Caves du Roy in Saint Tropez, people who knew him said. While others talked about financial markets long into the night, Harris preferred to discuss music and art, introducing friends to hip-hop records produced by the Salazar Brothers and street artists Paul Insect and Banksy.

At his trial, Choucair described how the traders operated, and others in the group confirmed their methods. They were careful to avoid detection, speaking on burner phones that they replaced after a few months. They bought contracts for difference, or CFDs, a leveraged bet on a stock’s movement that meant gains and losses could be far higher than the initial investment. The group, a loose association more than a ring, became expert at ferreting out mergers and acquisitions.



Demane Debih’s testimony shed light on the value of intermediaries. He said he paid $12 million to French art dealer John Dodelande for tips from London investment bankers to insulate him from their source. Dodelande hasn’t been charged with any wrongdoing.

Once they’d built their positions, Harris, Choucair, Demane Debih and others would call journalists, including some at Bloomberg News. They were betting that if the reporters wrote a story, the stock would move and the traders could cash out. Bloomberg’s policy is not to publish any information without confirming it with people who have direct knowledge of the matter. The policy also prohibits telling sources if or when a story will be published.

In 2011, Harris left London, flew to New York and took up residence at the swanky Mercer Hotel. Seeing him whiz off in a flashy car one day, a 22-year-old American woman named Michelle Gomolin slipped the doorman her number and asked him to pass it along. Six months later they married and moved into an apartment in SoHo, embarking on a roller-coaster ride that even then Harris said he wanted to turn into a movie, Gomolin wrote in an Instagram tribute after he died.

“You took me on this ride for years and years, a ride that I could never get off of,” Gomolin, who eventually divorced Harris, wrote. “You were the highest highs and the lowest lows. The best of times and the worst of them too. You were the most lavish, insane, larger than life human I have ever met. You walked as if you owned the world, and to me you were my entire existence. Your quirks and oddities never ceased to amaze me.”

Within a year of their marriage, Gomolin was posting $20,000 bail to get Harris out of jail. He had been arrested by FBI agents for securities fraud, but he’d also become entangled in an international scandal involving the son of a former president of Kyrgyzstan.

Harris had been providing trading tips to Eugene Gourevitch, who ran a $45 million securities account for the former leader’s son, Maksim Bakiyev. Gourevitch was arrested in 2011 and agreed to cooperate with the Justice Department to dismantle the insider-trading network.

Gourevitch said in an interview that he was introduced to Harris by friends who told him he had access to insider information. “Harris bragged he knew lawyers and bankers but never mentioned specific names to protect his source of income,” Gourevitch said. “Sometimes Harris’s information was spot on, at other times it was completely wrong.”

To help U.S. investigators, Gourevitch began recording conversations with suspects, including Harris and his friend Tayyib Ali Munir, then a trader at Brown Brothers Harriman & Co. During one conversation in early 2012, Munir told Gourevitch he could provide corporate earnings reports ahead of publication if Bakiyev agreed to pay $122,000 for previous tips, according to court documents. Munir also boasted that some of the information came from a former director of the New York Stock Exchange.

Munir didn’t supply the promised releases, and it’s unclear if he had a source at the exchange. But Harris came through a few weeks later. A day before Russian wireless company VimpelCom Ltd. reported a net loss, he gave Gourevitch the statement the company was planning to publish. He told Gourevitch to short VimpelCom and pay him half the profit, which would have netted Harris about $1 million. Gourevitch didn’t make the trade, but he paid Harris $50,000 anyway.

Harris and Munir were both arrested and pleaded guilty. Harris was sentenced to two years of supervised release, and Munir three. Harris was ordered to forfeit the $50,000 and a Ducati motorbike he bought with proceeds from the securities fraud. Gourevitch got five years. Charges against Bakiyev were dropped a few months later without explanation. Munir and a lawyer for Bakiyev didn't respond to requests for comment.

“No fines were imposed because the defendant does not have any assets, and it is unlikely that he will have any in the foreseeable future to pay a fine,” Judge Jack Weinstein wrote about Harris in his decision. “It is unlikely that the defendant will engage in further criminal activity in light of his sincere remorse.”

Harris returned to the U.K. and rented an apartment in St. James’s, an exclusive neighborhood between Buckingham Palace and Piccadilly Circus that is home to some of London’s finest tailors. Choucair testified during his trial that he was still exchanging tips with Harris in late 2013, and call logs between the two presented to the jury showed they spoke frequently before Choucair bought CFDs for property group BRE Properties Inc. The jury found Choucair’s friend Fabiana Abdel-Malek, a compliance officer at UBS Group AG at the time, guilty of leaking confidential information about an acquisition of BRE to Choucair. No one alleged Harris did anything wrong.

Harris resurfaced again in London’s day-trading scene in 2016, according to two people who interacted with him, then went silent during a spell in the Caribbean. He got back in touch early last year, touting stocks and asking old friends to invest on his behalf as a way of circumventing margin limits or disguising bets.

He claimed to have information about an alleged takeover of French chemical company Arkema SA, showing what turned out to be a forged offer document, one of them said. In what would turn out to be his last trade, in mid-May, he persuaded some of the same people to buy derivatives on his behalf linked to the share price of At Home Group Inc., a U.S. home-decor retail chain.

With At Home, Harris again showed what he said was a detailed copy of a takeover offer, according to one of the people. That document, too, turned out to be doctored, though it wouldn’t become apparent until a few days after Harris’s death, when the company slashed its profit outlook and shares lost more than half their value. Because the trades were done informally, Harris’s friends who suffered losses on his bet had no claim on his estate.

A few days after Harris died, his red Ferrari was parked outside the Greek Orthodox Saint Sophia’s Cathedral in London, where his family and friends gathered in a haze of incense. His body lay beneath a gold mosaic dome with an image of Jesus crouching before a rainbow. His coffin was decorated with images of skyscrapers. Friends and family filed past, leaning in to kiss him, hold his hand or caress his cheek. Those who spoke described a mischievous prankster, a restless soul filled with energy and tenderness, on a mission to sample the best the world had to offer.

“Only you, James, could live in a five-star hotel,” a former girlfriend, Olcay Gulsen, dressed in a broad-brimmed white hat and lace suit, said between sobs. “So lavish. The cool cars, the cigars, everything. But that’s not what made you so special. It was your heart, James.”

In October, in a coroner’s court above a bustling food market in West London, authorities said they found nothing suspicious about Harris’s demise: He had been alone at home that Monday morning, and video surveillance footage showed no one coming or going. His sister Emily wept as the coroner found that an overdose had killed her brother. The coroner called it death by misadventure – not a suicide, not an accident, not at the hands of someone else, but the result of a risk taken voluntarily.

JAPAN
Steel Giant Mulls Plan for Aging Plants as Demand Fades

Masumi Suga Bloomberg March 5, 2020


(Bloomberg) -- JFE Holdings Inc., Japan’s second-biggest steelmaker, is reassessing production at its aging facilities at home as domestic demand shrinks and competition intensifies overseas.

In contrast to faster growing markets such as China and India, demand in Japan is set to fall over the next 10 to 20 years as the population shrinks, Chief Financial Officer Masashi Terahata said in an interview earlier this week. The company also faces stiffer competition in Southeast Asia, its top export market, as rival mills, especially from China, step up sales of cheaper steel.

“We must look ahead and make a judgment on the optimal structure of our production facilities for the mid- to long-term,” Terahata said at the company’s headquarters in Tokyo. “We will see a drastic change in the worldwide industrial map if Chinese mills build blast furnaces in Southeast Asia” as it could make Japanese steel less competitive, he said.

JFE is currently trying to estimate the pace of decline in domestic demand over the next couple of decades to determine the appropriate size of its production capacity, Terahata said, adding that the company will unveil its reorganization plans in the year starting April. It also intends to utilize or add more overseas manufacturing sites and move some production from Japan to faster-growing Asian economies to compete against foreign rivals, he said.

JFE currently ships more than 40% of its crude steel outside its home market. The plan to reorganize its facilities comes as margins are being squeezed by high production costs and low steel prices. JFE has forecast zero profit for the full-year at its steel unit, which contributes more than 60% of the company’s total sales.

Japan’s steelmakers were hit particularly hard by a downturn in both domestic and overseas demand, as well as disruptions to production caused by a typhoon last year. Nippon Steel Corp. last month announced a structural reform, including the unprecedented closure of all facilities at its Kure steelworks in southwestern Japan, as it warned it was heading for a record annual loss.

JFE collapsed 7.2% to close at 889 yen in Tokyo on Friday, the lowest since the company was formed by a merger in 2002. Nippon Steel tumbled 7.5% to the lowest in 40 years, while the Nikkei 225 stock index declined 2.7%.

In 2019, Japanese crude steel output fell 4.8% to 99.3 million tons, the first time in a decade production has fallen below 100 million tons. The figures contrast with a bumper year in China, which increased its crude steel output by 8.3% to a record 996 million tons. Japan is now the third biggest producer after being overtaken by India in 2018.

Coronavirus Concerns

“We have long spent money on renovation and maintenance for aging facilities in Japan, but the issue is we can’t spending the same way,” the executive said. JFE has said it will scale back its proposed 1 trillion yen ($9.3 billion) capital investment budget by 10% over the three years through March 2021.

The outbreak of the coronavirus is also a concern. While JFE has yet to see a major impact, Terahata says the virus will pose two risks. It could sap demand if customers in the manufacturing and construction industries are unable to secure enough parts or materials from China, halting activity. It also raises the risk that China would ship its record stockpiles of steel to other countries at a discount if it’s unable to consume it at home.

In a reflection of the growing turmoil, Japan’s top steel industry group last week urged mills in China to reduce output as demand falls.

Tesla Sent Incomplete Injury Reports, California Regulator Says

Josh Eidelson and Dana Hull

BloombergMar. 6, 2020, 4:00 a.m.

(Bloomberg) -- For years, Tesla Inc. has refuted concerns about worker safety at its main assembly plant by describing reviews from a California regulator as vindication.

But new documents and statements from the agency contradict those claims. Tesla omitted hundreds of injuries that the company listed in logs at its factory from annual summary data that the company sends to the government, according to a memorandum the state’s workplace-safety agency sent in December. California’s Division of Occupational Safety and Health, or Cal/OSHA, also hit Tesla with a citation that month for failing to properly record other injuries in its logs since 2015.

 The documents, some of which were obtained through a public-records request, undermine statements Tesla executives have made about its plant in Fremont, California. Chief Executive Officer Elon Musk dedicated a portion of an October 2018 earnings call to brief investors about workplace-safety efforts. He said Cal/OSHA had investigated the company and concluded it had not been underreporting injuries. Last month, Tesla said a review by the agency showed its record-keeping was 99% accurate.

But Cal/OSHA wasn’t focused on verifying the overall accuracy of Tesla’s injury record-keeping in the first place in 2018, according to Frank Polizzi, a spokesman. The agency also can’t verify the claim that Laurie Shelby, Tesla’s environmental, health and safety vice president, made in the February blog post. Tesla didn’t respond to requests for comment.

Tesla’s workplace safety faded from the headlines as the company emerged from “production hell,” Musk parlance for the period when he struggled to ramp up the Model 3 sedan. But the Cal/OSHA documents suggest the carmaker overstated the strides it was making in improving injury rates after reports by the Center for Investigative Reporting and others called attention to the issue.

Government officials rely on accurate summary data from companies to determine which workplaces need the closest scrutiny in the future, said Deborah Berkowitz, the former chief of staff for the U.S. Occupational Safety and Health Administration.

“If companies don’t report accurately, it has really an impact on where the agency ends up using its scarce resources,” said Berkowitz, who directs the worker safety and health program at the National Employment Law Project, a pro-labor non-profit. “It’s very important to the agency that the summary data be accurate so that it doesn’t portray a workplace that’s safer than it really is.”

In retrospect, Tesla’s handling of the workplace-safety scrutiny appears similar to how it dealt with a National Highway Traffic Safety Administration investigation into Autopilot in 2017. The agency concluded the controversial driver-assistance system wasn’t defective and didn’t need to be recalled partly based on a finding that Teslas with Autopilot installed were crashing 40% less than those without. But a study released last year said Tesla handed over data to NHTSA that was incomplete or contradictory. The agency has said it stands by the finding.

In its December memorandum, Cal/OSHA said the 2018 summary data Tesla provided to the government was missing roughly three dozen incidents that were listed in its logs, or 4% of the total. For 2016, 44% of the incidents weren’t included.

The $400 citation Cal/OSHA issued that month was for 14 injuries or illnesses the agency said the company failed to properly record in its logs. Four of those occurred in 2019, and the others were between 2015 and 2018. Tesla is appealing the citation, and the agency said it’s reviewing additional evidence the company has provided.

Cal/OSHA said in its December memorandum that disparities sometime arise when companies learn about incidents and add them to their injury logs after they’ve sent their summary to the government. But the agency said that when there are “significant numerical disparities,” a company should consider whether its processes are “adequate to verify accuracy.”

The government uses the annual summary logs to calculate total work-related injury and illness rates, measured as the number of incidents per year per hundred full-time employees. For 2018, the Bureau of Labor Statistics said the overall rate for automobile manufacturing was 6.1. The figures Tesla reported on its summary log for 2018 add up to a rate of 6.2; including the additional 36 incidents that Cal/OSHA says were omitted would raise Tesla’s rate to 6.5.

Tesla’s Fremont plant produces the Model S, X and 3 and is just starting to build Model Y, a new crossover slated to begin customer deliveries this month. The company began making the Model 3 at a new factory near Shanghai in December and aims to begin construction of a plant near Berlin this year.

LINE 5
Enbridge hires companies to design, build Great Lakes tunnel

The Canadian Press March 6, 2020


Enbridge hires companies to design, build Great Lakes tunnelMore


TRAVERSE CITY, Mich. — Enbridge Inc. said Friday it has hired companies to design and build a disputed oil pipeline tunnel beneath the channel linking Lakes Huron and Michigan, despite pending legal challenges.

The Canadian company is forging ahead with plans to begin construction work next year on the tunnel, which would replace twin pipes that have lain across the bottom of the Straits of Mackinac in northern Michigan since 1953.

State Attorney General Dana Nessel is appealing a Michigan Court of Claims ruling last October that upheld an agreement between Enbridge and former Republican Gov. Rick Snyder's administration to drill the tunnel through bedrock beneath the straits. The case is before the state Court of Appeals, which declined to put the lower court ruling on hold while considering the matter.

Nessel, a Democrat, also has filed a separate lawsuit seeking to shut down Enbridge's existing Line 5 pipes.

But the company believes its success in court thus far creates "a path forward," spokesman Ryan Duffy said.

“We feel like it's time now for Enbridge and the state to work together and keep the project moving," he said.

Enbridge, based in Calgary, Alberta, planned Friday to provide a status report to the Mackinac Straits Corridor Authority during a meeting in St. Ignace, Michigan. The panel was established by the law that approved the tunnel agreement.

Great Lakes Tunnel Constructors, a partnership between Jay Dee Contractors Inc. of Livonia, Michigan, and the U.S. affiliate of Japan-based Obayashi Corp., will build the tunnel. Arup, a multinational engineering company based in London, will design it, Enbridge said in a statement.

Line 5 each day carries 23 million gallons (87 million litres ) of crude oil and natural gas liquids used for propane between Superior, Wisconsin, and Sarnia, Ontario. A roughly 4-mile (6. 4-kilometre ) segment divides into two pipes that run beneath the Straits of Mackinac.

Environmental groups want the line decommissioned, contending the underwater pipes are aging and vulnerable to a rupture that could do catastrophic damage to the lakes and their shorelines. Enbridge says they're in good condition and sustained only minor damage from a tugboat anchor strike in 2018.

For Love of Water, an advocacy group, urged the corridor authority to halt further work on the tunnel plan. The Traverse City-based organization argued that Enbridge had failed to seek authorization for the project through the Great Lakes Submerged Lands Act as required under a common-law doctrine that holds navigable waters and soils beneath them in trust for public uses.

Bypassing those laws is "one of the most egregious attacks on citizens' rights and sovereign public trust interest in the Great Lakes in the history of the state of Michigan," said Jim Olsen, the group's president.

Duffy said Enbridge will seek construction permits from the Michigan Department of Environment, Great Lakes and Energy and the U.S. Army Corps of Engineers.

John Flesher, The Associated Press

ALBERTA to spend $100M on operating rooms to shorten wait times

CBC March 4, 2020

The Alberta government will spend $100 million constructing and renovating operating rooms in Edmonton, Calgary, Grande Prairie and elsewhere, Premier Jason Kenney says.

The investment is part of a re-organization of Alberta operating rooms to equip more urban hospitals to handle complex surgeries, Health Minister Tyler Shandro told reporters at Edmonton's Mazankowski Alberta Heart Institute on Wednesday.

"Albertans are going to get quicker access to surgeries they need closer to home," Shandro said.

Wait times for some essential surgeries rose between 2015 and 2019 to become unacceptably long, Kenney said on Wednesday.

"Albertans want, expect and deserve the highest quality health care that their tax dollars can buy," he said.

The money will cover upgrades of operating rooms in Edmonton's Royal Alexandra Hospital and the University of Alberta Hospital, including the addition of a new operating room.

Calgary's Foothills Medical Centre will see upgrades to 12 operating rooms. Surgical suites in Grande Prairie, Rocky Mountain House, Edson, Lethbridge and Medicine Hat will also be renovated.

The changes will allow Alberta Health Services to shuffle more routine procedures to smaller hospitals in Fort Saskatchewan, Edmonton's Grey Nuns Hospital, and the Sturgeon Community Hospital in St. Albert.

Tweaking where surgeries are performed

The changes are part of a new provincial surgical care initiative, which aims to shorten wait lists by spending $500 million in the next three years. The approach is similar to a Saskatchewan program that ran between 2010 and 2014 to whittle down wait times.

Dr. Verna Yiu, CEO of Alberta Health Services, said Alberta will need more doctors and other health professionals working in the province to tackle the growing number of planned surgeries. That news comes at a time when family doctors are in an uproar about the government's changes to how they are paid.

The government had already announced in last week's budget it intends to double the number of surgeries performed in private clinics. By 2023, 30 per cent of Alberta surgeries would be done outside of hospitals, if the government achieves this goal.

In its 2019 election platform, the United Conservative Party pledged to reduce surgery wait times to no more than four months within four years of taking office. Its goal was to reduce the number of people waiting more than three months by 75 per cent by the end of government's first term.

According to the Canadian Institute for Health Information, wait times for non-emergency coronary bypass surgery, hip replacements, knee replacements and cataract repair all rose between 2014 and 2018. For cataract repair, in 2014, 71 per cent of Alberta patients had surgery within 112 days of referral. By 2018, only 49 per cent were in the operating room within that 112-day goal.

Alberta did improve access to urgent hip fracture repair surgeries during that time. In 2018, 94 per cent of patients were under the knife within 48 hours.

Critics question privatization plan

NDP health critic David Shepherd said Wednesday the government will have trouble staffing more operating rooms when its policy decisions could drive health-care workers out of the province.

 no money in the budget for raises to nurses and other public sector workers.Many family doctors are upset about government changes to doctor pay and the finance minister has said there's

"(Shandro) is making enemies of the very doctors and physicians that need to perform these surgeries, not to mention the nurses and the other people that provide support, as they look to reduce the number of nurses across the province," Shepherd said.

Sandra Azocar, executive director of Friends of Medicare, questioned how the government intends to spend the rest of the $500 million it has budgeted to improve surgery wait times. Although she welcomed a $100-million investment in public hospitals, she questioned how much funding will go to for-profit surgical centres.

She said rejigging where surgeries are offered could force some patients and families to travel and incur extra costs out of pocket.

Outsourcing more surgeries to private clinics was a supposedly cost-saving option recommended by both a blue ribbon report on provincial spending and an Ernst and Young review of Alberta Health Services.

SCHADENFREUDE Environmental groups criticize public hearings set to study massive Saguenay LNG project

QUEBEC LIKE BC OPPOSES ALBERTA OIL PIPELINES BUT WANTS LNG

CBC March 4, 2020
A coalition of environmental groups is asking Quebec's environmental review agency to widen the scope of its hearings into a $9.5-billion project to build a natural gas facility in the Saguenay.

As it stands, the agency, known as the BAPE, will begin public hearings later this month in the Saguenay. The hearings will focus only on GNL Quebec's plans to build a liquefaction plant by a port, roughly 230 kilometres northeast of Quebec City.

But in an open letter, 42 environmental and community groups say the BAPE should study the proposed Saguenay facility alongside plans to build a 780-kilometre pipeline, which would feed the facility natural gas from Western Canada.

They also want additional hearings held in Quebec City and Montreal, so local concerns aren't drowned out in the process.

"We fear that if there are public hearings only in Saguenay, people from all across Quebec will go there, and then it will be less equitable for people in Saguenay," said Alice-Anne Simard, director of Nature Quebec, one of the groups behind the letter.

"We know that many people all across Quebec want to take part in this process because this is such an important project for the future of this whole province."

View photos

Priscilla Plamondon Lalancette/Radio-CanadaMore

In addition, the groups are expressing concern about the impartiality of the environmental review process.

It was revealed recently that one of the two BAPE commissioners in charge of the review, Denis Bergeron, worked for 16 years as a consultant in the chemical industry.

The environmental groups are proposing that a third commissioner be appointed.

Their demands, however, failed to convince the BAPE to change course, at least for the time being.

The agency defended the impartiality of its commissioners in a statement released Wednesday. It also said it is rule-bound to hold public hearings in the community where a project is slated to be built.

"The BAPE has a lot of respect for host communities," the statement said.

Long list of environmental concerns

The project — both the port facility and the pipeline — has divided many in the region, and the province as a whole.

Premier François Legault has been vocal in his support of the project, claiming it will help reduce emissions globally by facilitating exports of LNG, which emits fewer emissions than coal.

But environmental groups argue the project will actually increase greenhouse gas emissions. And their concerns don't end there.

"There are, in addition, concerns about local environmental and social impacts of the project along the pipeline route, on endangered species such as the caribou, as well as impacts on the Saguenay River and the Gulf of Saint Lawrence, where ships would transport the gas liquefied by the plant," said Caroline Brouillette, a researcher with the environmental lobby group Équiterre.

View photos Julia Page/CBC

For its part, GNL Quebec maintains its plant will be carbon neutral, and will emit 85 per cent fewer greenhouse gas emissions than similar projects because it will be powered by hydroelectricity.

"The Project aims to support the fight against climate change in Europe, Asia, and other parts of the globe by offering transition energy that is cleaner than those currently in use, such as coal and fuel oil," GNL Quebec said in a statement.

Brouillette said that argument is not good enough.

"Rather than reduce emissions from coal, it is likely to slow down the transition to renewables," Brouilette said, referring to solar and wind energy.

The BAPE's public hearings begin March 16.

Advocacy groups, First Nations to weigh in on Alberta environmental review case

The Canadian Press March 4, 2020

CALGARY — Alberta's top court is allowing a dozen submissions to be heard from advocacy groups and First Nations in the province's constitutional challenge to Ottawa's revamped environmental assessment rules

Alberta's United Conservative government has argued no new pipelines would be built under the Impact Assessment Act, part of the contentious Bill C-69.

It filed its challenge to the Alberta Court of Appeal last fall asking whether Ottawa was within its authority in imposing the new regulations.

Justice Patricia Rowbotham said submissions from six interveners would be allowed on Alberta's side, along with another five in support of the federal government.

She also granted intervener status to the Canadian Taxpayers Federation, which says it does not support either party.

Ottawa challenged the taxpayer group's application, as well as a joint application on the Alberta side from the Independent Contractors and Business Association and Alberta Enterprise Group. Rowbotham decided both should be heard.

The other interveners on Alberta's side are: Woodland Cree First Nation; Canadian Association of Petroleum Producers; Canadian Energy Pipeline Association; Explorers and Producers of Canada; and Indian Resource Council

Interveners for Ottawa are: The Canadian Environmental Law Association, Environmental Defence Canada and Mining Watch Canada jointly; Nature Canada; Ecojustice; Mikisew Cree First Nation and Athabasca Chipewyan First Nation.

The governments of Ontario and Saskatchewan are also intervening.

In a news release, Ecojustice called the Impact Assessment Act a "balanced, hard fought" piece of legislation that was the product of much collaboration.

"We're arguing that the Impact Assessment Act and its regulations are constitutional and that they're a proper exercise of federal jurisdiction over their part of the environment," Ecojustice lawyer Joshua Ginsberg said in an interview.

No hearing date has been set for the case, but Ginsberg anticipates it will be some time in the fall.

This report by The Canadian Press was first published on March 4, 2020.

OPINION | If you're going to evoke the legacy of Peter Lougheed, get it right

 CBC 23 hours ago

This column is an opinion from Sara Hastings-Simon, a research fellow at the School of Public Policy at the University of Calgary.

Last week, the Government of Alberta announced a new policy in the Throne Speech that was not detailed in the budget.

Evoking the legacy of Peter Lougheed, there was a promise that "Alberta is prepared to invest directly and support companies and Indigenous groups, when necessary, to assure the future of responsible resource development."

But, if we truly want to be "like the government of the late premier Lougheed," we can't simply invest public money to grow production of oil from the oilsands as he did.

Context matters, and much has changed in the decades since.

Instead, we should apply the same thinking to the different situation we face today.

In doing so, the history of Lougheed's approach can guide us in making public investments that open up access to more of Alberta's natural resources, from hydrogen to lithium to agri-food and more, just as his investments in the oilsands was critical in unlocking that industry.

The Alberta context

The global context in both periods is complex, with the oil embargoes and restructuring of the international industry in the 1970s, and the energy transition today, but there is a clear difference in the Alberta context.

While today the oil industry in Alberta is dominated by oilsands production, when Lougheed came to power in 1971, the oil industry in the province was one of conventional oil. So much so that there were limits in place to oilsands production to protect the conventional industry.

The Conservation Board, the government entity responsible for approving new oilsands facilities, had even rejected new oilsands projects on the grounds that they threatened the existing conventional industry. 

A shift in government policy to allow for more oilsands production was possible in part because of the decline in conventional reserves that became clear in the early 1970s, as production outpaced the finding of new reserves.

Lougheed acknowledged this threat to the incumbent industry head on. He spoke of the need to make good use of the remaining revenues in light of what he called an eight-to-12 year horizon for conventional industry growth. He even raised royalty rates to increase the government's ability to do so.
Moreover, he did not heed the call of many in the conventional industry at the time who wanted a primary focus on enhanced oil recovery to increase production from this existing industry.

Growing something new

Instead, his investment in the future of resource development was primarily directed toward growing something new in the oilsands, through direct investment in both technology development and construction of the industry.

In doing so, he acknowledged the critical role of the incumbent industry in the economy, both historically and in funding future economic growth, while simultaneously acknowledging the larger opportunity beyond.

While the factors underpinning the threat are different, the oilsands industry today more closely resembles that of the conventional industry in Lougheed's time. Therefore, following the lessons from Lougheed's actions requires more than simply repeating the same investments he made.

Lougheed's public investment in the oilsands was far from support for an existing industry. Rather, it was a strategy that used the public wealth generated by the existing industry to unlock new and different resources in the province.

In doing so, he walked a difficult line in industrial policy, working with existing strengths and competencies within the province but applying them to new challenges that were adjacent to the core activities of the incumbents of the day.

Alberta's natural resource wealth provides an opportunity to make similar investments in today's context. For example, unlocking production of the hydrogen that is abundant in the oilsands resource, or the critical metals and minerals found within the province like the lithium required for batteries, are both new ways to use our natural resources to power the world.

Building on the province's core competencies, including engineering and technical skills, we can responsibly develop these resources. The same is true for the natural resources that support our agricultural system and the potential for significant growth in the agri-food industry.

PETER LOUGHEED WAS A PROGRESSIVE (CONSERVATIVE) AKA A LIBERAL
1984 NEP AND PETROCAN CREATED JOINTLY BY ALBERTA AND OTTAWA

Well respected across the political spectrum in Alberta, Lougheed's government provides important lessons we can use today about the need for direct government investment in developing our resources, but we must get the lessons right.

Lougheed did not shy away from the difficult truth of the future that Alberta faced at the time. He spoke of his despair of short-term thinking, and the need to ensure long-term prosperity for Alberta.

And he understood that investing the wealth that came from the public's ownership in the existing resource industry was critical in realizing this prosperity in new ways.

I believe we would indeed be wise to follow his legacy today in our investments in Alberta's resources.

---30---

SEE 
https://plawiuk.blogspot.com/search?q=LOUGHEED
https://plawiuk.blogspot.com/search?q=PETROCAN
https://plawiuk.blogspot.com/search?q=NEP
https://plawiuk.blogspot.com/search?q=OILSANDS

Supreme Court of Canada will not hear B.C. groups' challenges against Trans Mountain pipeline expansion

CBC March 5, 2020

The Supreme Court of Canada has declined to hear five B.C.-based challenges against the approval of the Trans Mountain pipeline expansion project.

Groups determined to overturn the project — two First Nations, environmental organizations and teenage activists — had argued a previous judicial review of the pipeline's re-approval by the federal government was unfairly denied by a single judge from the Federal Court of Appeal in September.

The Squamish and Tsleil-Waututh First Nations, the Raincoast Conservation Foundation, B.C. Nature and several youth climate activists applied to the country's highest court for leave to appeal the dismissal last fall.

The Supreme Court declined to grant the leave in a decision posted Thursday. As is custom, the court did not provide reasons for its decision.

For one of the groups, the ruling marks the end of its six-year legal fight against the pipeline.

5 groups were originally among 12

Twelve groups originally filed challenges against the project with the Federal Court of Appeal last year.

On Sept. 4, the court only agreed to take up six of those appeals. It chose just to hear challenges based on the issue of whether the federal government consulted Indigenous peoples adequately before approving the project for a second time in June.

The federal court declined to hear the second part of the overall dispute: arguments centred on environmental concerns and claims of government bias. Several of the applicants argued the National Energy Board didn't do enough to address environmental and marine concerns when it green-lit the project, while the two First Nations said the federal cabinet couldn't objectively approve or deny the project because they own it.

The four teenaged activists had said Ottawa did not fully consider the pipeline's potential impact on climate change before approving the project.

View photos

Maggie MacPherson/CBCMore

The Squamish Nation and the Tsleil-Wautuh Nation were among the groups who succeeded at the federal court in September, but pressed ahead to the Supreme Court of Canada because they thought concerns around bias and the environment should be heard.

"Obviously, this pipeline has become a political issue as much as a legal or economic issue," said lawyer Eugene Kung, who was not named in the application to the Supreme Court but has previously worked to stop the expansion project.

"What the applicants are looking for is just that the laws of Canada be applied when this project is approved. They've said that it hasn't, and that has very real consequences."

View photos Jonathan Hayward/The Canadian Press


The Raincoast Conservation Foundation, one of the groups which lost its bid Thursday, has long been fighting the pipeline on the basis that the project would further threaten B.C.'s southern resident killer whales.

The foundation cannot pursue its legal challenge further, as there's no court higher than the Supreme Court of Canada.

"This scenario should serve as a wake-up call," Margot Venton said in a statement Thursday. "If the government is allowed to shirk its responsibilities [to at-risk species], then there is something fundamentally wrong with how Canadian species protection works in practice."

Rebecca Wold Gage, 13, said she and the other activists were "devastated" they will not have their day in court.

"I feel like I have failed the generations of the future by not being able to stop this pipeline," Wolf Gage said in a statement.

The sixth group whose challenges were dismissed in federal court in September did not join the other five in pursuing leave to appeal with the Supreme Court.

The proposed Trans Mountain pipeline expansion would carry nearly a million barrels of refined oil products and crude oils from Alberta to the B.C. coast every day. The Crown corporation that now owns the line has previously said the expansion will be finished by mid-2022.

A statement from Alberta Energy Minister Sonya Savage said Thursday's decision "clears the way" for the project to be finished, though she said recent blockades at pipeline and rail sites elsewhere in Canada "continue to be a concern" for the national economy.