30 December 2011

Familiar Furrows #nlpoli

Kathy Dunderdale spent most of her time in year-end interviews lamenting her critics.

No accomplishments.

No vision thing.

Just a lot of carping.

Lots of grousing about her critics and even a reference to the problems free speech in the legislature are causing her.

She said she kept the House of Assembly closed because it was dysfunctional, and a waste of time, and everyone else was useless.

Can’t ask proper questions, dontchya know. Kathy-approved intelligent questions.

Now, as the Telegram’s James Macleod puts it, the story is a little different:

Dunderdale has said repeatedly that there’s a simple reason for leaving the House closed: the government had no legislation to pass.

All that and the glories of Muskrat Falls, even though she  - herself – spends more time griping about everyone else rather than explaining the whole thing to people.

It is all just so boringly familiar.

The relentless negativity, that is.

Follow that second link if you haven’t already.  It will lead you to a quote from the Old Man Hisself circa November 2009:

But Williams said he's not going to stick around forever "to beat a dead horse" if a deal cannot be sealed, nor will he sign a bad deal [to develop the Lower Churchill] for the sake of getting one done while in office.

Hmmm.

In an interview with CBC to be broadcast Friday evening, Williams says he left office suddenly in late 2010 because he couldn’t handle the criticism anymore. 

His skin got thin again, apparently.

When Williams left office he said it was because he had just inked a deal with Nova Scotia to develop the Lower Churchill that was by no means a give away.

And as for that promise about no deal just to get out of the job?

Well, let’s just say that Harvey’s has salt for sale by the bucket load down at the waterfront. 

Buy lots.

You’ll need it.

- srbp -

The Scribbler’s Picks for 2011 #nlpoli

National Political Story:  The Conservatives finally won a majority government in 2011.  They turned out to be not-so-scary after all for enough Canadians.


Provincial Political Story:   OCI’s unilateral start to changing the fishing industry beats anything else.  What they have started will have a profound effect on the province well into the future.

Many the politician is scared shitless of the whole thing.  You can see the fear in their eyes every time they speak of it.

None was more fear-filled than Kathy Dunderdale who tried to claim in one year-end interview that all she could do was facilitate discussions among other people.  Yeah, right,  as if Kath and her fellow pols of all political stripes haven’t been intimately involved with creating the current mess or won’t be affected by the sea change that is coming.

Try the SRBP post “The Wheel of Fish” if you want to read some of this corner’s observations.

High Point for the Scribbler:  The 15 Ideas series. Start here.  Close second:  The series on politics, polls and the media starting with the Echo Chamber which goes back to a 2006 series that changed the way many people look at politics and the news media.

Recurring Theme to Remember:  You can’t slide a single sheet of paper between the three political parties on most issues.  The Tory leadership fiasco at the start of the year is as good a place as any to start your review. Try “A Hugh Shea for our time” from January.

What Theme  Keeps Repeating Like Greasy Fish and Chips?  Irresponsible government spending. Start with “The Four Horsemen and government finances”.  Notice how familiar the issues are.  Regular readers will recall that SRBP flagged the Tories’ spending habits in 2006. 

A story that will drag into the New Year:  The death throes of the provincial Liberal Party.   “The Zazzy Substitution”  will get you started.  Don’t worry if you haven’t been paying attention.  There’ll be plenty of opportunities to catch up over the next couple of years.

- srbp -

29 December 2011

The reality of her world #nlpoli

Some people are trying to make a controversy out of Premier Kathy Dunderdale’s recent comments that public sector unions should “expect a more modest increase” than the salary rises they’ve been used to from the Conservatives since 2003.

Look at “the reality of the world”, Dunderdale admonishes everyone.

Well, a look at the world she lives in  - as opposed to the one people imagine exists - reveals a great deal.

Revelation One:  As labradore has noted repeatedly, the provincial Conservatives are responsible for expanding the public service both in absolute numbers and as a share of the provincial labour force.

In his most recent version, labradore notes both the size of the public sector: 25% of the provincial labour force.  Then he adds Revelation 2: the growth in the total value of the pay packet.  Since 2006, the total public sector pay cost has gone from about $1.9 billion to about $2.65 billion by January 2011.

Revelation 3 really puts it in perspective. Scan down through David Campbell’s commentary in the Globe on December 28 and you’ll find plenty to knock your eyeballs out about the growth of the provincial economy. Take the bits rom labradore and put it together with this on the relative position od the public sector pay envelope compared to the national average:

In 1998, the average weekly wage in the public administration sector in Newfoundland and Labrador was more than 22 per cent below the national average. Now it is 3.3 per cent above. That is a monumental shift in wages over a short 11 year period. A similar, but less pronounced story is found in both the health care and education sectors.

Most of that increase came since 2006.

So for anyone who is still harbouring any misapprehensions, understand that the provincial public sector has been driving the provincial economy for the past decade.  Thousands of more employees making – collectively – hundreds of millions more year over year and you have the growth since 2006 focused on the northeast Avalon. 

Now add to that the sources of provincial government revenue, as laid out in the annual provincial budget Estimates. You start to see the role that taxes on individual incomes and consumption play in fuelling the explosion in government spending since 2006.

Mining taxes and royalties produced about $167.5 million in revenue in 2010.  Personal income taxes brought in $888 million and sales taxes brought in another $791 million. Even gasoline taxes brought in more than mining royalties ($168.45 million) in 2010.

The forecast for 2011 did include an increase in mining royalties and taxes to $343 million. But even with that, two of those three taxes will still produce well over double the amount for the treasury than will come from rent companies pay for the privilege of exploiting the province’s non-renewable mineral resources.

When you look at the reality of things, Kathy Dunderdale and the Conservatives can’t afford to chop into provincial spending without putting a gigantic chill in the local economy.  As much as Dunderdale likes to admit that she and her colleagues have been irresponsible in boosting public sector spending to unsustainable levels, they haven’t left themselves any real manoeuvring room politically.

Now this might seem a bit harsh to Kathy’s delicate sensibilities, but the reality is that Dunderdale can’t do anything but provide the public sector with some lovely increases in their coming contract negotiations. 

When Kathy Dunderdale says public sector unions should expect more modest increases, we should understand she is probably speaking relatively.  Compared to their last contract when they got an eight percent jump followed by three successive years of four percent, public sector employees should probably look for something like four years of four percent. or four percent followed by three over the subsequent years.

But any serious confrontation?

Don’t count on it.

The Tories don’t have the nuts for it, pea or otherwise.

- srbp -

Undisclosed risk (September 12, 2007)

[Editor's Note:  This is a post originally scheduled for publication in September 2007.  For some reason, it never appeared. Here it is, as originally written.  Note that some of the links may not work].

Take a look at the energy plan consultation document released in November 2006.

Try to find any reference to changing the province's generic oil royalty regime.

You won't find one.

That's because there was no public discussion of changing the generic offshore oil royalty regime until Premier Danny Williams and natural resources minister Kathy Dunderdale unveiled the new energy plan on Tuesday.

The changes Williams and Dunderdale announced are described only in one paragraph of the colourful, glossy booklet; that's because the regime isn't finished. However, that didn't stop the Premier from describing it as a regime that will be applicable well into the future, as if the provincial government had not previously developed a robust, functional royalty structure in 1996.

Here's exactly what the energy plan says about the new regime (p. 22):
The Provincial Government will also establish a new Generic Offshore Oil Royalty Regime based on principles and structure similar to the Offshore Natural Gas Royalty Regime. In the case of satellite field developments that use existing field infrastructure, adjustments to the regime may be made to reflect the robustness of satellite field economics, including consideration of recoverable reserve size and the potential that costs of existing field infrastructure may have already been recovered.
That's all.

The generic gas royalty regime is described in some greater detail, and it is useful to quote sections of it whole in order to appreciate what the principles and structure will likely be:
Basic Royalty provides a revenue stream to the province at all stages of a project. The basic royalty rate is linked to realized prices, rather than volumes or project economics as under existing oil royalty terms. This means that the province’s percentage share of the gross revenue from each project will be largely driven by price. This approach leads to greater transparency and ensures that the interests of the Provincial Government and industry are well-aligned.
Let's look more closely at this first paragraph, correct the misrepresentations it contains and then discover the radical reform the Premier introduced. The provincial generic oil royalty regime's basic royalty is linked to gross revenues, i.e. realized prices. The royalty rate increases progressively based on several triggers, including cumulative production levels until the project development and some pre-development costs are deemed to have been recovered by the project proponents.

The existing generic regime ties the resource owner's rent - not share - directly to price  and production; the higher production is and/or the higher the price per barrel, the greater is gross revenue. Hence, even at the lowest basic rate of 1%, the resource owners - i.e. the people of Newfoundland and Labrador - realize greater royalty revenue. At the highest possible basic rate of 7.5%, the resource owner stood to gain significant royalties.

The existing regime is transparent since it is a matter of public record. Any reasonably competent economist or even a rank amateur with access to the Internet and a calculator could come up with a robust assessment of the regime's impacts on the provincial treasury.

The key to udnerstanding the scope of the Williams' royalty regime comes in the last sentence as well as reference to the royalty as a "share". The new regime, as with the publicly-owned oil company, is intended to "ensure that the interests of the Provincial Government and industry are well-aligned." That alignment means one thing: the assumption of risk.

The scope and nature of that risk has not been disclosed to the public.

The province's existing royalty regime is based on the understanding that royalties are the rent paid to the resource owner for the right to develop a non-renewable resource. The existing regime claims a return for the resource owners based on no assumption of risk: royalties are a fundamental entitlement that are varied only by factors such as production levels and market rpcie for crude. They do not represent a share, as if the owners were co-venturers in the project.

The structure of the 1996 regime provided rates of return to the oil companies in the period after payout. However, the resource owners received their entitlement from the start of production. Their revenues increased progressively wither as a function of price and production directly or in combination with the progressively increasing royalty rate. That basic rate regime also served as a positive incentive for oil companies to run cost-effective developments to forestall losing gross revenue. The faster the companies could escape the drain on gross (pre-tax, pre-cost) revenue, the faster they could obtain sizeable net profits.

A solid foundation

Consider as well, that the commitment of the current administration to obtaining the greatest benefit for the province is exactly the commitment of every administration since the 1960s. For example, Challenge and change, the strategic economic plan issued in 1992, stated that "[t]the current policy of the Province with respect to onshore and offshore petroleum resources is to encourage and promote development in a manner which maximizes economic benefits to the province."

Even the natural gas royalty regime, in development for most of the last decade, is still a draft pending industry consultations. those consultations began over the past year and the regime exists in draft form solely because the indutry has expressed strong reservations about its components, including the equity stake.

As well, it is important to realise the even the claim today by Premier Danny Williams that his plan would bring predictability and stability to the industry through a standard royalty regime is nothing new. Challenge and change committed that "[t]he Province will... develop and implement competitive generic royalty regimes for both onshore and offshore petroleum production." This commitment was fulfilled four years later with the release of two royalty regimes, one for offshore and one for onshore oil development.

Development of the gas regime began in 1998 and has neared completion on several occasions. However, it did not languish due to neglect any more than oil and gas resources offshore have lain undeveloped due to neglect, indifference, ignorance or a willful effort to leave them underground. Cost of development, the size of the resources available and international economic circumstances combined to make them commercially unviable - like Hebron - until relatively recently.

The considerable work of successive administrations, both Liberal and Progressive Conservative, laid the foundations on which the province's oil industry is built. That work, refined with experience, provides the financial resources with which the current administration has attained unprecedented heights of popularity.

The Newfoundland and Labrador Model

Since development of the offshore was first considered with Hibernia negotiations in the 1980s, the Newfoundland and labrador offshore has operated in an environment which balanced competing interests and appropriately separated the policy roles of the parties.

Overall policy on development, local benefits and taxation lay with the provincial government acting on behalf of the public, as the de facto owner of the resource.

The public interest in regulation of development, maximising resource exploitation, and protecting public health, safety and the environment has been the responsibility of the offshore regulatory board. It was established at arms length from both the federal and provincial governments to ensure the creation of a stable and predictable regulatory environment which is important to the oil companies exploiting the resource.

The board also served as a locus of government insight into the industry and into the geology and engineering of the public resource.

Development of the resource was undertaken solely by oil companies, some public and some private. They represented the source of capital and expertise needed to extract oil and gas and bring it to market.

Each of these interests worked in a balance, akin to the model followed in Norway.

A fundamental policy shift, a fundamental conflict of interests

The Williams energy plan proposes a fundamental change in provincial government oil and gas policy. The change and the consequences are found in the creation of a state-owned oil company oeprated directly by the provincial government.

In itself, creating a state-owned energy corporation to operate within the province would not alter the management model applied to date. Under the Norwegian model, state-owned enterprises are run at arm's length from government and are treated, for all practical purposes, as if they were entirely non-government entities. The contending interests are managed through the triangular balance between state, regulator and companies. Each exists in an open, transparent and predictable environment that has eveolved over 30 years.

However, the energy corporation created in 2006 and modified in 2007 is entirely controlled by the provincial government. Therein rests the problem; the provincial government itself has become, in effect, a subordinate partner in project development.

The effect of this situation has already been seen in the Hebron negotiations. The head of one of the equity partners (Newfoundland and Labrador hydro/energy company) served as the lead negtiator for provincial taxes and rents. This is fully in keeping with the energy plan which states that one of the purposes of the state-owned energy corporation, is to "ensure better alignment between the provincial interest and the partners in the projects."

Yet, in the process, transparency - one means of protecting the public interest per se - has essentially disappeared. The Hebron royalty regime is currently held secret at the request of the project proponents. However, under the MOU, the provincial government is, in effect, one of those project proponents. For the first time since oil development began in Newfoundland and Labrador, the owners of the resource have no idea on what basis they will be paid for the right to develop their resources.

Further impacts of the changed policy structure may be seen in the new generic royalty regime, described briefly in a single paragraph of the energy plan (pp.22-23) as being similar to the new generic gas royalty regime:
Net Royalty is based on project profitability and reflects the revenue and costs associated with a particular project. Where profitability of a project is higher, the province will share in that profitability. Where profitability is less or declining, the Net Royalty Rate will be lower and the province’s share will decline.

Both the Basic Royalty rate and Net Royalty rate will be determined by a smoothing formula, rather than the existing “step” based system. This enables the new system to respond quickly to falling or rising prices, sending a positive message to investors and demonstrating that the province is prepared to share in price risk. (p.23)
The generic royalty developed in 1996 established royalties based on defined percentages. It was robust and ensured "that if oil prices increase or the profitability of field otherwise increases, the royalties to the province also increase."

Both the public and the corporations shared in the benefits of a project which was well-run and therefore remained profitable, even in times of relatively low oil prices. Both parties shared the benefit of a well-run project in periods of high crude prices. The resource owners, however, assumed no risk nor should they. The regime functioned well for the provincial treasury across all but the most expensive, small projects in periods of sustained low oil prices.

By contrast, the new regime will tie net royalties - the rent paid to the resource owner for development rights after project payout - only to profitability in a way that appears to subordinate the owner interest to the corporate one. This comes from the assumption of risk.

Project profitability, after all, is a function of revenue and cost. The new regime will actually lower both the rate and the amount paid to the resource owner in a period of relatively lower profitability. A project can be or appear to be relatively less profitable depending on how costs are assessed. Thus, even in a period of high crude prices, the rent paid by the project to the resource owner may be lower than under the old generic regime.

The bird in the hand for two in the bush

By accepting risk, the public interest in the new regime bets on what some might call a reverse Churchill Falls assumption. In that 1969 agreement, the revenue for what became the energy producer was tied to a fixed price on the assumption of long-term low prices for electricity.

The new oil royalty regime based on risk best on low-cost projects in a period of high oil prices. In all other scenarios, including higher cost projects in moderate to high revenues, the royalty return to the province will likely be affected negatively since profitability would be affected. Under the regime, as described in the energy plan, the resource owners agree to accept not merely less money in absolute terms but a lower rate as well.

This approach certainly has the prospect of assuring investors, as the energy plan states, and it may well increase competitiveness of the local offshore. However, it clearly does so, as in the Hebron agreement, by guaranteeing the oil companies pay lower rents at the front and potentially over the life of a project. It trades the bird in the hand of the old generic regime for the two that may be in the bush two decades from now.

Unfortunately for the Premier, he stated the real nature of the risk inherent in an approach that ties the public interest with the corporate.


-srbp-

27 December 2011

Monkey Cage Round-up

From The Monkey Cage, some recent posts that also tie to local politics and events:

  • Media “consumption”. A recent post by John Sides at the Washington Post discussed a study into how much radio news people reported they listened to with the amount they actually did.  Two things to take away from Sides in the WP:  First, there can be a huge discrepancy between what people report and what they actually do.  As a result, pundits and analysts may have a hard time connecting advertising, news coverage and other sources of political opinion to voter attitudes and behaviour.  Second, think about the technology used to collect the data.  They used a small cellphone that recorded ambient noise.  The researchers then compared the information to “radio and television programming in the participant’s media market to identify what, if any, programs they had listened to or watched.”
  • The Partisan use of Public Money:  A new study published in the American Political Science Review established an undeniable connection between a recorded incident of political direction from the White House with changes in government contracting:  “Vendors in Republican districts labeled vulnerable [by the White House] experienced contracts an estimated 272% larger than those in their unmentioned counterparts.”  Yes, folks, in some parts of the world this sort of thing is actually considered to be wrong. In other places, political direction of capital works spending is considered “normal”.
  • Tax rates and Corporate Investment:  “Utilizing dynamic tests for up to 19 OECD countries from 1980 to 2000 and isolating the impact of time-varying factors on FDI [foreign direct investment] inflows, I find no empirical relationship between corporate taxation and FDI inflows. Using a number of different tax rate variables, control variables, and estimation techniques, I find no relationship between corporate tax rate changes and FDI flows.” 
  • Nonvoters:  The phrase “absentee ballots and early voting” caught your humble e-scribbler’s attention given the law suit the local Dippers have launched against the provincial special ballot laws.  Those “special ballots” are not really special but rather a way to allow people who will be absent from the province during an election to vote. Do a bit of digging, though, and you’ll find the original New York Times commentary on the differences between people who vote and those who don’t vote in elections.  That discussion gets to be especially interesting around these parts given that elections since 2003 are characterised by relatively low voter turn-outs (when compared to previous elections in this province.)
  • Politics and polls:  “No one set of polls drives how Americans think nor how “the media” reports on politics. Neither does a single politician reap a unique advantage from polling. The signal is too diffuse.
  • The overall effects of polling are often neutralized in the cacophony of private and public surveys and the swirl of other media and campaign tactics. There are tremendous problems with American politics today; polls are not the cause.

- srbp -

Making the world safe for sexism #cdnpoli #nlpoli

Year-end political columns and features do nothing if not go for the easy and predictable when it comes to picking the top political story.

Jeff Simpson, for example, known to many as the poor man’s George Will, picked women in politics to lead off his Christmas Eve column:

This being Christmas weekend, let’s give thanks for some encouraging developments in Canada in 2011.

First off, women in politics. Three women became premiers – Kathy Dunderdale in Newfoundland and Labrador, Alison Redford in Alberta and Christy Clark in British Columbia.

The venerable Canadian Press ran a story on women in politics as well for Christmas week.  Surely this is something not seen since maybe the 1970s.

ST. JOHN’S, N.L. — Nunavut Premier Eva Aariak looks forward to a shift in dynamics when provincial and territorial leaders gather next month in Victoria.

For the first time ever, three other women will join her at the male-dominated meeting: Kathy Dunderdale of Newfoundland and Labrador, Alison Redford of Alberta and Christy Clark of British Columbia.

“The three seas are guarded by women,” Aariak said with a laugh.

Flip around the newspapers and broadcast media and you are likely to find more examples.  These two just stood out for being among the the firs.

And not long after those comments both Jeff and CP went to exactly the same spot..

Canadian Press:

“I think it will be very exciting to come together as a group with more women at the table,” she said in an interview. “And I think they will contribute valuable information.”

[Newfoundland and Labrador Premier Kathy] Dunderdale agreed.

“I know it’s going to be different because women do approach it differently,” she said in an interview.

Women simply don’t experience life the same way as men, Dunderdale said.

“So that gives you a certain insight, a certain perspective.

“And certain issues that are extremely important to you.”

And Jeff:

… women often have a nose for issues that men miss, or they see the same things through a different prism, and that difference is useful and important. Political life is better with more women running or helping to run the show.

Women see issues men don’t see.  They see all issues “differently”.  As Dunderdale put it “certain issues” are extremely import.  She then chose employment insurance and how it is unfair to some types of workers, incidentally, but more on that later. Yes friends, women are more socially aware.  They focus on the softer issues.

And, darn it all,  politics is just “better” with women in it.

The only thing missing from these insightful journalistic comments is the open admission that the offices smell better,  that the chicks make great coffee when you ask them to bring you a cup and cabinet meetings are better because sometimes the babes will even bring cookies they baked themselves.  The boys will have to watch their waist lines and their cholesterol counts now that women are in higher places.

So let’s deal with the obvious. 

Women do see the world somewhat differently from the way men do.  Then again, so do black men and women, aboriginal people, and immigrants.  White middle-class men from St. John’s will have a different experience than their counterparts from Quebec or Edmonton. 

But when you get beyond these most general of generalizations, so what?

Well, not much.  The differences in politicians come now as they always have, in the individuals themselves.  Women – as a group - are not inherently any better at politics or any more sensitive to certain issues than are men. 

Kathy Dunderdale, for example, hasn’t been any better at promoting a more civilized, inclusive, and open form of politics than any of her male predecessors.  She is every bit as arrogant and condescending as her predecessor ever was. She just has less than a tenth the reason to behave so ignorantly.

Dunderdale may see issues differently than someone like Jerome Kennedy – a man – but that is because she seems to have difficulty grasping many of them, very much unlike Kennedy. That doesn’t come from the fact that Dunderdale is a woman and Kennedy a man. Finance minister Tom Marshall  seems to have as limited a grasp on public finance as Dunderdale does and, as you likely concluded from his name, Tom is one of the guys in the room.

Kathy Dunderdale is certainly just as committed to secrecy and keeping the legislature as dysfunctional as her predecessor.  Dunderdale’s had a year in office. Most people in Newfoundland and Labrador who read that CP article are likely dumfounded to find out that Dunderdale has some sort of personal stake in employment insurance reform. 

So far she hasn’t said much of anything about it beyond a news release issued last summer.  Eight years in politics and not a peep other than mentioning that people who receive regular benefits need fewer hours to qualify for parental leave benefits under the Employment Insurance system than others.

What has actually been remarkable about women premiers is that the average Canadian doesn’t seem to have noticed at all.  You just did not see letters to the editor and calls to open line shows gushing about the historic first of Kathy Dunderdale, the first woman premier of her province.  A few reporters and Dunderdale supporters have tried to play it up, but for the most part Dunderdale as the first elected woman premier is a non-issue.

Not an issue.

Sure people noticed.

They couldn’t help but notice, especially if they followed Dunderdale’s staged campaign events that posed her as the Great Nan, heir to the Great Dan.

But the ordinary Joes and Janes didn’t play up the “first woman” angle themselves beyond maybe a comment or two in passing. 

24 hours tops, after the election.

Gone.

Part of that may well be due to the fact that people are a wee bit more evolved that the crowd in newsrooms these days.  They understand that it was only a matter of time before we had women premiers.  It’s a numbers game.  Get more women in politics over a longer time, eventually one of them gets the top job.

A goodly chunk of the reaction in Newfoundland and Labrador likely had to do with the fact that Dunderdale slid into her job a year ago. People are used to her.  The novelty of her chromosomal structure wore off long ago.  And to be brutally frank, it was never an issue anyway.

If someone wanted to make an issue, they might note that Dunderdale  got her job on a man’s coattails, hand-picked by a man to succeed him.  What’s more, the provincial Tories could have run a cardboard cut-out and they would have been swept back into power. They sure didn’t run their campaign as if she made a difference.  The “Dunderdale2011” thing was more about cutting and pasting than the use of a campaign built around the party’s strongest marketing appeal. 

The Tories do Big Giant Head campaigns so naturally they ran lots of shots of a Big Giant Head.  But they ran a stealth campaign with Dunderdale:  a photo op here and there and not much beyond it. There was no wave of Dundermania.

Truth be told Kathy could have frigged off to Florida with Susan Sullivan and no one would have wondered where Kathy went.  That’s what actually happened after the election, incidentally, and – you guessed it – no one cared.

Unlike reporters and political pundits, Canadians apparently don’t really give a toss about whether their politicians are women or men.  People are just interested in how well the politicians do their jobs.

That’s pretty much how it should be.

- srbp -

26 December 2011

Best Political Blog – Final Round of Voting is On!

Okay gang, that was just the preliminary round.

Now we are in the finals, along with Fighting Newfoundlander, Gritchick, Impolitical and Dawg’s Blog.

Some of you may have skipped voting last time.  Maybe you got confused by Bong Papers and thought you were in the legalised marijuana blog category.

Nope.

It was just a typo.

Now you can vote for the Bond Papers in the final round.

As always, vote early and vote often.  That’s not just a joke.  Once a day will be sufficient.

Here’s the link:

Vote Sir Robert Bond Papers.

- srbp -

24 December 2011

Euphonium Christmas

- srbp -

Connies grinch consumers on Muskrat review #nlpoli

Anyone who thinks the governing Conservatives in Newfoundland and Labrador are interested in anything but ramming their megadebt Muskrat Falls deal down the public throat, well, those fine people are just not paying attention.

From Friday’s Telegram, public utilities board chairman Andy Wells:

"Now we have to have the report by end of March and, of course, that's an order from the government and we shall do that," Wells told The Telegram Thursday.

"The public consultation is going to very restricted. I don't know whether we will be holding a technical conference. The consumer advocate role will be substantially restricted. There is not sufficient time."

"In order to meet the March 31 deadline, we have to start writing our report in mid-February. What we really are looking at is two to three weeks of work that we thought would require three months."

Talk about undisclosed risk.

- srbp -

Happy Full Metal Jacket Christmas

- srbp -

T’was the week before Christmas… #nlpoli

And all the loyal SRBP readers who haven’t voted in the Best Political Blog category can still do so.

Click here.

When you are done there, you might sample these top 10 posts from last week as selected by the readers themselves:

  1. Federal Liberals fear SRBP
  2. Nalcor and the Muskrat alternatives
  3. Penashue – the third smack
  4. Muskrat Falls PIFO
  5. Political party finance:  much more to read
  6. All I want for Christmas is a paradigm shift
  7. Undisclosed risk:  putting the plan into action
  8. Memorable Christopher Hitchens
  9. Amen, brother, amen.
  10. More Muskrat Fun:  HQ, NALCO and PEI

- srbp -

23 December 2011

Muskrat Falls: the PUB review story #nlpoli

The Telegram has the best account of the unsuccessful effort by the public utilities board to get an extension on its review deadline for Muskrat Falls.

The whole thing is worth reading, right down to the bit where natural resources minister Jerome Kennedy disputes the role of the consumer advocate in the PUB process.

Then read the Telegram editorial:

But Kennedy seems to have missed the point of the PUB’s letter to him concerning its ability to do the review, because board chairman Andy Wells wasn’t actually asking for time — he was telling the government the time was needed.

The Telly-torial writer then makes a neat transition from a talk of the reason for the delay – Nalcor can’t cough up information on time - to a discussion of Nalcor’s and Emera’s problems coming up with information full-stop.

That difficulty in providing information in response to simple, obvious questions is pretty much the main reason for the growing opposition to the project. 

- srbp -

Amen, brother, amen #nlpoli #cdnpoli

nottawa asks a good question about politicians, university professors and journalists and discovery of a fairly obvious point about public life in Newfoundland and Labrador since 2003.

- srbp -

More Muskrat Fun: HQ, NALCO and PEI #nlpoli #nspoli #cdnpoli

The Ghosts of Hydro-Quebec and NALCO:  A pair of readers fired off separate e-mails to point out an alternate  explanation for the “anything cabinet decides they can do” clause from the energy corporation legislation than the tack SRBP took.

They both pointed to comments made over several years by different politicians about making the local energy corporation act like Hydro-Quebec.  In the province those same pols love to hate, HQ gets involved in all sorts of public works.

The HQ spending supplements what the provincial government is doing and, as some of those pols noted, helps to keep a raft of what is essentially provincial government spending from the prying eyes of the Equalization cops.  The result is that Quebec gets to collect more Equalization than it might otherwise get if they transferred the HQ cash into the provincial treasury and had it counted as provincial government income for the purposes of calculating Equalization entitlements. To paraphrase one e-mail, you can also bitch at the same time about Ottawa not doing enough for your province as you collect all this extra money.

Those readers are absolutely right.  Some politicians had that as part of their goal for the energy corporation.  Usually they tied it with nationalising Newfoundland Power to create One Big Crown corporation.

Just to refresh people who might not have followed the whole discussion going back five years, the SRBP view is that Nalcor was essentially supposed to be like the old NALCO.  That was a failed Smallwood-era plan to use one giant corporation that controlled all the province’s natural resources to broker development.

NALCO with an R tacked on the end might not be able to control all resources but it would be able to assume an increasingly stronger role in economic development.  You can look at the exploration program and incentive grants created under the 2007 energy plan let Nalcor use its financial power to foster a leading relationship with smaller, cash-strapped local companies.  The fibre optic deal has Nalcor and the provincial government as the larger partner in the deal.  Even offshore, Nalcor’s exploration program can be seen as a way to step into areas where the private sector isn’t interested at the moment and where Nalcor can assume a dominant role.

Basically, though, the Equalization dodge and the One Big Corp idea aren’t incompatible with the idea of having the energy corporation assume a NALCO-like role in the economy.  The two ideas fit together rather neatly.

In a related story, federal New Democratic Party leadership contender Thomas Mulcair showed up in Prince Edward Island garnering supporter for his campaign.  Part of the story in the Guardian included this rather curious reference by a prominent Island Dipper:

"Tom supports policies which are good for P.E.I. including federal support for the Lower Churchill development which will give us a third electric cable and support for a moratorium on hydraulic fracking."
What Joe Byrne seems to be talking about is actually not a Lower Churchill project at all.  It’s a plan to run another line from the mainland to PEI.  There’s an SRBP post on it from January 2011 when the conventional media reported the federal government wouldn’t fund the project as a green initiative.

Other than that, the only time anyone talked about PEI and the Lower Churchill in the same breath was in 2005.  Back then a British Columbia company was looking at the idea of running a cable to PEI  directly from Labrador.  If memory serves, Nalcor was also thinking about the same option.  Apparently it never got to the point where anyone discussed it officially with the people running Prince Edward Island.

Of course with the Emera deal, there’s no reason to run another bunch of underwater lines to PEI. 

However, if the Islanders are happy to pay outrageous prices for electricity, the gang at Nalcor would be happy to speak with them.  They have just the thing you are looking for.

- srbp -

22 December 2011

Federal Liberals fear SRBP #nlpoli #cdnpoli

Well, not just the Sir Robert Bond Papers but all bloggers.

Idiots.

- srbp -

Undisclosed risk: putting the plan into action #nlpoli

The provincial government is dropping $11.3 million to string fibre optic cables from Goose Bay to western Labrador.

The federal government will plunk in $3.0 million with $9.7 million from Bell Aliant.

Of the provincial total, Nalcor Energy will cover $8.3 million.

Just do the math, though.  The provincial government has 47% of this project.  Both the federal and provincial government shares combined cover a majority interest in the project.

If that doesn’t hit you funny, it might be striking you a bit odd that an energy company is suddenly getting involved in telecommunications.  Here’s the quote the people who put the news conference together made up for the Nalcor representative:

“This is one of the many benefits that Labrador will see from the Lower Churchill Project,” said Gilbert Bennett, Nalcor’s Vice-President, Lower Churchill Project. “Nalcor is investing in this project to ensure that critical infrastructure required to build and operate the Muskrat Falls development is in place in Labrador.”

“This is one of the many benefits that Labrador will see from the Lower Churchill Project,” said Gilbert Bennett, Nalcor’s Vice-President, Lower Churchill Project. “Nalcor is investing in this project to ensure that critical infrastructure required to build and operate the Muskrat Falls development is in place in Labrador.”

Not that Nalcor is bullshitting the public or anything,  but of course, they are bullshitting. Nalcor has been on a heavy marketing campaign for Muskrat Falls for several months now in all sorts of ways.  If they gave money to put new public toilets in a town somewhere, the news release would credit the whole thing to Muskrat Falls.

So yeah, on the crudest level, this is just another version of Nalcor’s publicity efforts for Muskrat Falls. 

On another level, this is part of a trend the provincial Conservatives have been pushing since 2003.  A key part of the whole effort has been to allow Nalcor – a state-owned, politically directed agency – to use public money to assume an increasingly larger role in the provincial economy.

Weird as it might sound for a Conservative government, that’s part of what is going on here.  You can understand it better if you look at what the party does as opposed to importing labels or ideologies from other places.  Progressive Conservative is just a label.  In practice, the political parties in Newfoundland and Labrador aren’t ideologically based at all.  That’s why people can jokingly refer to the Danny Williams Tories as the first NDP government the province ever had and not really be making a silly joke at all.

This sort of project is why the province’s ruling Conservatives inserted clauses in the energy corporation legislation in 2007 that allowed an energy company to do anything the cabinet wants it to do. It was a pretty dramatic change from the old law that governed the provincial hydro corporation.

In fact, this clause was so far away from one one would expect for an  energy corporation that most people likely blew it off as being just a meaningless oddity.  The whole thing stands out, though, because the clause survived through some pretty significant revisions from the first version of the energy corporation laws in 2006  to the ones that currently govern the corporation dating from 2007. 

Cabinet obviously meant for the new corporation to take on anything at all.  They didn’t need a way of funnelling provincial government money to the private sector.  They already have dozens of ways to do that.  They also didn’t need to do this for Muskrat Falls. They’ve been running Churchill Falls, for example, since the 1970s with good old copper telephone lines. 

Muskrat Falls wouldn’t be the only new industrial venture that could use fibre optic communications.  There are some new mining businesses likely to start in Labrador soon that could claim a far bigger interest in these cables than Nalcor.

And for what it’s worth, Muskrat Falls might not even happen.

What’s going on here is a continuation of the policy laid down by the Conservatives early in their mandate.  They want to assume greater and greater control over the provincial economy.  Today,it’s fibre optic cables.  Tomorrow, it might well be another administration of any partisan stripe getting Nalcor into fish processing or marketing.

As your humble e-scribbler put it in 2006:

Williams' new Hydro corporation returns to an older model based on government subsidy and government dependence. Beyond the attractiveness to some businesses of relying on whatever contracts they can secure from the new Hydro corporation, the political and financial muscle of the state-owned company will likely make it considerably more attractive an investment than a private sector venture, since it will always carry with it a government guarantee of its operations and expenditures. The end result will almost inevitably be a weakening of the local private sector.

Weakening the private sector is one result.

Another is ensuring that local taxpayers pay the full financial cost and then some. Under the Electrical Power Control Act and the public utilities board legislation, the utilities board must set provincial electricity rates to ensure the financial viability of the provincial energy corporation.  The company can never lose.

It’s that same combination of powers, incidentally, that Nalcor is using to finance the Muskrat Falls project.  Local taxpayers will be forced – by law – to pay whatever rates Nalcor needs to ensure it recovers its costs, makes a profit and maintains its credit rating.

It was an undisclosed risk in 2006, but then again, that’s what the Lower Churchill is all about.  It’s what a 2009 Emera deal was all about. Heck, it’s what the provincial Conservatives have been all about since 2003.

No wonder they dropped it out there a couple of days before Christmas.

- srbp -

21 December 2011

All I want for Christmas is a paradigm shift #nlpoli

Here’s the difference between a province that is successfully tackling the challenge of labour shortages compared to one that is hopelessly adrift.

Saskatchewan is open to people from anywhere.

In Newfoundland and Labrador, meanwhile, the emphasis in every discussion seems to be on keeping local people in or figuring out – as with apprentices – in how to lure them back. 

Check that article from the Telegram – first in a series – and notice how fast they turn to talking about a labour shortage. That’s really code for “there won’t be enough of ‘us’ to get the work.”  Part of that sentiment goes unspoken, namely that letting more of “them” in would be, at worse, undesirable socially and culturally or at best an admission of some sort of ethnic failure.

In Saskatchewan, they don’t spend any time fretting that all this prosperity will mean a loss of the old.  They don’t seem to be quite so bothered dividing the world up into “we”s and “they”s.

All we need in Newfoundland and Labrador this Christmas is a massive shift in headspace for some people.

- srbp -

Unsound financial management – the Dunderdale acknowledgement #nlpoli

It’s not hard to find the toad of truth in the swamp otherwise known as the ruling Conservatives’ record on public spending since they took office in 2003.

You can find it because since 2009 they like to admit every now and then that their spending habits are “unsustainable."

As nottawa reminds everyone, Premier Kathy Dunderdale has now acknowledged that:
“[o]ur spending at the rate that we've been doing over the last eight years — and it has been very necessary for a number of very good reasons to do that — is not sustainable in the long run.” [CBC online story]
But when Mark claims that “[u]p to now, Tories (and others) have disagreed with that assessment” he is not exactly right.

In 2009, Paul Oram was the first Tory cabinet minister to acknowledge publicly that “unsustainable” thing.

As your humble e-scribbler noted at the time, those words must have received the blessing of the Premier’s Office since cabinet ministers under Danny Williams couldn’t break wind without permission from Hisself’s posse.

Fnance minister Tom Marshall.chimed in with an unsustainability admission.*

And then they just kept up the same old habits.

It’s not surprising therefore that the public sector unions just won’t react to Kathy Dunderdale’s comments that the unions must not expect big wage increases in the upcoming round of negotiations.  Local CBC has been pounding away for a couple of days trying to make a story out of this but so far they’ve come up with zip.

The unions know the sad Tory record of saying one thing and doing another.  They also know that the Tories are still in a pre-leadership phase.  Danny’s gone.  Kathy’s a fill-in. 

If they thought about it for a moment, they’d also know that the local economic boom the Tories like to praise themselves for is actually a function of public sector spending.

That’s right.

It isn’t oil.

It’s a massive increase in the number of public servants since 2003,  fantastic wage increases, and unprecedented increases in  public spending. Roads and buildings are just part of it.

That unsustainable public spending is what has been sustaining the provincial economy. Under the Tories, the provincial economy is considerably more fragile than it’s ever been before

Any effort by the Tories to get their spending under control – to get it to sustainable levels - will put a chill through the place.  That will inevitably lead to a chill in the local economy.  The chill won’t just hit St. John’s where most of the public servants and the construction industry lives.  The chill will be felt everywhere and that will put a chill on the Tories’ political standing.

All that is the answer to Doug Letto’s questions in his essay on the “massive obstacles” Kathy Dunderdale is facing:
Can she and the government say no? Consistently?
No.

And no.

And everyone knows it, including Kathy.

Muskrat Falls, incidentally, is nothing more than the best example of a party addicted to unsustainable public spending.  The project will increase the public debt to new record levels but that is irrelevant to the province’s Tories.  They want all those jobs to keep the economy humming.

You can easily find the toad of fiscal truth in the swamp of Tory financial mismanagement since 2003. The truth is – as Kathy admitted herself – their spending is unsustainable.

The part Kathy didn’t say is that she won’t be able to do anything but keep it up.

- srbp -

* Changed wording to clear up sentence meaning in the context of the post.  Original post had wording left over from earlier draft.

20 December 2011

Muskrat Falls PIFO #nlpoli

Q:  When is an independent review not independent?

A:  When the project proponents control the timetable for completing the report.

Or, as voice of the cabinet minister reports:

The provincial government will not be granting the PUB another extension for its review of the Muskrat Falls project. Last week, Natural Resources Minister Jerome Kennedy moved the deadline from December 31st to March 31st. But Kennedy says he is not even considering the second request by the PUB to extend the deadline to June 30th. He says the report needs to be completed so it can be debated in the House of Assembly.

- srbp -

PIFO = Penetrating Insight into the Fracking Obvious

Penashue - the third smack #nlpoli

Turns out that his campaign spending was the third smack troubled Tory cabinet Minister Peter Penashue took.

First, there was the story that Penashue porked out his campaign manager with an appointment to the offshore regulatory board, something for which his campaign manager was spectacularly unqualified for.

Then there was the story that Penashue had personally called federal employees in his riding to assure them their jobs were safe from cuts or relocations.

Now it turns out that, during the federal election,  Penashue was the top spender in the province.  He shelled out $115,000 compared to only $37,000 spent by his main opponent, Liberal Todd Russell.

Why is this a smack, you ask?

Well, for starters, Penashue is likely to be a source of continuing political controversy, nay even scandal.  He won the seat by only 79 votes despite spending $60,000 on advertising alone.  That means Penashue is a lot less secure in the seat than he might otherwise seem.  People who are insecure tend to do things like his first two smacks that will leave him open to further political scandal. The more he tries to shore himself up, the more likely he is to shag up.

And then there’s the question people will be wondering about, given the way politics tends to go in the Big Land.  People will wonder how you spend $60,000 on advertising in Labrador.  And for the rest of the cash, people will wonder what else Peter spent his cash on given the way politics goes in the Big Land. 

Three stories in such a short space of time?

Count on more.

- srbp -

Memorable Christopher Hitchens (II) #nlpoli

“The noble title of "dissident" must be earned rather than claimed; it connotes sacrifice and risk rather than mere disagreement.”

- srbp -

Nalcor and the Muskrat alternatives #nlpoli #cdnpoli

Nalcor’s capital works submission to the public utilities board for 2012 included a last-minute addition of an upgrade to the power lines that connect the Avalon peninsula to the rest of the island. The submission is dated September 22.

That’s really important because the Bay d’Espoir/Exploits generating complex has a large surplus of electricity.  Nalcor can’t get that electricity to where it’s needed because the existing lines across the Isthmus of Avalon are at capacity.

The problem is actually a bit more complex than that.  As Nalcor’s supplementary capital works submission puts it:

The heavy loading on the eastern portion of the system is coupled with the incentive to provide least‐cost power to customers by minimizing Holyrood production and maximizing production from hydroelectric resources located in Bay d’Espoir and west. Constant monitoring of the load on the eastern portion of the system is therefore required. Thermal load limits on the lines must be strictly enforced to avoid unacceptable line sag and/or potential conductor damage. Further loading pressures will be placed upon the Bay d’Espoir East system with the addition of the Vale processing plant at Long Harbour and has already occurred due to the loss of load and net hydroelectric generation increase attributed to the closure of the Abitibi Bowater paper mill in Grand Falls-Windsor. (pp. 1-2)

On top of that consider that the existing power lines are all part of the major island electrification projects completed between 1965 and 1968.

The estimated total cost of the new line would be $209 million.  The PUB submission anticipates work starting in 2012 with completion in 2017.

As it turned out, Nalcor and the PUB have deferred consideration of the new transmission line.  Both the Board and Nalcor are involved in extensive regulatory reviews, including Muskrat Falls.  And, as a December 6 Nalcor letter to PUB lawyer Maureen Greene notes, it “is our understanding that the Muskrat Falls Review is of high priority to government.”

There are a few things to note about this:

  • Shifting priorities:  When discussion of this line came up a couple of years ago in questioning in a House of Assembly committee, Nalcor officials told the committee that it wasn’t thinking about upgrading the line because the Muskrat Falls project would take care of it.  Evidently something has changed.  That’s most likely…
  • Muskrat Falls delays:  The public utilities board hearings are taking way longer than Nalcor expected.  Even if they finish by the end of the current fiscal year (March 31, 2012), anything beyond a complete blessing will cause further political problems for a project that can’t afford any more political problems. Or, it could be …
  • Muskrat Falls will die:  Nalcor could also be hedging its bets against the project being canned altogether.  The capital works supplement includes this line in the rationale:  “Given that the Lower Churchill Project has yet to receive final project sanction…”.  Nalcor is apparently no longer willing to defer discussion of the line as they were a year or so ago.
  • Muskrat Falls is a political project:  Since it started, the Lower Churchill has been driven by political demands to meet political needs. Nalcor’s reference in its correspondence to government priorities pretty much confirms that point for anyone who still believes Muskrat Falls is about delivering consumers the power they need at the lowest price.

As for the overall question of priorities, the PUB took pains in its letter acknowledging deferment of the new line that the project will require significant attention including a possible hearing.  The line is the most expensive single project Nalcor has brought forward since the company came fully under the PUB’s regulatory authority in 1996. The PUB letter states that – under the circumstances – the board couldn’t guarantee approval in 2012.

You might interpret that as a simple statement of fact.  But you might also read it as a reminder to Nalcor that if it needs to get this project done, the company might need to sort through its priorities again.

Don’t be surprised if Nalcor does just that early in the New Year.

- srbp -

19 December 2011

Memorable Christopher Hitchens #nlpoli

“To 'choose' dogma and faith over doubt and experience is to throw out the ripening vintage and to reach greedily for the Kool-Aid.”

That line – from God is not great – would apply equally to politics in Newfoundland and Labrador since 2003.

- srbp -

Party Political Finance: much more to read #nlpoli #cdnpoli

The Telegram took a very light look on Saturday at the most recent figures on political contributions released by the provincial elections office a couple of months ago.

For some reason, the Telly singled out Aliant for its record of donations even though the telecommunications company is by no means the big story in the 2010 figures or indeed of the recent public record of party donations.

If you want a more detailed analysis, then check these posts from SRBP and labradore:

- srbp -

17 December 2011

The Hitchens Method #nlpoli #cdnpoli

There are plenty of people out there who pat themselves on the back for telling it like it is, for calling it as they see it.

You know they do it because they relentlessly point it out to you.

They are brave.

They are fearless in delivering their opinions.

They cannot stop telling you that.

You all know them.

Closer examination invariably reveals they are full of shite.

Not so Christopher Hitchens, as Paul Wells makes plain in his obituary for a man so wonderfully described during his lifetime as a public intellectual:

His method was simple:

1. Read everything.

2. Draw your own conclusions.

Expanding the range of his inquiry, digging deeper, engaging with the minds he admired most. Hitchens spent much of his life offering everyone his answers on any subject, but they would not have mattered so much if he had not also been such a ravenous asker of questions.

And the world would have been so much duller a place if Hitchens had not told us what he found out in so eloquent a way.

- srbp -

Dunderdale leads from the rear #nlpoli

Premier Kathy Dunderdale wants everyone in the province to get involved in the fishery debate.  Doesn’t matter who you are.  Doesn’t matter what you want.  Get in and have your say on the future of the resource we all own.

CBC’s Azzo Rezzori says Kathy is staying out of the way. [Story starts at about 9:00 of this video link]

Others would call it what it is:  chickenshit.

In a scrum with reporters on Friday, Dunderdale rattled off all the penetrating insights into the obvious one can find about the fishing industry in the province.  The Telegram’s James McLeod has a neat account of it for those who want to catch up.

Yes, Kathy, we all know the problems.  And yes, we know the solutions because, yes, they’ve been talked about, discussed, debated and ignored for decades.

Yes, Kathy, we know people are using the fishery to their own ends.  Yes, we know lots of people are being manipulated.

What Dunderdale conveniently omits is that the provincial government has a role to play.  After all, the law in this province gives the provincial government considerable power to manipulate the fishery and the people who depend on it for their living.

What Dunderdale conveniently forgets is that successive administrations haven’t been shy about doing just that.  The one Kathy has been involved with since 2003 has been one of the most interfering and manipulative administrations in a long list of them.

What Kathy deliberately omits to mention is the process – the MOU – that the Tory administration started and then rejected because they were afraid of the political consequences. 

The costs don’t frighten them.  That was just a bullshit excuse the fisheries  minister used.  Kathy has more money sitting in the bank  - doing nothing  - than some of her predecessors got in total from their own means to pay for everything the government does.

Billions of dollars.

So when Kathy Dunderdale clucks about the tragedy of manipulating people and the tired attitudes about the need for everyone people to come together to find a solution, she is being worse than the worst kind of manipulative character she laments.

Kathy has the power to change things.

Kathy has the power to set things right.

Kathy refuses to get involved.

That’s not just chickenshit.

That’s immoral.

- srbp -

The Traffic the Grinch couldn’t Steal #nlpoli

Muppets, lawyers and politicians.

Problems in the fishery, bad grammar and blatant political patronage.

Just another week in the live action edition of the National Midnight Star, otherwise known as politics in Newfoundland and Labrador.

Last week’s top 10 most read posts at SRBP:

  1. A bad week for Penashue
  2. Change in the fishery
  3. The Crowd in the Dark
  4. Globe and Mail goes American
  5. Danger:  Lawyer at Work
  6. Muskrat Falls deal will succeed:  Nalcor boss
  7. Ball takes over as Liberal leader
  8. Connies pork up offshore board
  9. A grain of salt
  10. Yes, it IS a Muppet movie, ya wingnut

- srbp -

16 December 2011

For the record… #nlpoli

Liberal leader Dwight Ball’s remarks on taking on the leadership:

The Liberal Party has a rich history in Newfoundland and Labrador and I’m proud to be a part of it.

That being said, we have much work ahead. I consider myself a team builder, and I believe teambuilding is what we need right now.

We need to reach out to Newfoundlanders and Labradorians and listen to their hopes and dreams.

I plan on spending a lot of time on the road engaging with the grassroots of our party and encouraging new interest in what we have to offer.

Additionally, we need a debt reduction plan to help rebuild the party  As a businessmen, I know the burden that debt can have on an organization and my first priority as Liberal leader will be to get our debt to a manageable level.

I like to call it the common sense approach – reach out, listen and manage debt.

These will be my priorities as I assume the Liberal leadership and help create a credible alternative to the current government. 

There will be challenges ahead, no doubt. But it is through these challenges that we will realize a better, brighter future for the next generation of Newfoundlanders and Labradorians 

- srbp -

Muskrat Falls deal will succeed: Nalcor boss #nlpoli #nspoli

“I’m optimistic the project is going to succeed,” Nalcor Energy chief executive Ed Martin told the Chronicle-Herald recently.

The delay in finishing the negotiations means that, as the CH put it, “the details under negotiation are being tapered to fit with the announced terms [sheet].”

Tapered to fit.

Great image.

The article just relates some information most SRBP readers would already know.  It also contains one comment that would make you wince. The comment reflects the level of inaccurate or misleading information out there about who will pay what for Muskrat Falls power.

The cost of Lower Churchill power to Nova Scotia has never been defined.

Nalcor projects it will cost 16.4 cents per kilowatt hour for consumers in Newfoundland and Labrador. That’s up from the current rate of 11 cents but lower than the projected costs if the province were to stick with its oil-fired plants.

That first sentence isn’t true.  The term sheet signed last fall makes it clear:

  • Emera gets a block of power guaranteed each year in exchange for their upfront cost of the link to Nova Scotia.  In effect, the cost of that electricity is zero cents per kilowatt hour.
  • Beyond that, Emera gets the right to buy additional power for a cost of something around nine cents per kwh. That’s based on memory and subject to adjustment.

As such, Nova Scotians could actually see no change in their domestic electricity rates at all. 

The second paragraph compares apples and oranges.  The 16.4 cents figure is what Kathy Dunderdale cited in 2010 as the upper range of the wholesale cost of making electricity at Muskrat Falls.  The lower end of the range was about 14 cents and that’s the figure the government has cited consistently.

But remember:  it’s a wholesale price and – more importantly – it’s an estimate.  If Muskrat Falls goes the way of every other government project since 2003 it will be over budget by more than 50%.

The 11 cents figure is the current retail price to consumers.  it includes Nalcor’s blended cost from existing generation, most of which was paid off years ago or, in the most recent examples, for free as a result of government’s expropriation of private sector generating facilities.  That figure also includes money for the electricity distributor and a tidy profit for both Nalcor and the Fortis-owned distributor.

In the future, consumers in this province will pay all of that plus they’ll have to cover the full cost of Muskrat Falls.  That conclusion is based on repeated statements by Nalcor officials.  That’s why Nova Scotians are getting free electricity up front and why they can buy extra power at a sweet discount.  People in Newfoundland and Labrador will already have paid for it.

In addition to that, Newfoundland and Labrador consumers will now also have to pay a chunk to Emera plus a profit since Emera will now operate a portion of the provincial distribution system. Not bad, eh?

Well, unless you are a consumer in Newfoundland and Labrador.

And while Nalcor estimates all of this will cost less than the alternatives, the simple truths are these:

  • Nalcor has never released detailed cost analysis of what this project will do to consumers.
  • Nalcor hasn’t costed all the alternatives.  That became clear during the joint environmental review panel hearings.
  • Nalcor can’t tell what this project will cost consumers in Newfoundland and labrador because they don’t know.
  • Whatever they wind up paying, it will be a lot more than 16 cents per kilowatt hour and it will always be more than any export consumers.

- srbp -

15 December 2011

Ball takes over as Liberal leader #nlpoli

The first sign of substantive and positive change in quite a while:  Dwight Ball takes the job of leading the Liberal Party of Newfoundland and Labrador.

The fact he is also interested in leading the party beyond the next leadership convention is also a good sign.

- srbp -

Yes, it IS a Muppet movie, ya wingnut #nlpoli #cdnpoli

Just when you thought they could not get any more loopy, the fried folks at Fox manage to turn a Muppet movie into a tool of “class warfare to brainwash our kids”.

You.

cannot.

make.

this.

stuff.

up.

- srbp -

A bad week for Penashue #nlpoli #cdnpoli

Poor Peter Penashue.

First, the federal Conservative intergovernmental affairs minister gets hammered for stupidly appointing his campaign manager to a position on the offshore regulatory board even though the guy isn’t qualified for the job. The SRBP post spawned a raft of comments in all sorts of places across the province about Penashue’s shameless decision to pork-up his buddy.

Then, on Wednesday, Liberal member of parliament Scott Simms outs Penashue for personally calling federal employees in Penashue’s riding to assure them they are safe from job cuts or transfers. Penashue apparently didn’t call any other federal employees in the province.

You know Penashue got caught doing something wrong.  As CBC reported:

Penashue walked past reporters after question period Wednesday and did not comment.

Since bad news comes in threes sometimes, it all makes you wonder what little rocket Penashue will get up his derriere next.

- srbp -

The Newfoundland Spring #nlpoli

Pay attention to some of the comments about the fishery the past couple of weeks and you’ll here talk about how we need to change the model. 

For example, labour federation boss Lana Payne has talked about the failure of what she called the “corporate model”.  When OCI boss Martin Sullivan says the fishery is broken, he’s basically talking about the “model”, too. 

What they both are referring to is how the government deals with the fishery.  The current “model” is not corporate as Payne claims so much as it is corporatist:  heavy state control irrespective of  economic rationality or public morality.

What frightens Payne and McCurdy more than anything else is that the change they and their predecessors have fought against relentlessly is finally here. What they have been able to rely on for so long is the threat of political catastrophe for any politician who dared to think about cutting the number of fish plants and fish plant workers down to a level where the workers could make a decent wage from their hard work alone.

Don’t believe it?

In a stint Wednesday on the province’s morning radio call-in show, McCurdy stated flatly that given his druthers he’d rather see people in Marystown and Port Union squeeze out enough work to qualify for employment insurance rather than have the plants close.  He tossed in full-time work for the plant in Fortune knowing that it isn’t really possible to do the two things together.

But just look at the front end of that.  It’s the essence of McCurdy’s position:  keep everything the way it is, even if  - as everyone including McCurdy knows – that idea isn’t really viable any more.  Keeping a few hundred people stamped up, collecting employment insurance for most of the year and bringing home poverty wages is better than any realistic alternative.

McCurdy wants to keep a system that promoted the overfishing that decimated the industry in the first place.

The people McCurdy expects to pick up the tab for his little scam are the taxpayers of Newfoundland and Labrador.

One can hardly imagine a more morally bankrupt position.

Thankfully, it seems like some politicians are finally getting the message. Sure you have guys like noob Liberal member of the House of Assembly Jim Bennett who is pushing another pile of outmoded, outdated ideas.  Bennett needs to stop hanging out with Jim Morgan and his buddies.

But another gang of politicians is finally standing up to the union shakedown and the bullshit conspiracy theories from people like Gus Etchegary.

Give the guy his full due: fisheries minister Darin King maybe be looking stressed but he is sounding tough. Maybe he is heartened by the people in Fortune who turned up on the news Wednesday night attacking McCurdy for undermining their chance at full-time work. Chainsaw Earle is apparently discovering that chainsaws buck when they hit a knot.

A couple of weeks ago, Ocean Choice International decided to close two fish plants.  They change the company started is long overdue.  The union and the provincial government have had plenty of time to come up with a workable plan to deal with fisheries reform.  They failed.

Expect the change that OCI has started to sweep the province.  This could wind up being the most significant political transformation in the province’s history.  The fishery, after all, is tied inextricably to the political and social fabric of the province.

The only real losers in the changes that are coming will be the people who profited from the old order.  You can tell because they are fighting so savagely against change.

- srbp -

14 December 2011

Globe and Mail goes American #cdnpoli

From the Globe’s blog and a post about American comedian Jimmy Kimmel:

Late-night host Jimmy Kimmel recently asked parents to give their kids lousy presents a couple weeks before Christmas….

There’s a little word missing there.

“of”

As in “a couple of” something.

You will hear that sort of construction all the time, especially from Americans, and increasingly you will see it in print as well.

But it is grammatically wrong.

And no, it is not concerning to your humble e-scribbler.

It is of concern to him, as in the abuse of the language pisses him off, just as it might be of concern that the Globe has fired its editors or hired people who do not know about proper English.

Here endeth the rant.

- srbp -

Chainsaw Earle #nlpoli

Fisheries union Earle McCurdy took a political chainsaw to the provincial government on Tuesday, accusing the governing Conservatives of buying “right into [OCI’s] sales pitch without there being any evidence of trying to negotiate anything better.”

McCurdy claimed that if OCI gets permission to export fish for processing, then the province is “on the brink of a major loss of control over public resources.”

According to the Telegram:

McCurdy argued that corporate greed was behind the plant closures, and the government should be pressing more aggressively to protect processing jobs in the province.

For his part, fisheries minister Darin King accused McCurdy of playing games. 

As CBC reported:

"Playing games, spreading propaganda and not keeping the best interest of the people in mind is not the way to go about it," King told reporters.

"I think that this is exactly what the FFAW is doing, and I believe wholeheartedly that it is inappropriate, irresponsible, and not certainly in the best interests of the members of the union."

King is right on everything except one point.  McCurdy may not be acting in the best interests of the plant workers or the people of the province.

But Earle doesn’t get paid to act in his members’ best interests, nor  does he give a toss for the best interests of the fishery or the province.

He can take a chainsaw to anyone and to anything he wants.  Facts don’t matter.  Worst case scenario:  the plants close, a few of his members are out of work but another bunch are working full-time to pay dues.  McCurdy looks like he fought for the guys on the unemployment line. He gets to keep his job.

All we are seeing is lowest common denominator politics of the worst kind.

And McCurdy’s good at it.

- srbp -