Comfort and Joy
I have to tie up two loose ends from my coverage of Tuesday morning’s council meeting.
After listening to—and approving—Destination Cape Breton’s funding request (which I covered in detail because opaque organizations spending oodles of public money are catnip to me— or would be, if I were a cat, I really need to work on this analogy) council ratified the contract negotiated with CBRM’s inside workers, CUPE Local 933, which it had discussed in camera earlier that morning.
HR manager Deanna Evely ran through the chronology of the negotiation process and explained that a tentative agreement, including a four-year wage package with a 9.5% wage increase “along with other improvements,” had been approved by the union membership and now required council approval to take effect.
Council approved it, after which Deputy Mayor James Edwards, who was chairing the meeting in the absence of Mayor Amanda McDougall, left the chair to present a motion calling for a staff issue paper on the possibility of designating the municipality’s volunteer and professional fire departments as emergency comfort centers (Edwards used the American spelling of “center,” in case you’re thinking I’ve been messing with his orthography).
Edwards’ reasons for turning to the fire departments were explained in his motion:
Now, any move by council to prepare for the increasingly severe storms in our future is welcome (if overdue) but what struck me about Edwards’ proposal is that he didn’t seem to have discussed it with anyone—not his fellow councilors, not the fire departments, not the CBRM’s head of emergency management—before putting it forward.
I say this because the discussion of the motion that followed consisted almost entirely of councilors saying they agreed with the notion of designating comfort centers but were not sure about the volunteer fire department approach, given the departments are facing a shortage of volunteers, some of their facilities are not suitable as centers and fire departments are active during weather (and other) emergencies.
Bruce MacDonald presents to CBRM Council, 11 October 2022. (Source: Livestream)
Bruce MacDonald, the municipality’s wonderfully titled manager of emergency management was called on to weigh in on the issue and it emerged that the provincial government has launched a program to fund generators for facilities wishing to be designated as comfort centers. The program will pay up to $50,000 for a generator, provided the applicants have letters of support from the CBRM and the facilities pass the necessary inspections.
MacDonald said the program was initially opened to facilities already designated as comfort centers (of which CBRM has 11, some of which could not function post-Fiona because of fallen trees and other disruptions) but was later expanded to include other groups.
MacDonald said 20 applications have been submitted by groups in CBRM which, you have to think, would have been good information for a councilor planning a motion on comfort centers to know. Why Edwards didn’t bother to inform himself of such basic facts is as big a mystery as why he’d bring forward a motion asking for a staff issue paper on selling Centre 200 without considering that such a motion might cause the provincial and federal governments to refuse to fund upgrades to the facility (this actually happened).
In a similar vein, District 12 Councilor Lorne Green used his opportunity to speak to Edwards’ motion to bemoan the CBRM’s rejection of the Whitney Pier Youth Club’s application to become a comfort center, waxing quite eloquent about the suitability of the club’s new facility for such a purpose. But it turned out the Youth Club’s application HAD been supported by the CBRM. MacDonald explained the group had applied during the early phase of the program, which was open only to designated comfort centers, but had reapplied (with a letter of support from CBRM) after the program was expanded.
MacDonald also mentioned the application of the Whitney Pier Legion which had hit a hurdle because it would require a $100,000 generator. I’m not sure how this has been resolved, I guess I’ll have to wait for the staff issue paper which council ultimately voted in favor of, entirely on the strength of that last line about identifying other community venues in areas where the local volunteer fire department is not suitable.
Why would you address council (let alone present a motion to council) without first doing your homework? Homework that, in both Green’s and Edwards’ cases, would have consisted in talking to the municipality’s emergency management manager for five minutes?
I’d wager I’ve spent more time fact-checking this item than Edwards spent consulting on his motion or Green spent following up with the Youth Club and that, I do not have to do any further research to tell you, is ridiculous.
Crypto mania
Speaking of doing your homework, I read with interest the revelation that the Ontario Teachers’ Pension Plan had invested US$90 million in Sam Bankman-Fried’s FTX, the crypto exchange that imploded earlier this month, wiping out an estimated $32 billion in assets.
The pension plan felt obliged to make a public statement about its loss on this investment, which it will be writing down to zero at its year-end, saying:
In October 2021, Ontario Teachers’ invested US$75 million in FTX International and its US entity (FTX.US). In January 2022, we made a follow-on investment of US$20 million in FTX.US. These investments were made through our Teachers’ Venture Growth (TVG) platform, alongside a number of global investors, to gain small-scale exposure to an emerging area in the financial technology sector. Our investment represented less than 0.05% of our total net assets and equated to ownership of 0.4% and 0.5% of FTX International and FTX.US, respectively.
Nothing to see here, folks, CDN$120 million down the old drain, but there’s lots more where that came from…
The Ontario Teachers’ insisted it had performed intensive due diligence on the FTX investments, but sadly:
…no due diligence process can uncover all risks especially in the context of an emerging technology business….
Which makes for interesting reading in light of what John Ray III, the lawyer appointed to administer FTX in chapter 11 bankruptcy, had to say about the company in a document filed with the Delaware Bankruptcy Court on November 17:
I have over 40 years of legal and restructuring experience. I have been the Chief Restructuring Officer or Chief Executive Officer in several of the largest corporate failures in history. I have supervised situations involving allegations of criminal activity and malfeasance (Enron). I have supervised situations involving novel financial structures (Enron and Residential Capital) and cross–border asset recovery and maximization (Nortel and Overseas Shipholding). Nearly every situation in which I have been involved has been characterized by defects of some sort in internal controls, regulatory compliance, human resources and systems integrity.
Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.
How “diligent” could the Ontario Teachers’ have been in its examination of FTX not to have picked up on any of this?
Pride and Prejudice
I was going to say “And now for something totally different…” but Jane Austen’s Pride and Prejudice, brought to the Highland Arts Theatre stage earlier this month by local playwright Lindsay Thompson, is actually very much about finance, which it makes clear from its very opening line:
It is a truth universally acknowledged, that a single man in possession of a good fortune, must be in want of a wife.
(The fortunes in Austen novels are invariable tied to property, often measured in terms of rents. A suitor trying to explain to the main character, Lizzie Bennet, that his wealth was tied up in a “virtual” currency would likely get short shrift.)
Lizzie and her four sisters, none of whom will inherit the family home upon the death of their father, need husbands with fortunes because the alternative for early 17th century gentlewomen was to work as a governess and die in poverty.
Consider it a sort of early Christmas present.
P.S.
Michel Rempel Garner’s bill to protect crypto “innovators” (discussed in this week’s edition of the Spectator) died a death on second reading in the House of Commons on Wednesday. According to CTV, the bill was defeated by “a vote of 199 to 119…meaning it won’t move ahead for further study or debate. Conservative Leader Pierre Poilievre and his caucus voted in favour of seeing the bill advance, as did a few Liberal and Independent MPs.”
