Land deals save the exploiters

Lawrence Solomon
National Post
September 12, 2000

When the Federation of Ontario Naturalists’ Ric Symmes, along with his counterparts at World Wildlife Fund and the Wildlands League, negotiated the Ontario Forest Accord last year with government and industry, they achieved something that would have otherwise been politically impossible — this century’s largest giveaway of Ontario’s resources to logging and mining interests. This deal, Mr. Symmes claims, was a necessary compromise given “the difficult economy of the 1990s.”

The 1990s difficult? Apart from the early 1990s, the decade was recession-free. By 1999, the year these groups signed the accord, unemployment had dropped to 1970s levels, inflation was less than 2%, government debt plummeted as the federal government and most provinces began running surpluses, exports soared and the TSE — in its biggest bull run ever — had transformed itself into a high-tech index and was poised to overtake the Dow Jones.

Many industries boomed in the 1990s, but not the ones Mr. Symmes identifies with. Not the forest industry, whose investors were fleeing, and not mining, whose stock promoters abandoned it in droves for the dot-com world. Mining and logging, two of the country’s chief rapers of the environment, were on the ropes. In their time of need, Mr. Symmes was there for them. With his help, they received government guarantees no other industrial sector could ever imagine — including perpetual access to price-frozen resources.

Instead of letting nature take her course, and letting these outdated industries contract drastically to their economically rational size, the Forest Accord ensures that the mining and forestry industries live to rape another day. In his zeal to cut a deal, Mr. Symmes has not protected the environment; he has protected two of its chief exploiters from the marketplace. Mr. Symmes pretends his deal has widespread support. In fact, the deal he and his cohorts signed with government and industry behind closed doors had widespread opposition among environmental groups, the native community and tourist operators: If the tourist industry needs intact forests to grow, it will now be taxed to compensate loggers. Neither is this resource giveaway economically sound: No independent economist in the country would endorse subsidizing money-losing resource sectors at the expense of the productive parts of the economy.

My colleague at Sierra Club, Elizabeth May, claims forests fare no better on private lands than on Crown lands. Having studied forest land regimes in Canada, the United States, Sweden, Finland, and several Third World countries, I know Ms. May to be entirely misinformed. She deplores the state of private woodlots in the Maritimes, which she presents as some sort of unregulated bastion of free-market forestry. In fact, Maritime governments thoroughly control small woodlots, adjusting wood marketing board regulations to increase feedstocks to the mills, devising managed woodlot programs to subsidize those who agree to log, and punishing woodlot owners who would otherwise stop logging. Nova Scotia’s “change-of use” tax — a steep 20% of the land’s market value as a managed woodlot — dissuades small owners from, for example, retiring on their woodlots by putting them to cottage use. The tax “keeps it in production, in forestry use,” explains Arden Whidden, the province’s director of private lands.

Yes, in the Maritimes some small woodlot owners have been clearcutting. Some, to Ms. May’s way of thinking, may be greedy; Others may need the money for their retirement. But the vast majority — about 90% of New Brunswick’s 40,000 woodlot owners, for example — have refused to clearcut, despite government policies that push them to do so, despite six years of sky-high prices, and despite the aggressive tactics of logging contractors that Ms. May describes. Small woodlot owners tend to log selectively or not at all. Yet Ms. May equates their conduct to the government’s – – even implying they clearcut more than government — when clearcutting accounts for more than 90% of logging on Crown-owned timberland, regardless of wood prices. The contrast between logging on private woodlots and logging on Crown land could not be more clear cut.

The giveaway of Ontario’s resources did not start with the Ontario Forest Accord, as the Wildlands League’s Lara Ellis correctly notes. But prior to the so-called Lands for Life negotiations that led to the accord, resource companies had limited rights and – – without subsidies — little or no ability to wreak havoc on the environment. That has changed, explains the Canadian Environmental Law Association, one of Canada’s leading environmental law firms, in a damning brief on the dealmaking, which it dubbed “The Lands for Mining Companies.”

CELA fears the government has given loggers and miners new rights “to such a degree that future governments and future generations will be precluded from making land use protection decisions. By arguably increasing the tenure of forestry and mineral interests in land use allocations, outside of the parks and protected areas designated, now, there will be huge economic costs to future governments who want to protect more land. This is partly because the process for additional protection is vague and non-specific, while the forest industry is given guarantees to present levels of fibre and wood supply, and without increased costs.” The forestry companies also obtained “undisputedly and for the first time, access to the vast lands north of the 50th parallel,” explains lawyer Theresa McClenaghan, principal author of the CELA brief.

Put another way, the resource companies knew what they were doing. And so did the Mike Harris government, which selected World Wildlife Fund, Wildlands League and Federation of Ontario Naturalists — and excluded natives and all other environmentalists — to negotiate in secret on behalf of all the rest of us.

In the past, environmentalists fought for full disclosure and a transparent public process. The Ontario Forest Accord, and the government-backed Clayoquot deal Elizabeth May defends, rips the heart out of environmental principles. The Clayoquot negotiations “were anything but open and transparent,” says Valerie Langer of Friends of Clayoquot Sound. CELA’s report states: “[T]hese commitments have been given to a selected group of companies, based on an arbitrary, ad hoc and non- public process.”

Read part 1: “The envirocrats’ betrayal of the environment”

Read letters of response

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Canadians not paying too little for water, says utilities group

Ian Jack
National Post
September 7, 2000

Responding to Report

OTTAWA – Claims by an international think-tank that Canadians pay too little for the water they consume are untrue, according to, the country’s municipal water utilities.  The Organization for Economic Co-operation and Development, in a report released Tuesday, said Canadian water rates are among the lowest in the developed world, while consumption ranks near the top of the international scale.

“To bring about more efficient water use, provincial and territorial governments should therefore implement the principle of ‘economic pricing’ without delay,” said the report.

Environment Canada figures show the average price of 1,000 litres of water is just under 40 cents, while per capita consumption, including industrial use, is 326 litres a day. In comparison, the English pay more than $4 per 1,000 litres and consume less than half as much. In the United States, prices are slightly higher than in Canada and consumption leads the world, at more than 400 litres a day per capita.  Duncan Ellison, executive director of the Canadian Water and Wastewater Association, said the cost of moving water to the end user is generally much lower in North America than in other, more crowded, developed countries.

“Canadians are paying their fair share,” he said. The cost of treating Canadian water is generally less, since it is cleaner to begin with and infrastructure is usually newer and cheaper to build, he said. “The fact that we are paying less doesn’t necessarily mean that we are drinking subsidized water,” he said.

Leaders in the Canadian environmental movement generally support a move to water meters, which only about half of Canadian households have, and to higher prices. They do not believe Canadians are paying the full cost of the water they consume.  Lawrence Solomon, executive director of the Urban Renaissance Institute, said industry and agriculture in particular should pay more.

“Generally they’re misusing it because they get it for so little.”

Mr. Solomon’s group and its sister organization, Environment Probe, advocate market solutions to most environmental problems.

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The envirocrats’ betrayal of the environment

Lawrence Solomon
National Post
August 29, 2000

The great battle to preserve Canada’s environment took another drubbing last week. The loser this time was old- growth forest in British Columbia’s Clayoquot Sound, where the chainsaws whirred while the victors — a species of environmentalists known as envirocrats — cheered them on. “We have changed,” enthused Adriane Carr of the Western Canada Wilderness Committee, a fine specimen of the mutated environmentalist. “We realize there can be a mixed economy here.”

Your group has changed, Adriane. Western Canada Wilderness Committee once helped inspire one of the biggest shows of civil disobedience in Canadian history — the 1993 non-violent protests that led to more than 800 arrests, focused the world’s attention on B.C.’s coastal rainforests as never before, and dramatically restrained the wanton destruction of one of the world’s most special places. Now your group — along with fellow envirocrats at Greenpeace, Sierra Club of British Columbia and Washington-based Natural Resources Defence Council — has joined your former adversaries: the B.C. government, which remains bent on uneconomically cutting Crown-owned trees, and the forestry companies, which are only too willing to profit from the government’s squandering ways. You have become a self- appointed, quasi-government bureaucrat, negotiating deals on behalf of the public at large, making compromises on behalf of those who don’t want to be compromised.

You are not alone, I know. Envirocrats are teaming up with industry and governments elsewhere in B.C. and Canada. Last year in Ontario, envirocrats at World Wildlife Fund, the Federation of Ontario Naturalists and the Wildlands League signed the Ontario Forest Accord, one of this century’s biggest resource giveaways. The accord effectively delivers most of the province to mining and logging interests, promising, for example, to help sawmills and pulp and paper mills obtain improved access to Crown forests in order to log farther and faster, and endorsing the ever-richer taxpayer subsidies needed to maintain uneconomic resource operations. Working on the public’s behalf, our envirocrats agreed to punish eco-tourist operations that depend on wilderness areas: If tourist operators insist on plying their trade in wooded areas, they will be taxed to compensate forestry companies for the inconvenience of logging elsewhere.

The very day the envirocrats signed the accord, the Ontario government issued press releases trumpeting its triumph, and announcing a slew of new mining subsidies. “Ontario is open for business,” the government boasted, saying that under the accord, the mining industry is free to prospect in protected areas. If ore is found, the industry can “borrow park land for mining while substituting it with land of equal natural heritage value.” After the parks are mined out, the industry would “restore land to the parks system.”

Astonishingly, the accords require the envirocrats to become mouthpieces for the industries and the governments they claim to watch over. In British Columbia, envirocrats have committed not only to endorse but actually to market old- growth wood for forestry companies. To justify the logging of old-growth forest, some envirocrats rationalize that the logging will mimic nature by taking down big trees, just as a winter storm or disease would — as if big trees, or fallen trees, pose a problem for Mother Nature. In Ontario, as part of a multi-million-dollar PR campaign to boost the image of the Mike Harris Conservatives, envirocrat Monte Hummel, president of World Wildlife Fund Canada, did his PR duty this week.

“This government has made an unprecedented contribution to conservation on a global scale. This is definitely a good day for loons, for old-growth forest and protected areas, and it’s a good day for people too,” he says, in an extravagant poster-sized insert lauding the accord that arrived on Ontarians’ doorsteps Saturday and Monday, along with their morning newspapers. The glossy, four-colour insert — Ontario’s Living Legacy — says nothing of the accord’s legacy of senseless wilderness destruction.

Although envirocrats think they are driving hard bargains and striking necessary balances between the needs of the environment and the needs of the economy, they are, in fact, being gulled. Without government subsidies, such as those that Ontario’s envirocrats helped secure for the resource industries, Ontario would see little large-scale logging. Most logging in British Columbia’s old-growth forests would also stop, because the land is worth much more as standing forest. An Environment Probe study of logging in B.C.’s Carmanah Valley, another forest battleground last decade, found that MacMillan Bloedel then stood to earn between $1-million and $2-million for logging the entire valley over many years — less than the profit one high-end tourist lodge could expect.

The Wilderness Committee’s embrace of what Ms. Carr touts as a “mixed economy” for Clayoquot Sound should not be confused with a market economy. The B.C. government runs its forests as a giant make-work project, even in the prized residential and tourist country that includes Clayoquot Sound. Private woodlot owners don’t log at a loss and, when not coerced by governments, they often don’t log at all, because wooded areas generally have higher recreational value, whether for wilderness camping, hunting or cottage lands. Private woodlot owners, unlike governments, often dream of passing on their lands to their children and grandchildren. If only the envirocrats shared the same concern for the future.


From an Ontario government press release dated March 29, 1999, the day the Ontario Forest Accord was signed.

Hodgson says Living Legacy Good News for Northern Ontario

The province’s Living Legacy and the Lands for Life process on which it was built, are good news for Northern Ontario, Northern Development and Mines Minister Chris Hodgson said today. … we can assure the sector that it has achieved the certainty it wants for the industry. “Access for environmentally sensitive mineral exploration is being protected in areas of provincially significant mineral potential, and it is business as usual for existing claim holders and mining activity already underway.”

“We are satisfied with the degree of certainty Living Legacy provides for the long term,” said Michael Wills of RBC Dominion Securities. “The government is willing to put its guarantees in a written contract and that substantially increases our comfort level.”

“It is vital that we have the access we need to land in Ontario with significant mineral potential,” said Inco’s Chairman and Chief Executive Officer Michael Sopko. “This initiative contributes to ensuring the continued success of the mineral industry in Ontario.”

“We are pleased that exploration will be allowed within the new protected areas,” said Don McKinnon, director of MCK Mining and Baltic Resources. “It makes good sense to follow carefully prescribed practices that have already proven successful in environmentally sensitive areas.”

The minister also announced that the province would be investing $21-million over two years for programs to boost mineral exploration in Ontario.

“Along with freezing mining taxes and fees, reducing red tape, streamlining regulations as well as lowering Workplace Safety and Insurance Board rates for mining, this government has demonstrated to the international mining community that we welcome its investments,” said Hodgson. “We’re proud of our track record on this front and fully intend to remain the front runners in this industry.”

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ACC premium rethink needed

Gerry Brownlee                                                                                                                          National ACC Spokesperson                                                                                                            August 14th 2000

 The Finance Minister is under pressure to re-think ACC premiums in the wake of revelations the Government’s ACC legislation has seen premiums sky-rocket, National’s ACC spokesperson Gerry Brownlee said today.

“National and many business and voluntary groups warned the Government that ACC premiums would go up under the Government’s renationalisation plans.

“The Government refused to listen.

“Dr Cullen dismissed the concerns saying “claims employers will be hit with higher costs under ACC is just plain wrong” (Media statement 6.6.2000).

“The reality is much different.

“ACC bills are now being delivered and for many businesses, farmers, childcare providers they mean much higher costs.

“Childcare providers can’t understand why they have to pay more than before, and more than the premiums faced by schools. Even with full ACC discounts they are paying 300% more than primary and secondary schools.

“The private sector based their premiums on individual claims records provided directly from ACC. The nonsense of industry classifications was done away with, and safe workplaces attracted very low premiums with poor performers paying higher levels.

“Why can’t ACC work the same way? The Government must go back to the drawing board and instruct ACC to do better than the 118 industry classifications one-size fits all approach to premiums.

“If it needs a law change National will support it.

“Dr Cullen must front up and fix the problems if his commitment to business that they won’t be hit with higher ACC costs is to have any credibility.”

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Richard Prebble to economists

August 11th 2000

Richard Prebble to economists

Speech to Economist Conferences’ Roundtable
the Park Royal Hotel, Wellington, New Zealand

10 in 2010: How ACT is going to grow the centre right vote

Thank you for the invitation to speak to the Economist’s Conference and for the wonderfully exciting topic – how ACT intends building the centre right vote and working with National to implement our policy goals for a more prosperous New Zealand.

I do not intend wasting your valuable time explaining to you how it’s the private sector that creates wealth and jobs. The fact that Carter Holt Harvey this year has $2.3 billion to invest, shows how Jim Anderton’s $100 million job machine over three years is irrelevant.

In February, when the Labour/Alliance coalition was riding the most popular honeymoon ever, ACT decided to be the opposition as National had determined the task was futile. The insurance industry told us that when they contacted National’s research unit about ACC re-nationalisation, they were told, it’s a done deal, it’s futile to fight it.

Well, ACT fought it! Using new political tools of email, the internet, Powerpoint presentations, we told business what the bill meant and generated hundreds of submissions.

When groups like Women’s Refuge and Presbyterian Social Services came to fight for competition, the right to choice and the benefits to consumers of a free market, it rocked the government.

We applied the same techniques to the Employment Relations Bill. Some 391 organisations made oral submissions. Over 2,000 substantive submissions were made, more than 15,000 form submissions and 57,000 people signed a petition in favour of the freedom to be independent contractors, to have freedom to contract.

When the Employment Contracts Bill was introduced a decade ago just 445 submissions in total were received.

ACT’s growing the centre right vote. Michael Cullen and Margaret Wilson claim that ACT is responsible for the opposition to ACC re-nationalisation and their union-promoting Employment Relations Bill.

Indeed, Dr Cullen goes further and says ACT is responsible for the collapse of economic confidence. While I believe that our role has been significant, Dr Cullen’s contribution has been more important.

The policies that the coalition have put in place will fail, even in their own terms – the gaps will widen.

The ACT caucus believes we can as a party move on from just leading the Parliamentary opposition. Since the budget National has stirred itself. This week National put up a strong fight in Parliament. Winston Peters is overcoming his depression at going within 37 votes of political annihilation and has begun attacking Mr Tamihere and Helen Clark’s role in `Dovergate’. ACT is happy to vacate this ground to the expert.

So ACT can return to our traditional role – to be the ginger group, the party of fresh new ideas, to supply a vision of how great this country can be.

Too many of our best and brightest have lost confidence in New Zealand. The ultimate vote of no confidence is to vote with your feet and migrate.

Since the election – the latest figures show some 51,000 New Zealanders, (that’s 212 a day), have left the country saying they will not return.

They do not see any leadership, practical policy solutions, or vision of a country they want to be a part of and to raise a family in.

So ACT’s first task is to demonstrate how New Zealand could be turned around.

ACT’s challenge is to describe an alternative future to the one this government is delivering.

Instead of a future of New Zealand with rising levels of dependency, deteriorating social services, poor standards in education, a Gisbornised health service, rising crime and social tensions, this country could be so different.

We can choose to have a New Zealand with excellent social services for those in need, to be a world leader in education, with every child able to read and be numerate, a health service that provides safe, high quality, accessible services and a government that is providing the framework to build a sense of purpose and nationhood.

I know which New Zealand I would rather live in and have my children live in. It’s a New Zealand that my successful 27 year old daughter in London would return to, bringing with her the skills we need.

What is exciting about this alternative future is it is ours for the choosing.

We know the policy framework needed to achieve it. We can do it in less than a decade.

ACT wants to set the country a goal.

Number 10 by 2010

Let us as a nation decide to achieve being at least 10th in the world ranking of social and economic indicators by the year 2010.

There is no social problem in this country that I know of that being 10th instead of 20th in standard of living, would not be improved by the extra prosperity.

There is no health problem that I know of that being 10th in GDP would not have the effect of lifting our present World Health Organisation ranking of 44th.

There is no education standard that would not be improved if we were 10th. In the most recent comparative test New Zealand was 23rd for teaching science.

The first goal is economic prosperity. If we set the goal as a nation to be 10th, then we have some yardstick to measure policy by.

What’s wrong with the goal of closing the gaps is that it is a Pol Pot policy. Year Zero. The income gap is closed when we all have nothing. There is no other explanation for envy taxes.

10 by 2010 measures the real gap, the growing gap between Australia and New Zealand, between the world and ourselves.

Australia is currently 13th in the world. New Zealand is 20th.

Our GDP per person is about $17,712 – Australia’s is $22,689.

So we are saying, let’s increase the average wealth in less than a decade by a third, to pass Australia and move into 10th place

Can’t be done you say?

Yes it can.

We need to be bold. We need leadership.

Every policy to achieve the goal – we already know.

As recently as 1993-1996, New Zealand was achieving 5% growth, we had inward migration, we had a tax and government compliance advantage over Australia.

By 1996 we had reached 5th in the world on the economic freedom index, by 1999 we were 14th, and today we are in free fall.

If we measure every policy against the goal – will this policy help the country reach 10 by 2010? – then I cannot think of a single policy the coalition has implemented or announced that will assist to achieve the goal of greater per capita income.

It’s an ambitious goal.

More ambitious than anything Sir Roger Douglas or Ruth Richardson attempted.

In government today they have simply ignored the fact that one adult in three is on dependency.

When the recent household survey was published showing 3,000 fewer people not recorded as jobless, Jim Anderton celebrated.

This audience knows that to be recorded as jobless on the household survey you must in the last week actively look for a job.

15,000 fewer people looked for a job. 15,000 people gave up.

It follows that if everyone stopped looking for a job, then the coalition would claim total success.

To achieve 10 by 2010 we must reach out to the 380,000 people in benefits and give them a hand up into work.

It can be done. In the United States, state after state introduced successful welfare reform.

Last year the greatest welfare reformer this century, Governor Tommy Thompson of Wisconsin, America’s longest serving governor, visited.

He has reduced welfare rolls in Wisconsin to one tenth of the level they were a decade ago.

Crime’s down, child abuse is down, family breakdown is down.

If Wisconsin can reduce welfare dependency by 90%, New Zealand can introduce a compassionate, effective welfare reform to liberate a third of our beneficiaries from welfare in seven years.

An achievable goal

ACT says we need to look at every policy.

Employment Relations Bill – will it promote investment, growth and jobs? It’s already destroying them.

Does freedom to contract promote employment? – You bet it does.

Does government monopoly accident insurance promote investment and jobs? – No.

Does competition and choice in accident cover promote growth and jobs? – You bet it does!

Does having a higher tax rate than Australia persuade people to stay and invest in New Zealand – no, it does not. So would having a tax rate below Australia promote jobs and growth? – You bet it would!

We know from the work of economists such as Scully, Caragata and others that it’s not just the tax rate, the level playing field, but the total tax take that matters.

So to catch Australia, our total tax take must be below Australia’s.

Does a virtual state monopoly in education lift standards? No it does not.

Does choice and competition lift standards in education? You bet it does – so ACT supports choice.

Does the record of independent hospitals show better return for the dollar in health? – You bet it does.

ACT also wants to look again at tough subjects like superannuation. Prefunding a tax paid benefit like superannuation makes no more sense than prefunding any taxpayer benefit, such as the DPB.

There is a growing welfare crisis. Social welfare spending increases have been unstoppable. When I had my first vote in 1969 there were just 38,346 New Zealanders on a benefit. 30 years later there are now 381,398 beneficiaries. That’s one in seven adults at a cost of $13.7 billion dollars per annum- and these are just 1999 figures.

If you make a straight line projection of the increase in benefits, you would believe that by 2020, 49% of all families will be headed by an adult on a benefit.

The figures don’t even include superannuitants – so following Cullen’s logic we should prefund the DPB.

Prefunding super from tax is one of the silliest ideas I have seen being seriously promoted. Repaying debt from surplus has got to be better than the government investing.

ACT intends entering the super debate with ideas of our own. Within the Party we have started a fundamental review of our superannuation policy ideas.

I like an idea that Len Bayliss has promoted. Let me quote him – “old people are not a burden – they are a valuable national asset already making major social contribution. They can make a much greater economic contribution, if through ‘Active Ageing’ policies, they have the choice of actively participating in the workforce. Prefunding should be given a decent and speedy burial, so that ‘Active Ageing’ policies can be developed within a soundly based political superannuation Accord.”

Let me turn to this question – how does ACT work with National?

We have gingered them along.

ACT put up a website on the Employment Relations Bill – National followed.

ACT did seminars for business – 27 last week, over 4,000 people attended.

National is also doing seminars.

This National opposition is now doing more within a year of an election defeat than National did in 1985. Much more than Labour was doing in 1991, or for that matter, 1997.

Competition leads to excellence.

ACT is setting the standard. For example, the best political Web site in New Zealand – ACT is regularly awarded this honour.

National rises to meet it – their ERB site, Walking with Dinosaurs – is a good site.

So we have to do better.

This week our site posted all amendments on the Employment Relations Bill as they were presented. We posted Hansard and the key speeches before the media reported the debate.

Indeed we are turning our website into an internet portal. If you want to know what is going on in politics, the ACT website is a must. Last week the ACT website received 185,000 hits.

It’s growing the centre right vote.

ACT has also removed from National one of their favourite political strategies.

Successive National oppositions opposed measures like compulsory trade unionism, but did not abolish it. It took National 40 years to abolish compulsory unionism.

National was able to campaign that they would administer Labour’s policies better than Labour – a credible promise.

So the believers in free enterprise, in choice, in freedom, in personal responsibility or George Bush’s compassionate conservatives, were disenfranchised. They had no one else on the centre right to vote for but National, and when National, for pragmatic political reasons decided to adopt Labour policies, the market liberals still had to vote National.

ACT gives the liberal voter a real choice.

Two weeks ago senior National MPs were telling Chamber of Commerce audiences that a National government may not be able to repeal the Employment Relations Bill.

ACT said we would.

The next day, Jenny Shipley also pledged to campaign to repeal the ACT.

So ACT is having a great influence.

So ACT will work hard to ensure that Jenny is our next Prime Minister.

But in a democracy, it’s the voters who decide.

For ACT to have a real influence in government, we need a mandate from the voters. First a majority for the centre right, and then a significant vote for ACT.

I am saying to every audience. If you share the vision of a prosperous New Zealand, of being 10th by 2010 – then you must vote for it by giving ACT your Party list vote.

It’s your choice – and as a Party of choice – I would not have it any other way.

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