Monday, August 25, 2014

Temporary Education Support for Parents - the $40 per day to parents - a well hidden program

BC announced the $40 a day payment to parents of kids under age of 13 that are registered in BC public schools three and a half weeks ago.    There are very few details about the program online and finding that information is not easy at all.   I can not find a link to anywhere on the Ministry of Education website.  Overall, other than as a spin line for politicians, there is very little useful information on any government website about the program

What I have found out since August 1st is that the program is called Temporary Education Support for Parents but there is still very little information on the website for the program.   The total information about the program is only 255 words long.  All the information could be covered by 12 tweets.

What has changed since the announcement is that people will be able to register retroactively for up to four months after the strike ends.  Initially you had to register before becoming eligible to collect the payment but clearly someone figured out that this was not going to be realistically possible to implement, which I pointed out when this was announced.

I still have no idea how the program will be rolled out and I worry that it will all be created after the strike is done.   Since the announcement there has been more than enough time to clearly explain what the program is and clearly indicate the eligibility rules with links to more information.  I thought the announcement of the program was clear on who would be eligible but that is not how everyone sees it.

In speaking with some parents there is a lot of confusion about the program and what they can use the $40 for.   People think you have to register your child in some form of formal education type of program or at least in some form of licensed daycare program.    Parents would then only be eligible for the expenses paid out.   The website can be read in that way because of the following two sentences from the website:

The Ministry of Finance recently announced the Temporary Education Support for Parents to help with learning and supervision in the event the labour disruption goes into September. 


The primary caregiver may receive $40 per eligible child for each day the child is not in school as a result of the labour disruption.

The first sentence from the website seems to say that the money has to be connected to some sort of out of pocket expense on the part of parents.

The second sentence includes the word may receive.   It is not will receive, but may receive.   This wording could be read that  you are not automatically approved for the money unless you meet some criteria beyond having a child under age 13 in the public school system.

I phoned the number on the website for information and all I got was someone reading off of the website that I was looking at.   It is as if no one has thought out who this program would work.  I suspect that the system will have serious problems dealing with the influx of applications once the strike is over.

Here are a few more wrinkles

  • Do students enrolled in distance education programs, full time or part time, qualify?
  • Will this support be available to foreign students enrolled in BC?
  • Who do is primary caregiver defined?   In the case of a joint custody any government payments are normally split between the two parents.
  • Will foster parents get this payment as well?
  • Will this have to be declared as income and does mean it will be taxed?   If it is not tax free, roughly an average of $2 of each $40 payment will flow back to the provincial government and $3.50 of each $40 payment will flow to the federal government.  That is an extra $638,000 per missed school day for the province and $1,100,000 per missed school day for the feds.

Thursday, August 21, 2014

2014 is the 10th worst wildfire year in the last 95 years

Mount McAllister Fire as from near Chetwynd recently
These are the top ten years for area of forest burned in BC

Year Number  Area Burned Avg Fire Size 
    of fires in hectares  in hectares
1958  3,058   835,848      273.3
1922  2,591   634,772      245.0
1925  2,521   414,305      164.3
1930  2,271   402,646      177.3
1928  1,642   368,103      224.2
1971  2,893   351,890      121.6
1982  2,205   348,663      158.1
1950  1,515   343,274      226.6
2010  1,673   337,149      201.5
2014  1,242   311,996      251.2 - to Aug 19th 

There has been rain in various parts of the interior over the last few days but the forecast is for it to be dry for the week to come.   Rain is not always goo because the southern interior has a thunderstorm warning today.  Thunderstorms will cause new fires.

Realistically we are likely to see another month of burning in BC and 2014 could still become the third most destructive fire year in BC. 

In the 17 years from 1986 to 2002 a total of 236,252 hectares burned.  The 2003 fire season alone was bigger than that with 265,053 hectares being burned but 2003 was not a one off.   In last 12 years there have been five years with more than 200,000 hectares burned and seven with more than 100,000 hectares burned.
China Nose Fire
Mount McAllister Fire has been burning since July 12th

Wednesday, August 6, 2014

Some Facts about the Mount Polley Mine

I have been aware of and following the Mount Polley mine for close to 20 years.   Because of a lot uninformed discussion about the mine I thought I would try to outline some basic facts

The Tailings Pond Spill

  • Water is used in the process to concentrate the ore from the mine, the tailings pond is where the waste water goes to allow waste materials to settle out.
  • The tailings pond will include not only the waste material suspended in the water but any additional  material used in the mine mill to extract the ore.   It is not a dump for whatever, it does not contain such things as used oil.    The sediment is like a very fine wet clay, when saturated it can run like a slurry, which is what seems to have happened on Monday
  • Mount Polley has a good record in reuse of the water for the mine with much of it coming from the tailings pond.  For them to reuse the water it has to be relatively clean.
  • The water is a milky green in the tailings pond because of the suspended fine particles, it is the same reason many fast flowing glacial mountain creeks have the same colour 
  • The sediment from the tailings pond is likely to contain various heavy metals but at this time I do not know of any factual information about the actual contents of the sediment.  
  • The sediment with the probable heavy metals will have settled out early in the flood, most of it will have ended up in Polley Lake or the upper parts of Hazeltine Creek, some if it may have managed to go all the way down to Quesnel Lake but no further than just into the edge of the lake.  Beyond that point the only issue is the quality of the water
  • About 10 kilometer of Hazeltine Creek have been completed destroyed through the flood of the water, by destroyed I mean going from a one to two meter wide creek bed to one close to 50 meters wide.   Hazeltine Creek was used by coho to spawn
  • The surface area of the tailings pond was about 170 hectares .  Looking at the pictures of the breach, the depth of the water and sediment  was something around 25 to 30 meters which would mean a total capacity of 50,000,000 cubic meters - reports are that a combined 14,500,000 cubic meters of water and sediment were lost.

The Mount Polley Mine

  • The Mount Polley mine is located just west of Quesnel Lake
  • The mine is an open pit copper-gold mine
  • The deposit was first discovered in the late 1960s
  • Imperial Metals received a mine development certificate in 1992 - this is approval process in place before the start of the BC environmental assessment
  • Each year the  mine produces about 40,000,000 pounds of copper and 50,000 ounces of gold
  • The mine employs about 300 people
  • The mine opened in 1997 and operated for four years before closing because of low copper prices.
  • It re-opened in September 2005 in part because another ore body was discovered and in part because the price of copper rose significantly
  • The mine is currently expected to operate for another 11 years.
  • The tax revenues from the latest expansion of the mine are shared between the province and two First Nations.  The William's Lake band get s 18.5%, Xatsull gets 16.5% and BC 65%

Imperial Metals

  • Mount Polley  is owned by Imperial Metals who are a small scale BC mining company - this is not some large multinational company
  • The largest share holder is N. Murray Edwards, the co-owner of the Calgary Flames, with a 36.1% stake in the company.  Another 16.9% is owned by the US based Fairholme Capital Management of Maimi Florida.  These two holdings have a majority control of the company.
  • Imperial Metals had a value of around $1,000,000,000 up until recently
  • The stock price has dropped 40% yesterday with about 100 times the number of shares being sold than normally
  • The net income of the company has been around $40,000,000 per year
  • As opposed to most mineral exploration juniors in BC, Imperial Metals decided to develop their properties instead of selling them to one of the big multi-nationals.
  • They own a 100% stake in the Mount Polley mine and in the Sterling mine, a very small gold mine in Nevada.
  • In north western BC they own a 50% stake in the Huckleberry mine which is a copper mine of the same scale as Mount Polley though without the significant gold portion pf the operations . 
  • They own 100% of the Red Chris mine 800 kilometers south of Dease Lake.   The mine is scheduled to open later this year 
  • They own a 50% stake in the Ruddock Creek property which is 50 km north of Shuswap Lake 
  • They own 100% of the Catface property in Clayoqout Sound though very little is being done with this property, realistically the possible development of a mine is at best a decade away.  They got this property in 2009 in a merger with Selkirk Metals
  • Imperial Metals have a number of other claims in BC but none of them are at all close to mine development

Friday, August 1, 2014

Questions about the $40 a day payment for each student under 13

It is now more than 24 hours since the government announced their idea that parents of kids younger than 13 registered in public schools would eligible for $40 per day for each day the strike continues.    There is nothing on the government website saying how this will work.  

This is serious scale financial program that feels like it has been made up at the spur of the moment.   To make it work something like this work would normally take a lot of planning and testing to make sure everything works well.  Given that is was announced without any details and no way for the public to learn about it seems rather stupid.  Should the government not have made sure everything was working before announcing this?  

What I do know:

  • If you do not register for the money you will not get the money
  • You will be issued a cheque for the money sometime after the strike is over
  • Based on last year's enrollment about 314,000 kids will be eligible - the government number of 300,000 is I have no idea how they came up with that figure.
  • Given that government was about 5% low on eligible students, and this is something they could answer from their own data in minutes, means no one has given any serious thought on how this program will work.  No one is ready to implement this.   On a good day fast action by government takes a long time.
  • There are 21 school days in September
  • For each eligible child that would be $840 for September
  • If everyone claimed the money they could this would be $12,560,000 per day or $263,760,000 for September if the schools are closed for that whole time.  If the government saves $12,000,000 a day from the strike, this program could end up costing more than that per day.

What I do not know:

  • When did the government come up with this idea?   If it really was in the last week, my question becomes does the government have any sort of coherent strategy for the negotiations?
  • When will the registration system be up and online?  I think it has to be fully operational by August 25 at the latest and ideally August 18th.   That is a very short time to have this all in place.
  • In August the provincial government tends to have many key staff on holidays so it is not clear to me how it is going to roll out one of the more complex government rebate programs in less than a few weeks.  Will a bunch of senior staff have to drop everything or interrupt their holidays to get his underway?
  • Who will build this software interface and make sure it works especially when you have thousands of people all at once trying to use it?
  • How much will it cost to create this software and where will you find the competent people to create it?   This is August, this is the month people go on holidays.   I can not see any IT firm being ready to take this on right away.  Anyone the government can get will charge extra to rush the job.
  • How will the government make sure that in a rush like this everyone's privacy is protected?
  • How will the government inform the public about the program?   I assume they will have to do a direct mailing and advertising to get the message out.
  • From where in the provincial government will the money come to pay to create this system?   It has to completely ready and done well before the school year starts which means the government will have to spend 100% of the cost to set up the system even if they settle with the BCTF
  • Since the telling the public about the program and designing the system will happen at the same time, a lot of money will have to spend on promotion before
  • How will people get proof of registration within the school system?   The strike is still on and the schools have minimal staff and will likely not be able to meet any requests for proof of registrations.  Getting something at the school would be most effective but that would involve 
  • What happens if you have just moved to BC?  How do you prove registration?
  • Foster kids - who can claim the money?
  • What happens for couples with joint custody?  What if both of them claim?   
  • What happens if the system is not operating well and it takes you until September to register, can you claim all the way back to the start if it is the fault of the system?
  • How will government be able to check the birth dates of the kids?   
My prediction
  • The online registration system will not work in time and in fact the government will admit in a week or two that it is not going to be how they do it.
  • Government will spend $100,000 to $200,000 on outside IT consultants to find out it can not be done.
  • Government will spend a bunch of money on advertising the program before changing it.
  • Government will spend a bunch of money on a direct mailing before changing the program.
  • Government will change it so that everyone can claim the benefit retroactively and will see the money sometime in early 2015 if the strike ends early in the fall which means the government will likely end up being out of pocket by $560,000 per day of the strike
My guess at a timeline
This program was driven by the political end of government which means the civil service is not ready for it at all.  This means for at least a few days senior civil service staff will have to figure out how to even start
  • August 5th - Senior civil servants meet to figure out who is doing what and broadly how to make this work
  • August 6th-9th - mid level civil servants work out how the program could be made to work.
  • August 11th-13th -  Senior civil servants meet with IT companies and figure out if there is anyone that can take on the contract
  • August 11th - 15th - Civil servants prepare informational website and prepare a household mailer - many will have to come in off of holidays or work many hours of overtime
  • August 14th -15th  Government finds an IT firm to direct award the contract to, maybe.  
  • August 16th - 24th - IT company creates the interface - I know, I am dreaming on that timeline, but lets assume it is possible.  I can not even see how you could test it properly in that short a time.
  • August 19th - Household mailer is mailed
  • August 21st - 22nd - Household mailer arrives
  • August 25th - system goes live but crashes due to too many people trying to register at once
  • August 25th - 29th - Schools are flooded with parents needed proof of registration details.   Remember, since it is summer my child is not currently in school.   The existing registration details are for last year and this changes with the start of the school year.   Here in Victoria a kid in going into grade 6 is going into a new school and as a parent you are unlikely to have ever seen anything from them.   

Wednesday, July 30, 2014

LNG Proposals for the South Coast - why?

I think the economics for BC LNG is weak for the best projects, but there are at least several that I do not understand how they could possibly make any financial sense.   I do not see how some of proposed LNG projects on the south coast could be viable unless there was a local supply of gas (and yes, there is natural gas potential on the south coast)

Currently there are four proposed LNG projects on the south coast, two of them might make sense, two of them seem like pie in the sky:

Woodfibre LNG near Squamish - 2.1 mtpa
Steelhead LNG near Port Alberni - 24 mpta
Discovery LNG near Campbell River - 20 mtpa
Tilbury LNG in Delta - 3 mtpa (currently about 0.45 mtpa)
(mpta = million tons per annum)

I think people on the south coast are not at all aware that some of the LNG proposals are for this part of the province.

The Tilbury LNG plant is not lot like the first three for a number of reasons.  First, it is an existing LNG plant that is planning on expanding.   It currently produces LNG for use regionally.  FortisBC uses it to manage peak demand periods in the Lower Mainland, sell it to heavy duty customers like Vedder Transport Ltd., Arrow Transportation Systems Inc. and Denwill Enterprises and finally to provide Watson Lake with LNG to provide electrical power. The town of Inuvik in the North West Territories is also offsetting its diesel-fuel utility operations using LNG transported from Tilbury. 

Second, they have much of the infrastructure in place.  The plant is owned by FortisBC who is a producer of natural gas and owns much of the natural gas pipeline infrastructure on the coast.

The plan is  to increase the production of LNG at Tilbury by six fold and then export LNG.This project might makes sense financially and is small enough that it could operate as needed when the prices work.  Realistically this is the most likely LNG export facility we will see in BC in the next five years.

The Woodfibre LNG plant is a small scale one in terms of the global LNG business.  It seems to mainly based on the idea that they have a brownfield industrial site to work from with the old Woodfibre mill site.   As LNG plant locations go, it is good one.  It is at tidewater with a deep anchorage and the community is protected from the plant.   The problem this proposal has is sourcing LNG.

The Woodfibre LNG proposal is too small to justify a new pipeline but at the same time it could be too large for the existing pipelines.   With the Tilbury LNG expansion and increased use of natural gas in the lower mainland, is there enough capacity to provide natural gas through to this plant at Woodfibre?

The final question for Woodfibre LNG is if they can acquire the natural gas cheap enough to make a profit selling LNG in Asia.

Now we come to the two Vancouver Island proposed LNG terminals which do not make sense because they are so far from the North East natural gas fields and would require a long, expensive and new pipeline.

Discovery LNG
The project is proposed for the old Elk Falls pulp mill site.   It has a deep water anchorage, it is outside of town and it an existing heavy industrial site - all factors in its favour, but I think it has more downsides.

They would need a much larger pipeline to service the plant.   The scale of the demand would realistically require a completely new pipeline from the Peace to the Island.   I fail to see how that could be done for less than a ballpark $10 billion.   At the moment no one is even proposing a new pipeline from the North East.   It would take about five or more years to plan and get approval to build a new pipeline.   Until there is a supply of natural gas this project has no hope of moving forward.  The lack of a current pipeline proposal means there is no chance of anything before 2020 at the absolute earliest.

Even if there were  supply of gas the company behind the project, Quicksilver Resources, is much too small to be able to get the financing for the project.   The company has revenues of around $400 million per year which is roughly the value of the company based on current stock prices.   A project of this size would cost between $20 billion and $40 billion to build.  Only a major global company could possibly afford to finance this project.   More or less every major player in the LNG field has some project they are already connected to.

Location of Proposed Steelhead LNG Plant
Steelhead LNG
This project is some sort of a partnership between  Steelhead and the Huu‐ay‐aht First Nations.  The proposal is to build a greenfield LNG plant on some of the Huu‐ay‐aht First Nations land on Sarita Bay, which is about 10 kilometers up the Alberni Channel from Bamfield.

In nothing I could find is it clear what the relationship between Steelhead and Huu‐ay‐aht First Nations is.   The use of Huu‐ay‐aht First Nations land is interesting because jurisdictionally it is not in the same category as other lands.  The project benefits from having the First Nation on board but can Steelhead deliver the benefits the First Nation members are looking for?

The project suffers because this is a greenfield site.   The location is 80 kilometers from Port Alberni, the nearest location with the full infrastructure to support a major industrial site.   The road to Bamfield would have to upgraded.  There would have to be a deep sea terminal built in Sarita Bay.  The powerline would have to upgraded.   etc....   All of these add to the costs of the projects

Sarita Bay
The project is not near to any large scale natural gas pipeline.  It is hard to see how this project could go ahead without someone committing to building a large new pipeline from the North East to the South Coast.  Even then this project would still require an extra 155 kilometers of pipeline once the gas is on the Island at the Comox Valley.

I do not know enough about the company behind this proposal to know if they could finance it,  but based on what this project would cost to build I seriously doubt that it could move forward without a major global partner to finance it.   Without a secure supply of gas, which means a pipeline ready to be constructed, I am not sure what would make this project interesting to any possible partner.

A South Coast Game Changer?
The Georgia Basin with an estimated 185 billion cubic meters of natural gas
These projects suddenly look much more promising if there were a source of gas in this region.   There are possible supplies for LNG plants here on the south coast.   Could the idea be that these plants are being developed to stimulate demand for local gas?

The first possible source is coal bed methane.   We have a lot of coal deposits on the east coast of Vancouver Island and all of them should have the potential for coal bed methane.  Estimates are that there is about 30 billion cubic meters of coal bed methane on Vancouver Island

The second is natural gas under the Strait of Georgia and estimated 185 billion cubic meters of it.  That is enough natural gas to allow for the export of 44 mpta from the south coast for 32 years.  It is a large enough amount to make development of the resource worthwhile and the south coast plants much more viable.

With a local resource the cost to produce the LNG would be lower and this would make the projects much more likely to be profitable.  

Wednesday, July 16, 2014

Average Size of BC Wild Fires is going up over 1991-2014

Another graph using the Ministry of Forests data on wild fires in BC.   I will get around to doing one that shows the 10 year running average for the size of fires.

The other graphs I have done today:

Graphs of Area Burned in BC and Annual Wild Fire Spending from 1991 to 2013

I thought these two graphs would be interesting to see

In area burned four years really stand out but I think more telling are the minimums.  the 2008 and 2012 low fire years are much higher than the lows in the 1990s.

 I have not corrected this data for inflation