People in the Know: Karen Farbridge, Part One

I find that the most interesting interviews seem to happen after someone has walked away from their careers rather than when they are in the middle of them.  I think that this is because when you are actually in office you are constrained by it to always think about how your words could affect your ability to function there. It's only when you've finally walked away from it that you have both the time to think clearly and objectively about what you've done, and, the freedom to say what you really think about things. To that end, I was happy to do an in-depth interview with Guelph's past mayor, Karen Farbridge.

I think it's important to mention in passing that Karen and I go way, way back. I first met her in 1978 and she is probably my oldest friend in the Royal City. But I hope that that doesn't mean that I can't do a fact-based, objective interview with her. Ultimately, that's for the readers to judge, though.

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Karen Farbridge, our 40th and 42nd Mayor in Guelph.
Original image from U. of Guelph website, used under
Fair Use provision, cropped by Bill Hulet

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Bill Hulet: I heard that there was a talk you gave in London shortly after you lost the 2014 election to Cam Guthrie. Could you tell me something about that?

Karen Farbridge: There is a woman [Ashley Good] who has a business---I think it's called "Fail Forward"---she does work with---I think Doctors Without Border, but it might be Engineers Without Borders---one of those. In addition to their standard annual report, they also do an annual "Failure Report" where they highlight the year's projects that didn't work and why. The point of her work is help institutions and individuals have conversations about failure without triggering a bunch of negativity. Or criticism. And how to do this without making people feel threatened.

She was brought in to facilitate a conversation at the 2015 Federation of Canadian Municipalities meeting about what I'd learned from what I hadn't been able to achieve as Mayor of Guelph.  

Bill Hulet: In business people often talk about the need to experiment, push the envelope, "break things", stuff like that. But in governance you aren't really supposed to take any risks at all.

Karen Farbridge: The problem with politics is that there's always somebody who will want to take advantage of somebody and sort of flog it. One example would be the SUBBOR [SUper Blue BOx Recycling] project. Remember that?

Bill Hulet: That was the idea that you grind up everything and ferment it and burn the gas to make electricity?

Karen Farbridge: Yeah. 

So the city had an opportunity and we took it. We provided some space for them to test their facility. And when they were not successful, and they were not able to demonstrate the effectiveness of their process---all of a sudden it became the city's failure. 

Right?

And it got caught up in the lawsuits and stuff like that. So they sued us. It turned out that that was pretty much how they made their money---through lawsuits. So it became somehow that the city had failed.

But we had taken a risk on an opportunity. At the end of the day we were whole. We didn't invest any of our own dollars into it. We didn't pay them to process our waste. It didn't work---but I'm sure we learned some things along the way. 

But we never were able to go back and learn from it---people just wanted to move on and forget about it.

Our administration did a really good job in the agreement of protecting the city, and we were left harm free. But it's an example of even when it wasn't a failure in any sort of measured way, it was used to be a negative story. And yet we'd taken advantage of an opportunity to see if it could have worked for the city. 

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The Saga of Eastern Power

SUBBOR is an interesting study all in it's own. It turns out that it was a project run by two brothers---Greg and Hubert Vogt---who are the owners of "Eastern Power Limited". And as Karen mentioned, this company has a history with governments and lawsuits---.

The earliest reference to Eastern Power Limited's legal issues is a throwaway reference in a story about Guelph's SUBBOR troubles in the magazine Solid Waste and Recycling:

(Interestingly, Eastern Power sued Italy’s largest municipal utility for $162 million in damages in the late 1990s over what Eastern called a breach of contract related to a deal to supply a plant to generate power from sewage in Rome. The Italian utility won and Eastern Power was ordered to pay $44,000 in costs.)

Unfortunately, I wasn't able to find any other reference to this lawsuit or the project in general.

In addition, Eastern Power has built two facilities that recover methane gas from landfills which were used to create electricity. The first one was at Brock West in Pickering which was installed in 1991. A second facility was installed at the Keele Valley landfill in Maple in 1995. (This was the largest landfill in Canada and the third largest in North America when it was in use.) Both of these facilities seem to have functioned according to specifications.

The Brock West methane collection facility in Pickering.  Image from the Keneidan Construction website,
used under the Fair Use Copyright provision.

In 1998 Guelph signed a contract with Eastern Power Limited to provide a space plus a source of garbage so they could display their SUBBOR technology.  The federal government had already ponied up $7 million to fund the project, and, the company had a proven track record because of their success running the Brock West and Keele Valley methane collection plants---the second and third largest landfills in North America. The idea was that the Vogt brothers had three years to show that their technology worked and at a price that would save Guelph money over the existing Wet/Dry system. Unfortunately they were unable to do so in the time allotted and the city decided to sever the connection. At this point Eastern Power sued the city of Guelph for the sum of $32 million because of "breach of contract". Eventually the Ontario Superior Court ruled in Guelph's favour on all points and awarded Guelph $4.5 million in court costs.   

Where the saga of Eastern Power really hits "over-drive" is the next project it took on. As part of the Ontario Liberal government's program to phase out coal-powered electricity generation, it was decided that the province needed to build "Peaker power plants" that would be able to harmonize electricity production and demand on days when sustainable electricity production (ie:  wind, solar, hydro-electricity, etc) couldn't keep up to demand.

Eastern Power had a background in producing electricity from methane gas collected from landfills, so it could be argued that they had some expertise in natural gas electricity plant technology. But on the other hand, they weren't experienced at building peaker plants---so some eyebrows were raised when the Liberals awarded them a contract to build two plants in the Mississauga area in 2005 instead of the experienced Albertan company TransCanada Energy (yeah, these are the same people behind the Keystone Pipeline.) These two plants were to be called "Greenfield North" and "Greenfield South". The Northern project was soon scrapped because Eastern Power couldn't find investors willing to loan them enough money to build the project. (Remember this last sentence---it will be important later!)

An election was called, and the two proposed generation stations were immensely unpopular with voters in Mississauga, so the Liberals cancelled their contracts. (They also cancelled a similar generating station in Oakville, but the contract for that plant had been awarded to Trans Canada Energy, so it isn't relevant to this story.) When Ontario Power Authority lawyers started the process of working out a settlement with Eastern Power they found that because the company didn't have any experience building peaker plants, they had found it extremely hard to find the money they needed to build the project. The only investor they could find, EIG Management Company, asked them to put in some extremely cautious controls over the way they used the money. In 2011 EIG agreed to loan Eastern Power $260 million, but only under what an ordinary person would consider quite onerous terms.

According to a Globe and Mail article published on the 7th of November in 2012,

Eastern could only withdraw money monthly and only for approved construction expenditures. In return, Eastern had to pay 14-per-cent interest on borrowed funds and pledge control of the company and virtually all of its assets as collateral.

Because of these tight controls, by the time their peaker plant was cancelled, Eastern Power had actually received only $61 million dollars. But when this happened, EIG sued the Ontario Government for $300 million in damages---and eventually received $149 million (eg: $61 plus $88 million) in an out-of-court settlement.

To understand what happened, I'll have to explain something called a "yield maintenance" amount. Basically, this is the idea that when someone loans another person some money at a specific rate of interest over a specified length of time, they expect to not only get their money back but also with a predicted amount of interest. When the peaker deal "went South" because of politics, the investors expected to get some compensation for the interest they expected to receive when they loaned Easter Power all that money. This isn't an outrageous idea, but the amount seemed out of proportion to the money actually lent. Again, to quote from the Globe and Mail article,

That provision shocked Rocco Sebastiano, a lawyer at Osler Hoskin & Harcourt LLP retained by the Ontario Power Authority, a provincial agency in charge of the negotiations. "I fell off my chair when I saw the yield maintenance amount being claimed by EIG," Mr. Sebastiano said in an e-mail dated Nov. 24 to officials at the Power Authority. "This sounds like a usury charge to me frankly."

The reporters said they couldn't find anything in the documents they looked at to explain either why EIG thought that they were entitled to such an enormous amount of money for lost interest on its loan to Eastern Power, or, why the Ontario Power Authority ended up paying $88 million. The authors of the Globe article had their own conclusions:

The controversy over the cancelled power plant serves as a cautionary tale for governments as they increasingly shift services from bureaucrats to the private sector. The risks associated with these projects are supposed to be borne by the private sector. But when deals unravel, it is taxpayers who are left on the hook.

The story of Eastern Power doesn't end with big cash payouts, though. As part of its settlement with Ontario Power Authority, it requested a contract to build a peaker plant somewhere else. This meant that they were contracted to build the "Green Electron" facility near Sarnia. The plant was finished in April of 2017, but during it's construction there were numerous complaints by people working on the facility about unsafe working conditions. And when it was finally finished, there doesn't really seem to be much need for it. According to a Toronto Star article on the 25th of January in 2018, the plant was only needed for 33 days in the previous year.

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I've gone on something of a tangent here talking about SUBBOR, but it's important to remember why it is that I'm producing this news blog. As I see it, at least part of the point of news is to inform the worldview of the readership. And this means that sometimes it's useful to go off on wild tangents when one story leads to another. It's easy to fall prey to the idea that things can be easily explained by concise narratives. But life's not really like that. Pull on a string and you never really know what the result is going to be. And how we view the world around us can often be dramatically changed by the unexpected results of seemingly random inquiries.

What I find interesting in looking at the SUBBOR story is something that I've found in other stories I've researched:  the really pernicious and deceitful way business tries and often does take advantage of both government and the ordinary citizenry. This has made me a lot more skeptical about government/business partnerships. Anyway, if you like the "deep digs" that I do on local Guelph stories---no matter where I end up with them---please consider subscribing through Patreon or making a one time purchase through the Tip Jar. Even as little as $1/month is appreciated. 

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Digital manipulation of images by GIMP

Hulet: Is part of the reason why politicians get blamed for taking risks because the media likes to do "gotcha" stories and reporters don't have time to do any meaningful research?

Farbridge: I think that's more of it. I was looking through paper clippings from all through the 90's about the various things we did. 

The paper then---because they had more resources, more reporters, who had more time. They were a huge contributor to helping see projects move forward---like the Wet/Dry, water conservation and efficiency.

We didn't have social media at that time. So I wonder what it would have been like trying to do those projects with social media. But the papers played this really important role of being a place where there was good reporting on the facts, there was good presenting of debates---criticisms but also the positives. There was a balance of that in the community conversation. 

But then when you get into the mid 2,000s with the rise of social media the paper's stories just continued to decline. At that point they only had time to go after the "gotchas"---at a very superficial level. And that would feed the social media stuff, and all of a sudden the negative stories had this platform and there was nothing counter-balance them. 

Put a positive story on FaceBook and it goes nowhere. Put a negative story on and it's shared---people put little crying icons, stuff like that. It's hysterical. There's lots of research on it---I've tested it myself. 

Hulet: And then there're examples like "Ontario Proud" that are specifically feeding that. If you have the analytics in front of you, can can tell what works and what doesn't.

Farbridge:  That's one of the reasons why I think it's gotten worse. Rob Fords and Doug Fords have always been on our councils---but there's always been a whole lot of other voices to put what they said into a context or perspective. Now it seems that those voices are amplified in a system that is driven digitally through social media and those analytics. Those voices are getting amplified out of proportion to what the larger population might believe. 

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Hulet: What have you learned about the difference between governing a city, and, being a politician and getting elected---so you have the opportunity to govern the city. I've always thought that these were two things that are very different, and are sort of at loggerheads with one another.

Farbridge: Yeah. No they are totally different. I'm much more comfortable in the governing role. I don't like the election role. I never did. How I managed that was to put together a good team who were able to work in that world and have them lead it. And where I haven't done well was when I haven't had that team. 

My second observation is it used to be that campaigns used to be six or eight weeks. Maybe a little bit of runway coming up. But not much because that would always be in the summer time. So things really just hit in September and October, you had the elections. They were over and you got to governing. 

Now the elections go everyday, the entire year, every year of the term. They just go constantly. It's not just at a municiipal level, it's at the federal level and the provincial level. The campaign is going all the time. 

Hulet: So you felt even in the middle of a term you had to be very careful about what you said, or, think about the election?

Farbridge: It's about time. There's only so much time. 

A woman who's doing her Master's---. I met her about a year ago now---. She asked the question "How do mayors in Canada express their influence and power?" We don't have a "weak mayor" system---that's a wrong use of the term. (That's where the mayor only has one vote on Council---as you know.) 

Anyway, this woman interviewed mayors across the country, and she defined things into three areas. And how she said it made a lot of sense to me. 

One is sort of bucket is executive execution, another bucket is community, and, the other bucket was politics. Her thesis is that with the resources that mayors are given in Canada that they can only operate in one effectively. Maybe a little bit in one of the others. And it depends on the context of the municipality. 

So, for example, John Tory [Mayor of Toronto] has to spend a lot of time in the political bucket because he has forty odd councilors. So he has to know who he has "lined up" on his votes before going into a Council meeting. 

Nenshi [Naheed Nenshi, Mayor of Calgary] is completely in the community bucket and has an abysmal political record in Council in terms of getting his stuff supported---because he spends his time connecting people with his lost cats over social media.

Hulet: So he's what they call "a retail politician"?

Farbridge: Yes

So when I reflected on that for my own various terms---.

My first term---because it was such a split Council---I spent a lot of time on the political side of it. A lot of time engaging Councilors. Making sure they had what they needed, making sure they were comfortable with the vote---to ensure we could move forward with decisions. 

In my second term as mayor I was able to put a lot of time and effort into execution---more fundamental governance stuff. So once Council had made a decision I put my focus on making sure Council's decision got implemented. Cause there's "no connect" between Council making policy and those policies actually getting implemented, right?  Unless you put attention to it. 

I was able to put a lot of time into the execution and I had a CAO [the Chief Administrative Officer---the person who runs the city and manages all the non-elected staff] at the time---Hans Loewig---who was very much into getting things done. So we were a great balance in terms of getting the Council's direction, and giving him the mandate, and getting things done. 

And then the third term. I should have switched to community, but I didn't. I stayed in execution and was up against an opponent who lives entirely in community: not very good politically, hasn't had a good political record, and doesn't govern. And so I lost for lots of reasons---but that was one of the contributing things. And I felt that pressure---and I was absolutely doing more in that space. But there's only so much time in the day. 

Campaigning takes a lot of time and energy. You know. Going to every event and tweeting it out and putting it on FaceBook, taking a picture wherever you go. If you watched Frank Valeriote and Lloyd Longfield now---Liz Sandals [past Guelph MPP] never did this---they are never present. They are never in the moment governing. They are running their election. 

[Karen breaks out laughing.]

They are constantly on their phones tweeting and just doing the social media stuff. So it's all about the attention span and band width. You can't be running an election and governing at the same time---and do them both well. 

Hulet: That's certainly what Mike Schreiner is doing. He's like the Ever-Ready Bunny---he's everywhere.

Farbridge: And I think that social media has raised this level of expectation---that somehow this is the job of the elected official. But they're actually supposed to do a job, and elected to govern, and sure there are community pieces to that, but the demands today on a Mayor to go to events compared to in the 2,000s---there is a night-and-day difference. And it's been exponential, its not about the growth of the city, it's about people have this expectation of accessibility that social media provides. 

So if you're not being seen to be doing it, somehow you're not doing your job. 

And Liz never got onto social media, she got criticised for not doing it. But she really made a decision---I don't know if she did it consciously or unconsciously---but she kept elections to elections, and once she was elected, she governed. 

She went to a lot of community events. But even there---I admired her---she wouldn't go to every event, every year. Take for example some fundraiser that happens every year, she'd go every other year. This set the precedent that she would not be at everything every year, every time. But the pressure was absolutely the other way. 

Hulet: It's not just politicians. I'm on five different social media accounts---flogging the blog, flogging the books. And the sad thing is that all this effort actually works. It's just part of being a writer now.

Farbridge: And artists, and musicians---same kind of thing. Right?

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I think that this is a good place to pause for now. I'll do some more work and get the next part out ASAP.

Furthermore, I say to you---climate change must be dealt with!