Antle and Cochrane: a Northern view

From the truly Great White North, former reporter's Craig Welsh's towniebastard perspective on work this week by Rob Antle at the Telegram, and David Cochrane's speech to the Board of Trade.

Craig links to both Antle and Cochrane. [left. Photo: cbc.ca. Does that look like the face of a wild-eyed radical to you?] You can find them elsewhere on Bond as well.

He makes some valid, well-argued points about the difficult job of reporting. No argument from here and your humble e-scribbler will take a few lumps if some of the criticism of reporters Craig mentions has come from this space.

Then Craig wonders where the pro-Danny blogs are.

There are a few. It doesn't take much scrolling to find them on the blog roll at right. Craig mentions Liam O'Brien at Responsible Government League and rightly notes that Liam has changed his view markedly over the course of time. Check out nf.general on the old part of the Internet, though, and you'll find many more doing their bit to support the Danny cause. For a case in point, have a gander at the thread on Cochrane's speech.

On blogs, it can be easy to forget that the audience for blogs in this province is small. While something like Bond can reach some pretty influential audiences, there's just no matching the readership of the province's major daily or the eyeballs glued to NTV every night for Fred, Lynn, Toni, and Glen. Government puts its effort where it brings the greatest result.

It's also important to recall that Danny's comms approach is inherited, in large part, from what went immediately before. A surprising number of his comms people - starting at the top - came out of the Tobin/Grimes system and they continue to do what they learned when they started. Others who have come on board since 2003 follow the general pattern already laid out. Largely it works, or, to be more accurate, seems to work.

There's a reason why this administration, like the Tobin and Grimes ones before it, uses radio talk shows as extensively as it does. Talk radio makes it much easier to get the word out unfiltered. In dealing with other media, the messaging still works, largely because reporters work with the disadvantage of not knowing a lot of things or having the time to background a story to be properly briefed. The entire crowd in this market can be as hardnosed and persistent as the best of them out there anywhere, but more often than not you need to know what to ask in order to get the information.

Given the pressures on modern newsrooms, it is rare to see a place - print, radio, or television - with the budget or a reporter with the time to be able to undertake the sort of in-depth research Antle obviously did. Not so long ago, that sort of background would have been done shortly after the story first broke. As it is, Antle wound up taking something eight months to piece it all together. That isn't a criticism of him; rather take it as an admonition to consider the human dimension to his job and that of all his colleagues.

To get back to blogs, though, this provincial government pays as much attention to blogs as most business people in the province. While blogging has become a very potent communications tool elsewhere, around these parts, people are still waking up to the phenomenon. Your humble e-scribbler was asked again this evening by a colleague if this effort generates any business. Not a stain, went the reply, although in virtually every other market, the seemingly obvious demonstration of the impact a blog can have plus whatever other skills and knowledge are evident here would likely pull the odd hobble.

Craig finishes off with an observation about what the next six months might bring. The first couple of months of the New Year have brought all sorts of bizarre developments in politics and elsewhere.

No one knows what's around the next corner and that's part of what will make 2007 a fascinating year in Newfoundland and Labrador.

It also makes for great blogging.

David Cochrane: Patriotic Correctness

CBC provincial reporter David Cochrane spoke to the St. John's Board of Trade last week.

His speech is insightful, well-founded and hard hitting.

Geoff Meeker has a copy which he has edited slightly and posted in its entirety.

Read it.

You won't be disappointed.

Dead blog in the middle of the road

Public discussion is dead over at Sue's little corner of cyberspace.

It was only a matter of time.

Free speech isn't free if it's underground.

Quebec and NL in same economic and political boat

This column by the Globe and Mail's Konrad Yakabuski describes Quebec as a province on the edge of a financial precipice.

The basis for Yakabuski's comments is a document released over a year ago by Lucien Bouchard and several prominent political scientists and economists. They argued, according to Yakabuski, "that Quebeckers were sleepwalking toward self-annihilation by failing to address the ticking time bombs of an ever-expanding provincial debt, sluggish economic growth and a population that is aging faster than anywhere else in the developed world except Japan."

One could easily switch "Newfoundland and Labrador" for "Quebec" and the names of local politicians for the crowd in this province. The tale is the same.

Public debt and the implications of demographic change sit as twin 800 pound gorillas in the middle of the Newfoundland and Labrador House of Assembly. Not a single politician will even acknowledge their presence, let alone deal with them.

Increased dependence on federal transfers is occurring in Quebec; in Newfoundland and Labrador, restoring Newfoundland and Labrador to dependence on the federal government is the core of Danny Williams' policy.

Quebec receives 20% of its revenue from Mon Oncle Ottawa; in Newfoundland and Labrador, the figure is somewhere between 30% - the official government figure - and over 40% - the figure from the Fraser Institute.

In some respects, Newfoundland and Labrador is actually in far worse shape than Quebec.

Yakabuski notes that Quebec runs the risk of having health care eat up 68% of public spending in 2030, compared with 43% today. Newfoundland and Labrador currently spends 31% of its budget on health care, but all social sector spending - health, plus education and social services - makes up 72% of government spending.

Not only is the situation already worse in some ways, the size of the problem is increasing at a greater rate here than in Quebec. Our neighbours to the west may be facing a sluggish economy. Newfoundland and Labrador is staring into an economic slowdown induced as much as anything else by a combination of conscious government policy in the case of the oil sector and, in the case of the fishery, a chronic inability to deal with a manifest disaster.

Quebec may be ignoring a problem. In Newfoundland and Labrador, politicians seem to be working hard at making the problems worse.

The provincial government here is actively pursuing a hydro-electric development that would cost upwards of $9.0 billion to build. Hydro board chairman Dean MacDonald told The Independent recently that government is seriously considering the very expensive option of shipping power around Quebec to other markets based on the belief that the deal would pay off sometime after 2041. If Premier Danny Williams is to be believed, he is prepared to defer revenue on that approach, that is to sell power for little or no profit in the meantime. That's 35 years from now. Quebec will at least make money from its hydro power. In Newfoundland and Labrador, the government may well wind up, in effect, paying people to take our resources away for a very long time.

For both provinces, though, the words of one Quebec economist are equally applicable:

"For now, someone else is paying, and it's other Canadians. But we're going to hit a wall and [the rest of Canada] is going to say: 'You're asking us to pay for programs that we can't even afford for ourselves,' " said Claude Montmarquette, one of the authors of the manifesto and an economics professor at the University of Montreal.

Quebec and Newfoundland and Labrador are in the same economic boat.

Quebec politicians may not be bailing against the rising seas, but at least they aren't opening the seacocks to settle the ship of state lower in the water.

A magically delicious waste of time

Danny Williams is in Ireland, in part to further the Ireland Business Partnership.

Meanwhile, three other premiers - from Ontario, Manitoba and New Brunswick - are in the United States trying to make sure that the border to our largest trading partner is as easy to cross as possible.

In honour of the Premier's trip across the pond, along with an expensive retinue, here are a couple of observations.

If you look at the Newfoundland half of this partnership, there is a preponderance of emphasis on cultural pursuits. Take a look at the 2005-06 annual report. On the face of one would have a hard time understanding why this whole thing isn't called the Ireland Cultural partnership and run out of the tourism department.

Now to be fair, the whole thing costs less than the members of the House overspent on their allowances budgets in 2005, but this is labelled as a business initiative.

So where's the business?

On top of that, if the initiative is so important, if there really is such potential here, how come the news release portion of the project website hasn't been updated since November 2005? There were a couple of announcements in 2006, but they are all cultural in nature. You'll find them on the main government website though. The festival of the Sea thing had its own website and sure enough that portion of the partnership was maintained as recently as last October.

But where's the business?

Let's try the Irish side of the project.

You'll find mention of a sewer company from Ireland starting up a North American subsidiary. There's also a 10 villa condo development in Maddox Cove, which is inside the boundaries of St. John's.

Nice.

But that was two years ago.

Perhaps the single biggest result of this deal, signed originally 10 years ago by Brian Tobin and revived by Danny Williams, has been the regular trade missions from one side or the other. Lots of work for hoteliers, car rental companies, airlines, travel agents, that sort of thing. Bugger all else in the way of business deals.

While Danny Williams has a grand and glorious time in the land of his ancestors, other premiers are busily doing the legwork that will ultimately help businesses in our province. The United States is the single largest destination for our exports, over $2.3 billion annually. Ireland doesn't even crack $100 million.

Newfoundland and Labrador doesn't import much from Ireland either. Well, not in comparison with the United Kingdom, from which we get about $105 million in imports annually. We don't have a special partnership with the United Kingdom to strengthen economic ties with one of the world's major powers.

Nope.

They aren't even tackling the UK and Ireland as a regional package. The provincial government is focusing on Ireland alone, apparently.

Given a choice of where to devote his energies in this late winter of 2007, how curious that Danny Williams opted for Waterford instead of Washington, Donegal and Dublin instead of Dallas.

The choice is as revealing as the provincial government's own forecast of a looming and dramatic economic downturn for Newfoundland and Labrador. We'd better hope that Danny snags a leprechaun and bargains for his pot o' gold. If he was successful at that, as far as business and trade is concerned, that's about all the Tobin/Williams experiment would have turned up.

Dinosaur blog

A child's view of the information world, interpreted by Non sequitur, circa 2005.

Fortis expands to British Columbia natural gas

In a deal announced on Monday, St. John's-based Fortis Inc. will acquire the British Columbia natural gas distribution service Terasen Inc. from the American company Kinder Morgan. The deal is reportedly worth $3.7 billion in cash and debt.

Edited extract from the news release:

The natural gas distribution business of Terasen, referred to as Terasen Gas, is one of the largest natural gas distribution utilities in Canada. Terasen Gas is the principal natural gas distribution utility in British Columbia, serving approximately 900,000 customers or 95% of natural gas customers in the province. Terasen Gas owns and operates 44,100 kilometres of natural gas distribution pipelines and 4,300 kilometres of natural gas transmission pipelines. Its service territory includes the populous lower mainland, Vancouver Island, and the southern interior of the province. As of September 30, 2006, Terasen Gas had an aggregate of $3.6 billion of assets, an aggregate rate base approaching $3.0 billion and approximately 1,200 employees. The company is regulated by the British Columbia Utilities Commission.

"These are high-quality utility assets located in a region with strong economic growth," says Stan Marshall, left, president and chief executive officer, Fortis Inc. "Through our FortisBC electric utility operations, we are very familiar with the regulatory environment and energy markets in British Columbia."

"Our expansion into the natural gas distribution business adds a third business segment and doubles the regulated rate base of Fortis to approximately $6.0 billion. The acquisition is expected to be immediately accretive to earnings per common share," explains Marshall.

Dependence on federal income support: Newfoundland and Labrador

While there is a general understanding that individuals in Newfoundland and Labrador receive significant income support from the federal government, the chart above puts it into a perspective that is nothing short of chilling.

Employment insurance currently accounts for eight percent of typical personal income in the province. That's the highest level in Canada.

While the increase in per capita employment insurance (EI) payments to Newfoundlanders and Labradorians begins to rise noticeably in the mid-1970s, the rate skyrockets after the creation of the 200 mile exclusive economic zone and the consequent expansion of the highly seasonal fish processing industry. That occurred in 1977.

Curiously, as fish stocks depleted, the per capita EI amounts climb dramatically until the imposition of the cod moratorium in 1992.

After a period of decline in the 1990s (exclusive of TAGS and NCARP payments), the rates of employment insurance per capita climbed again in 1999. It continues to climb. This coincides with the end of federal support payments specifically made in relation to the cod moratorium (NCARP/TAGS). It also coincides with a provincial government policy which saw plants shift production to species such as shrimp.


Update:


The same figures, given in constant dollars, compared with the national average.

"...everyone is upset with us, so we must be doing a good job!"

Speaking Points for Max Ruelokke, Chair and CEO, C-NLOPB

NOIA Luncheon, February 21, 2007

[Note: May not be exactly as delivered. Thanks to Max Ruelokke and Sean Kelly for providing these notes.]

• Thanks for the invitation, it feels great to be in this group where we have many shared experiences of helping to grow this industry. I must say, I felt equally at home last month in addressing the offshore workforce on Terra Nova and the Henry Goodrich.

IMPORTANCE OF OIL AND GAS WEEK:

• The C-NLOPB commissioned Corporate Research Associates in autumn 2005 to assess how much people know about the offshore oil and gas industry and about us. Here are some of the things we found out from the survey:

• Actual impact: GDP; 3200 workers directly employed. Perceived impact: Stats from Survey - 61% of people who were surveyed had no idea of the number employed, the majority of those who responded thought it was less than 2,000.

• Actual Impact: Spending since the Hibernia discovery - $ 19 B. Perceived impact: 68% had no idea, of those who did respond, the average estimate was $1.5 B.

• Offshore Industry has many components, all with a role to play:

- NOIA and its impact
- Offshore Workforce
- Operators, individually and via CAPP [Canadian Association of Petroleum Producers.]
- Governments
- Finally, C-NLOPB

WHO WE ARE

• 21% of people surveyed felt we were responsible for regulating the O&G industry, compared to 42% for the Federal Government and 36% for the Provincial Government.

• Established in 1985 to administer the Canada-Newfoundland Atlantic Accord Implementation Acts. [Federal and Provincial]


• Key mandates:

Safety
Resource management
Environmental protection
Industrial benefits

• The Board, in many ways, serves all stakeholders in the industry, sometimes satisfying none! A good example of that is the current situation where Government appears to be upset with us and our recent decision, while at the same time we are still in the appeal period of a recent court decision in a case where we were taken to court by HMDC [Hibernia Management and Development Corporation] and Petro-Canada who claimed we were imposing an unfair requirement to spend within the Province on them.

• A former Board member once mused that “.. it seems as though everyone is upset with us, so we must be doing a good job!”

• But seriously, let’s take a look at the Board:

• Seven members: Federal appointees: Hal Stanley, Lorne Spracklin and Herb Clarke; Provincial Appointees: Fred Way, Dr. Joan Whelan, Andy Wells and myself as Chairman and CEO.

• How the Board works: Decisions are made by Board Members, by the Executive, or by either or both of the Chief Safety Officer and the Chief Conservation Officer. Fundamental Decisions involving: Rights Issuance, Extraordinary Powers, Development Plans are subject to the approval of Ministers,

• All the above are based on sound staff work by the Board’s 60 employees, who are really the heart and soul of the Board. They are highly qualified, with 89% holding formal post-secondary degrees or diplomas, with 86% having been educated in Newfoundland and Labrador. More that half of them have professional designations in engineering, geoscience, finance, human resources and public relations. They are highly skilled, dedicated, and respected by their peers in industry. There is a great blend of experience and youth, and Fred Way and I as the two full-time Board members are truly blessed to work with them.

• The basis of all the Board’s decisions is its mandate to manage our offshore resources to ensure that all purposes of the Accord are taken into consideration and a balanced decision reached. Allow me to read these brief purposes:

• (Purposes are on page 1 of the Atlantic Accord Memorandum, a pdf file on our website under “Publications”)

• You can see that keeping these all in balance can be a challenge. For this reason, the Board does not, can not and will not make political decisions. Board members are appointed by Governments to manage our offshore oil and gas resources, not elected to govern. We (or rather, most of us) wouldn’t have it any other way!

• An example of a Board decision which will have a major positive impact on the province is our R&D/E&T guidelines decision. As you will all know, we are managing the exploitation of a fixed, finite, non-renewable resource. How then do we ensure that the positive impact on our Province and Country will be felt long after the resource is depleted?

• The Board considered this and concluded that it would require those who are extracting this resource should make significant investments into research and development and education and training in our province. It was decided that an annual percentage, equal to that expended in Canada by the oil industry generally, as determined by Statistics Canada from industry sources, would be applied as a levy against production operations here. At current production rates and oil prices, this will result in the expenditure of approximately $20 M annually. Several operators challenged this decision in court, but last month the courts decided in our favour. There is still the possibility of an appeal, but we are cautiously optimistic of the outcome.

• These funds will have a long-lasting positive impact on our society, and I would encourage all those who are interested in further details to contact our office and specifically Frank Smyth, our Manager of Industrial Benefits and Regulatory Coordination, who is here today .

• Thank you for your courtesy and attention, and I hope these few remarks have been helpful in explaining who we are, what we do, and how and why we do it. If there are questions I’d be pleased to answer them.

Doing job worth news release

Intergovernmental affairs minister John Ottenheimer issued a news release today to let everyone know he had a bunch of meetings in Ottawa with federal ministers.

Nothing new happened, except that they met.

In polling season, that's enough, apparently, but it sure isn't news.

What an appalling waste of one of this administration's more competent ministers.

Why unions don't work

That got your attention, didn't it?

Well it's either why they don't work or Kathy Dunderdale's google-search aide is now working for the National Union of Public and General Employees [NUPGE].

Check out this piece trying to rally support against the idea of Atlantica, a trade deal aimed at increasing co-operation between the northeastern United States and eastern Canada.

The date on the piece is today.

NUPGE says that the idea is being pushed by the Atlantic Institute for Market Studies. That's true, but others are interested.

NUPGE says that AIMS is headed by Brian Crowley.

Problem.

Not at the moment. Crowley is off in Ottawa giving advice to Stephen Harper. Maybe the NUPGE writer didn't see Brian on the OCTRANSPO route they probably share. Crowley's move was widely reported and is found here, at the AIMS website.

It happened in November, over three months ago.

NUPGE lists the board of directors.

Second problem.

It's out of date. To be fair, NUPGE likely got this information from the AIMS website and that's where the problem rests. AIMS lists Derrick Rowe as chief executive of Fishery Products International, a job he gave up over a year ago.

Third problem?

Well, it's the overall approach. NUPGE's tirade against Atlantica is long on ideology and short on details. AIMS gets slagged, for example, because it has complained about the very large government to private sector ratio in Atlantic Canada. Lots of people do and with good reason: as taxpayers, we all pay for the general inefficiency of the bureaucracy and the burden of carrying around higher costs than we actually need to do the job.

The general rant against free trade that forms the basis of the piece has been around for 20 years. Fewer people accept it as the evidence of free trade mounts. There are ups and downs, depending on whether you are working in the Hershey factory in Smith's Falls or if you're the Mexican worker who is getting a job upgrade.

We could get into a long rant about the need for unions, especially those in eastern Canada, to update their slogan books, but that's for another time. Like the hunter-gatherers' union, FFAW, that stands as both a giant anachronism, a conflict of interest that works against its members best interests, and, as the recent experience with FPI shows, part of the cabal of business and government interests working together - even if inadvertently - to break up Fishery Products International, all the while blaming it on someone else.

In the meantime, take a quick look at NUPGE's little piece. Then go read the stuff at AIMS and make up your mind.

Maybe when you're done, you can give some thought to why people seem happy with international free trade (ok. NUPGE isn't, I know.) but want to grab the nearest pitchfork when someone promotes inter-provincial free trade.

Defining a fair share of oil and gas revenue

Wade Locke's presentation to a Harris Centre public meeting last November is now available through Newfoundland Quarterly as a five page article.

To start with, Locke notes the vagueness of the "fair share" position:

While it is feasible to calculate the level of benefits currently received by the province, especially those flowing to the provincial treasury, and also possible to estimate how those benefits evolve over time as the industry grows and matures, it is not at all obvious to determine with any degree of precision, what would constitute a "fair share" of those benefits from the perspective of Newfoundland and Labrador. Moreover, many individuals arguing for a "fair share" of benefits fail to specify explicitly the benefits benchmark that needs to be surpassed.

That pretty much describes the provincial government's approach: there is a claim but no definition. That's exactly the same way the provincial government approached the idea of principal beneficiary, oil revenues and transfer payments from Ottawa.

Then there is Locke's consideration of the value of timely development:

With all four fields being developed to their potential, provincial revenue from the oil and gas sector would peak at $1.4 billion in 2012, generate more than $1.0 billion to the provincial treasury for another 12 years [beyond that] and yield in excess of $500 million per year for at least another eight years. ...

However, at this point the following caveat is important to bear in mind: these tremendous impacts may never be realized. They are contingent on Hibernia South and the Hebron project proceeding. If these developments do not proceed, then the revenue from the oil and gas industry will fall from $23 billion to $9 billion. In other words, while enhanced prosperity is within our grasp, there is a real risk it may not be realized. Furthermore, this risk is directly affected by decisions that are within the control of the Government of Newfoundland and Labrador. [Emphasis added]

That makes it pretty clear: no Hebron and Hibernia South and benefits drop dramatically. Elsewhere in the article, Locke makes it clear that leaving the oil in the ground runs the risk of drastically diminishing benefits compared to what would accrue from timely development.

Locke noted in his presentation that oil revenues account for more than 18% of the provincial government's total annual revenue. However, Locke doesn't point out that if one looks at own source revenues, i.e. the provincial government's direct revenues, not including transfers from Ottawa, offshore revenues account for about 26% of the government's haul.

Locke's presentation was specifically aimed at the "fair share" question. Putting Hebron and Hibernia South in the slings (White Rose expansion may suffer the same fate) has an impact on the province's fair share, as Locke notes.

Those cancellations also have an impact on other economic issues. As noted previously, the provincial government's own economic forecasts put the province into a period of stagnation (near zero growth) or recession for 2008 and 2009. The primary cause of that downturn is the lack of development offshore.

Province forecasts economic slowdown

While you won't hear it mentioned by the Premier, cabinet ministers or the administration's other spokespeople, the provincial government's own economic analysis division is forecasting an economic slowdown in the province over the next two years.

The Economy, 2006, delivered with the budget in the spring of 2006 forecast a shrinkage in the economy in 2008 and 2009. Real gross domestic product (GDP) was forecast to shrink by 1.5% each year.

Economic Review 2006, issued at the mid-way point in the current fiscal year, revised the estimates and provided projections for both nominal and real GDP. Both categories are forecast to see either negligible growth of less than one percent or a shrinkage of 1.5%.

Both documents pointed to oil production and mining output, including Voisey's Bay, as the major drivers of the economic growth into 2007.

Voisey's Bay is a deal criticized heavily by the current administration while in opposition.

Background on legislature allowances

It took eight months, but someone finally put together an excellent backgrounder on the House of Assembly remuneration for legislators and the history of their allowances and other indemnities.

Rob Antle has it in Saturday's Telegram.

Insipid sameness, as some pretentious columnist called what's in the Telegram, turns out to be the sort of robust journalism the equally pretentious paper that prints her column just can't seem to produce. Can't produce, no matter how many times its editor claims to be doing just that.

Gimme insipid any day, if the alternative is pretentious blather.

If one article wasn't enough, there's also an excellent article by Antle in the Lifestyles section that describes the circumstances surrounding the changes to the internal economy commission legislation in 2000.

Antle gives us as much detail as we could expect in these two articles and there can be no excuses for people accepting the simplistic version of events tossed out from politicians anymore.

Still, there are four points Antle hasn't tackled in these pieces.

First, there's the curious saga of ejecting the Auditor General from the legislature in 2000. Antle notes "[Danny] Williams, leader of the PC party, was against it [barring the Auditor General from the legislature's accounts], but was not a member of the IEC."

That's true. The Leader of the Opposition is not a member of the commission; nor is the Premier. But in both cases some of the most senior members of the cabinet and the opposition caucus sit on the legislature's executive committee. Their job is to reflect the views of their caucus members and ultimately their respective bosses. It shouldn't matter that Danny didn't sit on the IEC; if he had a grip at all on his caucus he ought to have been able to handle this differently. That's especially the case of point supposedly so central to Williams' pledge of accountability and transparency.

Skip ahead to April 2004 and the Internal Economy Commission allowed the Auditor General to review the legislature's books once again. Williams takes credit for the move, but he wasn't on the commission as Premier any more than he was as Leader Op.

There's much more to this story that hasn't been told. It may never be told, but the version presented, even by Antle, doesn't explain how Williams could triumph at one point - supposedly - despite having failed earlier.

Antle doesn't explain the May 2004 bonus which Williams knew about at the time it was issued and, implicitly sanctioned. He couldn't be powerful at one moment and impotent the next without some better explanation than the one offered so far. Actually there hasn't been an explanation of this local version of the magic, reversing bullet.

Second, Antle notes changes made to the legislature's administration after April 2004. He points to cuts in allowances. Sadly, he doesn't explain how it could be that while members' allowances were cut, overspending on the budget line item that covers those allowances ballooned. According to the government's official, audited financial statements the legislature overspent its allowance line item by a total of almost $1.0 million in FY 2004 and FY 2005. The Auditor General's reports to date have only accounted for about $200,000 of that amount.

Third, Antle says that "Auditors found a 'significant spike' in overspending after the decision to bar them in 2000." The Auditor General may claim there was a spike in that year, but the Public Accounts - audited by John Noseworthy's staff and that of his predecessor Beth Marshall - showed a consistent pattern of overspending in the allowances line item from 1998 to 2005.

As the red line shows in the table above, the spike in spending occurred before the AG was barred, i.e. in FY 1999, tamped down for two fiscal years - after the AG was blocked - and then started its upward trend in 2003. That upward trend continued in 2004 and grew higher in 2005 in plain view of the Auditor General.

The yellow line in the table above represents the amounts identified by the Auditor General. His numbers may confirm his own theory, but the facts contained in the Public Accounts say something completely different. Sometimes people see what they look for, rather than what was. The "what was" may raise other questions that some would find uncomfortable.

The fourth point Antle hasn't touched is about the comptroller general. The version of events offered by both the current administration and the Auditor General is that the government's chief financial officer could not see what was going on in the legislature since the claims his office received in order to generate payments did not contain receipts.

This defies even a layman's reading of the Financial Administration Act, let alone beggar's the belief of anyone even passingly familiar with how things work inside Confederation Building's East Block.

Simply put, there's no way to run over a line item in the budget - especially by the $3.2 million total shown in the Public Accounts - without the guy who writes the cheques knowing about it. If he knew, then others knew or ought to have known.

Antle's last comment is well taken: "To appreciate why those changes are necessary, it’s important to remember how they were done in the past."

The difficulty is that even after his yeoman service in two fine articles, there are still crucial pieces of information missing.

It would seem that the only way to get to the bottom of the whole matter is through a properly constituted public inquiry.

Egyptian blogger jailed

From Associated Press:

ALEXANDRIA, Egypt, Feb. 22 -- An Egyptian blogger was convicted Thursday and sentenced to four years in prison for insulting Islam and Egypt's president, sending a chill through fellow Internet writers who fear a government crackdown.

Abdel Kareem Nabil, a 22-year-old former student at Egypt's Al-Azhar University, had been a vocal secularist and sharp critic of conservative Muslims in his blog. He often lashed out at Al-Azhar -- the most prominent religious centre in Sunni Islam -- calling it "the university of terrorism" and accusing it of encouraging extremism.

Egyptian blogger Abdel Kareem Nabil, 22, centre, is escorted by police officers from a police van and towards a court house in Alexandria, Egypt Thursday, Feb. 22, 2007. The Egyptian blogger was convicted of insulting Islam and President Hosni Mubarak and sentenced to four years in prison on Thursday in Egypt's first prosecution of a blogger. (AP Photo)

Roger Grimes and the Lower Churchill

1. From The Independent, a story buried in the print edition last week but given prominence on the website.

Former premier Roger Grimes says when -- or if -- Danny Williams signs a deal to develop the lower Churchill, it will be "almost identical" to the one Grimes nearly signed with Quebec in 2002. He says the project remains undeveloped because of political games played by Danny Williams' administration.

"My assessment of it, quite frankly, is this: if Danny Williams ever does a lower Churchill deal," Grimes tells The Independent, "he'll do the deal I had on the table, or very close to it, because it is the only one that makes any economic sense."

There's another story this week featuring an interview with Dean MacDonald. It won't be online until Wednesday, but as soon as your humble e-scribbler can grab a copy, there'll be a post.

2. As a backdrop to all this, read for yourself the draft agreement Roger, Dean and Danny are talking about.

Combat medicine

From CBC Newfoundland and Labrador, this profile of Lieutenant Commander Bob Farrell, a Canadian Forces medical officer recently returned from a tour in Afghanistan. [Note: ram file]

Let's do the Time Warp

Let's take a little trip through the Magic Time Machine of Hansard, back to March 12, 2002.

Danny Williams, then Leader of the Opposition was in full flight, debating Bill 65, an act to amend the Fishery Products International Act.

Mr. Williams:...It did not have to happen. We have a black eye now on the business reputation of this Province. People do not like heavy-handed intervention. They do not like it, and that is what happened in the business community. The national media are looking at it and they now see our intervention as heavy-handed. If it had happened back in April of last year, back in May of last year, there would have been no problem.

The hon. Member for Lewisporte talked about his concern about a privitive clause. We all share that concern. There should be no need for a privitive clause. There should be no need to hide behind your mistakes, so that people who have a right to sue you can rightfully sue you. We have done it; it is out there. You have this unique legislation that talks about privity, so you cannot sue us because we made mistakes. That is wrong. That could have been prevented. The legal opinion that you had last spring said that you could change that legislation for public policy reasons, and you did not do it. [Emphasis added]

Black eye on the business reputation of the province?

Think Fishery Products International after Danny Williams came to power. Think Hebron and threats to take out ExxonMobil. Think Abitibi and the threats to expropriate.

Privitive clause?

No need to hide behind your mistakes?

Think Max Ruelokke and Danny Williams' argument that the courts had no right to review government's decisions, or to be accurate their persistent failure to act as the law directed.

Something suggests Don Burridge was carrying a brief he did not write on that one.

But you know, when you go back to what Danny said then and what happened later...

It's astounding, time is fleeting
Madness takes its toll
But listen closely, not for very much longer
I've got to keep control

...

It's so dreamy, oh fantasy free me
So you can't see me, no not at all
In another dimension, with voyeuristic intention
Well-secluded, I see all
With a bit of a mind flip
You're there in the time slip
And nothing can ever be the same
You're spaced out on sensation, like you're under sedation
Let's do the Time Warp again!

Man, that was fun. We'll have to do the time warp again, really soon.

More like a small gene pool

The local New Democrats are still a little miffed that Karen Oldford decided to run for the Liberals in Labrador West instead of the party of Tommy Douglas.

"I'm quite disgusted.… I've never heard of this stuff happening before," said Nancy Riche, responding to Karen Oldford's decision to run for the Liberals in the March 13 byelection in Labrador West.

NDP president Nancy Riche said she is appalled that the Liberals competed for a candidate her party had lined up to run in Labrador West. NDP president Nancy Riche said she is appalled that the Liberals competed for a candidate her party had lined up to run in Labrador West.

"It really speaks to principles [and] lack of principles and ethics, I think."

That's a quote from the CBC story.

As much as Nancy Riche is a solid commentator and a savvy political operative, this comment suggests the early stages of late onset pinocchiosis.

Now that we have a bit more information, the whole thing sounds like typical daily life in the small gene pool known as Newfoundland and Labrador politics.

I used to be commonplace to see the same person being courted by at least two parties at the same time. That was back before the ice sheet retreated and Pangaea split up; you know back when your humble e-scribbler was actively involved in politics.

Young readers will be excused for googling Pangaea to see who played lead guitar.

In the run up to the 1989 Cucumber Battle between Tom "Shakeylegs" Rideout, right, and Clyde "Unconscionable" Wells, there was one candidate who was fiercely pursued by both Grit and Tory suitors. In the end, the candidate elected to go Tory figuring that Rideout would win. It was a fair bet and had the candidate chosen correctly, well, a cabinet seat was waiting either way. That wasn't part of the inducement; it's just a natural conclusion given who the individual is.

Trevor Taylor ran as a Dipper, if memory serves. Ditto Wally Noel, the former King of Pleasantville who could easily knock off the singularly unimpressive natural resources minister even if he ran again even for the Radical Looney A-ha-ha Party.

Floor crossing is an old sport in this province after an election. Sometimes people start out working with one party only to see the error of their ways and switching to another team.

If Nancy really wants to find the culprit in this little drama, she can look to Jack who hit the road after 16 years as head of the local NDP having done nothing obvious in the meantime to give the part a reasonable shot at being the official opposition, let alone take government.

As good as she is at partisan politics, Nancy couldn't hope to undo a decade and a half of inertia in a handful of weeks.

Province wants assets for free?

Fish minister Tom Rideout confirmed Wednesday that any sale of Fishery Products International Limited must include transfer of FPI's most valuable asset - fishing quotas - to the provincial government.

Rideout gave no indication the provincial government was prepared to purchase the quota or any other assets. His comments suggest that the provincial government will use its power under the Fishery Products International Act to obtain the quotas for free. Under the Act, any sale of FPI assets must be approved by the Lieutenant Governor in Council.

As CBC News reports, the provincial government acquired fishing quotas as part of a deal to keep the Arnold's Cove fish plant from closing.

A 2005 review by the province's auditor general found substantive problems with the Arnold's Cove deal.

Auditor General John Noseworthy reported that the provincial government provided $3.5 million in financial assistance to Icewater Seafoods Inc. contrary to government policy that prohibits direct financial assistance and loan guarantees to primary fish processors.

Noseworthy said the allocations were acquired by Newfoundland and Labrador Industrial Development Corporation (NIDC) in order to avoid concerns raised by the federal government over transfering quotas to the provincial government directly. As part of this transaction, the provincial government, through NIDC, "received a groundfish quota from High Liner Foods Incorporated comprised of allocations for [nine] groundfish species totaling 3,676 metric tonnes for 2004-05. In addition, the company agreed to pay NIDC a minimum annual lease fee of $50,000 relating to this quota."

Noseworthy concluded the provincial government violated the Financial Administration Act by advnacing money from the Department of Finance to NIDC. Noseworthy said the pre-commitment "would not meet the requirement in the Financial Administration Act for 'an agreement to be entered into for the provision of goods or services to be delivered in a subsequent fiscal year.'"

Noseworthy said that while Ice Water Seafoods was required to pay $50,000 annually to lease the quotas, that amount did not cover the carrying costs of the $3.5 million, estimated at $200,000.

While the deal was presented to the public on the basis of retaining control over the right to fish in waters adjacent to the province, Noseworthy said that Icewater subsequently transferred 72 tonnes of its allocation to a Nova Scotia interest for processing in that province. An additional 300 tonnes was transferred from Icewater to an unnamed Newfoundland and Labrador processor.

While the provincial government invested $3.5 million in Icewater, there is no indication the provincial government is planning any investment in a future operator of FPI assets. However, acquiring a business interest with no capital investment is similar to a fear being expressed about the province's oil patch and the upcoming energy plan.

In a December 19, 2006 article in the Financial Post, bureau chief Claudia Cattaneo said "[t]he province is expected to unveil an energy plan early in the new year that will bring back government ownership and control of oil and gas resources in Canada for the first time since the 1980 National Energy Program. One the greatest fears is that the plan will mandate equity ownership in oil projects by the province without contributing capital...."

Sanford Limited acknowledges purchase offer

Sanford Limited, the New Zealand fishing enterprise with slightly less than a 15% interest in Fishery Products International Limited confirmed for New Zealand media in late January that it had received unspecified offers for "most of its Canadian business" held through FPIL.

Managing director Eric Barratt is reported to have indicated that while the outcome of the offers was unknown, the offer(s) would not be detrimental to the carrying value of the company's investment.

Sanford recently disposed of its Argentinian assets. Barratt told the Dominion Post that several offers were being considered for FPIL, but that selling out of overseas fisheries was not part of Sanford's international structure.

In May 2006, Bond Papers reported on Sanford's 2005 annual report. At the time, the company directors noted that they were prohibited by Newfoundland and Labrador law from increasing their investment in the company. Increasing their investment would have shown Sanford's confidence in the medium- to long-term viability of FPI under its current ownership and management.

As well, Sanford was compelled to write down the value of its shares, which had been booked at CDN$11.00 per share, due to persistent trading of FPI shares at less than CDN$6.00 per share.

The Minister for High Dudgeon

Recreation minister Tom Hedderson "takes great offense" at allegations surrounding the selection of Corner Brook as the site for the next Newfoundland and Labrador summer games. He also finds the allegation "contemptible."

"It is very upsetting to me that completely unfounded allegations of political interference by the Opposition may have taken some of the good feelings of pride and expectation that the people of Corner Brook and all of the athletes across Newfoundland and Labrador who will be there in 2008 should be feeling right now," said Minister Hedderson. "I urge all involved in the planning and preparation for these games to ignore the senseless innuendo taking place for crass political gain."

For some reason that is completely unfathomable to normal human beings, politicians in Newfoundland and Labrador seem to feel that their emotional condition qualifies as news.

It doesn't.

Just about every paragraph of this news release is an expression of some form over emotion in reaction to the idea that a member of the opposition might make an allegation that maybe the awarding of the games wasn't kosher, that it might be politically motivated. There are few facts, if any, except that Corner Brook last hosted the games in 1986, while Harbour Grace hosted the games in 1992. The original release was much better in explaining the rationale behind selecting Corner Brook.

What we have here is a highly predictable news release from the Liberal member for the Harbour Grace-Carbonear district. It actually isn't worthy of a response.

If there was a reply, one might expect the minister to merely state the reasons offered in the original release, note the number of strong bids received and wish the bidders better luck the next time around.

What we get instead is more just more of the melodrama that passes for politics in Newfoundland and Labrador. The Premier loves to express his anger, his frustration or his pride in this that or something else. Now his ministers have caught the same political disease.

Now to be fair, not so long ago, the Liberals used to do exactly the same sort of thing. It was silly then. It is even sillier now, especially considering that this administration was elected on the pledge that they were bringing a new approach to government. Some of us thought that the foolishness would go; little did we know that what Danny Williams' team they really meant was that they would raise silliness to a new height.

Harbour Grace-Carbonear didn't get the games. Too bad. Suck it up and move on. The opposition member alleges political interference. Wow: that's original. The minister is irked. Who really gives a sweet you know what.

The risk being run here is that people who are already tuning out political news out of disgust at the House of Assembly debacle will just become convinced that politics in general consists mostly of people being sooky. Forget the important issues the province is facing: let's just yak about what - in the bigger scheme of things - is simply irrelevant.

Given Tom Hedderson's comments today, it would be hard to blame them for changing the channel, or in the case of these two legislators, changing the incumbent next time out.

Arse-lickers of Satan

Another blow for bad ideas

Nova Scotia maintains barriers to inter-provincial free trade in beer.

Beer.

That's positively un-Canadian, for cryin' out loud.

Restrictions on beer?

Another blow is struck for the cause of provincialism.

Protectionism isn't a new thing for Nova Scotia, of course, but one can only wonder why the province insists on repeating the mistakes of the past and others, closer to home, continue to advocate the same counter-productive approaches from the murky past.

Getting rid of $1.32 levy per case would be selling the farm, there, Rodney?

Get a life.

It's surprising that some politicians in Atlantic Canada didn't try to make the East Germans an offer on The Wall. You know, seeing as how they aren't using it any more. What a waste of all that good concrete, not to mention the guard dogs and land mines.

Dipper moves to Libs

The New Democrats are claiming that the provincial Liberals "poached" their candidate in Labrador West.

of course, candidates aren't like fish. You can't poach them if they aren't poachable.

Ending parliamentary immunity: as easy as pie

Last week, Premier Danny Williams stated his unequivocal support for allowing anyone to sue parliamentarians in Newfoundland and Labrador for comments made in the legislature.

If the Williams administration decided to act on the Premier's comments, it would be remarkably easy to achieve the goal. In this, the first of two articles, Bond Papers will briefly discuss the notion of privileges and immunities and how they apply in the House of Assembly. In the second article, we will examine the implications of removing parliamentary privilege and immunity as it relates to free speech.

It is important to note that Premier Williams made the comments in response to a reporter's question during a scrum:

Let's change it. From my perspective, I think the legislature should have the exact same accountability [ i.e. being sued for defamation]. That's a democratic practice that goes way, way beyond me. But from my perspective, I'd be prepared to be held accountable...those laws get changed [sic]...or anybody else in the House has to be held accountable for what they say. I have no problem with that.

Like all Westminster style parliaments, the House of Assembly and its members enjoy certain privileges and immunities. Privilege exists for several reasons, one of which is the constitutional separation of powers. The notion is embodied in Article 9 of the Bill of Rights, 1689, "that the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament."

This notion has been reaffirmed by courts in Canada. In New Brunswick Broadcasting v. Nova Scotia (Speaker of the House of Assembly), a case heard on appeal to the Supreme Court of Canada in 1993, the majority held that:

Our democratic government consists of several branches: the Crown, as represented by the Governor General and the provincial counterparts of that office; the legislative body; the executive; and the courts. It is fundamental to the working of government as a whole that all these parts play their proper role. It is equally fundamental that no one of them overstep its bounds, that each show proper deference for the legitimate sphere of activity of the other.

Freedom of speech is also widely held to be an important right of legislators for the wider public interest it serves. Members of the legislature are entitled to make whatever statements they wish in dealing with a public issue. The same privilege extends to those called before the legislature or its committees as witnesses. All may speak freely and openly without fear and without concern that comments out to be proven true before they are made.

As in all Westminster parliaments, the House of Assembly is master of its own privileges and immunities. Term 7 of the Terms of Union revived the Newfoundland constitution as it existed in February 1934. That constitution included several aspects, including the fundamental power of the legislature to decide its own internal business.

The Terms of Union also provide that the Canadian constitution applies to Newfoundland and Labrador except as varied in the Terms. This general provision not only reinforces the inherent privileges and immunities of the legislature but also provides that the provincial legislatures can establish their own procedures free of interference of the courts. This notion is affirmed in New Brunswick Broadcasting (1993).

The House of Assembly established in section 19 of the House of Assembly Act that the legislature and its members enjoy the privileges, immunities and powers of the federal House of Commons.

The privilege - including free speech - is established easily.

It can also be removed as easily.

If the Williams administration wished to remove privilege and immunity related to free speech for the House of Assembly, it need only introduce an amendment to section 19 of the House of Assembly Act. Given that the administration enjoys the support of a majority of members, it is likely the measure would pass and receive Royal Assent. Only a majority of 50% plus one of members in the legislature at the time would be needed for the measure to proceed through each of the three stages a bill goes through.

Privilege may be a part of the constitution, but it is a portion which applies only to the legislature. As such a simple majority of members may remove a constitutional provision dating back at least to the 16th century.

Thank God for snow days

Seems like Simon's posts are better - if that's possible - when he's stuck indoors.

1. A short piece on the growing tendency of elected officials hiding behind appointed officials...likely telling us how "accountable" they are all the while.

2. A longer piece on how Newfoundlanders (and likely less so Labradorians) are joining the ranks of the world's remittance labourers.

And their government is jiggy with that.

When minds are closed

They miss an interesting study that suggests one way to improve Canada's global competitiveness.

Of course, those same closed minds leap at trivial issues and petty jealousies hold them back from thinking new thoughts.

On the trivial issues front, look around for a long list of who funded the study and who worked on it. Yep. It's a conspiracy to get at our vital bodily fluids.

Petty jealousies? Plenty of those too. How ironic that St. John's Mayor Andy Wells greets the idea of Halifax being a major hub city with the same derision people in Mount Pearl reserve for his pet idea of annexing their city to his own fiefdom.

That's just like shipping government jobs out of a capital city to the hinterland. Wells opposed it when it means moving taxpayers from his city to the various bits of Newfoundland and Labrador devoid of public servants. Wells is in favour of the big waste of money - of course - when the jobs are flowing from Ottawa into his tax base.

Typical.

Wells derides Halifax as an oil centre yet misses the fact that St. John's is rapidly losing its status as an oil and gas centre largely because of the policies he advocates.

Anyway, go against the grain. Keep your mind open. Read the Conference Board of Canada's study on major cities.

You'll be rewarded with sensible observations like this one:

The Balkanization of our Economic Space

Every volume of this report emphasizes the adverse consequences to Canadians of chopping up our national economic space. The non-tariff barriers to interprovincial
trade, mobility and investment are at times so severe that they inhibit the kinds of east–west connections that characterize our deep connections outside Canada. People cannot move easily to work, some industries cannot recruit easily, students face difficulties in transferring credits from one post-secondary institution to another, and supply chains across provincial borders can face obstacles that global supply chains have eliminated. In an age of global mobility, it simply makes no sense to add degrees of difficulty to the movement of people, goods and services from one province to another.

Separated at birth 2

Conrad Black, left [Photo: canada.com], is suing an author for allegedly defaming Black's wife.

Danny Williams, right [Photo: Greg Locke], is threatening to sue people for defamation.

What's the difference?

Well, much like the grumpy-looking visages, there isn't much of a difference actually. At least on this point.

Except, maybe that Black's lawsuit demonstrates both a breathtaking command of obscure words that mean really bad things and an almost fetishistic penchant for hyphens.

Danny Williams likes short sentence. Crisp ones. Half sentences. Fragments really. Sometimes half-thoughts.

The purpose is both cases is the same: people with money, power and a penchant for free speech seek to chill free speech for others through the use of the courts.

Bonus points on this snow storm Tuesday for anyone who could read about Black's law suit and didn't have to look up harridan and slattern.

Government helps cut price on FPI sale

If current speculation is correct, Clearwater Seafoods Income Fund is floating a $43 million debenture issue to purchase some of the assets of Fishery Products International Limited (FPI). There's an option for an additional $6.0 million to be issued.

Something's in the works: fisheries minister Tom Rideout [Right] issued a news release on FPI on Monday.

If it turns out to be true, Clearwater will buy up FPI for about half the value of the income trust proposal, dithered and delayed by the Williams administration until it became useless.

Almost 50 million bucks is less than half the value of FPI's income trust fund proposal.

The impact of government policy is obvious.

Makes one wonder what was the cost per share of Tom Rideout's little dance on the tailgate of a truck in front of FPI's headquarters this time last year and the subsequent decision to prosecute the company for exporting fish.

Curious that exporting undersized fish was one of the ways FPI subsidized it s money-losing groundfish operations. That was very likely something FPI briefed government on in December 2005 when the company let government in on its financial situation and its plans for getting out of the fiscal hole.

That little tidbit did become public until after Rideout's little tailgate party. Odd that, in light of Rideout's very public declarations about the company.

Yes, if Clearwater's debenture issue is intended to finance an FPI purchase, the people of Newfoundland and Labrador should demand a public inquiry into government's (in)action over such a long period. The consequences of what appears to be neglect and bad policy could be dismantling of a company developed with public money with assets sold off for less than their real value. Take a look at a write-down Sanford took last year as a result of the FPI shenanigans.

Don't forget too that, as Bond Papers noted last may, changes to the FPI legislation were intended to make it easier to sell off the company in bits and pieces. Some others have only figured that out now.

But that easy sell-off wouldn't necessarily extend to Clearwater, a company from outside Newfoundland and Labrador and therefore - by definition - one of the foreign demons Danny Williams' administration likes to fight against.

That's where the whole thing gets a bit murky.

The provincial government wants to acquire - completely free of charge - FPI's quotas. If Clearwater wants the whole company or the bits with quota, expect the provincial government to veto the deal or try and squeeze its advantage.

But if Clearwater wants any other part of FPI at all, like say the valuable overseas marketing arm, the whole FPI saga could be over in a matter of a few weeks.

It only took three years to break up a once-proud company, with the help of the provincial government.

Changing the channel

In politics, they call it changing the channel.

That's when an incumbent is taking a few smacks in the skull without let up. So he starts talking about something else entirely.

It's especially important when the provincial pollster is in the field.

Like right now.

After all, this Premier does nothing if he doesn't try to goose polls to demonstrate how much support he has. He needs those numbers to dazzle people, like say a columnist for the Globe.

The provincial government issued 55 news releases last week in an effort to change channels from the by-election loss and the ongoing spending scandal in the House of Assembly. That's the latest aspect of the spending scandal, which of course is different from the previous scandal, as Danny Williams will tell you.

It is different of course since this aspect of it happened since he became Premier and despite earlier assurances that all inappropriate spending was stopped on 22 October 2003.

But I digress.

Let's put that 55 releases in a week in some kind of perspective.

Since the government started it's online news archive in 1996, last week was the seventh heaviest week of releases.

Those 55 releases are the second highest number for Danny Williams' administration. Only Budget 2005 beat it out, but only but two releases.

The typical number of news releases for February over the past two years is around 34. During the same week in 2004, the provincial government issued on 19 releases.

Yessirreee Bob, that's a serious effort at changing the channel.

Manitoba, Ontario move closer on electricity

Manitoba has the electricity Ontario needs.

Manitoba will develop new supplies of electricity to feed demand both in Manitoba and in Ontario.

Ontario gets the power.

Manitoba gets Ontario's cash.

Everybody is happy.

Everybody, that is, except a few people who see plots and schemes in everything designed to rob Newfoundlanders and Labradorians of their precious bodily fluids.

The concern in this province should be that the Lower Churchill will not be built simply because everyone else will get power to market before we do. No one should worry about some secret plans on the mainland to rob us blind; that's just another fantasy devoid of any basis in fact.

In the meantime, some people will continue to advocate that Newfoundland and Labrador follow the successful example of Enver Hoxha's Albania: no export of anything to anyone for any reason. Everything was developed, if it was developed at all, on a go-it-alone basis.

The approach was so successful the country was propped up by hand-outs from outsiders.

Enjoy the story from the weekend Winnipeg Free Press.

Equalization made easy

For those who can't quite figure out this Equalization thing, a short piece from the Edmonton Journal.

If you can't figure out, you aren't alone. There are about five people who actually understand how it works.

Neither of the five currently work for any provincial government in Canada.

Rectifying history

The past is whatever the Party chooses to make it....
If the facts say otherwise then the facts must be altered.

George Orwell, 1984

Apparently someone at Confederation Building read 1984 - or more likely saw the movie - and didn't get the point.

One of the major activities of The Party's Ministry of Truth was the constant rewriting of history to conform to whatever mythology The Party was spreading at the moment, especially about Big Brother.

Witness the latest Newspeak utterance from the Premier's propaganda department announcing the by-election for Labrador West.

"It is a pleasure to announce that residents of Labrador West will have the opportunity to go to the polls and vote for new representation on March 13," said Premier Williams. "The legislation was amended in 2004 to ensure a district does not go without representation for a prolonged period of time."

Seems that some Winston fouled up. He or she was supposed to go back and amend all the previous amendments to the amendments to conform to the current distortion. The factual material would then be dropped down the memory hole whence it could not escape.

A quick check of the 2004 changes to the Elections Act shows that the time to call a by-election was reduced from 90 days to 60 days. The original version was introduced by the Wells administration in 1992. Prior to that the government could wait pretty much as long as it pleased to call a by-election. That's what happened in 1987 when Clyde Wells was elected leader of the Liberal Party. The Tories decided to delay the by-election in Windsor-Buchans as long as they could. So, as premier, Wells introduced changes to the Act to prevent that kind of abuse.

Danny didn't have to wait that long to get his seat in the House.

The Williams change was a cosmetic change at worst. At best, the changes brought in by Danny Williams were inconsequential, tiny, insignificant even, at least when it comes to ensuring that the people of any part of Newfoundland and Labrador were properly represented in the House of Assembly in a timely way once a vacancy had occurred.

Only The Ministry would view it otherwise.

By the looks of it though, someone will be sent off for re-education.

Of course, he/she and his/her error will be erased as if they never existed.

Oil and Gas Week 2007

What a difference a year makes.

For Oil and Gas Week 2006, there was no news release from the provincial government praising the future potential of the industry.

Nope.

There was an announcement that consultations were starting on an energy plan due later in the spring or summer.

Hebron negotiations were moving ahead on a deal for the fourth offshore field.

The oil industry knew that the Hibernia partners would be looking to develop the 300 million barrels at Hibernia South.

Now it's 2007.

No Hebron.

No Hibernia South.

No energy plan. It's only been under development for 10 years.

Natural resources minister Kathy Dunderdale issues a news release talking about all the undiscovered potential offshore Newfoundland and Labrador. Not a peep about the contribution the oil industry already makes to the provincial economy and to the government's treasury.

Then she adds this thought:

We are continuing our efforts to establish a competitive and efficient offshore and onshore regulatory regime that encourages exploration and the timely development of discoveries, while also ensuring a fair return to the people of the province and industry...

The competitive regulatory regime for the offshore already exists and what needs to be adjusted is being adjusted - by the offshore regulatory board. Dunderdale's recent rejection of Hibernia South - based apparently on a series of flimsy excuses - hasn't done a thing to creative a competitive environment for the local offshore sector. Rather it just adds to a very difficult environment in which government demands remain incalculable.

The folly of that can be found in a number of documents, including - oddly enough - a paper written almost a decade ago by former Peckford advisor Cabot Martin. He noted at the time that the oil industry makes its capital decisions on the basis of long-term calculations measured in decades. How true.

Leaping ahead a few years, its easy to see that decisions to investigate Hebron and try to bring it onstream were taken almost a decade ago based in no small measure on the competitive offshore royalty regime the province had at the time. Likewise, the decision to shelve the project means that it will be a while before the proponents come back to the negotiating table.

By comparison, note that Newfoundland and Labrador has never accepted zero royalties, as the Americans did to jump-start exploration and development in the Gulf of Mexico. The local royalty regime also provides significantly better royalties to the provincial government than the American federal regime would provide if the recent Congressional decision is implemented.

There's been nothing done in the past three years to encourage exploration. To the contrary, exploration continues to putter along at an incredibly slow rate due in no small measure to the climate created by Hebron, Hibernia South and the foot-dragging on the gas royalty regime and the energy plan.

Any change in the current freeze offshore will depend on what sits in that energy plan. If it turns out to be a plan modelled on such paragons of sensible economic development as Algeria or Venezuela, we can expect the oil industry to invest its billions somewhere else. Danny Williams' prediction of a better tomorrow a decade from now will have to turn into a longer timescale.

With little or no action in the province's offshore, it seems words now have to serve as a poor substitute.

Our Place in Canada: More in than out

A recent study released by Statistics Canada shows that Newfoundland and Labrador generated $4,741 per capita in federal government revenues in Fiscal Year 2004 but received $9,356 per capita in federal transfers.

A widely-criticized series of articles by The Independent claimed that Newfoundland and Labrador contributed more to Canada than it received in return. It also claimed that a great deal of information wasn't available despite the fact that Statistics Canada generates both raw data and analyses of all aspects of economic activity in Canada, including federal-provincial transfers.

Among the provinces, Newfoundland and Labrador is the largest recipient of transfers to individuals on a per capita basis, at $3,468. The Government of Newfoundland and Labrador is the second largest per capita recipient of government transfers, at slightly more than $2,800.

For the record: Danny Williams on ending parliamentary free speech

Let's change it. From my perspective, I think the legislature should have the exact same accountability [ i.e. being sued for defamation]. That's a democratic practice that goes way, way beyond me. But from my perspective, I'd be prepared to be held accountable...those laws get changed [sic]...or anybody else in the House has to be held accountable for what they say. I have no problem with that.

That's what Danny Williams told reporters on Tuesday in answer to a question about the right of members of the legislature to speak freely, immune from legal proceedings in a court. The words don't flow well simple because the Premier was speaking off the top of his head, but there's no mistaking what he meant: let's change the rules so legislators can be sued for anything they say, anywhere, anytime. A right that dates back to the 16th century needs to go, not just by the boards, but over them with a hip check.

NTV wins the brownie points this week for being the only media outlet to report the Premier's unquestionable - dare we say enthusiastic - support for ending the centuries-old right of free speech accorded to members of the legislature.

While comments made about four individuals, including your humble e-scribbler garnered considerable public and news media attention, the comments quoted above have far more ominous implications.

There'll be more to say about the idea of ending parliamentary free speech, but for now let's just let Danny Williams speak for himself.

The legacy of Sir Sam

Canada has had its fair share of blow-hard and/or incompetent defence ministers.

The ones that do the most damage are the former military officers who never made it to the top while in uniform but manage to circumvent the eminent good judgment of the professional promotion system and get there through the political route.

Witness one Gordo, the current MND, but formerly a brigadier general who spent his career bouncing around inside a tank.

O'Connor seems determined to follow in the fine tradition of politicians who, as national defence minister, presume to know considerably more than they do.

Gordo, as many across the country have known for far too long, is trying to impose his vision for the Canadian Forces on a professional and highly-competent officer corps that knows their business far better than the retired zipperhead. His ideas do not stand up on their merit. Instead, O'Connor persists in advancing his ludicrous notions - like relocating JTF 2 to Trenton or creating whole new battalions of currently non-existent troops for deployment across Canada - merely because he is the political boss.

In the meantime, the far more competent Chief of Defence Staff, General Rick Hillier, faces the challenge of reconciling the demands of the men and women in the field doing the hard work of defending the country with a budget that cannot support them and Gordo's foolishness.

To give an indication of how obvious was the problem with Gordo, consider that Bond Papers pointed it out fully one year ago, shortly after the retired tank driver was appointed to the job at 101 Colonel By.

Also noted at the time was the misery being inflicted on the people of Goose Bay who have been taken in by O'Connor's promises of troops, troops and more troops. They have their hopes pinned on O'Connor's commitments.

If they are lucky, Gordo will be fired - the sooner the better - and the community can start finding a new direction for the town's major employer.

If they are unlucky, the current federal administration will leave the decidedly wrong man defence minister, waste millions of taxpayers dollars fulfilling Gordo's pledges and in the process hook the people of Goose Bay to a form of economic crack cocaine: political patronage and pork.

It will fall to a future administration, gifted with more reasonable leadership to cope with the results of the mistake inherent in putting retired military men or women in charge of national defence.

It's not like we haven't been down this road before, far, far, far too many times.

The truth hurts, part deux

The Offal News take on Tom Rideout's concerns about supposed "irregularities" in the Humber Valley by-election.

To paraphrase Lono at Offal News, Rideout's irregularity seeems to be that his candidate - correction - the Premier's candidate lost.

Hey, Denis: The truth hurts.

The period of cuts to the Canadian Forces ushered in by Jean Chretien was a dark period for not just the men and women in uniform.

It was a dark period for the whole country.

Simple thing, there, Denis Coderre, is the truth hurts.

Suck it up.

Memo to Stephane: Punt this guy into the cheap seats. He embarrasses the country.

Either that or hire him some better advisors. I can make some suggestions.

You know how to reach me.

Put on a happy face

It's polling season.

There is disquiet in some elements of the electorate.

News media are fried at the threats of law suits over libel chill.

Government's response is to flood a Friday morning with every manner of happy-face news releases.

A dozen before noon.

Still nothing though on the attack on our pride from Wisconsin.

Remember the Alamo?

A tongue-in-cheek piece in the Badger Herald calls for the United States to liberate Canada as part of the war on terror.

But is it humour or is there a serious threat being made?

With support, our Canadian heartland brethren can break the shackles of liberalism for once and for all. This would be accomplished by providing significant financial, organizational, and material backing to strengthen the position of Canadian conservatives. When they have gained sufficient power and popular support, they should be impelled to secede from the liberal elite dominating the country from Montreal, Ottawa, Toronto and Vancouver.

Preferably, this would be the first step toward statehood, though an independent Alberta, Manitoba and Saskatchewan loyal to the United States would also be acceptable. If the Canadian government attempted to quash the push for independence, we would be forced to move American troops into Canada and dissolve their government to maintain law and order, incorporating Canada into the United States as a protectorate. In this event it would be best to grant Quebec autonomy, and allow it sovereignty over New Brunswick, Nova Scotia, Newfoundland and other useless parts of the former Canadian nation. While some may find the creation of a Vichy Quebec undesirable in contrast to total annexation, let us pose a simple question. Does the United States need millions of croissant-loving French and Newfies pouring over the border and taking jobs from hard-working Americans? We most certainly think not. [Emphasis added]

Newfies?

Useless?

Hmmm.

Anyone familiar with history knows the real story of the Alamo.

Ask any Mexican nationalist.

It looks like humour.

This guy Bill Rowe wrote a column a few weeks ago that sounds suspiciously like one component of this little plan: annex Newfoundland and Labrador to Quebec.

Perhaps he's a fifth columnist on this one.

The Telegram.

Badger Herald.

Both newspapers.

Coincidence?

Maybe there's something sinister behind the clown mask.

If nothing else there is an effort here to bring down not merely a single individual but an entire nation.

We await the Premier's next scrum.

Our pride is at stake.

Let's reform campaign finance laws too, Tom

Tom Rideout is the lead man for Danny Williams efforts to take the Humber Valley by any means necessary.

It's called desperation, but hey, if they have nothing better to do than try and overturn a vote by the electorate, that's their problem.

But when Tom Rideout starts talking about the by-election with tones like "we can now confirm..." he starts to sound a bit like the police inspector in Casablanca who declares "Gambling? At Rick's? I'm shocked!"

Rideout is intimately familiar with the province's election laws. It wouldn't be a surprise to find out that ballot boxes were moved about seniors homes in his own district.

But Rideout's efforts here seem aimed at the type of innuendo that often substitutes for the lack of evidence . By implication, Rideout is smearing the neutral elections officials who did nothing but follow the law and common practice in the way set down by the legislature.

Nothing new here. Public servants in the House of Assembly - all of them the same as elections officials - are used to being blamed for the failings of politicians.

It seems a common practice for this administration to take no responsibility even for things it does. In this case it seems that the loss of an election, despite the Premier's supreme efforts, must now be blamed on those who did nothing other than follows the rules, as established, that applied equally to all candidates and all parties.

In the meantime, Rideout seems unconcerned to reform election finance laws. There are plenty of issues there from out of province donations to soft money that need to be addressed too.

Unfortunately, those things - all of which would enhance accountability and fairness in the electoral process - wouldn't help in soothing the political frustration Danny Williams' is feeling right at the moment.

Heaven knows we can't have Danny frustrated.

Countries respond to Al Queda threats to US oil supplies

Al Queda issued a general threat Wednesday to American oil supplies, including possible attacls on Mexico, Canada and Venezuela.

Bond Papers discussed oil rig security in the province's offshore last November, based on a report in the Ottawa Citizen that the federal government had drafted legislation on the issue.

The federal government is taking the threat seriously, according to public security minister Stockwell Day. Alberta has increased security, while the Saskatchewan government appears confident in the security of its oil production.

Rutter wins $3.5 million Brazilian oil contract

St. John's manufacturing company Rutter Inc.(TSX: RUT) announced on Wednesday that its 74%-owned subsidiary Unicontrol International Ltda. (Unicontrol) has successfully
renewed its contract to provide support services to 32 Petrobras platforms operating in the Campos Basin, offshore Brazil.

It's that time of the month

There are by-elections.

Corporate Research Associates must be in the field with their quarterly omnibus survey.

How do we know?

The number of government news releases about capital spending in rural areas shot up this week. Like Thursday where the first four releases are about rural infrastructure.

Hickey to pay own tab, Oram flubs badly

Despite his vehement defence of having the public treasury cover transportation minister John Hickey's legal bills in the battle with former premier Roger Grimes, Premier Danny Williams today told VOCM Open Line that Hickey would be footing the bill himself.

Many in the province - heck most people - were taken aback by the sudden change of direction.

Late in the day, Hickey turned up to tell CBC Radio that "I've thought it through and I decided that I wanted to change course here.... I'm going to pick up whatever legal cost that's going to be associated with this particular issue."

Later in the day still, Paul Oram, the Premier's tried vainly to explain to Back Talk host Bill Rowe what the heck the whole dispute was about. Rowe, a former politician and lawyer, tried in vain to get Oram to state specifically what remarks Grimes should apologise for.

Oram went down several roads, always making the same unsubstantiated claim likely contained in the talking points from the Premier's publicity department. At every juncture, Rowe shut him down with simple, obvious questions related specifically to the case.

To embarrass the hapless politician even more, Rowe insulted him at several points, essentially begging Oram to take offense and threaten to sue Rowe. Each time, Oram declined, thereby confirming that his initial point was impossible to defend. Of course that means that the Premier's point on the whole affray is nonsense as well.

Memo to the Premier: Paul Oram deserves a cabinet seat solely for his ability to defend the indefensible, repeatedly, despite the savaging of his own credibility in the process.

Williams slags Bond: the audio record

1. An audio clip of Premier Danny Williams scrum on Tuesday, from CBC Radio Noon. [The relevant part is at around 12:25 on your counter.]

2. Your humble e-scribbler responds. An interview with Ann Budgell on blogging and ethics. [Off the top of the show.]

The value of criticism

Criticism may not be agreeable, but it is necessary. It fulfils the same function as pain in the human body. It calls attention to an unhealthy state of things.

Winston Churchill, 1874-1965

Meeker on media

Communications consultant Geoff Meeker has joined the online revolution with a new blog, Meeker on media.

As Geoff describes it, Meeker on media "offers insight and analysis on the media scene in Newfoundland and Labrador, with a sprinkling of national and international commentary. This blog was preceded by the award-winning Media Spotlight newspaper column in The Express, which ran from 2002 to 2006. A sampling of columns that remain relevant or interesting have been archived...".

Geoff waded into the Hickey-Grimes affray and included some comments on Premier Williams remarks aimed at some of us in the online comment community.

His post for today draws attention to a speech next week by David Cochrane, CBC's provincial affairs reporter. Cochrane's has some strong opinions about the business community and resource issues and from the description David gave to Geoff, the speech should be an interesting set of observations on major resource development.

Interestingly, Cochrane's luncheon speech at the Board of Trade is up against a speech by Max Ruelokke to a NOIA luncheon.

Geoff always has something provocative to say about the business he came from and which he continues to deal with as a consultant.

Check him out.

You won't be disappointed.

Canada West Foundation backs Harper on Equalization

Canada West Foundation issued a paper on Monday praising the inclusion of 50% of natural resources revenues in Equalization calculations as an "interesting compromise" on the issue.

"Equalization and the Fiscal Imbalance: Options for Moving Forward" is co-authored by Ken Boessenkool and Evan Wilson. The paper suggests ways to address the so-called fiscal imbalance.

Bond Papers readers will recall that Boessenkool is the author of several papers on Equalization that advocated, among other things, the complete removal of non-renewable resources from the Equalization formula. Boessenkool is also a former senior policy advisor to Prime Minister Stephen Harper.

From the abstract:

The federal government has said that it wants to address the fiscal imbalance in the upcoming budget. Broadly speaking, this means dealing with fiscal arrangements between, and clarifying roles of, the federal and provincial governments, and fixing the equalization program. This paper does three things to stimulate debate on possible options for reform. First it discusses three broad policy pillars that together constitute a consistent approach to fiscal federalism. These pillars are: 1) "equalization as glue," which argues for the importance of equalization for our federation; 2) "after equalization, equal transfers per capita," which argues that programs outside equalization should treat all Canadians equally; and 3) "re-balancing the federation," which argues for clarifying federal and provincial roles and responsibilities.

The paper then discusses political and economic constraints facing the government as it seeks to address the fiscal imbalance. These include the current inefficiencies of the equalization program, cost challenges faced by the federal government, the political importance of Quebec and Ontario, and the influence of promises made previously by the Conservative government. Finally, the paper provides some reform options grouped into three categories: 1) the really difficult; 2) the really, really difficult; and 3) the nearly impossible.

The paper lists options for both fixing equalization and addressing other federal-provincial fiscal arrangements. When it comes to addressing the fiscal imbalance, there are many possible paths. The real challenge for the current government is to choose a path that results in a coherent system of fiscal federalism while addressing very real political and fiscal constraints. The paper does not put such a package together—it leaves this task to the current government. It does, however, present ideas that widen the menu of options currently being discussed.

The Canada West Foundation paper contains a number of recommendations, many of which the authors acknowledge would be difficult if not impossible to implement.

A fundamental right in any democracy

From the Bill of Rights 1689:

That the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament;

The elected representatives of the people enjoy a right of free speech in British parliamentary democracy for a reason. It prevents them from being intimidated by outside or inside forces.

Parliament itself, as reaffirmed in the Bill of Rights, must hold to account the Crown and the executive.

In any established western democracy, members of the legislature enjoy some measure of immunity from prosecution and a virtually untrammelled right of free speech.

What he said, another one

Libel chill, from Offal News.

Stupid is...?

Transportation minister John Hickey is suing former premier Roger Grimes for defamation over comments Grimes made about Hickey's double-billing of expenses to the legislature.

Hickey has admitted the double-billing - and in one instance a triple bill - both by paying back the money involved and by acknowledging that he and his staff members made unspecified mistakes in filing the claims.

Grimes pointed out that the first line of defence against inappropriate billing of expenses is the signature by a claimant - in this case, Hickey - on a form containing the details of the expense and some form of documentation that the expense was legitimate. Grimes has said many things about the implication of Hickey's actions and his defense and that is the nub of Hickey's claim of defamation.

Leaving aside the details of the double-billing and Grimes' comments for a moment, let's take a look at the legal action that is now resulting.

If Roger Grimes did nothing else after moving to the opposition benches in 2003, he demonstrated his ability to induce apoplexy in Premier Danny Williams. Grimes' mere presence in the House was enough to cause Williams to turn red in the face and launch into a variety of attacks on the former premier, some substantive and some - as is Danny Williams' wont - distinctly personal.

On several occasions since retiring from politics, Grimes has made public comments about the current administration. His remarks, in fact the mere fact Grimes spoke at all, was sufficient to cause the Premier and his supporters no measure of anxiety.

The comments on Hickey are no exception. Take a look at the remarks left by various pseudonymous individuals on a vocm.com poll on the issue. Given the current administration's practice of organizing responses to these things, it is a reasonable assumption that a majority of the comments left reflect the views of the Premier's political supporters.

Grimes still gets under Danny's exceedingly thin skin.

And that was the whole point of Grimes' comments in the first place.

Even if Roger Grimes loses the Hickey lawsuit and winds up issuing an apology and paying costs and damages, he has already succeeded in his political purpose.

Moreover, Hickey's lawsuit guarantees that Grimes will succeed beyond his wildest dreams.

Hickey's admitted mistakes will now continue to be the subject of media attention for months to come. His double-billing will be in front of the public on a regular basis at least until the election and possibly after.

On top of that, Hickey's action - possibly at the insistence of the Premier himself - demolishes whatever effect the Premier's communications tactic for Hickey was intended to have in the first place.

The whole idea of pulling Hickey back into cabinet, daring the police to lay charges, paying back the excessive claims and then claim vindication once charges were not laid, was to get the matter out of the public eye as quickly as possible.

Williams' political strategy here - inseparable from the communications tactics - was also to draw an immediate distinction between Hickey and the other five members of the legislature who overbilled its accounts. Recall that Williams said - initially through at least one media leak - that Hickey's case was different from the others because the amounts were smaller and the whole matter could be chalked up to the mess in the legislature's financial administration.

That was said - you will recall - when the details of the overspending were known to the Premier's Office but not to general public, and likely not to the reporter or reporters who got the Blackberry messages from the 8th floor on what the line the Premier would be taking when he spoke.

The whole thing was built around a pretty simply understanding that the public tends to forget incidents such as these after a short period of time. For the time it remained in their eyesight, they can be persuaded of a point of view by the repetition of the same messages from multiple, seemingly independent sources.

Hickey's lawsuit demolishes that little strategy as well. If Hickey had not launched his suit, the whole matter would be forgotten even today. By-elections, the pending budget, just about anything would have knocked Hickey's mistakes from the public eye.

Now they will be reminded regularly until the suit is finished its wanderings through the courts.

In a wider sense we see here enough to question the wisdom of whatever passes for strategic thinking in the provincial government these days. It's pretty dumb to give ones political opponents a rod with which to beat ones back. It's pretty dumb to undermine your own cause in the process.

But then again, such blunders are consistent with the fundamental strategic mistake Danny Williams made in his response to the House of Assembly scandal in the first place.

When the Premier and his cabinet set up the repeat Auditor General's probe and the compensation panel under Chief Justice Derek Green, they created a series of events which would bring the entire spending scandal forcefully back into the public eye right up until the October general election.

To see the folly of the Williams approach, one need only look at the public reaction to the bonus money revealed recently by the Auditor General in his annual report on government spending. Although the Premier knew of the money three years ago - and approved it by silence - and knew of the Auditor General's report before Christmas, his first strategy was to defend.

The public reaction was bitter, perhaps more than the Premier could have guessed. The Premier moved to his Plan B, namely to order the money repaid but only after his government took two days of public flogging. The Premier complained about the impact the scandal was having on his ability to government, just as he did before Christmas when the Hickey business was revealed initially, but the damage was done.

The so-called dribs and drabs of information are exactly the result of the system Danny Williams established. The Premier reaps what he sowed based on the tactical goal of limiting damage to his administration through the control of information release, rather than on debriding the wound quickly and allowing recovery to take place.

By their very nature, micro-managers are tactical thinkers. That is, they focus on the individual details, rather than looking at the bigger picture. It shows in their actions, if not at the outset, then as an issue unfolds.

In the House of Assembly scandal, the people of Newfoundland and Labrador can see the folly of purely tactical thinking. In the Hickey matter, we can see yet another excellent example of the weakness in trying to make tactics a substitute for strategy.

No matter what the outcome of the lawsuit, Roger Grimes has won this encounter already. In launching the suit, John Hickey may well have handed Grimes an eloquent defence that few will ignore, even if a judge rules against the former premier.

Dwight wins, Danny loses

Every Tory except John Hickey and Jack Byrne came off the benches to try and win the Humber Valley by-election, but in the end, Deer Lake pharmacist Dwight Ball squeeked out an 18 vote victory.

The next by-election will come in the Labrador West district. The seat will be vacated in mid-February by incumbent Randy Collins, who is leaving politics for a job in Toronto. For member of the House of Assembly Perry Canning is reported to be considering a run for his old seat on behalf of the Liberals.

Maine, NB cooperate on electricity, NL likely behind development curve

Maine Governor John Baldacci and New Brunswick Premier Shawn Graham signed a memorandum of understanding on Friday to explore increased co-operation between the state and the province on electricity distribution.

Gov. Baldacci noted that both Maine and New Brunswick produce surplus electricity much of it coming from environmentally friendly sources like wind energy. Maine has also been looking at alternatives to an agreement covering New England states that the Maine Public Utilities Commission believes will cost Maine residents US$616 million over the next five years. As a result, Maine has begun to look at alternative energy sources to ensure Maine residents are not subsidizing excessive energy consumption in other states.

The memorandum commits the two jurisdictions to explore over the next two years options on establishing a common market for electricity, improvements to transmission facilities and interconnections and generally to examine areas of co-operation on electricity generation and distribution. While both jurisdictions produce more power than is consumed in the jurisdictions, both have peak demand times when power must be imported.

The Maine-New Brunswick agreement casts doubts about the meaning and value of a recent announcement by the Newfoundland and Labrador government on the Lower Churchill.

The day before the Maine-New Brunswick agreement, Premier Danny Williams announced that his province's hydroelectricity Crown corporation had filed an application with New Brunswick's electricity regulator for long-term transmission service.

The Newfoundland and Labrador announcement is essentially exploratory in nature, since the Lower Churchill project has not been approved for construction. As Premier Williams acknowledged to news media, his government is not currently in discussion with any potential purchasers of Lower Churchill power since the costs of the project have not been finalized.

By contrast, Maine and New Brunswick are exploring options over the next to years that would lead to freer energy flow between the two jurisdictions. Even according to official timelines, Lower Churchill will not be sanctioned before 2009 and no power is forecast to flow until 2015 at the earliest. Maine's requirements are immediate and New Brunswick and Quebec have the capacity to meet those needs well before 2015.

Cost of Lower Churchill power might also place it out of competition for New England needs. Some estimates put the cost of installing subsea cabling and other transmission systems to New Brunswick in excess of $2.0 billion. That's in addition to the cost of building the Gull Island and Muskrat Falls generating complexes.

There is some reason to believe the so-called Anglo-Saxon route for Lower Churchill power would be unprofitable. Premier Williams told reports last week that he was considering selling power into New England under a deferred revenue arrangement. That's likely code for selling at a loss.

Text of MOU:

Memorandum of Understanding Between The Province of New Brunswick And The State of Maine To Enhance The Mutual Benefits Of the Maine/New Brunswick Electrical Interconnections

WHEREAS, The State of Maine (“Maine”) shares electrical interconnections with the Province of New Brunswick (“New Brunswick”);

Maine also shares electrical interconnections with other New England states;

New Brunswick also shares electrical interconnections with the Maritime Provinces and Quebec;

New Brunswick and Maine each have located within their respective borders adequate and at most times abundant generation capacity;

New Brunswick and Maine export significant quantities of generation to southern New England for the benefit of all consumers;

New Brunswick and Maine each have abundant natural resources from which renewable energy, such as wind and tidal energy, can be harvested to generate electrical energy;

Maine and New Brunswick have each adopted policies to promote the development of renewable resources;

The northeastern United States needs new supplies of electrical energy, including renewables;

Maine and New Brunswick wish to expand opportunities for the mutual development and export of new electric generation capacity resources;

Maine and New Brunswick wish to increase the opportunities to transmit energy between the State and Province and to their neighbors in Canada and the United States;

Maine and New Brunswick wish to improve the efficiency of their respective electric systems and the interconnections between them to benefit consumers and the environment; and New Brunswick and Maine acknowledge the significance of climate change and recognize the importance of emphasizing the development and deployment of low emission electricity generation in the future.

NOW THEREFORE,

I, Shawn Graham, Premier of the Province of New Brunswick, and I, John Elias Baldacci, Governor of the State of Maine, do hereby enter into this “Memorandum of Understanding Between the Province of New Brunswick and The State of Maine To Enhance The Mutual Benefits Of the Maine/New Brunswick Electrical Interconnections” and do hereby agree as hereinafter set forth.

Maine and New Brunswick agree to explore expansions of generation capacity, including renewables, and transmission opportunities by agreeing to jointly undertake the following tasks:

1. Study the feasibility of expanding generation capacity and transmission infrastructure to increase electrical flows across borders;

2. Identify processes and systems to provide transparency and efficiency in Maine and New Brunswick markets;

3. Study the feasibility of developing common market rules that could be applied in Maine and New Brunswick;

4. Explore the potential benefits and technical and legal impediments to the common provisioning of control area services (including balancing, dispatch and reserve sharing);

5. Explore the tariff and governance structures required for a regional transmission organization for Maine and New Brunswick; and

6. Examine the opportunities for compatible greenhouse gas emissions reduction regimes in the electricity sector.

Maine and New Brunswick agree to dedicate sufficient resources from their respective state and provincial agencies for the completion of the tasks described herein. Maine and New Brunswick agree to appoint one person from each government to serve as each state’s or province’s, as applicable, point of contact (the “Joint Representatives”).

The tasks are to be completed in two phases. Phase 1 work will overview the tasks, will assess priorities and possibilities, and will identify common principles (the “Principles”) to guide additional work and any future implementation. The Joint Representatives shall deliver to their respective governments a report on the Phase 1 activities no later than June 1, 2007.

Upon completion of Phase 1, and agreement on the Principles, Maine and New Brunswick agree to proceed to Phase 2. It will be guided by the Principles and will complete detailed assessments of all tasks. The Joint Representatives shall present a final Phase 2 report to their respective governments no later than January 1, 2008.

Upon completion of the tasks identified above, Maine and New Brunswick agree to consider entering into a further agreement to implement mutually beneficial actions. Upon mutual consent, this further agreement may include other states or provinces.

Signed and delivered this 9th day of February, 2007.

Premier Graham Official Signature Block

Governor Baldacci Official Signature Block

[Source: Maine Governor's Office]

Abitibi shedding power plants

Canadian Press reports that Abitibi Consolidated is transferring some of its electricity production to a new company owned 75% by the paper giant and 25% by a Quebec financial institution. The deal will yeild gross proceeds to ACI of slightly less than $300 million, according to an Abitibi news release.

Industry analyst Paul Quinn notes, however, that the move could jeopardize Abitibi's low-cost power generation, which might, in turn, affect paper pricing and profitability.

He doubts that more than 50% of existing assets would be transferred to the new company, despite company claims that it is looking at moving more and more power assets to the new company.

Fish crisis hitting Europeans, too

From Associated Press, this article on trends in Europe to save fish stocks.

One interesting comment from the article notes that during the 1980s, Canadian fishing interests ignored warning signs that fish stocks on the Grand Banks were in trouble, just as many European fishing countries are doing even today in other places.

One of their number continues today to blame everyone but himself and his colleagues for the cod collapse and refuses to acknowledge the responsibility of Canadian fishing interests in driving overfishing within the 200 mile exclusive economic zone.

They never learn, it seems.

No job creation = outmigration

The provincial government's economics and statistics agency is reporting that 4,849 people left Newfoundland and Labrador in the third quarter of 2006.

Overall, the province's population declined by 4,584 between October 1 2005 and October 1, 2006 going from slightly over 513,000 to slightly under 509,000.

In January 2007, Bond Papers published a chart [Above. Source: Bond Papers] comparing outmigration by quarter.

The third quarter of 2006 was the highest quarterly period of outmigration for the province since 1993.

Outmigration; typically caused in Newfoundland and Labrador by a lack of jobs, not by, as Danny Williams claimed recently, by young people having big debts coming out of their education. Young people in Alberta with huge education debts don't head for Nova Scotia. Nope. They stay at home where the big jobs are.Take a look at this chart on migration by level of education, taken from a slide presentation your humble e-scribbler sat through about a decade ago. You don't need to blow the thing up - although you can by clicking on it - to see that pink line. It represents people with university degrees. In each of the four periods, starting with the five years between 1976 and 1981, the pink people have left the province in droves substantially beyond other educational cohorts.

Their leaving was not stimulated by the crushing load of debt they carried. In relative terms, debt in the early period of that slide was lighter than student debt today. In the later periods it might have been on par - relative to salaries.

In just three years, the Newfoundland and Labrador economy has gone from leading the nation to heading for the bottom of the pile. Economic growth in Newfoundland and Labrador will be pedestrian come 2008.

Just like it was in the 1970s and 1980s.

The huge difference between now and then is that then there simply weren't the opportunities. We dreamed about opportunities as we loaded up the car to head to Ontario or British Columbia or Alberta where there were jobs. We made some good deals along the way, when there were deals to be had. We walked away from a few too, like with Quebec in the early 1990s.

In 2006, we had opportunities; solid opportunities with good financial deals tagged along. The stuff we used to dream about. And then someone started shutting everything down, Hebron and Hibernia South.

Deliberately.

Opportunities get missed, like with Labrador West and Consolidated Thompson.

So, outmigration heads back up to levels not seen since the collapse of the cod fishery.

Should we be surprised?

Be media savvy

On Sunday mornings, CBC Radio One has been running an excellent series on political spin and the news media.

You can find the programs web page here, along with archived interviews and audio files for the hour-long episodes. The Ep 4 one is here.

Episode 4 is on political spin, leaks and the planting of stories as a means of influencing news coverage. Interestingly, one of the chief spin practitioners interviewed is a former journalist who later went to work for Mike Harris. There is also a great interview with a guy who was a respected journalist and a respected communications guy and who is now the respected senator Jim Munson.

Of course, local news media aren't spun by politicians. Heavens no. It's not like you'd ever hear local reporters say phrases are that are almost identical to words that will later come from a politician's mouth.

Like that Goudie and Hickey were different from the "others" because the amounts were small and the whole thing was just sloppy administration at the House of Assembly.

Or that the New Democrats will be or already are the real opposition party in the province.

Local reporters being spun by politicians?

How could you even think such a thing?

Next thing you know, you'll be saying that the Confed Building sends callers to talk shows with talking points to support government's spin agenda.

Seriously though, in the interests of becoming much more media savvy, in order to learn how the sausages are indeed made far too frequently, give Spin Cycles a listen.

_________________________

Update: And when you're done with that, take a gander at Simon Lono's take on spin.

FLQ encore?

From la presse, word that the Royal Canadian Mounted Police are investigating communiques purporting to come from the Front de liberation du Quebec (FLQ).

In the new stories, RCMP have reportedly questioned members of the Societe Saint-Jean-Baptiste, a nationalist association, as well as other well-known nationalists.

Radio-Canada reports that police have turned up at places of work and stopped individuals on the street as part of their investigation.

As Canadian Press reports, the letters, delivered in mid-November and mid-January threaten bomb attacks against a variety of public infrastructure sites such as bridges and railroads, as well as in the supposedly anglophone "cities" of Beaconsfield, Baie d'Urfe and Mont-Royal.

(h/t to indiescribe)

The story was reported by cbc.ca and other English-language media in January.

Some information on the military aspects of Operations ESSAY and GINGER can be found here, in an article published in Parameters by Dr. Sean Maloney.

Analyst: NL economy from top to bottom of pile by '08

Laurentian Bank Securities' analysis of provincial economies forecasts that Newfoundland and Labrador will experience 3.5% real economic growth in 2007 - third largest growth in the country - but fall to last place among the provinces in 2008.

The cause: a lack of major economic development. Projects that were in development have all been cancelled. None of the others proposed are certain or are not close to development.

The analysis, extracted below for Newfoundland and Labrador, is simple and concise. It also corresponds to observations made previously by Bond Papers.

Newfoundland & Labrador to rank third in real GDP growth in 2007 …but last in 2008

In the 1990s and early 2000s, economic growth in Newfoundland & Labrador was rock-solid. Manufacturing, retail, construction and transportation sectors benefited from massive investment in the resource sector. Unfortunately, the labour-intense construction phase of massive projects ended last year, leading to adverse impacts on the economy: the province was virtually at the bottom of the barrel for growth in retail sales and housing starts. Also, the 111,000 barrels of oil extracted in 2006 was unchanged from 2005 (see chart). Problems with the gas compression system at the Hibernia oilfield and longer than-anticipated shutdowns at the Terra Nova oilfield were offset by the first full year of extraction at the White Rose oilfield. One area of strength was the mining sector, thanks to the start-up of nickel extraction at the Voisey’s Bay mining site. Altogether, we estimate the economy expanded at a respectable pace of 2.5% in 2006.

Canada’s most easterly province is likely to be the leader in the Maritimes this year, with real output growth quickening to 3.5%. It is important to notice that this acceleration is primarily coming from the oil industry, assuming activities at the Hibernia and Terra Nova oilfields resume as planned. Besides the oil sector, the rest of the economy is expected to expand slowly in 2007. In 2008, total oil production should edge down slightly given that reserves are declining at the Terra Nova oilfield. As a result, real output growth is anticipated to ease to 1.7%.

New projects to light N&L’s economic future?

The province needs to find new capital projects to feed both the labour market and the economy. One good news is that two dwells drilled has led to the discovery of an extra 190 million barrels of recoverable oil resources at the White Rose oilfield. However, this discovery won’t lead to massive investment. In fact, none of the major investment projects proposed lately are fully certain to go ahead yet. In mid-January, the Newfoundland & Labrador government declined the proposal from a group of oil companies looking to expand the Hibernia oilfield. And, back in the spring of 2006, the province and the same group of oil companies were unable to find a deal to develop the Hebron oilfield. No agreement has been reached for a number of reasons. On one hand, the provincial government is not willing to accept new oilfields development without reaping more benefits for its residents. This is understandable. Standards of living of Newfoundlanders and Labradoreans – measured by per capita real output or per capita real disposable income – is well below the national average. It is also more difficult to find a job in this province than anywhere else in the country, amid an elevated jobless rate of about 15%. It is not surprising then to find out that the labour force had stalled in the last two years and that a growing number of residents are moving to Western Canada, lure by job opportunities. On the other hand, the oil industry wants to make sure that their private investment in the province will be profitable in the long run.

The bottom line is that the economic future of the province is highly tied on both parties’ abilities to find a consensus about the potential development of resource projects. If a deal is reach, the benefits are likely to be felt beyond 2008 and not alter meaningfully our 2007-08 forecast. The potential development of the Lower Churchill hydroelectric resource is another project that could provide a fresh impetus to growth.

Shift from deficits to a respectable surplus

On the fiscal front, the provincial government has successfully turned the boat around and recorded a surplus of $199 million in the fiscal year 2005-06. This is quite an improvement compared to the $489-million deficit reported the year before. The government forecasts a $6 million surplus for fiscal 2006-07. Looking forward, the fiscal outlook could depend heavily on the outcome of a new deal on equalization payments. The latter count for about one of every six dollars in revenues in Newfoundland & Labrador. The exclusion (inclusion) of royalties revenues in the 50,000 formula will be good (bad) news for oil-rich province.

Some rejected campaign slogans

As the three major political parties in Newfoundland and Labrador get ready for the fall general election, their advertising consultants are busily working to come up with slogans that capture the mood of the times.

Some rejected slogans, found inside an empty Mary Brown's snack box recently, along with notes on why some were rejected:


1. We're in the money!

2. Ready for a better tomorrow.

3. My way or the highway.

4. Danny 2: A Newer Approach

5. The buck stops here!

6. Ross for Boss. (Note: Put this one aside for 2011. [initialled] JC])

7. Do the right thing.

For the record: Danny Williams' 2001 speech to Nova Scotia Tories

Shortly after taking power in 2003, the provincial Progressive Conservatives stripped their party website of any documents from their time in opposition.

The reasons are inexplicable.

The site could have been re-arranged but older, important document still retrieved via google. Could have been, that is, if the Tory webmaster hadn't also blocked access to the old stuff.

Never fear, gentle reader. Some of us saved files for just such an eventuality.

In light of recent events, it is useful to go back and look at what Danny Williams said to a bunch of Nova Scotia Tories in 2001. Williams had just recently been elected leader. Some of his recollections of what had happened just prior to that might not be entirely in accordance with the historical fact, but in the six years that Danny Williams has been in elected politics, some of us have come to understand the Premier's penchant for making things up as he goes along inaccuracy.

A few things to note:

1. The then-newbie politician apparently spent 25% of his working day listening to radio call-in shows. The practice continues but now draws in public servants.

2. The obviously visceral hatred evident for the federal government, which Williams equates with "Liberals".

3. In light of the campaign to increase federal transfer payments through Equalization and offshore revenue side-deals, the oddity of this statement: "We don't want handouts. We want our pride back. We want to be independent and self-sufficient."

4. The numerous historical fallacies - a polite word for falsehood - like the bit about the federal "manipulation" on the Upper Churchill deal or pre-Confederation Newfoundland "owning" adjacent ocean resources.

Williams sees cooperation
among Atlantic provinces as
the key to battling Ottawa

Notes for a Speech by Danny Williams,
Newfoundland and Labrador PC Party Leader,
at the Nova Scotia Annual Premier's Dinner
Halifax, NS, Saturday, June 2, 2001

This text may vary from the delivered version

Thank you very much for the invitation to speak to your annual fundraiser this evening. Unfortunately, my wife, Maureen, could not join me as she is attending a graduation party for the son of a close family friend.

I want you to know that I feel very much at home here tonight. Both Maureen and I remember fondly the day 30 years ago as newlyweds when we jumped into our beaten-up '61 Valiant Station Wagon and headed for Dal where I obtained my Canadian Law Degree. Our memories of student poverty are treasured. In particular, I vividly remember one lunchtime in Dartmouth when we were trying to scrape together the price of two snack packs of Kentucky Fried Chicken by hauling out the seats of the car to get some loose change to make up the shortfall. The Colonel hasn't tasted as good since.

But my fondness for this province is not just personal. It is also cultural. We have a history and values that go back centuries before Confederation. The bonds that unite us are far stronger than the few differences that could divide us. We have common goals, common interests, common challenges, common vulnerabilities, common opportunities and of course a common boundary. But we have been more than just neighbours sharing adjoining properties. We have been partners sharing enterprises, resources and people. We hold kinship in thousands of families throughout both our provinces. Many Newfoundlanders and Labradorians like myself have received quality education in your province and are alumni of Nova Scotia Universities and Colleges. So when I say that I feel at home, I mean it. Our Atlantic Canadian family is a strong bond that unites us all.

So you may ask yourself why am I here tonight. By way of quick background, just a year ago I was a very happy man. I had a good law practice, a successful business, some free time for my family and a chance to play the odd game of golf. But then the Leader of the P.C. Party in Newfoundland and Labrador, Ed Byrne, resigned and, in the absence of a strong successor, I decided that the province needed a change in leadership and direction - and I threw my hat into the ring. As a result, I sold my business to avoid conflict of interest. My practice is drying up because people think I'm too busy, and I now spend at least 25 per cent of my time listening to our open line shows and less time with family. In the last seven months, I have campaigned in the fall federal election - and also in two winter by-elections on the Great Northern Peninsula, both of which we won. I have had a leadership convention in April, and I now find myself running in a by-election in Corner Brook to obtain a seat in the legislature. I didn't realize how good I had it! Premier, no one will ever convince me that the role of a politician or a party leader is an easy one. As CEO of a private company, you are top dog - but in politics some days you are the dog and some days you are the hydrant.

But it does have its light moments. One supporter told me at the convention that the Liberals in Newfoundland should erect a sign in Port aux Basques that the light at the end of the tunnel has been turned off indefinitely.

And another voter who wanted change in the Northern Peninsula told me that politicians and diapers have something in common: they both have to be changed regularly, for the same reason.

But all jokes aside, I am truly enjoying the experience and challenge of political life. Like Premier Hamm, I did not seek the position for something to do to fill the leisure hours. I have sought this position because I love my province, because I see some things that are desperately wrong that need fixing, because I think I bring a background to the table that can make a difference and because I cannot rest until I have tried.

The more that I see, the more nauseous and angry that I get. The way that our people and our region have been treated by one arrogant federal Liberal government after another is disgusting. The legacy that the late Prime Minister Trudeau and Jean Chrétien will leave in Atlantic Canada is one of dependence on Mother Ottawa, which has been orchestrated for political motives for the sole purpose of maintaining power. No wonder the West is alienated and Québec has threatened separation. Canadians - and Atlantic Canadians, in particular - realize the importance of dignity and self-respect while Ottawa prefers that we negotiate from a position of weakness on our hands and knees. We must heed the words of J.F.K. who said, "Let us never negotiate out of fear, but let us never fear to negotiate."

Our fellow Canadians must wonder why Newfoundlanders and Labradorians are always angry, always complaining about the inequity of the Upper Churchill, when we receive unemployment and TAGS benefits from Ottawa together with generous transfer payments.

We don't want handouts. We want our pride back. We want to be independent and self-sufficient. We have already lost 30 years of profits from the Upper Churchill representing tens of billions of dollars. If we had just ten years of profit from the remainder of that contract at today's prices, our province would be debt-free. Instead, Ottawa saves that money by paying less to Québec.

Last year, over $2 billion worth of oil left our shores - and, after the federal clawback, we netted $12 million. Our mining industry last year produced over $1 billion, and we netted $4 million after federal clawback.

If Voisey's Bay is developed, we will net approximately $6 million after clawback on over a billion dollars worth of nickel production.

So on those three items alone with $4.5 billion dollars of annual production we would net $22 million dollars on royalties after federal clawback of 70% and 80%.

Not to mention the gross mismanagement of our cod fishery by the federal government, resulting in its destruction; the bartering of our fishery rights for favoured access to international markets; and federal manipulation in favour of Québec on our hydroelectric power.

That is why we are angry, we just want a fair share. Comments like "fish have no home" from Trudeau, the philosopher king, might make good soundbites, but they portray arrogance and contempt for a hard-working people who have been deprived of their heritage.

In Atlantic Canada, we are resource-rich but economically poor. We do not benefit as we should from our resource bounty, and part of the reason is that we gave up ownership and control of some of our most important resources when we joined Confederation. Prior to that, we were a sovereign country and we owned the sea's resources. We brought with us the fish in the ocean and the oil and gas in the adjacent ocean shelf, and God knows what else might be discovered in years to come with new technology.

By contrast, the provinces of Alberta and Saskatchewan were carved out of federal lands in 1905. The federal government of that day gave those new provinces ownership and control of the oil and gas in those former federal lands. They could own them and manage them as they saw fit. Alberta, in particular, has turned those resources into colossal wealth for the people of that province. There is no Alberta Accord to allow Albertans a limited share of the benefits from their natural resources. As a result, they hope to pay down $5 billion this year on their debt.

What is the difference between the wealth beneath Alberta's soil and the wealth beneath the sea adjacent to our coasts? Why have we been treated differently merely because our resources are located underwater rather than underground?

I believe that this distinction cannot be justified. I believe it is fundamentally wrong. I believe the situation is discriminatory and goes a long way to keeping our Atlantic provinces in positions of fiscal and economic subservience.

Our offshore resources belong to Canada simply because we are provinces of Canada. They are there because we are there. They go where we go. If we left Canada, the economic zone would go with us. There is no dispute about that. Why then should there be any dispute about the claim to the right of ownership of those economic resources within Canada? Joe Clark's government acknowledged our ownership and control over oil and gas resources offshore in 1979, but Trudeau rejected it in 1980. It was the Mulroney government in 1985 that gave us the Atlantic Accord.

Ours is a strong case of basic fairness and fundamental justice. Jean Chrétien knows this because he was Trudeau's Minister of Energy and intricately involved in the original negotiations. He should be ashamed of himself for the way that he has treated our provinces. Unfortunately, because of relatively low population numbers and the consequent low number of seats in the House of Commons, the Senate and the federal Cabinet, our voice is not heard loudly enough in Ottawa when we try to state our case. All too often, a muted voice is mistaken for a whining voice, if it is heard at all. Atlantic Canadians should never give up the fight to have clear ownership of resources in our economic zone restored to us. Don't ever forget that we collectively constitute four provinces of this country despite our population.

I am proud to say that one Premier in particular in this region has been fighting back and setting the example - and that Premier is John Hamm. Thank Heavens for Premier Hamm! Our province, with its string of silent compliant Liberal Premiers, owes John Hamm a debt of gratitude for fighting on their behalf. But it's time we joined forces and fought together. It's time to form a united power block in this region. With Ontario controlling the Commons, with Québec frequently setting the national agenda and with the West now uniting to ensure their particular perspective is heard, we cannot afford not to act in concert. Circumstances necessitate it. If we want to get our fair share of benefits and to influence public policy in this country, we must band together.

Provincial Liberal Governments in Atlantic Canada have put party ahead of province at the expense of the people they were elected to govern. By contrast, the Progressive Conservative approach is based on the premise that sacrificing the concerns of part of the country for the good of the whole of the country only leaves the country weaker, not stronger.

A blue tide is sweeping the Atlantic region. It has swept over the Maritimes and it is rolling in Newfoundland and Labrador, because our people are tired of poor representation. After a general election, all four Atlantic provinces will be Tory blue - and we must work together to get action.

His fellow Premier Ralph Klein has come out in favour of Premier Hamm's Campaign for Fairness. He feels that a better deal with Ottawa over the lucrative and ever-expanding royalties from vast reserves in the North Atlantic would benefit all Canadians and help the Atlantic provinces get back on their feet. Just this week, Jeffrey Simpson's column in The Globe and Mail drew attention to Premier Hamm’s campaign and the unfairness of clawback. And the Commentary in The National Post on Thursday past was entitled "The Cruel Hand of Equalization". The author agreed with Premier Klein that all Canadians would benefit by removing the shackles from Atlantic Canada and shifting from dependence on Ottawa to greater self-reliance. The perverse incentives of equalization only prevent sound, long-term development.

With developments in the U.S. energy plan and high energy prices, the time is right for the Atlantic provinces to revisit these issues and demand fairness.

Mr. Roland Martin, a former deputy Minister of Finance in Newfoundland and Labrador who now lives in Nova Scotia, recently published the first significant analysis of federal equalization payments since the program was introduced over 40 years ago. He says Ottawa should do three things to help the economies of the Atlantic provinces and reduce their dependence over the long term.

First, he says, Ottawa should take oil and gas out of the equalization formula so there will be no clawback of revenues from offshore royalties and taxes. Second, Ottawa should return to a ten-province standard for calculating entitlement to equalization instead of the current five-province standard. A ten-province standard would treat provinces equally in terms of their capacity to raise revenues, and would provide more equalization revenues to the Atlantic provinces.

Thirdly, Mr. Martin calls for a needs component in the equalization formula that will compensate, to some degree, for the higher costs of such public services as transportation, health and education in our province.

There is now a huge disconnect between the wealth generated by our resources and the net value we derive from them as provinces of Canada.

Ottawa, not Newfoundland and Labrador, is the big beneficiary.

This inability to gain any significant advantage from our resource wealth goes a long way to explaining the stark contrast between reported GDP growth and the actual economic and revenue benefits that accrue to Newfoundlanders and Labradorians.

Newfoundland and Labrador leads the nation in GDP growth and has been at or near the top for several years.

For every one of those years, Newfoundland and Labrador has also led the nation in unemployment and outmigration and trailed every other province in the nation in its ability to raise revenues to pay for essential public services, despite having some of the highest taxes in the nation.

Our dilemma is compounded by Ottawa's retreat from the federal principles of comparable public services for comparable fiscal effort. Those principles distinguished Canada among the nations of the world for much of the post-war period. But we are much less a sharing, caring nation today.

Mr. Martin, in his own paper on equalization, described the widening gap in taxation levels among provinces as "a rapidly evolving threat to the nation's political, social, and economic survival".

All of us in Atlantic Canada are suffering as a result of Ottawa's greater tolerance for inequalities in Canada.

We can no longer count on transfers from Ottawa to help pay for essential public services up to national standards.

From now on, this region will be more reliant on it own resources than at any time in the last half-century.

It is urgent that we find ways together to adjust to these new realities.

And it is urgent that we work together to impress upon Ottawa the need to give us the time to make those adjustments - to end our dependence on Ottawa in a planned way, without creating an even-wider gap between this region and the rest of the country.

I believe that we need our own Atlantic Accord and we can achieve greater self-sufficiency by working together as a region. Ontario looks after Ontario. Québec has its own agenda. The western provinces are a force in their own right and have succeeded in capturing national attention to their issues.

So far, Atlantic Canada has been irrelevant in the debate about the values of our nation and its future. Thanks to Premier Hamm, people are standing up and taking notice.

There is much work to be done.

There is a fight to be won.

Capitulation is not an option.

We owe it to our children and their children to preserve and find new creative ways to build a stronger, prosperous and self-reliant society.

The fight is well underway in Nova Scotia.

It has begun with the Conservatives in Newfoundland and Labrador.

We will fight as a united team, and I firmly believe that we will win.

No charges for Hickey; defamation suit possible

According to news reports, the Royal Newfoundland Constabulary will not be laying charges against transportation minister John Hickey [Right. Photo: cbc.ca] following an investigation of his double-billing for legislature expenses.

Hickey did double-bill the legislature for everything from donations to community groups to an apparently exorbitant monthly rental fee for a laptop computer.

If the computer had been purchased outright, the cost to the Crown would have been considerably less than a year's worth of payments at the rate indicated in the duplicate claims.

Hickey was initially relieved of cabinet duties but restored to cabinet by Premier Danny Williams shortly afterward in a move virtually unprecedented in parliamentary history.

It is customary to preserve the integrity of government by removing from cabinet any minister under criminal ivnestigation.

Hickey [Left. Double Photo: cbc.ca] told reporters: "I am completely vindicated."

Well, yes, there is vindication, at least to the extent that there was no criminal wrong-doing.

But Hickey most definitely did double-bill, and he has admitted to unspecified "mistakes". presumably that includes a situation in which two, and in one instance three claims, were filed for the same expense.

Like all newbie government members deployed as part of the government's communications strategy on the legislature scandal, Hickey lays the blame for the double-billing on the legislature's financial staff...presumably for not noticing that Hickey had in fact submitted duplicate claims for service not once, not twice, but 20 separate times. The duplicate claims were submitted in Fiscal Years 2003, 2004 and 2005. Hickey was first elected to the legislature in October 2003.

Hickey is also demanding an unqualified apology from former Premier Roger Grimes who stated publicly at the time, and as he repeated for news media today that he would "repeat every word that I've said publicly about how incompetent and dumb and stupid and sloppy that somebody like Mr. Hickey [Right. Hat-trick Photo: cbc.ca] would have to be to double-bill the government some 30-odd times and then pay the money back...".

Details of Hickey's double-billing can found in Auditor general John Noseworthy's report.

Among the billings were claims submitted twice for a chamber of commerce luncheon in November 2003. The first claim, along with the original invoice for $50.00 was submitted with a payment date of December 4, 2003. The claim was submitted a second time with a copy of the original invoice. Payment for the second claim was made in February 2004.

One of the most curious claims was a triplicate submission for an ad in the souvenir booklet for the 2004 Labrador Canoe Regatta. The first claim for $125, supported by an invoice apparently dated 22 July 04, was paid by the legislature on August 25, 2004. The second claim for the same ad was submitted with an invoice apparently dated in September 2004, was paid on October 6. A third claim - for the same ad - was submitted with a copy of a cancelled cheque apparently dated Aug 4. It was paid on February 4, 2005. None of the Auditor General's reports contains the actual date on which each claim was submitted.

Rather than sue Grimes, it would be far cheaper - not to mention genuinely open, transparent and accountable - for Hickey to hold a news conference, bring along his claims and explain what happened.

Otherwise, the public purse could be burdened completely needlessly by Hickey's legal fees.

Of course, if he had just kept track of what he was submitting, the whole thing would never have happened in the first place.

Then again, if Hickey [Left. Not exactly as illustrated] hadn't claimed to have a signed road construction contract on his desk last fall, he never would have been caught in an embarrassing fact malfunction under questioning in the legislature.

Lorne Calvert to Harper: you shoulda let income trusts suck my treasury dry

While the federal government's decision on income trusts may have violated an election promise, failing to act in the way it did would have caused phenomenal revenue loss for both the federal and provincial governments.

That's the sort of simple background that makes Lorne Calvert's comments in St. John's on Friday undeniably bizarre.

Calvert told a local business luncheon:

"Whether you agree or disagree with the income trust decision - and it was clearly walking away from a promised commitment - he's at high jeopardy if he does that anymore," Calvert said after delivering a speech to the St. John's Board of Trade.

That sounds like Calvert would have been happy if the feds had left income trusts alone, just for the sake of keeping a promise. If Calvert was merely saying that Harper couldn't afford to break another promise, one must wonder at Calvert's logic.

If keeping the original promise would have produced financial problems for both orders of government, then it was sensible to break the promise. By the same token, then, if the second promise on resources and Equalization would cause as many problems as it fixes, then it's only sensible to trash the second promise as well.

On another point, the Canadian Press story linked above contains a glaring factual error:

Newfoundland's offshore oil revenues are protected by the Atlantic Accord, but Williams has expressed fears that Harper is leaning towards including them in a new formula.

Newfoundland and Labrador's offshore revenues are included entirely in the current Equalization formula. They are included for the purposes of determining the province's fiscal capacity and therefore, its entitlement to the Equalization top-up.

The O'Brien expert panel recommended excluding 50% of all resource revenues from the calculation. Premier Danny Williams originally proposed including all revenues in the calculation of Equalization entitlements. He now seeks their total inclusion, apparently.

Under no circumstances are the revenues in some form of jeopardy that requires them to be protected. This is a totally false presentation, the lie of which is confirmed by the admission in the Atlantic Accord (2005) that the Government of Newfoundland and Labrador sets, collects and retains 100% of provincial government revenues from offshore oil production.

A day late...again

On January 17, Consolidated Thompson chief executive Brian Tobin - yes, that Brian Tobin - said that his company would no longer be pursuing plans to purchase Wabush Mines.

No surprise there, since Bond Papers covered the issue when it happened. Never content to accept things at face value, your humble e-scribbler went so far as to speculate that maybe Premier Danny Williams' attitude to power costs for the two mines in Labrador West may have been a factor in the decision by CT to abandon the Wabush deal. Incidentally, CT cited unspecified liabilities as the reason for dropping the project.

On top of that, about 10 days after the original story, reference to the Bond Papers column turned up in The Aurora, Transcons' weekly in Labrador West.

How very strange then, that this news release flew out of Confederation Building at mid-day on Friday stating that the provincial government was encouraging CT to take another look at Wabush.

Two weeks after the company abandons the project and makes an announcement to investors to that effect, Danny Williams apparently decided to give his old pal Brian a call and "encourage" him to take another look.

The cynic would point out that the Premier is just trying to do some damage control in Labrador West in advance of what will be the fifth by-election in 2007.

Then again, regular readers of Bond Papers would recognize the pattern here. Long after an issue has been decided, Danny Williams issues a news release all for naught.

Think about the long series of releases and delays over the Voisey's Bay smelter location. INCO decided against the Argentia site since it carried way too many liabilities. Williams asked the federal government to accept unlimited liability for the site. He kept it up for months, until the feds politely declined the opportunity. Heck, Danny Williams was still talking about Argentia as INCO filed applications to approve the Long Harbour site.

Completely pointless, mind you, but Danny is persistent.

Then there was the release last summer taking issue with someone's remarks about the province's offshore policy. The only problem was the Premier's comments were about something that had happened three weeks previously. By the time he got around to clenching his jaw again for the cameras, most reporters - let alone most people on the planet - had long since forgotten what had been said at the NOIA conference on the local oil and gas industry. Nonetheless, Williams fired out the release, called reporters together and had at the windmill.

In this latest instance, there are one of three possible outcomes:

1. Since the company has skedaddled away from the purchase based on certain liabilities and maybe because of Danny Williams' position on power rates, Danny will find himself talking to himself...yet again. Consolidated Thompson will move on to other things. In the meantime, western Labrador will see some benefits from the Bloom Lake development, once it is up and operating.

2. Consolidated Thompson will gladly come back to the table expecting that Danny Williams will now be willing to talk some sense on power rates. They might even expect - since he is chasing after them - that he will pony up cash and take care of those pesky environmental liabilities.

Yes, the Great Negotiator will meet the Great Communicator.

But since the Great Negotiator is entering the talks from a position of some weakness, I'd put my money on the guy who parted ways from Frank Stronach after a handful of months and pocketed more cash than you could shake an unread financial report at.

3. While Danny is busily talking to shadows, or figuring out how to get his watch on the right date, Brian Tobin will make a pitch to Iron Ore Company of Canada, buy up their facility and extend the life of that operation.

That's only possible, of course, if Williams changes his tune on what rates IOC can buy power from its own company.

Either way you look at it though, this latest news release shows just exactly how heavily micromanaged and how badly out of touch this government is.

The Equalization Phoney War

Before he was hired away from Atlantic Institute for Market Studies to work for the Harper Conservatives, Brian Lee Crowley wrote a brief commentary that might serve as a clue to the federal government's Equalization plans.

Crowley argues - among other things - that removing non-renewable natural resources is possible provided that provincial governments commit to use the revenue for debt reduction. The other features of Crowley's proposal are similar to the O'Brien expert panel recommendations and produce approximately the same cuts to outlays the federal government is seeking.

The federal budget will likely feature a revamped Equalization program that excludes 50% of resource revenues for all provinces. For provinces that wish to take up the option, the federal government will offer removal of the other 50% of non-renewable resource revenues provided the province agrees to commit the cash to debt reduction or infrastructure development.

Crowley's analysis shows that over a 10 year period, Newfoundland and Labrador could reduce its debt by $2.4 billion or 26.7% of Crowley's total debt of $9.1 billion. That's based on including only 50% of revenues from non-renewable resources in the Equalization formula.

That figure is suspiciously close to Premier Danny Williams' recent comment that the provincial budget will include a $2.0 billion for a new capital works program.

The Crowley option may already have been discussed at the finance ministers' meeting before Christmas. Any possible arrangement along those lines would have been communicated to Premiers - including Danny Williams - before Williams ramped up his anti-Ottawa tirade. In other words, he may already know the likely outcome. Williams can run a political crusade largely designed to divert public attention from substantial problems in the province knowing that the "war" is - in effect - a sham.

According to Crowley's analysis, the Equalization entitlement for Newfoundland and Labrador under the O'Brien scenario, and under his version that completely excludes non-renewables, would come out to the same figure: slightly more than $900 per capita.

If asked about it by news media on Friday, Williams' response is predictable:

1. Williams will insist on the original Harper promise that is "in writing six times."

2. Williams will criticize AIMS as a right-wing thinktank and dismiss Crowley out of hand. He can do this reliably since most people won't take the time to read Crowley's report and there is little likelihood news media will report it.

Once the federal government announces the Crowley option, the Williams reaction is also predictable:

1. Williams will claim complete victory since the federal government has lived up to its commitment to remove 100% of non-renewable resources from the Equalization formula and trashed the O'Brien mess that would have resulted if the "Goodale-inspired" plan was put in place. [No media in Newfoundland and Labrador will report that Crowley's plan is a modified version of the O'Brien one.]

2. The Premier will not discuss the commitment on revenues, and the feds will likely keep that under wraps as well. Danny Williams will emphasise the removal of 100% of resource revenues and declare yet another victory over the federal government with a "We got it!" as dramatic as the declaration of victory in January 2005.

All the public will see is cash flowing everywhere less than six months before a provincial election and in the same year as a federal election.

3. Danny Williams will openly campaign for Stephen Harper in the next federal election in an effort to repair the relationship with Ottawa.

Pay heed to the silent majority

Political science professors often get quoted in media stories.

They are considered experts on politics.

Fair enough assumption.

Too often though, what comes out is nothing more than garden-variety opinion without much analysis.

Like this comment featured in a Canadian Press story on Thursday's by-election sweep by the ruling Progressive Conservatives under Danny Williams:

"Byelections are typically opportunities to send a message to government," [MUN political science prof Michael Temelini] he said in an interview. "There's no message here, other than, 'Keep on going, Danny!' "

By-elections are about a lot of things. It all depends on context, so a comment like the one above doesn't offer any insight.

What Temelini didn't apparently notice was that the turn-out in these by-elections was strikingly low. Canadian Press did and included references to fall-out from the legislature spending scandal.

None of the turn-outs are anything to crow about. The high was Port au Port where 51% of eligible voters showed up at the polls. In Kilbride, a traditional Conservative stronghold, only 33% of voters turned out to cast ballots. That continues a low turn-out trend set in Signal Hill-Quidi Vidi where, as in Port au Port, Danny Williams personally campaigned extensively on behalf of his candidate.

Look closer at the winning side and you see something as well. In Port au Port, Progressive Conservative candidate Tony Cornect took 31% of the eligible vote. That's in a district where the Premier and his entire caucus campaigned hard to convince voters they had to deliver a message to Ottawa and Big Oil with their votes.

In Ferryland and Kilbride, where voters didn't see the same Danny campaign machine in action and didn't get the same messages, the winners got respectively 34% and 26% of the eligible vote.

That hardly sounds like "Go Danny Go!"

The simple fact is that most voters sat on their hands.

In Port au Port where the Danny message was clearly a call to send an unmistakable sign to the foreign demons, more opted to sit quietly on the sidelines than voted for the Danny-boy candidate.

The question to answer is why they did that. Temelini clearly didn't know. Odds are good most of the commentary in the next few days will miss it too.

Perhaps the non-voters just supported Danny so much they didn't feel the need to vote. Highly unlikely. If there had been an election in January 2005, Danny Williams would have found more members on his side than there are seats in the legislature.

Perhaps some felt there was no point in voting since the outcomes was pre-ordained in a race where the Premier is apparently overwhelmingly popular. That's a possibility.

Perhaps some sat on their hands because they are simply disaffected from the political process as a direct result of the ongoing scandal. That's much more likely.

Other factors were also at work as well and taken together with that last likelihood, one can come up with a plausible explanation of the by-election result.

In the two Avalon peninsula ridings, the Liberal campaigns were vigorous on a local level but little was done to launch major attacks on the government as a way of hamstringing cabinet ministers and capitalizing on public discontent.

Neither party took the chance to attack cabinet ministers - like Kathy Dunderdale, for example - whose performance overall has been abysmal and who, shortly before Christmas, was caught in an embarrassing case of misleading the province on a public tendering scandal.

Ditto for transportation minister John Hickey, who sits in cabinet despite being the subject of a criminal investigation over alleged double-billing on his legislature allowances.

In each riding, the candidates fought very local battles. True, sitting members of the House campaigned door-to-door, but the province-wide political messages simply didn't exist.

For voters, especially voters intent on sending Danny Williams a rocket, there wasn't a clear alternative to Williams that they could stand behind. Neither the Liberals nor New Democrats look like a renewed and credible alternative devil to the one they already know. That reaction is all too common in Newfoundland and Labrador, the 1.5 party state.

In past cases where the Opposition has picked up seats, voters wanted to send a message to government. But that's usually been when the incumbents are in trouble and the major opposition party - Liberal or Conservative - looks like a pretty solid alternative. Otherwise, voters stay home and wash their hair or make sure all the spaghetti is lined up straight in the cupboard rather than vote. It's the equivalent of telling a public opinion pollster that they are "undecided"; there's no way to miss the meaning if you pay attention.

What's left on Thursday, then, is a situation where the highly organized, well-funded and aggressive political party - bolstered by incumbency - could identify its hard core supporters and get them to the polls. It isn't rocket science.

The only bright spot for the Liberals now remains Humber Valley where the capable and popular candidate will face mounting pressure over the weekend. As he goes door-to-door, Dwight Ball can simply tell people that Danny doesn't need one more seat to send a message. That job was done. They can instead make their choice based on something else.

Danny Williams did a curious thing in putting a label on the by-election results before they were known. He is already claiming a massive endorsement, of course, but in truth, both Stephen Harper and Big Oil are looking at Williams' victories with a more sophisticated eye than any of the commentary from news media and at least one poli sci prof would bring to bear.

For Harper, Williams' victories are largely irrelevant. Harper likely knows that there is a simple solution to the Equalization battle at hand. That makes Williams' Equalization battle a distraction intended primarily for domestic audiences. The reaction in the Langevin Block will likely be the common one to news from Dannystan: big freakin' deal.

Of course, Williams doesn't matter politically to Stephen Harper anyway since Williams' political influence west of Corner Brook is all but non-existant.

For the oil companies, knowing that Williams couldn't generate a massive groundswell of support is telling. If the by-elections mattered to them at all - and there is no reason to believe any of them pay any serious attention to that sort of thing - the public affairs analysts would tell them that Williams faces difficult times ahead and there is a mood of discontent that affects all current politicians.

Their conclusion would be the same one they already reached: Hebron is dead for at least five years. Hibernia South is on life-support. An emboldened Danny Williams is highly unlikely to come to any deal at all, no matter how sweet the pot gets. They will continue to wait on the energy plan - if it ever comes - or the gas royalty regime. Their interest in these documents has been largely academic since last April. Medium- to long-term spending commitments are already made. By the time they might have an interest in Hebron or Hibernia again, or if there is a significant discovery somewhere else offshore, Danny will be gone and the economic and political environment will be changed.

Danny Williams can claim there are discussions and negotiations with Big Oil.

People who know what's really going on understand that the fibreoptic phone lines from the Confederation Building to the oil companies are blacker than crude.

Danny sweeps three

The Tories took all three by-elections.

No surprise in Kilbride which is a staunchly Tory seat, for for that matter in Ferryland which was last represented by a Liberal in the 1950s.

In Port au Port, the race was reportedly close, however a heavy press put on by the Tories seems to have pulled more Tories to the polls.

Overall though, the voter turnout is down dramatically. It follows a trend that has been running since the race to replace Fabian Manning where the turnout exceeded the general turnout by a small margin.

Stelmach and Williams at odds on fed hand-outs?

During his trip to Alberta with the three Maritime premiers, Premier Danny Williams claimed he had support from Alberta Premier Ed Stelmach in Williams' battle with Ottawa on Equalization.

Seems that might not be exactly the case.

Stelmach told reporters in Alberta that he and his provincial colleagues have adopted a "wait-and-see" approach. That is, they'll wait and see what Ottawa does before discussing Equalization any further.

CHED Edmonton is reporting that Stelmach "says if more revenue is put into the pool, it puts additional pressures on so-called 'have provinces' to maintain those levels in the future."

Williams wants to make changes to Equalization that would see more money flow to his province and keep Newfoundland and Labrador in a "have-not" position for the foreseeable future.

Stelmach apparently prefers lower Equalization demands while seeing additional federal cash flowing to all provinces through transfers on health and education.

Premiers disagree on Equalization

Demonstrating once again that the Council of the Federation is a vital tool of inter-provincial co-operation, premiers agreed yesterday to abandon any efforts to achieve a consensus on Equalization and instead move on to other topics, like energy and internal trade.

Danny Williams told reporters: "There wasn't any arguing, there was enough of that in other meetings. There was a real appetite to work together."

So much for any posturing by Danny Williams that more Premiers than Lorne Calvert were staunchly behind Williams' got-it-alone approach to inter-provincial relations. After all, one of the things Bond Papers has maintained consistently is that Williams' unilateral blustering goes over like the proverbial flatulent emission in a house of worship.

That would be the plenty of arguing thing.

So now Premiers will go on to other issues, having successfully achieved a consensus on Equalization: "No matter what happens we must be able to beat up on Ottawa."

Yep, like you haven't heard that before.

Natural gas terminal on track: Turner

Mark Turner, president and chief executive of Newfoundland LNG Ltd, is optimistic construction will start this spring on the company's proposed liquid natural gas terminal near Arnold's Cove.

Newfoundland LNG's environmental application to the provincial government received conditional approval around the same time the provincial government denied conditional approval to Hibernia South.

Hibernia production slowed down

Operators of the Hibernia production platform are doing a scheduled maintenance now, instead of seven months from now when it was originally the planned.

Industry insiders have known for some time that the operators moved up the planned maintenance in the wake of a generator malfunction in January. The decision pre-dates the province's rejection of an application to develop Hibernia South.

Production is expected to be 110,000 barrels per day, down from the 220,000 barrels per day at peak.

A family of talent

Mike Herriott's back in town to play a gig.

He truly is a talented trumpet player who has made a name for himself internationally. Your humble e-scribbler played in a band with Mike more than a few years ago. Mike was one of several talented trumpet guys - talented to the point of being intimidating; talented to the point of generating a bunch of ongoing "mine is bigger" kinda healthy competition - so it's no surprise that each them has gone on to acclaim in the musical realm.

Mike comes from a talented family, too. His brother Richard is an accomplished pianist.

Another brother - Chuck - is an exceptionally creative local actor.

Lower Churchill timelines slide back

Newfoundland and Labrador Premier Danny Williams announced on Tuesday that the province's hydro corporation had filed applications to transmit electricity through New Brunswick to unspecified markets.

In a media scrum, Williams said there were currently no talks under way on power purchase agreements since negotiations couldn't occur until costs were known. Tuesday's announcement was part of the process of gathering information on costs.

Williams also told reporters the provincial government would consider deferring revenue on the so-called Maritime route (Labrador via Newfoundland to Prince Edward Island). Deferring revenue is code for selling power at a loss.

The feisty Premier claimed the New Brunswick application is part of a plan to deal with a situation in which Quebec would supposedly try to keep Lower Churchill power from markets by loading its grid with energy generated by Hydro Quebec.

Williams knows this argument is a complete fiction since the joint Quebec/Ontario proposal on the Lower Churchill - flatly rejected by Williams - included upgrades to the Quebec grid and to the Quebec-Ontario interconnection. The limitations of Quebec's existing grid are well known and Hydro Quebec is already working on upgrades to the system's capacity.

The go-it-alone option now being pursued by Williams means that Newfoundland and Labrador Hydro may now have to eat the costs of grid upgrades in Quebec and will certainly bear the cost of the underwater cabling to use the Maritime route. The cheapest estimate for the Maritime route would add an additional $1.5 to $2.0 billion to the project cost.

Taken altogether, Williams announcement on Tuesday would likely slide the project time lines back by upwards of two years. Project sanction - which some assumed meant construction startup - might be achieved in 2009 but that would simply mean approval to start negotiating power purchase agreements. Construction would start - if it started at all - only after those deals were closed and financing arranged.

Plans to sell Upper Churchill power to New York fell apart in the 1960s since the costs of transmission from Labrador could never be brought in line with market prices.

The Lower Churchill project is currently estimated to cost upwards of $9.0 billion, or 75% of the total provincial debt load. An additional $9.0 billion of public debt - especially if power is sold at a loss - would bring the provincial debt to almost $20 billion.

That figure may be tough for financial markets to bear given the current gross domestic product is running at less than $25 billion. Newfoundland and Labrador's debt to GDP ratio at that point would be one of the worst in the developed world. Cancellation of major oil projects, like Hebron and Hibernia South, will prevent anticipated growth in the provincial economy that might have otherwise offset the financial problems or given cash that would have covered some of the Lower Churchill's costs.

Energy plan delayed...again

Premier Danny Williams told a VOCM audience this evening the energy plan - 10 years in the making - will be delayed until spring, at the earliest.

He said the gas royalty regime will likely be split off from the plan and announced separately.

In the wake of the Hebron failure, Premier Danny Williams said the gas royalty regime - which at that time had to be included in the energy plan would be released, along with the energy plan, in late 2006.

Times change.

The energy plan - dating from the late 1990s when Brian Tobin was Premier - has languished inside the energy department ever since.

Plunkin' it at City Hall

Danny Williams says he doesn't take a salary.

He does, of course.

Williams donates the whole thing to his family charity.

Since the mid-1990s, members of the House of Assembly [right: Not exactly as illustrated] have quietly adopted the same practice. They take a portion of the allowances established to cover the costs of operating a constituency office and of representing their districts and hand them out to a variety of groups and individuals.

There is something fundamentally - ethically - wrong with elected officials using public money, directly or indirectly, in this way.

It doesn't take a rule book or a judge to let you know it is...wrong.

Should we be surprised in the current political climate that at least one councilor at St. John's Tammany City Hall [left] does the same thing with his annual salary of about $35,000?

As cbc.ca notes in a story on a recent racket about budget cuts,

[Ron]Ellsworth, a successful businessman, said most of his salary winds up in community groups.

"My salary goes back into my ward," Ellsworth said.

Ah yes.

The ward.

Money goes back to the ward.

Looks like Bond Papers had it right in 2005.

DW missile hits target!

Danny Williams said Friday he wanted to send a missile to the oil industry.

It hit.

bloomberg.com - one of the most widely read business news services included this paragraph in its coverage of Husky Energy's financial reports:

Husky's plan to boost output at White Rose may be slowed after a provincial government ruling rejected the proposed expansion of Hibernia, a nearby field, the Canada-Newfoundland and Labrador Offshore Petroleum Board said Feb. 1.

The missile message got through: Newfoundland and Labrador might not be a good place to invest.

Lower Churchill costs increase; must be polling season

This announcement on filing an application to build transmission lines in New Brunswick for Lower Churchill electrical power means three things:

1. The costs of the project will escalate;

2. Corporate Research Associates is in the field again; and,

3. There are by-elections on the go.

Service interruption

A minor technical glitch kept the updates down for a couple of days.

Bond is back!

We now return you to regularly scheduled programming.

McLellan joins LabMag

Former deputy prime minister Anne McLellan has joined New Millenium Corp as a strategic advisor.

New Millennium holds an 80% interest in the LabMag Iron Ore Project, the world's largest known undeveloped magnetite reserve that is currently at an advanced stage of exploration. The project is located in the province of Newfoundland and Labrador ("NL") about 220 km north of Labrador City and 30 km northwest of Schefferville, Quebec. The development envisions the construction and operation of a mine, crusher, concentrator, slurry pipeline, pellet plant, shiploading facilities and related infrastructure. Subject to positive feasibility studies and project financing, it is expected that pellet production from LabMag would constitute a significant new source of global pellet supply and would be shipped by ocean vessels to markets in Canada, the United States, Western Europe and Asia.

Williams acts...long after the fact (Updated)(Updated 2)

[Originally posted 02 February 2007]

Danny Williams wants members of the legislature repay a $2800 bonus granted in May 2004 for the previous fiscal year.

Yesterday - after the story broke - Williams was defending the legislators as supposed victims of incompetent administration or an Internal Economy Commission that ran its own private, unquestioned fiefdom.

With such heavy public criticism, the Premier has apparently changed his mind.

Well, sort of.

First there's this little admission : "I became aware of the decision some time after the fact, and I don’t think there is any disagreement that it was a poor decision that did not reflect the values and guiding principles of our government at that time."

How long is "some time"? A day? A few hours? A few years?

If it was so obviously wrong - as the Premier now acknowledges - why did it take the public furor to have the Premier act?

________________________

Update: 02 February 2007 Premier Danny Williams scrummed with reporters today on his news release. Under questioning from David Cochrane (if the voice on the CBC Radio broadcast was right), the Premier equivocated on when he first learned of the added allowance for members of the House of Assembly.

Cochrane persisted to his credit.

Williams persisted in his evasion, to his detriment.

Then he switched to excuses: he was a new Premier with huge responsibilities and lots of stuff going on; when he heard about it he never put it in the wage freeze context; he didn't pay attention because it was about compensation and allowances and since he doesn't take a salary, then he didn't feel it right to have input on these things.

A bad story for the Premier just got immensely worse.

The Premier's evasion is done for the same reason as the vague wording in the original minutes of the Internal Economy Commission approving the allowance increase.

The Premier seeks to evade responsibility for his own actions, or in this case his inaction.

His excuses are more revealing of his mindset in seeking to escape responsibility.

The Premier's job is a tough one. It carries weighty responsibilities, not the least of which is to watch over the spending of public money. He has helpers in his task, if he lets them help. But those helpers must receive clear and unmistakable direction. Having worked in the office, your humble e-scribbler can attest to the demands of the office. Having spoken over the years with several premiers, your scribbler is also witness to the weight that sits on the shoulders of each Premier.

None would have offered excuses. The exercise of offering excuses is bad enough; it is the antithesis of leadership and fundamentally, the Premier must be a leader in good times and bad.

Not putting the allowance hike in the context of the freeze is a excuse which - by the Premier's own implication - suggests his judgment is exceedingly poor. How could he not see what everyone else apparently saw at the time and the public knows now? The allowance increase was unnecessary. It was wrong. He should have stopped it when he learned of it. He is the Premier after all.

The third is excuse is perhaps even more serious by implication than the others since it contains a serious misstatement of fact.

Danny Williams, member of the House of Assembly and Premier, collects a salary and draws down on his constituency entitlements and other allowances just like every other member of the House of Assembly and member of cabinet.

It's a matter of fact.

Nothing wrong with it.

He lives entirely within his means and there is no sign of any impropriety on his part.

Danny Williams donates his salary to his own family charity.

That too is a matter of fact.

Nothing wrong with it.

Who better - as Premier, and given his example - than to put a stop to an inappropriate public hand-out done in a sneaky way?

For the Premier to say he turned a blind eye to this allowance since he doesn't collect a salary is to mislead the public on a key aspect of an important issue. One can only believe the Premier does so deliberately since he repeats the same false comment each time he mentions his salary.

The House of Assembly story today took on a much more ominous cast for Danny Williams and it did so as a consequence of the Premier's own comments.

Danny Williams enjoys almost unprecedented public confidence in his forthrightness and integrity. People believe that above all else, Danny Williams will be accountable. That is his reputation.

The essence of accountability is responsibility.

In evading responsibility for not putting a halt to the allowance when it occurred or as soon as he learned of it, in equivocating so miserably on even when he knew, Danny Williams attacked the heart of his credibility and hence his reputation.

Danny Williams forgot the most important lesson of scandal: it is not the action or the inaction - not matter how minor - that causes a downfall.

It is the evasion that kills you in the long run.
__________________________________

Update 2: When did Danny know about the extra cash? Likely May 2004, when it was approved, according to the Telegram front page story in its 03 February edition.

That little morsel wasn't reported by other media.

So the guy who had enough power to order the Internal Economy Commission to let the Auditor General back into the House of Assembly in April 2004 couldn't or wouldn't deal with a bonus stipend right after he froze public sector wages for two years.

Hmmm.

The secretive bonus was effectively hidden from view by a vaguely worded set of minutes from the meeting that approved the retroactive payment.

As for the total overspending by members of the House of Assembly allowances and assistance budget during the two years of the freeze - 2004 and 2005 - well that was hidden by misreporting - deliberately (?) - the spending in the annual budget estimates.

For FY 2004, the government estimates showed spending as dead-on budget even though the entire cabinet knew at the time the account was overspent by $479,000. The next year they misreported the spending, knowing full-well the account was overspent by $557,000

The Auditor General's reports to date have only identified 20% of the overspending for those two years. AG John Noseworthy says his work on overspending is done.

NL subsidiary posts higher profits in Alberta

FortisAlberta, subsidiary of Newfoundland and Labrador-based Fortis Inc announced Friday its profit for 2006 was Cdn$41.1 million, up from $31 million the year before.

The serial government slows further

Since Danny Williams took office in 2003 he's tried to manage the provincial government with everything - literally every little thing - flowing across his desk.

He's a micro-manager for micro-managers.

It shows in everything government does.

Or, to be more accurate what it doesn't do.

Micro-managing something as large as government means it doesn't take too long before your list of unaccomplishments - as Alice might say - is considerably long than your list of accomplishments.

There's plenty of meetings and busy-work and people generating "strategies", like the 20 or so Williams claims to have sitting on his desk right at the moment.

Some of the meetings go for hours, like one on the fishery last week that supposed went on for two or three hours. Smart leaders tell you any meeting longer than 30 minutes is useless.

But hey, it's hard to know for sure because Williams is also a definite bullshitter hyperbole addict. He tells fibs through the colourful use of exaggeration.

And he's a micro-manager.

That's why Bond Papers said that Danny Williams runs a serial government.

He takes everything - and we mean everything - one at a time.

He only has so much time available.

And so things pile up.

No surprise then, that Williams admits the latest bit of the House of Assembly money scandal is clogging the wheels of progress in Danny-land.

it's bound to do that.

God knows what else in his life is taking his mind off the business of micro-managing the living daylights out of a giant organization like government.

That's a government that in the next eight weeks has to:

- wage four by-elections;

- deliver a Throne Speech setting out the policy agenda for the next year;

- figure out what the policy agenda will be for the next year;

- write the Throne Speech, or at least edit it into yet another ear-numbing, soul-eating POS like the others so far;

- finish a budget that will call for more than $5.0 billion in spending and include a capital works program the size of the recent federal infrastructure project;

- wage an ongoing war with Big Oil;

- get ready for a war with Ottawa over hand-outs that are only necessary because of the failure of the war with Big Oil; and,

- cope with money scandals, bimbo eruptions or any other typical political crisis that might emerge - unforeseen - from the darkness.

It's enough to tighten even the tightest sphincter.

And as we know, that just makes the crap back up even more.

Williams to oilpatch: closed until further notice

Danny Williams is confused.

Or maybe Telegram political reporter Craig Jackson is confused.

In the Saturday paper, Danny Williams rants about Hebron, a multi-billion dollar deal that died last year and won't be revived anytime soon.

"I'm into a battle with them to make sure that they are not jamming us on the Hebron field," Williams said.

If Danny Williams is still in a battle on that one, then he is fighting alone. The oil companies left last year. They won't be coming back, at least as long as the pugnacious, dyspeptic, East Coast satrap is hanging around.

Danny should know he's not fighting on Hebron because...well...he killed it. Danny just got back from a very expensive hug-fest with the Alberta oil patch. Williams - you may recall - was trying to drum up work for local supply service companies who Williams shafted big time with his shut-down of the local oil industry last year. They had planned on doing work in this province on not one but oil developments.

Now people like Jerry Byrne are stuck with tagging along while Daddy Danny introduces them to Alberta, which is, as Danny put it, the place we want to be when we grow up.

To cap off the rant, Williams apparently then scolded Petro-Canada chief executive Ron Brenneman for pointing out that oil companies have other places to invest their money.

"Well, I ask Ron to tell me where he can get a return which gives him, basically, $60 on a $3 cost. That’s a pretty good return," said Williams,...

Well for one thing, those figures are not accurate for Hibernia, Hebron or anywhere else in the local offshore.

They are about as accurate as the Premier's comments on the secret bonus cash he called the scrum to discuss in the first place. Or for that matter they are about as accurate as a great many things he's been saying these last three years.

But I digress.

If Danny Williams wasn't so busy trying to cover up, paper over and otherwise dodge the mess in the House of Assembly - a mess he is responsible for just like the other forty-odd members of the legislature - Williams would have noticed Petro-Canada investing in places like Norway.

Why?

Let's compare the two places and their offshore:

A. Political Climate

1. Norway: Politically stable, mature democracy.

2. Newfoundland and Labrador: Politically unstable, immature democracy currently embroiled in a spending democracy that encompasses ass parties and politicians. While the leader is not implicated directly, he admitted on Friday to condoning secretive bonus payments to legislators. Same leader may have taken cash - which came as a tax-free entitlement - and donated to his family charity.

leader prone to rants. Since shortly after taking office, frequently talks of leaving office due to pressures of work and ingratitude of public.

Admires Hugo Chavez.

B. Regulatory environment

1. Norway: Regulatory authority arms length from government with no conflicts of interest with government policy and taxation arm or state-owned energy companies. A model system often used as an example for the world.

2. Newfoundland and Labrador: Regulatory authority arms length from government with no conflicts of interest with government policy and taxation arm or state-owned oil companies.

Warning: Since taking office, current Premier has been engaged in a series of efforts to bring all regulatory, policy and state-owned energy businesses under his direct control. Actively creates serious conflicts of interest. Attempted to subvert the independence of the regulatory authority by appointing political and ideological ally to senior position. Recently overturned regulatory decision on major project citing "lack of information."

C. Financial

1. Norway: A mature, stable financial environment in which government royalty and taxation is designed to balance government revenue with the need to stimulate exploration and development

2. Newfoundland and Labrador. Total unknown. In Hebron negotiations, Leader suddenly jacked up demands at last minute, after a working agreement was achieved. Gas royalty regime in development for 10 years, currently on hold while leader copes with widening political scandal. State-owned energy company officials recently spoke admiringly of oil and gas regime in developing world dictatorships.

Not surprising that the companies are quickly leaving the local oil patch for somewhere else.

Given the political mess that has been seizing more and more government attention and which on Friday started lapping at the door of the Premier's Office, it will be surprising if the local oilpatch rights itself or is righted any time soon.

Danny Williams is out of touch, overwhelmed and largely incapable of progress on many issues. From his scrum, all he can offer is bluster which sends a clear message to everyone, including Big Oil:

Newfoundland and Labrador's oilpatch is closed until further notice.

Williams money recall: Lipstick on a pig

Give the Telegram editorialist credit for stating it plainly and correctly.

In Saturday's editorial, the province's largest circulation daily tells its largest daily audience that it just isn't good enough for Danny Williams to ask his fellow politicians to return money now that they were caught getting it.

The payment itself is called "sleazy, dishonest and downright underhanded."

Absolutely.

The current crop of MHAs, rightly or wrongly, are now marked by their behaviour, maybe for the rest of their political careers. And because of that, they should be fully and publicly policed — they may not realize it, but if they had done the same as a civil servant, they would now be fired.

Let's see what happens.

Energy minister displays incompetence...again

Newfoundlanders and Labradorians are growing sadly too familiar with incompetent legislators who sign documents without reading them.

In the case of natural resources minister Kathy Dunderdale, they also know she has some difficulty with information. Google is a concept she never mastered in another portfolio as she insisted her officials would "do the due diligence piece".

Now in what may turn out to be another pissing match between this administration and someone else, Dunderdale has issued a news release and taken exception to the publication on Thursday of documents by the offshore regulatory board related to Hibernia South.

Dunderdale has a right to be embarrassed. Documents released show the inherent falsehood in many of Dunderdale's claims when she vetoed the Hibernia South project conditional approval. It's never nice to have your incompetence displayed in such an open and unequivocal fashion.

For example, Dunderdale claimed the Board's decision removed the province's ability to look after its financial interests. Not true, as the official Decision demonstrates in remarkably plain English. The project could proceed - if and only if - the provincial government was satisfied on matters related to royalties. Similar safeguards existed on benefits and two other issues affecting the long-term exploitation of the Hibernia field.

Dunderdale's veto letter, by contrast was poorly written and highly repetitive. Dunderdale's letter-writer(s) appeared to be grasping for any available excuse to justify a decision taken many months before by her boss.

It is highly unusual for a regulatory board to release information in this way.

However, both Dunderdale and her boss have consistently attacked the competence of the 60 Newfoundlanders and Labradorians protecting the interests of the province at the offshore Board. Their morale has suffered solely as a result of the ignorant comments directed at them either directly or indirectly by the Premier.

In her rejection letter, Dunderdale impugned the Board itself. The Board had little choice but to demonstrate that Dunderdale's attacks on its competence and actions were utterly without merit. The Board released information that might otherwise have been withheld to avoid a repetition of the sorry display of political games played by a former Premier and his energy minister over the Terra Nova project. At that time, Brian Tobin and Chuck Furey blamed the offshore board for decisions they sanctioned.

Bond Papers will have a lengthier post on this issue over the weekend. The only thing Dunderdale made clear in her letter released today, is that she needs to read her own documents rather than affixing her signature to letters dictated for her by others.

Did Williams fatten charity with allowance?

Since first confronted with the Auditor General's revelation that members of the legislature took a retro-active bonus in 2004, Premier Danny Williams has contended that it didn't apply to him as he does not take a salary.

His language has grown carefully precise but potentially misleading. Williams states that he did not take or receive the money personally.

Many people, including most reporters, have interpreted this to mean that Williams did not take the money full stop. Williams' publicist told the Telegram the Premier did not use the money - not because he takes no salary - but because, as the Telly attributes the remark, Williams "had sufficient constituency funds available.

The latter comment was made before the rest of us realized or were made aware that the House of Assembly actually had already overspent its budget by $350,000. Rather than provide reimbursement on a case by case basis, the House of Assembly's executive committee - controlled by three of Williams' senior ministers - opted to give everyone a retroactive bonus. The additional $2800 applied to the previous fiscal year and was not issued on the basis of receipted expenses.

On Friday, Danny Williams admitted he learned of the payment sometime after it was approved, but did nothing to stop it until public outrage reached its current peak. Williams' parliamentary assistant and one of his ministers tried to justify the retro-cash with no success on Thursday.

The key point to recall is that Williams in fact does collect a salary and routinely avails of allowances and other stipends from the House of Assembly.

The question to be answered is this: Did Danny Williams not receive the bonus at all or did he take and turn it over to the Williams Family Foundation?

The former is what people have assumed. But we have all made grave errors in doing along with what we assume Danny and others have meant when what they said was actually very different.

The latter would be entirely consistent with the Premier's language and with established practice of donating his salary and stipends to his family charity. It would also explain - more than anything else - why he simply kept his mouth shut about the thing. And too, since he had actually taken the money, it would explain the Premier's reluctance to admit when he knew about the bonus and why it took him three years and the ire of voters across the province to realize the allowance was a bad thing.

The Auditor General knows who got the money and who didn't.

Maybe he'd tell us, if someone asked.

Friday Follies

This wasn't there last night when Bond posted last night on advertising.

But overnight, this turned up on youtube.com.

It's funny.

Hibernia South veto has consequences

Bond Papers linked to the offshore board documents on Thursday, but the Telegram's Moira Baird does a much better job of covering the Hibernia South story here.

The offshore board noted the implication inherent in government's decision - namely that the approvals process would take longer on future projects.

Industry representative Paul Barnes concurs:

"From the industry’s perspective, this will mean it will take longer to get projects approved," said Paul Barnes, Atlantic Canada manager for CAPP in St. John’s.

"This flies in the face of what we’ve been working towards with governments over the last few years in trying to shorten timelines for regulatory approval."

Barnes says the Hibernia South decision erodes efforts to create a "single regulatory window" and increases uncertainty about the rules for Newfoundland offshore developments.

"It’s causing a lot of confusion,” he said. “You’ve got to have certainty around the regulatory regime because it has an impact on who invests here, why they invest and when they invest."

Advertising highs and well...ummm...

For SuperBowl Sunday (now that I know when it is!), here's a spot that remains one of the best SuperBowl spots ever run. This one comes from Pirate Radio and Television, which regular readers of Bond Papers will know is home to Terry O'Reilly's creatively warped cranium. Here's the link to O'Reilly's blog supporting his CBC radio show, Age of Persuasion.



On another level entirely are these spots coming from some pseudonyposter on youtube.com and aimed squarely at the local political market.

These showed up at the Bond e-mail just as they seem to have shown up in a bunch of other inboxes. Despite the fact the first one has had almost 8,000 hits and managed to make both vocm.com and NTV evening news, your humble e-scribbler isn't sure if they are hitting anything other than a novelty.

Nonetheless, here is the latest one: a karaoke version of an old Frank Sinatra song, rewritten to reflect local content.

This kind of guerrilla advertising is likely to spread as the technology to produce video of a reasonable quality grows more accessible.

Boston "guerrilla marketing" stunt: a dumb idea

The publicity stunt that set Boston police bomb squads hopping on Thursday was not a guerrilla stunt so much as a case of some monkey tossing his own...well, you know.

If convicted, the two twits misunderstood creative geniuses will fit right in; jails are full of stupid people victims of society.

Successful crooks never get caught.

And smart marketers don't screw up in the first place or compound their error with a totally lame news gaggle in which they talk about "hair" questions.

Alberta oilpatch keen on Norwegian offshore

From CanWest:

Canadian-based companies went to town Tuesday in Norway's offshore oil and gas licensing round, snapping up 13 of 49 parcels offered in the world's third-largest petroleum exporter.Petro-Canada led the way by gaining interests in seven blocks; Nexen Inc. had four and Talisman Energy Inc. came away with two.Half a world away, local analysts said the Norwegian North Sea offers potentially big discoveries for homegrown players operating in a mature oil and gas region....

So why aren't they looking at Newfoundland and Labrador?

Maybe this has something to do with it:

Though the state oil company Statoil controls about 60 per cent of the country's production, Norway has been liberalizing its fiscal regime to offset declines and attract new exploration.

Knowles compared it to competition between the governments of Alberta and Saskatchewan to attract drilling dollars in their respective jurisdictions. "The same kind of thing happens between the U.K. and Norway."'

Fuelled by a royalty holiday on new discoveries, the European North Sea has become a hot spot for Canadian companies operating abroad.... [Emphasis added]

Around here, Danny Williams keeps pointing to the Norwegian example.

Well, apparently he doesn't understand how Norway really works.

Army reserve stretched by Afghan mission

Reserve army commanders told the Senate committee on national security that continuing the Afghan mission beyond 2009 will put increased pressure on reserve army units for training and recruiting.

Military family support centres opens in Corner Brook

With the deployment of nine reservists from second battalion of the Royal Newfoundland Regiment, the Gander Military Family Resource Centre is opening an office in the west coast city.

Dunderdale wrong on offshore board and Hibernia South

The Canada-Newfoundland and Labrador Offshore Board today released (click "what's new", once at the CNLOPB site) correspondence between the board and the provincial government on Hibernia South.

In total, the correspondence, including the formal reply to natural resources minister Kathy Dunderdale's letter of January 17, 2007, demolishes every contention by the provincial government on the proposal and on the board's actions.

Among the choice comments: "The Board's Decision [sic] actually goes a step further by requiring that the agreement [commercial agreement among the proponents] be approved by the royalty owner, i.e. the Province, before it will be acceptable to the Board."

That's right: there would have been no production unless and until the provincial government was satisfied on its financial issues.

So much for Dunderdale's spin that she rejected the decision merely to seek "more information".