31 October 2009

Bad placement

Separately, they are great ads.

But if someone in layout isn’t paying attention…



Tough times at National Post

Criminals are now writing columns, presumably from inside their American jail cells.

Yes, Insta-peer Conrad Black has a by-line for a piece on the monarchy.

Quebec and Newfoundland have a string of politicos with criminal records all of whom could do either court or political reporting.  Maybe that would help solve the Post’s financial woes.


Federal Kremlinology 1: Connie Unease

So, did Jane Taber’s informant actually do air quotes around the word “pollster”, or did she add that for extra effect on her own? 

You know, a creative-reporter-license kinda thing?

That’s a funny thing about something someone is supposed to have said.  There are no quotations marks.

Must be something about Connies  - like Jane’s informant - that make them telegraph their fears.

Meanwhile, in Frenchman’s Cove, Newfoundland, at least one provincial Connie must be clicking his heels together frantically and chanting ‘There’s no place like home”  at the top of his lungs.  


Fruitloops on parade

So if there really had been a cultural genocide, as the Societe St-Jean Baptiste claims, there wouldn’t be anyone speaking French in Quebec , would there?

Some people just need to portray themselves as victims for some unfathomable reason.


The Can Opener II

Just in time for Halloween, there’s a remake of an old horrorshow:  the local economist who makes dubious assessments that seem a wee bit tinged by things non-economical.

Used to be Wade Locke was the regime-supportive economist of record.

Now it’s Jim Feehan, a guy with a record of producing dubious bits of research on partisan political subjects.  He also co-wrote a paper on another local partisan favourite, the 1969 Churchill Falls contract.  The article  was titled “The Origins of a Coming Crisis” but at no point in the article is the crisis ever described. That should make you scratch your head just a wee bit in scepticism.  


Jim Feehan told local CBC radio listeners Friday morning that while this New Brunswick power deal looks like a good one in that rates will be stabilised after a series of increases, public debt will be hacked down and pulp and paper mills will benefit from lower rates, this deal isn’t really so good because once it is sold, NB Power can never come back again.

In other words, even though this deal is great from the standpoint of an economist, people should maybe think twice because of things the economist commenting knows nothing about.

Like say law.

You see, as the Fortis expropriation in this province demonstrates, even in the worst possible case in New Brunswick, there is nothing like this that can’t be undone. 

But why would you want to expropriate or buy back a debt pig like NB Power if the new arrangement delivers all the economic benefits the economist noted but downplayed?

Well, there’s a question for us to ponder as we wait for the great news in Labrador Feehan’s predecessor once predicted. In the meantime, don’t hold your breath expect an answer to that one from Feehan.


30 October 2009

Something to look forward to…

When Gushue’s book is finished, make sure you get a copy.

in the meantime, check John’s blog post and leave him some words of encouragement and support.


No word on Fortis expropriation talks

While other power utilities in Atlantic Canada are up for grabs, there’s no word on the status of compensation talks between the Government of Newfoundland and Labrador and Fortis, Inc. resulting from the provincial government’s surprise seizure last winter of hydro-electricity assets in central Newfoundland.

Fortis-owned Newfoundland Properties  was one of three companies – including ENEL and Abitibi – generating capacity in the unexpected, and thus far unexplained, seizure.

Newfoundland and Labrador Premier Danny Williams announced the measures.  Williams introduced a bill in the provincial legislature in December 2008 that also quashed active court cases and stripped the companies of any legal recourse to the seizure.

The seizure of assets caused a loan default among other financial consequences.


Emera silent on NS Power sale

With Hydro-Quebec reportedly casting covetous eyes on Nova Scotia Power, the company’s current owner – Emera – is keeping to a strict “no comment” policy, according to reports.

In related news, Nova Scotia Premier Darrell Dexter said his government has not been contacted with respect to any sale of NS Power.  He also said he doubted HQ was even interested in NS Power, despite some media reports.

Dexter also backed away from joining Newfoundland and Labrador Premier cum New Brunswick Opposition Leader Danny Williams in his crusade against the recent deal to sell NB Power to Hydro-Quebec:

"At this point, it’s certainly not my intention to pick a side in this," Mr. Dexter said.

"Those decisions with respect to what New Brunswick does are New Brunswick’s decisions. We are going to have to deal with the system operator, no matter who it is, and so we respect their right to make those decisions."

Danny Williams reportedly fears being isolated.

Too late to worry about that now.


And by his actions, he is known

In war, said Napoleon, the moral is to the physical three to one.

In other words, psychological effects are three times greater than physical ones.

The recent by-election loss seems to have had a profound psychological impact on some of the most ardent supporters of the Blue Cause.

 Tony the Tory – he of Open Line fame – was left so profoundly distraught by the loss that he wrote the editor of the province’s largest daily to assure the world that all had not been lost and that his beloved party was not dead.

No one said it was.

But Tony evidently was afraid of such a thought.

Now it’s hardly surprising that Tony’s emotional reaction is so extreme.  The fellow is a fervent believer in The cause.  Tony worships Hisself as fervently as any. 

So it is not surprising Tony is full of fear, disquiet and unease since, you see, his idol attacked the by-election with the same manic intensity out of all proportion to what was actually involved.

As such, the psychological impact of the defeat is equally out of proportion.

labradore, it turns out, has made much the same point.

Tony rattles off a bit of history to bolster his case, but only a bit and he conveniently forgets much.

In 1987, for example, his beloved Blue Cause was so afraid of a by-election  - so petrified of the newly chosen Liberal leader at the time - that they delayed calling it as long as they could.  

Months rolled by. 

In those days there was no law requiring a by-election to be called with a fixed period.  The Liberals introduced such a law setting the maximum delay after a vacancy at 90 days.

Then in 1988, the Tories called a by-election in the old configuration of Waterford- Kenmount but only when they thought they could win it.

They didn’t.

But all of that has no larger meaning just as Tony’s list of by-elections has no such larger meaning.

But Tony’s letter itself does.

It just doesn’t have the meaning he thought it would have.


29 October 2009

Williams fears wheeling partner will bail, too

New Brunswick Tory Opposition leader Danny Williams said today that New Brunswickers should rise up and oppose the plan to sell NB Power to Hydro-Quebec.

Williams, who is also Premier of Newfoundland and Labrador, said that "if [Quebec also] acquires P.E.I. and Nova Scotia [power], we will find ourselves in a situation where one province will have energy control of the entire Maritime provinces. It will be attempting to strand Newfoundland and Labrador. So good, cheap, competitively priced energy, can't be offered to that whole region.”

Williams is worried that HQ might also buy Nova Scotia Power?

Of course, that would be the  Nova Scotia Power that is owned by the same company  - Emera – that Williams is paying to sell electricity from Churchill Falls into New York state. 

Yes that’s right.  While Williams was frothing about the negative impact of the NB Power deal on Lower Churchill power sales to the United States, he is already selling power through Quebec and happily agreed to pay $19 million annually to do so. 

So much for blocking the Lower Churchill, right?

And now Williams is concerned that Emera will bail on him in favour of selling their Nova Scotia subsidiary to HQ.

Things must be getting really bad for Williams if he believes that even his business partners are abandoning him.  That’s on top of reports that have his party organizers blaming Trevor Taylor, the former member of the provincial legislature, for Williams’ loss in the Tuesday by-election.  Talk about clubbing the fans.

Next thing you know he’ll be accusing his campaign donors of screwing him over too.


Lower Churchill “unviable for the foreseeable future”: analyst

Energy analyst Tom Adams had this to say about the Lower Churchill project in a recent commentary on the NB Power sale:

Premier Williams has attacked Quebec’s interest in NB Power as a threat to Newfoundland’s prospects for developing the Lower Churchill’s hydro‐electric potential. Charged with emotion arising from historic Churchill Falls grievances – a contract that Newfoundland’s then Premier Smallwood sought out and willingly signed and that has been twice confirmed by the Supreme Court – Premier Williams imagines inter‐provincial intrigues to be Quebec’s motivation. This emotionalism blinds some Newfoundlanders to the real commercial challenges to the Lower Churchill’s development. Just as natural gas from the Mackenzie delta is now recognized as uneconomic in light of foreseeable market conditions, the factors that have driven down power prices in Northeastern North America make the economics of Lower Churchill development unviable for the foreseeable future. Newfoundlanders are lucky that Nalcor, their Crown energy company, is not out in the market the trying to sell high cost power right now. [Emphasis added.]

Unfortunately, NALCOR and Danny Williams didn’t get Adams’ memo. Premier Danny Williams revealed yesterday that NALCOR is out there trying to flog high cost power from an economically unviable project.


The NB Power/Hydro-Quebec Memorandum of Understanding

The Governments of Quebec and New Brunswick unveiled the deal today that will see Hydro-Quebec buy most of the assets of NB Power.

The full text of the memorandum of understanding is available online.

Key points of the deal (quoted from the official news release):

  • Under the terms of the MOU, Hydro-Québec would acquire most of the assets of NB Power for an amount equivalent to NB Power's debt, $4.75 billion. The utility's debt would thereby be completely eliminated.
  • As a pre-condition to the negotiations, New Brunswick has established a revised rate structure to benefit New Brunswickers. It is estimated by New Brunswick to have a value to ratepayers of about $5 billion. The proposed transaction would have no impact on Hydro-Québec's electricity rates in Quebec.
  • NB Power would continue as a separate, New Brunswick entity, headquartered in Fredericton, and would use the existing name and corporate identity. Hydro-Québec would offer employment to all employees of NB Power at the time of closing, and respect the collective agreements in place.
  • The nuclear generating facility at Point Lepreau (after completion of the plant's refurbishment), the hydro facilities, the peaking power plants and the transmission and distribution assets of NB Power are part of the proposed transaction. Hydro-Québec would not assume any liabilities with respect to the Point Lepreau refurbishment project.
  • Thermal generation facilities at Coleson Cove and Belledune would continue to be owned and operated by the Province of New Brunswick, and would supply electricity to Hydro-Québec under the terms of tolling agreements.

The upside for the New Brunswick provincial government appears to be that it offloads a debt pig while guaranteeing stable rates for residential consumers and lower- and hence more attractive  - rates for industrial consumers.

The one curious part of the MOU is that Hydro-Quebec continues to operate the company as if it were a Crown corporation in that it will pay no taxes of any kind to the provincial government. 

Interestingly, Premier Shawn Graham acknowledged the role played  by his predecessors Frank McKenna and Bernard Lord in laying the ground work for the disposal of NB Power. 

Lord’s successor as Tory party leader has been opposed to the deal since before he knew what it was about. 


The Fan Club

There has always been this bizarro cult of personality thing to Danny Williams’ supporters.

They worship him as if he was a celebrity.

Some out here in the rest of the world – your humble e-scribbler included – have taken to calling the truly hard core cultists The Fan Club.  They make comments all over the Internet faithfully  pushing whatever line is currently on the go from the Club directors or simply attacking anything that they think undermines the gloriousness of their idol.

They’ve got a language of their own, too, but that’s another story.

Six years in, though, the Fan Club doesn’t have quite the same impact as it once did.

Take the past 24 hours with two examples.

Not so very long ago, the sort of attack on supposed foreign demonios being launched by Hisself and the Fan Club  against Hydro-Quebec (again) would be spreading like wildfire.  For examples of the Fan Club talking points, just check the comments sections at the Telegram, CBC or even here at Bond Papers.

Not so this time.

This is all old hat around these parts and ordinary taxpayers seem to be having a really hard time connecting a theoretical issue in far off New Brunswick to real-world issues in this province and in their lives. 

People have built up an immunity to the same old, same old.

Now that’s really interesting because the immunity is really at the heart of the results in the Straits by-election.  Hisself framed the whole thing around the same old, same old:  look at all the riches I brought you.  $137 million.  Show me how much you appreciate that by voting for me.

Well, they didn’t. 

A couple of thousand people didn’t and likely lots more didn’t who just never bothered to show up at the polls.  A monumental effort worthy of the most grandiose display of the faltering Smallwood empire failed to motivate enough to win the seat as it has every time since 2001 in the Straits and on the overwhelming majority of other similar cases across the province ever since 2001.

That’s not good.

Nor is it good that the Hydro-Quebec attack – another same old, same old – ain’t working either. 

That is intended for two purposes:

First, it lets Hisself vent his frustration that the Lower Churchill just isn’t happening. 

Second – and perhaps most importantly -  it is supposed to help change the channel and get people’s mind off the disaster in the Straits.

But it isn’t doing that second thing.  The ordinary taxpayers seem to have caught on.

Meanwhile, there is another problem for the Fan Club beyond the fact their usual stuff just doesn’t work any more.

As he left, Trevor Taylor provided his membership in the Fan Club by praising Hisself to the highest heights on every level.  Hisself returned the favour in his comments about Trevor.

Until the loss in the Straits.

Now party insiders are spinning the story to local media – see David Cochrane’s report on Wednesday’s Here and Now, for example –  that the whole loss was Trevor’s fault.

That sort of stuff just isn’t going to sit well with a whole bunch of people who haven’t joined the Fan Club but who like the stuff Hisself puts out.  They’ve been buying his CDs for a few years now just like they’ve bought The Other Blue Note CDs before. 

But maybe not so much any more.

Not, that is, if people like Trevor are getting blamed for stuff they really didn’t do.

Fan Club takes on a whole new meaning when it’s the fans getting clubbed.


Eating his own

Newfoundland and Labrador Premier Danny Williams is tearing strips, not off New Brunswick Premier Shawn Graham or Hydro-Quebec but his own deal with Hydro-Quebec from last April.

Williams attacked the deal in a letter to Graham:

Despite our expectation of regulatory fairness [ in wheeling electricity across Quebec], Nalcor Energy has encountered obstacles in Quebec. Nalcor has been forced to lodge four complaints with the regulatory authority in Quebec about the tactics being used by Hydro Quebec Transenergie that serve to delay and inhibit our progress.

Under an agreement announced in April 2009, the provincial government’s energy corporation sells power to unidentified customers in New York state.  The power is wheeled along transmissions lines in Quebec under what is known as the open access transmission tariff.   NALCO pays Hydro-Quebec $19 million a year to wheel the power.  The figure was not released by NALCO or the Government of Newfoundland and Labrador.

While Williams is now slamming the deal – making it sound as if there was no wheeling agreement at all -  back in April, he was positively giddy with excitement at what he termed an “historic” agreement:

“This is truly a historic and momentous occasion for the people of our province, as never before have we been granted access through the province of Quebec with our own power…”.

There is no obvious explanation for Williams sudden attack on his own project nor is there any explanation for his claims that Hydro-Quebec is blocking or trying to block NALCOR’s access to markets.  The April deal proves there is no real obstacle.

What makes the latest tirade all the more bizarre is that in a scrum with reporters two days ago, Williams acknowledged  that there was no obstacle to getting power to markets in the United States.  In the same scrum, he said Hydro-Quebec might be trying to do just that. 

His disdain for the sale of NB Power to Hydro-Quebec is apparently based on losing the race for new markets for hydroelectricity.


A cross between Karnac and Kreskin

In 2006, the Globe’s Konrad Yakabuski warned Danny Williams that he might be beaten to market by the people at Hydro-Quebec.

Turns out Konrad was right, after all:

Newfoundland Premier Danny Williams decided earlier this year to go it alone on a proposed $6-billion to $9-billion (according to already stale estimates) hydroelectric development on the lower Churchill River in Labrador, rejecting an offer from Hydro-Quebec and the Ontario government to jointly build the 2,800-megawatt project. It was great politics. Newfoundlanders still feel they're being stiffed by Quebec on the massive 5,400-MW Churchill Falls hydro deal that their late premier Joey Smallwood negotiated in the sixties. They'd dearly love to see their current leader stiff Quebec on the lower Churchill.

The problem is that it's impossible. Hydro-Quebec is the biggest and most savvy hydroelectric company on the continent. When Mr. Williams turned his nose up at its offer, it took about two seconds for Hydro-Quebec chief executive officer Thierry Vandal to move to Plan B. The latter entails fast-tracking 4,500-MW worth of hydro developments within Quebec. If Hydro-Quebec's stated goal is not to prevent Newfoundland from proceeding without it on the lower Churchill, its decision to green-light competing projects in la belle province certainly casts enough of a pall over Newfoundland's project in order to make it a tough sell for Mr. Williams.

Anyone have the full article?

It is amazing the number times people have forecast things like this since 2003 and they have come true.


28 October 2009

Williams miffed that HQ beat him to market again

In his written reply to Shawn Graham released today, Newfoundland and Labrador Premier Danny Williams reveals that his government energy corporation was in discussions to sell power to New Brunswick from the still largely conceptual Lower Churchill project.

But Hydro Quebec – with as much power as the Lower Churchill may one day offer already under construction -  evidently beat Williams to the punch.

The real  source of Williams’ frustration at news of a deal to sell NB Power to Hydro Quebec is buried after six lengthy paragraphs of irrelevant frothing:

One of the potential impacts of Hydro Quebec’s dominance may be the premature cessation of current, good faith discussions between Nalcor Energy and NB Power to sell competitively priced Lower Churchill power to New Brunswick and jointly advance the long term, mutual interests of both of our provinces in conjunction with Nova Scotia and P.E.I. These discussions have not yet reached an advanced stage, so it is not possible to quantify the benefits that might be lost to our two provinces and all of Atlantic Canada if discussions are terminated. If New Brunswick narrows down its range of alternatives to a single-window with Hydro Quebec, full information may not be available to evaluate the opportunities that other alternatives may bring. I would reiterate that our province feels compelled to look into the potential of anti-competitive behaviour on the part of Hydro Quebec given the potential monopoly that could exist as the result of an agreement between them and NB Power. [Emphasis added]

The revelation that Williams had been beaten to the market by Hydro Quebec is almost as astonishing as word last month from Williams energy minister that he had been working for five years, making secret offers for Hydro-Quebec to take an ownership stake in the Lower Churchill project. 

Williams criticises the Churchill Falls deal in the Graham letter but, according natural resources minister Kathy Dunderdale, Williams was willing to set the issue to one side in exchange for Hydro-Quebec buying a piece of the Lower Churchill.

In 2006, Williams rejected a proposal from Ontario Hydro and Hydro-Quebec to jointly develop the Lower Churchill.  Williams said the province would go-it-alone.  He made no reference at the time to efforts to lure Hydro-Quebec into another deal, as Dunderdale revealed.

Hydro-Quebec already had significant hydro projects in the works and added about 4,000 megawatts of wind energy to its mix of new project.

The Lower Churchill proposal currently undergoing environmental review consists of transmission through Quebec and a line to bring power from the project to eastern Newfoundland.  There is no proposal in public to run the power to New Brunswick.

The Lower Churchill project  - estimated to cost between $6.0 and $9.0 billion – has no confirmed markets.  An opening to Rhode Island apparently fell apart because power could not be delivered at a marketable price.  That isn’t what the energy minister told the public.


The best by-election commentary

1.  There is nothing that trumps the analysis by a political veteran like nottawa.  The Temelinis, Dunns and Marlands of the world are so far removed from what actually goes on they really can’t offer anything beyond theory and abstraction masquerading as fact. 

To take it a step further, nottawa has really hit on the essence of the Danny message since Day One.  Back in 2001 and again in 2003, it was “Elect me and I will personally take away all your pain, bring you jobs and gobs of cash.”  In 2007 and since then, it was all about Hisself and how much Hisself had brought in fulfillment of the earlier promise.

2.   Right behind nottawa is Winston Smith.  His round-up includes a reference to Yvonne Jones pithy observation that:

"People want a voice, and there isn't a voice inside the Williams government," she said. "Most of the backbenchers are silent. Many of the cabinet ministers are allowing critical cuts to happen in their districts without ever speaking out against it."

Winston has a couple of other things in there including the complicity of the local media in supporting the cult of personality but that’s almost old hat.

3.  Undoubtedly there’ll be more but that should hold you for now.


Separated at birth: Magicians

Harry Blackstone Junior

Marshall Dean

Kremlinology 11: Words that start with “p” and “o” together

Just notice in the by-election follow up media how much the Premier and others – including Memorial University profs like Alex Marland and Michael Temelini  - base their assessment of the importance of Marshall Dean’s win in the Straits pretty much exclusively on how popular Danny Williams is showing in the polls.

Just notice it.

Pretty well exclusively.

It doesn’t really matter, they say, because we are/he is hugely popular.

Just keep that in mind.




27 October 2009

Libs win Straits

Marshall Dean took the by-election in the Straits and White Bay North this evening against Premier Danny Williams, just about all the provincial cabinet and millions in public cash.

Dean defeated provincial Conservative candidate Rick Pelley – former executive assistant to Trevor Taylor – and New Democrat Dale Colbourne.

The results (40 out of 40 polls) were:

Dean – 1925

Pelley – 1799

Colbourne – 320

The Straits was one of two by-elections won by the provincial Conservatives in 2001 and heralded by many as a sign of the ascendency of the Tories under Danny Williams. 

Trevor Taylor won the seat for the Tories.  The by-election Tuesday was necessitated by his unexpected resignation in September.

Danny Williams, the former cable television mogul,  was the only declared candidate to lead the provincial Conservatives at the time of the 2001 by-election in January 2001 and was acclaimed as leader a few weeks later. 

In many respects this Liberal victory is truly remarkable.  Williams’ Conservatives have been virtually unassailable for years and their bank account is full.  that’s exemplified by the 2008 financial reports which show the Tories raised the better part of $600,000 while the Liberals barely pocketed $40,000.

While Williams, his cabinet and long-time party organizers rushed to the district to back the Tory candidate, the Grits could rely on little more than moral encouragement from other parts of the province, a very small cadre of provincial organizers and whatever Dean could pull together himself. 

The next test will be a by-election in Terra Nova necessitated by the surprise resignation of Paul Oram only days after Taylor bailed out.



With municipal affairs minister Diane Whelan hospitalized with an undisclosed but reportedly very serious illness, the Premier shuffles a few more portfolios off to ministers on a temporary basis with no sign of a permanent set up.

Whelan was already carrying the temporary assignments resulting from Trevor Taylor’s surprise resignation.


Shawn to Danny: sod off, mate

New Brunswick Premier Shawn Graham sent Newfoundland and Labrador premier Danny Williams a polite letter on Wednesday telling him to keep his nose out of the NB Power talks and stick to running his own province.


Graham also repeats the point that others have made, namely that any suggestion that the grid through new Brunswick might be somehow closed or restricted as a result of any deal with Hydro-Quebec is without merit or foundation. Click that image, by the way, and you’ll get the whole letter, courtesy of cbc.ca/nb.

Stunning.  Not.

Incidentally, there’s also no small irony in Williams’ comments warning about New Brunswick selling off its natural resources to Hydro-Quebec.

In September natural resources minister Kathy Dunderdale revealed some details about Danny Williams’ previously secret offers to Hydro-Quebec to take an ownership stake in the Lower Churchill.

labradore offers chunks of the transcript of Dunderdale’s interview. So much for “despicable.” 

Those Dunderdale comments were all the more stunning in light of Williams’ previous position about demanding redress for the Churchill Falls contract before there would be any deal on the Lower Churchill.  According Dunderdale, Williams was willing to set the whole issue of the odious 1969 contract to one side in the interest of giving Quebec a fair return on its investment in the new project.


26 October 2009

NL and the NB Power story: the facts

For the benefit of those who keep using the Premier’s comments on the NB Power story, here is what is really going on, in the words of natural resources minister Kathy Dunderdale:

We know that if you come in here as an equity player that you have to have a good return on your investment. And we want you to have a good return on your investment. But it also has to be a good deal for the people of Newfoundland and Labrador. Now we have been with that message back and forth [i.e. to Hydro-Quebec] for five years. No, sir. No, sir. There is no takeup on that proposal.


That’s right.

Danny Williams wants Hydro-Quebec to have a good return on its investments.

In this case, it was a good return in exchange for owning a piece of the Lower Churchill.

So what is the pseudo-racket all about?

It might all be irrelevant by tomorrow evening.


25 October 2009

The next target for over-the-hill celebrities


That used to be a seal in there somewhere.


Kremlinology 10: Ah to be a Tory in Gander in October, when the dogs are fit to wag

When the political going gets tough, what better way to handle it than to launch a phoney jihad against a completely imaginary enemy over a completely imaginary dispute:

The Premier is gearing up for another fight on the national stage. Danny Williams says Hydro Quebec continues to try and block this province from developing the Lower Churchill, now refusing to sign onto a water management agreement for the Churchill River in Labrador.

For starters, Danny Williams is only pissed at Hydro-Quebec because they aren’t willing to take the ownership of the Lower Churchill he offered then. It’s not that they are so interested in the LC and Danny that they are blocking him, it’s really bothering him that Hydro-Quebec just isn’t interested at all.

And that’s after five years of desperately trying:

[Natural resources minister Kathy] Dunderdale told VOCM Open Line show host Randy Simms on Friday morning that over the past five years, the Williams administration “got a path beaten to their [Hydro Quebec’s] door” in an attempt to have HQ become what Dunderdale described as an “equity partner” in the Lower Churchill.

Dunderdale described the Lower Churchill “piece” as a “win-win” for Hydro Quebec. She said that despite efforts by the Government of Newfoundland and Labrador there was “no take up [from Hydro Quebec] on the proposal.”

But the biggest thing you have to consider on this water rights agreement thingy is that if the two parties – NALCO and Churchill Falls-Labrador Company – can’t reach and agreement on their own, the whole thing will be settled legally and finally by the public utilities board.

No big public, hair-mussing fuss required.

Danny Williams knows this because that’s what he amended the law to say in preparation for just such an event.

Well, okay first the provincial government tried to screw with the contract – as someone else tried in the 1980 water rights case - but they got caught red-handed in that little bit of tomfoolery.

While Williams and his ministers tried to downplay it at the time, they were caught so far in the wrong they even had to call an extremely rare emergency session of the legislature to deal with the mess created by someone’s childish legalistic game.

Anyway, that’s another story.

CFLCO not interested in the deal on water rights Williams wants?

Well that’s no problemo.

The whole thing just falls along according to amendments made to the Electrical Power Control Act in 2007 by none other than Danny Williams’ own administration.

The public utilities board – headed by Williams’ new buddy Andy Wells – just imposes a deal on the two sides:

5.5 (1) Where 2 or more persons to whom subsection 5.4(1) applies fail to enter into an agreement within a reasonable time, one or more of them may apply to the public utilities board to establish the terms of an agreement between them.

(2) Where an application is made to the public utilities board under subsection (1), the board shall establish the terms of an agreement for the purpose of achieving the policy objective set out in subparagraph 3(b)(i).

(3) An agreement established by the public utilities board under subsection (2) is binding on the persons named in the agreement.


Job done.

Pas de sweat.

And lookit, the company involved here isn’t Hydro-Quebec, it’s the Churchill Falls-Labrador Corporation. That’s the company in which the provincial government’s energy company – NALCOR - owns a 65% stake.

And if you are still not convinced this is all yet another case of Tory dog-wagging, just consider that this evil foreign demonio Hydro-Quebec hates Williams so much and is working so hard to block the Lower Churchill they were will to sign a deal allowing energy from Labrador wheel across their province.

Wheel power and they make millions off the wheeling charges. Gee, that’s really putting obstacles in the way of the Lower Churchill. Yep, what better way to block the Glorious Lower Churchill project than demonstrating that Danny Williams can wheel power through Quebec to some other market than Quebec without any obstacles.

So what is all Danny Williams’ puffed chest really about?

Not even Ed Martin - the head of the provincial government’s energy company - seems to know.

But if one Ed doesn’t, maybe your humble e-scribbler can offer some easy suggestions on what issues are causing the provincial Conservatives to go hunting for a distraction:

- The by-election in the Straits is really not going well at all for the Tories. Then there’s Terra Nova to fight where the Tories haven’t even got a candidate yet and the Liberals wound up having two to pick from. Eight cabinet ministers in one day and four trips by the premier Hisself don’t seem to be working on the voters, at least not the way it is supposed to work.

Very frustrating when the old tricks don’t work any more.

- It’s really, really, really painful to make one decision and then be forced to make another. Think Danny Williams and the whole lab and x-ray thing. Jerome Kennedy confessed just this past week to what some of us have known all along: the decision to chop service was made by the entire cabinet.

That’s why they all stuck so hard to the line about “improvements.

That’s why they resisted changing their minds right up until the point they had no choice.

That’s why they tried desperately for weeks to try and blame someone else for the shag up rather than the people who actually shagged up.

It really bruises the ego to lose.

- And that’s on top of a string of “losses” including the Gros Morne one. Again, as much as they tried to downplay it, the whole emergency session of the legislature must have deeply embarrassed cabinet.

- There’s also the ongoing embarrassment of Paul Oram coupled with his decision to up and run when the going got tough. A cabinet minister resigns hot on the heels of another, thereby creating a mini-crisis in the government? Not a way to make the leader feel cheery. Paul Oram took himself off a raft of Tory Christmas card lists with his poorly executed exit.

- Unflattering comparisons to Roger Grimes? Lighten up a bit, people. It’s a joke.

- Let’s not forget the admission that the provincial Conservatives haven’t been doing such a fine old job of managing the public purse as they’d claimed. The word Oram used was “unsustainable.” Finance minister Tom Marshall said much the same thing.

- Then there’s the revelation that the government’s satisfaction rate ain’t what it was purported to be by the government’s own pollster. Between the opposition and local media, three recent CRA polls – never released publicly before – show that the people of Newfoundland and Labrador told CRA one thing but CRA told the public something else. The truth is sometimes painful but it does come out.

- Then there is the ongoing frustration of the Lower Churchill. As a story in the Telegram noted [not available online], NALCO has to go back and answer a whole bunch of questions for the environmental review on the Lower Churchill and that is now behind schedule. That’s on top of the lack of partners (see above), lack of markets - think Rhode Island - and the huge embarrassment to the government of being forced to abandon their original plan of slinging power lines through a UNESCO World Heritage Site.

On the whole it has been a very rough patch for the ruling Conservatives, at least from their perspective over the last six weeks and a bit more.

And what better place for provincial Conservatives to engage in some traditional Tory dog-wagging than the annual convention in Gander.

After all, that’s where ABC was born, at a time – as the House spending scandal broke in 2006, among other things – when things didn’t look all that rosy for provincial Tories in the short term.

Come to think of it, Loyola Sullivan packed it in not long after that, as did Paul Shelley and a few others.



24 October 2009

Minister in hospital, “seriously ill”

Revealed at the Tory convention in Gander:  municipal affairs minister Diane Whelan has been hospitalised and is “seriously ill.”


$10 billion for NB Power

A deal is close according to the Globe and Mail that would see Hydro-Quebec buy all of NB Power for $10 billion.

But the Globe story contains some of its characteristic shit reporting in the sub-head: “blocking access of other provinces' utilities to U.S. markets”.

There’s more the same drivel farther down the story but don’t buy most of it because it just isn’t true.

This sale can’t block access for anyone to NB’s power grid.  It can’t, not if NB Power and HQ want to keep selling power into the US.

And from the looks of it at least one statement could be completely false:  “Newfoundland and Labrador Hydro has complained to regulators in Quebec and the United States that Hydro-Québec's transmission arm is not providing it fair access to U.S. markets.”

You see Danny Williams has bitched alright, but he was bitching because he couldn’t get HQ to buy into the Lower Churchill. 


According to Ed Martin, Williams right-hand on any of a number of issues, there is no problem whatsoever with Hydro-Quebec.  Thus it would be very odd if the company Martin runs was doing things – as the Globe reports -  like filing formal complaints alleging some pretty serious unfair market practices against HQ. 

All they have actually done is pursue a tariff through Quebec which they duly got.  Your see – Shawn and Rheal take note – NL Hydro has already been wheeling power into the United States across lines in Quebec in a deal touted by none other than …wait for it…Danny Williams Hisself.

Notice there is no further detail on that in the Globe story.  That’s a pretty good clue that Rheal Seguin and and Shawn McCarthy just didn’t do their homework.   Instead, they seem to have opted for a half-backed paraphrase of an equally a half-baked version of the old Danny story and not rely on what Danny’s energy minister said. 

In the process, the bitching morphed into a complaint filed with a Canadian or American utility regulator.  Look farther on in the story and that’s exactly what they do, and as you can see they got the bitching story and the bit about the alternate transmission line wrong too.  That’s what you get for quoting Liz’s thumbs and not doing any real research.

There’s also another completely asinine comment about HQ getting greater access to the US as a result.  If the guys at the Globe even bothered to check their facts, they’d know that HQ already owns capacity on the grid through New Brunswick. The story has been out there since the spring. That’s definitely not the motivation for this deal.

The upside to this story is that New Brunswickers will shed a 90-year-old chronic debt pig and retire in the process what the Globe describes as 40% of public debt in one fell swoop.

Let’s just hope that while about half the story appears to be complete fiction, the bit about New Brunswickers shedding their debt burden turns out to be true.


That’s likely to impress the hell out of them

Fisheries minister Tom Hedderson, campaigning desperately in the Straits and White Bay North tells talk show host Bill Rowe that he’s having a great time in the district.

Apparently it’s been wonderful to be reacquainted with the district and the local concerns.  In fact, it’s the first he’s been there since 2001 when Trevor Taylor won the by-election.


And this would be the same district hard hit by the economic downturn, particularly in the fishery.  Where Tom offered people make work at minimum wage in October using a form that evidently had been around since July.

First time back since 2001, eh?

Oh yeah, that’s bound to impress the hell out of the locals in the run-up to what voting day in what appears to be a very tight race.

And Tommy is not the only cabinet minister expressing his surprise at discovering there are actually people who live out beyond that overpass thing.


23 October 2009

Competitive Advantage versus the Albania Solution

New Brunswick and Quebec have some interesting common energy interests, not the least of which is New Brunswick’s electricity interconnection with the United States.

No surprise therefore that the two provinces are talking about co-operation, possibly including the sale of some of NB Power’s assets to Hydro-Quebec.

What  parts of the New Brunswick company might be of interest to Quebec aren’t clear.  One thing is certain, though:  the nuclear division is mired in cost over-runs on the up-grade for the Point Lepreau site.  That might well make it a huge liability for NB Power in any broader sale.

The one competitive advantage the province has is its transmission lines and a strong, continuing relationship with New England customers.  By contrast, Newfoundland and Labrador can’t even figure out if they are still working with Rhode Island.

Expect a local talking point that heads somewhere close to the giant conspiracy theory floated earlier by the Premier.

What you get by putting the real stories together is that NB Power is considerably more attractive than a fanciful project in Labrador that is both far from market and far from existing. A recent Telegram report by Rob Antle [not online] noted that the project is behind schedule in delivering detailed answers as part of the environmental review process.

On top of that it can’t be discounted that political tirades by the current administration have poisoned the relationship with other provinces.  things are evidently so bad that even a willingness by Danny Williams to completely abandon his “redress” position and offer Hydro-Quebec an ownership stake in the Lower Churchill didn’t get even a sniff of interest from the Quebec Crown corporation.

Isolation is not good for Newfoundland and Labrador’s long term interest. The New Brunswick-Quebec connection demonstrates that pretty clearly.


Kremlinology 9: By-elections

If it seems to you that there have been more by-elections since 2003 than at any comparable previous time in recent political history, you are absolutely correct.

Twice as many, in fact.

On average there was one by-election per year between  1982 and 2003.  But in the period of the provincial government’s greatest prosperity, politicians have been leaving their jobs on average at the rate of two per year.

There have been a dozen by-elections in the six years since the provincial Conservatives returned to power in 2003.  In the six years before that there were only seven and in the entire period of Liberal rule – four Premiers and 14 years – there were 16.

And just to really drive the point home, in the seven years between Brian Peckford’s massive victory and the fall of Tom Rideout’s Tories in 1989, there were just six.

The Conservatives have also shed more cabinet ministers compared to any administration since 1982 and lost them in unusual or controversial situations.

Former Tory leader Ed Byrne resigned to face corruption charges.  Former leader Loyola Sullivan left politics in a complete shocker later that same year. Paul Shelley resigned suddenly in early 2007.  Since the 2007 general election, Tom Rideout packed it in during a dispute over road paving work.  Trevor Taylor walked in the middle of controversies over health care cuts, fisheries and forestry affecting his district and Paul Oram pulled pin a week after Taylor amid controversy over health care cuts.

Here’s the data:

1.   Number of by-elections since October 2003:  13

  • Exploits
  • Placentia and St. Mary's
  • Signal Hill-Quidi Vidi
  • Port au Port
  • Kilbride
  • Ferryland
  • Humber Valley
  • Labrador West
  • Baie Verte-Springdale – 2007*
  • Baie Verte-Springdale – 2008
  • Cape St. Francis
  • The Straits & White Bay North
  • Terra Nova

*  Cabinet minister Paul Shelley resigned in early 2007 necessitating a by-election in Baie Verte-Springdale.  In the event, the by-election wasn’t called until late in the year with a date a few days before the general election.  The writ for the by-election was vacated by the general election writ.  The seat was won by Tom Rideout who resigned the next year.

2.  Number of by-Elections in same period before 2003 (i.e. 1997 to 2003): 7

  • Trinity North
  • The Straits & White Bay North
  • St. Barbe
  • Port de Grave
  • Humber West
  • Bonavista North
  • Conception Bay South

3.   Number of by-elections between 1989 and 2003:  16

4.   Number of by-elections between 1982 and 1989: 6


NB Power up for sale?

Hydro-Quebec may be in the market to purchase NB Power, the government-owned New Brunswick power utility.

According to CBC,

In a statement Thursday, his communications director, Elizabeth Matthews, said Williams "can't imagine the people of New Brunswick would allow their government to sell their energy asset and put that power into someone else's hands."

Odd idea, that, selling an energy asset or even a chunk of an asset to Hydro-Quebec.

Surely Danny Williams would never do anything like that especially since he supposedly wanted “redress” on Churchill Falls first.


22 October 2009

Kremlinology 8: Honestly, we’re so f*cking sorry

Count the number of Tory cabinet ministers lining up to tell the people of the Straits and White Bay North this simple little message:

We screwed up.  We are sorry.  Please, puhleese vote for our guy.  We are sorry.  We have spent a lot of money on you.  We are sorry.  Oh and did I say how sorry we were?

Jerome Kennedy.  Tom Hedderson. Two classic examples.

Could make for an interesting audio compilation, but in the short term it’s a huge clue as to how desperate things are getting for some people in the current by-election.


Kremlinology 7: Desperate in the Straits

Signs that things are not good in some parts of the province for some people:

1.   The Other One Percent:  Danny Williams rockets into Flower’s Cove a few days after advance polls and announces he’s managed to find the last one percent under the cushions of his Avalanche.  Lab and x-ray will stay in Flower’s Cove regardless of who wins the by-election.

2.  How many shifts of position does that make?  It really depends on how many shifts of position you want to count. 

In Flower’s Cove alone, a suggestion last February from the regional health authority to reduce clinic hours in the community as a way – theoretically – to save money was never implemented because cabinet ponied up the cash.

Suddenly and inexplicably that became a decision - by cabinet as it turned out - announced in August to cut operating hours and take out lab and x-ray service.

On top of that there was a review of x-ray and lab services everywhere in the province.

As the by-election started in the Straits and White Bay North, the clinic hours miraculously reappeared.

Then the lab and x-ray cuts became mere possibilities if savings could be found.

Then the review went into the “Doubtful it will be finished” pile.

Then suddenly the Premier was 99% sure the lab and x-ray service could be saved.

But only 99% sure.

And now it’s 100% back.

That’s eight shifts and it doesn’t even begin to count the finance minister flip flops on whether there is cash for everyone or things are tight and previous decisions were unsustainable.

3.  Who actually made the decision?  Paul Oram claimed he made the fateful decision in late August.  No one really contradicted him directly but the Premier said early on that the decision were know before Oram became minister.   Maybe Ross made it. 

After Oram resigned, the Premier told someone on the campaign trail that “Paul Oram had proceeded on the basis of recommendations made to him by the health authority.”  The story was picked up in the local paper.

Now it turns out that isn’t true. 

Well, at least according to Jerome! Kennedy it isn’t true.  In an interview with Here and Now on Thursday, the former finance minister and current health minister Kennedy told Debbie Cooper that the decision to cut lab and x-ray service was not made by Paul Oram but by cabinet.  Paul was just the messenger boy.

That means that Jerome and Danny made the decision  - along with every other cabinet minister in the district St. Anthony is in -  a fact they didn’t disclose as they started campaigning and began switching positions.

4.  Who’s fault is it anyway?  Apparently, Jerome was in a fessing up mood on Thursday.  He told VOCM that this has been a useful exercise for government since it forced government to look at the issues and admit they were wrong.

That’s pretty good for a guy who only a few days ago was admitting to the same  media outlet that he and his cabinet colleagues would be playing the whole issue of lab and x-ray and the by-election by ear and see how it went.

Evidently making it up as you go along isn’t a good strategy after all.

5.  How many ministers can dance on the end of a line?  Pretty well all of them, if the radio call-in shows are any indication.

Shawn Skinner was charming if not a wee bit patronising as he recounted how Trevor Taylor had taught him so much about rural Newfoundland in their discussions around the cabinet table and in caucus.

Best of the bunch?  Kevin O’Brien, the minister of permits and licenses for two reasons. 

First he talked about much money this government had spent in the district and allowed that they wanted to keep doing that.  Sounded a bit like a threat, it did.

Second – and the best bit – was when he stumbled repeatedly trying to remember the name of the district he was in.  Finally O’Brien blurted out something like how great it was to be in the district St. Anthony was in. 

Evidently he wasn’t in the same cabinet meeting as Shawn.

6.  Things are that bad, eh?  During his report on Here and Now, CBC’s David Cochrane referred this evening to senior Conservatives who admitted to him that the race was tight in the Straits.  If the Tories are admitting even that much, along with Danny’s win-or-lose-ya-got-it-back, you can guess the Tory campaign shows the Liberals out in front.

That would also explain the steady barrage of cabinet ministers and Jerome’s repeated admissions of mistakes and errors and acceptance of blame.  Odds are good the Tories are trying everything, including backing as far away as possible from their usual arrogance to try and win over  every vote they can.


Kennedy on Straits by-election: Hail Mary!

Guess what?

Lab and x-ray service is staying in Flower’s Cove.

Former finance minister Jerome Kennedy announced the decision today on voice of the cabinet minister’s morning call-in show.

The Tory candidate must not be doing too well in the by-election.


Big Oil’s New L’il Buddies and helicopter safety

While the offshore helicopter safety inquiry has given some people a platform for their false statements about search and rescue again, let’s try a scenario that is based on facts and reasonable suppositions. 

Let’s suppose, for example, that after the whole thing is over, former Supreme Court Judge Robert Wells makes some recommendations that – in the opinion of the offshore oil companies – would adversely affect the projects. 

Let’s take the Hebron project as a typical one.

Adverse affect might be cost in this case. 

For example, let’s suppose that Wells decides that – despite the very best and most intense lobbying by everyone from Jack Harris to lawyer Randall Earle – the cost burden for providing search and rescue for the offshore in St. John’s should still be borne by the oil companies.

Let’s suppose that Big Oil’s L’il Buddies fail miserably in their efforts to shift the cost to taxpayers.  Let’s imagine that – contrary to the campaign being waged -  Wells requires that the companies continue to provide SAR support for their own employees and their own helicopters. 

And let’s imagine Wells decides to up the ante arguing that they should do it 24/7.

All of that is either established fact (there is such a campaign underway, even if it is hodge-podge and disorganized) or is a likely outcome of the inquiry.

And further, let’s suppose the oil companies find that – for a whole bunch of arguable reasons – that cost is just too much to bear. 

Maybe oil prices have dropped down again to levels far below the current US$80 a barrel.  And hey, it’s not like oil prices will go up and up and up forever.

So there’s our scenario.

What does the provincial government do?

Well, the provincial cabinet would likely find themselves bound by section 5.1 of the Hebron financial agreements:

The Province shall, on the request of the Proponents…support the efforts of the Proponents in responding to any future legislative and regulatory changes that may be proposed by Canada or a municipal government in the Province that might adversely affect any Development Project, provided such action does not negatively impact the Province or require the Province to take any legislative or regulatory action respecting municipalities.

And before you start arguing that opposing the SAR regulation “negatively impact the Province”, you are really not reading carefully enough.  When the word “province” is written with a capital “P” it means the Government of the place.

So since the provincial government as such would not be negatively affected, they wouldn’t have the one and only ground that applies on which they could slip out from under their legally binding obligation to back Big Oil.

Of course, the provincial government is also really an oil company these days.  Therefore it would liable for the cost of providing those helicopters for SAR.  It  would be in the provincial government’s interest to work with the other oil companies against the Wells safety recommendation anyway. 

If money is really tight - after all  - and these extra costs threaten the Lower Churchill project too, there might be lots of reasons for the provincial government/oil company to fight such a recommendation.

This inquiry might turn out to be very interesting after all. 


And we can expect the lobbying effort that benefits Big Oil – Jack Harris is a witness in the schedule, for example – to intensify over the next few weeks.


21 October 2009

When it comes to reckless speculation…

at least CBC commentator Brian Callahan is an expert on the subject.

Since the Cougar helicopter crash this past spring Callahan has been pushing an attack on 103 Rescue Squadron based on the speculation that somehow 103 Squadron could have materially changed the outcome had it not been training at Sydney Nova Scotia at the time of the incident.

Callahan continued his irresponsible attack during a CBC commentary on Wednesday.  Give it a listen, if you will. 

Notice that he actually doesn’t make a case on this.  He never has.   

Rather, Callahan makes false statements.  He claims, for example, that the Department of National Defence will be as absent from the helicopter safety inquiry “as they were on March 12th.”  Callahan knows of course that both coast guard and the Canadian Forces were far from absent on the day of the crash and subsequently during the recovery of the bodies.  Callahan clearly knows nothing about search and rescue as he claims that 103 Squadron left its task to others on that fateful day.

And he suggests – in his reference to 26 years ago – that the recommendations of the Ocean Ranger Royal Commission were ignored.  That too is an utterly false suggestion. 

Words from last spring remain appropriate:

This sort of misrepresentation amounts to an abuse. 

It tortures the families of the victims of the crash by suggesting a hope which is false. 

This attack – and that’s what it amounts to – tortures the men and women of the search and rescue services.  103 Search and Rescue Squadron flies twice the national average in SAR missions.  Hercules from 413 Squadron join them far out to sea.  They all train hard and fly hard and risk their lives in weather when the rest of us are huddled by a fire safe at home. They do it to save the souls whose lives are at risk in the harsh North Atlantic. When lives are lost, as in this case, they will inevitably search their souls to ensure that all that could be done was done.

This attack abuses the men and women of Cougar. The company has an exemplary safety record.  The company has such a record because every single employee is committed to safe service.  Over 48,000 accident free flying hours don’t happen without such a level of personal commitment. The company’s crews also fly search and rescue services every bit as good and every bit as dangerous as the work done by 103 and its sister squadrons.

These misrepresentations abuse the members of the public who are shocked by the tragedy and who share in the grief of those who have lost loved ones. They are misled into believing things which are not true.

In a time of tragedy, it is hard to imagine more monstrous abuses. The tortures will continue until someone decides to put an end to them. Maybe a wise editorial hand needs to rest on someone’s shoulder.

In the meantime,  all that the rest of us can do is hope that somewhere in the midst of their self-absorption, the perpetrators of the abuse can realize the harm they are doing.

Sadly, Brian is not alone.  Some politicians have also taken to building platforms for themselves out of corpses and grief.

Sadder still, Callahan continues to get a paid platform from which to spread his misinformation;  the wise editorial hand is still missing.

Since the perpetrators of the abuse have clearly not realized what they doing, perhaps it remains a hope that Judge Robert Wells’ inquiry will provide enough fact to silence the reckless speculation once and for all.


Job Vacancy – no experience required

Joan Cook retired from the senate on October 6. 

The Chretien-era appointee hit the magic age to retire from what used to be known as the Antechamber to the Kingdom of Heaven.  Used to be the only way most senators left the job and its lovely salary was to die.

That means there is a vacancy from Newfoundland and Labrador just waiting to be filled by Stephen Harper.

Who will get it?

There’s a good question.


Oram and Williams tell radically different versions of departure story

Even in Paul Oram’s political death, he and Danny Williams can’t get on the same page.

Asked about Oram’s resignation, Danny Williams told reporters that when it comes to an individual’s health and family, he doesn’t even try and convince someone to stay. “I just accept it,” said Williams.

But that’s not what Paul says.  As the Gander Beacon put it:

Mr. Oram said the premier asked whether he would consider staying on as an MHA, but he said he felt if he was going to walk away from one aspect of his work, he would prefer to fully remove himself from politics.

"I just felt that if I needed to regain control of my life, I had to walk away from politics altogether."

That’s not the first time that Oram and Williams have been at odds.

On the same day in early September – before Oram’s surprise resignation - Williams said the decision on  cutting lab and x-ray services was made months earlier, long before Oram became minister. 

Williams told a scrum that Lewisporte MHA Wade Verge knew of the cuts some time before July 9, 2009. Williams indicated Verge had the information from both Williams’ chief of staff and from Ross Wiseman when the latter was still health minister. 

Oram told the House of Assembly  - at almost the same time Williams was talking to reporters at another location - that he made the decision after meeting with concerned citizens in Lewisporte in mid-August. 

None of the dates match up since letters released by Oram in early September were part of the pre-budget process.  They were dated in February 2009.

But now even Danny Williams can’t get it straight.

According to the Northern Pen, the Beacon’s sister newspaper, a campaigning Danny Williams said something completely different from his earlier versions:

"Paul Oram had proceeded on the basis of recommendations made to him by the health authority," stated Premier Williams.

Not only did Oram now supposedly make a decisions Williams earlier attributed to someone else but the health authorities actually didn’t make the recommendations.  They were simply asked for options to save money, money that – as it turned out – they actually never had to save anyway.

No wonder some people don’t trust some politicians.


Oil and the budget

The provincial government seems to be in one of those strange places it goes every now and then.

It’s a world where the messages are decidedly mixed, if one picks a generous way to describe it.

Totally confused would be another way of saying there are two completely contradictory messages rolling at the same time.

Both of them are coming from the current finance minister who is also a former finance minister and notorious for running an open cheque-book department.

In the latest incarnation, Tom Marshall is seen supporting a CBC news story that rising oil prices are wiping out the projected government deficit.

Just yesterday it was a tale of looming financial woes. Tom Marshall even repeated the message that government spending  - i.e. the spending he oversaw in the job before - is unsustainable

In the CBC story, though, Marshall tries desperately to avoid giving any firm indication of the province’s current financial state:

If the price averages $70 a barrel for the entire year, it could wipe out the provincial deficit, but Marshall cautions against such predictions yet.

"It's not just the price," he said. "It's the volume. It's the exchange rate and of course we don't know what's going to happen in the future in terms of production numbers."

There are a couple of things to note here.

First of all, Marshall knows exactly where things are at this, the midpoint in the fiscal year.  he also knows where things are likely to wind up within a relatively narrow range of possibilities.  Marshall just didn’t want to share, even if CBC actually asked, and he likely won’t share until December if recent practice holds firm.

Of course, there’s a reason why the government holds on to information.  They clam up so that people who ought to have accurate information can’t get it, but that’s another issue

Second of all, we can fill in some numbers but not others. 

The stuff we are missing includes revenue figures like sales tax, mineral royalties and personal income tax.   If those are lower than expected, then it would take more than high oil prices to deliver a balanced budget. It’s unlikely those figures will turn out lower than estimated since the finance department routinely low-ball revenues these days.  But still, we don’t know because they aren’t saying.

We also don’t know what government spending is actually like. Operational spending may be up or it may be down.  Ditto the capital budget, or the “stimulus” as it is known currently.  If projects are behind schedule or delayed – as many are – then the cash budgeted for those projects will reduce the overall spending part of the budget.  A healthy chunk of the massive surplus in the last couples of years has been coming from forecast spending that just never happened and wound up not happening for two or three budgets.

As for oil, we can get a fairly good idea of what that looks like. 

Price is one element.  The 2009 budget used a figure of US$50 a barrel and an exchange rate that put oil at the equivalent of around Cdn$60.  Oil is currently almost $20 a barrel higher than that, even allowing for the lower exchange rate with the American dollar.

Production is another element.  Last year, oil production exceeded 125 million barrels.  This year, the provincial budget used a figure of  98.5 million barrels or a decline of  21%.  As it stands right now production in the first five months of the fiscal year is down about 27% compared to last year.  A 27% drop in production would mean a total production of about 93.75 million barrels.

But that’s not the whole oil picture.

The other bit is the percentage of each barrel the treasury gets and neither the budget documents last March nor Tom Marshall these days will talk about that publicly either. 

Thanks to the 19 year old Hibernia royalty regime, the provincial government take at Hibernia jumped to between 30% and 42.5% this year when the project hit pay-out.  Terra Nova and White Rose are already in pay-out and are pumping 30% royalty rates based on the original royalty regimes from before 2003.

And that’s where it gets interesting.

The budget figures don’t appear to include the higher royalty rates. factor those in and even the lower production total of 93 million barrels would produce provincial royalties of at least $1.9 billion. When your humble e-scribbler ran the numbers in August - estimating the revenues from each project -  the figure came out about the same as last year’s oil royalty. 

What all this means is that even allowing for some variation in other revenues and in overall spending, the books will likely be balanced this year on an accrual basis even at the low-end estimate.  On a cash basis there would a shortfall;  the budget forecast $1.3 billion. 

On the upper end, the forecast accrual deficit would turn into a surplus of something on the order of $500 million.  On a cash basis, the books would be balanced.

All in all, though, one must wonder why there is some much confusion coming from the current and former finance minister(s).  They could be letting the rest of is on their own projections since, the only negotiations going on right now are with voters.

Voters have a right to know how their own finances are looking, don’t they?

Oh yes.

And let’s not forget in all this that the budget last year included $1.8 billion in temporary investments that no one wanted to draw any attention to.

Makes you wonder why Tom and Jerome and Danny have been putting on the poor mouth again, even if just for a minute now and then.


The Secret of Success

In any major business venture, it is important to ensure that the product will meet demand in the marketplace including consumer preferences.


20 October 2009

A new - if idiotic - tourism idea

Check out Lee Hopkins’ blog post on his latest podcast with fellow communications consultant Allen Jenkins.

This is worth checking out for two videos, both of which turn out ultimately to be really cheesy marketing stunts.

One is from Denmark and involves a young woman who is supposedly looking for the father of her child.  The child is supposedly the result of a drunken one-nighter with some unknown tourist.

While it looks a bit pathetic, the video is apparently a tourism board idea.  Allan and Lee discuss the cost and the target market, one of which is outrageous while the other is imponderable. They also discuss the complete failure of the campaign. At least two senior officials – one with the tourism board, the other with the agency – wound up leaving their employment over the fiasco.  According to the lads, there were more in the sequence which have since been shelved.

The inspiration for this bit of tomfoolery was a stunt in Australia involving a jacket and a supposed chance encounter in a bar.  The subsequent controversy  - based on alleged misrepresentation of the video - saw one of the creative geniuses behind the thing leaving his company to pursue other opportunities.

Oh yes, the Danish one also generated another version of the  Hitler meme.

Great podcast on a great topic from two guys who know their stuff.    lee and Allen discuss viral videos and ethics at some length.  it’s all good stuff.

And when you are done with that, enjoy once again a fine example of the viral art featuring none other than NTV’s own Glenn Carter.



Inconvenient questions, H1N1 update version


The latest H1N1 update from the provincial medical officer of health says there have been seven confirmed cases of H1N1 in the province over the past week.  This is the second wave.

So how does she know it is seven confirmed cases of H1N1?

You see the official advice from the health department is that if you get sick you don’t go to the doctor or to a hospital emergency room:

If you get influenza-like symptoms, but are otherwise healthy, stay home to avoid infecting others and treat the symptoms.

So how exactly do they know that there have been seven confirmed H1N1 cases in the province in the last week?

Just wondering.


Offshore Helicopter Safety Inquiry - links

The offshore board’s inquiry into offshore helicopter safety started in St. John’s on October 19.

You can find the inquiry website via the offshore board website or here: www.oshsi.nl.ca.

For the record, you can also find:

Transcribing is fast.  You can find the testimony from this morning already posted.


Politics and Language in Newfoundland, Corner Brook version

Someone writes a letter to the Western Star commenting on Danny  Williams’ use of language.

Some members of The Fan Club take issue in predictable ways.

More comments follow, pro and con.



Great Moments in Sound Financial Management

Tom Marshall in 2008 on the need for balanced budget legislation:

“I would like to see us come forward with some fiscal responsibility legislation that would make it a commitment of every government to ensure that, as a principle, we budget for a balanced budget, recognizing it won’t be possible to always have a balanced budget,” said Marshall. “And, if we can’t balance the budget, there would be an obligation on the government to explain and disclose to the people of the province why it didn’t happen and to disclose a strategy to ensure we get back to a balanced budget over a certain period of time.”

Marshall prefers to have balanced budget legislation that doesn’t require balanced budgets.

At least Tom is consistent.  From 2007:

"I don't know if I agree with balanced budget legislation," Marshall said.

"I certainly would agree with fiscal responsibility legislation … but I'm not prepared to be locked in automatically to a balanced budget every year," he said.

Not surprising then that government spending up to know has been unsustainable and  - dare one say it? – not very sound or responsible.

We know because the current finance minister told us.


When politicians become ghouls

My grandmother used to tell the story of going to a funeral in a small community where one her distant relatives had passed away. 

The story happened so long ago that neither the place nor the time was important.  What is worth recollecting is her account of the people who attended at the cemetery for the committal of the body to the ground.

They didn’t stand around, a lot of them.  The onlookers  arranged themselves sitting along the top-most rail of the little white fence with the heels of their shoes hooked in the bottom rail.  My grandmother described them as being very creepy and ghoulish.

That image has come to mind several times over the last few months.  Too many politicians in Newfoundland and Labrador have tried to make a political platform out of the tragic deaths of 17 people on Cougar 491.

They were quick to rush forward with a bunch of ideas that all turned out to be completely false and they have persisted, especially in attacking the federal government generally and the brave men and women of the Canadian Forces search and rescue service.

These politicians want to have search and rescue service in St. John’s.

But here’s the thing:  their entire argument is based on the case of Cougar 491.  In that incident – as the events themselves showed – the passengers and crew died pretty much on impact. 

There is virtually no way – even in the highly unlikely situation that a rescue helicopter had been flying alongside the ill-fated Cougar helicopter – that a single additional life could have been saved.

Sad. Tragic, even. 

But true.

Now that the consensus among politicians of all stripes has taken hold, it is apparently spreading to some of the lawyers at the Wells helicopter inquiry.  To wit, we have the bizarre case of the lawyer representing offshore workers at the inquiry.    The lawyer claims that “if DND does not have the resources or the federal government is not willing to alter the distribution of  search and rescue resources,” then the oil companies will have to do the job.

That’s an “if” that is based on the false premise that additional Canadian Forces equipment would have made a difference in this case or others like it and that the only solution worth talking is that the federal government  - correction – the taxpayers like you and me - must pay instead of perhaps requiring that the offshore operating companies bear a heftier burden for life safety, including a SAR service that doesn’t take an hour to get ready and that can fly when the weather is bad or it’s dark.

That’s actually one of the rather interesting things about the position taken by politicians, Liberal Conservative and New Democrat, who have taken up the position on the fence-top calling out advice from the sidelines:  they’ve all leaped to a conclusion that doesn’t involve the offshore operators and instead fingers the feds.
And now their argument has reached one of the lawyers involved.

Maybe people should hear the evidence before they come to conclusions.

And maybe, just maybe, politicians should stop trying to make political platforms out of corpses.


19 October 2009

Dumb and Dumber, the fin min version

Reborn finance minister Tom “Marshall's challenge now is balancing declining revenues against increasing needs” to quote the Telegram story from today’s from page.

He said the key is "spending wiser, and spending smarter."

Okay, sez your humble e-scribbler, so does that means Marshall’s previous tenure as finance minister involved spending dumb and dumber?

Interesting line to take during a by-election, incidentally.  Cuts to spending by Marshall’s predecessor are what got the governing party into this by-election in the first place.  Jerome! Kennedy the high-pitched predecessor – now the higher pitched health minister – has been busily backtracking on the cuts Marshall, Kennedy and their boss approved in cabinet.



18 October 2009

“Feeling queasy”: Is quieter better?

People in Newfoundland and Labrador must surely be looking with some puzzlement on the flap over federal Conservatives handing out government money as if it was their own.

In this province, their provincial Conservative cousins have the thing down to a science. The use of public money for partisan benefit is an old one in Newfoundland and Labrador but this current crowd have raised it to a fine  art. 

The House of Assembly spending scandal was – for the most part – a scam worked up to push free and untraceable cash that politicians could hand out to all and sundry in their district for any purpose the politician could think of approving.

So pervasive was the practice that a review by the auditor general found scarcely a single politician from any political party who sat in the House after the scam started in 1998 who did not use it to some extent. 

The review also revealed that the politicians elected after 2003 used it with an enthusiasm their federal cousins could only envy.  Of the top ten spenders as a percentage of their constituency operations allowance, six were elected after 2003 and all but one was a Tory.

As it turned out, one of the biggest supporters of the public cash for partisan benefit scheme was a former auditor general.  Ironically, she was the one the House management commission blocked from looking at some aspects of the scam while it was first organizing.  Beth Marshall also felt no qualms about handing out cash in small and larger amounts, nor did she feel any difficulty that there was a skimpy audit trail for the cash or that money was going to duplicate  existing government programs in some cases.

The use of public money for partisan purposes was not confined to individual members of the legislature and that’s where the parallel with the federal Conservatives really becomes apparent.  Since 2003, the Provincial Conservatives have worked to make sure that local partisan benefit came from any available pot of public cash:

-  As we found out when Tom Rideout packed it in, road paving and construction is over-seen by a political staffer in the Premier’s office.

Since 2003, it has been consistently managed in a way to maximise the benefit to Conservative districts and to punish those that voted for another party.

Fire trucks are a recent favourite for the spending announcement with the local MHA. With the recent by-elections and political upheaval, the fire truck announcements are coming about one a week.

The one they’ve consistently used is the small time cash being handed out by one department or another.  The money is from a legitimate departmental program but when the cash is handed out someone from the government caucus gets the credit.  It is inevitably called a “donation” or a “contribution” to make the free cash sound like anything but what it is.

There’s nothing new about it.  Back in 2007, Bond Papers linked to an old CBC news story that dates from the early 1970s that mentions the same practice dating back three or four decades and more.

But just because something is old is not a reason to think it is okay.  Not all traditions are fine or honorable.

Nor is it any better that it is done quietly in these parts as opposed to brazenly at the federal level.  The quiet nature of the local practice makes it all the more insidious.

Done loudly or quietly, though the practice is enough to make anyone concerned for the state of our democracy feel very queasy indeed.