Stats Can’t-a-da: Part 3

The recent NB Power/Hydro-Quebec saga was a stark reminder to me of the importance of making evidence-based decisions.   There were people with almost no knowledge of the industry and even less knowledge of energy asset valuation, long term market trend analysis, etc. posturing as credible experts and getting away with it.  They were widely cited – along with their wacky theories such as NB Power being worth $42 billion – in the mainstream press – print and radio/TV.  At the same time, many of the credible, impartial voices were drowned out.

That exercise taught me some valuable lessons.  I don’t have a problem with people being against something because it just doesn’t feel right or because it sets off their crap-o-meter.  Sometimes intuition is a good tool -sometimes the only tool – we have (think Gladwell’s Blink).  But I can’t stomach the idea of basing a decision – of serious magnitude on quack science because it validates intuition.

Another valuable lesson for me was the importance of not posturing as some kind of expert in areas where I have little expertise.  I can render an opinion – and I do so on an hourly basis – but I am now more sensitive to position this as just an opinion – based on my limited knowledge of the subject matter. 

Which brings me back around to Statistics Canada.  I was surprised that the agency was letting Minister Clement get away with his comment that voluntary would generate the same results as mandatory regarding the filling out of the long form.    Now the chief statistician has resigned – and he has cited this strange assertion as just plain wrong. 

There must be something else going on here.  All of the Minister’s reasons for scrapping the long form are very thin and just about every ‘expert’ has come out against it.  The privacy argument is bogus.  The Canada Revenue Agency can conduct a full body cavity search to make sure you are paying your fair share of taxes.  I have a friend who just finished a three year ordeal with CRA where he had to share just about every possible piece of private banking and legal document.  Governments can and do intrude into our privacy on a regular basis.  The long form Census is one of the least intrusive ways.

Like John Ibbitson in the G&M today, I hope the Tories backtrack on this – set up some kind of commission to study it or something.

7 thoughts on “Stats Can’t-a-da: Part 3

  1. Without accurate data, it will be more difficult to call the government to task on its policies. Makes sense if you have an ideological agenda.

  2. Oh boy, you had to drag that out again! You’ll really have to provide some footnotes there, because I followed the news pretty diligently during that time and most of the crazy theories were relegated to the Facebook group and protestors-many WERE and are believed. That one girl who started the theory that Graham was embezzling billions and that all the books were cooked is now a prominent voice in the Anglo Society Facebook group.
    But most of the media stuff was actually pretty thorough, and the ‘experts’ on the government side really said some suspicious stuff as well. If we didn’t know your position then readers probably wouldn’t have noticed that that was a backhanded slap at critics.
    We can sum that up with the fact that NOBODY could even predict that this year NBPower apparantly didn’t need ANY increase at all in power rates, so so much for the big theory. It seems that the first year out of those five years SHOULD have been increase free anyway. Which kills virtually all the ‘expert predictions’ about what was going to happen if the deal fell through.
    As for the tories, this is the same populist rhetoric that they use to fan the masses. Claim that the form is ‘voluntary’ and it gives off the idea that somehow government is less intrusive. Its an easy way to draw a line in the sand between them and the almost identical liberals, sort of like the way that in criminal justice the liberals are right wing but allow for some leeway for judges, whereas the tories take out the leeway.
    The claim is that this is ‘populist’, but of course numerous critics have complained about the power of the PMO, and since far less than 40% even support the conservatives, then its a false claim. If you read the article in the G&M you’ll also notice how the Clement was insinuating that “we control statscan” which Ibbitson says is the straw that broke Mr. Sheikh’s back. IF you taint statscan by association with the sitting government, then you get more support for making the long form voluntary-because who wants the tory government (or liberals for that matter) to have that kind of access?

  3. “All of the Minister’s reasons for scrapping the long form are very thin ”

    According to various news reports, Clements and Flaherty both wrote to Harper asking that the mandatory long form be kept. Clements ‘reasons’ for scrapping the long form are thin in part because Clements does not really know why Harper took the position he did.

    This really has nothing to do with privacy concerns, IMHO. Neocons and libertarians don’t like high-quality data because such data almost always contradicts their points-of-view. Get rid of good data collection and we are left with uninformed opinions. That is the objective here; to reduce the role of data analysis in the making of public policy.

  4. “NOBODY could even predict that this year NBPower apparantly didn’t need ANY increase at all in power rates, so so much for the big theory.”

    Once again, I would advise readers interested in this topic to visit the EUB website and peruse the meeting transcripts. Its clear that when Hay and then Thomas made their ‘profit’ predictions they were not being straight-up with NBers. They were omitting the fact that their numbers did not include debt service costs or the Lepreau deferral account. When those numbers are included the ‘profit’ turns into a debt; adding to the over 4 billion dollar debt that ratepayers are stuck with.

    This confusion could have been prevented had the EUB been given the regulatory authority to compell all the companies under the NB Power umbrella to disclose their financial documents. That lack of transparency has resulted in nonsence being repeated time and time again. That’s a good example of what happens when we have poor and insufficient data sets available for analysis.

  5. NBPowers books are audited by the same people who audit corporate books-for good and ill. In europe they are now making financial audit changes so that corporations don’t even have to include debt on equity in their financials. This will effectively make it impossible to adequately gauge financials.

    With regards to NBPower, they are admitting that they didn’t need a rate increase THIS year. And they know full well about Lepreau’s debt, although debt servicing costs were and are included.

    The justification for Lepreau is that this debt will be paid off over the life of the nuclear plant, much in the same way as debt on building a new dam would be paid off over the life of the dam, but still results in a substancial ‘profit’.

    So thats just a different interpretation of the data-at least as far as we know. In fact a recent CBC report stated that one of the entities that DON”T release their books is in even better shape than the ones that do. People can take from that what they want.

    The NBPower debate DOES highlight the problems that Richard mentions, but he won’t admit that he may be the same as everybody else in getting biased data (everybody likes to think THEIR opinion is ‘unbiased’).

    The problem is pretty deep in Canada. We have governments that are increasingly resorting to secrecy and the same sort of financial reporting that corporations admit to, and which makes getting good financial information almost impossible.

    The problem at the next level is with the obvious media bias, apparant at CBC, and even worse at Irving. They are not only quite lazy, but usually biased-although the lazy may be even worse. This leaves those private organizations and people like Mr. Campbell to bring up the level, and their audience is limited. Even worse of course is that the entire population largely couldn’t care less.

  6. “With regards to NBPower, they are admitting that they didn’t need a rate increase THIS year. And they know full well about Lepreau’s debt, although debt servicing costs were and are included.”

    That isn’t correct, as you can see from the EUB website. This has nothing to do with auditing, it has to do with the regulatory power of the EUB. Only Disco has to present its financial data to the EUB; the other corps, including the Financial Corp, do not. Thus debt servicing and the Lepreau deferral account are not accounted for. When included, NB Power is running a deficit. See the EUB meeting transcripts for examples.

    In fact, if you go back to the 2000/2001 transcripts, you can see how embarrased NB Power brass became under the perceptive questioning of those who attended the hearings. Remember that was before NB Power was broken up. One of the rationales for the break up NB Power into several separate corps was that was supposedly a prelude to Lord selling off some of the units. But I think that Nb Power was in such a mess by then that the NB Power brass were afraid to go before the EUB. So when Lord proposed the breakup, the NB Power brass said ‘great idea, but how about we restrict the EUB to examining Disco’s books?’. That has resulted in 6 more years of bamboozlement and data-hiding.

    This is not about opinion, its about data. Only part of the data is released to the public; that allows Hay and Thomas to make misleading statements. And it permits faux-journalists like the CBC’s Robert Jones to make bizarre claims. I wonder where he thinks the 4+ billion dollar debt comes from. Thin air at the CBC, perhaps? You can’t have a reasonable debate when most of the data are absent from public view, especially when the data that are available are twisted and misinterpreted by ‘professional’ journalists. You can critique the Irving press on many fronts, but they presented more data and more points of view on this issue than did CBC/NB.

    ” this debt will be paid off over the life of the nuclear plant”

    Of course it will be paid off; all debts have to be paid off. But that forecast does not take the deferral account into the picture. In fact, NB Power rarely admits that the deferral account represents debt! The issue is how much power rates will have to rise to pay off that debt. The longer we pretend the problems are not there, the higher those rates will be.

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