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Bob Mackin

A critic of the British Columbia coastal salmon farming industry says the latest efforts by two major players to fight sea lice are all for show.

Biologist Alexandra Morton says Cermaq’s $12 million hydrolicer barge and MOWI’s $30 million delousing ship Aqua Tromoy failed to make a difference in Scandinavia and they won’t make a difference on Canada’s West Coast.

Cermaq’s hydrolicer barge (Cermaq Canada)

“They’re saying it’s a one billion [dollar] with a b problem, and they don’t know how to stop it, they don’t know how to control the lice,” Morton said in an interview. “This is the equipment in Norway that didn’t work, they’re sending it here to make it look like they’re diligent and spending a lot of money.”

Morton quoted a June story in trade publication IntraFish that said sea lice costs the industry close to $1 billion a year. The IntraFish story quoted MOWI Southern Norway production manager Bernhard Ostebovok’s concession: “We must admit that the louse is there and will always be there. As long as we farm in open cages in the sea, we must live with lice.”

IntraFish’s latest detailed sea lice report said B.C. produces two-thirds of Canada’s farmed salmon, mostly Atlantic salmon, and mentioned the spring 2018 major sea lice outbreak in Clayoquot Sound that affected both farmed and wild juvenile salmon.

Alexandra Morton (Rolf Hicker/Facebook)

Cermaq spokeswoman Amy Jonsson said the company is “excited” about the custom built barge for imminent use at farm sites around Tofino. The purpose-built hydrolicer barge uses no medication or pesticide. For a farm of up to a million fish, it takes two to three days to delouse them all.

Jonsson said Cermaq is seeing very low numbers of sea lice at farms in Clayoquot Sound. Fish were treated as smolts with Lufenuron, the active ingredient of flea medication for dogs and cats. Lufenuron is only available through a case-by-case, emergency drug release permit from the Veterinarian Drug Directorate of Health Canada. It protects salmon for six to 10 months and is administered in freshwater hatcheries.

MOWI did not respond.

The industry is facing political pressure, but Morton is not sure how effective it will be after meeting with Fisheries and Oceans Minister Jonathan Wilkinson in early June.

“He wants to do these things, but he has no idea what he’s up against with his senior bureaucracy, particularly in the aquaculture management division,” Morton said. “They work with the aquaculture industry, the aquaculture management division of DFO, their master really is the aquaculture industry.”

Smolt with lice (Salmon Confidential)

Wilkinson appeared July 10 by the site of the 2014 Seymour River rockslide, where a salmon run is being restored. He told reporters that he wanted to “move this conversation about aquaculture beyond this almost futile debate that’s been going on the last number of decades.”

“We will be more fully implementing the precautionary principle, more area-based management, moving farms away from areas of wild salmon migration,” he said. “We’ve required now testing a range of viruses that were not required to be tested before. We have said, in part as a result of the conversation I had with Alexandra, that we will be more forcefully enforcing the regulations with respect to sea lice going forward.”

Wilkinson said that the way conditions of licence had been constructed for some farmers, DFO had difficulty enforcing regulations.

Fisheries and Oceans Minister Jonathan Wilkinson on July 10 (Mackin)

“We will be changing that to make sure we can enforce that on a go forward basis and make sure that they are in compliance with all the regulations.”

Morton and others, however, have long advocated for shutting down the open net farm system and moving to land-based fish farms.

In Washington State, coastal fish farms will be banned by 2022 from raising non-native fish. The decision came after a Cooke Aquaculture net pen containing 305,000 Atlantic salmon collapsed in summer 2017 near Cypress Island. An estimated 243,000 to 263,000 fish escaped, of which 57,000 were recovered. Between 186,000 and 206,000 remained unaccounted for as of the January 2018 report.

Cooke Aquaculture originally blamed tides related to the solar eclipse, but a state report said the Aug. 21 event did not alter the normal pattern of seasonal tidal strength.

The report blamed insufficient cleaning that led to excessive bio fuelling by mussels and other marine organisms and caused breakdowns in net cleaning machines. Ultimately, on Aug. 19, “some combination of anchor dragging, failure of mooring attachment points, and failure of structural members of the net pen framing resulted in the collapse of the net pen.”

Updated permits require increased underwater video monitoring, regular inspections of net pen structures, better maintenance and cleaning, and site-specific escape response plans. 

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Bob Mackin A critic of the British Columbia

The gas and diesel wholesalers and retailers say they’re not in cahoots and they blame high fuel prices on other factors.

Economists say there is not enough competition and they doubt the industry’s honesty.

It is up to the British Columbia Utilities Commission to sort this out. But it only has until Aug. 30 and it can’t examine the impact of taxes at the pump.

Last week, it was the hearing stage of the BCUC’s fast-track inquiry, which was called by Premier John Horgan in May.

On this edition of theBreaker.news Podcast, listen to highlights of testimony by Krista Friesen, vice-president of downstream business and operations for Calgary-based Husky Energy, and economists Robyn Allan and Marc Eliesen. The former B.C. Crown corporation heads from the 1990s are among Canada’s foremost analysts and critics of the oil and gas industry.

Friesen explained how Husky sets prices and blamed unique B.C. cost drivers like real estate and minimum wage.

Allan said the market is failing because of a lack of competition. Fellow intervener Eliesen said suppliers are not transparent or accountable. They say the BCUC should be mandated to regulate gas and diesel prices.

“High prices have negative implications for B.C. consumers and businesses because they disproportionately increase spending on refined products, reducing spending on other products and services, they disproportionately harm the B.C. economy,” Eliesen said.

Plus, Pacific Northwest and Pacific Rim headlines and commentaries. And, when he hosted the president of the European Union, did Prime Minister Justin Trudeau really say the NBA champion Toronto Raptors are from Montreal? Listen for yourself.

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The gas and diesel wholesalers and retailers

Bob Mackin

Premier John Horgan tends to fly commercial, but recently hopped aboard a private charter jet to Kelowna with an entourage of eight.

Horgan’s agenda shows he was on the ground for six-and-a-half hours on May 24 with aides Evan Brown, Don Bain and Jen Holmwood, RCMP bodyguard Greg Haasdyk, Emergency Management Deputy Minister Lori Hall and Executive Director Kathryn Forge, event coordinator Elena Banfield and contracted videographer Riel McGuire.

Horgan at a Kelowna funding announcement on May 24 (BC Gov)

Office of the Premier spokesman George Smith said the cost of the Alkan Air charter was $6,737.07.

“The reason for chartering the flight, given the number of people flying, was that the price point was comparable to commercial tickets and the charter allowed the Premier to fly in and out within the time restrictions of his schedule as well as avoiding the need for him or his staff to overnight in Kelowna,” Smith said.

Horgan and his entourage flew on the Yukon-based airline from the Signature Flight Support private terminal on Vancouver International Airport’s south side and arrived in time for a wildfire preparedness roundtable. Horgan had to respond to the B.C. Court of Appeal’s decision against B.C.’s bid to stop the Trans Mountain Pipeline before a mid-morning photo op at the Kelowna Fire Hall, where he announced $31 million to a Community Emergency Preparedness Fund for local governments and First Nations.

Premier John Horgan on an Air Canada flight (Twitter)

Horgan also met with Aaron Sam Sumexheltza, the Lower Nicola Indian Band chief that the NDP named to the boards of B.C. Housing, Climate Solution and Clean Environment Council and Indigenous Business and Investment Council.

The itinerary wrapped-up with shooting of a wildfire prevention video and tour of the Joe Rich fuel mitigation site.

The Alkan Air charter departed 2:45 p.m. for stops in Vancouver and Victoria.

The last entry on Horgan’s agenda was the Victoria Shamrocks’ Western Lacrosse Association home opener at the Q Centre, an 11-6 loss to the Nanaimo Timbermen.

“He’s got to be cautious,” said IntegrityBC’s Dermod Travis. “You don’t want to adopt the practices of the previous premier.”

A February 2016 analysis in The Tyee showed that, in less than five years as premier, Christy Clark racked-up more than $500,000 in charter flight costs, including $65,000 on round-trip flights to Kelowna where she became the MLA in summer 2013. Clark continued to live in Vancouver and never fulfilled a by-election promise to find a residence in the Kelowna.

In Question Period on March 1, 2016, Horgan slammed Clark for spending on charter jets so she could bring a camera crew to photo ops. The NDP’s advertising arsenal during the 2017 provincial election campaign included a 58-second animated parody of Air Christy

Unlike Clark, Horgan is known for regularly flying commercial. Last summer, Vancouver Sun reporter Larry Pynn wrote about a chance encounter with Horgan at a Toronto departure lounge before they found out they were seatmates on the Air Canada flight to Vancouver. More recently, North Vancouver MLA Bowinn Ma snapped a photo of Horgan on a Penticton-bound flight on June 23. Horgan was en route to Osoyoos for a photo op and party fundraiser.

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Bob Mackin Premier John Horgan tends to

Bob Mackin

The Trudeau Liberal-appointed chair of a federally-owned coal port attended a Stanford University seminar after the government decided to sell the Crown corporation.

theBreaker.news learned that Ridley Terminals Inc. (RTI) chair Michael McPhie traveled to the prestigious Palo Alto, Calif. university for a course earlier this month that a source said cost RTI $15,000.

Ridley Terminals chair Michael McPhie at Stanford (Facebook)

Ridley Terminals board directors are expected to commit to ongoing professional development as recommended by the board,” read a prepared statement sent to theBreaker.news by corporate affairs manager Michelle Bryant-Gravelle. “The board approves expenditures for the professional development of its directors so they can keep up with evolving governance and management best practices. The professional development course in which the chair is enrolled was initiated more than six months ago and was board-approved.”

A photo on McPhie’s Facebook page shows him on the Stanford campus. “Gorgeous campus and looking forward to a week of learning with a bunch of people way smarter than me,” he wrote on July 7. In another photo, McPhie posed among the university’s collection of work by Auguste Rodin, creator of The Thinker. “@Stanford for a few days. A good place to think!”

theBreaker.news contacted McPhie, who repeated the prepared statement.

When he was asked to confirm the $15,000 cost, McPhie said. “I’m sorry, I’m not responding to those questions about costs. We have provided a full statement. That’s all I have to say at this moment.”

What did McPhie learn at Stanford?

“I’m not answering anything further,” McPhie said. “What part of that answer do you not understand? I’m not beholden to you to give you anything.”

RTI, a federal Crown corporation since 1991, is under Transport Canada. McPhie began a five-year term as chair in September 2017 as the replacement for Byng Giraud, an appointee of the previous Conservative government. He is paid a per diem in the $220 to $260 range and annual fees of $5,700 to $6,700. McPhie chaired IDM Mining from 2014 to April of this year. The former CEO of the Mining Association of B.C. is the founder of Falkirk Environmental. From 2005 to 2011, he donated $6,834 to the federal Liberals, according to Elections Canada.

Ridley Terminals near Prince Rupert (RTI)

Last November, the Trudeau Liberal government announced it was looking for a buyer. On July 12, it announced Riverstone Holdings and AMCI Group would pay $350 million for 90% of RTI shares, with the remainder going to the Lax Kwalaams and Metlakatla first nations.

“He has a responsibility, given his outside sources of income, to say why taxpayers are being left with 100% of the cost,” said IntegrityBC’s Dermod Travis. “What benefit to Ridley Terminals now, in light of the situation, given he would’ve been aware of what would transpire before he left.”

McPhie submitted no travel expenses for the first half of 2019. Last year, McPhie charged $8,716.95 for two trips to meetings with unspecified “stakeholders” in Ottawa and $4,408.43 on two trips to Prince Rupert.

The Prince Rupert bulk handling metallurgical and thermal coal and petroleum coke export terminal netted $47 million on $117.7 million revenue last year.

RTI spent a total $267,000 on travel, hospitality and conferences in 2018, a $105,000 boost from the previous year. Training-related travel increased by $50,000 from just $5,000 “with increased training provided to board members and employees,” said the RTI expense report.

A February 2018 special examination report by the Auditor General found “significant deficiencies in [RTI] governance, strategic planning, performance measurement and reporting, risk management, and human resource systems and practices. The board did not meet its key responsibilities and failed to oversee the management of the Corporation.”

The special examination tested a period from mid-September 2016 to the end of June 2017.

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Bob Mackin The Trudeau Liberal-appointed chair of a

Bob Mackin

The company that polls and datamines for NDP campaigns was paid almost $1 million by taxpayers during the year ended March 31, 2019.

Public Accounts show Stratcom (aka Strategic Communications) billed $825,390 to central government and another $156,844 to the Legislative Assembly for various projects, including internal polls, focus groups and secret reports to cabinet. Stratcom works for the federal NDP and was key to Gregor Robertson and Vision Vancouver’s three election wins.

The NDP government released the province’s sunshine list on July 18, the second anniversary of Premier John Horgan and cabinet’s swearing-in.

theBreaker.news asked Finance Minister Carole James, whose ministry includes Government Communications and Public Engagement, about the payments to the Bob Penner-led company that is inextricably linked to the governing party.

Stratcom boss Bob Penner and a Vision campaign sign (Penner)

“Each of the contracts that’s put out goes through a public process, there are vendors who are approved and then become the vendors that continue to be used,” James said. “There is a range of them, Strategic Communications is one of them.”

NOW Communications Group, the party’s ad agency, billed the government $161,193 and the legislature $129,002.

The BC Liberals spent $82,670 on former Globe and Mail photographer John Lehmann. Lehmann became the party’s photographer in late 2016. His pay last year was $20,000 more than what the BC Liberal government paid Kyle Surovy to be Christy Clark’s photographer and videographer.

Another company that had ties to the Clark government, Kimbo Design, billed the Legislature $32,970. Meanwhile, the digital ad agency that works for leader Andrew Wilkinson’s constituency office, Motiontide Media, billed the Legislature $33,184.

The retired-in-disgrace ex-Clerk, Craig James (no relation to the finance minister), remained the top-paid person in the B.C. Legislature. He took-in $328,409, which was less than the $347,090 from the previous year.

James’s last day was Nov. 20, 2018 when he was suspended and escorted off the property. On May 15, he retired the night before he was going to be fired for misconduct in the Legislature.

Sergeant-at-Arms Gary Lenz is also under an RCMP investigation and a Police Act investigation. He was paid $226,467 last year, but remains paid under suspension.

James’s interim replacement, Kate Ryan-Lloyd, received $243,432. Executive financial officer Hilary Woodward was paid $202,789. By comparison, the finance minister’s pay was $158,269. 

Who were B.C.’s highest-paid public servants through March 31, 2019?

Finance Minister Carole James, Feb. 19, 2019 (Hansard)

Powerex CEO Thomas Bechard ($938,499); UBC president Santa Ono ($601,772); BC Hydro president Chris O’Riley ($554,900); PavCo CEO Ken Cretney ($472,951); ICBC CEO Nicholas Jimenez ($468,783); UBC provost/vice-president Andrew Szeri ($444,415); SFU president Andrew Petter ($439,910); University of Victoria president James Cassels ($432,979) and BC Hydro executive vice-president Mark Poweska ($422,746).

theBreaker.news asked James about the optics of three BC Hydro executives and one from ICBC being among the top 10 and earning pay raises while British Columbians pay higher power and car insurance rates.

“Each of those organizations are accountable for the salaries,” James said. “There have been some changes, which has created some salary changes in different areas, ICBC being one of those for example, changes when government changed.”

Employment at taxpayer-supported Crown corporations and agencies increased.

There were 5,076 in 2018, which became 5,258 in 2019.

B.C. Transit was the biggest employer with 960 full-time equivalent positions, up from 910. BC Housing (802) and BC Assessment (710) were next.

B.C. Pavilion Corporation, the operator of B.C. Place Stadium and the Vancouver Convention Centre, registered a modest $469,000 profit on $132.5 million revenue.

A closer look shows the $5.4 million B.C. Place loss was more than offset by the $6.01 million profit for the convention centre.

B.C. Lottery Corporation transferred $1.39 billion to government coffers after bringing $2.59 billion revenue from lottery, bingo, casino and online gambling losers.

ICBC reported a loss of nearly $868 million. The Crown auto insurer earned $5.95 billion revenue, but lost $1.027 billion on insurance operations. BC Hydro ended up $428 million in deficit after more than $6.57 billion revenue.

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Bob Mackin The company that polls and datamines

Bob Mackin

A stop work order is expected to be lifted in a matter of days, allowing the North Shore Wastewater Treatment Plant project to resume after more than three months at standstill.

On April 10, District of North Vancouver halted site preparation for Metro Vancouver’s $778 million secondary sewage treatment project on the former BC Rail train station site. Only 4% of work has been completed with a deadline of the end of 2020.

Work had unofficially stopped in March, as a dispute brewed between design-build-operate contractor Acciona and engineering subcontractor Tetra Tech. Tetra Tech sued for $20 million four days before the District of North Vancouver moved.

North Vancouver Mayor Mike LIttle

“We are anticipating removing the stop work order this week,” North Vancouver District Mayor Mike Little told theBreaker.news. “They do meet the conditions of removing the stop work order, they have certified professionals in place now and have given the District assurances on the other things we asked for.”

Little, who is also the vice chair of Metro Vancouver’s liquid waste committee, said Acciona has made changes and he anticipates “they’ll have more of their team based here.”

He said designers and head architects are based in Spain and had been commuting for monthly project updates. 

“The turnaround for changes just wasn’t fast enough.”

Now, Little said, Acciona has reached a critical mass of projects in B.C., including work on Site C as part of Peace River Hydro Partners, bids on the Broadway Subway and Pattullo Bridge replacement and a new highway maintenance contract in Okanagan-Shuswap and South Okanagan.

As for the lawsuit, Little said “the view they were portraying was Acciona was cutting corners.”

Acciona did not respond for comment on July 16.

On July 10, the three-month milestone, North Vancouver Liberal MP Jonathan Wilkinson, who is also the fisheries and oceans minister, said the project scope could be upgraded from a secondary to tertiary treatment at an unspecified, higher cost.

Fisheries and Oceans Minister Jonathan Wilkinson on July 10 (Mackin)

As theBreaker.news exclusively reported on April 25, Tetra Tech claimed in the B.C. Supreme Court lawsuit that it was wrongfully fired Feb. 22 after Acciona breached its contract by failing to provide, “in a timely way, fully and accurately all information as might reasonably be required for Tetra Tech’s performance of all the services, including decisions and directions passed down to Acciona from [Metro Vancouver] and Acciona Wastewater.”

Tetra Tech also claimed Acciona failed to provide viable integrated schedules, including procurement and construction schedules, and that Acciona provided late and incomplete responses to requests for information and failed. 

The 2016 federal Liberal budget included $212 million to upgrade the Lions Gate sewage plant. In March 2017, the feds announced up to $212.3 million, “representing one-third of the estimated $636.9 million in total eligible project cost.” B.C. is contributing $193 million, leaving the rest to Metro Vancouver. 

In April 2017, Acciona was awarded a $542 Million fixed price contract. North Shore ratepayers are expected to see the annual household cost double from $300 in 2019 to $609 in 2023. “Capital cost impacts are still under review.”

Little said he did not know the revised schedule and budget. “I’m sure there will be more information available, but it’s not yet.”

Acciona has appealed to the Office of the Information and Privacy Commissioner in a bid to block a freedom of information request by theBreaker.news for the project’s detailed construction status, cost and schedule report.

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Bob Mackin A stop work order is expected

Bob Mackin

A decade-and-a-half after reaching a truce, the Competition Bureau is investigating CN for alleged breach of the agreement that allowed the controversial privatization of BC Rail.

“The Commissioner has reason to believe that CN is in violation of certain commitments under the [consent] agreement,” said Jayme Albert of the Competition Bureau. “To that end, on July 4, 2019, the Bureau filed applications with the Federal Court of Canada for orders under section 11 of the Competition Act requiring Canadian Pacific Railway Limited, West Fraser Timber Co. Ltd., Canfor Corporation, Tolko Industries Ltd., Conifex Timber Inc. and Carrier Lumber Ltd. to provide the Bureau with information related to its inquiry.”

BC Rail train in 1995 (Trainspotted.com)

Albert said the Commissioner believes the six lumber companies and the railway have or are likely to have information relevant to the Bureau inquiry. The reopening of the deal was first reported by Blacklock’s Reporter.

On July 2, 2004 the Commissioner of Competition and BC Rail and CN committed to “specific, enforceable and transparent standards and covenants to prevent anti-competitive behaviour.”

The consent agreement included sections on benchmark transit times, car allocation, and Peace River grain commitments.

“Commissioner has expressed concerns that without the specific commitments contained herein there is a reasonable likelihood that CN could use the market power it may acquire as a result of the transaction to substantially prevent and/or lessen competition in the affected product or geographic markets,” said the consent agreement.

CN spokesman Jonathan Abecassis said the company is cooperating.

“CN has been cooperating with the Competition Bureau in its investigation of a program CN implemented throughout its Canadian network to reduce car cycle time, improve rail car utilization and increase car availability to the greatest number of lumber producers,” Abecassis said.

BC Rail still exists because it officially retains ownership of the tracks on which CN runs. Deputy Minister of Transportation and Infrastructure Grant Main is the chair. He did not respond to questions from theBreaker.news. A prepared statement delivered by Danielle Pope of the ministry said “It’s our understanding from the court records that the competition bureau is investigating a service complaint from a private company against CN. It would be inappropriate for either the Ministry or BC Railway to comment on an ongoing competition bureau investigation.”

The Gordon Campbell-led BC Liberals won the 2001 election on a platform that included a promise not to privatize BC Rail. After gaining power, Campbell switched gears and put the railway on the block.

Ex-CN chair David McLean (McLean Group)

The sale was fraught with controversy. Bidders CP and Burlington Northern Santa Fe both dropped out, both suggesting CN had the inside track. OmniTrax was the only other bidder, which had previously partnered with BNSF. CN, chaired by BC Liberal bagman David McLean, eventually paid $1 billion for BC Rail in November 2003. In late December of that year, however, police raided offices at the Legislature and took away numerous banker’s boxes of evidence.

The Adrian Dix-led NDP lost the 2013 election by surprise after a platform that included a promised public inquiry into the BC Rail sale.

In June, theBreaker exclusively reported that the federal government dropped a bizarre tax case against Dave Basi and Bob Virk, whose defence lawyers were paid $6.2 million after they agreed to a plea bargain that resulted in two years house arrest and probation for breach of trust. Basi and Virk had maintained their innocence until the deal, which halted their B.C. Supreme Court trial before former Finance Minister Gary Collins was to testify.

The federal government deemed the payments to lawyers a taxable benefit and reassessed their incomes. Their lawyer, David Mulroney, told the Federal Court in a July 2016 filing that there was no evidence the province had ever intended to confer a benefit and both Basi and Virk were no longer employees.

The province was funding a very expensive trial and wanted out from under that cost, which was out of all proportion to any potential recovery and needed an acceptable outcome. Employment had long since ended and was not then relevant to the decision.”

The federal government settled with Basi and Virk two weeks before a scheduled June 24 Victoria hearing. The assessments were reversed in exchange for a waiver of costs.

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Bob Mackin A decade-and-a-half after reaching a truce,

The Union of British Columbia Municipalities is proceeding with the People’s Republic of China’s $6,000 sponsorship deal and cocktail party for politicians and bureaucrats paid for by China at its September convention.

Port Coquitlam Mayor Brad West vows to continue to resist the relationship, one that Dermod Travis of IntegrityBC says should never have happened.

Dermod Travis (Voice of B.C./Shaw)

“There’s only one foreign government that is a sponsor and it’s the government of China and you don’t see foreign governments acting in a similar capacity with similar organizations across the country,” Travis said in an interview on this edition of theBreaker.news Podcast. “It’s a one-off, backroom, special deal for the government of China. A country with one of the most-deplorable human rights records in the world being allowed to wine and dine our elected officials across British Columbia.”

Richmond Mayor Malcolm Brodie disagrees with West and plans to attend, if his schedule permits. Brodie was among several politicians who spent part of their Canada Day at a Mainland Chinese cultural festival organized by the pro-Beijing Canadian Alliance of Chinese Associations. The event featured Consul-Gen. Tong Xiaoling. It coincided with the anniversary of the 1921 founding of the Communist Party of China.

In an interview with host Bob Mackin, Travis challenges Brodie and other China-friendly politicians to issue proclamations in support of the Uighur and Tibetan communities, and even Falun Gong practitioners.

“If you’re not prepared to put your money where your mouth is when it comes to those three key constituencies in China, then you’re saying even more with your presence at groups and associations that are aligned with the government of China,” Travis said.

Also, Travis discusses the need for conflict of interest reforms and campaign finance checks and balances in municipal politics.

Plus, Pacific Northwest and Pacific Rim headlines and commentaries, including Mackin’s take on the week that was for ex-ambassador to China John McCallum and Liberal MP Joe Peschisolido — “Traitor Jack” and “Traitor Joe.”

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The Union of British Columbia Municipalities is

Bob Mackin

A food fight that has erupted among the clan connected to four restaurant chains highlights how so few own so many of the biggest food and drink brands in Canada.

A June 6 B.C. Supreme Court judgment, which was published last week, denied an application to waive the obligation for sole Cactus Club director Richard Jaffray to produce and publish audited financial statements to shareholders Earl’s Holdings, Stanley Fuller and a family trust, Rockefuller Holdings and Cacthold Holdings.

“Cactus and Earl’s are competitors in the ‘premium’ casual dining market. Stanley and his brothers Stewart, Clayton and Jeffrey Fuller, are the directors of Earl’s. They are also the directors of Joey Restaurant Group,” wrote Justice Margot Fleming. “Jeffrey is Joey’s chief executive officer. Joey also operates multiple restaurants in Canada and the United States. Cactus describes Joey as a direct and active competitor that unlike Earl’s, has no economic interest in the success of Cactus.”

Bus Fuller (the father of Stanley, Jeffrey, Clayton and Stewart Fuller) founded Earl’s in 1982 in Edmonton. Jaffray met Bus and Stanley Fuller while working at Earl’s in 1986 and, two years later, Jaffray and Scot Morison opened Cactus Club in North Vancouver with $180,000 in startup capital from Earl’s; Stanley and Julie Fuller were 60% shareholders in the Cactus Club startup.

Jaffray now owns 35% interest in Cactus Club and Earl’s owns 45%, with Stanley Fuller, the Fuller Family Trust, Rockefuller and Cacthold holding the remaining 20%. Jaffray and the Fullers have traded legal barbs amid allegations that Jaffray has misspent company funds on travel and luxury items.

Jaffray became sole director and president of Cactus Club indefinitely in September 2004, after a falling out with Morison, who founded the Browns Socialhouse chain.

In June 2018, Cactus petitioned the court for an order to permanently relieve Jaffray of his obligation to publish financial statements to all shareholders.

Cactus Club’s Richard Jaffray (left), Christy Clark and chef Rob Feenie in 2013. Clark is now a director of competitor Recipe Unlimited. (BC Gov)

“Cactus complains that in recent years and in breach of the confidentiality clause, the respondents have refused to prevent Jeffrey and others associated with Joey from accessing the financial statements or the information they contain, providing Joey with a competitive advantage,” Fleming wrote. “Given these circumstances and the ‘the specific bargain struck’, Cactus takes the position that relieving Mr. Jaffray of his obligation to provide the financial statements to the respondents, so as to prevent their content from being disclosed to and used by Joey, is reasonable.”

Fleming refused the Cactus application.

The evidence does not show, despite the history of delivery to date and Cactus’ earlier disclosure of confidential information during meetings with Earl’s and Joey, however, a competitive disadvantage or any harm to Cactus. What this leaves is the mere possibility of a detriment for Cactus arising from Jeffrey and others having access to the information contained in the financial statements.”

Earls Kitchen + Bar, the oldest of the group, has 56 locations from B.C. to Ontario, while Cactus Club has 31 and Joey 22. Browns, meanwhile, has 67.

Meanwhile, publicly listed Recipe Unlimited (the former Cara Operations) boasts 1,382 restaurants operating under 22 brands (1,324 are in Canada). It says 82% of them are franchised or joint ventures in Canada and nine other countries (U.S., Bahrain, China, Macau, Oman, Panama, Qatar, Saudi Arabia and United Arab Emirates). Of the restaurants, 46 are joint venture, 208 are corporate and 1,128 franchised.

Recipe reported system-wide sales of $3.4 billion for the 2018 fiscal year from Swiss Chalet, Harvey’s, St-Hubert, The Keg, Milestones, Montana’s, Kelsey’s, East Side Mario’s, New York Fries, Prime Pubs, Bier Markt, Landing, Original Joe’s, State & Main, Elephant & Castle, The Burger’s Priest, The Pickle Barrel, Marigolds & Onions, and 1909 Taverne Moderne.

The board of directors includes former BC Liberal Premier Christy Clark, whose crowning achievement while in office for six years was the relaxation of laws and regulations around the retail, wholesale and service of beer, wine and spirits.

A late 2013 Clark news conference about some of those amendments was held at the flagship Cactus Club at the Vancouver Convention Centre.

Those at the top of the food chain with Cactus, Earls and Recipe were some of the biggest donors to the BC Liberals, before the NDP banned unlimited corporate political donations in fall 2017.

From 2012 to 2017, Jaffray donated $123,600 to the BC Liberals, the lion’s share from Cactus Club accounts. In June 2017, after the provincial election, Cactus made two $25,000 donations to the BC Liberals.

Stan Fuller donated $192,749 from 2005 to 2017, including $25,000 from Earls Head Office Canadian Inc. in June 2017, three days before the BC Liberals were toppled in a confidence vote by the Green-supported NDP. Joey Restaurants gave $38,650 from 2013 to 2017.

Recipe Unlimited vice chairman David Aisenstat, the CEO of Keg Restaurants, donated $427,232.66 from 2005 to 2016, including $150,000 from the Keg Restaurants on May 17, 2013 — three days after Clark led the BC Liberals to a surprise re-election.

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Bob Mackin A food fight that has erupted

Bob Mackin

An external investigation has cleared an NPA Vancouver city councillor of conflict of interest, theBreaker.news has learned.

Lawyer Henry Wood dismissed pro-density activist Peter Waldkirch’s Jan. 16 complaint against Colleen Hardwick, finding no evidence that the 2018-elected councillor used her PlaceSpeak.com civic engagement company improperly.

Waldkirch’s complaint to city manager Sadhu Johnston took issue with a page on the PlaceSpeak website showing Hardwick and an image of city hall with the headline “You don’t need to wait for an election to have your voice heard – I’m listening.” Waldkirch, a research lawyer, alleged that Hardwick was confusing citizens and using public office to benefit her private company.

NPA Coun. Colleen Hardwick (Mackin)

“I do not believe it is appropriate for her to use it for city business and there is at least the appearance of this,” Waldkirch wrote in the email to Johnston, obtained via freedom of information.

Waldkirch went further on Twitter, just over 30 minutes after his initial complaint to Johnston. He publicly accused Hardwick of “attempted privatization” of public engagement and called PlaceSpeak a “black box.”

On housing issues, Waldkirch’s social media messaging aligns with Abundant Housing Vancouver, the coalition of Liberal and NDP activists lobbying city council to rubber-stamp rezonings of single-family houses to make way for townhouses and apartment buildings. AHV associates have frequently targeted Hardwick on social media and in newspaper commentaries since her election on a platform favouring a citywide plan and better consultation with neighbourhoods.

In his May 5 report to Mayor Kennedy Stewart, also obtained via freedom of information, Wood found no evidence of any contravention of the City of Vancouver Code of Conduct or Vancouver Charter.

There was nothing to contradict Hardwick’s assertions that she will give due consideration to all public input, whatever the source, and that the data architecture used by PlaceSpeak ensures the privacy of respondents’ personal data, Wood wrote.

Whether the website presentation implies official city status is beyond city hall’s code and charter, he wrote. As for Hardwick’s financial interest in PlaceSpeak, Wood concluded that Waldkirch’s concern over financial gain was “prospective and speculative.”

“We are dealing with a soft launch of a consultation site on which the only question posed was ‘Do you think that you are being heard by the City of Vancouver?’ There is no obvious potential conflict arising from the substance of that issue,” Wood wrote.

Also in Hardwick’s favour was her purpose for the initial exposure of the page: she was seeking input on potential conflict of interest concerns from the city’s director of legal services. The page in question was taken down after Waldkirch complained and not reactivated during Wood’s investigation.

Peter Waldkirch (LinkedIn)

At the end of his report, Wood offered a “final cautionary note,” after seeing a page on PlaceSpeak seeking feedback on the Broadway Subway extension to the University of B.C. He suggested there is a risk that if PlaceSpeak hosts a topic of significant interest in Vancouver, that “the mythical reasonable elector might become concerned if Coun. Hardwick were to vote in support of that proponent’s position, and that he/she might conclude that her motivation was tainted by the business relationship.”

He suggested that, in such a case, Hardwick might choose to declare an apparent conflict and withdraw from discussion or voting. Wood also wrote that constituents expect their chosen representatives to avoid potential conflicts, so that they can fully participate and vote on matters of civic performance.

Kennedy Stewart’s poster on 4th Ave. (Mackin)

Stewart’s May 13 letter accepted Wood’s dismissal of the complaint and deemed the matter closed.

Waldkirch had no comment. As for Hardwick, she said she is “happy to let the report speak for itself.”

Stewart apparently took Wood’s report as a signal that he could embark on his own type of digital engagement, separate from official city hall communications channels.

On June 6, Stewart sent invitations to those on his 2018 campaign email list to join a new “Van-News Team email group” so he could seek public input, advice and support from both Vancouverites and non-Vancouverites.

“I promise if you join my Van-News Team, you will receive a single monthly email update and up to three invitations every four weeks to attend events, take part in online actions or other activities that will help us build a Vancouver that works for everyone,” said the June 6 email appeal.

Last weekend, attendees of the civic-supported Khatsahlano Street Party on West 4th Avenue noticed posters urging citizens to fill-out a questionnaire on Stewart’s campaign website. The posters recycled a photograph from independent Stewart’s 2018 union-supported mayoral campaign and read: “Have Your Say on Housing: Mayor Kennedy Stewart wants to hear from you.” The posters did not include any of Stewart’s city hall contact information. Stewart’s posters and website are a common tactic used by politicians to build or update voter and donor-targeting databases.

His campaign website, on the NationBuilder political platform, was produced by Van City Studios, a digital ad agency that also worked on his 2015 federal NDP campaign in Burnaby South.

The next scheduled civic election is three-and-a-quarter years away.

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Bob Mackin An external investigation has cleared an