Tuesday, July 8, 2014

$1 billiion could buy a few climate brains

How many environmental scientists can you hire for $1 billion?

I have no idea, but I think I’m safe in saying, a great many.

One billion bucks is the early estimate on the damage done by the recent deluge in southeastern Saskatchewan and southern Manitoba. That is a massive economic kick in the head. Add to that the Alberta flood of last year, which cost our western neighbours $6 billion, and the floods of 2011, and you have a bill that approaches astronomic proportions.

The human toll has not yet been accounted for in those numbers. People have lost homes, businesses, jobs, farm buildings, cabins, crops, livestock -- and therefore, peace of mind. What effect does that have on the human condition?

Years ago, we had two huge trees fall on our family cottage during a spectacular storm led by plow winds. The damage, miraculously, was minimal, and we were very lucky; but to this day, over a decade later, I shake like a wet dog when the winds really howl. And that was just the cabin, with no serious damage. I can hardly imagine what people in the southern prairies are going through.

Whether it’s climate change, as environmentalists understand it, or some other problem, there is certainly something going on. It’s coming home to roost. We need to understand this better, and start thinking about solutions.

Enter John Pomeroy, director of the centre for hydrology at the University of Saskatchewan. He became a media star this week (probably unintended) when he was approached to explain what the hell is happening on the flood-drenched prairies.

It was by far the best explanation I have heard thus far. As I understand it, the persistently rainy springs and early summers of the last 10 years are not just “a cycle.” Rather, in a PostMedia interview, Pomeroy said there has been a shift in the climate system bringing prolonged summer storms to the Prairies.

His view is that a warmer arctic is changing the jet stream, allowing big wet storm fronts to move up from the United States and then stall over the prairies for days. In this case, the rain fell on saturated fields from two years of big snows. Making matters worse is the agricultural practice of draining fields, allowing the water to flow into the streams and rivers that move east into Manitoba.

This last rainfall, he said, was an unheard-of event since the Prairies were settled, while the climate changes over the last 10 years have been remarkable. Also not helping is Canada’s woeful flood forecasting and management system, he added. (And, I might add, an early warning system that does not work because we can’t translate “tornado warning” into French.)

Get used to the new and somewhat terrifying normal.

Let’s return to the billion bucks, remembering that this amount is only the mop-up funding for the last prairie rain event. Let’s say, for the sake of argument, that a meteorologist earns $100,000. If the federal government even hired 50 of them, the annual cost would be $5 million. That’s “illion” with an M, not a B. It’s a drop in the bucket, so to speak, compared to the huge economic toll climate problems are causing.

Unfortunately, for years, Environment Canada has been slashed and underfunded. In 2011, the government started hacking 1,200 jobs from the department, and that’s after years of cutting jobs and offices.

Someone with credibility on the subject must grab Prime Minister Stephen Harper by the lapels and shout, “you’re going the wrong way!”

Whether climate scientists can help us understand, and therefore stop, climate change is certainly up for debate. But without doing the research, we will never know. More people must be dedicated to this problem, yesterday.

So far, our beautiful city has been largely spared from the worst of the flooding events. We’re a little further north from the U.S., which helps, and our founding fathers, Chief Whitecap and John Lake, had the great good sense to plunk this town on a river with high banks. While we still get flooded basements, hard rains during thunderstorms, and a riverbank that’s being eroded by high flows, Saskatoon itself has long been spared overland river-related flooding (although some surrounding areas have been affected.)

Whether our good fortune will last remains to be seen. I’d feel a lot better if we had a few more climate researchers who could let us know. In the meantime, thank goodness for John Pomeroy, who is telling it like it is and trying to do something about it.

Tuesday, June 17, 2014

Foggy morning in Saskatoon

Shore Gold plans more drilling


Shore Gold Inc. (TSX-SGF) plans to drill 12 new holes into its Orion South kimberlite property in east-central Saskatchewan “soon” at a cost of $3 to $6 million, the company’s annual general meeting heard in Saskatoon Tuesday.

The drilling plan still requires funding, likely via flow-through shares, and will take approximately five months to complete including analysis, the company said.

Shore Gold owns a considerable stake at Fort a la Corne, an area of Saskatchewan with a large number of kimberlites -- the geological “pipes” that contain diamonds. Shore has been working toward opening a diamond mine at its Star-Orion project for years, but has faced underfunding and delays.

George Read, the company’s senior vice-president of exploration and development, said the search for drill funding has not yet begun, but he expects it to happen soon, once the necessary amount is determined. The company is receiving quotes on the work.

The drill and its outcome is intended to make “the project more attractive and stronger,” said Read.

Shareholders in attendance at the AGM were concerned that flow-through share funding would further dilute the shares outstanding, and board chair Brian Menell agreed that was a concern.

The company is taking care to ensure the appropriate funding model will be used, he said.

Shareholders asked a considerable number of questions, but the atmosphere at the AGM was less fraught with tension than last year. One shareholder suggested that was because the diamond market was looking stronger than a year or two ago.

It didn’t stop shareholders from making several suggestions to drive the delayed diamond mine project forward. With varying degrees of seriousness, they suggested approaching governments for partnership funding, asking Apple Corp. to come in, or getting out their own shovels to start removing the huge overburden on the kimberlites.

Shore Gold’s diamond mine project has been languishing most particularly since the financial crisis of 2008. Shareholders have been expressing considerable frustration for most of that time, and the share price has not offered much consolation, now trading in the 22 cent range.

However, board directors said opportunities for investment were looking up somewhat.  

“The diamond market as a whole remains reasonably buoyant,” said Menell, adding that the outlook for diamonds also remains positive.

However, there continues to be a lot of risk aversion built into the equity market, which means junior exploration companies are still struggling to raise capital.

Menell said he hoped and believed the coming year “will be an interesting one,” and that Shore will be able to unlock and create value that shareholders “have been patient in waiting for.”

The company pointed to a report from Dundee Capital’s Matt O’Keefe, which said that diamond supply is limited and set to decrease in the medium to long term.  Bain & Co. predicts diamond production will begin to decline by 2019.

Diamond prices are up seven percent this year. Some forecasts suggest prices will continue to rise five to seven percent annually over the next several years.

Menell said the market is starting to see more appetite from sources of capital that have not been historically involved in mining or diamonds.

Still, global risk aversion could continue for up to 10 years, although the situation is considerably better today than it was over the last few years.

The Star and Orion South projects at Fort a la Corne in east-central Saskatchewan hold estimated reserves of 34.4 million carats valued at $242 US per carat. Inferred reserves total 9.1 million carats.

The most daunting part of the mine development process is removing the colossal 100 metre overburden from the kimberlite zone. Just that part of the project would take four years. Asked if it would require another 10 years to get the mine operational, Read said he did not think it would take that long.

Overburden aside, the future mine site has several advantages, including proximity to Saskatoon and Prince Albert, access to electricity, and a “world class resource,” said the company.

The company also quoted Mackie Research’s Barry Allan as saying “it is clear there is a large and robust diamond mine in Saskatchewan, and that there is deep underlying value in Shore Gold’s share price.”

The Canadian Environmental Assessment Agency has recently completed its technical review of Shore’s environmental impact statement, which was submitted in August, 2012.



Monday, June 16, 2014

Saskatoon housing: a tale of two markets

The Saskatchewan real estate market is expected to stagnate somewhat in 2014 and 2015, The Canadian Real Estate Association (CREA) said Monday in a forecast.

After 13,535 sales in 2013, CREA predicts essentially the same number in 2014 and a tiny increase to 13,580 in 2015. Prices are also expected to rise slightly, to $297,300 in 2014 and $299,600 in 2015 from $288,698 in 2013.

The provincial numbers do not entirely reflect the Saskatoon story, however. In this city, the only thing keeping a relative lid on what might have been a completely crazy spring market is the huge number of listings, many of them new builds.

As of May, year-to-date listings were up 15 percent while sales were up 10 percent, with an average price of just over $353,000, up three percent from last year. Those are the numbers from the Saskatoon Region Association of Realtors (SRAR).

If you drive around the older parts of Area 2, including such neighbourhoods as Buena Vista, Nutana, Exhibition and Avalon, there are more sold signs than for sale signs. This does not include properties that are either falling down or seriously overpriced. If it’s a good house at a good price, or on a big lot, it’s gone.

In the week of June 8 to 14, for instance, 32 houses sold in Area 2: seven at list, four above list, and 21 below list at an average reduction of about $7,200 (Norm Fisher’s website statistics.)

SRAR also points out that 679 properties sold in May, by far the most in the last five years. Meanwhile, there were 1,453 properties listed. That has got to be a record.

Prices are not leaping because of the high amount of new home inventory. Canada Mortgage and Housing Corp. (CMHC), in its spring outlook, said that the inventory of complete and unabsorbed (as in, unsold) units was up 40 percent over the same time in 2013.

It’s a bit of a tale of two markets. Resale home sales are better than steady, while a large number of relatively expensive (over $450,000) new homes are not selling nearly as quickly. Of course, that entirely makes market sense. The busiest part of the market is always under $450,000, or even under $400,000, simply because of affordability.

However, it’s a very positive sign that the less expensive homes are getting snapped up. It shows confidence in the Saskatoon market, and provides a good base of future buyers for move-up properties.

It’s less terrific for home builders, who are waiting for their homes to sell. Perhaps they were a bit optimistic about the Saskatoon economy and market: it’s hard to blame them considering all the talk about boom times in our region. But the boom is slowing, and while in-migration remains strong, it has slowed down. Potash prices are down, uranium is facing a troubled market, and farmers are still struggling to get a bumper crop to market. The economic scene is not dire, but it’s not hot, either – apart from the oil and gas sector.

Furthermore, building houses is what builders do. They can’t really just stop. But CMHC says they will slow down, and build fewer units in 2014 and 2015, bringing a bit more balance to the market.

Meanwhile, they are not really messing things up for resale home owners. Resale is doing just fine, overall, and it’s also likely to remain so, at least until interest rates rise. They are unlikely to start soaring for many years. Bank of Canada governor Stephen Poloz predicts that interest rates will remain historically low for some time, in part because big jumps after years of low rates will destabilize the economy.

Expect prices to moderate and sales to remain fairly strong over the next two years, barring any significant economic shock.







Two new bridges? Bring them on

Crossing the South Saskatchewan River is, for many Saskatonians, a regular and unavoidable part of life. It has been thus since Chief Whitecap advised John Lake to settle in a spot where a ferry could easily carry him across.

That spot is approximately where the Victoria Street or Traffic Bridge, now defunct, sits as a monument to poor planning and bad infrastructure maintenance. Rather, that’s where it would sit if a portion of it had not been removed.

Saskatoon has been waiting for a decision on what to do with that river crossing for four years. Even more crucial to the safe and smooth traffic flow of this growing city is a north bridge, also considered for several years.

Finally, after what has been a protracted period of discussion with the federal and provincial governments, we are getting new bridges. It is hard to imagine better news.

Last week, the three levels of government announced that $252 million would be spent on the two new bridges, with $60.8 million coming from the feds and $50 million for the province. The projects will fit into a public-private partnership or P3 model, which involves a contractor who will design, build and maintain the structures for 30 years.

Some pundits and observers have raised concerns about the model, and perhaps rightly so. The most significant problem would be if the contractor went out of business in the future, and a new maintenance contract had to be signed. Saskatchewan residents are likely to be leery of P3s, since few projects have been developed under this relatively new model. We are accustomed to governments doing it all.

However, in a province where most folks still want to park either two feet away from their destinations or for free (both would be preferable), some of the other options would not be palatable. Consider toll roads: a political non-starter, I would think.

The massive benefits of building the new bridges outweigh concerns over the P3 model, which may even bring its own benefits. The Traffic Bridge is now near collapse because of a lack of maintenance. If a company is contractually obligated to maintain the bridges, perhaps we will not see this problem again. Successive city councils were not able to manage it, so arguing the entire project should remain public doesn’t hold much water.

The Traffic Bridge, despite the well-intentioned arguments of some that it should be a pedestrian bridge, must carry traffic – partly to improve movement out of downtown, but also as a buffer against maintenance downtime on nearby bridges. Will the city delay maintaining the Broadway or University bridges because high traffic does not allow for it?

The north bridge, meanwhile, is crucial to the prosperity, comfort and safety of Saskatoon. The amount of traffic congestion in the north end is spectacular and entirely unacceptable. From a prosperity standpoint, goods and services must flow in a timely fashion through – and around – the city. People must have at least a reasonable shot at getting to work on time. How often do we hear on CBC Radio in the mornings that College Drive is backed up on the commute? Give up? Every Monday through Friday.

Community services that keep us safe, such as ambulance, police and fire, need to be able to get through traffic to their destinations. I have often wondered how this is possible when Millar Avenue, Warman Road and Circle Drive are completely jammed, bumper to bumper. How would a fire truck get through there?

Saskatoon is a growing and increasingly cosmopolitan place. An insufficient and, frankly, embarrassing road system is not going to support population growth, economic growth or a pleasant, courteous driving community. Let’s face it; road rage, discourteous driving and general commuting misery is no way to grow.

On the long, long list of important infrastructure investments, these are at the very top. We are so fortunate to be located on this beautiful river that defines the shape and contributes to the culture of our community. It is our finest feature. Along with it comes the need for bridges. Bring them on.








Monday, June 9, 2014

It's not summer yet.
Has anyone investigated how SAD -- that sad winter malady -- may affect us in the summer when the sun never shines and every day brings cloud, rain and the threat of thunderstorms?
Tomatoes languish. Zucchini freezes. Only the lawn shows signs of growth -- of course, since it must be mowed.
It is a beautiful picture from the Broadway Bridge, though, isn't it?

Wednesday, June 4, 2014

Beautiful day downtown, especially due to Maria and Melinda, musical sisters hoping to busk across Europe.

Friday, May 16, 2014

Hero creation at the U of S

Big, bald, bespectacled Robert Buckingham cuts an imposing figure. When University of Saskatchewan security officers waltzed him off campus and out of his job, I would have paid good money to see him shake them off.

It’s unlikely he did so, having behaved with aplomb and integrity throughout the debacle that saw him stripped of tenure, pension, position and his executive directorship of the School of Public Health earlier this week.

It was a bold and dangerous move for Buckingham to publicly question the university’s administrators on the TransformUS process of cost-cutting and college amalgamation. After considerable deliberation among lawyers, academic leaders and others – according to president Ilene Busch-Vishniac – Buckingham was removed from his role. But far from an act of resolute managing, firing Buckingham and frogmarching him off campus was the act of petulant, arrogant and short-sighted administrators.

The resulting firestorm over public speech in academia has partly changed their minds. It wasn’t because they did the wrong thing and tried to right it. It was, like Nixon, because their mistake was caught – by a diligent media and international public opinion.

Buckingham has been partly reinstated, but it’s too late for that to mitigate public fury. Busch-Vishniac, who does not appear to have taken any personal responsibility for the fiasco, will not back down from firing Buckingham as executive director, which is where this issue really rests. Buckingham will not back down from his anti-muzzling essay, The Silence of the Deans, which started the whole thing. We have stalemate, to that extent.

But in the court of public opinion, the knives are out for U of S management, while Buckingham’s freedom of speech stance is garnering enormous support from students, academics, commentators, and apparently the provincial government.

What’s fascinating about this mess is how the U of S has in one mad act compromised the brand it was obsessively trying to defend, by insisting its leadership could not speak out about TransformUS and firing the first manager to do so.  

Their actions may have long-reaching repercussions. They could certainly affect the future recruitment of qualified professors – including Buckingham’s replacement -- and international and Canadian students. Even as the U of S tries to cut costs, such a public relations disaster may also affect the future funding it will increasingly need. These are issues the administration should have evaluated before attacking Buckingham.

Perhaps the entire event is unsurprising in an environment where speaking out, speaking up, or just speaking at all is becoming an increasingly rare act due to fears of reprisal. The federal government, for example, has also taken the approach of managing the message from all of its bureaucrats, and that includes scientists. Heaven help the journalist seeking information from a researcher, who must wade through layers of communications officials before saying anything – or nothing.

The right of the public to know what is going on at all levels of government and at tax-funded institutions is being trampled -- or at least, the effort is being made. If there is a positive outcome to this case, it will be that it shows muzzling policies can come back to bite the organizations that instituted them.

Busch-Vishniac needs to take a page out of Michael McCain’s communications playbook, and quickly. McCain, head of his family’s eponymous meat firm, was abject in his apology over his company’s listeriosis crisis a few years ago. His approach essentially saved his company. The buck stops at the president’s office, and she needs to apologize, personally and absolutely, to even have a hope that this will go away.

The U of S has done much more damage to its reputation than the brave and outspoken Buckingham could possibly have done himself. In the process, it has created a hero.